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Page 1: 21 - Bombay Stock · PDF fileB.Com, CAIIB, Post Graduate ... laws, rules and regulations applicable from time to time . 3 ... shall be counted for the purpose of passing resolution
Page 2: 21 - Bombay Stock · PDF fileB.Com, CAIIB, Post Graduate ... laws, rules and regulations applicable from time to time . 3 ... shall be counted for the purpose of passing resolution

21st Annual Report 2013-14

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Mr. Kumar NairF.C.A., Chairman is the Managing Director of Transwarranty Finance Limited and has over two decades of experience in Financial Services, Capital Market and Investment Banking.

Mr. Ramachandran U.B.Com, FCA, has close to 3 decades experience in Audit and Accounting profession.

Mr. Jose Thomas PolachiraB.Com, CAIIB, Post Graduate Diploma in Banking, Industrial Relations & Personal Management, has close to 3 decades experience in banking with ���������������� ������������ ����������������

Mr. James PothenM.Sc has close to 3 decades of experience in various senior capacities in Reserve Bank of India.

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1

ANNUAL REPORT 2013-14

Contents

Corporate Information ...................................................... 1

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

Directors’ Report ................................................................ 8

Corporate Governance ...................................................... 12

Management Discussion and Analysis .......................... 19

Independent Auditors’ Report ......................................... 21

Balance Sheet ...................................................................... 24

������������� ������� ............................................... 25

Cash Flow Statement ......................................................... 26

Notes to the Financial Statements ................................... 27

Consolidated Financial Statements ................................. 47

Statement Pursuant to Section 212 of the Companies Act, 1956 ......................................................... 70

CORPORATE INFORMATION

BOARD OF DIRECTORSKumar Nair (Chairman & Managing Director)James PothenJose Thomas PolachiraU. Ramachandran

Company SecretarySandhya Nair

AUDITORS������������������������������Chartered Accountants,�������!���"#����$�%��&�Nariman Point, Mumbai - 400 021

BANKERSAxis BankBank of BarodaCanara BankFederal BankHDFC BankICICI BankSouth Indian BankState Bank of IndiaState Bank of Travancore

REGISTERED OFFICE$'()��*+�/:;��<<���$::+��<"�!������"#�����/�=�>���Market Road, Ernakulam,Kochi - 682 018Tel. No. 0484-2384848Fax No. 0484-2394209e-mail id : [email protected]

CORPORATE OFICE403, Regent ChambersNariman Point, Mumbai 400 021Tel. No. 91-022-6630 6090 / 40010900Fax No. 91-022-66306655e-mail id : [email protected]

REGISTRAR & TRANSFER AGENTS�V�W����X�'������'�=������W���=C-13, Pannalal Silk Mills Compound�Y�����&��Y���=�Z�[%���\�Mumbai 400 078Tel. No. 022-2596 3838Fax No. 022-2592 6969e-mail id : [email protected]

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2

VERTEX SECURITIES LIMITED

NOTICE

NOTICE is hereby given that the 18th Annual General ������&� � "����#������_� >������� ������=� #���� `�� ���=� ��� �W�C. Ghia Hall, Bhogilal Hargovindas Building, 2nd Floor, 18/20, ;��X���������`�������&�����`��j�::�::����%�=���=�_���

Notice is hereby given that the 21st Annual General Meeting of q����z� ����������� ������=� #���� `�� ���=� �� /:th September, 2014 at Conference Hall of the Company at Ground Floor, Amritha Towers, Kombara Junction, Market Road, Ernakulam, Cochin - 682 018 at 9.30 AM to transact the following businesses:

ORDINARY BUSINESS1. To receive, consider and adopt the Audited Statement of

�� �� ��=� ���� �� ���� �������� _���� ��=�=� ��st March, 2014, the Balance Sheet as at that date and the Reports of the Directors and Auditors to Shareholders.

2. To consider reappointment of Mr. Kumar Nair Managing ��������[�'(j::�/:{��\�#����������`_����������=�`���&����&�`���|����������������ZZ�������W

�W� "� ����=��� ���� ����������� � ��W� }����� ������ [�'(j:/�</��:\� #�� ��� Z�Z��=� �� `�� �ZZ����=� ��� ���independent Director.

4. To consider the retirement of Mr. Jose Thomas Polachira [�'(j:�:�<�~<\� #�� ��� Z�Z��=� �� `�� �ZZ����=� ��� ���independent Director.

{W� "� �ZZ������=����� ��=� �� z� ������ ������������ ��=� �������� ��&��=�� �� ����=�����=� �� ���&��� ��� ��Z����#������#������ �=� �����[�\�� ���� ��#��&� ��������� ��� ���Ordinary Resolution:

“RESOLVED THAT pursuant to Section 139 and other applicable provisions, if any, of the Companies Act, 2013 ���=� #���� ���� $�Z������ [��=��� ��=� ��=����\� �������2014 and other applicable rules, if any, M/s. Rahul Gautam �������������������$�������=����������������`���[>������&��������� (W� � �/:/<�%\� ���� �������&� ��=����� � ����Company, be and are hereby appointed as Auditors of the $�Z��_�������Z���=�����[�\�_���������=��������the conclusion of this Annual General Meeting until the conclusion of the twenty second Annual General Meeting of the Company, on such remuneration as may be decided `_�����Y��=���������������_�$���!��������W�

Special Business:*W� "� ����=��� ��=�� �� ���&��� ��� �� Z���� #���� �� #������

�=� �����[�\�� ���� ��#��&� ��������� ��� �� �Z������Resolution:

“RESOLVED THAT,� ��� Z������� �=� ������ �� ����resolution passed by the members at the Annual General Meeting held on 28th September, 2013 approving the appointment and terms of remuneration of Kumar Nair ��� ����&��&� �������� [�'(j::�/:{��\� ��� ����=����� #����the provisions of Sections 198, 269, 309, 310 read with Schedule XIII and other applicable provisions, if any, of the Companies Act, 1956, now pursuant to the provisions

of Sections 149, 152 and other applicable provisions, if any, of the Companies Act, 2013 read with the Companies [�ZZ�������� ��=� ����� ������ � ��������\� ������� /:���and other applicable rules, if any, the Company hereby approves the period of appointment as liable to retire by ������W�

“RESOLVED FURTHER THAT all other terms and conditions of appointment of Managing Director as approved earlier by the members shall remain ������&�=W�

+W� "� ����=��� ��=�� �� ���&��� ��� �� Z���� #���� �� #�������=� �����[�\�� ���� ��#��&� ��������� ��� ��� ��=����_�Resolution:

“RESOLVED THAT pursuant to the provisions of Sections 149, 152 and other applicable provisions, if any, of the Companies Act, 2013 read with the Companies [�ZZ�������� ��=� ����� ������ � ��������\� ������� /:�����=�������ZZ����`���������� ����_����W�}�����������[�'(j:/�</��:\�� `�� ��=� ��� ����`_� �ZZ����=� ��� ��� '�=�Z��=�����������������$�Z��_������Z���=�� ���[{\�_������������`������������`_�������W�

~W� "� ����=��� ��=�� �� ���&��� ��� �� Z���� #���� �� #�������=� �����[�\�� ���� ��#��&� ��������� ��� ��� ��=����_�Resolution:

“RESOLVED THAT pursuant to the provisions of Sections 149, 152 and other applicable provisions, if any, of the Companies Act, 2013 read with the Companies [�ZZ�������� ��=� ����� ������ � ��������\� �������2014 and other applicable rules, if any, Mr. Jose Thomas ��������� [�'(j:�:�<�~<\�� `�� ��=� ��� ����`_� �ZZ����=� ���an Independent Director of the Company, for a period of ��[{\�_������������`������������`_�������W�

<W� "� ����=��� ��=�� �� ���&��� ��� �� Z���� #���� �� #�������=� �����[�\�� ���� ��#��&� ��������� ��� �� �Z������Resolution:

“RESOLVED THAT pursuant to the provisions of Foreign �z����&������&������������<<<�[>���\���=�����>���&���z����&�� ����&������ ["������� �� ������ � �������_� `_� ��Z���������=��������=��'�=��\���&���������/:::��������=���� �Y'� (�� ������ (W� >���� /:V/:::j�Y� =���=� �rd May /:::�� >� �� �� ["������� �� '����� � �������_� `_� �� ����������=���� ����=�� '�=��\� [����=����\� ��&��������� /::���������=� ��� (�� ������ (W� >���W� �{� V/::�j�Y� =���=���Z���`���/:��/::����=�>���["���������'�������������_�`_�������������=��������=�� '�=��\� [����=�����=����\���&��������� /::�� �������=� ��� (�� ������ (W� >���W�94/2003-RB dated 18th June 2003 and subject to the relevant laws, rules and regulations applicable from time to time

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3

ANNUAL REPORT 2013-14

and subject to such consents, sanctions and permissions as may be required, consent of the members be and is hereby accorded for acquiring and holding Equity Shares � ���� $�Z��_�� `_� >���&�� '������������ '�������� [>''�\��upto an aggregate limit of 100% of the paid up Equity Share Capital of the Company. Provided, however, that the equity shareholding of a single FII or a sub-account of an FII in the Company shall not at any time exceed 10 percent of the paid up Equity Share Capital of the $�Z��_W�

“RESOLVED FURTHER THAT such increased limits of the holdings of FIIs/sub accounts of FIIs be subject to such conditions as may be imposed by Reserve Bank of India or any other Statutory Authority whose permission or ����������_�`���������=���=�����_���#W�

“RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorized to do all ����� ������ =��=��� ��!���� ��=� ����&�� ��=� �z������ ���� �����documents, deeds and writings as may be required for ���� ������=� Z��Z��� ��=� #����� ��� ��_� =���� �� ��� ������������������$�Z��_W�

By Order of the Board of Directors, For VERTEX SECURITIES LIMITED

Place : Kochi - 18 SANDHYA R. NAIR Date : 18.07.2014 Company Secretary

NOTES:

1. An Explanatory Statement pursuant to Section 102 of the Companies Act, 2013 relating to the Special Businesses to `�� ���������=� ��� ���� ������� �������� ������&� [���\� ���annexed hereto

2. A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE ON HIS / HER BEHALF AND THE PROXY NEED NOT BE A MEMBER OF THE COMPANY. Pursuant to the provisions of Section 105 of the Companies Act, 2013, a person can act as a proxy on `����� � ��� ���� ����� �_� ���`���� ��=� ��=��&� ���aggregate not more than ten percent of the total Share Capital of the Company. Members holding more than ten percent of the total Share Capital of the Company may appoint a single person as proxy, who shall not act as a proxy for any other Member. The instrument of ��z_�� ��� �=��� �� `�� �|�������� ����=� `�� =�Z����=� ��� ������&������=� ����� � ���� $�Z��_�� =��_� ��Z����=� ��=�signed, not later than 48 hours before the commencement of the meeting. A Proxy Form is annexed to this Report. ��z���� ��`��!�=� �� `����� � ������=� ��Z�������societies, etc., must be supported by an appropriate

resolution / authority, as applicable.

3. The Register of Members and Share Transfer Books of the Company will remain closed from September 11, 2014 �� ��Z���`��� /:�� /:��� [`��� =�_�� ���������\W� "��� `X�������� =����� ����� `���� z�=� ��� ����������� #���� ����Stock Exchanges.

4. Pursuant to Section 101 and Section 136 of the Companies Act, 2013 read with relevant Rules made thereunder, Companies can serve Annual Reports and other communications through electronic mode to those Members who have registered their e-mail address either with the Company or with the Depository. Members who have not registered their e-mail address with the Company can now register the same by notifying the company at [email protected]. Members holding shares in demat form are requested to register ������ �j����� �==����� #���� ������ ��Z����_� �������Z���[�\�only. Members of the Company, who have registered their e-mail address, are entitled to receive such communication in physical form upon request.

{W� "��� (����� � ����� ������� ��Z��� ��=� �!��=�����Slip are being sent in electronic mode to Members whose e-mail IDs are registered with the Company or ���� ��Z����_� �������Z���[�\� ������� ���� ���`���� �����registered their request for a hard copy of the same. Physical copy of the Notice of AGM, Annual Report and �!��=����� ���Z� ���� `���&� ����� �� ����� ���`���� #��have not registered their e-mail IDs with the Company �� ��Z����_� �������Z���[�\W� ���`���� #�� ����� �������=����� (����� � ����� ������� ��Z��� ��=� �!��=����� ���Z���� ���������� �=�� ���� ��������=� �� Z����� ���� �!��=��������Z� ��=� ��`���� �� =��_� ���=� ��� �!��=����� ���Z� ��� ������&�������������������!��=��������W

6. Pursuant to Section 108 of the Companies Act, 2013, read with the relevant Rules of the Act, the Company is pleased to provide the facility to Members to exercise their right to vote by electronic means. The Members, whose names �ZZ���� ��� ���� ��&������ � ���`���� V� ����� � Y��� �����Owners as on 10th September, 2014 i.e. the date prior to the commencement of book closure date are entitled to vote on the Resolutions set forth in this Notice. The e-voting period will commence at 9.30 am 15th September, 2014 and will end at 5.30 pm on 16th September, 2014. The Company has appointed Mr. K P Gopimohan, Practising Company Secretary, to act as the Scrutinizer, for conducting the scrutiny of the votes cast. The Members desiring to vote through electronic mode may refer to the detailed Z���=�������j����&�&���������������W

7. The Scrutinizer shall, within a period of not exceeding ������[�\�#�X��&�=�_������������������������j����&�period, unlock the votes in the presence of at least two witnesses, not in the employment of the company and make a Scrutinizers Report of the votes cast in favour or

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4

VERTEX SECURITIES LIMITED

against, if any, and submit forthwith to the Chairman of the company.

8. In the event of a poll, please note that the members who have exercised their right to vote by electronic means or through ballot form as above shall not be eligible to vote by way of poll at the meeting. The poll process shall be conducted and scrutinized and report thereon will be prepared in accordance with the provisions of Section 109 of the Companies Act, 2013 read with the relevant Rules. In such an event, votes cast under the poll, taken together with the votes cast through e-voting and using ballot form shall be counted for the purpose of passing resolution.

<W� ��`����� �� ���� �����Z�� � ��������� ������ ���� ���������shall be deemed to be passed at the 21st Annual General Meeting of the company scheduled to be held on Friday 20th September, 2014. At the said Annual General Meeting the Chairman shall declare the results of e-voting. The results declared along with the Scrutinizers Report shall be placed on the Company’s website and on the website � ���X� '������ '�=��� ���W� ��=W�� #������ �#� =�_�� � ����passing of the resolutions at the 20st Annual General Meeting of the company and shall also be communicated to the Stock Exchange/s.

10. The Members desiring to vote through electronic mode may refer to the detailed procedure on e-voting given ����������W

PROCEDURE FOR E-VOTING:

The instructions for members for voting electronically are as under:-

In case of members receiving e-mail:

[�\� �&����������j����&�#�`�����www.evotingindia.com

[��\� $���X����������=������`W

[���\� (#�� ������� ���� $����(�� (���� ��� ���� =�Z� =#��menu and click on SUBMIT

[��\� (#�������_��������'�

�W� >��$���)��*�=�&����`��� ����_�'��

`W� >�� (���)� ~� $��������� ��� '�� ��#�=� `_� ~� ��&����Client ID,

c. Members holding shares in Physical Form should enter Folio Number registered with the Company.

[�\� (�z�� ������ ���� '��&�� q��� ������ ��� =��Z��_�=� ��=� $���X����&��W

[��\� '� _�� ���� ��=��&� ������� ��� =����� ��� ��=� ��=� �&&�=�on to www.evotingindia.com and voted on an earlier voting of any company, then your existing password is to be used.

[���\� '�_�������� ����������������#��������Z��&�����`��#)

For Members holding shares in Demat Form and Physical Form

PAN* Enter your 10 digit alpha-numeric *PAN issued `_� '����� "�z� ��Z�������� [�ZZ����`��� ��both demat shareholders as well as physical �������=���\

� Members who have not updated their PAN with the Company/Depository Participant ���� ��������=� �� ���� ���� ���� �#� ��!���� �their name and the last 8 digits of the demat ������V������`������������(� ��=W

� In case the folio number is less than 8 digits enter the applicable number of 0’s before the ���`��� ����� ���� ���� �#� ����������� � ��������� ��� $��'"��� ��!���W� �&W� '� _��� �����is Ramesh Kumar with folio number 100 �������������:::::�::����������(� ��=W

DOB# Enter the Date of Birth as recorded in your demat account or in the company records for the said demat account or folio in dd/mm/yyyy format.

Dividend Bank Details#

Enter the Dividend Bank Details as recorded in your demat account or in the company records for the said demat account or folio.

� Please enter the DOB or Dividend Bank Details in order to login. If the details are not recorded with the depository or company please enter the number of shares ����� ��� �� ��� � ���� ��� �� ���� in the ������ ���� ���������������

[����\� ����� �������&� ������ =������� �ZZ�Z������_�� ����X� ��SUBMIT tab.

[�z\� ���`���� ��=��&� ������� ��� Z�_������ ��� #���� ����� ������directly the Company selection screen. However, members holding shares in demat form will now reach ‘Password Creation’ menu wherein they are required to mandatorily ������ ������ �&��� Z���#�=� ��� ���� ��#� Z���#�=� ��=W�Kindly note that this password is to be also used by the demat holders for voting for resolutions of any other company on which they are eligible to vote, provided ����� ��Z��_� Z��� �� �j����&� ����&�� $���� Z�����W�It is strongly recommended not to share your password with any other person and take utmost care to keep your Z���#�=��� =������W

[z\� >�� ���`���� ��=��&� ������� ��� Z�_������ ���� ���� =�������can be used only for e-voting on the resolutions contained in this Notice.

[z�\� $���X� �� ���� �q�(� �� ���� ��������� �$�Z��_� (����� ��which you choose to vote.

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ANNUAL REPORT 2013-14

[z��\� ��� ���� ����&� Z�&��� _�� #���� ���� ������"'�(����$�'�"'�(� ��=� �&������ ���� ����� ���� Z���� ���V(���� ����&W� ������� ���� Z���� ���� �� (�� ��� =�����=W� "���Z���� ���� ��Z����� ����� _�� ������� �� ���� ��������� ��=�option NO implies that you dissent to the Resolution.

[z���\� $���X� �� ���� ������"'�(�� >'��� �'(;� �� _�� #���� ��view the entire Resolution details.

[z��\� �������������&��������������_�������=���=�=��������������X�����Y�'"W����� �������`z�#����`��=��Z��_�=W� '�_��#�������� ���_������������X����;�������������&��_������������X���$�($�����=�����=��&�_��=�_�_���vote.

[z�\� �����_��$�(>'���_�����������������������_��#����not be allowed to modify your vote.

[z��\� ��� ���� ���� ��X�� ��� Z����� � ���� ����&� =��� `_� _�� `_�clicking on Click here to print option on the Voting page.

[z���\�'� ������ ������� ��=��� ���� �&!��� ���� ����&�=�password then Enter the User ID and the image ���� �������=����=�����X���>�&������#�=�������������details as prompted by the system.

�� '������������ �������=���� [�W�W� ����� �����'�=���=������ ��>�� (�'� ���W\� ���� �������=� �� �&�on to �!Z�)VV###W�����&��=��W�W�� and register themselves as Corporates.

�� "��_� ����=� ��`���� �� ������=� �Z_� � ����Registration Form bearing the stamp and sign of the entity to [email protected].

�� ����� ��������&� ���� �&��� =������� ���_� ����� �� ��������� ����� #�� #��=� `�� �`��� �� ���X� ���� ������[�\�which they wish to vote on.

�� "��� ����� � �������� ����=� `�� �����=� �� [email protected] and on approval of the accounts they would be able to cast their vote.

�� "��_� ����=� �Z��=� �� ������=� �Z_� � ���� Y��=���������� ��=� �#��� � �!���_� [���\� #�����they have issued in favour of the Custodian, if any, in PDF format in the system for the scrutinizer to verify the same.

In case of members receiving the physical copy:[�\� ���������#��������Z�������W��W�[�\�����W��W�[z���\��`���

to cast vote.[Y\� "��� ����&� Z���=� `�&���� �� <W�:� ��� �� �{��� ��Z���`����

2014 and ends on 5.30 am on 16th September, 2014. During this period shareholders’ of the Company, holding shares either in physical form or in dematerialized form, ������������j|�=�����:�����Z���`���/:������_������ ������vote electronically. The e-voting module shall be disabled `_�$����������&����������W

[$\� ���`���� ��=��&� ������� ������� ��� ������ �� Z�_������mode who are in receipt of Notice of Annual General Meeting in physical form may cast their vote using the

Ballot Form. Please refer instructions below for more details.

[�\� '�������_���������_��������������������&��=��&��j����&��_�� ��_� ����� ���� >��������_� ��X�=� ��������� [�>����\�and e-voting manual available at www.evotingindia.co.in under help section or write an email to [email protected].

MEMBERS WHO WISH TO VOTE USING BALLOT FORM:'�� ������ � $������ �{Y� � ���� ������&��&�������� ���`���� ��_� ����������Y�����>�����=���`�����������������������=������Z��to the Scrutinizer, Mr. K. P Gopimohan, 39/4781, Toufeeq $�Z��z�� /�=� ���� �W�W� ��=�� ����Z������ $����j*~/:�*�so as to reach by 5.30 p.m. of 16 September, 2014. Unsigned, incomplete or incorrectly ticked forms are liable to be rejected and the decision of the Scrutinizer on the validity of the forms #����`�� ���WIn the event member casts his votes through both the processes i.e. E-voting and Physical Ballot Form, the votes in the electronic system would be considered and the physical ballot form would be ignored.

EXPLANATORY STATEMENT:

Item 6:���� $�Z��_� ��������_� ���� ��� ��������� � #����� �#� ����Independent Directors, one Executive Director appointed �� �� Z���=� � ��� _����� `_� ���� �������� Y=_� ��=� ��� (�j�Executive Director liable to retire by Rotation. As per Section �{/� ��`� ������� *� [�\� � $�Z���������� /:��� ������� ���� ���������provide for the retirement of all directors at every annual general meeting, not less than two-thirds of the total number of directors of a public company shall be persons whose period � ���� ��� ���`��� �� =������������ `_� ����������� � =�������� `_�rotation. And at every subsequent annual general meeting, one-third of such of the directors for the time being as are liable to retire by rotation, or if their number is neither three nor a multiple of three, then, the number nearest to one-third, shall ������� ��� ���W� >�� ���� Z��Z���� � ����� ��`j�������� �����number of directors shall not include independent directors, whether appointed under this Act or any other law for the time being in force, on the Board of a company.

Considering that the Act stipulates retirement of Directors by rotation and as on date we have only one director who as Z��� ���� =� ������ ��� ���`��� �� ������� `_� �������� ���� $�Z��_�propose to modify the terms of Appointment of Mr. Kumar (����� $�������� ��=� ����&��&� �������� [�'(j::�/:{��\� `_�altering the terms of his appointment as liable to retire by rotation instead of Director not liable to retire by rotation. ��W�;����� (���� [�'(j::�/:{��\#��� �ZZ����=� `_� ���� ��������Body in its meeting held on 28th September, 2013. All other terms and conditions of appointment of Managing Director as approved earlier by the members shall remain unchanged.

None of the Directors or Key Managerial Personnel of the $�Z��_� ��=� ������ ���������� �z��Z�� ��W� ;����� (����� [�'(j

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6

VERTEX SECURITIES LIMITED

::�/:{��\� ���� �������=� �� ���������=�� ��������_� �� ����#�������� ���� �`��� ��������W� ��W� ;����� (���� [�'(j::�/:{��\� ���interested in the resolution as the resolution relates to variation of the terms of his appointment as a Managing Director. The Board recommends the Special Resolution as set out at item no. 6 for approval of the Members.

Item 7&8:The Board of Directors of the Company has decided to adopt the provisions with respect to appointment and tenure of Independent Directors which is consistent with the Companies �����/:�����=���������=�=�������&��&�������W�����=��&�_������Independent Directors will serve for not more than two terms of ���_����������������Y��=������$�Z��_W

��W� }����� ������ [�'(j:/�</��:\� ��=� ��W� ��W� }��� "�������������� [�'(j:�:�<�~<\�� ���� Z�Z��=� �� ������� ��� ����ensuing AGM as per the erstwhile applicable provisions of the Companies Act, 1956. In terms of Section 149 and any other applicable provisions of the Companies Act, 2013, Mr. James ������ [�'(j:/�</��:\� ��=� ��W� }��� "����� ��������� [�'(j:�:�<�~<\� `���&� ���&�`���� |��� ����������� �� �ZZ�������� ���Independent Directors on the Board of the Company.

