afsl master - part 1 -final · and conditions and with or without mortgaging or charging...

Twenty First

2013-2014

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Action Financial Services (India) Limited

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AUDITORS : Ford, Rhodes, Parks & Co.

Chartered Accountants

BANKERS : Bank of India, HDFC Bank Ltd.,

ICICI Bank Ltd.

REGISTRAR & SHARE : M/s. Link Intime India Pvt. Ltd.

TRANSFER AGENT C-13, Pannalal Silk

Mills Compound, L. B. S. Marg,

Bhandup (W), Mumbai - 400 078.

Tel.: 2596 3838 Fax : 2567 2693

REGISTERED OFFICE & : 46/47 6th Floor, Rajgir Chambers,

BROKING DIVISION & 12/14, Shahid Bhagatsingh Rd, Fort,

SECURITIES BANKING CELL : Mumbai- 400 023.

(Depository Participant of NSDL) Tel. 4365 4444 Fax: 4365 44 47

Email ID : [email protected]

Website : www.actionfin.com

BRANCH WITH BSE & NSE : Mumbai (Fort, Matunga, Borivali),

TERMINALS Bokaro, Dharmavaram, Dhanbad

& Valsad

DEPOSITORY BRANCHES : Mumbai (Fort), Ahmedabad, Bokaro

& Kakinada

LISTED AT : Bombay Stock Exchange

Company’s Vision : To Provide World Class Services to all

Our investors within the shortest

possible time in a pleasant

experience

Company’s Mission : To develop creative and innovative

means of investment for benefit of

institutions and individuals, within

the regulatory framework. To

support investors financial growth by

providing them best advisory services

o f a l l m o d e s & m e t h o d s o f

investments which is most relevant,

reliable and accurate and thus

contribute in overall growth of

society. To care for customers by

being fair and to share a mutually

beneficial relationship.

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21st. Annual Report 2013-14

NOTICE is hereby given that the Twenty-First Annual General Meeting of the Members of Action Financial Services (India) Limited (CIN: L65944MH1992PLC068879) will be held at 2A, 2B & 2C 1st floor, Rajgir chambers, 12/14, Shahid Bhagat Singh Road, opp. old Custom House, Fort Mumbai-400023 on 25th September, 2014 at 11.00 a.m. to transact the following business:

ORDINARY BUSINESS:

1. To receive, consider and adopt the Financial Statements as at 31st March, 2014 together with the Directors' Report and Auditors' R e p o r t thereon.

2. To appoint a Director in place of Mr. Bakul Parekh, (DIN No.: 00108609) who retires by rotation, and being eligible offers himself for re-appointment.

3. To appoint Auditors and to fix their remuneration

To consider and, if thought fit to pass, with or without modification(s) the following Resolution as an Ordinary Resolution.

“RESOLVED THAT pursuant to the provisions of section 139 of the Companies Act, 2013 and the Rules made thereunder, M/s Ford, Rhodes, Parks & Co. (Firm Registration No.102860W) the Chartered Accountants, Mumbai, be and are hereby re- appointed as the Auditors of the Company to hold office for the period of three (3) years from the conclusion of this meeting until the conclusion of the Twenty Fourth Annual General Meeting of the Company (subject to ratification of the appointment by the members at every Annual General Meeting held after this Annual General Meeting) at a remuneration as may be decided by the Chairman.”

SPECIAL BUSINESS:

4. Appointment of Mr. Atul Anoopchand Zatakia, (DIN No.: 00588390) as the Independent Director.


“RESOLVED THAT pursuant to the provisions of Sections 149, 152 read with Schedule IV and all other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory modification(s) or re-enactment thereof for the time being in force) and Clause 49 of the Listing Agreement, Mr. Atul Anoopchand Zatakia, (DIN No.: 00588390), be and is hereby appointed as an Independent Director of the Company to hold office for 5 (Five ) y e a r s

NOTICE

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w.e.f 01.04.2014 to 31.03.2019, not liable to retire by rotation a n d i n respect of whom the Company has received a notice in writing u n d e r Section 160 of the Companies Act, 2013 from a member proposing his candidature for the office of Director,”

5. Appointment of Mr. Ketan Himmatlal Mehta, (DIN No.: 02903954) as the Independent Director.


“RESOLVED THAT pursuant to the provisions of Sections 149, 152 read with Schedule IV and all other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory modification(s) or re-enactment thereof for the time being in force) and Clause 49 of the Listing Agreement, Mr. Ketan Himmatlal M e hta , (DIN No.:02903954), be and is hereby appointed as an Independent Director of the Company to hold office for 5 (Five) years w.e.f 01.04.2014 to 31.03.2019, not liable to retire by rotation and in respect of whom the Company has received a notice in writing under Section 160 of the Companies Act, 2013 from a member proposing his candidature for the office of Director,”

6. Appointment of Mr. Harbhajan Singh J Dhillon,

(DIN No.: 05322003) as the Independent Director.


“RESOLVED THAT pursuant to the provisions of Sections 149, 152 read with Schedule IV and all other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory modification(s) or re- enactment thereof for the time being in force) and Clause 49 of the Listing Agreement, Mr. Harbhajan Singh J Dhillon, (DIN No.: 05322003), be and is hereby appointed as an Independent Director of the Company to hold office for 5 (Five )years w.e.f 01.04.2014 to 31.03.2019, not liable to retire by rotation and in respect of whom the Company has received a notice in writing under Section 160 of the Companies Act, 2013 from a member proposing his candidature for the office of Director,”

7. To consider and if thought fit, to pass with or without modifications the following resolution as a special resolution:

“RESOLVED THAT pursuant to the provisions of Section 180(1)(c) of the Companies Act, 2013 and any other applicable provisions thereof and the Articles of Association of the Company, consent of the members

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be and is hereby accorded to the Board of Directors of the Company to borrow moneys by way of loans, debentures, or otherwise from time to time for the purpose of the business of the Company upon such terms and conditions and with or without mortgaging or charging undertakings, assets and properties, whether movable or immovable, stock-in-trade, work-in-process, debtors or any part thereof of the Company as security, as the Board of Directors may in its absolute discretion deem fit even if the moneys to be borrowed together with moneys already borrowed by the Company (apart from temporary loans obtained from the bankers of the Company in the ordinary course of business) may exceed the aggregate of the paid up capital and free reserves (i.e. reserves not set apart for any specific purpose) of the Company provided however that the total amount up to which moneys may be borrowed by the Company shall not exceed Rs. 25,00,00,000/- (Rupees twenty-five crores only) over and above the aggregate of the paid up capital and free reserves of the Company and shall exclude all temporary loans obtained by the Company from its bankers in the ordinary course of its business.”

Registered office: by order of the Board46 & 47, 6th floor, Rajgir chambers,12/14,Shahid Bhagat Singh Road, sd/-opp. old Custom House, Fort Mumbai-400023. (CS Archana Andhare) Date: 08.08.2014 Company Secretary

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For Members holding shares in Demat Form and Physical Form

PAN* Enter your 10 digit alpha-numeric *PAN issued by Income Tax Department (Applicable for both demat shareholders as well as physical shareholders)

• Members who have not updated their PAN with the Company/Depository Participant are requested to use the first two letters of their name and the last 8 digits of the demat account/folio number in the PAN field.

• In case the folio number is less than 8 digits enter the applicable number of 0’s before the number after the first two characters of the name in CAPITAL letters. Eg. If your name is Ramesh Kumar with folio number 100 then enter RA00000100 in the PAN field.

(viii) After entering these details appropriately, click on “SUBMIT” tab.

(ix) Members holding shares in physical form will then reach directly the

Company selection screen. However, members holding shares in

demat form will now reach ‘Password Creation’ menu wherein they

are required to mandatorily enter their login password in the new

password field. 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 that company opts for e-

voting through CDSL platform. It is strongly recommended not to

share your password with any other person and take utmost care to

keep your password confidential.

(x) For Members holding shares in physical form, the details can be used

only for e-voting on the resolutions contained in this Notice.

(xi) Click on the EVSN for the relevant <Company Name> on which you

choose to vote.

(xii) On the voting page, you will see “RESOLUTION DESCRIPTION” and

against the same the option “YES/NO” for voting. Select the option

YES or NO as desired. The option YES implies that you assent to the

Resolution and option NO implies that you dissent to the Resolution.

(xiii) Click on the “RESOLUTIONS FILE LINK” if you wish to view the entire

Resolution details.

(xiv) After selecting the resolution you have decided to vote on, click on

“SUBMIT”. A confirmation box will be displayed. If you wish to

confirm your vote, click on “OK”, else to change your vote, click on

“CANCEL” and accordingly modify your vote.

(xv) Once you “CONFIRM” your vote on the resolution, you will not be

allowed to modify your vote.

(xvi) You can also take out print of the voting done by you by clicking on

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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 Enter the Dividend Bank Details as recorded in your demat Bank account or in the company records for the said demat account Details# 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 held by you as on the cut off date in the Dividend Bank details field.


“Click here to print” option on the Voting page.

(xvii)If Demat account holder has forgotten the changed password

then Enter the User ID and the image verification code and click on

Forgot Password & enter the details as prompted by the system.

• Institutional shareholders (i.e. other than Individuals, HUF, NRI

etc.) are required to log on to https://www.evotingindia.co.in

and register themselves as Corporates.

• They should submit a scanned copy of the Registration Form

b e a r i n g t h e s t a m p a n d s i g n o f t h e e n t i t y t o

[email protected].

• After receiving the login details they have to create a user who

would be able to link the account(s) which they wish to vote on.

• T h e l i s t o f a c c o u n t s s h o u l d b e m a i l e d t o

[email protected] and on approval of the

accounts they would be able to cast their vote.

• They should upload a scanned copy of the Board Resolution and

Power of Attorney (POA) which 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:

(A) Please follow all steps from sl. no. (i) to sl. no. (xvii) above to cast vote.

(B) The voting period begins on <Date and Time> and ends on <Date and

Time>. During this period shareholders’ of the Company, holding shares

either in physical form or in dematerialized form, as on the cut-off date

(record date) of <Record Date>, may cast their vote electronically. The e-

voting module shall be disabled by CDSL for voting thereafter.

(C) In case you have any queries or issues regarding e-voting, you may refer

the Frequently Asked Questions (“FAQs”) and e-voting manual available

at www.evotingindia.co.in under help section or write an email to

[email protected].

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( D) Institutional shareholders (i.e. other than individuals, HUF, NRI etc.) are

re q u i re d to l o g o n to htt ps : / / w w w. evo t i n g i n d i a . co . i n

and register themselves, link their account which they wish to vote on

and then cast their vote. They should upload a scanned copy of t h e

Board Resolution in PDF format in the system for the scrutinizer to

verify the vote.

IV. The voting period begins at on Friday, 19th September, 2014 at 9:00 am

and will end on Sunday, 21st September, 2014 at 6:00 p.m. During this

period shareholders’ of the Company, holding shares either in

physical form or in dematerialized form, as on the cut-off date

(record date) of 22nd August 2014, may cast their vote

electronically. The e-voting module shall be disabled by CDSL

for voting thereafter. Once the vote on a resolution is cast by the

shareholder, the shareholder shall not be allowed to change it

subsequently.

In case you have any queries or issues regarding e-voting, you

may refer the Frequently Asked Questions (“FAQs”) and e- v o t i n g

manual available at www.evotingindia.com under help

section or write an email to [email protected].

V. The Company has appointed CS Jagdish P. Patel, Practicing

Company Secretary as the Scrutinizer for conducting the e- v o t i n g

process in fair and transparent manner.

VI. Copy of this notice has been placed on the website of the

Company and the website of CDSL.

6. All documents referred to in the accompanying Notice and the

Explanatory Statement shall be open for inspection at the

Registered Office of the Company during normal business h o u r s

(9 .00 am to 5.00 pm) on a l l working days except

Saturdays, up to and including the date of the Annual General

Meeting of the Company.

7. Members desirous of asking any questions at the Annual General

Meeting are requested to send in their questions so as to reach

the Company at least 10 days before the Annual General Meeting so

that the same can be suitably replied.

8. In case of joint holders attending the Meeting, only such joint

holder who is higher in the order of names will be entitled to

vote.

9. Members are requested to bring their attendance slip along

with their copy of Annual Report to the Meeting.

10. Members are requested to intimate change of address, if any, to

the company quoting reference to their Registered Folio Number.

