అకౌంట్స్ గమనికలుFrontline Securities Ltd.

Notes to Account

2.25 RETIREMENT BENEFITS A) GRATUITY

The employees'' Group Gratuity Scheme is managed by Life Insurance Corporation of India. The present value of obligation is determined based on actuarial valuation using the Projected Unit credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

B) Leave accumulated during the year lapse on the balance sheet date and thus no provision for leave encashment is made.

C) Contribution to provident fund is made monthly at predetermined rates to the appropriate authorities.

Note:

1. The company has recognised the gratuity income (actuarial gain) of Rs. 2,43,915/- & gratuity expenses of Rs. 2,594/-in FY 2017-18.

2. The company has recognised the excess of fair value of plan assets over present value of obligation of Rs.2,43,915/- as an assets in FY 17-18 and Gratuity Payable of Rs. 2,5947- as an liability in FY 2017-18.

2.27 SEGMENT REPORTING

The company operates in one geographical segment, i.e. India and has identified two business segments i.e. Segment-I which is Consultancy Commission & Brokerage and Segment-II Investments in Bonds, Fixed Deposits & Loans & Advances. Segment Profit & Loss is measured on the basis of Operating Profit or Loss of each respective segment. Segment Assets and Liabilities have been apportioned similarly

2.28.2 The basic & diluted EPS as on 31.03.2018 has been computed on reduced weighted average share capita] after buy back.

2.30 Capital & Other Commitments

Estimated amount of contracts remaining to be executed on Capital account and not provided for (net of advances) Rs. 7.38 Lakhs as on 31st March 2018 (Previous Year - Rs. 84.88 lakhs).

2.31 Foreign Exchange Earning and Expenditure

The company has not made any foreign exchange transaction during the year.

2.32 Corporate Social Responsibility

The Company shall utilize the available funds on long term projects such as education, old age home , orphanage etc (as specified under schedule VII of the Companies Act, 2013 for CSR Activities ). The Company is under process of finding suitable options and finalization of the implementation plan for the same.

In view of the above, the company is preserving the funds so that as and when adequate and appropriate option is available to the company , it will utilize them for CSR activities. Hence the Company has decided not to spend the amount on CSR during the year under review.

2.33. [Schedule to the Balance sheet of a Non Banking Financial company as required in terms of paragraph 13 of Non Banking Financial (Non Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007]

LIABILITIES SIDE

ASSET SIDE

Notes:

1 Amount is due to Greater Noida Authority for purhase of lease hold land of 90 Year.

2 As defined in paragraph 2(l)(xii) of the Non- Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998

3 Provisioning norms shall be applicable as prescribed in the Non-Banking Financial Companies Prudential Norms (Reserve Bank) Directions, 1998

4 All Accounting Standards and Guidance Notes issued by the Institute of Chartered Accountants of India (''ICAI'') are applicable including for calculation of investments and other assets as also assets acquired in satisfaction of debts. However, market value in respect of quoted investments and break up / fair value / NAV in respect of unquoted investments should be disclosed irrespective of whether they are classified as long term of current in category 5 above.

The previous year figures have been regrouped / reclassified, wherever necessary to confirm to the current period presentation.

1. RELATED PARTY DISCLOSURE

Following disclosures are made as per Accounting Standard 18, regarding "Related Party Disclosures" as notified by the Companies Accounting Standard Rules (2016):

2. List of Related Parties

3. Wholly Owned Subsidiary: Nil

4. Fellow Subsidiary: Nil

5. Enterprise for which Reporting Enterprise is an Associate: Nil

6. Individual having significant influence or control Mr Rakesh K Jain Ms Prerna Jain

7. Relatives of individual having significant influence or control

Ms Aridhi Jain

8. Key Management Personnel:

Mr. Gauri Shanker Pandey (Whole Time Director)

Ms. Richa Arora (Company Secretary ) - shall become Whole Time Director w.e.f. 29.05.2017

Mr. Lav Agarwal (Chief Financial Officer Appointment Effective from 11.05.2016 and Resigned Effective from 01.11.2016)

Ms. Swarna Gowri S (Chief Financial Officer Appointed Effective from 01.11.2016)

Ms. Bhawna Grover (Chief Financial Officer Resigned Effective from 11.05.2016)

(vii) List of companies/enterprises, in which any of person (including any of relative), listed in (iv),(v) & (vi) have significant influence or control

9. Hope Consultants Limited

10. FSL Software Technologies Limited

11. Wonder Buildtech Private Limited

12. Frontline Commodities & Derivatives LLP

13. Petal Consultants Private Limited

14. Association of National Exchange Members of India

15. FSL Education Services LLP

16. FSL Consultants Private Limited

17. Jain Singhal & Associates (Converted to LLP w.e.f 25.04.2017)

18. JSAAdvisors LLP

19. Frontline Capital Services Limited

20. Front Investments & Financial Consultants LLP

21. Petal Resorts Private Limited

22 QUANTITATIVE DETAILS

The Company is engaged in financial consultancy, distribution of financial products and investments in financial securities. As the company is neither a manufacturing company nor a trading company therefore the requirement of Quantities Detail of Purchases and Sales are not applicable.

23. DUES TO MICRO SMALL AND MEDIUM ENTERPRISES

The company has no dues to micro and small enterprises during the year ended 31 March, 2017 and March 31, 2016.

24 RETIREMENT BENEFITS

25. GRATUITY

The employees'' Group Gratuity Scheme is managed by Life Insurance Corporation of India. The present value of obligation is determined based on actuarial valuation using the Projected Unit credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

26. Leave accumulated during the year lapse on the balance sheet date and thus no provision for leave encashment is made.

27. Contribution to provident fund is made monthly at predetermined rates to the appropriate authorities.

28. The company on suomo to has recognized the gratuity expense of Rs. 1,465 in FY 16-17.

29. As per the prudence concept, the company has not recognized asset of gratuity in the balance sheet for FY 16-17. The amount of premium paid to LIC for the purpose of gratuity amounting to Rs 1,465 is booked as gratuity payable during the year.

1. RELATED PARTY DISCLOSURE

Following disclosures are made as per Accounting Standard 18, regarding "Related Party Disclosures" as notified by the Companies Accounting Standard Rules (2006):

(A) List of Related Parties

(i) Wholly Owned Subsidiary:

Nil

(ii) Fellow Subsidiary:

Nil

(iii) Enterprise for which Reporting Enterprise is an Associate:

Hope Consultants Ltd.

(iv) Individual having significant influence or control

Mr Rakesh K Jain

(v) Relatives of individual having significant influence or control

Ms. Aridhi Jain

(vi) Key Management Personnel:

Mr. Gauri Shanker Pandey

Mr. Avinash Chandra (Resigned Effective 13.04.2015)

CS Ekta Karwa (Appointed Effective 13.04.2015)

CA Bhawna Grover

(vii) List of companies/enterprises, in which any of person (including any of relative), listed in (iv),(v) & (vi) have

significant influence or control

1. Hope Consultants Limited

2. FSL Software Technologies Limited

3. Wonder Buildtech Private Limited

4. Frontline Commodities & Derivatives Private Limited

5. Petal Consultants Private Limited

6. Association of National Exchange Members of India

7. FSL Education Services Private Limited

8. FSL Consultants Private Limited

9. Jain Singhal & Associates

10. JSA Advisors LLP

11. Frontline Capital Services Limited

12. Front Investments & Financial Consultants LLP

2. QUANTITATIVE DETAILS

The Company is engaged in financial consultancy,distribution of financial products and investments in financial securities. As the company is niether a manufacturing company nor a trading company therefore the requirement of Quantative Detail of Purchases and Sales are not applicable.

3. DUES TO MICRO SMALL AND MEDIUM ENTERPRISES

The company has no dues to micro and small enterprises during the year ended 31 March, 2015 and March 31, 2014.

4. RETIREMENT BENEFITS

A) GRATUITY

The employees'' Group Gratuity Scheme is managed by Life Insurance Corporation of India. The present value of obligation is determined based on actuarial valuation using the Projected Unit credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

1. The company on suo moto has recognised the gratuity expense of Rs. 79587 in FY 14-15.

2. As per the prudence concept, the company has not recognised asset of gratuity in the balance sheet for FY 14-15. The amount of premium paid to LIC for the purpose of gratuity amounting to Rs 57,414 is booked as gratuity payable during the year.

5. The Basic and Diluted Earning Per Share have been computed by dividing the Profit After Tax by the weighted average number of equity share for respective periods as specified by AS 20 issued by Institute of Chartered Accountants of India (ICAI).