Further, in line with the requirements of the Companies Act, /:����������Z�Z��=����ZZ������W�}�����������[�'(j:/�</��:\���=� ��W� }��� "����� ��������� [�'(j:�:�<�~<\� ��� '�=�Z��=������������� �� ���� Y��=� � ���� $�Z��_� �� �� ����� � ��� _�����commencing from the date of the Annual General Meeting 20th� ��Z���`���� /:��W� �� `���� Z� ��� � Z�Z��=� '�=�Z��=����Directors, including nature of their expertise, is as given below.

None of the Directors or Key Managerial Personnel of the Company and their relatives, other than Independent Directors for their respective appointment, are concerned or interested, ��������_� �� ����#����� ��� ������ ���������W� "��� Y��=�recommends the Ordinary Resolutions as set out at item no. 7 to 8 for approval of the Members.

Item 9:���Z��������z�����&���&���������(�� ������(W�>����/:V/:::jRB dated 3rd� ��_� /:::� ��=� (�� ������ (W� >���W� �{� V/::�jRB dated September 20, 2001], FIIs and their sub accounts taken together cannot acquire more than 24% of the paid-up capital of an Indian Company. The said limits can be raised above the 24% ceiling up-to the sectoral cap / statutory ceiling, as applicable, by passing a resolution by the Board of Directors followed by Z�����&�����Z�����������������������|����`_�������������Y=_W����� $�Z��_� ��=� ��������=� ���� >''� ������ ��� /��� �� �<����=�� ������ Y����� Z����=� �� ���`��� ��� /:��W� %���� �� ���#� ����Z����������������������`�����>''������Y��=������������the Company at their meeting held on 18th July, 2014 approved the proposal to increase the FIIs limit in the paid-up capital of the Company from 49% to 100%.

None of the Directors or Key Managerial Personnel of the Company and their relatives, are concerned or interested, ��������_� �� ����#����� ��� ������ ���������W� "��� Y��=�

recommends the Special Resolutions as set out at item no. 9 for approval of the Members.

ADDITIONAL INFORMATION PURSUANT TO CLAUSE 49 OF THE LISTING AGREEMENT WITH REGARD TO DIRECTOR SEEKING APPOINTMENT / RE-APPOINTMENT AT THE 21st ANNUAL GENERAL MEETING:

Name of Director : ��W�;�����(����[�'(j::�/:{��\

Date of Birth : 24.03.1962

Directors ��� ������� ���

: 00320541

Date of appointment of Board

: 31.07.2008

��������� : YW�$��[���\��W$W�

������� ���� �������� : ����������� �#���_j ��� [/{\�_������experience in the Capital Market and Investment Banking industry.

No. of Shares held :

5,88,2058 Equity Shares of `�/Vj�����

17,39,097 0.5% Fully Convertible Preference Shares of `��:Vj�����

Other Directorship : "����#������_�>�������������=q����z�$��=��������������������=Transwarranty Capital Market �����������������������=�����Y�����&��������=$����=���=�����������[;���Z��\���������������=;���Y���=�����������������=q����'���������������W���=W�[���&�Z��\

Name of Director : ��W�}�����������[�'(j:/�</��:\

Date of Birth : 26.11.1951

Date of appointment of Board

: 10.01.2009

��������� : – M.Sc.�� ���� ���=����� $���� ����� ���

Personnel Management and Organisational Behaviour.

�� ���� ���=����� $���� ����� ���Programme Evaluation and Rating Techniques.

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7

ANNUAL REPORT 2013-14

�� $���� ����� ��� $�Z��_�Director’s Course in Corporate Governance from the Commonwealth Secretariat and Commonwealth Association for $�Z������������������=�W

– Underwent more than 25 senior level specialized courses/ �������&� Z�&������� [��� '�=�����=� �`��=\� ��� ���� ��=� �Banking, Finance, Foreign Exchange, Infrastructure Development and Financing, Management and related areas.

Experience in �������

: �����&� ����� �� ������ [�\� =���=���of experience in various Senior capacities in Reserve Bank of India

No. of Shares held : 10,000 Equity Shares

Other Directorship : Vertex Commodities And Finpro ��������������=

Name of Director : ��W� }��� "����� ��������� [�'(j:�:�<�~<\

Date of Birth : 01.06.1951

Date of appointment of Board

: 10.01.2009

��������� : B. Com, CAIIB, Post Graduate Diploma in Banking, Industrial �����������������������&�����W

Experience in �������

: Having 32 years experience, has rich experience in Banking and Stock Broking related areas.

No. of Shares held : 1,12,500 Equity Shares

Other Directorship : �V�W�Y�����>=�����W���=W

By Order of the Board of Directors, For VERTEX SECURITIES LIMITED

Place : Kochi - 18 SANDHYA R. NAIR Date : 18.07.2014 Company Secretary

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8

VERTEX SECURITIES LIMITED

SHARE CAPITAL STRUCTURE

ParticularsAs At 31.03.2014

(`)As At 31.03.2013

(`)

SHARE CAPITAL

�\ 73,753,805 Equity Shares of ` /Vj������[�W�W�+��+{��~:{������_���������` /Vj�����\ 147,507,610 147,507,610

/\ 5,981,739 0.5% Preference shares of `��:Vj������ [�W�W�{�<~��+�<�:W{��������������������`��:Vj�����\

59,817,390 59,817,390

�\ 5,00,000 15% Non-Cumulative Redeemable Preference shares of `��::Vj� ����� [�W�W�{:�::�:::��{��(�j$������������=����`���������������������` �::Vj�����\

50,000,000 50,000,000

257,325,000 257,325,000

���� ��������� ����� Z�������� ��� Z��������&� `���� _�� ���� /����Annual Report of the Company along with Audited Accounts, ������ ��������_������=�=���st March, 2014.

"��� ����=����� ���������� � �� �� �� ���� �� ���� _���� ��=�=�31st March, 2014 and Balance Sheet as on that date together with the notes forming part of accounts as audited and reported by the Auditors of the Company and also Consolidated Accounts ����Z�����&� ���� ���������� � �� �� �� ���� ��=� Y������� ������of the Subsidiary Company, M/s. Vertex Commodities And >��Z����������������=�����������=���=�������������&��&�����������������!����=�����#���W

FINANCIAL RESULTS:The Financial highlights of the Company for the year ended 31st �������/:���#���������Z�=��&� &����������Z�������_��������given below:-

[`��������\

Particulars 31.03.2014 31.03.2013Total Income 498.61 768.36Total Expenditure 597.81 861.60�� ��V�[���\�����Z��������`����������'������>�������$�����Exceptional Items

(99.20) [<�W/�\

�� ��V�[���\������=����_������������`����>�������$�����Exceptional Items

(99.20) [<�W/�\

�� ��V�[���\������=����_�����������������>�������$���`���before Exceptional Items

(111.26) [��~W��\

�z��Z������'������� ��V�[���\ 12.20 [<W/<\�� ��V�[���\������=����_�Activities before Tax

(99.06) [��+W�:\

Total Tax – [��W�*\(����� ��V�[���\������=����_�����������������"�z

(99.06) [�*�W~*\

(����� ��V�[���\�>������Z���= (99.06) [�*�W~*\

DIRECTORS’ REPORT

BUSINESSDuring the year ended 31st March, 2014 your Company earned consolidated revenue of ` {~�W{:�����������Z���=���` 1,088.56 ����� ��� ���� Z������� _���W� "��� �����=���=� Z�������� �����recorded a net loss of `��{/W</�����������Z���=��������������` �*�W/{�������������Z�������_���W�"�������������|���=����`���&�carried over to the Balance Sheet.

�������=� ��������� �� Z��������� ��=� �������� Z�������������W� � ���� $�Z��_� �� ���� �������� _���� ��� &����� ��� ����Management Discussion and Analysis which is set out as Annexure to the Directors’ Report.

DIVIDEND���������=�����_��Z� ���_��������������&�������������`����_�to recommend any Dividend for the year.

DIRECTORSIn accordance with the provisions of Sections 149, 152 and other applicable provisions, if any, of the Companies Act, 2013 ���=� #���� ���� $�Z������ [�ZZ�������� ��=� ����� ������ ���������\� ������� /:���� �ZZ����� � ���� ���`���� #���� `�� ��&���at the ensuing Annual General Meeting of the Company for the �ZZ�������� � ��W� }����� ������ [�'(j:/�</��:\� ��=� ��W� }���"��������������[�'(j:�:�<�~<\����'�=�Z��=������������������$�Z��_�������`������������`_������������������� ���_����W

��������� �� $������ �<[&\� [�\� � ���� ������&��&�������� #���� ����Stock Exchange, brief resume of the Directors proposed for re-appointment has been given in the Notice convening the Annual General Meeting.

Further it is proposed to modify the terms and of Appointment � ��W� ;����� (����� $�������� ��=� ����&��&� �������� [�'(j::�/:{��\� `_� �������&� ���� Z���=� � �ZZ�������� ��� ��� [{\�years to liable to retire by rotation. This is to ensure compliance #���� ������� �{/� ��`� ������� *� [�\� � $�Z������ ���� /:��W���W�;����� (���� ������ ������� `_� ������� ��� ���� ������&� ���������������������&���=�`���&����&�`���|���������ZZ�������W

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9

ANNUAL REPORT 2013-14

ParticularsAs At 31.03.2014

(`)As At 31.03.2013

(`)

ISSUED, SUBSCRIBED AND PAID UP :

�+�+/���~:�[�W�����~�~�<~:\������_���������` 2/- each fully paid up 95,442,960 87,697,960

{�/:*��{��[�W�W�{�<~:�<{�\�:W{��>���_�$������`�������������������� of `��:Vj���������_�Z��=��ZW

52,064,540 59,809,540

/+�+{~�[�W�W/+�+{~\��{��(��$������������=����`������������� Shares of `��::Vj���������_�Z��=��ZW

2,775,800 2,775,800

TOTAL 150,283,300 150,283,300

�����&� ���� ����� ���� $�Z��_��� ��`����`�=� ��=� �����=� ��Z�����has increased due to conversion of 7,74,500 0.5% Compulsorily Convertible Preference Shares of `��:Vj� ����� ���� �~�+/�{::�Equity shares of `�/Vj� ����W� "����� ���� `���� �� ����&�� ��� ����Authorised Capital of the Company.

CORPORATE GOVERNANCE"��� ����������� ��=� �z����&�� Y��=� � '�=��� [��Y'\� ����Z������`�=� $�Z����� ���������� ����=��=�W� ���� ���������������� ������ ���������� �� ������ ����=��=�� ��=� ����� �������Report carries a section on Corporate Governance.

DIRECTORS’ RESPONSIBILITY STATEMENT

!������������������� ��"#$�\� That in the preparation of the Annual Accounts for the year

ended 31st March, 2014, applicable Accounting Standards have been followed along with proper explanation relating to material departures, wherever necessary.

`\� "���� ���� ��������� ����� �������=� ����� ��������&� Z�������and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a �������=��������#��������������|����������$�Z��_����������=�� ���� ��������_������=����� ����� ����$�Z��_�for the year ended 31st March, 2014.

�\� "���� ���� ��������� ����� ��X��� Z�Z��� ��=� ��������� �����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.

=\� "���� ���� ��������� ����� Z��Z���=� ���� ������� �������� ��an ongoing concern basis.

CONSOLIDATED ACCOUNTS"��� $����=���=� ���������� � �� �� ��=� ���� �� ���� _����ended 31st March, 2014 and the Balance Sheet as on that date as �������=���=���������&��&����������������!����=�����#���W

OPERATIONS OF SUBSIDIARYDuring the year ended 31st March, 2014 the subsidiary company q����z�$��=��������=�>��Z����������������=���=��������������

of ` 1,33,89,365 and loss of ` 53,86,350 as against `��:�<:��<*<���=�loss of `����~�<{<����Z�������_��������Z�������_���W

In accordance with the general circular issued by the Ministry � $�Z����� �|������ ���������� � '�=���� ���� Y������� ����������������� � �� �� ��=� ���� ��=� ����� =�������� � ������`��=���_� ��Z��_� ���� ��� `���&� �!����=� #���� ���� Y�������Sheet of the Company. The Company will make available the Annual Accounts of the subsidiary company and the related detailed information to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary company will also be kept open for inspection at the ��&������=� ����� � ���� $�Z��_� ��=� ����� � ���� ��`��=���_�Company.

The Consolidated Financial Statements presented by the $�Z��_������=������ �����������������������`��=���_���Z��_W

PARTICULARS OF EMPLOYEES’ U/S 217 (2A) OF THE COMPANIES ACT, 1956There are no employees drawing a monthly or yearly ����������������z������������������Z��� �=�����������/�+[/�\�of the Companies Act, 1956

DISCLOSURE OF EMPLOYEE STOCK OPTIONSDetails as per the Securities and Exchange Board of India [��Z�_��� ���X� �Z���� ������� ��=� ��Z�_��� ���X� ���������������\����=���������<<<�������������`��#)

�\� "��� q����z� ��Z�_��� ���X� �Z���� ����� /:�:� ���� `����approved by the Board Of Directors of the company on 10th March, 2008.

`\� "��� ������&� Z���=� ��� ��� _����� ��� ���� =���� � &��������������&���������_�����������=�����&����W

�\� �z������� ����=� #��=� �������� ��� _���� ��� =���� �&�������=�#�����zZ��������Z������� ���_������������date of vesting.

=\� "��� Z����� #���� `�� ��!��=� ��� �����_� ������� � ����company.

�\� "��� ��Z��_� ���=� ���� ���������� ������ ����=� �� �������for ESOPs.

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10

VERTEX SECURITIES LIMITED

The exercise price has been determined as follows:

GrantOptions

(Face Value of `%'*+;����������<

Price Per Option `

Options (Split to Face value of

`%=+;����������<

Price Per >��� �?@���

����������J� Q�`

Grant – I 462,500 69.00 2,312,500 13.80

Grant – II 50,000 145.50 250,000 29.10

Grant – III 17,500 145.50 87,500 29.10

Grant – IV 25,000 145.50 125,000 29.10

Grant – V 100,000 145.50 500,000 29.10

Grant – VI – – 1,013,750 29.10

Grant – VII – – 200,000 5.46

Grant – VIII – – 1,875,000 5.46

f) Details of movement of Options

ParticularsAs at

31st March, 2014(`)

As at 31st March, 2013

(`)

�Z�����������=��&��������`�&�����&������_����[>����q������`�/Vj�[�W�W�`�/Vj\\ 2,537,002 2,680,315

Options granted during the year – 2,075,000

Options vested during the year – 248,627

Options exercised during the year – –

Options forfeited during the year 814,995 1,751,310

Options lapsed /surrendered during the year – 467,003

Options outstanding at the end of the year 1,722,007 2,537,002

&\� ��=� ���� ������ ����=� `���� ���=�� ���� ��Z�������� ����would have been higher by ` ��W{{� ��X��� [�������� �����`�/�W��� ��X��\W� ���� ����� ��z� #��=� ����� `���� ��&���� `_�` ���W*�� ��X��� [�������� _���� `�/�W��� ��X��\� ��=� Y�����EPS would have been ` [:W/�\� ���� ������ [�������� �����`�[:W�/\� ���� �����\� ��=� ������=� ���� #��=� ����� `����` [:W�{\�[�������������` [:W/{\W

MANAGEMENT DISCUSSION AND ANALYSISThe Management Discussion and Analysis Report for 2013-14, as �������=���=���$�������<������������&��&��������� ���&����������separate statement in the Annual Report.

DISCLOSURE OF ADDITIONAL PARTICULARSIn view of the nature of activities which are being carried on by

���� $�Z��_�� ���� Z����������� Z������`�=� ��=��� ������� /�+[�\[�\�� ���� $�Z����������� �<{*� ���=�#���� $�Z������ [����������������������� ��� ���� ��Z��� � ���� Y��=� � ��������\� ������� �<~~���&��=��&� ����������� � ����&_� �� "�����&_� �`��Z���� ����not applicable to the Company.

AUDITORSM/s. Rahul Gautam Divan & Associates, Chartered Accountants, Mumbai will retire at the ensuing Annual General ������&� ��=� ����� �� ���=� ������ ���&�`����_� ��=� #�����&����� ����j�ZZ�������W���������������������=��������ZZ�������W

LISTING PARTICULARSThe Company’s Equity Shares continue to be listed on Bombay Stock Exchange.

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11

ANNUAL REPORT 2013-14

REPLIES TO AUDITORS’ OBSERVATIONS�������&� �� `���������� �\� ��=� `\� &����� ��=��� Y����� ������� �=� �Z����� ��� ���� '�=�Z��=���� ��=����� ��Z���� ��� �������� �=������)

[�\� ��� �����=� ��� ����� ����&� Z���� � �������� ����management has evaluated long term investments and �� ��� ����� ������ �z���� �� �������������� #����� #�������any provision in the accounts for a possible diminution in the value.

[`\� ���������Z��_�������������=���&����������������������_�of the dues, it will not be prudent to make any provisions ������������������������������&������=�|������$����W

ACKNOWLEDGEMENT���� ��������� #��=� ��X�� �� �zZ����� ������ &������=�� �� ����������� � (������� ���X� �z����&�� � '�=��� ������=�� Y�`�_����X� �z����&�� ������=�� $����� ���X� �z����&��� ����� ����Counter Exchange of India, National Securities Depository ������=��$���������Z����_����������['�=��\�������=���=����������� �������=���� ��=� Y��X���W� ���� =�������� ���� �zZ����� ������=��Z� �ZZ��������� � ���� �����`��� ��������� � ���� ������� ��=����|����`���������$�Z��_W

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

Place : Cochin KUMAR NAIR Date : 18.07.2014 Chairman

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12

VERTEX SECURITIES LIMITED

CORPORATE GOVERNANCE REPORT 2013-14

Mandatory Requirements:

1. COMPANY’S PHILOSOPHY ON CODE OF CORPORATE GOVERNANCE: The Company’s essential character revolves around values based on transparency, integrity, professionalism and accountability.

At the highest level, the Company continuously endeavours to improve upon these aspects on an ongoing basis and adopts innovative approaches for leveraging resources, converting opportunities into achievements through proper empowerment and motivation, fostering a healthy growth and development of human resources to take the Company forward.

Corporate Governance is about promoting corporate fairness, transparency, accountability and integrity of the management. It also aims to align as nearly as possible the interests of individuals, corporates and society and enhancing the stakeholders’ value. Best results are achieved when the companies begin to treat the Corporate Governance system not as a mere structure but as a way of corporate life. A good Corporate Governance practice have always been an integral part of your Company’s Z����Z�_���=��������!�=�����������&���=�����������&�������&���������=��=���$�Z��������������W�"���$�Z��_����������=_�Z������Z������_��������=�Z���=�������=�������_���Z������#����$�������<������������&��&�������W

2. BOARD OF DIRECTORS: Composition of the Board:� "��� Y��=� � ��������� ��� q����z� ����������� ������=� ���� `���� ���������=� ��� �� ������� #����� �������� �ZZ�Z������ ��z� �

executive/non-executive and Independent Directors to ensure proper governance and management. The Board members have ���������� �zZ�������� ��� =������� ��=�W� ��� �� ��st� ������� /:��� ���� Y��=� �������� � ��� [�\� ���`����� � #����� ��� [�\� �������&��&�����������#�[/\�'�=�Z��=���������������=����[�\�(�j�z���������������W

Board Meetings:� "��� Y��=� � ��������� Z���=��� &��=����� ��=� ������&��� =�������� �� ���� ����&������ ��=� ���������� �|����������� �

����&������ Z������� ��� ��������&� ���� &���� ���W� %����� ��������&� ����&������ Z���������� ��� �������� �=�������� �� ������&����� ����=��=�� � ��Z����� &��������W� Y��=� ������&� =����� ���� ������=� ��� ����������� #���� ���� =�������� ��=� �&��=��papers backed up by comprehensive notes and detailed background information are circulated well in advance before the =���������������&������`_����`���&�����Y��=�����X�������=�=�������W�Y��=����`��������������`���&��Z���_���!�����consideration of the Board. A business review presentation is made by the Senior Management team at each Board Meeting to apprise the Directors about the performance of the Company. The Board meets at least once a quarter to review the quarterly Z�����������=��ZZ��������� ���������������W

� "����� #���� ��� [�\� Y��=� ������&�� =����&� ���� �������� _���� ��=�=� ��st March, 2014, namely on 16.05.2013, 18.07.2013, 25.10.2013 and 07.02.2014.

� ���������� ���������������������������� ���`�����Z���=��!��=��������������������������Y��=�����������������&�����=�=����&�����_������=�������������������������

������&���=��������`�������������������Z���=�$����������Z�V����`�����Z��Y��=�$���!�����������st March, 2014:

Name of the DirectorDirector

��� ������� �No. (DIN)

CategoryBoard

Meetings �J� ���

?J� �� ������the last AGM

No. of Directorship in

other Boards

No. of Chairmanship/ Membership

in other Board Z""�J���

Mr. Kumar Nair 00320541 Chairman 4 No 7 1Mr. U. Ramachandran 00493707 Non-Executive

Director4 No 8 1

Mr. Jose Thomas Polachira 01049189 Independent 4 ��� 1 1Mr. James Pothen 02492330 Independent 4 ��� 1 1

� (��������������$�Z��_���������`�����������������[�:\���$������������������ ���[{\��Z��� �=�����!����������all the companies in which he is a director.

� �������������������������������������������������� ���� $�Z��_� ��������_� ���� ��� ��������� � #����� �#� ���� '�=�Z��=���� ���������� ��� �z�������� �������� �ZZ����=� ��

�� Z���=� � ��� _����� `_� ���� �������� Y=_� ��=� ��� (�j� �z�������� �������� ���`��� �� ������� `_� ������W� ��� Z��� ������� �{/���`��������*� [�\��$�Z����������/:���������� �������������Z���=�� �� ���� ������������ ����=����������� ����_��������&�������

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ANNUAL REPORT 2013-14

������&����� �����������#j����=��� ������������`����=�����������Z�`������Z��_�������`��Z������#����Z���=������is liable to determination by retirement of directors by rotation. And at every subsequent annual general meeting, one-third of such of the directors for the time being as are liable to retire by rotation, or if their number is neither three nor a multiple � ������� ������ ���� ���`��� �������� �� ��j����=�� ������ ������� ��� ���W� >�� ���� Z��Z���� � ����� ��`j�������� ����� ���`��� �directors shall not include independent directors, whether appointed under this Act or any other law for the time being in force, on the Board of a company.

Considering that the Act stipulates retirement of Directors by rotation and as on date we have only one director who as per ����=� ������������`������������`_������������$�Z��_�Z�Z������=�_�������������=���ZZ�����������W�;�����(�����$����������=�����&��&���������[�'(::�/:{��\�`_��������&�����Z���=���ZZ����������� ���[{\�_����������`������������`_�������W���W�;�����(����#����ZZ����=�`_�������������Y=_��������������&����=���/~th September, 2013. All other terms and conditions of appointment of Managing Director as approved earlier by the members shall remain unchanged.

The Board of Directors of the Company has decided to adopt the provisions with respect to appointment and tenure of '�=�Z��=�������������#������������������#��������$�Z�����������/:�����=���������=�=�������&��&�������W�����=��&�_������'�=�Z��=�������������#�������������������������#�������� ���_����������������Y��=������$�Z��_W

� ��W� }����� ������ [�'(j:/�</��:\� ��=� ��W� ��W� }��� "����� ��������� [�'(j:�:�<�~<\�� ���� Z�Z��=� �� ������� ��� ���� ������&�AGM as per the erstwhile applicable provisions of the Companies Act, 1956. In terms of Section 149 and any other applicable Z�������������$�Z�����������/:������W�}�����������[�'(j:/�</��:\���=���W�}���"��������������[�'(j:�:�<�~<\�`���&����&�`����|�����������������ZZ�����������'�=�Z��=�������������������Y��=������$�Z��_W

� >�������� ��� �����#���������������������� ����$�Z�����������/:���� ��� ���Z�Z��=����ZZ������W� }�����������[�'(j:/�</��:\���=���W�}���"��������������[�'(j:�:�<�~<\����'�=�Z��=�������������������Y��=������$�Z��_����������� ���_�����commencing from the date of the Annual General Meeting 20th September, 2014.