11. At the ensuing Annual General Meeting, Mr. Bakul Parekh retire

by rotation and is being proposed for re-appointment as Director,

Mr. Atul Zatakia (DIN: 00588390), Mr. Ketan Mehta (DIN: 02903954)

and Mr. Harbhjan Singh Dhillon(DIN: 05322003) are being appointed

as the Independent Directors for the period of five (5) years w.e.f. 1st

April, 2014, not liable to retire by rotation the detail as required

under Clause 49 (IV)(v)of the Listing Agreement is given below:

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Registered office: by order of the Board46 & 47, 6th floor, Rajgir chambers,12/14,Shahid Bhagat Singh Road, sd/-opp. old Custom House, Fort Mumbai-400023. (CS Archana Andhare) Date: 08.08.2014 Company Secretary

EXPLANATORY STATEMENT PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013

Item No. 4 to 6:

Section 149 of the Companies Act, 2013, read with 49 of the Listing Agreement effective from 1st October, 2014, it is hereby proposed to appoint woman director and three (3) independent directors as proposed at resolution No. 4 to 7.

As per Clause 49 of the Listing Agreement with the Stock Exchanges the shareholding and particulars of Mr. Atul Zatakia, Mr. Ketan Mehta and Mr. Harbhajan Singh Dhillon are given herein above.

None of the Independent Directors are related neither with each other nor with Promoters and Key Managerial Persons.

None of the Directors or Key Managerial Persons of the Company and their relatives are concerned or interested, financially or otherwise, in those resolutions.

Item No. 7:

As per the provisions of Section 180(1)© of the Companies Act, 2013, a company can borrow monies exceeding the aggregate of its paid up capital and free reserves (apart from temporary loans obtained from the Company’s bankers in the ordinary course of business) only with the approval of Members of the Company by way of a Special Resolution.

The Board accordingly recommends the Special Resolution as mentioned at item no. 8 of this Notice for your approval.

None of the Directors or Key Managerial Persons of the Company and their relatives are concerned or interested, financially or otherwise, in the resolution.

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Name AgeExperienceEducational

QualificationNo. of shares

hold.

Mr. Bakul ParekhMr. Atul AnoopchandZatakia)Mr. Ketan Himmatlal Mehta)Mr. Harbhajan SinghJ Dhillon)

51

50

44

69

Graduate

GraduateUnderGraduate

B.E.

30

26

10

46

(No. of years)

20,38,889

12,045

9,232

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DIRECTORS' REPORT

To,The Members,Action Financial Services (India) Limited,

Dear Sir/Madam

The Directors have pleasure in presenting the 21st Annual Report together with the Audited Financial Statements for the year ended on 31st March, 2014.FINANCIAL RESULTS

Year ended Year ended 2014 2013

Revenue from operations & other Income 4,37,03,207 6,07,09,367

Profit (Loss) before Interest & Depreciation 37,32,540 1,28,72,133

Less: Interest 59,98,567 66,33,240

Less: Depreciation 38,16,506 24,48,435

Profit (Loss) After Depreciation & before Tax (60,82,533) 37,90,458

Exceptional Item 63,94,442 -

Profit before Tax 3,11,909 37,90,458

- Taxation Current Year 3,20,000 11,45,000

- Deferred Tax (written back) (6,06,493) 15,37,352

Profit /(Loss) after tax 5,98,402 11,08,106

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FINANCIAL PERFORMANCE

This year witnessed huge volatility and further due to political instability led the client base grow at sluggish rate. As we have launched one paisa brokerage scheme which brought down our brokerage income to great extent as many of the active clients moved into this scheme, so there is a fall in the brokerage income.

The primordial focus of the Company has been on raising fresh funds, in an increasingly difficult economic environment. The economic slowdown, poor dollar returns on the back of significant currency devaluation, and policy inaction have prompted most investors to await changes in government before relooking at India as an investment option.

CONSOLIDATED RESULTS:

The audited Standalone and consolidated Financial Statements of the Company along with its subsidiary companies are attached herewith and form part of this annual report. These have been prepared in accordance with the provisions of the Companies Act, 1956, the Listing Agreement, the Accounting Standard 21 (AS-21) on Consolidated Financial Statements and Accounting Standard 23 - (AS-23) on Accounting for Investments in Associates in Consolidated Financial Statements based on Audited Financial Results for the year ended 31st March, 2014.

SUBSIDIARIES:

As on 31st March, 2014 the Company has two wholly owned subsidiary companies (non-material) namely Action Securities Limited and Action Commodities Limited. In terms of section 212 of the Companies Act, 1956, the company has attached the Financial Statements of its subsidiaries to the Annual Report.

DIVIDEND

The Company do not recommend any dividend on Cumulative Redeemable Preference Shares and Equity Shares for the year ended 31st March, 2014.

OVERVIEW:

With the stable government and optimistic sentiments of FII and retail investors, there are lot of opportunities in the market to build wealth and expand. However, being a broking company, its opportunities and threat would be more specific to the ones, which apply to the companies operating in the capital market as brokers. But as it is known a healthy competition is always good for the industry we expect various new sources of revenues in coming future from financial and capital markets.

REVIEW OF BUSINESS DIVISIONS:

Broking Division and Depository Division:

Our Services under the Broking Business comprising of Equity, Currency & Derivatives Services, we offer retail and Institutional broking services in

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Equity to a large institutional and retail clientele in India and also offer retail broking services in currency segment. During the year under review the total turnover increased to Rs 4052.25 crores as compared to Rs 3838.30 crores in the previous financial year.

Action offers personalized services and complete transaction support through our website to our client for investment in primary market through Mutual fund and IPO’s. Action offers platform for trading in Equity Market in BSE, NSE for cash, Derivatives & currency segment of the Exchange.

Last year company launched One paisa brokerage scheme. effects of which are already started showing in terms of increased number of clienteles. Further as the markets are on its lifetime high, there is huge opportunity for the company to gain the market share as the investors are back in the market.

Company has established new sales partner and authorized person system all over the country. For the purpose of access to wide business opportunities this has resulted into increase in clientele base of the company.

Company has completed 17 years as a Depository Participant. Company is holding approximately Rs.1600.39 Crores worth stock on behalf of clients as on 31st March 2014. Company is registered with NSDL for Internet based IDeAS facility for the convenience of the Investor to enable them to view latest holding with valuation as well as transactions.

Company also has its own website through which client can view their holding, transaction and ledger balances. Company has introduced various tariff Schemes for clients as per their requirement & convenience.

As a result, of flexible working hours, experienced staff, timely information to clients regarding failure of instructions, acceptance of last minute Pay-In instructions, less processing time, Low cost etc. Clients of other brokers also prefer to open their Demat Accounts with us. Key areas of service are retail clientele, clearing members and promoters of various companies.

DP Division caters to 29 clearing Members Pool Account and maintains 38 Promoters Accounts.

FUTURE OUTLOOK & EXPANSION PLAN

The company is focused on building a long term stable business with emphasis on retail business brokerage that does not rely on highly leveraged trading clients.

The actions of the new government will have a significant bearing on the pace of policy reforms, improvement in investment climate and on the public market sentiments. Stability in global markets and sustained demand from the industrialized nations are also imperative for the growth playing out along expected lines.

With the launch of our most innovative product, ‘1 Paise brokerage per executed order’ in capital market, your Company has commenced its journey to create wonders in conducting business and change the overall views of broking industry.

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To make this a super success and break the myth of how stock brokers operate, we want to go few steps ahead. Our roadmap is ready with lot of ideas and we are all set to achieve our goals. We have set of targets to be achieved & to accelerate the growth Company is looking out of fresh Investments.

Our subsidiary Company, Action Commodities Limited, became one of the first Company all over India, to get the approval from Insurance Regulatory Development Authority (IRDA) to dematerialise all insurance policies of all policy holders including individuals, firms and corporate. This will create additional client base for the Company and will also help generate additional revenue for the Company.

FINANCE

The Company has availed credit facilities from Bank of India. The performance of the last two years has led to significance liquidity pressure in the long term sources. During the year Kedia Group has ceased to be promoter of the Company.

DEPOSITS:

During the year under review, your Company has not accepted any deposits within the meaning of Section 58A and Section 58AA of the Companies Act, 1956 and rules made there under.

DIRECTORS' RESPONSIBILITY STATEMENT:

Your Directors confirm:

i) That in the preparation of the annual accounts, the applicable accounting standards had been followed and that no material departures have been made from the same.

ii) That they had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the financial year ended 31st March, 2014 and of the profit or loss of the company for that period.

iii) That they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for presenting and detecting fraud and other irregularities.

iv) That they had prepared the annual accounts on a going concern basis.

DIRECTORS

In accordance with the requirements of the Companies Act 2013, Mr. Bakul R. Parekh (DIN: 00108609) will retire by rotation being eligible, has offered himself for re-appointment and Ms. Esha Kedia, has resigned as Director during the year.

In terms of Section 149 of the Companies Act, 2013, Mr. Atul Zatakia (DIN: 00588390), Mr. Ketan Mehta (DIN: 02903954) and Mr. Harbhjan Singh Dhillon (DIN: 05322003) are being appointed as the Independent Directors for the

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period of five (5) years w.e.f. 1st April, 2014, not liable to retire by rotation.

Declaration to the effect that the proposed appointees meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges has been received from each of the aforesaid Independent Directors.

AUDITORS:

The present Auditors of the Company M/s. Ford, Rhodes, Parks & Co. (Firm Registration No.102860W), Chartered Accountants, Mumbai, will retire at the conclusion of ensuing Annual General Meeting and being eligible; offer, themselves for re-appointment to hold the office till the conclusion of 24th Annual General Meeting.

The Company has also received a certificate from M/s. Ford, Rhodes, Parks & Co., Chartered Accountants, Mumbai, under Section 139(1) and Section 141 of the Companies Act, 2013 confirming their eligibility for re-appointment. M/s. Ford, Rhodes, Parks & Co., Chartered Accountants, Mumbai, have also confirmed to the Company that the firm is subjected to the Peer Review Process of the Institute of Chartered Accountants of India (ICAI). Accordingly, M/s. Ford, Rhodes, Parks & Co., Chartered Accountants, Mumbai, are being re-appointed as the Statutory Auditors of the Company for a period of three years, subject to annual ratification of the same by the shareholders.

AUDIT COMMITTEE:

The Board of Directors constituted an Audit Committee as per the existing clause 49 of the Listing Agreements entered into with Stock Exchanges and in terms of Section 292(A) of the Companies Act, 1956.

CORPORATE GOVERNANCE:

A Separate section on Corporate Governance, Management discussion and Analysis and a Certificate from Company’s Auditors regarding compliance of the conditions of the corporate governance as stipulated under clause 49 of the Listing Agreements with the Stock Exchanges forms part of this Annual Report.

Certificate of CEO and CFO, inter alia, confirming the correctness of the financial statements, adequacy of the internal measures and reporting of matters to the audit committee in terms of the clause 49 of the listing agreements with Stock Exchanges, is also attached as a part of this Annual Report.

INSURANCE

All the properties of your Company including Office Premises Furniture & Fixtures Office Equipments and Computer, are adequately insured.

PARTICULARS OF EMPLOYEES

None of the employees of the Company was paid remuneration of Rs. 60,00,000/- p.a. or more for the year or Rs. 5,00,000/- p.m. or more and hence the information required under section 217 (2-A) of the Companies (Particulars

of Employees) Rules, 1975 is not required to be given.

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

(A) Conservation of Energy

Considering the nature of business activities carried out by the Company, your directors have nothing to report with regard to conservation of energy as required under Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.

(B) Technology absorption, research and development

The management keeps itself abreast of the technological advancements in the industry and has adopted the state of the art transaction, billing and accounting systems and also risk management solutions.

(C) Foreign Exchange Earnings and Outgo

a) The foreign exchange earnings of the Company was Nil

b) The foreign exchange expenditure was Nil

DEPOSITORY SYSTEM

As the Members are aware, your Company’s share are tradable compulsorily in electronic form and your Company has established connectivity with both the depositories, i.e. National Securities Depository Limited and Central Depository Services (India) Limited. In view of the numerous advantages offered by the Depository system, members are requested to avail the facility of dematerialisation of the Company’s shares on either of the Depositories as aforesaid.

ACKNOWLEDGEMENT

Your Directors would take this opportunity to express its deep appreciation for the co-operation and assistance received from the shareholders, Company’s clients, suppliers, bankers and other authorities during the year under review. Your Directors also wish to place on record their appreciation for the services rendered by all the employees of your Company.