1.1 RELATED PARTY DISCLOSURE

Following disclosures are made as per Accounting Standard 18, regarding "Related Party Disclosures" as notified by the Companies Accounting Standard Rules (2006):

(A) List of Related Parties

(i) Wholly Owned Subsidiary:

Nil

(ii) Fellow Subsidiary:

Nil

(iii) Enterprise for which Reporting Enterprise is an Associate:

Nil

(iv) Individual having significant influence or control

Mr Rakesh K Jain

(v) Relatives of individual having significant influence or control

Ms. Aridhi Jain

(vi) Key Management Personnel:

Mr. Gauri Shanker Pandey Mr. Avinash Chandra CA. Bhawna Grover

(vii) List of companies/enterprises, in which any of person (including any of relative), listed in (iv),(v) & (vi) have significant influence or control

1. Hope consultants Limited

2. FSL Software Technologies Limited

3. Wonder Buildtech Private Limited

4. Frontline Commodities & Derivatives Private Limited

5. Petal Consultants Private Limited

6. Front Investments & Financial Consultants Private Limited

7. Vardhman Electricals Private Limited

8. FSL Education Services Private Limited

9. FSL Consultants Private Limited

10. Jain Singhal & Associates

11. JSA Advisors LLP

12. Frontline Capital Services Limited

During the year, Hope Consultants Limited & Frontline Capital Services Limited has participated in the share buy-back programme conducted by Frontline Securities Limited in which Hope Consultants Limited surrenderred 6 lac shares & received proceeds of Rs. 1.95 Crore (Rupees One Crore Ninety Five Lacs ) & Frontline Capital Services Limited surrenderred 7.25 lac shares & received proceeds of Rs. 2.36 Crore (Rupeees Two Crore Thirty Six Lacs ) from Frontline Securities Limited.

1.2 QUANTITATIVE DETAILS

The Company is engaged in financial consultancy, distribution of financial products and investments in financial securities. As the company is niether a manufacturing company nor a trading company therefore the requirement of Quantative Detail of Purchases and Sales are not applicable.

1.3 DUES TO MICRO SMALL AND MEDIUM ENTERPRISES

The company has no dues to micro and small enterprises during the year ended 31 March, 2014 and March 31,2013.

1.4 RETIREMENT BENEFITS

A) GRATUITY

The employees'' Group Gratuity Scheme is managed by Life Insurance Corporation of India. The present value of obligation is determined based on actuarial valuation using the Projected Unit credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

B) Leave accumulated during the year lapse on the balance sheet date and thus no provision for leave encashment is made.

C) Contribution to provident fund is made monthly at predetermined rates to the appropriate authorities.

1.4.2 The Basic and Diluted Earning Per Share have been computed by dividing the Profit After Tax by the weighted average number of equity share for respective periods as specified by AS-20 issued by Institute of Chartered Accountant of India (ICAI).

Notes:

1 As defined in paragraph 2(1)(xii) of the Non- Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998

2 Provisioning norms shall be applicable as prescribed in the Non-Banking Financial Companies Prudential Norms (Reserve Bank) Directions, 1998

3 All Accounting Standards and Guidance Notes issued by the Institute of Chartered Accountants of India (''ICAI'') are applicable including for calculation of investments and other assets as also assets acquired in satisfaction of debts. However, market value in respect of quoted investments and break up / fair value / NAV in respect of unquoted investments should be disclosed irrespective of whether they are classified as long term of current in category 5 above.

CORPORATE INFORMATION

Frontline Securities Limited provides a wide range of fnancial consultancy services including Mutual Fund Distribution and other fnancial products distribution services. Company also does investments in various fnancial products. The Company''s full service portfolio consists of fnancial product distribution, providing fnancial consultancy to corporates & individuals and investment in various fnancial products.

The Company''s registered offce is in Delhi and also provides services from the Branch offce situated at Noida.

1.1 RELATED PARTY DISCLOSURE

Following disclosures are made as per Accounting Standard 18, regarding "Related Party Disclosures" as notifed by the Companies Accounting Standard Rules (2006):

(A) List of Related Parties

(i) Wholly Owned Subsidiary:

Nil

(ii) Fellow Subsidiary:

Nil

(iii) Enterprise for which Reporting Enterprise is an Associate:

Nil

(iv) Individual having signifcant infuence or control

Mr Rakesh K Jain

(v) Relatives of individual having signifcant infuence or control

Mrs Prerna Jain Ms Vidha Jain Ms Aridhi Jain

(vi) Key Management Personnel:

Mr. Gauri Shanker Pandey

Mrs. Sarabjeet Kaur (resigned w.e.f. 16.03.2013)

Mr. Avinash Chandra

(vii) List of companies/enterprises, in which any of person (including any of relative), listed in (iv),(v) & (vi) have signifcant infuence or control

1. Hope consultants Limited

2. FSL Software Technologies Limited

3. Wonder Buildtech Private Limited

4. Frontline Commodities & Derivatives Private Limited

5. Petal Consultants Private Limited

6. Front Investments & Financial Consultants Private Limited

7. Vardhman Electricals Private Limited

8. FSL Education Services Private Limited

9. FSL Consultants Private Limited

10. Jain Singhal & Associates

11. JSA Advisors LLP

12. Frontline Capital Services Limited

* Mrs Sarabjeet Kaur resigned from the post of Whole Time Director & Company Secretary w.e.f 16.03.2013

** Mr. Gauri Shanker Pandey has been appointed as Whole Time Director w.e.f 16.03.2013. He has been paid an amount of Rs. 7,90,500/- for the F.Y. 2012-13 as salary which includes amount of Rs.34,950/- paid to him as remuneration for the period 16.03.2013 to 31.03.2013.

*** Mr. Avinash Chandra has been appointed as Company Secretary & Compliance Offcer w.e.f 16.03.2013. He has been paid an amount of Rs. 74,312/- for the period from 01.11.2012 to 31.03.2013 as salary which includes amount of Rs.8,453/- paid to him as remuneration for the period 16.03.2013 to 31.03.2013.

1.2 QUANTITATIVE DETAILS

The Company is engaged in fnancial consultancy, distribution of fnancial products and investments in fnancial securities. As the company is niether a manufacturing company nor a trading company therefore the requirement of Quantative Detail of Purchases and Sales are not applicable.

1.3 DUES TO MICRO SMALL AND MEDIUM ENTERPRISES

The company has no dues to micro and small enterprises during the year ended 31 March, 2013 and March 31, 2012.

1.4 RETIREMENT BENEFITS

A) GRATUITY

The employees'' Group Gratuity Scheme is managed by Life Insurance Corporation of India. The present value of obligation is determined based on actuarial valuation using the Projected Unit credit Method, which recognizes each period of service as giving rise to additional unit of employee beneft entitlement and measures each unit separately to build up the fnal obligation.

1.1 RELATED PARTY DISCLOSURE

Following disclosures are made as per Accounting Standard 18, regarding "Related Party Disclosures" as notified by the Companies Accounting Standard Rules (2006):

(A) List of Related Parties

(i) Wholly Owned Subsidiary:

Nil

(ii) Fellow Subsidiary:

Nil

(iii) Enterprise for which Reporting Enterprise is an Associate:

Nil

(iv) Individual having significant influence or control

Mr Rakesh K Jain Ms Prerna Jain

(v) Relatives of individual having significant influence or control

Ms Vidha Jain Ms Aridhi Jain

(vi) Key Management Personnel:

Ms. Sarabjeet Kaur

(vii) List of companies/enterprises, in which any of person (including any of relative), listed in (iv),(v) & (vi) have significant influence or control

1. Hope Consultants Limited

2. FSL Software Technologies Limited

3. Wonder Buildtech Private Limited

4. Frontline Commodities & Derivatives Private Limited

5. Petal Consultants Private Limited

6. Front Investments & Financial Consultants Private Limited

7. Vardhman Electricals Private Limited

8. FSL Education Services Private Limited

9. FSL Consultants Private Limited

10. Jain Singhal & Associates

11. JSA Advisors LLP

12. Frontline Capital Services Limited

1.2 QUANTITATIVE DETAILS

The Company is engaged in financial consultancy,distribution of financial products and investments in financial securities. As the company is not a manufacturing company and cannot be expressed in any generic unit. Hence, it is not possible to give the quantitative details of sales and certain information as required under paragraph 5(viii)( c ) of general instructions for preparation of the statement of profit and loss as per revised schedule VI to the Companies Act, 1956.

1.3 DUES TO MICRO SMALL AND MEDIUM ENTERPRISES

The company has no dues to micro and small enterprises during the year ended 31, 2012 and March 31, 2011.

1.4 RETIREMENT BENEFITS

A) GRATUITY

The employees'' Group Gratuity Scheme is managed by Life Insurance Corporation of India. The present value of obligation is determined based on actuarial valuation using the Projected Unit credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

1. In the opinion of the Board, the current assets, loans and advances have a value on realisation in the ordinary course of business, at least equal to the aggregate amount as shown in the Balance sheet.

2 A)

(i) Expenditure in foreign currency: Rs. Nil [Previous year Rs. Nil]

(ii) Earning in foreign currency: Rs. Nil [Previous year Rs. Nil]

3. Income Tax

Company has accounted for Deferred Tax in accordance with Accounting Standard- 22 (AS-22) "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India and accordingly deferred tax assets and liabilities are recognized.

4 EARNING PER SHARE (EPS)

The numerator and denominator used to calculate the basic / diluted earning per share.