A brief resume of the Directors being appointed / re-appointed is given in Notice of the Meeting:

3. BOARD COMMITTEES:� "��� Y��=� $���!���� ���� �� �������� �Z��� �� ������ ��=� ��X�� �����=� =�������� #������ ���� =���&���=� �������_W� �����

$���!��� � ���� Y��=� �������� ����=��&� �� ���� ��Z�� ����� =� ���� ���� ��Z������� Z#��� ��=� ���� ��� ����=����� #���� ����$�Z������������<{*���=�����������&��&�������W�"�����Z�������������&����!��=�������=�����=������=�������������������������$���!���������Y��=��������=�`��#)

� ������������ In Compliance with the provisions of Section 292A of the Companies Act, 1956 and in accordance with the provisions of Clause

�<������������&��&�������������$�Z��_���������&�������� �=���=���=�Z��=������=���$���!����������Y��=������W

� �����������������������������������������!����������"#st�������$%#&�� "�����=��� $���!��� ��Z������ � ������ [�\� ���������� �#� [/\� � #��� ���� '�=�Z��=���� ��������W� �����&� ���� �������� _����

����$���!����������[�\����������*W:{W/:�����~W:+W/:����/{W�:W/:�����=�:+W:/W/:��W

� ?J� �� ����������?����Z""�J���[���� Q#

Name of Director Designation ���\�"���� Q���J� ���Mr. James Pothen 02492330 Chairman 4Mr. U. Ramachandran 00493707 Member 4Mr. Jose Thomas Polachira 01049189 Member 4

� '��������(���������� "�����=���$���!���������������������#����=���Z����������Y��=���������#��&)

�\� ������&��������$�Z��_��� ����������Z����&W��\� �����#��&� ���� ��������_V������� �������� ��������� �������� ����������� `���� ��`������� �� ���� Y��=� �� �ZZ������ #����

Z�����������������������������&�Z���������Z���=�������������������&�Z��������������=�Z���_����������������W���\� �������=��&��� ����Y��=������ZZ�������� V���j�ZZ����������������_���=�������=�'����������=�������=� z�����

of audit fees.��\� �ZZ����&������������=���Z������=������#��&������_������������������_������V�������W

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14

VERTEX SECURITIES LIMITED

The Z#���� ��=� ������ � ��������� � ������=��� $���!��� ���� ��� ����=����� #���� ���� Z�������� � $������ �<� � ���� ������&�Agreement.

� "��� $�������� � ���� ��=��� $���!��� ��� ��� '�=�Z��=���� �������W� ���� ���� ���`���� � ���� ��=��� $���!��� ���� ��������_������������=������������������������&���=�������=� ������������&�������zZ������W

� (�������������������� '��������(���������� "���$���!��������#����=��������=��������Y��=�����������������Z�_�`������z����������������V�%�������������������

��������� ��=� ����� ����&������ ������W� "��� $���!��� �������=�� ���� ������������ Z��X�&�� ����� ����=����&� ������such as experience, expertise, position, responsibilities to be shouldered by the individual, leadership qualities, the volume of $�Z��_���`����������=�Z� ��������=�`_� ��W�"���$�Z��_����� �������=���Z�_�������X��Z���������� ����=��� ���!��������#��=���=���������������=���=������ �=�Z����������=�������������������`���&��&����&�����W

� �����������������������������������������!����������"#st�������$%#&�� "���������������$���!�����Z�������������[�\�=����������#�[/\��#���������=�Z��=����=�������W� $���!��������������=����&������_���

4. MANAGERIAL REMUNERATION: Mr. Kumar Nair is in charge of the overall management of the Company. As consented by him he will not be paid any

remuneration for his services.

The Company pays `� {�:::Vj� �� ��=�Z��=���� ��������� �#��=�� ��!��&� ���� �� ����� Y��=� ������&� ��=� ` 2,000/- for each $���!���������&����Z�������_��!��=�=�`_�����W

5. CODE OF CONDUCT: The Board of Directors of the Company has laid down a Code of Conduct for the Board of Directors and Senior Management

��������� � ���� $�Z��_W� ���� ���� ��������� ��=� ������ ����&������ ��������� ����� �����=� ��Z������� #���� ���� $=�� �Conduct as on 31st��������/:�����=���=������������������|������&��=�`_���������&��&�������������Z������������Z��W

6. A. GENERAL BODY MEETINGS: ������������������������������&��=����&����������������[�\�_����)

Financial year Day, Date and Time Venue Special Resolutions Passed, if any

2010-11 %�=���=�_��/:V:+V/:���at 9.30 AM

Sharon Hall, The International Hotel, M.G. Road, Ernakulam, Kochi - 682 031

No

2011-12 %�=���=�_���~V:+V/:�/�at 9:30 AM

The International Hotel, Veekshanam Road, Ernakulam, Kochi - 682031

�����>���=� �������������Employee Stock Option Scheme.

2012-13 Saturday, 28/09/2013 at 9.30 AM

Conference Hall, Amritha Towers, Kombara Junction, Market Road, Ernakulam, Cochin - 682 018

�������j�ZZ�����������W�;�����Nair as Managing Director

B. Extra Ordinary General Body Meetings:� (��z������=����_���������Y=_�������&�#������=�=����&����� ��������_������=�=���st March, 2014.

C. Postal Ballot:� >�� ���� �������� _���� ��=�=� ��st March, 2014, No Special Resolutions were passed by the Company’s Shareholders

through Postal Ballot. No special resolution is proposed to be conducted through postal ballot as on date.

7. DISCLOSURES: There were no transactions of material nature with the Promoters, Directors or the Management, their Subsidiaries or relatives

=����&�����Z���=��������_������Z���������������#����������������������$�Z��_�������&�W There were no non-compliances by the Company during the year. No penalties or strictures have been imposed on the

$�Z��_� `_� ���X� �z����&�� �� ��Y'� �� ��_� �������_� ����������� �� ��_� ��!��� ������=� �� ���� ��Z����� ���X���� =����&� ����Z������������� ��������_����W

The Board has adopted a Code of Conduct including Business Ethics Policy for its Directors and Senior Management.

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15

ANNUAL REPORT 2013-14

� "�������&��&���������������`��!�=�`��������Y��=���=�������������Z�������#��������$=���$�=����`_��������������=����&����� ��������_������=�=���st March, 2014.

The Company follows the Accounting Standards issued by the National Advisory Board on Accounting Standards and in ���� Z��Z������� � ���� �������� ����������� ���� $�Z��_� ���� ��� �=Z��=� �� ���������� =�|������ ��� ����� Z������`�=� `_� ��_�accounting standard.

� ���X��������������=��������������Z���=���������Z���=�����_������#�=�`_�������=���$���!�����=�����Y��=�����������of the Company.

� "�������&��&������������������ �=�������Y��=����������������Z��������$�������<�[q\������������&��&��������#�����������X��z����&���������Z������`�=�����W�"��������`���������#�=�`_�������=���$���!�����=���X���������=�`_�����Y��=��Directors.

� "��� $�Z��_� ���� ��Z���=� #���� ���� ���=���_� ������������� ��=��� $������ �<� � ���� ������&� �&�������� #���� ���� ���X�Exchange. The adoption of non-mandatory requirements has been dealt with in this Report.

8. MEANS OF COMMUNICATION:� ��������_� ��j��=���=� �������� �������� ���� Z�`�����=� ��� ���=��&� ��&����� ��=� q���������� ��#�Z�Z���� ��=� ���� `���&� ��&�����_�

placed on the website of the Company. Half yearly report is not sent separately to the shareholders. Annual Reports are sent to �����������=���������������&������=��==�����#��������$�Z��_���=����`���&���&�����_�Z����=�������%�`����������$�Z��_W

9. GENERAL SHAREHOLDERS INFORMATION: Annual General Meeting : 21st Annual General Meeting Date : 20th September, 2014 Time : 9.30 A.M. Venue : The Conference Hall of the Company at Amritha Towers, Ground Floor,

Market Road, Ernakulam, Kochi - 682 018. Financial Calendar (Tentative): Financial reporting for the quarter ending 30th June, 2014 : Third week of July, 2014 Financial reporting for the quarter ending 30th���Z���`����/:��� )� �����#��X�����`����/:�� Financial reporting for the quarter ending 31st������`����/:��� )� �����#��X��}�����_��/:�{ Financial reporting for the quarter ending 31st��������/:�{� )� �����#��X����_��/:�{ Annual General Meeting for the year ended 31st March, 2015 : August / September, 2015 Date of Book Closure : 11th September, 2014 to 20th���Z���`����/:���[`���=�_�����������\W� ������&��������� )� Y�`�_����X��z����&��������= Stock Code : 531950� ��_������������&�>���� )� ������&���������� ��������_����/:��j/:�������`����Z��=W� ������'�'(���(������$���� )� '(���*���:/�

10. STOCK PERFORMANCE: Market Price Data during the year ended 31st March, 2014:

Month High Low BSE Sensex (High)

Apr-13 3.08 2.42 19622.68May-13 3.19 2.36 20443.62Jun-13 3.10 1.67 19860.19Jul-13 2.80 1.91 20351.06

Aug-13 2.13 1.54 19569.20Sep-13 2.38 1.60 20739.69Oct-13 2.52 1.95 21205.44Nov-13 2.25 1.91 21321.53Dec-13 2.24 1.85 21483.74Jan-14 2.15 1.58 21409.66Feb-14 2.00 1.51 21140.51Mar-14 1.83 1.40 22467.21

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VERTEX SECURITIES LIMITED

� ��&����������"��������&����� )� M/S. LINK INTIME INDIA PRIVATE LIMITED C-13, Pannalal Silk Mills Compound, �Y�����&��Y���=�Z�[%���\� Mumbai - 400 078

Contact person : Ms. Sarita Mote

Contact No. : 022-25963838

Fax No. : 022-25926969

E-Mail Id : [email protected]

Share Transfer System:�� ����������� �=&�=� �� �������� ��� ���� ��&��������� ����� ���� ������_� Z������=� #������ ����� [�{\� =�_�� ��� ���� =���� �

lodgment, if the documents are clear in all respects. All requests for dematerialization of securities are processed and the �� ����������&�����������=�Z��������#������ �����[�{\�=�_�W���W����=�_�������(�����$�Z��_���������_������Z#���=��� �������� � ������� ��=� ����� �������� ������=� ��!���W� ����������� �������=� ��� ��������� ��=� ����� ������������������Z�=�����������&����==���������=��������������Z������=�`_�������&��������#�����������_�[�:\�=�_�W

�� ��������� ��$�������+[�\�� ����������&��&��������#���� �������X��z����&��������� ������������j_����_�`�����������`����issued by a Company Secretary-in-Practice for due compliance of share transfer formalities by the Company. Pursuant to ��Y'�[��Z����������=��������Z����\���&����������<<*������� ���������������`�����������=������$�Z��_���������_j��jPractice 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 31st March, 2014:

No. of Equity Shares held No. of �������������

Percentage of �������������

Total No. of shares held

Percentage of �������������

1 500 919 40.03 203,532 0.43

501 1000 421 18.34 356,638 0.75

1001 2000 282 12.28 458,051 0.96

2001 3000 169 7.36 437,527 0.92

3001 4000 64 2.79 228,703 0.48

4001 5000 102 4.44 494,782 1.04

5001 10000 130 5.66 10,28,480 2.15

10001 and above 209 9.10 4,45,13,767 93.27

Total 2,296 100.00 4,77,21,480 100.00

� ��������� Q�]�J�� ���� �^'st March, 2014:

Sr. No. Category No. of Shares % of Holding

1 ����������������������&����$����� 3,11,77,953 65.332 Mutual funds / UTI / Banks / FIs ('� ('�3 Private Corporate Bodies 29,70,358 6.224 Clearing Member 3,48,293 0.735 NRIs / OCBs 22,29,628 4.676 Indian Public 1,09,95,248 23.05

Grand Total 4,77,21,480 100.00

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17

ANNUAL REPORT 2013-14

Dematerialization of Shares : 99.60% of the shares have been dematerialize Outstanding GDRs/ADRs/Warrants or any )� "��� $�Z��_� ���� �����=� ��=� ���!�=� {<�~:�<{�� ��=����`��

convertible/instruments, conversion data and Cumulative Preference Shares which are compulsorily convertible likely impact on equity� �� �� �����_� ������� #������ �� Z���=� � ��� [{\� _����� ��� ���� =���� � issue.

Plant location : Not applicable

Address for Correspondence : VERTEX SECURITIES LIMITED � � $'()��*+�/:;��<<���$::+��< � � "�!������"#�����/nd Floor, Market Road, Kochi, Kerala – 682 018 Phone: 91-484-2384848

Contact Person : Ms. Sandhya R. Nair, Email Id: [email protected]

: Shri. K.J. Thomas Email Id: [email protected]

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

NON-MANDATORY REQUIREMENTS:

'<� Z����"� �\����������$����������j������"�� ��� ���\���������������Z����"� � Mr. Jose Thomas Polachira and Mr. James Pothen are Independent Directors on the Board of the Company. All the directors

�������������������� ��������=��zZ����������=��������Z����������$�Z��_������#��=����`���������������`�����|�������_�to the Company in their capacity as Independent Directors.

2) Shareholders Right – "���$�Z��_�����������������_����_� ��������Z��������������=��&�������_��������&�� �������������������������=�� �����������=����� ������ ���� ��������#����Z�`�����=� ��� �#� [/\���#�Z�Z�������� [�\� ���q������������=����[�\������&�������#�Z�Z��W

3) Training of Board Members –�"���Y��=������������������������ �=���=�#�����zZ�������=���������W�"�������� �������&��Board Members is not required.

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

DECLARATION

'������=�����#����$�������<������������&��&��������#�����������X��z����&���'�����`_��� �������������Y��=����`������=�����������&������ ��������� � ���� $�Z��_� ����� �����=� ��Z������� #���� ���� $=�� � $�=���� ��=� ������� =����&� ���� �������� _����ended 31st March, 2014.

For VERTEX SECURITIES LIMITED

Place : Mumbai KUMAR NAIRDate : 18.07.2014 Chairman & Managing Director

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VERTEX SECURITIES LIMITED

CEO / CFO CERTIFICATION

%������`_������_�������Y��=�����)�\� %�� ����� �����#�=� ���� �������� ����������� ��=� ���� ����� �#� ����������� �� ���� _���� ��=� �� ���� `���� � ��� X�#��=&�� ��=�

belief:[�\� "����� ����������� =� ��� ������� ��_� ���������_� ������� ���������� �� ���� ��_� ��������� ���� �� ������� ����������� �����

might be misleading[��\� "����� ����������� �&������ Z������� �� ����� ��=� ���� ���#� � ���� ��Z��_��� �|����� ��=� ���� ��� ��Z������� #���� �z�����&�

accounting standards, applicable laws and regulations.`\� "����� ���� �� ���� `���� � ��� X�#��=&�� ��=� `������ �� ������������ ������=� ���� `_� ���� $�Z��_� =����&� ���� _���� #����� ����

fraudulent, illegal or violate the Company’s Code of Conduct.�\� %�� ����Z�� ���� ���Z���`����_� �� ����`������&� ��=� ����������&� ��������� ������� �� �������� ��Z����&� ��=� ������ #�� �����

��������=� ���� �|����������� � ���� ��������� ������ �_������ � ���� $�Z��_� Z��������&� �� ���� �������� ��Z����&� ��=� �����=������=� �� ���� ��=����� ��=� ������=��� $���!���� =� ��������� ��� ���� =���&�� �� Z������� � ����� ��������� �������� �� ��_� �#�����#�������#������=��������Z��#���������X�����Z�Z�������X�����Z���������_�������=� ��������W

=\� %��������������_�����)�\� "����������`��������&�� ���������&���������������������=����&�����_��� ��\� "����� ����� `���� �� ��&�� ����� ����&��� ��� ��������&� Z������� =����&� ���� _����� �z��Z�� ���� $�Z��_� ���� �=Z��=�

��������&� ����=��=� �{� �� ��Z�_���� Y��� ��� [������=� /::{\� �����=� `_� ���� '��������� � $�������=������������ � '�=�� �and

���\� "� ���� `���� � ��� X�#��=&��� ������ ����� `���� �� ���������� � ���=�� �������&� ����&������� �� ��� ��Z�_��� �����&� ����&�� ����������������$�Z��_�������������������_�����W

For VERTEX SECURITIES LIMITED

Place : Kochi-18 KUMAR NAIRDate : 18.07.2014 ����������� ������

COMPLIANCE CERTIFICATE

ToThe Members ofq��"�¡���$��'"'����'�'"��

%�� ����� �z�����=� ���� ��Z������� � ��=������ � $�Z����� ���������� `_� �V�W� q����z� ����������� ������=� �� ���� _���� ��=�=�����������/:����������Z�����=����$�������<������������&��&����������������=�$�Z��_�#�������X��z����&��W

The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate ���������W�'������������������=����������zZ��������Z����������� ������������������������$�Z��_W

In our opinion and to the best of our information and according to the explanations given to us, we certify that the company has ��Z���=�#����������=�������$�Z���������������������Z�����=�'�������`����������=�������&��&�������W

%�������������������Z�������������&�����������������=�=����&�����_������=�=������������/:��������������&��������������Z��=��&���a period exceeding one month against the company as per the records maintained by the Company.

%�� ������� ������ ����� ����� ��Z������� ��� �������� ��� ���������� ��� �� ���� ������� ���`����_� � ���� $�Z��_� ��� ���� �������_� ���|�����������#����#�������������&������������=����=������|����������$�Z��_W

Place : Kochi (K. P. GOPIMOHAN) Date : 18.07.2014 Practising Company Secretary � [$W�W�(W/<�/\

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ANNUAL REPORT 2013-14

Economy Overview:"��� '�=���� ����_� �������=� ���� &�`��� ������� �����������=����&����� �����/:��W�'���������=���`=��=���=�������������=�perhaps was one of the worst year in a long time. Economic &�#��� `!��=� ��� ��=� �� ���� ���� ����� ��� �� =���=�� �������largest economy grew by a mere 4.86% in 2013-14 as compared to 9.5% in 2007-08. This steady decline was due to numerous ������ ����� ��Z�=�=� &�#��W� �������� ��� �������� �����&�����&�� �������� ��=� �#� `�������� �� =����� �����`���=� �� ����=������W�"������������&�������������&�� �������=����������������=� ����� ����&������� ����_����������&� ������Z��� ��Z�������touching an all time low of `�*~W~:� �&������ ���� =����W� ���������challenges have created more confusion and skepticism. Global economic uncertainties are aggravating India’s internal troubles and it was among the worst hit of the emerging economies whose currency, bond and equity markets experienced extreme volatility. Global activity strengthened during the second half of 2013 and the sum global growth is now projected to be 3.6% in 2014 from approximately 2.9% in 2013 by the IMF. CAD has come down during the last quarter and the volatility in the Indian rupee began to subside.

Industry Overview:For most of last year, the equity markets shadowed the broader ������� Z���������� #���� ���� ���X���� `!��=� `_� ��&���W�The period saw waning investor enthusiasm for equities and a general decline in investor participation in the markets due to macroeconomic fundamentals not being conducive for healthy growth. The markets reclaimed some lost ground and the benchmark equity index, the BSE Sensex, increased by 18.8% by March 31, 2014. As per SEBI, foreign institutional investment [>''\� �#�� #���� ��&�� �����_� �#��� ��� ����� /:��� #���� �������#�� � ����=� ��¢� <W:+� `������ ��Z���=� �� ���� ���#�� ���¢� /+W{~� `������ =����&� ����� /:��W� "����� #���� ���� ���#�� ���¢���W*<�`��������������_���=��������#�����¢��W*/�`���������=�`�����X����=����&� �����/:��W

Review of Operations:

�)� *��+������,��-�����������_� ���� ��������� �� `�� ������� `�X��&W� �|���� ���� �� ��increase internet and mobile trading to take advantage of the improved market conditions. As a result of this, branches have come down and clients have also increased.

The company currently provides brokerage services in equity, equity derivatives and currency derivative segments. Commodity broking service is provided through its subsidiary q����z� $��=������ ��=� >��Z�� ���W� ��=W� [q$>��\W� %�� ����looking at having a more balanced approach to deliver a more ���� �|������� ������� �������W� ���� �|���� ��� ��=����&� ��� ����network and converting our franchisee clients into direct clients is continuing with full vigor.

MANAGEMENT DISCUSSION AND ANALYSIS

The average equity volume per day continues to remain stable which is a positive indicator. Steps have been initiated to activate old clients to increase our business volumes.

Vertex has membership of:�\� (����������X��z����&���'�=�����=W�[(��'�\W`\� ���`������X��z����&����=W�[Y��\W�\� (����[��=�Z����_���������\W=\� ��Y'���&���������������������Y��X��W�\� (���[$������_���&����\W

q$>����������`�����Z����#��&����=��_��z����&��)�\� ������$��=��_��z����&���'�=���[�$¡\W`\� (�������$��=��_���=�������������z����&��[($��¡\W�\� (�������������$��=��_��z����&��[(�$�\W=\� (��������Z���z����&���'�=���[(��'�\W

�)� ��������!�,��-����As of March 31 2014, Vertex had 23,140 depository accounts – a net addition of 490 Depository accounts.

Outlook 2014 -15"��� �������� �������� ������ ��� �������&� �� Z���=� � =_������transformation. Since the fundamentals of the Indian economy are strong and with elections round the corner there is hope that the economy should achieve a much higher growth rate. The expectations are a higher GDP growth and an improved business climate. In the event of any other unlikely scenario ���� ������������� ����_� ��� ���� Z������=� �� �������� `�!���growth. The liberal stance of the US Fed is likely to improve ���� �����=��_� ��� ��������&�_���W�"�������>''� ���#��#�����#�into India thereby giving the Capital markets the much needed boost.

The Primary markets are also expected to show an improvement in the coming year due to the changed political scenario and a `�!�����������������W

Opportunities and ThreatsDespite a very uninspiring year the company remains bullish and sees many opportunities for growth and expansion. A �����&� �������� ��=� ��� ��Z���=� `�������� �������� ����=�boost up the markets giving an opportunity to explore the vast potential of the capital markets. Thrust can be given to tap the vast potential of the NRI and HNI segment. The company needs to focus on growth and build a brand to counter the threat of new players.

Risks & ConcernsThe company being a part of a high risk industry the RMS policy is crucial. A continuous review and updation policy

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VERTEX SECURITIES LIMITED

needs to be in place to make it the best in the industry. The company also needs to function in a high regulatory environment and a highly vigilant compliance mechanism is in place manned by competent and dedicated personnel.

Internal Control Systems:The company has an adequate system of internal controls to ensure all policies and procedures relating to accounting, ��Z������� #���� ��#�� �� ��&�������� Z������`�=� `_� ����management. An independent internal auditor has been �ZZ����=� ��=� ���� ��=��� $���!��� � ���� Y��=� �����#�� ����scope and observations on a regular basis.

Human Resources:"��� ��Z��_� ���� �� ����!�=� #�X� ���� ��=� ����� ����� ���

the real asset of the company. Employee recognition is seen as crucial to keep them motivated. An area that needs to be focused on is the training of employees to improve the skill set.

Cautionary Note:

Statements in this Report describing the Company’s objectives, estimates and expectations may constitute forward looking statements within the meaning of applicable laws and regulations. Forward looking statements are based on certain assumptions and expectations of future events. These statements are subject �� ���X�� �� ��������������W� ������� �������� ���=� =�|��� ���������_�from those expressed or implied since there could be many factors which are beyond the control of the management. The company assumes no responsibility in respect of forward looking statements that may change due to subsequent developments.

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ANNUAL REPORT 2013-14

TO THE MEMBERS OFVERTEX SECURITIES LIMITED

Report on the Financial Statements%�� ����� ��=���=� ���� ����Z��_��&� �������� ����������� � q����z������������ ������=� [����� $�Z��_�\� #����� ��Z����� ���� Y������������� ��� ��� ��� ������ /:���� ���� ���������� � �� �� ��=� ���� ��=�the Cash Flow Statement for the year then ended and a summary ���&�� �������������&�Z���������=�������zZ������_���������W

Management’s Responsibility for the Financial Statements����&������ ��� ���Z���`��� �� ���� Z��Z������� � ������ ������������������� ����� &���� �� ����� ��=� ���� ���#� � ���� �������� Z������� ��������Z�����������=�������#�������$�Z��_��������=�����#���� ���� ��������&� ����=��=�� ������=� �� ��� ��`j������� [�$\� �������� /��� � ���� $�Z������ ����� �<{*� [����� ����\� ���=� #���� ����General Circular 15/2013 dated 13th September 2013 of the Ministry �$�Z������|�����������Z���������������������$�Z�����������2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and Z����������� � ���� �������� ����������� ����� &���� �� ����� ��=� ����view and are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility���� ���Z���`����_� ��� �� �zZ����� ��� Z����� �� ������ ������������������� `���=� �� ��� ��=��W� %�� ��=����=� ��� ��=��� ���accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the ��=��� �� `����� ������`��� ���������� �`��� #������� ���� ��������statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence �`��� ���� ������� ��=� =���������� ��� ���� �������� ����������W� "���procedures selected depend on the auditor’s judgment, including ���������������� �������X�������������������������� ���� ��������statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to ���� $�Z��_��� Z��Z������� ��=� ���� Z����������� � ���� ��������statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an Z������������|���������������������_�����������������W������=���also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the ������������������W

%�� `������� ����� ���� ��=��� ���=����� #�� ����� `�����=� ��� ���������and appropriate to provide a basis for our audit opinion.