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For and on Behalf of the BoardSd/-

(Milan R. Parekh)Chairman

DIN : 00108368

Place: MumbaiDate: 29th May, 2014

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MANAGEMENT DISCUSSION AND ANALYSIS :Market Scenario:During the previous year market witnessed huge volatility due to the

instability of the government, but as the view and pre poll predictions

expected a stable government the market moved positively after the second

half of the year. Market has seen a strong positive movement since Mr. Modi was selected as

the prime ministerial candidate from the NDA. Public expected a stable and

growth oriented government, which resulted in the market to move towards

higher side.Further the year 2014 is the most successful year for the market till this report

is being prepared as all the indices are on their life time high, India got the

most stable Government in last 35 years & has established confidence in the

economy at the macro scenario. We hope that the government fulfils all its commitments during their tenure

of 5 years then as said by our respectable Prime Minister “Ache Din Ayenge”

becomes a reality.

OPPORTUNITIES AND THREAT: Being a broking company, its opportunities and threat would be more specific

to the ones, which apply to the companies operating in the capital market as

brokers. But as it is known a healthy competition is always good for the

industry we expect various new sources of revenues in coming future from

financial and capital markets.

SEGEMENT WISE PERFORMANCE:Your company is mainly engaged in Capital Market Related Activities i.e.

Broking & Depository Participant, which are under one broad segment of

capital market, so segment reporting is not applicable to it.

OUTLOOK:Review of the Operation of the Company has been given in detail in Directors’

Report.

RISK AND CONCERNS:Your company ensures adherence to best practice and has necessary internal

system and control in place to manage the risk. Further the strict regulations and guidelines imposed by the regulatory

authorities like SEBI, Stock exchange and NSDL with reference to capital

market operation and Depository functions are sufficient in controlling the

market related financial and technical risks. All these guidelines of the

regulatory authorities whether it for margin money in capital market

transaction or otherwise are being strictly adhered to by your company.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:Your company has appropriate and adequate internal control systems. The

existing systems and procedures help in identifying the potential issues and

problems, if any. Company had appointed skilled employees to monitor the

regulatory compliance work, to avoid any shortfall in compliance related

issues.

FINANCIAL PERFORMANCE:Financial performance with the financial data and figures, have been given in

detail in Directors’ Report.

HUMAN RESOURCES:ACTION has a set of experienced and qualified staff to look after its

operations, it offers a challenging work and growth-oriented culture to its

employees with a people oriented philosophy to deploy right person at right

place. ACTION allows its employees to learn all kind of work to educate them

properly about the industry. Action lays tremendous emphasis on building

and strengthening its human resources capital and accordingly existing

employees undergo specific training and exams conducted by stock

exchanges on their own assessment and the feedback received in their

appraisal. The objective of learning and training process is to enable the

employees to reach higher levels of performance and responsibility.

Company encourages employees to clear NCFM and NISM exams for Capital

market, Derivatives and Depository module.

CAUTIONARY STATEMENT:Certain statements in the Management Discussion and Analysis describing

the company’s objectives, predictions may be “forward-looking statements”

within the meaning of applicable laws and regulations. Actual results may

vary significantly from the forward-looking statements contained in this

document due to various risks and uncertainties. These risks and

uncertainties include the effect of economic and political conditions in India,

volatility in interest rates, new regulations and government policies that may

impact the company’s business as well as its ability to implement the strategy.

The company does not undertake to update these statements.

18


Report on Corporate Governance(Pursuant to clause 49 of the Listing Agreement)

1. Company’s philosophy on code of Governance The Company remains committed to the core aspect of Corporate Governance, viz. fairness, transparency, accountability and responsibility.

2. Board of Directors

• Composition of the Board:The present Board of Directors consists of 5 Directors out of which Two (2) are Executive Directors, three (3) are Non-Executive& Independent Directors. The Chairman of the Company is Executive Promoter Director.

All the Directors have made the requisite disclosures regarding Committee positions held by them in other companies. The details as on till date, of the composition of the Board and changes therein since the last Annual report, category of the Directors and their attendance at the Board Meetings and the last Annual General Meeting, number of their Directorships in other companies incorporated in India (excluding alternate directorships & directorship in Pvt. Ltd. Companies) are given below:

# I– Independent Director, N.E.D. – Non-Executive Director, M.D. – Managing Director, W.T.D. – Whole-time Director@ resigned as a director as on 04.09.2013

•CS Archana Andhare, Company Secretary of the Company is the secretary to the Board w.e.f 01.01.2014.

Mr. Milan R. Parekh Chairman-M.D. 15 Yes 2 Nil Nil 2679056

Mr. Bakul R. Parekh Jt. M.D. 15 Yes 2 Nil Nil 2038889

Ms. Esha Kedia @ W.T.D. 0 No ---- Nil Nil 144224

Mr. Atul Zatakia I & N.E.D 14 Yes --- Nil Nil 12045

Mr. Ketan Mehta I & N.E.D 11 Yes --- Nil Nil 9232

Mr. Harbhjan

Singh Dhillon I & N.E.D 8 Yes --- Nil Nil NIL

Name of Director Attendance at the last AGM

No. of specifiedCommittees (Other thanAFSL) in whichChairman / Member $

Category ofDirectorship #

No. of Board Mtgs. Attended

Directorshipin otherCompaniesIncorporatedin India(excluding alternate directorships & directorship in Pvt. Ltd. Companies)

No. ofEquitySharesheld

Chairman Member

19


• Information placed before the Board of Directors

To enable the Board to discharge its responsibilities effectively and take informed decisions, necessary information is made available to the Board as per the Agenda Papers in advance of the Board Meetings.In addition to matters statutorily required to be placed before the Board of Directors for its approval, all major decisions regarding resource mobilisation, capital expenditure, etc., are considered by the Board. Following information are regularly put up before the Board for its consideration and approval:• Strategic plan and direction of the Company;• Annual Business Plan, Sales Budget;• Quarterly financial Results of the Company; • Minutes of the meetings of Audit Committee, Shareholders and • Investors Grievance Committee of the Board;• Matters related to significant environmental issues, accidents, if

any, etc.;• Material information from Government bodies, which may have

implications on the business of the Company, if any;• Information on material transactions, which are not in the ordinary

course of business;• Disclosure of material transactions with potential conflict of interest,

if any; and• Compliance with various listing and statutory requirements.

Code of Conduct:The Company has laid down the code of conduct for all Board members and senior Management personnel of the Company. Requisite annual affirmations of compliance with the respective codes have been made by the Directors and Senior Management personnel of the Company. The copy of code of conduct is available on the web site of the Company. The Declaration signed by the Managing Director and CEO is given below.

• Number of Board Meetings held during the year along with the dates:

During the year 2013-14, Fifteenth (15) Board Meetings were held as follows:-

April 2013 to June 2013 July 2013 to Sept. 2013 Oct. 2013 to Dec. 2013 Jan.2014 to March2014

22.04.2013 20.07.2013 28.10.2013 01.01.2014

30.04.2013 14.08.2013 06.11.2013 04.02.2014

30.05.2013 04.09.2014 20.12.2013 07.02.2014

28.06.2013 ----- --- 10.03.2014

---- ----- --- 27.03.2014

20


3. Audit Committee

The Board of Directors constituted an Audit Committee as per the existing clause 49 of the Listing Agreements entered into with the Stock Exchange.Four (4) meetings of the Audit Committee were held during the year. The Present composition of the Audit Committee and their attendance at meetings are as follows:

@ resigned as a director as on 04.09.2013

•CS Archana Andhare, Company Secretary of the Company is the secretary to the Audit Committeew.e.f 01.01.2014.

The Managing Director& CEO and Head of Accounts CFO are permanent invitees to the Audit Committee Meetings. The Statutory Auditor is also invited to attend the Audit Committee Meetings, as and when required.The Minutes of the Audit Committee Meetings were noted by the Board of Directors at the Board Meetings.The Chairman of the Audit Committee was present at the 20th Annual General Meeting held on30th September, 2013.The powers and role of the Audit Committee are as per Guidelines set out in Clause 49 of the Listing Agreement with the Stock Exchange and the Section 292A of the Companies Act, 1956. The salient features of powers and role of the Audit Committee are:

Terms of reference:The Terms of reference of the Audit committee broadly are as under:

1. Overseeing the Company’s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible.

2. Recommending the Board, the appointment, reappointment of the statutory auditor, fixation of audit fees and for other services.

3. Reviewing with the Management, the quarterly and annual financial statements before submission to the Board for approval.

4. Discussions with statutory auditors before the audit commence nature and scope of audit as well as have post audit discussion to ascertain any area of concern.

Name Designation CategoryMeeting attended

Mr.AtulZatakia Chairman I & N.E.D. 4

Mr.HarbhjanDhillon Member I & N.E.D. 4

Mr.Ketan Mehta Member I & N.E.D. 4

Ms.EshaKedia @ Member E.D 0

Number of

21


5. Reviews with the management, statutory auditors and internal audit system, the adequacy and the compliances of internal control systems.

6. In addition to above, all items listed in clause 49, matters requiring under Section 292A and other clauses of the Listing Agreements.

4. Shareholders/Investors’ Grievance Committee:The Board of Directors, constituted Shareholders/Investors’ Grievance Committee, to attend to and redress the Shareholders and Investors’ grievances. The present composition of the Shareholders/Investors’ Grievance Committee is as follows and four (4) meetings of the Shareholders/Investors’ Grievance Committee were held during the year. The attendance of each Member of the Committee is given below:

• CS Archana Andhare, Company Secretary of the Company is the secretary to the Shareholders/Investors’ Grievance Committee w.e.f 01.01.2014.

Role of Shareholders/Investors’ Grievance Committee:a). Review the existing “Investor Redressal System” and suggest measures for improvement.b). The Investors’ Grievance Committee meets once in every quarter to review and to take note of the Compliance Report submitted to the Stock Exchange and Grievances of the shareholders.c). To look into redressing of Shareholders and Investors Complaints regarding transfer of shares, non receipt of annual Reports etc.During the year 2013-2014,One (1)complaint was received and resolved by the Company and no complaints are pending to be resolved at the end of the financial year.

5. Remuneration Committee:The Board of Directors, constituted a Remuneration committee. The Committee is empowered to approve the remuneration of the Directors of the Company and their relatives and their relatives and to ensure compliance of the Companies Act, 1956, Listing Agreements, etc.

5A. Remuneration Policy:Remuneration of employees largely consists of salary and perquisites. The objectives of remuneration policy are to motivate employees to excel in their performance, recognize their contribution, retain talent and reward merit.

Name Designation CategoryMeeting attended

Mr.AtulZatakia

Chairman I & N.E.D. 4 Mr.HarbhjanDhillon

Member I & N.E.D. 4

Mr.Ketan Mehta Member I & N.E.D. 4

Number of

22


Details of Remuneration paid to the Directors during the financial year

@ resigned as WTD on 04.09.2013

6. Subsidiaries:

Though providing Stock Broking and Depository Services to be the prime business activity of the Company, the Company has two non material Unlisted subsidiary companies viz. Action Securities Limited (ASL) and Action Commodities Limited (ACL).

The Company monitors the performance of its subsidiaries, interalia, by the following means:

• The financial statements, investments, are reviewed by the AuditCommittee and the Board.• The minutes of Board Meetings of the subsidiary are noted at the BoardMeeting of the Company.

7. Annual General Meetings:

The details of Annual General Meetings are below:

The Shareholders passed all the resolutions including the Special Resolutions set out in the respective Notices. No item requiring for postal ballot under the statute was applicable at the aforesaid meetings. At the forthcoming AGM, there is no item on the agenda that needs approval by postal ballot.

Name Position Sitting fees Salary

&Perquisites

Commission Total

Mr. Milan R. Parekh

Managing Director

Nil 24,37,960

Nil 24,37,960

Mr.Bakul R. Parekh

Jt. Managing Director

Nil 24,37,960 Nil 24,37,960

Ms.EshaKedia@ Whole-time Director

Nil 4,40,000 Nil 4,40,000

Financial year Date and Time Location

2010-2011 th29 September,2011 at 10.00 a.m.

31, Rajgir Chambers, 12/14,

SahidBhagatsingh Road, Mumbai

– 400 023

2011-2012 th 29 September,2012 at 10.00 a.m. 31, Rajgir Chambers, 12/14,


– 400 023

2012-2013 th 30 September,2013 at 10.00 a.m.