5. Loans and advances include Rs. 5,000,000/- (Previous year Rs. 5,000,000/-) given as interest bearing cash margin to M/s Frontline Capital Services Limited, a member of national stock exchange being the company under the same management as defined under section 370(1B) of the Companies Act 1956 and the maximum amount outstanding during the year at any time Rs. 5,000,000/- (Previous year Rs. 5,000,000/-).

6. There are no amounts payable to any small scale industrial undertaking registered under Micro, Small and Medium Enterprises Development Act 2006.

7. Estimated amount of contract remaining to be executed on capital and not provided for (Net of advance) is Rs. NIL (Previous Year Rs. NIL).

8. The main business of the company is financial consultancy, investment and finance. All other activities of the company revolve around the main business. As such, there are no separate reportable segments, as per accounting standard on Segment Reporting (AS-17), issued by the ICAI.

9. RELATED PARTY DISCLOSURE

A. List of Related Parties and description of Relationship

1. Investing party in respect of which Frontline Capital Services company is an associate Limited

2. Individuals having significant influence Mr. Rakesh K. Jain or control Mrs. Prerna Jain

3. Relatives of individual having significant Ms. Vidha Jain influence or control Ms. Aridhi Jain

4. Key Management Personnel Mrs. Sarabjeet Kaur

5. Enterprises over which person under Hope Consultants Ltd. above item A(2),(3) have significant FSL Software Technologies Ltd. influence or control Jain Singhal & Associates

Frontline Capital Services Limited

Wonder Buildtech Pvt. Ltd.

Frontline Commodities & Derivatives Pvt. Ltd.

Petal Consultants Pvt. Ltd.

Front Investments & Financial Consultants Pvt. Ltd.

Vardhman Electricals Pvt. Ltd.

FSL Education Services Private Limited

FSL Consultants Pvt. Ltd.

10. Previous year''s figures have been regrouped / recasted wherever considered necessary.

11. Schedules 1 to 14 form an integral part of the Balance Sheet and Profit and Loss Account.

1. In the opinion of the Board, the current assets, loans and advances have a value on realisation in the ordinary course of business, at least equal to the aggregate amount as shown in the Balance sheet.

a) (i) Expenditure in foreign currency: Rs. Nil [Previous year Rs. Nil] (ii) Earning in foreign currency: Rs. Nil [Previous year Rs. Nil]

2. Income Tax

Company has accounted for Deferred Tax in accordance with Accounting Standard- 22 (AS-22) "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India and accordingly deferred tax assets and liabilities are recognized.

The net cumulative tax effect of significant timing difference that results in deferred tax assets and liabilities and description of items thereof that creates these differences is as follows:

3. Loans and advances include Rs. 5,000,000/- (Previous year Rs. 5,000,000/-) given as interest bearing cash margin to M/s Frontline Capital Services Limited, a member of national stock exchange being the company under the same management as defined under section 370(1 B) of the Companies Act 1956 and the maximum amount outstanding during the year at any time Rs. 5,000,000/- (Previous year Rs. 5,000,000/-).

4. There are no amounts payable to any small scale industrial undertaking.

5. Estimated amount of contract remaining to be executed on capital and not provided for (Net of advance) is Rs. NIL (Previous Year Rs. NIL)

6. The main business of the company is financial consultancy, investment and finance. All other activities of the company revolve around the main business. As such, there are no separate reportable segments, as per accounting standard on Segment Reporting (AS-17), issued by the ICAI.

7. RELATED PARTY DISCLOSURE

A. List of Related Parties and description of Relationship

1. Investing party in respect of which Frontline Capital Services Limited company is an associate

2. Individuals having significant influence Mr. Rakesh K. Jain or control Mrs. Prerna Jain

3. Relatives of individual having significant Ms. Vidha Jain

influence or control Ms. Aridhi Jain

4. Key Management Personnel Mrs. Sarabjeet Kaur

5. Enterprises over which person under FSL Software Technologies Ltd.

above item A(2),(3) have significant Jajn Singhal & Associates influence or control

Hope Consultants Ltd.

Frontline Capital Services Limited

Wonder Buildtech Pvt. Ltd.

Frontline Commodities & Derivat- ives Pvt. Ltd.

Petal Consultants Pvt. Ltd.

Front Investments & Financial Consultants Pvt. Ltd.

Vardhman Electricals Pvt. Ltd.

8. Previous years figures have been regrouped / recasted wherever considered necessary.

9. Schedules 1 to 14 form an integral part of, the Balance Sheet and Profit and Loss Account.

1. In the opinion of the Board, the current assets, loans and advances have a value on realisation in the ordinary course of business, at least equal to the aggregate amount as shown in the Balance sheet.

2. Income Tax

Company has accounted for Deferred Tax in accordance with Accounting Standard-22 (AS-22) "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India and accordingly deferred tax assets and liabilities are recognized.

3. Loans and advances include Rs. 5,000,000/- (Previous year Rs. 5,000,000/-) given as interest bearing cash margin to M/s Frontline Capital Services Limited, a member of national stock exchange being the company under the same management as defined under section 370(1 B) of the Companies Act 1956 and the maximum amount outstanding during the year at any time Rs. 5,000,000/- (Previous year Rs. 5,000,000/-).

4. There are no amounts payable to any small scale industrial undertaking.

5. Estimated amount of contract remaining to be executed on capital and not provided for (Net of advance) isRs. NIL (Previous Year Rs. NIL)

6. The main business of the company is financial Consultancy , distribution of mutual funds, investment and finance. All other activities of the company revolve around the main business. As such, there are no separate reportable segments, as per accounting standard on Segment Reporting (AS-17), issued by the ICAI.

7. RELATED PARTY DISCLOSURE

A. List of Related Parties and description of Relationship

1. Investing party in respect of which Frontline Capital Services Limited company is an associate

2. Individuals having significant Mr. Rakesh K. Jain influence or control Mrs. Prerna Jain

3. Relatives of individual having Ms. Vidha Jain significant influence or control Ms. Aridhi Jain

4. Key Management Personnel Mrs. Sarabjeet Kaur

5. Enterprises over which person Hope Consultants Ltd.

under above item A(3),(5) have FSL Software Technologies Ltd.

significant influence or control Jain Singhal & Associates

Frontline Capital Services Limited

Wonder Buildtech Pvt. Ltd.

Frontline Commodities & Derivatives

Pvt. Ltd.

8. Previous years figures have been regrouped / recasted wherever considered necessary.

1. In the opinion of the Board, the current assets, loans and advances have a value on realisation in the ordinary course of business, at least equal to the aggregate amount as shown in the Balance sheet.

2. Income Tax

Company has accounted for Deferred Tax in accordance with Accounting Standard-22 (AS-22) "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India and accordingly deferred tax assets and liabilities are recognized.

3. Loans and advances includes Rs.Nil/-(Previous year Rs. 17,000,000 ) given to M/s FSL Software Technologies Limited which is a company under same management and the maximum amount outstanding during the year at any time Rs. 18,800,000/- (Previous yearRs. 17,000,000/-)

4. Loans and advances include Rs. 5,000,000/- (Previous year Rs. 5,000,000/-) given as cash margin to M/s Frontline Capital Services Limited being the company under the same management as defined under section 370(1B) of the Companies Act 1956 and the maximum amount outstanding during the year at any time Rs. 5,000,000/- (Previous year Rs. 5,000,000/-).

5. There are no amounts payable to any small scale industrial undertaking.

6. Estimated amount of contract remaining to be executed on capital and not provided for (Net of advance) is Rs. NIL (previous Year Rs. NIL)

7. The main business of the company is financial consultancy, investment and finance. All other activities of the company revolve around the main business. As such, there are no separate reportable segments, as per accounting standard on Segment Reporting (AS- 17), issued by the ICAI.

8. FSL Software Technologies Limited has ceased to be the subsidiary of the Company.

9. RELATED PARTY DISCLOSURE

A. List of Related Parties and description of Relationship

1. Investing party in respect of which company is an associate

2. Individuals having significant influence or control

3. Relatives of individual having significant influence or control

4. Key Management Personnel

5. Enterprises over which person under above item A(3),(5) have significant influence or control

Frontline Capital Services Limited

Mr. Rakesh K. Jain

Mrs. Prerna Jain

Ms. Vidha Jain

Ms. Aridhi Jain

Mrs. Sarabjeet Kaur

Hope Consultants Ltd.

FSL Software Technologies Ltd.

Jain Singhal & Associates

Frontline Capital Services Limited

Wonder Buildtech Pvt. Ltd.

10. Previous years figures have been regrouped / recasted wherever considered necessary.

1. In the opinion of the Board, the current assets, loans and advances have a value on realisation in the ordinary course of business, at least equal to the aggregate amount as shown in the Balance sheet.