������\����������>�� � ��� ��������� ��� �� ����� ��� ����� ��� �������� ����� ��� ���� �������!�

"���������#� ���������� � �!������� ��� !���� ����� �� �������� $%����� ����������'� *�� �� �� ��!���� ����� ���� ��+�������� $%� �����������������������$��������������������������!�� �!������'

$�� ��� ������� ��� ������ �,� �������� ����� ��� ���� �������!� "���������#������%� ��$����� ������ ���� ����� ������� ������� ��!���� �!�������������� ����'� -��� �����%� ��$����� ������������ ���� ����� �������� ������� ������� ��� `�.,#/,0#,1�23'� �������� ���� ��� ���� ����!������%� ��$����#� ���� �� ���� ��� `�4#/45#56423#� ���� ������%� ����

���������� !���!�������� ��%�������#� ������������������7�������� �����8������������'

9�� ��7� ��� ���� �$� �#� ���� :������� ��� ���!���$�!��%� ��� �!�� �����������������%���$����2�!���!!%�������������$�������������������$!���������������'

OpinionIn our opinion and to the best of our information and according �� ���� �zZ��������� &����� �� ���� �z��Z�� �� ���� �|����� � ���� ��!���=�����`�=��������Y������������ �=��Z�����Z���&��Z������� ��������statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:[�\�� ��� ���� ����� � ���� Y������� ������� � ���� ������ � �|����� � ����

$�Z��_����������������/:�� [��\�� ��� ���������� ����������������� ����=������� ���� ������

����_������=�=��������=��� ���=[���\�� ��� ���� ������ ����$����>�#������������� ���� ������#�� ��

the year ended on that date.

Report on Other Legal and Regulatory Requirements�W� ��� �������=� `_� ���� $�Z������ [��=������ ��Z��\� ��=���� /::��

[����� ��=���\�� ��� ����=�=�� �����=� `_� ���� $������� ����������� '�=��� ��� ������ � ��`j������� [��\� � ������� //+� � ���������#��&���������������z������������������������!�����Z��� �=����paragraphs 4 and 5 of the Order.

/W�� ����������=�`_��������//+[�\�����������#����Z�������)a. we have obtained all the information and explanations

which to the best of our knowledge and belief were ��������_�������Z��Z���������=�� 

b. in our opinion proper books of account as required by law have been kept by the Company so far as appears from ����z���������������`X� 

�W�� ���� Y������� ������� ���������� � �� �� ��=� ���� ��=� $����Flow Statement dealt with by this Report are in agreement #��������`X��������� 

=W� �z��Z�� �� ���� �|����� � ���� ��!��� =�����`�=� ��� ���� Y������� ����� �=� �Z����� Z���&��Z��� ��� ��� Z������ ����Y��������������������������� ����=�������=�$����>�#�Statement comply with the Accounting Standards referred �� ��� ��`������� [�$\�� �������/���� ����$�Z�����������1956 read with the General Circular 15/2013 dated 13th ��Z���`��� /:��� � ���� �������_� � $�Z����� �|����� ������Z���������������������$�Z�����������/:�� ���=

�W� �� ���� `����� � #��!��� ��Z������������ �������=� ��� ����directors as on 31 March 2014, and taken on record by the Y��=����������������� ����=�������� ���=������� �=����on 31 March 2014, from being appointed as a director in ������ � ������� [&\� � ��`j������� [�\� � ������� /+�� � ����Companies Act, 1956.

For RAHUL GAUTAM DIVAN & ASSOCIATES �������������������

[>��������&���������(��`��)��/:/<�%\

RAHUL DIVAN Place : Mumbai Partner Date : 5 May, 2014 Membership Number: 100733

INDEPENDENT AUDITORS’ REPORT

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22

VERTEX SECURITIES LIMITED

�\� [�\� "��� $�Z��_� ��� maintained proper records showing full particulars including quantitative =���������=����������� z�=�������W

� [`\� ���� ���� ������� ����� `���� Z�_������_� ���� �=� `_�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 ���� �����W

� [�\� "����� #��� �� ��`��������� =��Z���� � z�=� �������during the year.

��\� "���$�Z��_���=����������_�=����&�����_���W�����������$�Z��_� ���� �� �������_�� �������� �� [��\� [�\�� [`\� �� [�\� �the Order are not applicable.

���\� �\� "��� $�Z��_� ���� &�����=� ��������=� ����� ��=�deposits to companies covered under section 301 of the Companies Act, 1956 during the year. The maximum amount during the year was `�����/<~�:::� ��=� ���� _���� ��=� `������� � ���� �����granted is `�<++�{�/W� `�����/<~�:::� � ���� ���� ���three individual companies have been converted into 8% Non-Cumulative Redeemable Preference Shares during the year.

� `\� '�� ��� Z����� ���� ����� � ��������� ��=� ����� ������and conditions of said unsecured loans were not, prima facie, prejudicial to the interest of the Company. ;�7� ������ ���������7��� ���� ������ ���� ��������������!����������������%���'

� �\� ��� �����=� �� ���� ���� $�Z��_� #��� ��&����� ���receiving the principal amount as per the terms and conditions of the agreement.

� =\� ��� �����=� �� ���� ������ ��� �� ���=��� ������ �loans granted by the Company.

� �\� "��� $�Z��_� ���� ��X��� ��������=� ���� ���companies covered under section 301 of the Companies Act, 1956. The year end balance of the loans taken is `�{{�{~��:*�W

� \� '�� ��� Z����� ���� ����� � ��������� ��=� ����� ������and conditions of said unsecured loans were not, prima facie, prejudicial to the interest of the Company.

� &\� ��� �����=� �� ���� ���� $�Z��_� #��� ��&����� ���paying the principal amount as per the terms and conditions of the agreement.

ANNEXURE TO THE INDEPENDENT AUDITORS’ REPORT[����z����������=������Z���&��Z������=����������=��&��£��Z�������������&�����=

��&�����_���������������������Z���������=���\

[��\� '�� ��� Z����� ��=� ����=��&� �� ���� ��������� ��=�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 Z�������� � z�=� ������� ��=� ����� � ��������W� �����&� ����course of our audit, no major weakness has been noticed in the internal control systems in these areas.

[�\� [�\� ����=��&� �� ���� ��������� ��=� �zZ���������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, 1956 have been so entered.

� [`\� '�� ��� Z����� ��=� ����=��&� �� ���� ���������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 have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

[��\� '�� ��� Z����� ��=� ����=��&� �� ���� ��������� ��=�explanations given to us, the Company has not accepted deposits from the public.

[���\� '�� ��� Z����� ��=� ����=��&� �� ���� ��������� ��=�explanation given to us, the Company has an internal audit system commensurate with the size and nature of its business.

[����\� "������������������������=����������`����Z������`�=�`_� ���� $������� ���������� ��=��� �������/:<[�\[=\�� ����Companies Act, 1956 for the year under report.

[�z\� [�\� ����=��&� �� ���� ����=�� � ���� $�Z��_� ��=�information and explanations given to us, the Company has been regularly depositing with the appropriate authorities undisputed statutory dues including Provident Fund, Employee State '���������� '�������z�������� ��z��%������ ��z����������tax, Customs Duty Excise Duty, Cess and any other statutory dues applicable to it. There are no undisputed statutory dues as referred to above as at 31 March 2014 outstanding for a period of more than six months from the date they become payable.

� [`\� ����=��&��� ���� �����������=��zZ��������&�����to us and the records of the Company examined by us, disputed amounts of taxes have not been deposited with the authorities as at 31 March 2014 as per details given below:

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23

ANNUAL REPORT 2013-14

[z\� �������� ��� ���� ������� ��� ���� ������%#� ���� ������%����� ����!����� !������ ��� ���� ���� ��� ���� +�����!� %���'� -���������%�������������������!���������������+�����!�%������������������������!%����������+�����!�%���'

[z�\� '�� ��� Z����� ��=� ����=��&� �� ���� ��������� ��=�explanations given to us, the Company has not defaulted ��� ��Z�_����� � =���� �� �� �������� ������������� `��X�� ��debenture holders.

[z��\� Y���=� �� ��� ��=��� Z���=����� ��=� �� ���� ���������and explanations given by the management, we are of the opinion that since the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities, it is not required to maintain records in respect thereof.

[z���\� "��� $�Z��_� ��� ��� �� ����� ��=V��=��V������� `��� ��fund/society to which the provisions of special statue relating to chit fund are applicable. Accordingly Z���&��Z���[z���\��������=����������ZZ����`��W

[z��\� '�� ���Z����� �������� ��������������W����=���� ������������`_�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 investments have been held by the Company in its own name.

[z�\� '�� ��� Z����� ��=� ����=��&� �� ���� ��������� ��=�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. The outstanding guarantees at the end of the year were `��:�:::�:::Vj�#�����������#������������&�������`����_W

[z��\� '�� ��� Z������ ���� ����� ����� ����� `���� �ZZ���=� �� ����purpose for which they were raised.

[z���\ According to the information and explanations given to us and an overall examination of the Balance Sheet and Cash Flows of the Company as at 31 March 2014, we report that funds raised on short term basis have not been used for long term investment.

[z����\ During the year, the Company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the $�Z������ ����� �<{*W� ����=��&�_�� Z���&��Z�� �[z����\� �the Order is not applicable.

[z�z\� "��� $�Z��_� ���� ��� �����=� ��_� =�`�������� =����&� ����_���� ��=�=� ��� ������ /:��W�����=��&�_�� Z���&��Z�� �[z�z\�of the Order is not applicable.

[zz\� �����&� ���� _���� ��=�=� ��� ������ /:���� ���� $�Z��_� ����not raised money by way of public issue. Accordingly, Z���&��Z���[zz\��������=����������ZZ����`��W

[zz�\� Y���=���������=���Z���=�����Z�����=���=����������and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit for the year ended 31 March 2014.

For RAHUL GAUTAM DIVAN & ASSOCIATES �������������������

[>��������&���������(��`��)��/:/<�%\

RAHUL DIVAN Place : Mumbai Partner Date : 05 May, 2014 Membership Number: 100733

Nature of Statue Nature of dues Amount (`) Period to which amount relates

Forum where the dispute is pending

Finance Act Tax / Penalty 622,000 2006-07 to 2009-10 The Customs, Excise and Service tax Appellate Tribunal.

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24

VERTEX SECURITIES LIMITED

BALANCE SHEET AS AT 31ST MARCH, 2014

Particulars Note No.

Figures as at 31.03.2014 Figures as at 31.03.2013` ` ` `

I EQUITY AND LIABILITIES(1) Shareholders Funds� [�\� ������$�Z���� 2 150,283,300 150,283,300� [`\� �����������=����Z��� 3 (13,101,838) [���<*��<�\

137,181,462 147,087,106(2) Non-Current Liabilities� [�\� ��&�"����Y��#��&� 4 60,949,217 44,198,050� [`\� ��������&�"�������`������� 5 3,730,843 2,479,797

64,680,060 46,677,847(3) Current Liabilities� [�\� �����"����Y��#��&� 6 5,642,520 5,929,010� [`\� "��=����_�`��� 7 57,982,483 56,405,570� [�\� ������$����������`������� 8 4,949,891 11,057,169� [=\� �����"������������ 9 3,132,747 71,707,641 1,148,307 74,540,056 TOTAL EQUITY AND LIABILITIES 273,569,163 268,305,009

II ASSETS(1) Non Current Assets� [�\� >�z�=�������� � [�\� "��&�`��������� 10 12,341,747 15,665,691� � [��\� '����&�`��������� 11 2,284,579 3,348,362� [`\� (��$�������'���������� 12 171,901,030 58,410,100

186,527,356 77,424,153(2) Current Assets� [�\� "��=���������`��� 13 29,766,119 30,901,604� [`\� $������=�$��������������� 14 18,682,890 33,638,761� [�\� �����"�����������=��=������ 15 36,969,442 122,666,283� [=\� ������$������������� 16 1,623,356 87,041,807 3,674,208 190,880,856 TOTAL ASSETS 273,569,163 268,305,009

The Note No.1 to 35 are an integral part of these Financial Statements

���Z�������!����=���Z���������=���

For Rahul Gautam Divan & Associates For and on behalf of Board of Directors �������������������

Rahul Divan Kumar Nair James Pothen Jose Thomas Polachira Partner Chairman & Managing Director Director Director

Mumbai Kochi-18 U. Ramachandran Sandhya R. Nair 5th May, 2014 5th May, 2014 <������� ������%�"������%

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25

ANNUAL REPORT 2013-14

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH, 2014

Particulars Note No.

Figures for the Year Ended

31.03.2014 `

Figures for the Year Ended

31.03.2013 `

REVENUE

Revenue From Operations 17 38,800,275 52,516,822

Other Income 18 11,060,675 24,319,585

TOTAL REVENUE 49,860,950 76,836,407

EXPENSES

��Z�_���Y��� ����zZ���� 19 22,677,669 34,955,587

Finance Costs 20 1,206,312 4,487,727

Depreciation and Amortisation Expense 10 & 11 2,773,764 3,687,981

Other Expenses 21 34,328,887 47,516,456

TOTAL EXPENSES 60,986,632 90,647,751

]���+|}��<���\���������� ���� ���������� �������"��� ��~�� (11,125,682) [���~������\

Exceptional Items :-

� �� ��V�[���\��������������� 1,220,038 [</~�~{*\

]���+|}��<���\������������ �������"��� ��~�� (9,905,644) [���+�:�/::\

Extraordinary Items – –

� �� �V[���\�Y����"�z (9,905,644) [���+�:�/::\

Tax Expense

Current Tax – –

Short provision for income tax in prior years – [�:/�/~+\

Deferred Tax – [������*�+\

]���+|}��<�\�����������\�"�Z �� � Q�>������ � (9,905,644) [�*��~*��:�\

]����+�|}��<�\�"����� �� � Q�>������ � – –

Tax Expenses of Discontinuing Operations – –

]����+�|}��<�\�"����� �� � Q�>������ ��?@���~�� – –

]���+|}��<�\���������� (9,905,644) [�*��~*��:�\

Basic Earning Per Share of ` /Vj������[�'����Z���\ 23 (0.21) [:W�+\

Diluted Earning Per Share of ` /Vj������[�'����Z���\ (0.13) [:W//\

The Note No.1 to 35 are an integral part of these Financial Statements

���Z�������!����=���Z���������=���

For Rahul Gautam Divan & Associates For and on behalf of Board of Directors �������������������

Rahul Divan Kumar Nair James Pothen Jose Thomas Polachira Partner Chairman & Managing Director Director Director

Mumbai Kochi-18 U. Ramachandran Sandhya R. Nair 5th May, 2014 5th May, 2014 <������� ������%�"������%

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26

VERTEX SECURITIES LIMITED

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2014

Particulars 2013-14 `

2012-13 `

A. Cash Flow from Operating Activities(����� ��[���\�Y����"�z���� (9,905,644) [���+�:�/::\Adjustments for:�==V[����\)

Depreciation/Amortisation 2,773,764 3,687,981[�� �\V���������������=V�#��!���| (1,220,038) 928,856Short provision for income tax in prior years – [�:/�/~+\'�����������=���Y��X������������zZ���� 1,206,312 4,487,727Interest Received (1,120,690) [+��<��*��\

>������ Q�]������\������� Q�Z�������Z�� Q�� (8,266,296) [����/<�{*�\�=������������$���&������%�X��&�$�Z����

"��=�����������������`���j���������V['�������\ 3,186,336 3,323,864��������=������[(��\�j���������V['�������\ 6,492,555 [���+<��*+\"��=��Z�_�`����j�[��������\V'������� (1,550,060) [+�+*/��/*\������Z�_�`����j�[��������\V'������� 1,984,440 4,634,714

Cash Generated from operations 1,846,975 [�*���/��+<\� '�����"�z���=�>���&��Y��� ��"�z�Z��= (100,258) [��+:���<�\����Z�������\�"�>������ Q�?��������� [�\ 1,746,717 [�~���*�*+/\

B. Cash Flow from Investing ActivitiesPurchase of Fixed Assets (36,400) [��/�*�*<�\Sale of Fixed Assets 2,870,401 265,071'���������������=������������= 1,120,690 7,391,641Inter Corporate Deposit (13,267,480) 8,708,996

Net Cash used in Investing Activities [Y\ (9,312,789) 15,129,017C. Cash Flow from Financing Activities:

�����Z�V��Z�_������������=�����[���\ (5,929,010) [�~{��:�\'�����������=���Y��X������������zZ���� (1,206,312) [���~+�+/+\Dividend paid (100) –(�j�$����������`�������j�[��������\�V�'������� (254,376) [*�{�*~�\

Net Cash used in Financing Activities [$\ (7,389,799) [{�*:~�~��\Net Increase/(Decrease) in Cash & Cash Equivalents(A+B+C) (14,955,871) [~�{<*��*+\Cash & Cash Equivalents as at the beginning of the year 33,638,761 42,235,228Cash & Cash Equivalents as at the end of the year 18,682,890 33,638,761

���Z�������!����=���Z���������=���

For Rahul Gautam Divan & Associates For and on behalf of Board of Directors �������������������

Rahul Divan Kumar Nair James Pothen Jose Thomas Polachira Partner Chairman & Managing Director Director Director

Mumbai Kochi-18 U. Ramachandran Sandhya R. Nair 5th May, 2014 5th May, 2014 <������� ������%�"������%

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27

ANNUAL REPORT 2013-14

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2014 (ALL AMOUNTS MENTIONED ARE IN RUPEES)

1. SIGNIFICANT ACCOUNTING POLICIES

a) Basis of Presentation of Financial Statements: The Financial Statements are prepared under historical cost convention, on an accrual basis of accounting in conformity

with the accounting principles generally accepted in India and comply with the Accounting Standards referred to in �������/���[�$\������$�Z������������<{*

b) Use of estimates� "���Z��Z�������� ����������������������������_�#��������&�������_�����Z��=���������&�Z�����Z����[����\����������

����&����������X��������������=������Z�����������|���� ������Z���=������������������=����`����������=�=���������������&���� ���`������������������=����� ���������������������=���Z���=��������������������=��zZ������=����&�������Z����&� Z���=W� ������� �������� ���=� =�|��� ��� ������ ���������W� ��_� �������� �� ��������&� ���������� ��� ���&����=�prospectively in the current and future periods.

c) Fixed Assets and Depreciation:�\� >�z�=�����������������=�����������������������=�=�Z�����������=��=�����=�����Z������������_W��\� "��� ��Z��_� Z���=��� ��Z��������� �� �����&��� ����� ����=� [���\� ��� ���� ����� �Z��� �=� ��� ����=���� ¡'q� � ����

Companies Act, 1956.���\� ��Z������������==�������� z�=�����������Z���=�=���Z�j�����`������������=������==����W

d) Intangible Assets:� '����&�`������������Z���������`�����Z���&��������X��z����&����$�Z�������#������=���#������������W�"������X�

�z����&����&������=���#������������������������=�������Z���=���:�_�������=�����$�Z�������#���� ����������=�������Z���=��{�_������������&��������`����W

e) Inventories - Shares: The shares are valued at lower of cost or net realizable value.

f) Income:� Y�X���&�� ������ ��� ���&����=� �� ���� =���� � ���� ������������ �Z�� �� ������� � ���� ���=�� `_� ������W� '�������� ��

����� ��=� =�`���� ���� �������=� �� �����Z�� `����� ������ ������ ��� ��&�� ����� ����������_� ��� ��������W� ����=��=� ������ ���recognised when right to receive the same is established. Service income is recognised as per the terms of the contract/agreement entered into with the customers when the related services are performed.

Q<� �"�������� ����#

� } Q�~��"��"�������� ����

�W� �� ��=�$����`�����Z���� "��� ��Z��_� ���� =� ��=� �����`����� Z����� �� ��Z�_���� ��Z�����&� � ����=���� >��=� ��=� ��Z�_���� ������

'��������W�"��������`������Z��=VZ�_�`�����������Z�������������&�=���������������� ��������������Z���=���which they are related.

��W� �� ��=�Y��� ������� "��� ��Z��_� ��X��� �����`������ �� ���Z�_����� ���Z� �������_j���j�������������� �������� � ���� '���������

$�Z������ � '�=��W� "��� ���� Z������� ������ � ���� `��&����� �� &������_� `��� ��� ��� =��������=� �� ����������valuation, conducted annually using the projected unit credit method, as adjusted for unrecognized past service cost if any and as reduced by fair value of plan assets, is recognized in the accounts. Actuarial gains and losses are ���&����=���������������������������� ��������������Z���=����#��������_�����W

���W� ��������&��������Z�_���Y��� ��� "�����Z��_�������������������������������������&�`�����Z�_���W�$�Z��_������`����_�����������`�������������

=���� �� ����� `��� ��� ��� Z���=�=� �� �� ���� `����� � ���������� ��������� ��=��� �������=� ����� $��� ����=�� =���

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28

VERTEX SECURITIES LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2014 (ALL AMOUNTS MENTIONED ARE IN RUPEES)

`_� ��� ��=�Z��=���� ������_W����������� &����� ��=� ������ ��Z����� �zZ�������� �=���������� ��=� �|����� � ����&��� ������������������Z�������=��������&����=��������������������� ��������������������zZ����W

��W� �����"������Z�_���Y��� ��� ���� ��Z�_��� `��� ��� Z�_�`��� #���_� #������ �#����� ������ � ���=����&� ���� �������� ���� ������ �=� ��� ����j�����

��Z�_���`��� �����=����&����=��������Z���=����#�����������Z�_������=��������������=��������W

h) Income tax� '����� ��z� ��� �������=� ��� ����=����� #���� ��������&� ����=��=� �� ��������&� �� "�z��� �� '����� [��� //\�� #�����

�����=��� �������� ��z��� ��=� =�����=� ��z��W� ������=� ��z� ������V���`�������� ��Z��������&� �����&� =�|�������� `��#����accounting income and taxable income are recognised to the extent considered capable of being reversed in subsequent _����W� ������=� ��z� ������� ���� ���&����=� ��_� �� ���� �z����� ������ ��� ������`��� ��������_� ����� ��������� ������ ��z�`���income will be available, except that deferred tax assets arising due to unabsorbed depreciation and losses are recognised �����������������������������_�����������������������z�`���������#����`��������`���������������������W

i) Investments� ��&� ����� ������������ ���� �����=� ��� ���� ����� Z������� �� Z��������� =��������� ��� ������ �������� �� ��_W� $�������

investments are stated at lower of cost and net realisable value.

j) Provisions and Contingent liabilities Provisions are recognised when the company has a present obligation as a result of past events, for which it is probable

����� �� ����� ���#� #���� `�� �������=� ��=� �����`��� ��������� ���� `�� ��=�� � ���� ������ � `��&����W� ��������� ���� ���=�������=� �� ������ Z������� ������ ��=� ���� =��������=� `���=� �� `���� ��������� �������=� �� ��!��� ���� `��&����� ��� ����`�������������=���W�"��������������#�=���������`�������������=������=��=�����=����������������������&���������������W

k) Earnings Per Share� Y����� ��=� =�����=� ������&�� Z��� ������ ��� ��Z���=� `_� =���=��&� ���� ���� Z� �� �!��`���`��� �� �����_� �������=���� �� ����

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

l) Leases� ����������� ��� �������=� `_���������&� ����=��=� �<�� ��������� �����=� `_� ���� '��������� � $�������=������������ � '�=����

are given below:[�\� "���$�Z��_�������X�����������������=�����������=����������&��������W�"���������&�������_���j�������`�����=�

range between 11 months and 5 years and are renewable by mutual consent on mutually agreeable terms.[��\� ������Z�_�������������&����=��������������������� ����������=���£�����W

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29

ANNUAL REPORT 2013-14

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2014 (ALL AMOUNTS MENTIONED ARE IN RUPEES)

ParticularsAs At

31.03.2014 `

As At 31.03.2013

`

2 SHARE CAPITAL Authorised Capital� �\� +��+{��~:{������_���������` /Vj������[�W�W�+��+{��~:{������_���������` /Vj������\ 147,507,610 147,507,610� /\� {�<~��+�<�:W{��������������������`��:Vj����� � � [�W�W�{�<~��+�<�:W{��������������������`��:Vj�����\

59,817,390 59,817,390

� �\� {�::�:::��{��(�j$������������=����`���������������������`��::Vj����� � � [�W�W�{:�::�:::��{��(�j$������������=����`���������������������` �::Vj�����\

50,000,000 50,000,000

257,325,000 257,325,000 Issued, Subscribed and Paid Up:

�+�+/���~:�[�W�����~�~�<~:\������_���������` 2/- each fully paid up 95,442,960 87,697,960{�/:*��{��[�W�W�{�<~:�<{�\�:W{��>���_�$������`���������������������`��:Vj����������_�Z��=��Z 52,064,540 59,809,540/+�+{~�[�W�W/+�+{~\��{��(��$������������=����`���������������������`��::Vj����������_�paid up

2,775,800 2,775,800

150,283,300 150,283,300

Notes: �\� �������������������������������=��&��������`�&�����&���=����������=��������Z����&�_���W

A) Equity shares

Particulars2013-14 2012-13

Number Amount (`) Number Amount (`)At the beginning of the year 43,848,980 87,697,960 43,848,980 87,697,960Add:- Preference Shares converted to Equity Shares– On 16 May 2013 1,592,500 3,185,000 – –– On 03 September 2013 1,780,000 3,560,000 – –– On 25 October 2013 425,000 850,000 – –– On 11 December 2013 75,000 150,000 – –Total No of Shares 47,721,480 95,442,960 43,848,980 87,697,960Allotment for ESOP – – – –Additional Equity Shares Issued – – – –Outstanding at the end of the year 47,721,480 95,442,960 43,848,980 87,697,960

B) 0.5 % Fully Convertible Preference Shares

Particulars2013-14 2012-13

Number Amount (`) Number Amount (`)At the beginning of the year 5,980,954 59,809,540 5,980,954 59,809,540����)j�$������=��������_�������– On 16 May 2013 318,500 3,185,000 – –– On 03 September 2013 356,000 3,560,000 – –– On 25 October 2013 85,000 850,000 – –– On 11 December 2013 15,000 150,000 – –Outstanding at the end of the year 5,206,454 52,064,540 5,980,954 59,809,540

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30

VERTEX SECURITIES LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2014 (ALL AMOUNTS MENTIONED ARE IN RUPEES)

C) 15% Non-Cumulative Redeemable Preference Shares

Particulars2013-14 2012-13

Number Amount (`) Number Amount (`)

At the beginning of the year 27,758 2,775,800 27,758 2,775,800

�==V�[����\)j�'����=V�=�=����=�=����&�����_��� – – – –

Outstanding at the end of the year 27,758 2,775,800 27,758 2,775,800

2) Term��� ����Q�����J��������������

A) Equity Shares�\� "��� ��Z��_� ���� ��_� ��� ������ � �����_� ������ �����&� �� ���� q����� �`�/Vj� ����W� ����� ��=��� � �����_� ������ ���

entitled for one vote per share. The company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to approval by the share holders in the ensuring Annual General Meeting.