31, Rajgir Chambers, 12/14,


– 400 023

23


8. Disclosure:There were no transactions of material nature between the Company and its Directors or Senior Management and their relatives or Promoters that may have potential conflict with the interest of the Company. The Register of Contracts containing transactions, in which Directors are interested, have been placed before the Board regularly. Transactions with the related parties are disclosed elsewhere in this Annual Report.During the last three years there has been no instance of non-compliance by the Company on any matter related to capital market. Hence there were no strictures or penalties imposed either by SEBI or by the Stock Exchanges or any statutory authority for non-compliance of any matter related to the capital market.9. Implementation of Code of Conduct for Insider Trading:Action Financial Services (India) Limited has adopted Code of Conduct for Insider Trading and is based on the SEBI framework. Action Financial Services (India) Limited follows strict guidelines in respect of insiders’ stock trading and related disclosures. Periodic disclosures have been obtained from all the Directors and ‘designated employees’. Under the aforesaid code all Directors and Designated Employees are required to conduct all their dealing in securities of the Company only in valid trading window after obtaining pre clearance from the Company as per the pre dealing procedure described in the Code.10. Secretarial Audit for reconciliation of Capital. As stipulated by SEBI, a Company Secretary in practice carries out Secretarial Audit to reconcile the total admitted capital with National Securities Depository Limited and Central Depository Services (India) Limited and the total issued and listed capital. This audit is carried out every quarter and the report thereon are submitted to the Stock Exchange as well as placed before the Board of Directors. The audit confirms that the total Listed and paid up capital is in agreement with the aggregate of the total number of Shares in dematerialised form (held by NSDL and CDSL) and total number of Shares in physical form.Means of Communication with Shareholders:

Quarterly Results The quarterly and annual results of the Company are published in English and vernacular newspaper inaccordance with the requirements of the Listing Agreement of the stock Exchange.

News papers in which results are normally published

1. Free Press (English) 2.

Navshakti (Marathi)

Web site www.actionfin.com

e –mail: [email protected]

24


MONTHWISE STOCK MARKET DATA (BSE) RELATING TO EQUITY SHARES OF THE COMPANY FOR THE PERIOD 1.4.2013 TO 31-3-2014

Month High BSE

Low BSE

Average BSE

Apr 13 30.50 18.05 24.27May 13 29.00 25.20 27.10Jun 13 26.45 18.65 22.55Jul 13 19.30 17.50 18.40Aug 13 17.50 16.70 17.10Sep 13 18.50

14.00

16.25Oct 13 13.91

10.41

12.16Nov 13 11.34

8.90

10.12Dec 13 10.78

10.25

10.51Jan 14 10.76

8.89

9.82Feb 14 8.90

8.50

8.70Mar 14 8.47

6.28

7.37

Average price per shares upto March, 2014

15.36

Bombay Stock Exchange (BSE)

GENERAL SHAREHOLDERS’ INFORMATION

Administrative Office :- 46 & 47, 6th Floor, Rajgir Chambers, 12/14, SahidBhagatsingh Road, Opp Old Custom House, Fort, Mumbai - 400 023

Tel:- (022) 43654444

Fax :- (022) 43654447

Whether Management Discussions and Analysis report is a part of Annual report

Yes

Registered Office : 46 & 47, 6th Floor, Rajgir Chambers, 12/14, SahidBhagatsingh Road, Opp Old Custom House, Fort, Mumbai - 400 023

Share Transfers in physical form and other communication in that regard including share certificates, dividends and change of address etc. may be addressed to

: Link Intime India Private Limited

Registrar & Share Transfer Agent C-13, Pannalal Silk Mills Compound L. B. S. Marg, Bhandup (W) Mumbai-400078

Tel No.: 022 - 25963838 Fax No.: 022 – 25946969

Annual General Meeting of the Company to be held on

: Date : 25.09.2014 Time : 11.00 a.m. Venue : 2A, 2B & 2C 1st Floor, Rajgir Chambers, 12/14,

SahidBhagatsingh Road, Opp Old Custom House, Fort, Mumbai - 400 023

Financial Calendar (tentative) : First quarter - 2 nd week of August, 2014 Second quarter - 2 nd week of November,2014 Third quarter - 2 nd week of February 2015 Fourth Quarter - 4 thweek of May 2015

Book Closure dates : 22.09.2014 to 25.09.2014 (both days inclusive).

Voting rights The Members whose names appear in the Register of Members/list of Beneficial Owners as received from Central Depository Services (India) Limited (CDSL) on 22.08.2014 for e-voting as well as on Ballot at General Meeting.

Listing on Stock Exchanges : Bombay Stock Exchange Limited

Listing Fees : Listing fees for the aforesaid Stock Exchanges for the financial year 2014-2015 have been paid.

Bombay Stock Exchanges Limited (BSE) scrip ID:

: ACTIONFI

Bombay Stock Exchanges Limited (BSE scrip Code:

511706

ISIN NO. : INE-357A01032

25


DISTRIBUTION OF SHAREHOL DING AS ON MARCH 31, 2014

No. of Shares held No. of Shareholders

% of Total Shareholders

No. of Shares % of Total Shares

1 500 1584 81.11

218340 1.75

501 1000 128 6.55

110198 0.88

1001 2000 65 3.33

101391 0.81

2001 3000 50 2.56

130117 1.04

3001 4000 13 0.67

46479 0.37

4001 5000 17 0.87

82159 0.65

5001 10000 34 1.74

282473 2.26

10001 and above 62 3.17 11533343 92.24

TOTAL 1953 100.00 12504500 100.00

Physical mode 869 311985 2.49

Electronic mode 1084 12192515 97.51

TOTAL 1953 100.00 12504500 100.00

CATEGORIES OF SHAREHOLDERS AS ON MARCH 31, 2014

Sr. No. Category No. of Folios Total Shares

held % to the Share

Capital

1. Other Bodies Corporate 52 3350955 26.80

2. Clearing Member 8 1301 0.01

3. Foreign Company 0 0 0.00

4. Foreign Institutional Investors * 0 0 0.00

5. Trust 0 0 0.00

6. GIC & its subsidiaries 0 0 0.00

7. Mutual Funds/ UTI 2 2500 0.02

8. Financial Institutions /Nationalised Banks

0 0 0.00

9. Non Nationalised Banks 0

0 0.00

10. Non Residents Indians (REPAT) 34

123187 0.99

11. Non Resident Indians(Non REPAT) 4

1176 0.01

12. Overseas Corporate Bodies 0

0 0.00

13. Public 1849

4210661 33.66

14. Promo ters

4761545 38.08

15. Hinu Undivided Family(HUF) 1

53175 0.43

Total

1953

12504500 100.00

Dematerialization of shares : As on March 31, 2014 a total of 12192515 equity shares constituting 97.51% of the equity share capital of the Company stand dematerialized and balance 311985 shares are in physical mode being 2.49%.

Business Location : Appeared in the Annual Report elsewhere-

Investors’ correspondence to be addressed to:

: Prakash Joshi is the Compliance Officer. Action Financial Services (India) Limited Registered Office: 46 & 47, 6th Floor, Rajgir Chambers, 12/14, SahidBhagatsingh Road, Opp Old Custom House, Fort, Mumbai - 400 023

Telephone:022 - 43654444Fax No.: 022 – 43654447E-mail: [email protected] Investor Complaint Email ID:- [email protected]

Details of Equity Shares Under lock-in period

: 77200 Equity Shares lock-in as on 30.01.2015. & 90000 Equity Shares lock-in as on 03.12.2015

3

26


DECLARATION

I Milan R. Parekh, Chairman &Managing Director & CEO of Action Financial Services (India) Limited hereby declare that all the members of the Board of Directors and the Seniormanagement personnel have affirmed compliances with the Code of conduct for the year ended 31st March, 2014.

BY AND ON BEHALF OF THE BOARD

-Sd/- (Mr. Milan R. Parekh) Managing Director & CEO

DIN 00108368MumbaiDate:-30th May, 2014

27


CERTIFICATETo The Board of Directors Action Financial Services (India) Limited

We, Milan R. Parekh, Chairman & Managing Director(CEO) and Bakul R. Parekh, Jt. Managing Director & Head-Finance & Accounts (CFO) of Action financial Services (India) Ltd. both certify that :

(a) We have reviewed financial statements and the cash flow statement for the year ended 31.3.2014 and that to the best of their knowledge and belief :

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

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

(b) There are, to the best of their knowledge and belief, no transactions entered into by the company during the year which are fraudulent, illegal or violative of the company's code of conduct.

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

(d) We have indicated to the auditors and the Audit Committee :(i) significant changes in internal control over financial reporting during

the year;(ii) significant changes in accounting policies during the year and that

the same have been disclosed in the notes to the financial statements; and

(iii) instances of significant fraud of which we have become aware and the involvement therein, if any, of the management or an employee

having a significant role in the company's internal control system over financial reporting.


Sd/-

( Bakul R. Parekh )Jt. Managing Director & CFO


Sd/-

( Milan R. Parekh )Managing Director & CEO

Place : Mumbai

Date :- 30th May, 2014

28


DIN 00108609DIN 00108368

29

CERTIFICATE ON CORPORATE GOVERNANCE

To,The Members,Action Financial Services (India) Limited,

We have examined the compliance of conditions of Corporate Governance by Action Financial Services (India) Limited, for the year ended on 31st March, 2014, as stipulated in Clause 49 of the Listing Agreement of the said Company with Stock Exchanges.

The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination has been limited to a review of the procedures and implementations thereof adopted by the Company for ensuring compliance with the conditions of the Corporate Governance as stipulated in the said clause. It is neither an audit nor an expression of option on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, and based on the representations made by the Directors and the Management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in clause 49 of the above mentioned Listing Agreement.

We state that such compliance is neither an assurance as to the future viability of the company nor the efficiency or effectiveness with the management has conducted the affairs of the Company.

For FORD, RHODES, PARKS & CO.


A.D.Shenoy

Membership No.11549Place : Mumbai

Date : 30th May,2014

Sd/-

(Partner)


Independent Auditor’s Report

To

The members of Action Financial Services (India) Limited

Report on the Financial Statements for the year ended 31st March, 2014

We have audited the accompanying financial statements of Action Financial Services (India) Limited (“the Company”) which comprise the balance sheet as at 31st March 2014, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company 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 September, 2013 of the Ministry of Corporate Affairs in respect 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 the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We 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 reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit 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 financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information

30


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:

i. in the case of the balance sheet, of the state of affairs of the Company as at 31st March 2014;

ii. in the case of the statement of profit and loss, of the profit for the year ended on that date; and

iii. in the case of the cash flow statement, of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2003 (“the Order”), as amended, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

i. we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

ii. in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

iii. the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

iv. in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956 read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013; and

v. on the basis of written representations received from the directors as on 31 March 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

For Ford, Rhodes, Parks & Co.


Firm Registration No.102860W

A.D. ShenoyPlace: Mumbai PartnerDate: 30th May, 2014 Membership No. 11549

31


Annexure to the Auditors’ Report

[Referred to in paragraph pertaining to “Report on Other Legal and Regulatory Requirement” of our Report of even date to the members of

Action Financial Services (India) Limited on the financial statements for the year ended 31st March, 2014]

1. a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

b) Fixed Assets have been physically verified by the management during the year and no material discrepancies between the book records and the physical inventory have been noticed. In our opinion, the frequency of verification is reasonable.

c) In our opinion and according to the information and explanations given to us a substantial part of Fixed Assets has not been disposed off by the Company during the year.

2. The Company does not have any stock of raw materials, store, spare parts and finished goods. However the Company has stock of shares on hand. The management has conducted physical verification of shares on hand at reasonable intervals. The procedure of physical verification of stock on hand followed by the management is reasonable and adequate in relation to the size of the Company and the nature of its business. The Company is maintaining proper records of stock on hand and no discrepancies were noticed on physical verification.

3. The Company has neither granted nor taken any loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Hence clause 3 of the order is not applicable.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for the purchase of shares and fixed asset and for providing services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas.

5. According to the information and explanations given to us by the management we are of the opinion that the transactions that need to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

6. The Company has not accepted any deposits from the public, within the meaning of Sections 58A and 58AA of the Act and the rules framed thereunder.