2. a) Directors remuneration paid is as under : (The amount includes payment made to Chief Financial officer who is not a board member)

(Amount in Rs.) Particulars For the year For the year ended 31.3.2007 ended 31.3.2006

Salary and other benefits (Rs.) 407,465/- 160,170/-

Contribution to Provident/other fund 8,663/- 6,735/-

b) Payment made to the auditors firm are as under:

For the year For the year Particulars ended 31.03.2007 ended 31.03.2006 [Rupees] [Rupees]

Audit Fee 12,000/- 10,000/-

Tax Audit Fee 3,000/- 2,500/-

Consultancy matters NIL NIL

c) (i) Expenditure in foreign currency : Rs. Nil [Previous year Rs. Nil] (ii) Earning in foreign currency : Rs. Nil [Previous year Rs. Nil]

3. Income Tax : Company has accounted for Deferred Tax in accordance with Accounting Standard-22 (AS-22) "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India and accordingly deferred tax assets and liabilities are recognized.

4. Other liabilities includes Rs.0.00/- (Previous year Rs. 233.623A as creditors) due to M/s Frontline Capital Services Limited being the company under the same management as defined u/s 370(1 B) of the Companies Act 1956.

5. Loans and advances includes Rs. 17,000,0007- (Previous year Rs. 13,200,000 ) given to M/s FSL Software Technologies Limited being the wholly owned subsidiary company and the maximum amount outstanding during the year at any time Rs. 17,000,0007- (Previous year Rs. 13,500,0007-)

6. Loans and advances include Rs. 5,000,0007- (Previous year Rs. 2,000,0007-) given in cash margin to M/s Frontline Capital Services Limited being the company under the same management as defined under section 370(1 B) of the Companies Act 1956 and the maximum amount outstanding during the year at any time Rs.5,000,0007- (Previous year Rs. 12,640,5237-).

7. There are no amounts payable to any small scale industrial undertaking.

8. As required under section 205C of the companies Act 1956, the company has transferred Rs.41,389.507- (Previous year Rs. 60,153) to the Investor Education And Protection Fund (IEPF) during the year. As of March 31st 2007, no amount was due for transfer to IEPF.

9. Estimated amount of contract remaining to be executed on capital and not provided for (Net of advance) is Rs. NIL (previous Year Rs. NIL)

10. The main business of the company is financial consultancy, investment and finance. All other activities of the company revolve around the main business. As such, there are no separate reportable segments, as per accounting Standard on Segment Reporting (AS-17), issued by the ICAI.

11. RELATED PARTY DISCLOSURE

A. List of Related Parties and description of Relationship

1. Subsidiary Company FSL Software Technologies Limited (formerly known as Budha Floriculture Ltd.)

2. Investing party in respect of which company is an associate Frontline Capital Services Limited

3. Individuals having significant influence or control Mr. Rakesh K. Jain Mrs. Prema Jain

4. Relatives of individual having significant influence or control Ms. Vidha Jain Ms. Aridhi Jain

5. Key Management Personnel Mrs. Sarabjeet Kaur Mrs. Shikha Gupta

6. Enterprises over which person under above item Hope Consultants Ltd. A(3),(4),(5) have significant influence or control Jain Singhal & Associates Frontline Capital Services Limited

12. Previous years figures have been regrouped / recasted wherever considered necessary.

ANNUAL REPORT 2005-2006

NOTES ON ACCOUNTS

ACCOUNTING POLICIES

I. Method of accounting

The company adopts the accrual system of accounting unless stated otherwise.

II. Fixed Assets

Fixed Assets are accounted for in the books at cost including incidental charges.

III. Depreciation

(i) Depreciation is provided at the rates prescribed in schedule-XIV to the Companies Act, 1956 on straight-line method.

(ii) Depreciation on addition / deletion to the fixed assets are provided from/to the date of addition/deletion of fixed assets.

IV. Valuation of the Investments

The long-term investments are valued at cost. However, if there is any decline in the value of investment, other than temporary, the carrying amount of investment is reduced for recognising the decline in value for each such investment.

V. Valuation of stock of securities

Stock of securities has been valued at lower of cost and market price.

VI. Revenue Recognition

Profit or losses from dealing in securities reflects the net profit / loss on Sale and purchase of securities.

VII. Retirement Benefits

a. Gratuity is provided on the basis of premium paid to Life Insurance Corporation of India for the employees covered under the 'Frontline Securities Limited Employees Group Gratuity Trust'. b. Provision for leave encashment to employees is provided on the basis of actual leave entitlement of employee as at balance sheet date.

c. Contribution to provident fund is made monthly at predetermined rates to the appropriate authorities.

VIII. Translation of Foreign Currency

Transactions in foreign currency are recorded by applying the exchange rate at the date of transaction. Monetary items denominated in the foreign currency remaining unsettled at the end of the year, are translated at the closing rate prevailing on the date of balance sheet. Gain / loss arising out of fluctuation on realisation, payment or restatement, except those identifiable to the acquisition of fixed assets is charged / credited to profit & loss account.

IX. Income Tax Income Tax expenses are accrued in accordance with Accounting Standard-22, 'Accounting for taxes on income', issued by the Institute of Chartered Accountants of India, which includes current taxes and deferred taxes. Deferred income tax reflects the impact of current year timing difference between taxable income and accounting income for the year and reversal of the timing difference of earlier years. Deferred tax assets are recognized only to the extent of future taxable income, which will be available with reasonable certainty. Such deferred tax asset and liability shall be calculated and valued at each balance sheet date and carrying value of the same will be adjusted for recognising the change in the value of such deferred tax assets and liability.

X. Miscellaneous Expenditure

Preliminary expenditure and Public Issue expenditure are written off over a period of ten years on pro-rata basis.

XI. Provisions & Contingencies

The Company creates a provision when there is present obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation. A disclosure for a contingent liability is made when there is a possible obligation that probably will not require an outflow of resources or where a reliable estimate of obligation cannot be made.

1. In the opinion of the Board, the current assets, loans and advances have a value on realisation in the ordinary course of business, at least equal to the aggregate amount as shown in the Balance sheet.

2. Additional information pursuant to the provisions of Para 3, 4, 4A, 4C and 4D of Part-II of Schedule VI to the Companies Act, 1956 to the extent applicable are given below:

a) Purchase and sale of shares / units of Indian Companies / Mutual funds.

Particulars Opening Stock Purchase

A B A B Shares/Units of Indian - - - - Companies/ (8,157,549) (109,178,361) (17,002,162) (212,618,226) Mutual Funds

Particulars Sales Closing Stock

A B A B Shares/Units of Indian - - - - Companies/ (25,159,711) (320,114,802) (-) (-) Mutual Funds

A = Qty. [Nos.] B = Value [Nos.]

Notes:

(i) Figures in brackets pertain to previous year.

(ii) Above number of shares / units, for sale and purchase do not include number of shares and amount for transactions of hedging in securities and in respect of securities in speculation i.e. future & option, and further the company has earned a net loss of Rs.300,304/- (Previous year profit of Rs.511,925/-) in respect of speculation i.e. future & option transactions.

b) Directors' remuneration paid is as under: (Amount in Rs.)

Particulars For the Year ended For the year ended 31.3.2006 31.3.2005 Salary and other benefits 160,170/- 137,561/-

Contribution to Provident/ other fund 6,735/- 7,001/-

c) Payment made to the auditor's firm are as under: (Amount in Rs.)

Particulars For the year ended For the year ended 31.03.2006 [Rupees] 31.03.2005 [Rupees]

Audit Fee 10,000/- 10,000/-

Tax Audit Fee 2,500/- 2,500/-

Consultancy matters NIL 100,000/-

d) (i) Expenditure in foreign currency: Rs. Nil [Previous year Rs. Nil]

(ii) Earning in foreign currency. Rs. Nil [Previous year Rs. Nil]

3. Income Tax Company has accounted for Deferred Tax in accordance with Accounting Standard-22 (AS-22) 'Accounting for Taxes on Income' issued by the Institute of Chartered Accountants of India and accordingly deferred tax assets and liabilities are recognized.

The net cumulative tax effect of significant timing difference that results in deferred tax assets and liabilities and description of items thereof that creates these differences is as follows:

Particulars As on As on A. Deferred Tax Assets 31.03.2006 31.03.2005

- Unabsorbed Losses/ Depreciation - -

- Others 471 512

B. Deferred Tax Liabilities

- Depreciation Difference (1,064,893) (1,144,050)

Net Deferred Tax Assets / (Liabilities) [A-B] (1,064,422) (1,143,538)

Opening Deferred Tax Assets/ (Liabilities) (1,143,538) (1,039,468)

Add/(Less): Net Deferred Tax for the Year 79,116 (104,070)

Net Closing Deferred Tax Assets / (Liabilities) (1,064,422) (1,143,538)

EARNING PER SHARE (EPS)

The numerator and denominator used to calculate the basic I diluted earning per share.' Year ended Year ended 31.03.2006 31.03.2005

Profit after tax Rs. 30,488,963 7,949,470

Profit attributable to equity shareholders (numerator) Rs. 30,488,963 7,949,470

Total number of fully paid up equity shares of Rs. 10/- each at the end of year No. 9,504,950 9,504,950

Weighted average basic and diluted equity shares for the purpose of EPS (denominator) No. 9,504,950 9,504,950 Nominal value of per equity share Rs. 10 0

Basic and diluted earning per share Rs. 3.21 0.84

5. Other liabilities includes Rs. 233,623/- (Previous year Rs. 3,364,630/- as- creditors) due to M/s Frontline Capital Services Limited being the company under the same management as defined u/s 370(1B) of the Companies Act 1956.