/\� '�� ����������� �����=������ ������Z��_�� ������=���������_��������#����`���������=� �� �������� ��������&���������������Z��_�������=�����`����������Z�����������������W�"���=�����`�����#����`�� ���Z�Z��������������`���of equity shares held by the shareholders.

B) 0.5% Fully Convertible Preference Shares.�\� ����� >���_� $������`��� ���������� ������ ������ `�� ��Z������_� �������=� ���� ��� �����_� ������ �` 2/- each fully

Z��=��Z����Z���������_���������������=�� ����_������������=�� ���_�����������=�������������W/\� ������������������=���������������=���&���=���=��=���_�#����������Z��_�����=�����`���`���Z� ��W�\� '�� ���� ������ � #��=��&� �Z� �� ��Z�_����� � ��Z������ ���������� ������ ��=���� ����� ���� Z����������� ��&��� �� `��

repaid the amount of capital paid up.

C) 15%, Non Cumulative Redeemable Preference Shares.�\� ����� (�� $���������� ��=����`��� ���������� ������ ������ `�� ��=����`��� #���� ��� �� Z���=� � �� �� �� _���� ��� ����

date of issue i.e. 19/05/2010 as may be determined by the Board of Directors of the company at their absolute discretion.

/\� ������������������=���������������=���&���=���=��=���_�#����������Z��_�����=�����`���`���Z� ��W�\� '�� ���� ������ � #��=��&� �Z� �� ��Z�_����� � ��Z������ ���������� ������ ��=���� ����� ���� Z����������� ��&��� �� `��

repaid the amount of capital paid up.

3) Shares held by Holding company- Transwarranty Finance Limited

Particulars 31st March, 2014 (`)

31st March, 2013 (`)

Equity Shares

Equity shares @ ` 2/- each Fully Paid 24,318,110 24,318,110

Preference Shares

0.5% Fully Convertible Preference share of `��:Vj����� 3,128,003 3,228,003

15% Non Cumulative Redeemable Preference Shares of `��::Vj����� 6,863 6,863

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31

ANNUAL REPORT 2013-14

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2014 (ALL AMOUNTS MENTIONED ARE IN RUPEES)

�<� ?QQ��Q�����"����\�����������J������\��������������������"� ����� Q����������� ��������� Q���������\���!�����preceding the date at which the Balance Sheet is prepared.

Particulars No of Shares Class of Shares

Equity Shares of ` 2/- each fully paid up issued to share holders of Transwarranty Capital ���W���=W����Z���������������&����������>W�W�/::<j�:

4,262,250 Equity Shares

0.5% Fully convertible Preference Share of ` 10/- each issued to share holders of "����#������_�$�Z��������W���=W����Z���������������&����������>W�W�/::<j�:

8,619,215 Preference Shares

15% Non Cumulative Redeemable Preference Shares of ` 100/- each reissued to share holders redeemable with in a period of 1 to 3 year from the date of issue i.e. 19/05/2010

27,758 Preference Shares

157,500 Equity Shares of ` 2/- each fully paid up issued to share application money of "����#������_�$�Z��������W���=W����Z���������������&����������>W�W�/:��j�/W

157,500 Equity Shares

5) Details of shares holders holding more than 5% shares in the Company.

A) Equity shares of ` 2/- fully paid up.

Particulars31st March, 2014 31st March, 2013

Number % of Holdings Number % of Holdings"����#������_�>�������������= 24,318,110 50.96 24,318,110 55.46Kumar Nair 5,882,058 12.33 5,963,320 13.60

B) 0.5% Fully Convertible Preference shares of ` 10/- fully paid up.

Particulars31st March, 2014 31st March, 2013

Number % of Holdings Number % of Holdings"����#������_�>�������������= 3,128,003 60.08 3,228,003 53.97Kumar Nair 1,739,097 33.40 2,095,097 35.03Pravin Khatau – – 318,500 5.33

Z<� '���� ;Z"������������"�����]��\��� ����������\��%'**+;�\�����������

Particulars31st March, 2014 31st March, 2013

Number % of Holdings Number % of Holdings"����#������_�>�������������= 6,863 24.72 6,863 24.72"����#������_���������������= 17,750 63.94 17,750 63.94"����#������_��=��������������������= 3,145 11.34 3,145 11.34

As per records of the company, including its register of share holders/ members and other declarations received from the �������=������&��=��&�`��� ��������������������`�����Z��������`�����&�����=�`��� �����#������Z��������W

6) Employees Stock Option Scheme�\� "��� � q����z� ��Z�_��� ���X� �Z���� ����� /:�:� ���� `���� �ZZ���=� `_� ���� Y��=� �� ��������� � ���� ��Z��_� �� �:th

March, 2008.

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32

VERTEX SECURITIES LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2014 (ALL AMOUNTS MENTIONED ARE IN RUPEES)

`\� "���������&�Z���=�������� ���_������������=�����&��������������&���������_�����������=�����&����W

�\� �z�����������=�#��=������������_���� ���=�����&�������=�#�����zZ��������Z������� ���_����� �������=����of vesting.

=\� "���Z�����#����`����!��=���������_���������������Z��_W

�\� "�����Z��_����=�������������������������=�����������������W

\� The exercise price has been determined as follows

Grant

Options (Face Value of

`%'*+;����������<

Price Per Option

(`)

Options (Split to Face value of

`%=+;����������<

Price Per Option ?@���������

����J� Q (`)

Grant -I 462,500 69.00 2,312,500 13.80

Grant -II 50,000 145.50 250,000 29.10

Grant -III 17,500 145.50 87,500 29.10

Grant-IV 25,000 145.50 125,000 29.10

Grant-V 100,000 145.50 500,000 29.10

Grant-VI – – 1,013,750 29.10

Grant-VII – – 200,000 5.46

Grant-VIII – – 1,875,000 5.46

&\� $���������_�� �� ��Z�������� ���� ���� `���� ���&����=� `_� ���� ��Z��_� ��� ����=����� #���� ���� ���=����� (��� ��Accounting for Employee Share-Based payments issued by the Institute of Chartered Accountants of India.

�\� �������������������Z����

Particulars

As at 31st March,

2014 (`)

As at 31st March,

2013 (`)

�Z�����������=��&��������`�&�����&������_����[�>����q������`�/Vj�[�W�W�`�/Vj\�\ 2,537,002 2,680,315

Options granted during the year – 2,075,000

Options vested during the year – 248,627

Options exercised during the year – –

Options forfeited during the year 814,995 1,751,310

Options lapsed /surrendered during the year – 467,003

Options outstanding at the end of the year 1,722,007 2,537,002

�\� ��=� ���� ������ ����=� `���� ���=�� ���� ��Z�������� ���� #��=� ����� `���� ��&���� `_� ` ��W{{� ��X��� [�������� �����`�/�W��� ��X��\W� ���� ����� ��z� #��=� ����� `���� ��&���� `_� ` ���W*�� ��X��� [�������� _���� `�/�W��� ��X��\� ��=� Y�����EPS would have been ` [:W/�� \� ���� ������ [�������� ����� `�[:W�/\� ���� �����\� ��=� ������=� ���� #��=� ����� `���� ` [:W�{\�[�������������` [:W/{\\W

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33

ANNUAL REPORT 2013-14

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2014 (ALL AMOUNTS MENTIONED ARE IN RUPEES)

Particulars

As at 01.04.2013

Additions/ Created During

the Year

Deductions During the

Year

As at 31.03.2014

(`) (`) (`) (`)

3. RESERVES AND SURPLUS

Reserve on Amalgamation Accounts 6,078,892 – – 6,078,892

���Z�������Z���������������� ����=���� [�����(���`��#\

[/+�{/:�*��\ [<�<:{�*��\ – [�+��/*�/+{\

Securities Premium Reserve 18,245,545 – – 18,245,545

Total Reserves and Surplus (3,196,194) (9,905,644) – (13,101,838)

Particulars

As at 01.04.2012

Additions/ Created During

the Year

Deductions During the

Year

As at 31.03.2013

(`) (`) (`) (`)

RESERVES AND SURPLUS

Reserve on Amalgamation Accounts 6,078,892 – – 6,078,892

���Z�������Z���������������� ����=���� [�����(���`��#\

[�������{/+\ [�*��~*��:�\ – [/+�{/:�*��\

Securities Premium Reserve 18,245,545 – – 18,245,545

Total Reserves and Surplus 12,989,910 (16,186,104) – (3,196,194)

Particulars 2013- 2014 (`) 2012- 2013 (`)

Note :-

�� ��V��������������� (9,905,644) [�*��~*��:�\

����)j��ZZ�Z������� – –

(9,905,644) [�*��~*��:�\

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34

VERTEX SECURITIES LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2014 (ALL AMOUNTS MENTIONED ARE IN RUPEES)

ParticularsFigures as at

31st March, 2014 (`)

Figures as at 31st March,

2013 (`)NON-CURRENT LIABILITIES

4. LONG TERM BORROWINGS

A) SECURED

Term Loans From Banks:-

�q����������������>$�Y��X [������=�`_��_Z������������������j�����$��j�X=�\

– 74,228

NOTE: The loan from HDFC was taken for purchase of Skoda Car, during the year 2010-11. The loan carried an interest rate @ 9.75% and is repayable in 60 installment. The loan is against hypothecation of the Car Purchased.

B) UNSECURED

� � �\� �������=��=����������������=��������

Inter-Corporate Deposits - Holding Company 50,388,865 37,927,082

Inter-Corporate Deposits - Others 5,195,196 –

� � `\� �������������=��=������

� � � ���������_���Z�������>�������������=������ 5,365,156 6,196,740

60,949,217 44,198,050

5. OTHER LONG TERM LIABILITIES

� �\� "��=����_�`���

Amount due to Clients 3,120,001 1,710,189

� `\� ������

Other Creditors 610,842 769,608

3,730,843 2,479,797

CURRENT LIABILITIES

6. SHORT TERM BORROWINGS

A) FROM BANKS

SECURED

����=�����������j�$��������_�����Y��X [������=��&���������=&��V�������>�z�=���Z����` (���[�W��`�+�<*<�<~{Vj\������=��&���������\

– 5,929,010

B) FROM OTHERS

UNSECURED

Inter Corporate Deposits 5,642,520 –

5,642,520 5,929,010

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35

ANNUAL REPORT 2013-14

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2014 (ALL AMOUNTS MENTIONED ARE IN RUPEES)

ParticularsFigures as at

31st March, 2014 (`)

Figures as at 31st March,

2013 (`)

7. TRADE PAYABLES

� �\� ������=�������������������=���=���������Z����� – –

� `\� ������$��=����

– Amount due to Clients and Exchanges 57,982,483 56,405,570

57,982,483 56,405,570

8. OTHER CURRENT LIABILITIES

� �\� $���������������������&�"������`� 99,373 279,521

� `\� ��Z��=�����=��= 9,066 9,166

� �\� '��������������=���=�������Y��#��&�����������=�������� – 2,573,523

� =\� ��������_�`���

� � ���������_���_�`����[(��\ 480,431 1,300,015

– Creditors For Expenses 4,361,022 6,894,944

4,949,891 11,057,169

9. SHORT TERM PROVISION

� �\� ��������>����Z�_���Y��� ��

� � ���������������������������� 830,552 493,022

– Provision for Gratuity payable 1,319,253 –

� `\� ������

– Provision for Preference Share dividend 156,911 156,911

– Other Provision 826,031 498,374

3,132,747 1,148,307

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36

VERTEX SECURITIES LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2014 (ALL AMOUNTS MENTIONED ARE IN RUPEES)

10.

FIXE

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37

ANNUAL REPORT 2013-14

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2014 (ALL AMOUNTS MENTIONED ARE IN RUPEES)

ParticularsFigures as at

31st March, 2014 (`)

Figures as at 31st March,

2013 [`\NON -CURRENT ASSETS12. NON- CURRENT INVESTMENTS (AT COST) 1) Investments in Equity investments A) Quoted

���������������=�[��::��������¤��:Vj���������_�Z��=\ 370 370���=���������&���[��::��������¤��:Vj���������_�Z��=\ 700 700�����'�=���[��/:��������¤��:���������_�Z��=\ 304 304�=_���_�q�=��$�[��::��������¤��:Vj����_�Z��=\ 1,432 1,432

2,806 2,806����)������������������������������� 2,806 2,806

– –Market Value of Quoted Investments – –

B) Un Quoted i) Subsidiaries

Vertex Commodities & Finpro Pvt Ltd��~{<��<��[�W�W���~{<�/<�\������_��������¤�` 10/- each. 38,595,330 38,402,400

ii) Others$��������X��z����&����=�[�<:{������_��������¤�`��:Vj���������_�Z��=\ 2,507,700 2,507,700(�#��_�$�Z�[�'�=���\���=W�[��{:�:::������_������������������ @ ` �:Vj���������_�Z��=\

17,500,000 17,500,000

2) Investments in Preference Shares i) Subsidiaries

Vertex Commodities & Finpro Pvt Ltd/�::�:::�[�W�W�(��\�~��(�j$������������=����`���������������������`��::Vj�����W

20,000,000 –

ii) Others 1) Transwarranty Private Limited 52,501,000 –

{�/{�:�:�[�W�W�(��\�~��(�j$������������=����`���������������������`��::Vj�����W

2) Transwarranty Advisors Private Limited��:+�<+:�[�W�W�(��\�~��(�j$������������=����`���������������������`��::Vj�����W

40,797,000 –

171,901,030 58,410,100

13. TRADE RECEIVABLES Unsecured Considered Good Debts outstanding for a period exceeding six months 17,670,742 18,635,214 Other Debts 12,095,377 12,266,390

29,766,119 30,901,604

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38

VERTEX SECURITIES LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2014 (ALL AMOUNTS MENTIONED ARE IN RUPEES)

ParticularsFigures as at

31st March, 2014 (`)

Figures as at 31st March,

2013 [`\

14. CASH & CASH EQUIVALENTS Balance with Banks – In Current Accounts 5,535,783 11,718,165 – In Deposits Accounts �����"�����/��������������_ 13,100,302 21,873,404 [>�z�=���Z�����` ���<::�:::Vj�[�W�W�` ~{�::�:::Vj\�����Z��=&�=��&������Y��X Guarantees and ` ��:::�:::Vj�[�W�W�` (��\�����Z��=&�=��&������"��=��&������������ �z����&�\ Cash On Hand 46,805 47,192

18,682,890 33,638,761

15. SHORT TERM LOANS & ADVANCES Unsecured Considered Good Loans and Advances to Related Parties Inter Corporate Deposits 977,542 54,620,378 Interest Accrued on ICD's – 4,411,708 Others Advance Receivable 4,621,733 5,036,514 �=������'�����"�z�[(�����������\ 3,973,928 3,873,670 Advance Gratuity – 153,071 Deposits 27,396,239 54,570,942

36,969,442 122,666,283

16. OTHER CURRENT ASSETS Interest Receivable on Fixed Deposits 1,623,356 3,674,208

1,623,356 3,674,208

Particulars

Figures for the year ended

on 31st March, 2014 (`)

Figures for the year ended

on 31st March, 2013 [`\

17. REVENUE FROM OPERATIONS Sale of Services Brokerage Income 35,902,778 47,452,851 Income from Merchant Banking 573,889 1,787,632 Income from DP Operations 2,323,608 3,276,339 Net Sales 38,800,275 52,516,822

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39

ANNUAL REPORT 2013-14

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2014 (ALL AMOUNTS MENTIONED ARE IN RUPEES)

Particulars

Figures for the year ended on

31st March, 2014 (`)

Figures for the year ended on

31st March, 2013 [`\

18. OTHER INCOME �\ Interest Income 1,120,690 7,391,641 `\ Other Non Operating Income ���������_�����$���&�� 834,096 2,147,822 ����#��������$�$���&����������= 1,027,274 1,550,716 – Vsat Recurring Charges Recovered 28,800 30,900 – Recovery on Shared Services 4,899,790 8,650,520 – Miscellaneous Income 3,150,025 4,547,985

11,060,675 24,319,584

19. EMPLOYEES BENEFIT EXPENSES ��������������#����� 18,975,514 31,805,538 $����`�����������=����>��=���������>��=� 3,084,270 2,338,122 ���|�%�������zZ����� 617,885 811,926

22,677,669 34,955,586

20. FINANCE COST �\ Interest Expense 797,758 4,187,189 `\ Other Borrowing Cost – Bank Charges 76,145 85,376 – Bank Guarantee Expenses 332,409 215,161

1,206,312 4,487,726

21. OTHER EXPENSES

Annual Fee to Depository / Exchanges 195,906 157,234

AMC Charges 1,652,678 2,207,411

$��������������Y����������������zZ����� 190,754 317,029

Consultation Fee 556,387 863,590

Connectivity Charges 4,903,875 5,436,156

Depository Charges 379,207 458,551

Investor Protection Fund 93 181

Marketing fee/Commission paid 8,673,586 12,704,007

Sub Brokerage 6,434,125 7,906,054

SEBI Turnover Charges 105,734 122,864

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40

VERTEX SECURITIES LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2014 (ALL AMOUNTS MENTIONED ARE IN RUPEES)

Stock Exchange Charges 117,680 71,333

VSAT Charges 149,675 676,531

Advertisement, Publicity and Business Promotion 116,351 112,681

Auditor's Remuneration

– Statutory Audit Fees 100,000 100,000

– Income Tax Audit Fees 25,000 25,000

– Other Services 43,100 56,000

Y�=�=�`���%��!���| 2,765 –

YX��������=����� 39,624 39,417

Communication Expenses 1,138,898 1,489,880

Data Entry expenses 353,394 906,847

Insurance Premium 35,848 34,271

��&����zZ��������=�>����&�>��� 177,721 191,189

������&�>�� 25,000 25,000

����W�$���&������zZ����� 844,614 248,129

���������������� 764,084 613,339

����&����$������$���&�� 172,470 341,432

Power Charges 1,453,009 2,056,045

�������&�����������_ 402,081 675,922

������������=���&���>��� 914,881 2,084,809

Rates and Taxes 514,927 56,399

Rent 2,469,736 5,656,482

��Z������������������ 234,670 365,079

��!��&�>�������������� 106,668 92,000

"������&���$���������zZ���� 174,158 39,900

Travelling and Conveyance Expenses 806,489 1,338,382

Vehicle Running and Maintenance Expenses 53,700 47,313

TOTAL 34,328,887 47,516,457

Particulars

Figures for the year ended on

31st March, 2014 (`)

Figures for the year ended on

31st March, 2013 [`\

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41

ANNUAL REPORT 2013-14

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2014 (ALL AMOUNTS MENTIONED ARE IN RUPEES)

ParticularsFigures as at

31st March, 2014 (`)

Figures as at 31st March,

2013 (`)

22. CONTINGENT LIABILITIES

1. Counter guarantee issued in favour of the banker for guarantee given by them to NSE for margin requirement

11,900,000 17,000,000

2. ����������&�������`��������`��=���_���Z��_�q����z�$��=��������>��Z��[�\�������=

30,000,000 10,000,000

3. Claims against the company not acknowledged as debts:-

a. Tax demand in respect of which:-

���������_�['�����"�z\�����������������������/::+j:~ – 1,111,000

����������"�z��=������>��/::*j:+���/::<j�: 622,000 622,000

42,522,000 28,733,000

Particulars

Figures for the year ended on

31st March, 2014 (`)

Figures for the year ended on

31st March, 2013 (`)

23. EARNINGS PER SHARE

I. �� �V�[����\��������z����Z����� ���������V� (9,905,644) [�*��~*��:�\

II. %��&���=������&�����`���������_����������������&��Z�����������Z������

�\ For Basic Earnings per share of `�/Vj������[(¦�\ 46,476,035 43,848,980

Y\ For Diluted Earnings per share of ` /Vj������[(¦�\

(�����������Y������������Z���''���[(¦�\ 46,476,035 43,848,980

�==)j�%��&���=������&��������=��&����������`���Z��������������� 27,277,715 29,904,770

No of shares for Diluted Earnings per Share of ` 2/- Each 73,753,750 73,753,750

III. ������&������������[�>����q������` /Vj�����\

Y�����[`\ (0.21) [:W�+\

������=�[`\ (0.13) [:W//\

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42

VERTEX SECURITIES LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2014 (ALL AMOUNTS MENTIONED ARE IN RUPEES)

24 DISCLOSURE AS REQUIRED UNDER ACCOUNTS STANDARD 15 ON EMPLOYEE BENEFITS FOR GRATUITY AND LEAVE ENCASHMENT IS AS UNDER:

ParticularsGratuity Leave Encashment (Unfunded)

2013-14 (`)

2012-13 (`)

2013-14 (`)

2012-13 (`)

Z�� Q��� ������� ����>���Q��� �#Present value of obligations as on 01. 04. 2013 1,615,076 1,395,679 493,022 520,484Current Service Cost 661,373 351,657 574,428 407,304Past Service Cost – – – –Interest Cost 117,400 96,679 24,682 18,728����������[����\V������`��&���� 1,081,237 145,448 107,411 119,268Y��� ������= (295,163) [�+���~+\ (368,991) [{+/�+*/\Present value of obligations as on 31.03.2014 3,179,923 1,615,076 830,552 493,022Change in Plan Assets:Fair Value of Plan Assets as on 01.04.2013 1,768,147 1,947,843 – –Adjustment to the opening balance (112,314) – – –Expected Return on Plan Assets 158,243 159,307 – –Employer's Contributions 500,000 18,861 368,991 572,762Y��� ������= (295,163) [�+���~+\ (368,991) [{+/�+*/\��������������V[���\�������������� (158,243) 16,523 – –Fair Value of plan assets as on 31.03.2014 1,860,670 1,768,147 – –Net (Asset) / Liability (i) - (ii) : 1,319,253 [�{��:+�\ 830,552 493,022Net Cost for the year ended 31.03.2014Current Service Cost 661,373 351,657 574,428 407,304Past Service Cost – – – –Interest Cost 117,400 96,679 24,682 18,728Expected Return on plan Assets (158,243) [�{<��:+\ – –����������[����\V�������&����=�=����&�����_��� 1,239,480 128,925 107,411 119,268�=��������V[����\���Z����&��������Z�����=������� – – – –Net Cost 1,860,010 417,954 706,521 545,300

���������&����=��������Y�������������[�����\�V����`����_

1,319,253 [�{��:+�\ 830,552 493,022

���������&����=���������� ����=������������[����\V���

1,860,010 417,954 706,521 545,300

Principal actuarial Assumptions:-Discount rate 8.00% 8.00% 8.00% 8.00%Expected Return on plan assets 0.00% 9.00% 0.00% 0.00%Salary Escalation Rate 10.00% 5.00% 10.00% 5.00%�!���������� 10.00% 5.00% 10.00% 5.00%Demographic Assumptions:Retirement age {~�����Mortality rate '����[/::*j:~\