7. The Company has appointed independent Chartered Accountant to carryout the internal audit of the company. In our opinion, the Company internal audit system is commensurate with its size and nature of its business.

8. The Central Government has not prescribed maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956.

32


9. a) According to the records and information and explanations obtainedfrom the management, the Company is generally regular in depositing undisputed statutory dues including Provident fund, Employee State Insurance, Income Tax and other statutory dues applicable to it with appropriate authorities. However in some cases there has been delay in depositing the government dues.

b) In our opinion and according to information and explanations obtained, there are no disputed dues outstanding in respect of Sales tax, Wealth tax, Income tax, Service tax and Cess as at 31st March, 2014 that have not been deposited on account of dispute except the following :

Sr.No Name of dues Forum where Dispute Period to which Amount

1 Income Tax ITAT Mumbai A.Y. 2008-09 10,130,835/-

2 Tax Deducted Commissioner of A.Y. 2010-11 129,990/-

at Sources Income(Appeals),Mumbai

3 Tax Deducted Commissioner of A.Y. 2011-12

at Sources Income(Appeals),Mumbai

143,056/-

Note:-1. The Company had contested Income Tax demand of Rs 10,130,835/-

for Assessment Year 2008-09. The Company has paid Rs. 5,400,000/- and balance amount is in abeyance till disposal of the case . The company has preferred an appeal in the ITAT against the CIT(A) order.

2. The Company had contested Income Tax Deducted at Sources of Rs. 129,990/- and Rs 143,056/- for Assessment Year 2010-11 and 2011-12. The company has preferred an appeal in CIT (A).

10. The company i s reg istered for over 5 years and has accumulated losses at t h e e n d o f t h e f i n a n c i a l ye a r o f Rs. 13.01 Lakhs (previous year Rs. 49.20 Lakhs) which is less than 50% of its net worth. It has not incurred any cash losses in the current as well as in the immediately preceding financial year.

11. According to the information and explanations given to us and records of the Company examined by us the company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the Balance Sheet date.

12. According to the information and explanations given to us the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The provisions of any special statute applicable to chit fund and nidhi/mutual benefit fund/societies are not applicable to the Company.

14. The Company has dealing/trading in shares and debentures during the year. In respect of dealing in securities and other investments, in our opinion and according to the information and explanations given to us, proper records have been maintained of the transactions and contracts

33


and timely entries have been made therein. The securities and other investments have been held by the Company in its own name.

15. According to the information and explanations given to us the Company has not given any guarantees for loans taken by others from banks or financial institution during the year.

16. The term loans taken were applied for the purpose for which they were obtained.

17. On the basis of an overall examination of the Balance Sheet of the Company, in our opinion and according to information and explanations given to us, we report that no funds obtained on short – term basis have been used by the company for long term investments.

18. The Company has not made any preferential allotment of shares to an parties or companies covered in the Register maintained under section 301 of the Companies Act, 1956.

19. The Company has not issued any debentures.20. The Company has not raised any money through a public issue during the

year. 21. Based upon the audit procedures performed and information and

explanations given by the management, we report that we have not come across any instances of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by management.

For Ford, Rhodes, Parks & Co.Chartered AccountantsFirm Registration No.102860W

A.D. ShenoyPlace: Mumbai PartnerDate: 30th May, 2014 Membership No.11549

34


Action Financial Services (India) Limited BALANCE SHEET AS AT 31ST MARCH 2014

Particulars Note. Current Previous No. Year Rs. Year Rs.

EQUITY AND LIABILITIESShareholders’ fundsShare capital 2 133,325,000 133,325,000 Reserves and surplus 3 114,799,038 111,180,098 Money received against share warrants 11,685,000 11,685,000

259,809,038 256,190,098

Non-current liabilitiesLong-term borrowings 4 - 1,972,021 Other Long term liabilities 5 10,378,454 12,718,659 Long-term provisions 6 4,244,156 3,954,027

14,622,611 18,644,707

Current liabilitiesShort-term borrowings 7 25,056,278 24,128,307 Trade payables 37,074,230 14,624,022 Other current liabilities 8 22,810,497 13,609,139 Short-term provisions 9 2,108,173 4,100,814

87,049,179 56,462,282

Total Equity & Liabilities 361,480,828 331,297,087

ASSETSNon-current assets Fixed assets 10Tangible assets 17,277,272 21,605,431 Intangible assets 6,508,456 6,066,598

23,785,728 27,672,029

Non-current investments 11 66,981,853 29,692,628 Deferred tax assets (net) 12 1,582,562 976,069 Long-term loans and advances 13 10,473,289 11,730,577 Other non-current assets 14 5,958,616 9,925,149

108,782,048 79,996,452

Current assetsInventories 15 164,092,343 98,245,605 Trade receivables 16 59,316,921 91,129,066 Cash and Bank Balance 17 15,354,665 47,527,707 Short-term loans and advances 18 2,945,381 7,232,943 Other current assets 19 10,989,470 7,165,314

252,698,780 251,300,635

Total Assets 361,480,828 331,297,087

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

For Ford,Rhodes,Parks & Co.Chartered Accountants Milan R. Parekh Firm Registration No.102860W Director

DIN 00108368

A. D. Shenoy Bakul R. Parekh Partner Director Membership No.11549 DIN 00108609

Mumbai MumbaiDate: 30th May 2014 Date: 30th May 2014

Significant Accounting Policies 1Notes to Accounts 2 - 43Significant Accounting Policies & Notes to Accounts forms an integral part of the accounts.

35



Statement of Profit and loss for the year ended 31st March 2014


Revenue Revenue from operations 20 41,792,476 48,395,461 Other income 21 1,910,731 12,313,906

Total Revenue 43,703,207 60,709,367

Expenses Employee benefits expense 22 14,236,002 14,445,436 Finance costs 23 6,405,401 6,633,240 Depreciation and amortization expense 10 3,816,506 2,448,435 Other expenses 24 25,327,830 33,391,798

Total expenses 49,785,739 56,918,909

Profit before exceptional and extraordinary items and tax (6,082,533) 3,790,458 Exceptional items 42 6,394,442 - Profit before tax 311,909 3,790,458 Less: Tax expenseCurrent tax 320,000 1,145,000 Deferred tax 12 (606,493) 1,537,352 Profit (Loss) for the Year 598,402 1,108,106

Earnings per equity share of Rs. 10 each:(1) Basic 0.02 0.03 (2) Diluted 0.02 0.02


For Ford,Rhodes,Parks & Co.Chartered Accountants Milan R. Parekh Firm Registration No.102860W Director

DIN 00108368



Significant Accounting Policies 1Notes to Accounts 2-43Significant Accounting Policies & Notes to Accounts forms an integral part of the accounts

36



Year ended Year ended

31.03.2014 31.03.2013

A. CASH FLOW FROM OPERATING ACTIVITIES

Net Profit before Tax 311,909 3,790,458

Depreciation 3,816,506 2,448,435

Creditor wrtitten Back (12,191) (635,446)

Provision on Standard & Sub Standard Assets 137,269 246,837

Excess provision for taxation considered as per R& S 3,020,538 (151,404)

Interest and Dividend Income (1,626,881) (1,969,825)

(Profit)/ Loss on sale of Investments 440,448 (9,405,244)

(Profit)/ Loss on sale of Fixed Assets (6,394,442) -

Interest Expenditure 6,405,401 6,633,240

Tax Deducted at Source - -

Operating Profit before Working Capital Change s 6,098,558 957,051

Loan and Advances 5,544,850 (6,922,242)

Trade Receivables 31,674,87 6 (39,512,930)

Other current /Non current assets 142,377 (6,568,798)

Inventories (65,846,738) (12,631,258)

Trade payables 22,462,39 9 (20,721,946)

Other Payables (Exluding Current tax Provision ) 4,838,642 10,407,204

Cash Generated from Operations 4,914,964 (74,992,919)

Direct Taxes Paid (Net ) - -

Net Cash from Operating Activities [A] 4,914,964 (74,992,919)

B. CASH FLOW FROM INVESTING ACTIVITIES

Purchase & Creation of Fixed Assets (2,066,763) (11,929,348)

Proceeds from sale of Fixed Assets 8,531,000 -

(Purchase) / Sale Of Investments (Net) (37,729,673) 38,664,572

Dividend Received 95,124 597,263

Investment in Fixed deposit (7,534,017) 2,132,389

Interest Received 1,531,757 1,372,563

Net Cash used in Investing Activities [B] (37,172,572) 30,837,439

C. CASH FLOW FROM FINANCING ACTIVITIESProceeds from Secured Borrowing (Net) (1,972,021) (716,382)

Proceeds from UnSecured Borrowing (Net) 927,971 (13,424,082)

Proceeds from issue of warrants - 11,685,000

Proceeds from issue of Equity Shares - 24,463,000

Securities premium on Equity Shares - 68,496,400

Interest paid (6,405,401) (6,633,240)

Net Cash from Financing Activities [C] (7,449,451) 83,870,696

Net increase/(decrease) in cash and cash equivalents A+B+C] (39,707,058) 39,715,216

Cash and cash equivalents as at 1st April (Opening) 40,343,364 628,149

Net increase / (decrease) in cash and cash equivalents (39,707,058) 39,715,216

Cash and cash equivalents as at 31st March (Closing) 636,306 40,343,365

Notes:

i) Cash and Cash Equivalents include:

Balances with Schedule Banks on Current Accounts 636,066 40,341,957

Cash in Hand 241 1,408

636,306 40,343,365

-

ii)

iii)

iv) Previous year's figures regrouped /reclassified wherever required.


For Ford, Rhodes, Parks & Co. Milan R Parekh

Chartered Accountants Chairman & Managing Director

Firm Registration No: 102860W

Bakul R Parekh

Director

A.D.Shenoy

Partner

Membership No : 11549

Place : Mumbai Place : Mumbai

Date: 30th May 2014 Date: 30th May 2014

The above cash flow statement has been prepared under the 'Indirect Method' as set out in the Accounting

Standard - 3 on Cash Flow Statements.

Cash and cash equivalents for the purpose of cash flow statement comprise of Cash at bank and in hand and

short term investments with an original maturity of three months or less.

37

Cash Flow Statement for The year ended 31st March 2014

DIN 00108368

DIN 00108609


Note forming part of financial statement for the year ended 31st March 2014.

1. Significant Accounting Policies and Corporate Information:-

Corporate Information:-

Action Financial Services (India) Limited is a public Company listed in

Bombay stock exchange. The company is engaged in share Broking and

depository services. The company has two wholly owned subsidiaries viz.

Action Securities Limited and Action Commodities Limited.

Significant Accounting Policies:

a. Accounting Concepts

The accounts have been prepared on accrual basis, in accordance with

the Accounting Standards referred to in Section 211 (3C) of the

Companies Act, 1956, which have been prescribed by the Companies

(Accounting Standards) Rules, 2006 and the provisions of the Companies

Act, 1956, read with the General Circular 15/2013 dated 13th

September, 2013 of the Ministry of Corporate Affairs in respect of

Section 133 of the Companies Act, 2013, to the extent appl icable.

Accounting policies have been consistently applied except where a

newly issued accounting standard is initially adopted or a

revision to the existing accounting standard or a more appropriate

presentation of the financial statements requires a change in the

accounting policy hitherto in use.

b. Use of estimates

The preparation of financial statements requires estimates and

assumptions to be made that affect the reported amount of assets and

liabilities on the date of the financial statement and the reported

amount of revenue and expenses during the reporting periods.

Difference between the actual results and estimates are recognized in

the period in which the results are known / materialized.

c. Revenue Recognition

(i) Income from broking activities and depository services are

recognized only when it is reasonably certain that the ultimate

collection will be made.

(ii) Income from trading in securities and Derivatives comprises of

profit or loss on sale of securities held as stock in trade and profit

or loss on Derivative instruments is accounted for based on the

“Guidance note on accounting for Equity Index and Equity Stock

Futures and Options”.

(iii) Interest income is recognized on time proportionate basis.

(iv) Dividend income is recognized on receipt basis.

38


d. Fixed Assets

Tangible & Intangible Assets

All the fixed assets are accounted at cost of acquisition less accumulated

depreciation.

e. Leased Assets:

Operating Lease

Assets taken on lease under which the lessor effectively retains all the risk

and rewards of ownership are classified as operating lease. Lease payments

under operating leases are recognized as expenses on accrual basis in

accordance with the respective lease agreement.