6. Loans and advances includes Rs. 13,200,000/- (Previous year Rs. Nil) given to M/s FSL Software Technologies Limited being the wholly owned subsidiary company and the maximum amount outstanding during the year at any time Rs. 13,500,000/- (Previous year Rs. 145,564/-)

7. Loans and advances include Rs. 2,000,000/- (Previous year Rs.3,260,260/- given in cash margin to M/s Frontline Capital Services Limited being the company under the same management as defined under section 370(1B) of the Companies Act 1956 and the maximum amount outstanding during the year at any time Rs.12,640,523/- (Previous year Rs. 3,260,260/-).

8. There are no amounts payable to any small scale industrial undertaking.

9. As required under Section 205C of the Companies Act 1956, the company has transferred Rs. 60,153/- (Previous year Rs. NIL) to the Investor Education And Protection Fund (IEPF) during the year. As of March 31st 2006, no amount was due for transfer to IEPF

10. Estimated amount of contract remaining to be executed on capital and not provided for (Net of advance) is Rs. NIL (Previous Year Rs. NIL)

11. The main business of the company is consultancy, investment and finance. All other activities of the company revolve around the main business. As such, there are no separate reportable segments, as per Accounting Standard on Segment Reporting (AS-17), issued by the ICAI.

12. RELATED PARTY DISCLOSURE

A. List of Related Parties and description of Relationship

1. Subsidiary Company

FSL Software Technologies Limited (formerly known as Budha Floriculture Ltd.)

2. Investing party in respect of which company is an associate

Frontline Capital Services Limited

3. Individuals having significant influence or control

Mr. Rakesh K. Jain Mrs. Prema Jain

4. Relatives of individual having significant influence or control

Ms. Vidha Jain Ms. Aridhi Jain

5. Key Management Personnel

Mrs. Sarabjeet Kaur Mrs. Shikha Gupta

6. Enterprises over which person under above item A(3),(4),(5) have significant influence or control

Hope Consultants Ltd. Avi Growth Avenue Pvt. Ltd. Frontcap Securities Pvt. Ltd. Jain Singhal & Associates Ample Consultants Pvt. Ltd. Frontline Capital Services Ltd.

B. Details of transactions relating to Person referred in item A above.

(Amount in Rs.)

For the Year For the Year ended 2006 ended 2005

1. Remuneration to key managerial personnel

- Sarabjeet Kaur 160,170 144,562

- Shikha Gupta 104,299 264,469 - 144,562

2. Other Expenditures

- FSL Software Technologies Ltd. 1,040,000 165,300

- Frontline Capital Services Ltd. 728,862 1,768,862 259,358 424,658

3. Interest Income on Cash Margin - Frontline Capital Services Ltd. 107,082 107,680

4. Investment in Equity Share Capital

- FSL Software Technologies Ltd. 7,660,110 7,660,110

5. Loans & Advances (Current Assets) - FSL Software Technologies Ltd. 13,200,000 -

- Frontline Capital Services Ltd. 2,000,000 15,200,000 3,260,260 3,260,260

6. Advance taken (Current Liabilities)

- Frontline Capital Services Ltd. 233,623 3,364,630

13. Previous year's figures have been regrouped / recasted wherever considered necessary.

'AS PER OUR REPORT ATTACHED OF EVEN DATE'

For J. JAIN & COMPANY Chartered Accountants

(JAYANTI JAIN) Proprietor M.No.83450

FOR AND ON BEHALF OF THE BOARD

(ATUL K. JAIN) Director

(PRERNA JAIN) Director

(SARABJEET KAUR) Director & Company Secretary

Place : New Delhi Dated : 29.06.2006

1. In the opinion of the Board, the current assets, loans and advances have a value on realisation in the ordinary course of business, at least equal to the aggregate amount as shown in the Balance sheet.

2. Directors remuneration paid is as under:

Particulars For the Year For the year ended 31.3.2005 ended 31.3.2004

Salary and other benefits (Rs.) 1,37,561/- 1,37,673/-

Contribution to Provident/other fund (Rs.) 7.001/- 7.190/-

3. Contingent Liabilities

Uncalled liability on partly paid shares is Rs. 94.900/- (Previous year Rs. 94.900/-)

4. Additional information pursuant to the provisions of Para 4, 4A, 4C and 4D of Part-II of Schedule VI to the Companies Act, 1956 to the extent applicable are given below:

a) Opening and closing stock of shares/units:

Particulars No. of shares/Units Value (Rs.)

Opening stock of shares/units of Indian 81,57,549 10,91,78,361

Companies/Mutual Funds. (81,46,574) (9,16,51,202)

Closing stock of shares/units of Indian - -

Companies/Mutual Funds. (81,57,549)(10,91,78,361)

b) Purchase and sale of shares/units of Indian Companies/Mutual funds

Particulars PURCHASES SALES Qty. [Nos.] Value [Rs.] Oty. [Nos.] Value [Rs.]

Shares/Units of Indian 170,02,162 21,26,18,226 2,51,59,711 32,01,14,802

Companies/ Mutual funds (3,59,48,856) (54,73,94,303) (3,59,37,881) (52,66,46,012)

Note : (i) Figures in brackets pertain to previous year.

(ii) Above number of shares/units and amount of Opening stock, Closing stock, Sale and Purchase do not include number of shares and amount for transactions of hedging in securities/speculation and futures in respect of securities in speculation/future option, and further the company has earned a net profit of Rs. 511,925/- (Previous year Rs. 3,951,159/-) in respect of speculation/future option transactions.

c) (i) Expenditure in foreign currency: Rs. Nil [Previous year Rs. 8,932/-]

(ii) Earning in foreign currency: Rs. Nil [Previous year Rs. 5,87,801/-]

5. INCOME TAX

Company has accounted for Deferred Tax in accordance with Accounting Standard-22 (AS-22) "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India and accordingly deferred tax assets and liabilities are recognized.

The net cumulative tax effect of significant timing difference that results in deferred tax assets and liabilities and description of items thereof that creates these differences is as follows:

Particulars As on 31.03.2005 As on 31.03.2004

A. Deferred Tax Assets

- Unabsorbed Losses/Depreciation - -

- Others 512 14,852

512 14,852

B. Deterred Tax Liabilities

- Depreciation Difference (1,144,050) (1,054,320)

Net Deferred Tax Assets/(Liabilities) [A-B](1,143,538) (1,039,468)

Opening Deferred Tax Assets/(Liabilities) (1,039,468) (1,727,132)

Add/(Less): Net Deferred Tax for the Year (104,070) 687,664

Net closing Deferred Tax Assets/(Liabilities) (1,143,538) (1,039,468)

6. RELATED PARTY DISCLOSURE

A. List of the related partes and description of relationship

1. Subsidiary Company PSL Software Technologies Limited (formerly known as Budha Floriculture Ltd)

2. Investing Party in respect of which Frontline Capital Services Limited Company is an Associate

3 Individuals having significant influence or control. Mr. Rakesh K. Jain Mrs. Prerna Jain

4 Relatives of Individual having significant Influence or Control. Ms VidhaJain Ms Aridhi Jain

5. Key Management Personnel Ms. Sarabjeet Kaur

6. Enterprises over which person under above item A (3), A (4) & A (5) have significant influence or control.

Hope Consultants Ltd. Avi. Growth Avenues Pvt. Ltd. Frontcap Securities Pvt. Ltd. Jain Singhal & Associates Ample Consultants Private Limited Frontline Capital Services Ltd.

7. EARNING PER SHARE (EPS)

The numerator and denominator used to calculate the basic/diluted earning per share.

Particulars Year ended Year ended 31.03.2005 31.03.2004

Profit alter tax Rs. 7,949,470 39,394,778 Profit attributable to equity shareholders (numerator) Rs. 7,949,470 39,394,778

Total number of fully paid up equity shares of Rs. 10/- each at the end of year No. 9,504,950 9,504,950

Weighted average basic and diluted equity shares for the purpose of EPS (denominator) No. 9,504,950 9,504,950

Nominal value of per equity share Rs. 10 10

Basic and diluted earning per share Rs. 0.84 4.14

8. Other liabilities include Rs. 3,364,630/- (previous year Rs. 26,60,744/- as debtors) due to M/s Frontline Capital Services Limited being the company under the same management as defined u/s 370(1B) of the Companies Act 1956.

9. Loans and advances includes Rs. Nil (Previous year Rs. 145.564/-) given to M/s FSL Software Technologies Limited being the wholly owned subsidiary company and the maximum amount outstanding during the year at any time Rs. 145,564/- (previous year Rs. 41,43,188/-) -

10. Loans and advances include Rs. 3,260,260/- (previous year Rs. 20,00,000/-) given in cash margin to M/s Frontline Capital Services Limited being the company under the same management as defined under section 370(1 B) of the Companies Act 1956 and the maximum amount outstanding during the year at any time Rs. 3,260,260/- (previous year Rs. 20,00,000/-).