Unlimited

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43

ANNUAL REPORT 2013-14

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2014 (ALL AMOUNTS MENTIONED ARE IN RUPEES)

25 RELATED PARTY DISCLOSURES� ���Z�����������&�����=��=�[��j�~\���������=�����_�����������������=�`_�����'����������$�������=�������������'�=��������

=����������������������#��������������=�Z���_����=� ��=����������������&�����=��=�����&�����`��#)j

Name of the party Relation

Kumar Nair $��������������&��&��������

"����#������_�>�������������= Holding Company

q����z�$��=��������=�>��Z��[�\�������= Subsidiary Company

"����#������_���������������= ��������=�$�Z��_�[�������*V�/V/:��\

"����#������_��=��������������������= ��������=�$�Z��_�[�������*V�/V/:��\

(II) Summary of Transactions :

Name of the Company / Transactions 2013-14 (`)

2012-13 (`)

1) Inter Corporate Deposits Received - Holding Company

"����#�������_�>�������������= 31,093,783 14,928,000

2) Inter Corporate Deposits Paid Back - Holding Company

"����#�������_�>�������������= 18,632,000 36,492,100

3) Interest Paid on ICD - Holding Company

"����#�������_�>�������������= – 2,891,833

4) Brokerage Received on Share Trading - Holding Company

"����#�������_�>�������������= 162,099 –

5) Inter Corporate Deposits Given - Subsidiary Company

q����z�$��=��������=�>��Z��[�\�������= 69,749,000 143,750,000

6) Inter Corporate Deposits Received Back - Subsidiary Company

q����z�$��=��������=�>��Z��[�\�������= 49,749,000 143,750,000

7) Conversion of Inter Corporate Deposits Given into 8% Non Cumulative Preference Shares - Subsidiary Company

q����z�$��=��������=�>��Z��[�\�������= 20,000,000 –

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44

VERTEX SECURITIES LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2014 (ALL AMOUNTS MENTIONED ARE IN RUPEES)

Name of the Company / Transactions 2013-14 (`)

2012-13 (`)

8) Interest Received on ICD - Subsidiary Company

q����z�$��=��������=�>��Z��[�\�������= – 231,780

9) Expenses shared - Subsidiary Company

q����z�$��=��������=�>��Z��[�\�������= 4,899,790 8,650,520

10) Inter Corporate Deposits Given - Associated Companies (Until 16/12/2013)

"����#�������_��=��������������������= 4,966,810 2,209,000

"����#�������_���������������= 8,027,200 13,051,200

11) Inter Corporate Deposits Received Back - Associated Companies (Until 16/12/2013)

"����#�������_��=��������������������= – 416,200

"����#�������_���������������= 2,643,000 6,580,000

12) Interest Received on ICD - Associated Companies

"����#�������_��=��������������������= – 1,155,483

"����#�������_���������������= – 3,746,415

13) Rent Paid - Associated Companies

"����#�������_��=��������������������= – 2,116,717

14) Brokerage Collected - Chairman & Managing Director

Kumar Nair 1,113 173

15) Remuneration Paid - CEO

Mayank Jayantilal Shah – 1,775,822

Kapil Bali – 1,446,075

Closing Balances as on 31/03/2014

1) Current Account Credit - Holding Company

"����#�������_�>�������������= 38,428 454,940

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45

ANNUAL REPORT 2013-14

Name of the Company / Transactions 2013-14 (`)

2012-13 (`)

2) Inter Corporate Deposit Credits - Holding Company

"����#�������_�>�������������= 50,388,865 37,927,082

3) Trading Account Credit - Holding Company

"����#�������_�>�������������= 1,441,169 4,426,765

4) Trading Account Credit - Chairman & Managing Director

Kumar Nair 455,065 38,349

Closing Balances as on 16/12/2014

1) Inter Corporate Deposit Debits - Associated Companies

"����#�������_��=��������������������= 17,035,969 12,069,159

"����#�������_���������������= 47,935,419 42,551,219

26. �Z������&� ������)� "��� $�Z��_� ���� `�����=� ���� Z�������� ��=��� Z������&� �����W� "����� ������� ���� �� �� Z���=� ���&��&���� ��� �� *:� ������ ��=� ���� ����#�`��� ��� ��_� `�� �������_� =���=�=W� "����� ���� &�������_� ��������`��� �����W� ������ Z�_���������&����=��������������������� ����=��������¦����¦���=���(���(W�/�����` /��*<�+�*�[�W�W�{�*{*��~/\W�>��������������������rent payable are as follows:

ParticularsAs at

31st March, 2014 (`)

As at 31st March,

2013 (`)

Not later than one year 978,537 981,114

��������������_����`����������������� ���_��� 142,442 790,094

����������� ���_��� – –

27. Sundry debtors include old outstanding debts amounting to ` <�*<{�{~<Vj� [�W�W� `��:���{�<+/\� ��� ���Z���� � #����� $�Z��_����� ��������=� ��&��� ��=� ����� ������_� �������� ���� Z����=��&�� � #����� ���� ��� =�|������ ���&��� � Z�&����W� (� Z������� ��=�`����=�`�������`������=�� ��� ������������=����&�����_���������� ��������&������ ����� =���� ����� ����=�`�������&=���=�recoverable.

28. In the opinion of Directors, the current assets and deposits have the value as stated in the Balance Sheet, if realized in the ordinary course of business.

29.� "��� ��Z��_� ��� ����������&� ����"� `��� ����_� ������� #���� #�� ��Z����_� ��������W� "��� ���X� ��� ���������=� �� �������Z������� ��������� �������� ��_� #���� ���� ��Z��_� ��������� �� #��!��� �������� ��� ���� �������� ��=� ����� �� ����&� ����� ���_�have enough credit / margin in their account.

30.� ���������`�������X�=�����������z���`��X�������Z�����Y��X���Z�����#����` ���<::�:::Vj�[�W��` ~�{::�:::Vj\��&������#��������������=� ��������� �������� �&������ `��X� &���������� �����=� `_� ����� �� ������� � ���� $�Z��_W� ����� ���� `���� ���X�=� ���favour of BSE against trading guarantee in respect of Bank Deposit worth ` ��:::�:::Vj� [�W�W�` (��\� �&������#��������������=�interest thereon.

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46

VERTEX SECURITIES LIMITED

31.� Y���=� �� ���� &��=��&� Z�����Z���� &����� ��� ��������&� ����=��=� �� ���&����� ��Z����&�� [��� �� �+\� �����=� `_� ���� '��������� �Chartered Accountants of India, the Company’s primary business segment is share broking. All other activities of the company revolve around the main business. As the company’s business activity falls within a single primary business segment, the disclosure requirements of AS – 17 in this regard are not applicable.

32.� "��� ����&������ ���� ��������=� ���� ��&� ����� ������������ ��=� �� ���� ����� ������ �z���� �� �������������� #����� #�������provision on account of permanent diminution in the value of investments.

33.� (� Z������� �� =���=��=� �� ���������� ������� ��=� =���=��=� ��z� ������ �� ���� `���� ��=�� ��� ���� �������� ���������� ��� �����`�������=�����`���`���Z� ���=����&�����_���W

34.� �\� "���$�Z��_�������=�����������Z����=��������������&��Y��=�����������=���=���������`����/:�����=��*���}�����_��2012 decided to demerge its Merchant Banking division into a new company in the name and style of Transwarranty $�Z��������X��������������������������=

� `\� ��� Z��� ���� ������������ � ���� $������ /�[\� � ���� ������&��&��������� ��Z��_� ���� ��=�� ��� �ZZ�������� �� ���� Y�`�_����X��z����&��������=�[Y��\�#��������Z��=��&����ZZ����W

� �\� �ZZ����=� =���� � ���� Z�Z��=� ������� � =����&��� ��� }�����_� ��� /:�/� ���� ���� �������� ��������� � ���� ��Z��_������=������� �����������������������Y��X��&�=������W

35.� �������� _���� &����� ����� `���� ��j&��Z�=V�������� �=V��j�����&�=V������� #�������� ��������_� �� ����� ���� �������� _������������ �����W���������_���� &��������������������#���������=�&��������`���X��W

���Z�������!����=���Z���������=���

For Rahul Gautam Divan & Associates For and on behalf of Board of Directors �������������������

Rahul Divan Kumar Nair James Pothen Jose Thomas Polachira Partner Chairman & Managing Director Director Director

Mumbai Kochi-18 U. Ramachandran Sandhya R. Nair 5th May, 2014 5th May, 2014 <������� ������%�"������%

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47

ANNUAL REPORT 2013-14

INDEPENDENT AUDITORS’ REPORT ON CONSOLIDATED FINANCIAL STATEMENTS

To The Board of Directors

VERTEX SECURITIES LIMITED

%�� ����� ��=���=� ���� ����Z��_��&� �����=���=� ��������statements of Vertex Securities Limited (“the Company”) and its subsidiaries, which comprise the Consolidated Balance Sheet as ������������/:��������$����=���=�������������� ����=�����and Consolidated Cash Flow Statement for the year then ended, ��=� �� ������_� � ��&�� ����� ��������&� Z������� ��=� �����explanatory information.

Management’s Responsibility for the Consolidated Financial Statements Management is responsible for the preparation of these �����=���=� �������� ����������� ����� &���� �� ����� ��=� ���� ���#�� ���� �����=���=� �������� Z������� �����=���=� ��������Z��������� ��=� �����=���=� ����� �#�� � ���� $�Z��_�in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 (“the Act”) read with the General Circular 15/2013 dated 13th ��Z���`��� /:��� � ���� �������_� � $�Z����� �|����� ��� ���Z����of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of ���� �����=���=� �������� ����������� ����� &���� �� ����� ��=� ����view and are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility Our responsibility is to express an opinion on these �����=���=� �������� ����������� `���=� �� ��� ��=��W� %��conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain ������`��� ���������� �`��� #������� ���� �����=���=� ��������statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated �������� ����������W� "��� Z���=����� �������=� =�Z��=� ��the auditor’s judgment, including the assessment of the ���X�� � ��������� ������������� � ���� �����=���=� ��������statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to the Company’s preparation and presentation of the �����=���=� �������� ����������� ����� &���� �� ����� ��=� ���� ���#�in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion �������|���������������������_�����������������W������=�������includes evaluating the appropriateness of accounting policies

used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation ����������=���=� ������������������W�

%��`������������������=������=�����#�������`�����=�������������and appropriate to provide a basis for our audit opinion.

������\����������>�� � ��� ��������� ��� �� ����� ��� ����� �1� �������� ����� ��� ���� �������!�

"���������#� ���������� � �!������� ��� !���� ����� �� �������� $%����� ����������'� *�� �� �� ��!���� ����� ���� ��+�������� $%� �����������������������$��������������������������!�� �!������'

$�� ��������������������4����������������������������!�"���������#������%� ��$����� ������ ���� ����� ������� ������� ��!���� �!�������������� ����'� -��� �����%� ��$����� ������������ ���� ���������� ��� ������� ������� ��� `=�,#55�#��,23'� �������� ���� ��� ��������!������%���$����#��������������`=.5#�54#/5523#�����������%����� ���������� !���!� ���� ��� ��%� ������#� ���� ����������� ���7�������������8������������'

� 9�� ��7� ��� ���� �$� �#� ���� :������� ��� ���!���$�!��%� ��� �!�������������� �����%� ��$����2� !���!!%� ���������� ��$��� ��� �������������$!���������������'

OpinionWe report that, on the basis of the information and explanations &����� �������z��Z�� �� �����|������ ������!���=�����`�=� ��� ����Y������������ �=��Z�����Z���&��Z�����=�����������=�������� ���� ��Z������ ��=��� ��Z���� �� ��=���=���� �������� �����������of the Company and its subsidiary, we are of the opinion that ���� ���=� ���� �����=���=� �������� ����������� &���� �� ����� ��=�fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Consolidated Balance Sheet, of the state ��|����������$�Z��_����������������/:�� �

[��\� ��� ���� ����� � ���� $����=���=� ���������� � �� �� ��=�������������� ���� ���� �� ����_������=�=��� �����=��� �and

(iii) in the case of the Consolidated Cash Flow Statement, of ����������#��������_������=�=��������=���W�

For RAHUL GAUTAM DIVAN & ASSOCIATES �������������������

(Firm’s Registration Number: 120294W)

RAHUL DIVAN Place : Mumbai >������ Date : 05 May, 2014 Membership Number: 100733

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48

VERTEX SECURITIES LIMITED

CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2014

Particulars Note No.Figures as at 31.03.2014 Figures as at 31.03.2013

(`) (`) (`) (`)

I EQUITY AND LIABILITIES(1) Shareholders Funds (a) Share Capital 2 150,283,300 150,283,300 (b) Reserves and Surplus 3 (18,624,384) (3,335,084)

131,658,916 146,948,216(2) Minority Interest 12,470 15,162(3) Non - Current Liabilities (a) Long Term Borrowings 4 62,239,370 45,934,324 (b) Other Long Term Liabilities 5 8,451,785 3,842,781

70,691,155 49,777,105(4) Current Liabilities (a) Short Term Borrowings 6 5,642,520 5,929,010 (b) Trade Payables 7 65,137,827 79,400,952 (c) Other Current Liabilities 8 8,064,322 18,903,014 (d) Short Term Provisions 9 3,474,656 82,319,325 1,275,137 105,508,113 TOTAL EQUITY AND LIABILITIES 284,681,866 302,248,596

II ASSETS(1) Non Current Assets (a) Fixed Assets (i) Tangible Assets 10 14,747,319 18,617,694 (ii) Intangible Assets 11 4,756,455 6,159,091 (b) Goodwill on Consolidation 8,146,986 7,954,056 (c) Non Current Investments 12 146,005,700 20,007,700

173,656,460 52,738,541(2) Current Assets (a) Trade Receivables 13 40,546,378 38,366,979 (b) Cash and Cash Equivalents 14 22,558,405 40,534,037 (c) Short Term Loans and Advances 15 46,093,067 166,031,904 (d) Other Current Assets 16 1,827,556 4,577,135

111,025,406 249,510,055 TOTAL ASSETS 284,681,866 302,248,596

The Note No.1 to 37 are integral part of these Financial Statements

������������ ���������������������For Rahul Gautam Divan & Associates For and on behalf of Board of Directors Chartered AccountantsRahul Divan Kumar Nair James Pothen Jose Thomas Polachira Partner Chairman & Managing Director Director DirectorMumbai Kochi-18 U. Ramachandran Sandhya R. Nair 5th May, 2014 5th May, 2014 Director Company Secretary

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49

ANNUAL REPORT 2013-14

CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH, 2014

Particulars Note No.

Figures for the year ended

31.03.2014 (`)

Figures for the year ended

31.03.2013 (`)

REVENUE

Revenue From Operations 17 50,560,005 83,204,612

Other Income 18 7,790,520 25,651,464

TOTAL REVENUE 58,350,525 108,856,076

EXPENSES

��Z�_���Y��� ����zZ���� 19 25,002,645 38,989,061

Finance Costs 20 1,436,274 5,922,048

Depreciation and Amortisation Expense 10 & 11 3,854,778 4,869,035

Other Expenses 21 44,568,859 71,519,768

TOTAL EXPENSES 74,862,556 121,299,912

Loss Before Exceptional and Extraordinary items and Tax (16,512,031) (12,443,836)

Exceptional Items :-

�� ��V�[���\���������>�z�=������� 1,220,038 (1,029,338)

Loss Before Extra ordinary items and Tax (15,291,993) (13,473,174)

Extraordinary Items:- – –

Loss Before Tax (15,291,993) (13,473,174)

Tax Expense

Current Tax – –

Excess provision for income tax in prior years – 42,378

Deferred Tax – (2,894,267)

Loss for the year from Continuing Operations (15,291,993) (16,325,063)

]����+�|}��<�\�"����� �� � Q�>������ � – –

Tax Expenses of Discontinuing Operations – –

]����+�|}��<�\�"����� �� � Q�>������ ��?@���~�� – –

LOSS FOR THE YEAR (15,291,993) (16,325,063)

Basic Earning Per Share of `�/Vj������['����Z���\ 23 (0.33) (0.37)

Diluted Earning Per Share of `�/Vj������['����Z���\ (0.21) (0.22)

The Note No.1 to 37 are an integral part of these Financial Statements

���Z�������!����=���Z���������=���

For Rahul Gautam Divan & Associates For and on behalf of Board of Directors �������������������

Rahul Divan Kumar Nair James Pothen Jose Thomas Polachira >������� ���������?�@��������<������� <������� <������

Mumbai Kochi-18 U. Ramachandran Sandhya R. Nair 5th May, 2014 5th May, 2014 <������� ������%�"������%

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50

VERTEX SECURITIES LIMITED

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2014

Particulars 2013-14 (`)

2012-13 (`)

A. Cash Flow from Operating Activities(����� ��V�[���\�Y����"�z���� (15,291,993) (13,473,174)Adjustments for:Add/(Less):Depreciation/Amortisation 3,854,778 4,869,035[�� �\V����������������=V�#��!���| (1,220,038) 1,029,338Interest Paid & Bank Guarantee Expense 1,436,274 5,922,048Interest Received (1,585,958) (11,835,353)Excess provision for Income tax in prior years – 42,378

>������ Q��������\������� Q�Z�������Z�� Q�� (12,806,937) (13,445,728)Adjustments for Increase / (-)Decrease in :Trade & Other Receivable - Decrease/(Increase) 570,181 98,958,822Trade & Other payables - (Decrease)/ Increase (19,209,677) (126,597,454)Other payables/ Provisions -(Decrease)/ Increase 2,199,519 4,641,640Loans & Advances(Net) - Decrease/(Increase) 7,726,996 (5,216,681)

Cash Generated from operations (21,519,918) (41,659,401)Income Tax Refund / (Paid) 207,297 (2,222,311)

����Z�������\�"�>������ Q�?���������� |?< (21,312,621) (43,881,712)B. Cash Flow from Investing Activities

Purchase of Fixed Assets (232,128) (1,241,391)Sale of Fixed Assets 2,870,401 269,771Interest Received Less Accrued 1,585,958 11,835,353Inter corporate deposit 6,732,520 8,708,996Net Cash used in Investing Activities 10,956,748 19,572,727

C. Cash Flow from Financing Activities: (B)Receipt/Repayment of Secured Loans(net) (5,929,010) (485,403)Dividend paid (100) –Interest Paid & Bank Guarantee Expense (1,436,274) (5,922,048)Non Current Liabilities - (Decrease) / Increase (254,376) (2,781,791)

Net Cash used in Financing Activities (C) (7,619,760) (9,189,242)����� ������+|��������<�� �Z������Z����������� ���|?���Z< (17,975,632) (33,498,227)Z������Z����������� ���������������Q� � Q�\��������� 40,534,037 74,032,264Z������Z����������� �������������� ��\��������� 22,558,405 40,534,037

���Z�������!����=���Z���������=���

For Rahul Gautam Divan & Associates For and on behalf of Board of Directors �������������������

Rahul Divan Kumar Nair James Pothen Jose Thomas Polachira >������� ���������?�@��������<������� <������� <������

Mumbai Kochi-18 U. Ramachandran Sandhya R. Nair 5th May, 2014 5th May, 2014 <������� ������%�"������%

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51

ANNUAL REPORT 2013-14

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST MARCH, 2014 (ALL AMOUNTS ARE MENTIONED IN RUPEES)

1. SIGNIFICANT ACCOUNTING POLICIES

1. Investments other than in Subsidiaries have been accounted as per Accounting Standard-13 “Accounting for Investments”.

/W� ������ ��&�� ����� ��������&� �������� ���� ���� ��� ��=��� ���&�� ����� ��������&� ��������� ��� &����� ��� ���� ����=����� ������������������������Z��������Z��_�

a) Basis of Presentation of Financial Statements: The Financial Statements are prepared under historical cost convention, on accrual basis of accounting in conformity with

the accounting principles generally accepted in India and comply with the Accounting Standards referred to in section 211 (3C) of the Companies Act, 1956.

b) Use of Estimates� "���Z��Z�������� ����������������������������_�#��������&�������_�����Z��=���������&�Z�����Z����[����\����������

����&����������X��������������=������Z�����������|���� ������Z���=������������������=����`����������=�=���������� �����&���� ���`�������� ��� ��� ���� =���� � �������� ����������� ��=� ��Z���=� ������� � ��������� ��=� �zZ������ =����&����� ��Z����&� _���W�������� �������� ���=� =�|��� ��� ������ ���������W���_� �������� �� ��������&� ���������� ��� ���&����=�prospectively in the current and future years.

c) Fixed Assets and Depreciation:i) Fixed assets are stated at cost less accumulated depreciation and adjusted for impairment if any.

��\� "��� $�Z��_� Z���=��� =�Z��������� �� �����&��j����� ����=� [���\� ��� ���� ����� �Z��� �=� ��� ����=���� ¡'q� � ����Companies Act, 1956.

���\� ��Z������������==�������� z�=�����������Z���=�=���Z�j�����`������������=������==����W

d) Intangible Assets:� '����&�`������������Z���������`�����Z���&��������X��z����&����$�Z�������#������=���#������������W�"������X�

�z����&�� ��&���� ��=� ��#���� ��������� ���� �������=� ���� �� _���� � �:� _����� ��=� ���� $�Z����� ��#���� ��� �������=�over a year of 5 years on Straight Line basis.

e) Inventories - Shares:� "�������������������=�����#���������������������`��������W

f) Income:� Y�X���&�� ������ ��� ���&����=� �� ���� =���� � ���� ������������ �Z�� �� ������� � ���� ���=�� `_� ������W� '�������� ��

����� ��=� =�`���� ���� �������=� �� �����Z�� `����� ������ ������ ��� ��&�� ����� ����������_� ��� ��������W� ����=��=� ������ ���recognised when right to receive the same is established. Service income is recognised as per the terms of the contract/agreement entered into with the customers when the related services are performed.

Q<� �"�������� ����#

� } Q�~��"��"�������� ����

�W� �� ��=�$����`�����Z���� "��� ��Z��_� ���� =� ��=� �����`����� Z����� �� ��Z�_���� ��Z�����&� � ����=���� >��=� ��=� ��Z�_���� ������

'��������W� "��� �����`������ Z��=VZ�_�`��� �� ������ Z����� ���� ����&�=� �� ���������� � Z� �� �� ���� �� ���� _���� ��which they are related.