Finance lease:

Leased assets acquired on which significant risk and rewards of ownership is

effectively transferred to the company are capitalized at lower of fair value or

the amount paid under such lease arrangements.

f. Depreciation /Amortization

Depreciation on Fixed Assets is provided on prorata basis in accordance with

the rates prescribed under Schedule XIV of the Companies Act, 1956 under

Straight Line Method. Goodwill is amortized over a period of Twenty years.

Assets acquired under Finance lease are amortized over the period of lease

or estimated useful life of Asset whichever is lower.

g. Impairment of Fixed Assets

An asset is treated as impaired when the carrying cost of assets exceeds its

recoverable value. An impairment loss is charged to the Statement of Profit

and Loss in the year in which an asset is identified as impaired. The

impairment loss recognized in prior accounting periods is reversed if there

has been a change in the estimate of recoverable amount.

h. Investments

Securities, which are bought with an intention of keeping for long term, are

classified under Investments and are valued at cost plus brokerage and

stamp charges. Provision for diminution in the value of long-term

investments is made only if such a decline is other than temporary in the

opinion of the management.

i. Stock In Trade

Shares and Debentures are valued at cost or market price whichever is lower,

whereby the cost of each script is compared vis-à-vis its market value and the

resultant shortfall if any, is charged to revenue.

j. Taxation

(i) Provision for current tax is made on the basis of estimated taxable

income for the current accounting year in accordance with the Income-

tax Act, 1961.

39


(ii) Deferred tax on timing difference between taxable income and accounting income is accounted for, using the tax rates and the tax laws enacted or substantially enacted as on the balance sheet date. Deferred tax assets are recognized for unabsorbed depreciation and carry forward losses to the extent there is virtual certainty that sufficient future taxable income will be available against which deferred tax assets can be realized.

k. Employee benefits(i) Gratuity to employees is provided as per AS 15 and liability as on

Balance Sheet date has been determined on the basis of actuarial valuation. The liability is not funded.

(ii) Leave encashment benefits payable to employees of the Company with respect to accumulated leave outstanding at the year-end are accounted for on the basis of an actuarial valuation as at the Balance Sheet date.

(iii) Contributions payable by the Company to the concerned government authorities in respect of provident fund, family pension fund and ESIC are charged to Statement of Profit and Loss on accrual/ payment basis.

l. Derivative Transactions:Gain /losses on transactions pertaining to Equity & Currency Futures are recognised on continuous basis. Gain / losses on options contracts are recognised on squaring off /settlement day.

m. Earning per ShareIn determining the earning per share, the Company considers the net profit after tax and includes the post tax effect of any extra ordinary/ exceptional items and also after reducing dividend on cumulative preference shares for the period ( irrespective whether dividend is paid or not). The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the period. The number of shares used in computing diluted earning per shares comprises the weighted average shares considered for deriving the basic earning per share and also weighted average number of equity shares that could have been issued on the conversion of all dilutive potential equity shares. The diluted potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. The number of shares and potentially dilutive equity shares are adjusted for any stock split and bonus shares issued.

n. Provisions for Contingent liabilities and Contingent assetsA provision is recognized for a present obligation as result of past events if it is probable that an outflow of resources will be required to settle the obligation and in respect of which reliable estimates can be made. Provisions are determined based on net estimate of the amount required to settle the obligation at the Balance sheet date. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.

40


2


NOTES:

1

Notes to Financial Statements for the year ended 31st March 2014

The Preference shares carry right to receive 10% dividend on cummulative basis. The Preference shares are

redeemable on or before March 2015. The Company has not declared or paid dividend on preference capital on

account of insufficient profits after tax. Cummulative Outstanding dividend on preference capital as at 31st

March 2014 is Rs. 49,68,000/-

Details of share Capital

A Details of Authorised,issued,subscribed and paid up capital

Particulars Current Year

(Rs)

Previous Year

(Rs)

SHARE CAPITAL Authorized share capital

14,000,000 (P.Y. 14,000,000) Equity Shares of

Rs.10/-each 140,000,000 140,000,000100,000 (P.Y. 100,000) Preference Shares of Rs.

100/- each 10,000,000 10,000,000

Issued share capital

12,504,500 ( P.Y. 12,504,500) Equity Shares of

Rs. 10/- each fully-paid 125,045,000 125,045,000

82,800 (P.Y. 82,800) 10 % Redeemable

Cumulative Preferences Shares of Rs.100/- each 8,280,000 8,280,000

133,325,000 133,325,000

Subscribed & fully paid up



82,800 (P.Y. 82,800) 10 % Redeemable


133,325,000 133,325,000

B

I) Equity Shares

Particulars Current Year Previous Year

Opening balance as on 01.04.13 12,504,500 10,058,200

Add :- Shares issued on Preferential basis - 2,446,300Closing Balance 31.03.14 12,504,500 12,504,500

NOTES:

1

2

II) Preference Shares

During the year there is no movement.


Opening balance as on 01.04.13 82,800 82,800

Add :- Shares issued -Closing Balance 31.03.14 82,800 82,800

(No. of Shares)

Reconciliation of number of shares outstanding at beginning & end of the reporting period

The Company did not Issue any Equity shares during the Financial Year 2013-14. During the previous year

company had issued 244,6300 equity shares of Rs. 10/- each for cash at a premium of Rs. 28/- on preferential

basis vide board resolution dated 4th December 2012. Accordingly a sum of Rs. 68,496,400/- was credited to

Securities Premium Account.

The company has only one class of Equity shares having par value of Rs.10/-. The equity share have rights,

Preferences and restrictions which are in accordance with the provision of law, in particular the Companies Act

1956.

(No. of Shares)

41


C

D Shareholder's Information


1. Shares held by Group Companies NA NA

2. Share holders holding 5% or more shares

Shares Percentage Shares Percentage

Equity Shares

Promoters

Milan R Parekh 2,679,056 21.42 2,679,056 21.42

Bakul R Parekh 2,038,889 16.30 2,038,889 16.30

Others

Prime Capital Market Limited 830,000 6.64 830,000 6.64Laxmiramuna Investment Pvt. Ltd. 730,000 5.84 730,000 5.84

TOTAL 6,277,945 50.20 6,277,945 50.20

Preference shares

Promoters

Milan R Parekh 64,827 78.29 64,827 78.29

Bakul R Parekh 14,193 17.14 14,193 17.14

E

F

G

H

Last 5 years details of Shares issued / bought back

Milan Parekh's shareholding includes 77200 shares having lock period till 30/01/2015

The Board of Directors of the Company in its meeting held on 29th Seprember 2012 issued 12,30,000 warrants

28/-per shares. The option of conversion shall be valid for a period of 18 months (i.e. on or before 3rd June

2014) from the date of allotment of the warrants. The company rece-ived Rs. 9.5/ per warrant as upfront

payment and is credited to Money received against share warrants.

There are no shares reserved for issue under options and contracts /commitments for sale of

Shares/disinvestment.

There are no unpaid calls as at Balance sheet date.

There are no forefeited shares as at Balance sheet date.

There are no issues for consideration other than cash, Bonus shares or buy back in past 5 years.

(No. of Shares)

Name

As at 31st March 2014 As at 31st March 2013

42


on 4th December 2012 on preferential basis to its Promoter at the rate of Rs. 38/ - p e r w a r r ant with an option toconvert the same into equivalent number of Equity shares of nominal value at Rs 10/ - e a c h a t a premium of Rs.



3 RESERVES AND SURPLUS

ParticularsCurrent Year

(Rs)

Previous Year

(Rs)

a. Securities Premium A/c

Opening Balance 99,704,700 31,208,300

Add: Addition on Shares issued on Preferential - 68,496,400

Add: Addition on conversion on warrants - -Closing Balance 99,704,700 99,704,700

b. Capital Redemption Reserve Account* 10,120,000 10,120,000

c. Capital Reserve A/c**

Opening Balance 6,275,000 6,275,000

Add: Addition on Forefeiture of Warrants - -Closing Balance 6,275,000 6,275,000

d. Surplus as per Statement of Profit & Loss

Opening Balance (4,919,602) (5,876,304)

Add: Profit 598,402 1,108,106

Add: Adjustment of eariler income tax 3,020,538 (151,404)

Closing Balance (1,300,662) (4,919,602)

Total Reserves & Surplus 114,799,038 111,180,098

4 LONG -TERM BORROWINGS


(Rs)

Previous Year

(Rs)

a. Term Loans from Banks (Secured) - 3,095,561

(1,123,540)

- 1,972,021

- 359,991

(359,991)

- -

Total - 1,972,021

5 Other Long term Liabilites


(Rs)

Previous Year

(Rs)

Deposit from Clients 10,378,454 12,718,659

Total 10,378,454 12,718,659

b. Payables under finance lease obligations

*CRR represents Reserve created on redemption of 101,200 Preference shares in 2008.

**CR represents forefeited amount of 11,90,000 warrants in year 2010 and 125,000 warrants in year 2011

Less: Current maturities of Long Term Debt disclosed under OCL

Less: Current maturities of finance lease obligations disclosed under OCL

43


7 Short Term Borrowings


(Rs)

Previous Year

(Rs)

Loans repayable on demand from Banks (Secured ) 20,055,891 9,927,919

Inter corporate deposit (Secured) 5,000,388 14,200,388

Total 25,056,278 24,128,307

8 Other Current Liabilities


(Rs)

Previous Year

(Rs)

Current maturities of Long- Term debt - 1,123,540

Others Loans & Advances : Book overdraft 15,074,968 4,273,214

Current maturities of finance lease obligations - 359,991

Deposit Received 1,700,000 5,400,000

Others payables 5,931,989 2,452,394

Payable to Related Parties 103,540 -

Total 22,810,497 13,609,139

9 Short term Provisions


(Rs)

Previous Year

(Rs)

Provision for Gratuity 300,980 349,886

Provision for leave benefits 186,563 631,579

Provision for Taxation 1,620,630 3,119,349

Total 2,108,173 4,100,814



6 Long - term Provisions


(Rs)

Previous Year

(Rs)

Contigent Provision against Standard Assets 538,688 381,606

Provison for gratuity 3,153,715 3,342,080

Provisoin for leave benefits 551,753 230,341

Total 4,244,156 3,954,027

44


Act

ion

Fina

ncia

l Ser

vice

s (In

dia)

Lim

ited

Not

e 10

Fixe

d A

sset

s

Tang

ible

Ass

ets

Off

ice

Prem

ises

11,7

40,8

86-

2,50

2,43

69,

238,

450

1,55

9,62

118

0,87

153

0,90

51,

209,

587

8,02

8,86

310

,181

,265

Leas

eH

old

Impr

ovem

ent

1,19

7,22

7-

1,19

7,22

711

0,12

527

1,25

238

1,37

781

5,84

91,

087,

102

Furn

iture

&Fi

xtur

es3,

685,

818

5,60

069

9,00

52,

992,

413

3,13

0,06

422

2,57

956

1,09

42,

791,

549

200,

864

555,

754

Vehi

cles

1,51

0,57

31,

510,

573

306,

667

143,

504

450,

171

1,06

0,40

21,

203,

906

Off

ice

Equi

pmen

ts2,

283,

711

-42

,500

2,24

1,21

11,

139,

457

116,

622

15,3

841,

240,

695

1,00

0,51

61,

144,

254

Com

pute

r14

,162

,613

8,00

022

,500

14,1

48,1

136,

729,

462

1,27

0,37

322

,500

7,97

7,33

56,

170,

778

7,43

3,15

1

Tota

l34

,580

,828

13,6

003,

266,

441

31,3

27,9

8712

,975

,396

2,20

5,20

11,

129,

883

14,0

50,7

1417

,277

,272

21,6

05,4

32

Inta

ngib

le A

sset

s

Goo

dwill

12,9

18,6

45-

-12

,918

,645

10,1

76,9

7064

5,93

210

,822

,902

2,09

5,74

32,

741,

675

Com

pute

rSof

twar

e4,

494,

610

2,05

3,16

36,

547,

773

1,16

9,68

796

5,37

32,

135,

060

4,41

2,71

33,

324,

923

Tota

l17

,413

,255

2,05

3,16

3-

19,4

66,4

1811

,346

,657

1,61

1,30

5-

12,9

57,9

626,

508,

456

6,06

6,59

8

Sub

Tota

l51

,994

,083

2,06

6,76

33,

266,

441

50,7

94,4

0524

,322

,053

3,81

6,50

61,

129,

883

27,0

08,6

7623

,785

,728

27,6

72,0

30

Prev

ious

Yea

r40

,064

,735

11,9

29,3

48-

51,9

94,0

8321

,873

,618

2,44

8,43

5-

24,3

22,0

5327

,672

,030

Add

ition

s D

ispo

sal

Clo

sing

Bala

nce

As

at

31.0

3.20

14

With

draw

n T

otal

A

s at

31.0

3.20

13

Net

Blo

ckG

ross

Blo

ckD

epre

ciat

ion

Not

es to

Fin

anci

al S

tate

men

ts fo

r the

yea

r end

ed 3

1st M

arch

201

4 (C

ontd

.)