11. Payment made to the auditors firm are as under:

Particulars For the year ended For the year ended 31.03.2005 31.03.2004 (Rupees) (Rupees)

Audit Fee 10,000 10,000

Tax Audit Fee 2,500 2,500

Consultancy Matters 1,00.000 1,00,000

12. Financial statements of the company for the current year are prepared for twelve months (i.e. from 1st April 2004 to 31st March 2005).

13. Previous years figures have been regrouped/recasted wherever considered necessary.

1. In the opinion of the Board, the current assets, loans and advances have a value on realisation in the ordinary course of business, at least equal to the aggregate amount as shown in the Balance sheet.

2. Directors remuneration paid is as under:

For the Year ended For the period ended particulars 31-03-2004 [Rs] 31-03-2003 [Rs]

Salary and other benefits 1,37,673/- 59.893/-

Contribution to Provident/other Fund 7,190/- 3.105/-

3. Contingent Liabilities

Uncalled liability on partly paid shares Rs.94,900/- (Previous Period Rs.94,900/-)

4. Additional information pursuant to the provisions of Para 4, 4A, 4C and 4D of part-ll of Schedule VI to the Companies Act, 1956 to the extent applicable are given below:

a) Opening and closing stock of shares/units:

Particulars No.of Shares/Units Value [Rs.]

Opening stock of shares/units of Indian 8,146,574 91,651,202

Companies/Mutual funds (9,628,932) (106,699,924)

Closing stock of shares/units of Indian 81,57,549 10,91,78,361

Companies/Mutual funds (8,146,574) (91,651,202)

b) Purchase and sale of s hares/units of Indian Companies/Mutual funds

Particulars Purchases Sales Qty.[Nos.] Value [Rs.] Qty. [Nos.] Value [Rs.]

Shares/Units of Indian 3,59,48,856 54,73,94,303 3,59,37,881 52,66,46,012 Companies/ Mutual funds (23,412,083) (290,765,826) (24,894,441) (312,443,116)

Note:

(i) Figures in brackets pertain to previous periods.

(ii) Above number of share/units and amount of Opening stock, Closing stock, Sales and Purchase do not include number of shares and amount for transactions of hedging in securities/speculation and further, Company has earned a Net profit of Rs.39,51,159/- (previous Period Rs.34,585/-) in speculation/hedging pf Securities transactions.

c) (i) Expenditure in foreign currency: 8.932/- [Previous period Rs. Nil/-]

(ii) Earning in foreign currency: Software Revenues Rs.5,87,801/- [Previous period 12,99,652/-].

5 INCOME TAX

Company has accounted for Income Tax in compliance with Accounting Standard-22 (AS-22) "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India and accordingly deferred tax assets and liabilities are recognised.

The net cumulative tax effect of significant timing difference that results in deferred tax assets and liabilities and description of items thereof that creates these differences are as follows:

As on As on 31.03.2004 31.03.2003

A. Deferred Tax Assets

-Unabsorbed Losses/Depreciation - 45,276

-Others 14,852 51,006

14,852 96,282 B. Deferred Tax Liabilities

-Depreciation Difference 10,54,320 18,23,414

Net Deferred Tax Assets/Liabilities [A-B] (10,39,468) (17,27,132)

Opening Deferred tax assets/(liabilities) (17,27,132) 7,65,633

Add/(Less): Net Deferred Tax for the year 6,87,664 (24,92,765)

Net closing deferred tax assets/(liabilities) (10,39,468) (17,27,132)

6. SEGMENT REPORTING

(i) Segment Information has been provided in conformity with Accounting Policies adopted in preparation and presentation of financial statements of the company.

(ii) The company has disclosed Business Segment as primary segment. The Segment has been identified taking into account the nature of goods/services, the different risk and return, organisation structure and internal, reporting system.

(iii) The company is mainly engaged in the Business of Finance, Investment & Consultancy services and Software Business. Finance, Investment & consultancy services and Software Business have been identified as reportabte segment as per quantitative Criteria specified in Accounting Standard 17 (AS17) Segment Reporting issued by the Institute of Chartered Accountants of India.

(iv) Companys operations are mainly in domestic market and the export turnover is not significant in the context of total turnover of the company therefore there Is no reportable geographical segment.

(v) Segment Revenue, Segment Result Segment Assets. Segment Liabilities Include respective amount identifiable to each segment and also Include amount allocated on reasonable basis. The expenses and income, which are not attributable to or allocated on reasonable basis to business segment are shown as unallocated corporate income.

(vi) Assets and liabilities that cannot be allocated between the segments are shown as a part of unallocated corporate assets and liabilities respectively.

(vii) During the year, Company has transferred its Software business namely FSL Technologies to FSL Software Technologies Limited being the wholly owned Subsidiary Company. Segment information with respect to such Software Business has been presented in these Segments information till the date of transfer of Software Business and accordingly figure of the current period of Software Business are not comparable with the previous period.

(viii) Information about Primary Segment (Business)

T. RELATED PARTY DISCLOSURE

A List the related partes and description of relationship

1. Subsidiary Company FSL Software Technologies Limited (formerly known as Budha Floriculture Ltd)

2 Inverting Party in respect of which Frontline Capital Services Limited Company is an Associates

3 Individuals having significant influence Mr. Rakesh K. Jam or control. Mrs. Prema Jain

4 Relatives of Individual having significant Ms Vidha Jain Influence or Control. Ms Aridhi Jain

5. Key Mangement Personnel Mr. Jeelendra Garg Ms. Sarabjeet Kaur

6. Enterprises over which person under Hope Consultants Ltd. above item A (3), A (4) & A (5) have Avi Growth Avenues Pvt Ltd. significant influence or control. Frontcap Securities Pvt. Ltd. Jain Singhal & Associates Ample Consultants Private Limited Frontline Capital Services Ltd.,

8. EARNING PER SHARE (EPS)

The numerator and denominator used to calculate the basic and diluted earning per share

Year ended Period ended 31.03.2004 31.03.2003

Profit after Tax Rs. 39.394,778 51,92,682

Profit attributable to equity shareholders (numerator) Rs. 39,394,778 51,92,682

Total Number of Fully Paid up equity shares of Rs.10/- No. 9,504,950 9,504,950 each at the end of period

Weighted Average Basic and Diluted Equity Shares for No. 9,504,950 9,504,950 the purpose of EPS (Denominator)

Nominal value of per equity share Rs. 10 10

Basic and Diluted Earning per Share Rs. 4.14 0.55

9. Sundry debtors includes Rs.26,60,744/- (previous period Rs.1,12,549/-) due from M/s Frontline Capital Services Ltd being the company under the same management as defined u/s 370(1 B) of Companies Act 1956.

10. Loan and advances includes Rs 145,564/-(Previous period Rs Nil-) given to M/s FSL Software Technologies Limited being the wholly owned subsidiary Company and the maximum amount outstanding during the year at anytime Rs 41,43,188/- (previous period Nil).

11. Loan and advances includes Rs 20,00,000/- (Previous period Rs NIL) given as cash margin to M/s Frontline Capital Services Limited being the company under the same management as defined under section 370(1 B) of the Companies Act 1956 and the maximum amount outstanding during the year at any time Rs 20.00.000/- (previous period Nil).

12. The Company has transferred its Software Business namely FSL Technologies to FSL Software Technologies Limited being the wholly owned Subsidiary Company on 5th August 2003 on going concern basis. Hence these financial statements contain the financial information with respect to such software business from 1st April 2003 to 5th August 2003 as against eight month in previous period (i.e. 1st August 2002 to 31st March 2003). Further besides such Software Business, Company is also engaged in the Business of Finance, Investment & Consultancy services and accordingly the transfer of Software Business has not affected the going concern assumption of the Company,

13. Payment made to auditors firm are as under:

For the Year ended For the period ended Particulars 31-03-2004 31-03-2003 [Rupees] [Rupees]

As an Audit Fee 10,000 7,500

As an Tax Audit fee 2,500 2,500

As an Consultancy Matters 1,00,000

14. Financial statements of the company for the current year are prepared for twelve months (i.e. from 1st April, 2003 to 31st March, 2004) as against eight months in the previous period (i.e. 1st August 2002 to 31st March 2003). Hence to that extent current year figures of these financial statements are not comparable with the previous period figures.

15. Previous years figures have been regrouped/recasted wherever considered necessary.

1. In the opinion of the Board, the current assets, loans and advances have a value on realisation in the ordinary course of business, at least equal to the aggregate amount as shown in the Balance sheet.