��W� �� ��=�Y��� ������ The company makes contributions to “Employees’ Group Gratuity-cum-Life Assurance Scheme” of Life Insurance

$�Z������ � '�=��W� "��� ���� Z������� ������ � ���� `��&����� �� &������_� `��� ��� ��� =��������=� �� �������������������� ��=����=� �������_� ����&� ���� Z������=� ����� ���=��� ����=�� ��� �=�����=� �� �����&����=� Z���� ��������

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52

VERTEX SECURITIES LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST MARCH, 2014 (ALL AMOUNTS ARE MENTIONED IN RUPEES)

��������_���=������=���=�`_������������Z������������������&����=���������������W�����������&�������=��������������&����=��������������������������Z� ��������������_�������#��������_�����W

���W� ��������&��������Z�_���Y��� �� The company has a scheme of Leave Encashment for eligible employees. Company’s liability as at the balance sheet

=���� �� ����� `��� ��� ��� Z���=�=� �� �� ���� `����� � ���������� ��������� ��=��� �������=� ����� $��� ����=�� =���`_� ��� ��=�Z��=���� ������_W����������� &����� ��=� ������ ��Z����� �zZ�������� �=���������� ��=� �|����� � ����&��� ������������������Z�������=��������&����=�������������������Z� ��������������������zZ����W

��W� �����"������Z�_���Y��� ��� ���� ��Z�_��� `��� ��� Z�_�`��� #���_� #������ �#����� ������ � ���=����&� ���� �������� ���� ������ �=� ��� ����j�����

��Z�_���`��� �����=����&����=��������_�������#�����������Z�_������=��������������=��������W

h) Income Tax Income tax is accounted in accordance with Accounting Standard on Accounting for Taxes on Income (AS 22), which

�����=��� �������� ��z��� ��=� =�����=� ��z��W� ������=� ��z� ������V���`�������� ��Z��������&� �����&� =�|�������� `��#����accounting income and taxable income are recognised to the extent considered capable of being reversed in subsequent _����W� ������=� ��z� ������� ���� ���&����=� ��_� �� ���� �z����� ������ ��� ������`��� ��������_� ����� ��������� ������ ��z�`���income will be available, except that deferred tax assets arising due to unabsorbed depreciation and losses are recognised �����������������������������_�����������������������z�`���������#����`��������`���������������������W

i) Investments Long term investments are stated at cost less provision for permanent diminution in their values, if any. Current

investments are stated at lower of cost and net realisable value.

j) Provisions and Contingent liabilities Provisions are recognised when the company has a present obligation as a result of past events, for which it is probable

����� �� ����� ���#� #���� `�� �������=� ��=� �����`��� ��������� ���� `�� ��=�� � ���� ������ � `��&����W� ��������� ���� ���=�������=� �� ������ Z������� ������ ��=� ���� =��������=� `���=� �� `���� ��������� �������=� �� ��!��� ���� `��&����� ��� ����`�������������=���W�"��������������#�=���������`�������������=������=��=�����=����������������������&���������������W

�<� ��� � Q��]��������� Y����� ��=� =�����=� ������&�� Z��� ������ ��� ��Z���=� `_� =���=��&� ���� ���� Z� �� �!��`���`��� �� �����_� �������=���� �� ����

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

l) Leases Disclosures as required by Accounting Standard 19, “Leases” issued by the Institute of Chartered Accountants of India,

are given below:[�\� "��� $�Z��_� ���� ��X��� ������� ����� ��=��� ������ ��=� �������� �&��������W� "����� ���� &�������_� ��j� �������`���

and range between 11 months and 5 years and are renewable by mutual consent on mutually agreeable terms.[��\� ������Z�_�������������&����=�������������������Z� ����������=���£�����W

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53

ANNUAL REPORT 2013-14

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST MARCH, 2014 (ALL AMOUNTS ARE MENTIONED IN RUPEES)

Particulars Figures as at 31.03.2014

Figures as at 31.03.2013

2. SHARE CAPITAL

Authorised Capital

1) 73,753,805 Equity Shares of ` 2/- each (P.Y. 73,753,805 Equity Shares of ` 2/- each)

147,507,610 147,507,610

2) 5,981,739 0.5% Preference shares of `��:Vj����� (P.Y. 5,981,739 0.5% Preference Shares of `��:Vj�����\

59,817,390 59,817,390

3) 500,000 15% Non-Cumulative Redeemable Preference shares of `��::Vj����� (P.Y. 500,000 15% Non-Cumulative Redeemable Preference shares of ` 100/- each)

50,000,000 50,000,000

257,325,000 257,325,000

Issued, Subscribed and Paid Up :

47,721,480 (P.Y 43,848,980) Equity Shares of ` 2/- each fully paid up 95,442,960 87,697,960

5,206,454 (P.Y. 5,980,954) 0.5% Fully Convertible Preference shares of `��:Vj���������_�paid up.

52,064,540 59,809,540

27,758 (P.Y.27,758) 15% Non Cumulative Redeemable Preference Shares of ` 100/- each fully paid up.

2,775,800 2,775,800

150,283,300 150,283,300

NOTES

1) Reconciliation of the shares outstanding at the beginning and at the end of the reporting year

?<� ������������

Particulars2013-14 2012-13

Number Amount Number Amount

At the beginning of the year 43,848,980 87,697,960 43,848,980 87,697,960

Add:- Preference Shares converted to Equity Shares

– On 16 May 2013 1,592,500 3,185,000 – –

– On 03 September 2013 1,780,000 3,560,000 – –

– On 25 October 2013 425,000 850,000 – –

– On 11 December 2013 75,000 150,000 – –

Total No of Shares 47,721,480 95,442,960 43,848,980 87,697,960

Allotment for ESOP – – – –

Additional Equity Shares Issued – – – –

Outstanding at the end of the year 47,721,480 95,442,960 43,848,980 87,697,960

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54

VERTEX SECURITIES LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST MARCH, 2014 (ALL AMOUNTS ARE MENTIONED IN RUPEES)

B) 0.5% Fully Convertible Preference Shares

Particulars2013-14 2012-13

Number Amount Number AmountAt the beginning of the year 5,980,954 59,809,540 5,980,954 59,809,540Less:- Converted to Equity Shares

– On 16 May 2013 318,500 3,185,000 – –– On 03 September 2013 356,000 3,560,000 – –– On 25 October 2013 85,000 850,000 – –– On 11 December 2013 15,000 150,000 – –

Outstanding at the end of the year 5,206,454 52,064,540 5,980,954 59,809,540

C) 15% Non-Cumulative Redeemable Preference Shares

Particulars2013-14 2012-13

Number Amount Number AmountAt the beginning of the year 27,758 2,775,800 27,758 2,775,800Issued/ deducted during the year – – – –Outstanding at the end of the year 27,758 2,775,800 27,758 2,775,800

=<� ~��"��� ����Q�����J��������������

?<� ������������1) The company has only one class of Equity share having a Par Value of `�/Vj� ����W� ����� ��=��� � �����_� ������ ���

entitled for one vote per share. The company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to approval by the share holders in the ensuring Annual General Meeting.

2) In the event of liquidation of the company, the holder of equity shares will be entitled to receive remaining assets of ������Z��_�������=�����`����������Z�����������������W�"���=�����`�����#����`�� ���Z�Z��������������`����equity shares held by the shareholders.

B) 0.5% Fully Convertible Preference Shares.

�\� ����� >���_� $������`��� ���������� ������ ������ `�� ��Z������_� �������=� ���� ��� �����_� ������ �` 2/- each fully Z��=��Z����Z���������_���������������=�� ����_������������=�� ���_�����������=�������������W

/\� ������������������=���������������=���&���=���=��=���_�#����������Z��_�����=�����`���`���Z� ��W3) In the event of winding up or repayment of capital, Preference share holders have the preferential right to be

repaid the amount of capital paid up.

C) 15%, Non Cumulative Redeemable Preference Share.

1) Each Non Cumulative Redeemable Preference Share shall be redeemable with in a period of 1 to 3 year from the date of issue i.e. 19/05/2010 as may be determined by the Board of Directors of the company at their absolute discretion.

/\� ������������������=���������������=���&���=���=��=���_�#����������Z��_������=�����`���`���Z� ��W3) In the event of winding up or repayment of capital, Preference share holders have the preferential right to be

repaid the amount of capital paid up.

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55

ANNUAL REPORT 2013-14

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST MARCH, 2014 (ALL AMOUNTS ARE MENTIONED IN RUPEES)

3) Shares held by Holding company- Transwarranty Finance Limited

Particulars 31st March, 2014

31st March, 2013

������������Equity shares @ ` 2/- each Fully Paid 24,318,110 24,318,110Preference Shares0.5% Fully Convertible Preference share of `��:Vj����� 3,128,003 3,228,00315% Non Cumulative Redeemable Preference Shares of `��::Vj����� 6,863 6,863

�<� ?QQ��Q���� �"���� \� ������� ���J��� ��� \���� ����� �� ������ ���"� �� ��� Q� ��������� � � ����� ��� Q� �� ����� \� �� !�����preceding the date at which the Balance Sheet is prepared.

Particulars No. of Shares Class of SharesEquity Shares of ` 2/- each fully paid up issued to share holders of “Transwarranty Capital Pvt. Ltd.” as per scheme of amalgamation in F.Y. 2009-10

4,262,250 Equity Shares

0.5% Fully convertible Preference Share of ` 10/- each issued to share holders of “Transwarranty Capital Pvt. Ltd.” as per scheme of amalgamation in F.Y. 2009-10

8,619,215 Preference Shares

15% Non Cumulative Redeemable Preference Shares of ` 100/- each reissued to share holders redeemable with in a year of 1 to 3 year from the date of issue i.e. 19/05/2010

27,758 Preference Shares

1,57,500 Equity Shares of ` 2/- each fully paid up issued to share application money of “Transwarranty Capital Pvt. Ltd.” as per scheme of amalgamation in F.Y. 2011-12.

157,500 Equity Shares

5) Details of shares holders holding more than 5% shares in the Company.

?<� �������������\�` =+;�\�����������

Particulars31st March, 2014 31st March, 2013

Number % of Holdings Number % of HoldingsTranswarranty Finance Limited 24,318,110 55.46 24,318,110 55.46Kumar Nair 5,882,058 12.33 5,963,320 13.60

B) 0.5% Fully Convertible Preference shares of ` '*+;�\�����������

Particulars31st March, 2014 31st March, 2013

Number % of Holdings Number % of HoldingsTranswarranty Finance Limited 3,128,003 60.08 3,228,003 53.97Kumar Nair 1,739,097 33.40 2,095,097 35.03Pravin Khatau – – 318,500 5.33

C) 15% Non Cumulative Redeemable Preference shares of ` '**+;�\�����������

Particulars31st March, 2014 31st March, 2013

Number % of Holdings Number % of HoldingsTranswarranty Finance Limited 6,863 24.72 6,863 24.72Transwarranty Private Limited 17,750 63.94 17,750 63.94Transwarranty Advisors Private Limited 3,145 11.34 3,145 11.34

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56

VERTEX SECURITIES LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST MARCH, 2014 (ALL AMOUNTS ARE MENTIONED IN RUPEES)

As per records of the company, including its register of share holders/ members and other declarations received from the �������=������&��=��&�`��� ��������������������`�����Z��������`�����&�����=�`��� �����#������Z��������W

�<� �"������������>��� �����"�a) The “Vertex Employee Stock Option Plan 2010” has been approved by the Board of Directors of the company on 10th

March, 2008.`\� "���������&�_����������� ���_������������=�����&��������������&���������_�����������=�����&����W�\� �z�������_����#��=������������_�������=�����&�������=�#�����zZ��������Z������� ���_������������=�����

vesting.=\� "���Z�����#����`����!��=���������_���������������Z��_We) The company used the intrinsic value method to account for ESOPs.f) The exercise price has been determined as follows

Grant

Options (Face Value of `%'*+;�

per share)

Price Per Option

(`)

Options (split to Face value

of `%=+;�����share)

Price Per >��� �|?@���

Share Split) (`)

Grant - I 462,500 69.00 2,312,500 13.80Grant - II 50,000 145.50 250,000 29.10Grant - III 17,500 145.50 87,500 29.10Grant - IV 25,000 145.50 125,000 29.10Grant - V 100,000 145.50 500,000 29.10Grant - VI – – 1,013,750 29.10Grant - VII – – 200,000 5.46Grant - VIII – – 1,875,000 5.46

&\� $���������_�� �� ��Z�������� ���� ���� `���� ���&����=� `_� ���� ��Z��_� ��� ����=����� #���� ���� ����=����� (��� ��Accounting for Employee Share-Based payments” issued by the Institute of Chartered Accountants of India.

h) Details of movement of Options

ParticularsAs at

31st March, 2014 (`)

As at 31st March,

2013 (`)

Options outstanding at the beginning of the year ( Face Value of `�/Vj\ 2,537,002 2,680,315Options granted during the year – 2,075,000Options vested during the year – 248,627Options exercised during the year – –Options forfeited during the year 814,995 1,751,310Options lapsed /surrendered during the year – 467,003

Options outstanding at the end of the year 1,722,007 2,537,002

i) Had fair value method been used, the compensation cost would have been higher by ` 14.55 Lakhs (Previous Year ` /�W��� ��X��\W� ���� ����� ��z� #��=� ����� `���� ��&���� `_� ` 167.47 Lakhs (Previous year ` 21.44 Lakhs) and Basic EPS would have been ` (0.36) Per share (Previous Year `�[:W�/\� ���� �����\� ��=� ������=� ���� #��=� ����� `���� ` (0.23) (Previous Year ` (0.25) ).

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57

ANNUAL REPORT 2013-14

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST MARCH, 2014 (ALL AMOUNTS ARE MENTIONED IN RUPEES)

ParticularsAs at

1st April, 2013

?����� �+�Created during

the year

Deductions during the

year

As at 31st March,

2014

3. RESERVES AND SURPLUS

General Reserve 269,212 – 269,212 –

Reserve on Amalgamation Accounts 6,078,891 – – 6,078,891

���Z�������Z���������������� ����=���� (Refer Note below)

(27,928,732) (15,020,088) – (42,948,820)

Securities Premium Reserve 18,245,545 – – 18,245,545

Total Reserves and Surplus (3,335,084) (15,020,088) 269,212 (18,624,384)

ParticularsAs at

1st April, 2012

?����� �+�Created during

the year

Deductions during the

year

As at 31st March,

2013

RESERVES AND SURPLUS

General Reserve 269,212 – – 269,212

Capital Reserve on consolidation (net) 3,779,600 – 3,779,600 –

Reserve on Amalgamation Accounts 6,078,891 – – 6,078,891

���Z�������Z���������������� ����=���� (Refer Note below)

(23,488,847) (4,439,885) – (27,928,732)

Securities Premium Reserve 18,245,545 – – 18,245,545

Total Reserves and Surplus 4,884,401 (4,439,885) 3,779,600 (3,335,084)

Note :-

Particulars 31st March, 2014 31st March, 2013

�� ��V��������������� (15,291,993) (16,325,063)

Less:-

Minority Share (2,693) (69)

Consolidation adjustments due to change in (269,212) (11,885,108)

Share holding in Subsidiary

(271,905) (11,885,177)

(15,020,088) (4,439,886)

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58

VERTEX SECURITIES LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST MARCH, 2014 (ALL AMOUNTS ARE MENTIONED IN RUPEES)

ParticularsFigures as at

31st March, 2014 (`)

Figures as at 31st March,

2013 (`)

NON- CURRENT LIABILITIES

4. LONG TERM BORROWINGS

A) SECURED

~��"�}� ���"��� ��

Vehicle Loan from HDFC Bank (Secured by hypothecation of vehicle - Motor Car-Skoda)

– 74,228

NOTE: The loan from HDFC was taken for purchase of Skoda Car, during the year 2010-11. The loan carried an interest rate @ 9.75% and is repayable in 60 installments. The loan is against hypothecation of the Car Purchased.

B) UNSECURED

a) Loans and Advances from Related Parties

Inter-Corporate Loan- Holding Company 55,584,061 37,927,082

b) Other Loans and Advances

Security Deposit from Franchises 6,655,309 7,933,014

62,239,370 45,934,324

5. OTHER LONG TERM LIABILITIES

a) Trade Payables

Amount due to Clients 7,731,131 2,769,679

b) Others

Other Creditors 720,654 1,073,103

8,451,785 3,842,782

CURRENT LIABILITIES

6. SHORT TERM BORROWINGS

A) ��"��� ��

Secured����=����������j�$��������_�����Y��X(Secured against pledge/ lien of Fixed Deposit of `�(���[�W�W�` 7,969,985) including interest) – 5,929,010

B) FROM OTHERS

� ��������=

Inter Corporate Deposits 5,642,520 –5,642,520 5,929,010

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59

ANNUAL REPORT 2013-14

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST MARCH, 2014 (ALL AMOUNTS ARE MENTIONED IN RUPEES)

ParticularsFigures as at

31st March, 2014 (`)

Figures as at 31st March,

2013 (`)

7. TRADE PAYABLES

a) Amount due to Micro, Small & Medium Enterprises – –

b) Other Creditors Amount due to Clients 65,137,827 79,400,952

65,137,827 79,400,952

8. OTHER CURRENT LIABILITIES

a) Current Maturities of Long Term Debt 99,373 279,521

`\� ��Z��=�����=��= 9,066 9,166

c) Interest Accrued and due on borrowings from related parties – 2,573,523

d) Other Payables

� ��YX�����=��� 1,535,270 5,889,581

� ���������_���_�`����[(��\ 991,757 1,916,128

� ��$��=��������zZ����� 5,428,856 8,235,095

8,064,322 18,903,014

9. SHORT TERM PROVISION

�<� ]����� �����"�������� ���� Provision for Gratuity 1,393,475 40,757 Provision for Leave Encashment 883,238 527,456

b) Others

Provision for Preference Share Dividend 156,911 156,911 Other Provision 1,041,032 550,013

3,474,656 1,275,137

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60

VERTEX SECURITIES LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST MARCH, 2014 (ALL AMOUNTS ARE MENTIONED IN RUPEES)

10.

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61

ANNUAL REPORT 2013-14

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST MARCH, 2014 (ALL AMOUNTS ARE MENTIONED IN RUPEES)

ParticularsFigures as at

31st March, 2014 (`)

Figures as at 31st March,

2013 (`)

NON - CURRENT ASSETS

12. NON - CURRENT INVESTMENTS (AT COST)

Other Investments

'<� � ����"� ���� �������� ���"� ��

A) Quoted

Motul Mafatlal Ltd ( 100 Shares @ 10/- Each fully paid) 370 370

Prudential Sugar ( 100 Shares @ 10/- each fully paid) 700 700

� � �����'�=���[��/:��������¤��:���������_�Z��=\ 304 304

Odyssey Video Co ( 100 Shares @ 10/- fully paid) 1,432 1,432

TOTAL 2,806 2,806

Less: Diminution in the value of shares 2,806 2,806

– –

[�����������\������� ����"� �� Nil Nil

B) Un Quoted

Cochin Stock Exchange Ltd (905 Equity Shares @ `��:Vj���������_�Z��=\ 2,507,700 2,507,700

Nawany Corp (India) Ltd. (3,50,000 Equity shares of face value @ ` 10/- Each fully paid) 17,500,000 17,500,000

2) Investments in Preference Shares (Un Quoted)

a) Transwarranty Private Limited8,52,010 (P.Y. Nil) 8% Non-Cumulative Redeemable Preference shares of `��::Vj�����W

85,201,000 –

b) Transwarranty Advisors Private Limited 40,797,000 –

4,07,970 (P.Y. Nil) 8% Non-Cumulative Redeemable Preference shares of `��::Vj�����W

146,005,700 20,007,700

CURRENT ASSETS

13. TRADE RECEIVABLES

��������=�$���=���=��=

Debts Outstanding for a period exceeding Six Months 27,552,227 26,347,178

����)j�Y�=���`���%��!���| – 2,700,785

27,552,227 23,646,393

Other Debts 12,994,151 14,721,267

����)j�Y�=���`���%��!���| – 681

12,994,151 14,720,586

40,546,378 38,366,979

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62

VERTEX SECURITIES LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST MARCH, 2014 (ALL AMOUNTS ARE MENTIONED IN RUPEES)

ParticularsFigures as at

31st March, 2014 (`)

Figures as at 31st March,

2013 (`)

14. CASH & CASH EQUIVALENTSBalance with Banks�­'��$�������������� 6,910,873 13,186,780�­'����Z������������Less Than 12 Months Maturity 15,600,302 26,873,404More Than 12 Months Maturity – 425,000(Fixed Deposit of `�����::�:::Vj�[�W�W�` 13,500,000/-) pledged against Bank Guarantees and ` 10,000,000/- (P.Y. ` Nil) are pledged against Trading Guarantee for Exchange.)Cash on Hand 47,230 48,853

22,558,405 40,534,037

15. SHORT TERM LOANS & ADVANCESUnsecured Considered GoodLoans and Advances to Related Parties Inter Corporate Deposits 977,542 84,620,378 Interest accrued on ICDs – 7,111,708Others Advance Receivable 4,965,763 5,946,583 Advance income Tax ( Including TDS ) 4,559,405 4,766,702 Advance Gratuity – 153,071 Deposits 35,590,357 63,433,463

46,093,067 166,031,905

16. OTHER CURRENT ASSETSInterest Receivable on Fixed Deposits 1,827,556 4,577,135

1,827,556 4,577,135

Particulars

Figures for the year ended 31st March,

2014 (`)

Figures for the year ended 31st March,

2013 (`)

17. REVENUE FROM OPERATIONSSale of services Brokerage Income 47,662,507 78,140,641 Income from Merchant Banking 573,889 1,787,632 Income from DP Operations 2,323,609 3,276,339

50,560,005 83,204,612

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63

ANNUAL REPORT 2013-14

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST MARCH, 2014 (ALL AMOUNTS ARE MENTIONED IN RUPEES)

Particulars

Figures for the year ended 31st March,

2014 (`)

Figures for the year ended 31st March,

2013 (`)

18. OTHER INCOMEa) Interest Income 1,585,958 11,835,353b) Other Non Operating Income Late Payment Charges 929,252 2,147,822� ��#��������$�����&����������= 1,309,874 2,121,216 P.Vsat Recurring Charges recovered 148,600 385,446 Misc. Income - Others 3,816,836 9,161,626

7,790,520 25,651,463

19. EMPLOYEES BENEFIT EXPENSESSalaries, Bonus & Allowances 21,117,042 35,521,626Contribution to Provident Fund & Other Funds 3,267,718 2,635,038���|�%�������zZ����� 617,885 832,397

25,002,645 38,989,061

20. FINANCE COSTa) Interest Expense 798,902 4,316,415b) Other Borrowing Cost Bank Charges 107,590 106,713 Bank Guarantee Expenses 529,782 1,498,920

1,436,274 5,922,04821. OTHER EXPENSES

Annual Fee to Depository / Exchanges 374,281 355,863

AMC Charges 2,448,430 2,900,274

Y�=���`���%��!���| – 2,701,466

Clients Meet & Business Promotion Expenses 275,463 354,738

Consultation fee 556,387 863,590

Connectivity Charges 5,297,621 5,959,316

Depository Charges 421,423 515,120

���������� ����� – 1,816

Investor Protection Fund 93 181

Marketing fee/Commission paid 16,118,002 30,211,020

Sub Brokerage 6,434,125 7,906,054

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64

VERTEX SECURITIES LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST MARCH, 2014 (ALL AMOUNTS ARE MENTIONED IN RUPEES)

SEBI Turnover Charges 105,734 122,864

Stock Exchange Charges 185,258 352,163

VSAT Charges 149,675 803,331

Advertisement, Publicity and Business Promotion 179,351 238,681

Auditor's Remuneration

– Statutory Audit Fees 110,000 110,000

– Income Tax Audit Fees 30,000 30,000

– Other Services 43,100 56,000

Y�=�=�`���%��!���| 2,765 –

Books & Periodicals 39,624 39,651

Communication Expenses 1,256,350 1,861,472

Data Entry expenses 353,394 906,847

Insurance Premium 42,845 48,750

Legal Expenses and Filing Fees 263,317 278,205

Listing Fee 25,000 25,000

Misc. Charges & Expenses 844,622 248,133

���������������� 767,920 627,662

Postage & Courier Charges 177,318 345,235

Power Charges 1,765,485 2,659,650

Printing & Stationery 441,556 737,867

Professional and Legal Fees 914,881 2,084,809

Rates and Taxes 624,926 56,399

Rent 2,908,336 6,203,880

Repairs & Maintenance 234,670 368,087

��!��&�>�������������� 106,668 92,000

Training & Conference Expense 174,158 39,900

Travelling and Conveyance Expenses 821,939 1,349,850

Interest on Service tax 1,991 –

Vehicle Running and Maintenance Expenses 72,151 63,897

TOTAL 44,568,859 71,519,768

Particulars

Figures for the year ended 31st March,

2014 (`)

Figures for the year ended 31st March,

2013 (`)

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65

ANNUAL REPORT 2013-14

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST MARCH, 2014 (ALL AMOUNTS ARE MENTIONED IN RUPEES)

Particulars

Figures for the year ended 31st March,

2014 (`)

Figures for the year ended 31st March,

2013 (`)

22. CONTINGENT LIABILITIES

1. Counter guarantee issued in favour of the banker for guarantee given by then to (��V($��¡������&��������������W

11,900,000 27,000,000

2. Guarantee given on behalf of subsidiary company Vertex Commodities & Finpro (P) Limited

30,000,000 10,000,000

3. Counter guarantee issued in favour of the banker for guarantee given by them to �$¡������&��������������

5,000,000 –

4. Claims against the company not acknowledged as debts:-

a. Tax demand in respect of which:-

Authority (Income Tax) for the Assessment Year 2007-08 – 1,111,000

� � �­��������"�z��=������>��/::*j:+���/::<j�: 622,000 622,000

47,522,000 38,733,000

Particulars

For the year ended on

31st March, 2014 (`)

For the year ended on

31st March, 2013 (`)

23. EARNINGS PER SHARE

'W� �� �V�[����\��������z����Z���������������� ������� (15,291,993) (16,325,063)

II. Weighted Average number of equity shares for Earnings per share computation

A) For Basic Earnings per share of `�/Vj������[(¦�\ 46,476,035 43,848,980

B) For Diluted Earnings per share of ` 2/- each (No's)

No of Shares for Basic EPS as per II A (No's) 46,476,035 43,848,980

Add:- Weighted Average outstanding for convertible preference shares 27,277,715 29,904,770

No of shares for Diluted Earnings per Share of ` 2/- each 73,753,750 73,753,750

III. Earnings Per Share ( Face Value of ` 2/- each)

Basic ( ` ) (0.33) (37.00)

Diluted ( ` ) (0.21) (22.00)

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66

VERTEX SECURITIES LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST MARCH, 2014 (ALL AMOUNTS ARE MENTIONED IN RUPEES)