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o

31.0

3.20

13

For

the

Year

P

artic

ular

s A

s at

01.0

4.20

13

45

---

- - - --

-


12 Deferred Tax Assets (Net)

Particulars

As at

01.04.2013

(Rs)

For the year As at

31.03.2014

(Rs)

WDV differential (3,239,130) (1,718,270) (4,957,400)

Retirement benefits 1,370,265 (108,588) 1,261,677

Unabsorbed Depreciation 475,656 - 475,656

Business Loss 2,211,365 1,594,265 3,805,630

Short Term Loss 157,913 839,086 996,999

Net Deferred tax Asset / (Liability) 976,069 606,493 1,582,562

13 Long -Term Loans & Advances


(Rs)

Previous Year

(Rs)

Security Deposits

Secured, Considered good 10,473,289 11,730,577

Total 10,473,289 11,730,577

14 Other non- current assets


(Rs)

Previous Year

(Rs)

4,823,780 8,790,313

Advances towards MCX Membership 1,134,836 1,134,836Total 5,958,616 9,925,149

Fixed Deposits having maturities after 12 month from balance sheet date

& held as margin money



11 Non- Current Investment


(Rs)

Previous Year

(Rs)

Non- Current Investment

Trade Investments

BSE shares 2,683,500 2,683,500

BGSE Shares 1,229,609 1,229,609

3,913,109 3,913,109

Unquoted Equity Instruments

1. Investment in wholly owned Subsidiaries

Action Securities Limited. 500,000 500,000

Action Commodities Limited. 8,500,000 8,500,000

2. Others 100,000 100,000

9,100,000 9,100,000

Quoted Equity Instruments

Equity Instruments 53,968,744 16,679,519

(Market value Rs. 5,24,43,420/-)

Total 66,981,853 29,692,628

15 Inventories


(Rs)

Previous Year

(Rs)

Shares as at 31.03.2014 valued at Cost or Market value, 164,092,343 98,245,605

whichever is lower.

Total 164,092,343 98,245,605

46


19 Other current assets


(Rs)

Previous Year

(Rs)

Interest Accrued on Deposits 1,067,518 899,175

Advance Tax Paid 8,751,819 5,400,000

Tax Deducted at Source 1,170,133 866,139

Total 10,989,470 7,165,314

17 Cash & bank Balances


(Rs)

Previous Year

(Rs)

Cash & Cash equivalents

Balances with bank 636,066 40,341,958

Cash on hand 241 1,408

636,306 40,343,366

Other bank balance

14,718,359 7,184,342

4,823,780 8,790,313

(4,823,780) (8,790,313)

14,718,359 7,184,342

Total 15,354,665 47,527,708

18 Short term loans and advances


(Rs)

Previous Year

(Rs)

Loans and advances to related partiesUnsecured, Considered good - 217,456

- 217,456

Others

Unsecured, Considered good

Employee Loan 25,614 100,645

Statutory Dues 62,746 261,603

Prepaid Expenses 553,048 577,979

Others 2,303,973 6,075,260

2,945,381 7,015,487

Total 2,945,381 7,232,943

FD held having maturity less than 12 mths from balance sheet date

held as margin moneyFD held as margin money maturity more than 12 mths from

balance sheet date

Less: Amount considered separate under non current asset



16 Trade receivables


(Rs)

Previous Year

(Rs)

Receivables outstanding for more than 6 months from

the due date

Unsecured, considered good 5,705,542 5,903,674

Less : Provision for Non- Performing Debtors (570,554) (590,367)5,134,988 5,313,307

Others

Unsecured, Considered good 54,181,933 85,815,759

Total 59,316,921 91,129,066

47


23 Finance cost

Particulars Current Year (Rs)

Previous Year (Rs)

Interest Paid to Bank 2,086,215 1,928,696Interest Paid to Others 3,493,021 3,426,951Interest Paid on Car Loan 15,049 59,870Loan Processing Charges - 6,000Prepayment charges 54,358 -Bank Guarantee Commission 352,476 414,532Interest Paid on Term Loan 404,282 797,191

Total 6,405,401 6,633,240

24 Other Expenses

Particulars Current Year (Rs)

Previous Year (Rs)

Advertisements 1,444,382 5,298,450Auditors Remuneration 449,440 391,800Bank Charges 432,718 338,950Communication Expenses 1,174,820 1,096,203Electricity Expenses 1,300,866 753,148Loss on Currency Derivatives 680,994 6,306,543Loss on Derivatives 3,944,581 3,085,552Loss on sales of investment 440,448 -

Maintainence Expenses 1,703,012 1,522,903Miscellaneous Expenses 589,357 1,619,448NSDL Expenses 635,082 798,086Printing & Stationery 404,410 581,790Professional Fees 4,827,891 4,891,037Contigent Provision aganist Standard Assets 157,082 246,837Provision for Non-Performing Assets - 127,623Rent , Rates & Taxes 3,260,503 2,040,037Settlement Charges 970,531 1,109,342Sub Brokerage 1,005,269 1,657,522Travelling and Conveyance 281,752 325,722Dimunation in value 1,624,690 1,200,805

25,327,830 33,391,798

- 9,405,244Income

21 Other Income


(Rs) Previous Year

(Rs)

Interest income 1,531,757 1,372,563Miscellaneous income 47,898 183,392Net gain or loss on sale of investments

95,124 597,262Rent received. 120,000 120,000Stock Exchange Expenses Recovered From Remisiers 83,948 -Creditors Written Back 12,191 635,446Excess provision written back 19,813 -

Total 1,910,731 12,313,907

22 Employee Benefit Expenses


(Rs) Previous Year

(Rs)

Salary & Wages 13,470,092 12,335,840Contribution to provident & other Funds 250,563 206,985Leave Encashment 49,748 487,886Staff welfare Expenses 188,077 164,891Incentive to staff 33,850 -Gratuity 243,672 1,249,834

Total 14,236,002 14,445,436



20 Revenue from Operations


(Rs)

Previous Year

(Rs)

1. Revenue from Services

Income from broking activities 10,973,095 11,441,904Income from depository Services 3,520,672 3,535,532

14,493,767 14,977,4362. Other operating revenue

Mutual Fund Commission 44,628 57,588Profit on sale of securities (Net) 27,254,081 33,360,437

27,298,709 33,418,025

Total 41,792,476 48,395,461

48


Dividend

25. Contingent Liabilities not provided in respect of

a. Bank Guarantee amounting to Rs. 36,200,000. /- (P.Y. Rs. 22,850,000/-)

Secured by fixed deposit of Rs. 19,542,139/-.

b. Allotment money payable on partly paid shares and debentures

Rs. 1,782,000/- (Previous year Rs. 1,782,000/-).

c. Rs 4,968,000/- being Arrears of Dividend on Cumulative 10%

Redeemable Preference Shares as at 31st March 2014. (P.Y.

Rs.4, 140,000/-).

d. Disputed Income Tax Dues are tabulated as under:

Sr.No Name of dues Forum where Dispute Period to which Amount

1 Income Tax ITAT Mumbai A.Y. 2008-09 10,130,835/-

2 Tax Deducted CIT (A) A.Y. 2010-11 129,990/-

at Sources Mumbai

3 Tax Deducted CIT (A) A.Y. 2011-12

at Sources Mumbai

143,056/-

Note:-

1. The Company had contested Income Tax demand of Rs 10,130,835/- for

Assessment Year 2008-09. The Company has paid Rs. 87, 51,819/-. The

company has preferred an appeal in the ITAT against the CIT (A) order.

2. The Company had contested Income Tax Deducted at Sources of

Rs 129,990/- and Rs 143,056/- for Assessment Year 2010-11 and 2011-

12. The company has preferred an appeal in CIT (A).

26. Capital Commitments:

The capital commitment with respect to software:-

Particulars Amount

Software Charges 3,00,000/-

27. Borrowings

Term Loan: The Company has repaid its term loan during the year. There is no

outstanding balance as on 31st March 2014.

Bank Overdraft: Overdraft of Rs. 20,055,891/- (P.Y. Rs. 9,927,919/-) as at

31.03.2014 from the Scheduled Banks are secured against Personal

Guarantee of both Directors and pledge of Equity shares of the company.

Facility carries interest ranging from 14 to 14.75%.

49


28. ICDS: Inter corporate deposit of Rs. 5,000,388/- (P.Y. 14,200,388/-) as at

31.03.2014 received from Enpee Enterprises Pvt. Limited is secured

against Pledge of Equity shares as well as Company premises in BSE

Building. It carries interest @21% p.a. There are no stipulations as to

repayment of ICD.

29. Managerial Remuneration: Whole time directors are paid remuneration

aggregating to Rs. 4,640,000/- .The computation of net profit under

section 198 / 349 of the Companies Act, 1956 has not been given since no

commission is paid / payable to any director in the current year.

30. Auditor’s remuneration:-

31. In compliance with RBI guidelines in relation to Non-Banking Financial

Companies, the company has provided Rs. 157,082/- (P.Y. 246,837/-) being

0.25% of standard asset as ‘Contingent provision against standard assets’.

The provision for Non performing assets is maintained at Rs. 570,554/- (P.Y.

Rs. 590,367/-) being 10% of receivables outstanding for more than 6 months

from due date. The company has written back Rs. 19,813/- being excess

provision for Non performing assets included under Other Income.

32. Investments:

(a) The aggregate market value of quoted investments as at 31.03.2014 is

Rs. 55,712,172/-(P.Y. Rs. 15,620,028/-) as against the total cost of quoted

investment of Rs. 53,968,744/- (P.Y. Rs.16,679,519 /-).

(b) No provision for diminution in the value of quoted investment is

considered necessary as in the management’s view the short fall in

market value of few of the script is of temporary nature.

(c) Details of opening and closing stock of investments are given below: -

(A) Quoted Shares (Fully Paid) at cost

As on 31st March 2014 As on 31st March 2013

Name of the Company No. of Shares

Face Value Cost

No. of Shares

Face Value Cost

Rs. Rs. Rs. Rs.

BALRAMPUR C* 16,230 1 883,120 220 1 9,614

BHART 7,231 5 2,715,905 117 5 34,141

BHEL 7,122 2 931,792 58 2 10,263

BHU STEE STR 27,503 2 13,566,321 32,362 2 15,729,850

CHAMB.FER(DM 27,150 10 1,238,693 177 10 8,841

SAPAN CHEMICALS LIMITED 500 10 645 500 10 645

HINDUS CONST 935 1 12,856 935 1 12,856

HOTEL LEELAV 741 2 14,894 741 2 14,894

50


Assumptions as at 31-Mar-14 31-Mar-13

MortalityIALM (2006-08)

Ult LIC (1994-96)

Ult

Interest / Discount Rate 8.25% 8.25%

Rate of increase in compensation 10.00% 15.00%

Rate of return (expected) on plan assets - -

Employee Attrition Rate(Past Service (PS) ) PS: 0to 5: 30%

PS: 5 to 42: 5% PS: 0to 5: 40%

PS: 5 to 42: 5%

33. In case of Stock in Trade, full provision for diminution in value of stock

amounting to Rs. 1,624,690/- (P.Y. Rs. 1,200,805/-) has been made in the

accounts.

34. During the year the Company has entered into futures and option

contracts on National stock exchange in equity segment and currency

segment. The open position as on 31.03.14 is Rs (84, 95,282) /- (P.Y.

Rs 13,730,365/-)

35. Defined Benefit Plan:

The company has applied revised Accounting Standard AS – 15 Employees

Benefits notified under the Companies (Accounting Standard) Rules, 2006.