2. Directors remuneration paid is as under:

Particulars For the period ended For the year ended on 31.03.2003 [Rupees] on 31.07.2002 [Rupees]

Salary and other benefits 59,893/- 274,034/-

Contribution to Provident/other Fund 3,105/- 19,613/-

3. Contingent Liabilities

Uncalled liability on partly paid shares Rs. 94,900/- (previous year Rs.94,900/-)

4. Additional information pursuant to the provisions of Para 4, 4A, 4C and 4D of part-II of Schedule VI to the Companies Act, 1956 to the extent applicable are given below:

a) Opening and closing stock of shares/units:

Particulars No. of Shares/Units Value [Rs.]

Opening stock of shares/units of 9,628,932 106,699,924

Indian Companies/Mutual funds (2,471,643) (35,142,851)

Closing stock of shares/units of 8,146,574 91,651,202

Indian Companies/Mutual funds (9,628,932) (106,699,924)

Note : (i) Figures in brackets pertain to previous years.

(ii) Above number of shares/units and amount of Opening stock, Closing stock, Sale and Purchase do not include number of snares and amount for transactions of securities in speculation/future & option, and further, company has earned a Net profit of Rs. 34,585/- (previous year Rs. 1,47,690/-) in. speculation/future & option transactions.

c) (i) Expenditure in foreign currency: Nil/- [Previous year Rs. Nil/-]

(ii) Earning in foreign currency: Software Development charges Rs. 12,99,652/- [Previous year Rs. 877,300/-] and consultancy charges Nil [Previous year Rs. 57,553/-

5. INCOME TAX

Company has accounted for Income Tax in compliance with Accounting Standard-22 (AS-22) "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India and accordingly deferred tax assets and liabilities are recognised.

The net cumulative tax effect of significant timing difference that results in deferred tax assets and liabilities and description of items thereof that creates these differences are as follows:

As on As on 31.03.2003 31.07.2002 A. Deferred Tax Assets

Unabsorbed Losses/Depreciation 45,276 1,931,766

- Others 51,006 117,546

96,282 2,049,312

B. Deferred Tax Liabilities

Depreciation Difference 18,23,414 1,283,679

Opening Deferred tax assets/inabilities 7,65,633 3,843,633

Less: Net Deferred Tax for the period 24,92,765 3,078,000

Net closing deferred tax assets/(liabllities) (17,27,132) 765,633

In the opinion of the management, there would be sufficient future taxable income as evident from current period profitability, against which above deferred tax assets on account of unabsorbed losses/depreciation can be realised.

6. SEGMENT REPORTING

(i) Segment Information has been provided in conformity with Accounting Policies adopted in preparation and presentation of financial statements of the company.

(ii) The company has disclosed Business Segment as primary segment. The Segment has been identified taking into account the nature of goods/Services, the different risk and return, organisation structure and internal reporting system.

(iii) The company is mainly engaged in the Business of Finance, Investment & Consultancy services and Software Development. Finance, Investment & consultancy services and Software Development have been identified as reportable segment as per quantitative Criteria specified in Accounting Standard 17 (AS-17) "Segment Reporting" issued by the Institute of Chartered Accountants of India.

(iv) Companys operations are mainly in domestic market and the export turnover is not significant in the context of total turnover of the company therefore there is no reportable geographical segment.

(v) Segment Revenue, Segment Result, Segment Assets, Segment Liabilities include respective amount identifiable to each segment and also include amount allocated on reasonable basis. The expenses and income, which are not attributable to or allocated on reasonable basis to business segment, are shown as unallocated corporate income.

(vi) Assets and liabilities that cannot be allocated between the segments are shown as a part of unallocated corporate assets and liabilities respectively.

9. Financial statements of the company for the current period are prepared for eight months (i.e. from 1st August, 2002 to 31st March, 2003) as against twelve months in the previous year. Hence to that extent current period figures of these financial statements are not comparable with the previous year figures.

10. Previous years figures have been regrouped/recasted wherever considered necessary.

1. Contingent Liabilities:

(i) Guarantee given to bank on behalf of a company under the same management is Nil (Previous year Rs.350 Lac)

(ii) Uncalled liability on partly paid shares Rs. 94,900/-.

2. In the opinion of the Board, the current assets, loans and advances have a value on realisation in the ordinary course of business, at least equal to the aggregate amount as shown in the Balance sheet.

3. Directors remuneration paid is as under:

Particulars 2001-2002 (Rs.) 2000-2001 (Rs.)

Salary and other benefits 274034/- 287,500/-

Contribution to Provident/other Fund 19613/- 9,600/-

4. Additional information pursuant to the provisions of Para 4, 4A, 4C and 4D of part-II of Schedule VI to the Companies Act, 1956 to the extent applicable are given below:

a) Opening and closing stock of shares/units:

Particulars No. of Value (Rs.) Shares/Units Opening stock of shares/units of Indian 2,471,643 35,142,851

Companies/Mutual funds (599,364) (40,610,411)

Closing stock of shares/units of Indian 9,628,932 106,699,924

Companies/Mutual funds (2,471,643) (35,142,851)

b) Purchase and sale of shares/units of Indian Companies/Mutual funds

Particulars PURCHASES SALES Qty. (Nos.) Value (Rs.) Qty. (Nos.) Value (Rs.) Shares/Units of Indian 27,338,642 341,658,544 20,181,353 281,069,396

Companies/ Mutual funds (4,955,483) (134,725,065) (3,083,204) (114.906,179)

Note:

(i) Figures in brackets pertain to previous years.

(ii) Above number of shares/units and amount of Opening stock, Closing stock, Sale and Purchase do not include number of shares and amount for transaction of securities in badla/ALBM/speculation/future option, and! further company has earned a Net profit of Rs.147690 (previous year Rs.6,503,837) in transaction of badla/ALBM/speculation/future option transactions.

c) (i) Expenditure in foreign currency: Nil/- (Previous year Rs. Nil/-)

(ii) Earning in foreign currency: Software Development charges Rs.877,300 and consultancy charges Rs.57,553 (Previous year consultancy charges Rs.317,648/-)

5. INCOME TAX

During the year company has first time accounted for Deferred Tax in accordance with Accounting Standard-22 (AS-22) "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India. Consequently the company has recognised in these Financial Statement the net Deferred Tax Assets of Rs.30,47,852/- for transitional period upto March 31, 2001 by way of Crediting to General Reserve and Rs.7,95,781/- for the period 01.04.2001 to 31.07.2001 to opening balance of Profit & loss Account as on August, 1, 2001 The net cumulative tax effect of significant timing difference that results in deferred tax assets and liabilities and description of items (hereof that creates these differences is as follows:

As on As on 31.07.2002 01.08.2001 A. Deferred Tax Assets

Unabsorbed Losses/Depreciation 1,931,766 4,632,151

Others 117,546 102,143

2,049,312 4,734,294

B. Deferred Tax Liabilities

Depreciation Difference 1,283,679 890,661

Opening Deferred tax assets/(liabilities) 3,843,633 -

Add/(Less): Net Deferred Tax 3,078,000 3,843.633

Net closing deferred tax assets/(liabilities) 765,633 3,843.633

In the opinion of the management, there would be sufficient future taxable income as evident from current year profitability, against which above deferred tax assets on account of unabsorbed losses/depreciation can be realised.

6. SEGMENT REPORTING

(i) Segment Information has been provided in conformity with Accounting Policies adopted in preparation and presentation of financial statements of the company.

(ii) The company has disclosed Business Segment as primary segment. The Segment has been identified taking into account the nature of goods/services, the different risk and return, organisation structure and internal reporting system.

(iii) The company is mainly engaged in the Business of Finance, Investment & Consultancy services and Software Development. Finance, Investment & consultancy services and Software Development have been identified as reportable segment as per quantitative Criteria specified in Accounting Standard 17 (AS-17) "Segment Reporting" issued by the Institute of Chartered Accountants of India.

(iv) Companys operations are mainly in domestic market and the export turnover is not significant in the context of total turnover of the company therefore there is no reportable geographical segment.

(v) Segment Revenue, Segment Result. Segment Assets, Segment Liabilities include respective amount identifiable to each segment and also include amount allocated on reasonable basis. The expenses, which are not attributable to or allocated on reasonable basis to business segment, are shown as unallocated corporate expenses.

7. RELATED PARTY DISCLOSURE

A. List of Related parties and description of Relationship

1. Associates

Frontline Capital Services Ltd.

2. Individuals having significant influence or control.

Mr. Rakesh K. Jain

Mrs. Prerna Jain

3. Key Management Personnel (Part of the Year)

Mr. Rajendra K. Mangal

Mrs. Sarabjeet Kaur

4. Enterprises over which person under above item A(2) & A(3) have significant influence or control.

Mope Consultants Ltd.

Avi Growth Avenues Pvt. Ltd.

Budlia Floriculture Pvt. Ltd.

Fronlcap Securities Pvt. Ltd.

Jain Singhal & Associates

Frontline Capital Services Ltd..