24. DISCLOSURE AS REQUIRED UNDER ACCOUNTS STANDARD 15 ON EMPLOYEE BENEFITS FOR GRATUITY AND LEAVE ENCASHMENT IS AS UNDER

ParticularsGratuity Leave Encashment (Unfunded)

2013-14 2012-13 2013-14 2012-13Z�� Q��� ������� ����>���Q��� �#Present value of obligations as on 01. 04. 2013 1,655,833 1,432,655 527,456 551,773Current Service Cost 688,073 376,660 609,592 440,563Past Service Cost – – – –Interest Cost 120,661 99,637 27,015 21,231Actuarial (Gain)/Loss on obligation 1,084,741 121,268 98,711 86,651

Y��� ������= (295,163) (374,387) (379,536) (572,762)Present value of obligations as on 31.03.2014 3,254,145 1,655,833 883,238 527,456Change in Plan Assets:Fair Value of Plan Assets as on 01.04.2013 1,768,147 1,947,843 – –Adjustment to the opening balance (112,314) – – –Expected Return on Plan Assets 158,243 159,307 – –Employer's Contributions 500,000 18,861 368,991 572,762Y��� ������= (295,163) (374,387) (368,991) (572,762)Actuarial Gain/(Loss) on Plan Assets (158,243) 16,523 – –Fair Value of plan assets as on 31.03.2014 1,860,670 1,768,147 – –����|?����<�+�}���������|�<�;�|��<�# 1,393,475 (112,314) 883,238 527,456Net Cost for the year ended 31.03.2014Current Service Cost 688,073 376,660 609,592 440,563Past Service Cost – – – –Interest Cost 120,661 99,637 27,015 21,231Expected Return on plan Assets (158,243) (159,307) – –Actuarial (Gain)/ Loss recognised during the year 1,242,984 104,745 98,711 86,651Adjustment/(Gain) to opening value of planned assets – – – –Net Cost 1,893,475 421,735 735,318 415,042Amount recognised in the Balance sheet (Asset) / Liability

1,393,475 (112,314) 883,238 527,456

���������&����=���������� ����=�����Account(Gain)/Loss

1,893,475 421,735 735,318 548,445

Principal actuarial Assumptions:-Discount rate 8% 8% 8% 8%Expected Return on plan assets 0% 9% 0% 0%Salary Escalation Rate 10% 5% 10% 5%�!���������� 10% 5% 10% 5%

Demographic Assumptions:Retirement age 58 YearMortality rate IALM (2006-08)

��������=

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67

ANNUAL REPORT 2013-14

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST MARCH, 2014 (ALL AMOUNTS ARE MENTIONED IN RUPEES)

25. RELATED PARTY DISCLOSURESAs per Accounting Standard (AS-18) on Related Party Disclosures issued by the Institute of Chartered Accountants of India, the =����������������������#��������������=�Z���_����=� ��=����������������&�����=��=�����&�����`��#)j

Name of the party RelationTranswarranty Finance Limited Holding CompanyKumar Nair Chairman & Managing DirectorTranswarranty Private Limited ��������=�$�Z��_�[��������*V�/V/:��\Transwarranty Advisors Private Limited ��������=�$�Z��_�[��������*V�/V/:��\

(II) Summary of Transactions

��"��\�����Z"�� ��+�~�� ����� � 2013-14 (`)

2012-13 (`)

1) Inter Corporate Deposits Received - Holding Company Transwarrranty Finance Limited 31,093,783 14,928,000=<� � ����Z���������������]���������;����� Q�Z"�� � Transwarrranty Finance Limited 18,632,000 36,492,1003) Interest Paid on ICD - Holding Company Transwarrranty Finance Limited – 2,891,833�<� ������Q����������� �������~���� Q�;����� Q�Z"�� � Transwarrranty Finance Limited 162,099 –�<� � ����Z������������������� �;�?���������Z"�� ����|� �����'�+'=+=*'^< Transwarrranty Advisors Private Limited 4,966,810 2,209,000 Transwarrranty Private Limited 8,027,200 13,051,2006) � ����Z�����������������������������;�?���������Z"�� ����|� �����'�+'=+=*'^< Transwarrranty Advisors Private Limited – 416,200 Transwarrranty Private Limited 2,643,000 6,580,0007) Interest Received on ICD - Associated Companies Transwarrranty Advisors Private Limited – 1,155,483 Transwarrranty Private Limited – 6,746,4158) Rent Paid - Associated Companies Transwarrranty Advisors Private Limited – 2,116,717�<� ������Q��Z��������;�Z����"� ���[� �Q� Q�������� Kumar Nair 1,113 17310) Remuneration Paid - CEO Mayank Jayantilal Shah – 1,775,822 Kapil Bali – 1,446,075Z��� Q����� ����?�� �'�+'=+=*'^�|�����������������}�"����<1) Inter Corporate Deposit Debits - Associated Companies Transwarrranty Advisors Private Limited 17,035,969 12,069,159 Transwarrranty Private Limited 47,935,419 42,551,219

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68

VERTEX SECURITIES LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST MARCH, 2014 (ALL AMOUNTS ARE MENTIONED IN RUPEES)

��"��\�����Z"�� ��+�~�� ����� � 2013-14 (`)

2012-13 (`)

Z��� Q����� ����?�� �'�+'=+=*'^�|�������Z""����������� ���]����}���<1) Inter Corporate Deposit Debits - Associated Companies Transwarrranty Private Limited 30,000,000 30,000,0002) Trading Account Credit - Associated Companies Transwarrranty Private Limited 283 283Z��� Q����� ����?�� �^'+*^+=*'��|�����������������}�"����<1) Current Account Credit - Holding Company Transwarrranty Finance Limited 353 454,9402) Inter Corporate Deposit Credits - Holding Company Transwarrranty Finance Limited – 37,927,0823) Trading Account Credit - Holding Company Transwarrranty Finance Limited – 4,426,7654) Trading Account Credit - Chairman & Managing Director Kumar Nair 424 38,349

26. PRINCIPLES OF CONSOLIDATION: The Consolidated Financial Statements of Vertex Securities Limited, (Parent Company) have been prepared in accordance with

the Accounting Standard 21 (AS 21) “Consolidated Financial Statements” issued by The Institute of Chartered Accountants of India.

� "��� ��������������������������`��=���_����=�������������=���������=��#���������������Z����&�=�������������������������Company, i.e.. 31st March, 2014.

� "��� $����=���=� �������� ����������� ����� `���� Z��Z���=� �ZZ�_��&� ������ ��������&� Z������� �� ��X�� ������������ ��=�events in similar circumstances and appropriate adjustment have been made where the accounting policies are not uniform.

� "��� ������������������������$�Z��_���=�������`��=���_������`������`���=���������j`_j�����`�����`_��==��&��&����������`X����������X��������������������`������������������=��zZ���������������_�����������&������j&��Z�`����������=���������������������&�������������=��� �V���W

The value of investment over the cost to the Company’s share in the net assets of the subsidiary at the date on which ����������������=���������&����=�����=#������=������Z������_�=������=�������������=���=� ������������������W

27.� �����������`��=���_������=�=�������������=���=� ������������������)

Name of the Subsidiary Company Country of Incorporation Share in ownership Shares held by

Vertex Commodities & Finpro (P) Limited India 99.95% (P.Y. 99.95%)

Vertex Securities Limited

28. Sundry debtors include old outstanding debts amounting to ` 15,259,655/- (` 16,476,641/-) in respect of which Company ���� ��������=� ��&��� ��=� ����� ������_� �������� ���� Z����=��&�� � #����� ���� ��� =�|������ ���&��� � Z�&����W� (� Z������� ��=�`����=�`�������`������=�� ��� ������������=����&�����_���������� ��������&������ ����� =���� ����� ����=�`�������&=���=�recoverable.

29.� '�� ���� Z����� � ���������� ���� �������� ������� ��=� =�Z����� ����� ���� ������ ��� �����=� ��� ���� Y������� ������� �� �������=� ��� ����ordinary course of business.

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69

ANNUAL REPORT 2013-14

30.� "��� ��Z��_� ��� ����������&� ����"� `��� ����_� ������� #���� #�� ��Z����_� ��������W� "��� ���X� ��� ���������=� �� �������Z������� ��������� �������� ��_� #���� ���� ��Z��_� ��������� �� #��!��� �������� ��� ���� �������� ��=� ����� �� ����&� ����� ���_�have enough credit / margin in their account.

31. Lien has been marked in favour of Axis bank in respect of Bank Deposits worth ` 14,400,000/- (P.Y ` 13,500,000/-) together with accumulated interest thereon, against bank guarantees issued by them on account of the Company. Lien has been marked in favour of BSE against trading guarantee in respect of Bank Deposit worth ` 1,000,000 /- (P.Y. ` Nil) together with accumulated interest thereon.

32. Based on the guiding principles given in Accounting Standard on “Segment Reporting” (AS – 17) issued by the Institute of Chartered Accountants of India, the Company’s primary business segment is share broking. All other activities of the company revolve around the main business. As the company’s business activity falls within a single primary business segment, the disclosure requirements of AS – 17 in this regard are not applicable.

33.� "��� ����&������ ���� ��������=� ���� ��&� ����� ������������ ��=� �� ���� ����� ������ �z���� �� �������������� #����� #�������provision on account of permanent diminution in the value of investments.

34.� (� Z������� �� =���=��=� �� ���������� ������� ��=� =���=��=� ��z� ������ �� ���� `���� ��=�� ��� ���� �������� ���������� ��� �����`�������=�����`���`���Z� ���=����&�����_���W

35.� ����� ����=�`��������=�������=���������=��������_�=�Z�����������`����� ���� �����������������������=��=���������W�"�������&������=�������zZ������_����������=�|��������|�����&�������������_������ ������������������W

36.� �Z������&� ������)� "��� $�Z��_� ���� `�����=� ���� Z�������� ��=��� Z������&� �����W� "����� ������� ���� �� �� Z���=� ���&��&�from 11 to 60 months and are renewable as may be mutually decided. These are generally cancellable lease. Lease payments ���&����=��������������������� ����=��������¦����¦���=���(���(W�/�����` 2,469,736 (P.Y. 5,656,482). Future minimum lease rent payable are as follows:

ParticularsAs at

31st March, 2014 (`)

As at 31st March,

2013 (`)

Not later than one year 1,447,737 1,219,114��������������_����`����������������� ���_��� 1,080,842 790,094����������� ���_��� – –

37.� �������� _���� &����� ����� `���� ��j&��Z�=V�������� �=V��j�����&�=V������� #�������� ��������_� �� ����� ���� �������� _������������ �����W���������_���� &��������������������#���������=�&��������`���X��W

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST MARCH, 2014 (ALL AMOUNTS ARE MENTIONED IN RUPEES)

���Z�������!����=���Z���������=���

For Rahul Gautam Divan & Associates For and on behalf of Board of Directors �������������������

Rahul Divan Kumar Nair James Pothen Jose Thomas Polachira >������� ���������?�@��������<������� <������� <������

Mumbai Kochi-18 U. Ramachandran Sandhya R. Nair 5th May, 2014 5th May, 2014 <������� ������%�"������%

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70

VERTEX SECURITIES LIMITED

STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956, RELATING TO SUBSIDIARY COMPANY FOR THE FINANCIAL YEAR 2013-14

1 Name of Subsidiary Company : Vertex Commodities and Finpro Private Limited2 The Financial year of Subsidiary Company ended on : 31st March, 20143 Number of shares in the subsidiary company held by Vertex

Securities Ltd at the above date fully paid: 3,859,493 Equity shares of `��:Vj� ����� ��=� /::�:::�

Non Cumulative Redeemable Preference Shares of `��::Vj�����

4 "��� ���� �&&��&���� � Z� �V������ � ���� ��`��=���_� $�Z��_W�So far as these concern the members of Vertex Securities Ltd.(i) dealt within the account of Vertex Securities Ltd. amounted

to [�\� ����`��=���_��� ��������_������=�=�����W:�W/:�� : `�[{��~��*{+\[`\� ��Z������� ��������_������������`��=���_�$�Z��_�

since this became subsidiary of Vertex Securities Ltd.: `��[��~�~<:\

(ii) not dealt within the account of Vertex Securities Ltd. amounted to [�\� ����`��=���_��� ��������_������=�=�����W:�W/:�� : `�[/�*<�\[`\� ��Z������� ��������_������������`��=���_�$�Z��_�

since this became subsidiary of Vertex Securities Ltd.: `�[*<\

STATEMENT PURSUANT TO SECTION 212 (8) OF THE COMPANIES ACT, 1956, RELATING TO SUBSIDIARY COMPANY FOR THE YEAR ENDED MARCH 31, 2014

'������=�����#����������������$�������������=�`_������������_��$�Z������|������������������'�=��W

Sr.No. Particulars Vertex Commodities & Finpro Pvt. Ltd (in `)

A Capital 58,615,000B Reserves & Surplus (13,676,733)C Total Assets 61,561,046D Total Liabilities 61,561,046E Details of Investment (Except in case of investment in subsidiaries) 32,700,000 F Turnover 13,389,365G �� ��Y����"�z���� (5,386,350)H Provision for taxation(Defered Tax) –I �� �������"�z���� (5,386,350)J Proposed Dividend Nil

For and on behalf of Board of Directors

Kumar Nair James Pothen Jose Thomas Polachira � ���������?�@��������<������� <������� <������

Kochi-18 U. Ramachandran Sandhya R. Nair 5th May, 2014 <������� ������%�"������%

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��

Form No. MGT-11

PROXY FORM[Pursuant to section 105(6) of the Companies Act, 2013 and rule 19(3) of the Companies

(Management and Administration) Rules, 2014]

VERTEX SECURITIES LIMITEDCIN:L67120KL1993PLC007349

��Q���>j��#"�!������"#�����/nd Floor, Market Road, Kochi –682 018

"��W)�:�~�j/�~�~�~���>�zW)�:�~�j/�<�/:< Website: �������������� Q��"

Email.: ���������������������� Q��"

Name of the member(s): ....................................................................................................................................................................................

Registered address: ............................................................................................................................................................................................

E-mail Id: ..............................................................................................................................................................................................................

Folio No / Client Id: ..................................................................... DP ID:.........................................................................................................

I/We, being the member(s) of .............................. shares of the above named Company, hereby appoint

1. Name: ...................................................................................................................................................................................................................

Address: ...............................................................................................................................................................................................................

E-mail Id: ............................................................................................... Signature: ................................................................ , or failing him

2. Name: ...................................................................................................................................................................................................................

Address: ...............................................................................................................................................................................................................

E-mail Id: ............................................................................................... Signature: ................................................................ , or failing him

3. Name: ...................................................................................................................................................................................................................

Address: ...............................................................................................................................................................................................................

E-mail Id: ............................................................................................... Signature: ...........................................................................................

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��� �_V��� Z�z_� �� �!��=� ��=� ���� [�� �� Z��\� �� ��V��� ��=� �� �_V��� `����� ��� ���� /���� ������� �������� ������&� � ����Company, to be held at Conference Hall of the Company at Ground Floor, Amritha Towers, Kombara Junction, Market Road, Ernakulam, Cochin-682 018, on 20th September, 2014 at 9.30 a.m. and at any adjournment thereof in respect of such resolutions as are indicated below:

RslnNo Ordinary Business Optional*For *Against

1. �=Z���� � �������� ���������� �� ���� _���� ��=�=� ������31, 2014

2. Appoint Director in place of Director who retires by rotation

3. Retirement of Director proposed to be appointed as Independent Director

4. Retirement of Director proposed to be appointed as Independent Director

5. Appointment of M/s. Rahul Gautam & Associates., $�������=� ����������� ��� ��=����� ��=� z����� �remuneration thereofSpecial Business

6. Variation of terms of appointment of Managing Director7. Appointment of Mr. James Pothen as an Independent

�������������$�Z��_������������Z�� ���_����8. Appointment of Mr. Jose Thomas Polachira as an

Independent Director of the Company for a term of upto ���_����

9. Increase investment limits of FII and NRI in the Company

Signed this ............................................................... day of .................................. 2014.

........................................................................ Signature of shareholder

........................................................................ Signature of Proxy holder(s)

Note:�W� "��������Z�z_�����=�����`���|�����������=�`��=��_���Z����=���=�=�Z����=����������&������=�����������$�Z��_��

not less than 48 hours before the commencement of the Meeting.

/W� ��Z����������������Z�z_���`���������`�����Z����=�����z���=��&� �_���=���=��&���������&&��&��������������������percent of the total share capital of the Company. Further, a Member holding more than ten percent, of the total share capital of the Company carrying voting rights may appoint a single person as proxy and such person shall not act as proxy for any other person or Member.

¯� '�� ��� Z������ �� Z��� �� £¡�� ��� ���� �ZZ�Z������ ������ �&������ ���� ���������� ��=�����=� ��� ���� YzW� '� _�� ������ ���� £>��� ��£�&������� ������ `���X� �&������ ��_� �� ���� ����������� _��� Z�z_� #���� `�� �������=� �� ���� ��� ���� ������� ��� ��V���� ����X��appropriate.

��zRevenueStamp of

` 1/-

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VERTEX SECURITIES LIMITEDCIN:L67120KL1993PLC007349

��Q���>j��#"�!������"#�����/nd Floor, Market Road, Kochi –682 018

"��W)�:�~�j/�~�~�~���>�zW)�:�~�j/�<�/:< Website: �������������� Q��"

Email.: ���������������������� Q��"

ATTENDANCE SLIP

Regd. Folio No./Client ID………………………….

'� ����`_� ����=� �_� Z�������� ��� ���� /��"��((���� ��(����� ���"'(�� � ���� $�Z��_� ��� $�������� ����� � ���� $�Z��_�at Ground Floor, Amritha Towers, Kombara Junction, Market Road, Ernakulam, Cochin-682 018, on 20th September, 2014 at 9.30 a.m..

…………………………….....................………………. …………………………….....................………………. Name of the Shareholder / Proxy / Authorised Signature of the Shareholder / Proxy / Representative of Body Corporate Authorised Representative of� [���Y��$;���!���\� Y=_�$�Z����

Notes:

[�\� ���`����V���z_��=����������������=���Z�=���������!��=��������Z�=��_���&��=����=�������������������&�����W

(2) Members are requested to bring their copy of Annual Report for reference at the Meeting.

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VERTEX SECURITIES LIMITEDCIN:L67120KL1993PLC007349

(���.��/�����"�!������"#�����/�=�>�������X�����=��;������*~/�:�~"��W)�:�~�j/�~�~�~���>�zW)�:�~�j/�<�/:<���%�`����)�###W�����z`�X��&W��

Email.: [email protected]

BALLOT FORM(In lieu of E-voting)

Registered Folio o. / DP ID No. / Client ID No. :

Name & Address : ...........................................................................................................................................................

................................................................................................................................................................................................

Name(s) of the Joint Member(s), if any : ........................................................................................................................

No. of Shares held : ...............................................

I/We hereby exercise my/our vote in respect of the Resolution(s) to be passed for the business stated in the Notice of 21st Annual General Meeting of the Company dated 20th September 2014, by conveying my/our assent or dissent to the said Resolution(s) by placing the tick() mark at the appropriate box below:-

RslnNo Ordinary BusinessOptional

*For *Against1. �=Z����� ������������������������_������=�=�����������/:��2. Appoint Director in place of Director who retires by rotation 3. Retirement of Director proposed to be appointed as Independent

Director4. Retirement of Director proposed to be appointed as Independent

Director5. Appointment of M/s. Rahul Gautam & Associates., Chartered

����������������=�������=� z�������������������������Z������Business

6. Variation of terms of appointment of Managing Director7. Appointment of Mr. James Pothen as an Independent Director of the

$�Z��_������������Z�� ���_����8. Appointment of Mr. Jose Thomas Polachira as an Independent

�������������$�Z��_������������Z�� ���_����9. Increase investment limits of FII and NRI in the Company

Place : .......................................

Date : ......................................Signature of Shareholder

NOTE: ;��=�_� ���=� ���� ������������ Z�����=� ������� `���� ����&� ���� ��W� q���=� Y����� >���� �������=�`_�����������������`_�{W�:�ZW�W����*���Z���`���/:�����������_�`������=���=W

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INSTRUCTIONS

�W� ���`���� ��_� ��� �Z� ���� Y����� >��� Z�����=� ������� ��=� ��`���� ���� ����� ��� �� �����=� �����Z�� ������ ������������� ��W� ;W� �� �Z������� �<V�+~��� "����� $�Z��z�� /�=� ���� �W�W� ��=�� ����Z������$����j*~/:�*������ ��������`_�{W�:�ZW�W���*���Z���`����/:��W�Y�����>����������=�����������#����strictly be treated as if not received.

2. The Company will not be responsible if the envelope containing the Ballot Form is lost in transit.

�W� ����&��=�� ����Z����� �� ���������_� ���X�=� ���� ���� ���`��� �� `�� �������=� ��=� ���� =������� � ��������������������������=��_����������#����`�� ���W

4. In the event member casts his votes through both the processes i.e., E-voting and Physical Ballot Form, the votes in the electronic system would be considered and the Ballot Form would be ignored.

5. The right of voting by Ballot Form shall not be exercised by a proxy.

6. To avoid fraudulent transactions, the identity/signature of the members holding shares in electronic/=����� ��� ������� �=�#���� �����Z���������&�������� �������=�`_�(���V$������=� ���������`������=��&� ������� ��� Z�_������ ��� ��� ���� �=� ��� Z��� ���� ����=�� � ���� ������ �������� �&���� � ����Company i.e.,Link Intime Pvt. Ltd. Members are requested to keep the same updated.

7. There will be only one Ballot Form for every Folio / DP ID Client ID irrespective of the number of joint members.

~W� '�� ����� � ����� ��=����� ���� Y����� >��� ����=� `�� ��&��=� `_� ���� ���� ����=� �������=��� ��=� ��� ����/ her absence by the next named shareholders. Ballot form signed by a joint holder shall be treated valid if signed as per records available with the Company and the Company shall not entertain any objection on such Ballot Form signed by other joint holders.

<W� %����� ���� Y����� >��� ���� `���� ��&��=� `_� ��� ��������=� ��Z������������ � ���� `=_� ��Z����V"����V�����_� ���W�� �� ����� �=� �Z_� � ���� ��������� ������������ V� Y��=� ��������� �� ���� ����=�accompany the Ballot Form.

10. Instructions for e-voting procedure are available in the Notice of annual general meeting and are also placed on the website of the Company.

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Vertex Securities Limited����������������� ������� ��� ���� ��� ������ ������������ ������ ���������� ��������� ��!� "�� ������"������������India having membership in National Stock Exchange of India Limited (NSE), Bombay Stock Exchange Limited (BSE), and depository services (NSDL).

The Company is also a SEBI registered full service Merchant Bank.

#� $������������%���� �#� '������*� ��+�-/0�� ��������������� ����� �������������������#� 1����������/�������� �#� - �������� ���%���� �#� 2��������#� 2'*-��������������������2�� ��!�������������"�����������'������*� ��

Transwarranty Finance LimitedTranswarranty Finance Limited (TFL) is a RBI registered full service Investment Bank providing a wide range of Financial Services to over 1000 large and mid cap companies and thousands of retail clients all over India since 1994.

Investment Banking#� '�������� ��2�7������� �#� �� �����8������#� /�������:7����#� - ��� ���� ���8�������'������������

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Real Estate & Infrastructure#� /�������:7����#� /��K����:7����#� <�� ���� ����!<�� ��1������� ��2����� ��#� 0�������������"��� �!���K����#� /��K������� #� ��������O���� ��"��� ����!�����������#� ���������!*� � �����- ����� ���

Gold Loan

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Merchant Banking#� '� ���� ���"�- ������/������0""����!�*������� �0""����!�$�����-����#� '� ���� ���"������ =%� �>� ������� "���8��� ���� !� - �������� ��!�8��������� ��!�Q���� � ��@ ������� ���!�

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Vertex Commodities & Finpro Private LimitedVertex Commodities & Finpro Private Limited, a subsidiary of Vertex Securities Limited is also a national level retail ����� �� ���� �� ���� ���� �� ���� ��� �� !� "�� ����� �"����� ������� - ���� ��� �� �������� � � ��� V���� ���Commodities & Derivatives Exchange (NCDEX), Multi Commodity Exchange (MCX), National Multi Commodity :��� ����"�- �����������=V'8:>�� ��V���� ����/0W�:��� ����"�- �����������

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����������CIN: L67120KL1993PLC007349

Thottathil Towers, 2nd Floor, Market Road, Ernakulam, Kochi - 682 018. Tel.: 0484-2384848 � Fax: 0484-2394209

Website: www.vertexbroking.com � vsl@ vertexbroking.com

������������� 403, Regent Chambers, Nariman Point, Mumbai - 400 021.

Tel.: 022-4001 0900 � Fax: 022-6630 6655 � Email: www.vertexbroking.com