B. DETAILS OF TRANSACTIONS RELATING TO PERSON REFERRED IN ITEM A ABOVE FOR THE YEAR ENDED 31.07.2002.

Particulars of Associates Individual Key Enterprises Transaction and also having Management over which enterprises significant personnel pesons over which persons or influence mentioned mentioned in above Control in above item A(2) & A(3) item A(2) & A(3) have significant have significant influence influence Brokerage on sale/ purchase of securities 148,399 - - -

D.P. Charges 1,884 - - -

Remuneration Paid - - 293,647 -

Outstanding Balance 9,986 - - - Included in Current Assets

Outstanding Balance - - _ - Included in Current Liabilities

Closing Investment - - - - In Equity (Bonus Shares) See note below

Note: Besides above outstanding investments, during the year company has surrendered 7,38,000 shares in equity of that party under the Buy-back scheme.

9. Previous years figures have been regrouped/recasted wherever considered necessary.

1. Contingent Liabilities for guarantee given to bank on behalf of a company under the same management - Rs.350 Lacs (Previous year Rs.350 Lacs)

2. In the opinion of the Board, the current assets, loans and advances have a value on realisa- tion in the ordinary course of business, at least equal to the aggregate amount as shown in the Balance sheet and provisions for all known liabilities have been made are adequate.

3. Provision for taxation has been made on the basis of results for the previous year ended 31st March 2001. It has not been adjusted for the result of the subsequent period of four month ended 31st July 2001, as the provision for the subsequent period would depend upon the result of the remaining eight-month ending 31st March 2002.

4. Company has issued 50,00,000 equity shares of Rs. 10 each at a premium of Rs.4 per share on preferential basis during the year. The Company has already made an application with the Delhi Stock Exchange for their permission for listing and approval is awaited.

5. Amount Payable on calls on partly paid up shares (excluding interest) Rs. 94,900/- (Previous Year Rs 724,900/-)

6. Accounting policies and notes forming part of the account as per schedule - 17 & 18 are annexed.

7. Balance Sheet Abstract and company's general business profile as per schedule 19 is annexed.

8. The schedules referred above form an integral part of the Balance Sheet.

INVESTMENTS

1 a) Aggregate value of unquoted investment is Rs. 32,21,087/- (Previous year Rs. 32,21,087/-).

b) Aggregate value of quoted investment is Rs.1,94,95,307/- (previous year Rs.5,95,350/-) Market value of quoted investments is Rs.89,26,015/- (previous year Rs.109,55,700/-).

c) In the opinion of the management decline in the value of quoted Long term investments is temporary.

* Includes Rs. 928,594.38/- (Previous year Rs. 13,06,145/-) due from Frontline Capital Services Ltd. (Company under the same management engaged in stock broking) on account of sale of shares in the normal course of business.

* Includes Rs. Nil (Previous year Rs. 10,00,000/-) due from Frontline Capital Services Ltd. (Company under the same management) Maximum amount outstanding during the year Rs. 10,00,000/- (Previous year Rs. 30,00,000/-).

1. Contingent Liabilities for guarantee given to bank on behalf of a company under the same management - Rs.35,000,000.

2. In the opinion of the Board, the current assets, loans and advances have a value on realisation in the ordinary course of business, at least equal to the aggregate amount as shown in the Balance sheet.

3. Provision for taxation has been made on the basis of results for the previous year ended 31st March 2000. It has not been adjusted for the result of the subsequent period of four months ended 31st July 2000, as the provision for the subsequent period would depend upon the result of the remaining eight-month ending 31st March 2001.

4. During the year Rs. 827,010 [Previous year Rs. 826,797/-] received as lease rent including Rs. 95.726/- [Previous year Rs. 96,010/-] as advance.

5. The company has converted 1,26,000 Equity Shares of Flex Chemicals Ltd. (Paidup Value Rs. 5/- each) into long term investment on 1.8.1999 at market value.

6. Amount payable on calls on partly paid up shares (excluding interest) Rs. 7,24,900/- (Previous year Rs. 7,24,900/-).

7. Additional information pursuant to the provisions of Para 4, 4A, 4C and 4D of part - II of Schedule VI to the Companies Act, 1956 to the extent applicable are given below:

i. Figures in brackets pertain to previous years.

ii. Figures of opening/closing stock, purchase, sale do not include transaction of badla, albm and speculation.

c) Expenditure in foreign currency :-

Foreign Travel Rs. Nil/- [Previous year Rs.85,637/-]

8. Previous year's figures have been regrouped/recasted wherever considered necessary.

9. Directors' remuneration paid is as under :

Particulars 1999-2000 1998-1999 [Rupees] [Rupees]

Salaries and other benefits 232,000 216,000

10. The Company has provided depreciation on leased assets as per the recommendation of the ICAI. However, if the depreciation is being provided at the rates prescribed in schedule - XIV, the depreciation would have been lower by Rs. 282,740/- [Previous year Rs. 209,416/-] and accordingly the profit would have been higher by the same amount.

Information is taken from 1999-2000 annual reports therefore not available.

1. CONTINGENT LIABILITIES

Uncalled liability on partly paid shares Rs. 94,900\- (Previous Year Rs. 98,150\-).

2. The current period figures are of 13 months against 12 months figures in the previous year and to that extent the current period figures are not directly comparable with previous year's figure.

3. In the opinion of the Board, the current assets, loans and advances have a value on realisation in the ordinary course of business, at least equal to the aggregate amount as shown in the Balance Sheet.

4. The company has provided depreciation on leased assets as per the recommendation of the ICAI. However, if the depreciation is being provided at the rates prescribed in schedule-XIV, the depreciation would have been lower by Rs. 13,78,264\- (previous year Rs. 8,94,272\-) and accordingly the profit/loss would have been higher or lower respectively by the same amount.

5. During the period Rs. 29,51,091 (Previous year Rs. 24,27,233) received as lease rent including Rs. 3,55,228 (previous year Rs. 2,45,302) as advance. Further Rs. 1,18,304 (previous year Nil) was receivable on account of lease rent as at 31.7.97

6. Profit/Loss from dealing in shares includes Profit from speculation Rs. 3,70,357\- (Previous year Rs. 19,93,581\-)

1. CONTINGENT LIABILITIES

- Uncalled liability in partly shares Rs. 98,150/- (previous Year Rs. 1,46,500/-).

- Capital issue underwritten outstanding as on 30th June 1996 is Rs. 26,99,000/- (Previous Year Rs. 39,29,000/-).

2. In the opinion of the Board, the current assets, loans and advances have a value on realisation in the ordinary course of business, at least equal to the aggregate amount as shown in the Balance Sheet. 3. During the year the company has comeout with rights issue of 15,01,650 Equity shares aggregating Rs.1,87,70,625/-. The issue was opened on 26th June 1996 and closed on 25th July 1996 and the allotment was made on 20th August 1996.

4. Additional information pursuant to the provisions of Para 4, 4A, 4C and 4D of part-II of Schedule VI to the Companies Act, 1956 to the extent applicable are given below:

a) Opening and Closing Stock of Shares: Nos. of Value Shares (Rs.)

i) Opening Stock of Shares 1,53,725 1,50,77,729 of Indian companies (Nil) (Nil)

ii)Closing Stock of Shares 4,88,261 2,21,82,568 of Indian companies (1,53,725) (1,50,77,729)

Figures in bracket represents previous year)

b) Purchase and sale of shares of Indian companies:

Particulars PURCHASES SALES Qty.(Nos.) Value(Rs.) Qty.(Nos.) Value(Rs.)

Shares/debenture of Indian 22,60,016 34,09,82,176 19,25,480 33,22,06,621 companies (9,27,275)(18,64,12,913) (7,73,550) (17,57,71,330)

(Figures in bracket represents previous year

c. Earning in foreign exchange from consultancy charges Rs. Nil (Previous Year Rs.20,790/-).

5. Previous Year's figures have been regrouped/recast wherever necessary to make them comparable with that of current year's

SCHEDULE - 20 NOTES TO THE ACCOUNTS

1.CONTINGENT LIABILITIES

- Uncalled liability on partly paid shares Rs. l,46,500/-.

- Capital issue underwritten outstanding as on 30th June 1995 is Rs. 39,29,000/-

2. The accounts has been prepared from the date of incorporation i.e. 5th May 1994 to 30th June 1995. Since, this is the first accounting year no figure for previous year has been given.

3. In the opinion of the Board, the current assets, loans and advances have a value on realisation in the ordinary course of business, at least equal to the aggregate amount as shown in the Balance Sheet.

4. Directors' remuneration paid are as under:

Particulars Amount Rs.

Salaries and others 1,39,513

5. Additional information pursuant to the provisions of Para 4, 4A, 4C and 4D of part-II of Schedule VI to the Companies Act, 1956 to the extent applicable are given below:

a) Opening and Closing Stock of Shares:

Nos. of Value Shares (Rs.)

i) Opening Stock of Shares of Indian companies -- --

ii) Closing Stock of Shares of Indian companies 153725 15077729

b) Purchase and sale of shares of Indian companies:

Particulars PURCHASES SALES Qty.(Nos.) Value(Rs.) Qty.(Nos.) Value(Rs.)

Shares/ debenture of Indian companies 927275 186412913 773550 175771330

c. Earning in foreign exchange from consultancy charges Rs. 20,790/-.