Consequent to the introduction of AS – 15, we have obtained the Actuarial

Certificate for Valuation of Gratuity and Leave Salary as under:

a) Gratuity: Disclosures are as under :

HOUSING DEVE 9,100 2 8,011,003 5 2 4,129

IFCI LTD 12,122 10 404,674 292 10 7,621

INDIA SECURI 1,300 2 15,925 37,300 2 456,925

INFOSYS TECH 27 5 9,602 - - -

JAIPRAK ASSO 15,230 2 561,690 1,186 2 77,683

MCLEOD RUSEL 175 5 51,894 - - -

PENINSULA LAND 19,616 2 864,990 252 2 9,198

RELIANCE 4,460 10 3,901,688 335 10 259,190

SAKTI SUGAL 17,381 10 356,442 300 10 5,940

TECH MAHINDRA 26,015 10 3,168,163 50 10 6,405

MARKSANS PHARMA 27,300 1 230,724 200 1 780TATA GLOBAL BECERAGES LIMITED 17,540 1 2,770,885 205 1 26,240

TTML 545 10 4,306 545 10 4,305

TCS LTD 7,766 1 14,172,534 - - -

Total (A) 53,968,744 16,679,519

(B) Unquoted Shares (Fully Paid)

Banglore Stock Exchange Ltd 7228 1 1,229,609 7228 1 1,229,609

BSE Limited 23257 1 2,683,500 23257 1 2,683,500

Action Securities Limited 50000 10 500,000 50000 10 500,000

Action Commodities Ltd. 100000 10 8,500,000 100000 10 8,500,000

Suman Resort 10000 10 100,000 10000 10 100,000

Total (B) 13,013,109 13,013,109

Grand Total (A+B) 66,981,853 29,692,628

51


Expected average remaining service 6.82 5.02

Changes in present value of obligations 31-Mar-14 31-Mar-13

PVO at beginning of period 3,691,966 2,442,132

Interest cost 284,748 201,479

Current Service Cost 341,943 535,015

Past service cost (Non vested benefits) - -

Past service cost (Vested benefits) - -

Benefits Paid (480,943) -

Actuarial (gain)/loss on obligation (383,019) 513343

PVO at end of period 3,454,695 3,691,966

Changes in fair value of plan assets 31-Mar-14 31-Mar-13

Fair Value of Plan Assets at beginning of period - -

Expected Return on Plan Assets - -

Contributions 480.943 -

Benefit Paid (480,943) -

Actuarial gain/(loss) on plan assets - -

Fair Value of Plan Assets at end of period - -

Fair Value of Plan Assets 31-Mar-14 31-Mar-13


Actual Return on Plan Assets - -

Contributions 480,943 -

Benefit Paid (480,943) -

Fair Value of Plan Assets at end of period - -Funded Status (including unrecognized past services cost) (3,454,695) (3,691,966)

Excess of actual over estimated return on Plan Assets - -

Experience History 31-Mar-14 31-Mar-13(Gain)/Loss on obligation due to change in Assumption (421,640) 268,453

Experience (Gain)/ Loss on obligation 38,621 244,890

Acturial (Gain)/ Loss on Plan Assets - -

Actuarial Gain/(Loss) Recognized 31-Mar-14 31-Mar-13

Actuarial Gain/(Loss) for the period (Obligation) 383,019 (513,343)

Actuarial Gain/(Loss) for the period (Plan Assets) - -

Total Gain/(Loss) for the period 383,019 (513,343)

Actuarial Gain/(Loss) recognized for the period 383,019 (513,343)

Unrecognized Actuarial Gain/(Loss) at end of period - -

Past service cost recognised 31-Mar-14 31-Mar-13

Past service cost -Non vested benefits - -

Past service cost -Vested benefits - -Average remaining future service till vesting of the benefits - -

Recognised Past service cost -Non vested benefits - -

Recognised Past service cost - vested benefits - -

Unrecognised Past service cost -Non vested benefits - -

Amounts to be recognized in the balance sheet and statement of Statement of profit & loss 31-Mar-14 31-Mar-13

PVO at end of period 3,454,695 3,691,966

52



Funded Status (3,454,695) (3,961,966)

Unrecognized Actuarial Gain/(Loss) - -

Unrecognized Past service cost- Non vested benefits - -

Net Asset/(Liability) recognized in the balance sheet (3,454,695) (3691,966)

Expense recognized in the statement of P & L 31-Mar-14 31-Mar-13

Current Service Cost 341,943 535,015


Past service cost (Non vested benefits) - -

Past service cost (Vested benefits) - -


Net Actuarial (Gain)/Loss recognized for the period (383,019) 513,343

Expense recognized in the statement of P & L 243,672 1,249,834

Movements in the Liability recognized in Balance Sheet 31-Mar-14 31-Mar-13

Opening Net Liability 3,691,966 2,442,132

Expenses as above 243,672 1,249,834

Contribution paid (480,943) -

Closing Net Liability 3,454,695 3,691,966

Revised Schedule VI 31-Mar-14 31-Mar-13

Current Liability 300,980 349,886

Non-Current Liability 3,153,715 3,342,080

b) Leave Encashment: Disclosures are as under

Assumptions as at 31-Mar-13 31-Mar-13

MortalityIALM (2006-

08) UltLIC (1994-96)

Ult

Interest / Discount Rate 8.25% 8.25%

Rate of increase in compensation 10.00% 15.00%

Rate of return (expected) on plan assets

Employee Attrition Rate(Past Service (PS) ) PS: 0to 5: 30%

PS: 5 to 42: 5% PS: 0to 5: 40%

PS: 5 to 42: 5%

Expected average remaining service 6.82 5.02

Changes in present value of obligations 31-Mar-14 31-Mar-13

PVO at beginning of period 251,556 140,535


Current Service Cost 676,972 1,017,496

Past Service Cost- (non vested benefits) - -

Past Service Cost- (vested benefits) - -

Benefits Paid (173,351) (64,012)

Actuarial (gain)/loss on obligation (130,508) (851,417)

PVO at end of period 638,272 251,556

Changes in fair value of plan assets 31-Mar-14 31-Mar-13



Contributions 173,351 64,012

Benefit Paid (173,351) (64,012)

Actuarial gain/(loss) on plan assets - -


53


Recognised Past Service Cost- vested benefits - -

Unrecognised Past Service Cost- non vested benefits - -

Amount to be recognized in the Balance sheet and statement of profit & loss 31-Mar-14 31-Mar-13

PVO at end of period 638,272 251,556


Funded Status (638,272) (251,556)

Unrecognized Actuarial Gain/(Loss) - -


Net Asset/(Liability) recognized in the balance sheet (638,272) (251,556)

Expense recognized in the statement of P & L 31-Mar-14 31-Mar-13

Current Service Cost 676,972 1,017,496


Past Service Cost (non vested benefits) - -

Past Service Cost ( vested benefits) - -



Net Actuarial (Gain)/Loss recognized for the period (130,508) (851,417)

Expense recognized in the statement of P & L 560,067 175,033Movements in the Liability recognized in Balance Sheet 31-Mar-14 31-Mar-13

Opening Net Liability 251,556 140,535

Expenses as above 560,067 175,033

Fair Value of Plan Assets 31-Mar-14 31-Mar-13


Actual Return on Plan Assets - -

Contributions 173,351 64,012

Benefit Paid (173,351) ( ,64 012)

Fair Value of Plan Assets at end of period - -Funded Status (including unrecognised past service cost) (638,272) (251,556)

Excess of actual over estimated return on Plan Assets - -

Experience History 31-Mar-14 31-Mar-13

(Gain)/Loss on obligation due to change in Assumption (296,521) 61,243

Experience (Gain)/ Loss on obligation 166,013 (912,660)

Experience (Gain)/ Loss on Plan Assets - -

Actuarial Gain/(Loss) Recognized

Actuarial Gain/(Loss) for the period (Obligation) 130,508 851,417

Actuarial Gain/(Loss) for the period (Plan Assets) - -

Total Gain/(Loss) for the period 130,508 851,417

Actuarial Gain/(Loss) recognized for the period 130,508 851,417

Unrecognized Actuarial Gain/(Loss) at end of period - -

Past Service Cost Recognised 31-Mar-14 31-Mar-13Past Service Cost (non vested benefits) - -Past Service Cost ( vested benefits) - -Average remaining future service till vesting of the benefit - -

Recognised Past Service Cost- non vested benefits - -

54


36. Provision for Taxation:

Tax provision for the year has been made on the basis of Minimum Alternate Tax (MAT provision) of the Income Tax Act, 1961.

37. Earning Per Share (EPS):

Contribution paid (173,351) (64,012)

Closing Net Liability 638,272 251,556

Revised Schedule VI

Current Liability 186,563 631,579

Non- Current Liability 551,753 230,341

Short Term Compensated Absence Liability 31-Mar-14 31-Mar-13

Valuation date. 31-Mar-13 31-Mar-13

No of Days 120.50 337.25

Amount * 100,044 610,364

(* Not included in the Net Liabilities under Item Movements in the Liability recognized in Balance Sheet.)

Sr. No.

Particulars Year Ended 31.03.2014

Year Ended 31.03.2013

(A) Profit /(Loss) After tax 598,402 1,108,106(B) Unpaid Dividend of preference Share (Not

Provided) 828,000 828,000

(C) Profit attributable to Equity Shareholders (in Rs.) after tax

(229,597) 280,106

(D) Nominal Value of Equity Shares (in Rs.) 10 10(E) Weighted Number of Equity Shares

outstanding during the Year 12,504,500 10,835,654

(F) Diluted Number of Equity Shares outstanding during the Year

13,734,500 11,226,558

(G) Basic Earnings Per Share (in Rs.) (C/E) 0.02 0.03(H) Diluted Earnings Per Share (in Rs.) (C/F) 0.02 0.02

38. a. Based on the details regarding the status of the suppliers, to the extent obtained, no supplier is covered under the Micro, Small and Medium Enterprises Development Act, 2006. The auditors have relied upon the management representation in this regard.

b. To the extent information available with the company, the company does not owe any sum to small scale industrial unit as defined in clause (j) of Section 3 of the Industrial (Development & Regulation) Act, 1951. The auditors have relied upon the management representation in this regard.

c. There are no balances outstanding Investor education and protection fund u/s 205 C of the Companies Act, 1956.

39. Disclosures as required by Accounting Standards 19, “Leases”: are given below: -

a. The Company has taken one office premises under leave and license agreements.

b. Lease payments are recognized in the Profit and Loss Account under “Rent”

c. The future minimum lease payments under Non Cancellable operating lease.

55


40. As per Accounting Standard 18, the disclosures of transaction with the related parties as defined in the Accounting Standard are given below:

a. Relationship & name of related party:



Particulars Amount (Rs.) Amount (Rs.)

Not later than one year 2,520,000 2,520,000 Later than one year and not later than five years

1,260,000 3,780,000

More than five years NIL NIL

Sr.

No.

Relation Related Party

1. Enterprise controlling the company NA

2. Key Management Personnel 1. Managing Director: Mr.Milan R.Parekh

2. Jt.Managing Director:

Mr.Bakul R.Parekh

3. Exceutive Director

Ms. Esha Kedia ( Resign w.e.f 04.09.2013)

3. Enterprise controlled by the company Subsidiaries:

1. Action Securities Limited

2. Action Commodities Limited

4. Relative of key management Personnel 1. Aman Kedia 2. Sagar Parekh 3. Nayana Parekh

5. Enterprise under control of relative of Key

Management Personnel

1. R. B. Parekh – HUF

2. Rajkumar Kedia- HUF

3. Shrim Investment Solutions Pvt Ltd.

4. Esha Securities.

6. Enterprise under common control of Key


M/s. Milan R Parekh

b. Details of transactions with related parties are as follows:

Sr. No.


1. Enterprise controlling the Company NA

2. Key Management Personnel Mr Milan R Parkeh

Nature of Transaction

Current Year

Previous Year

Remuneration 24,37,960 2,459,360

Mr. Bakul R Parkeh


Current Year

Previous Year

Remuneration 24,37,960 24,07,960

Ms. Esha Kedia


Current Year

Previous Year

Salary - 330,000

Remuneration 440,000 440,000

Equity share Allotted

- 34,20,000

Equity Warrant Allotted

- 70,30,000

56


3. Enterprise controlled by the company Nature of

Transaction

Current

Year

Previous

Year

Professional

Expenses

15,04,883 1,200,440

Brokerage

income on

shares

7,685 5,135

Rent received 1,20,000 1,20,000

Balance (103,540) 217,456

4. Relative of key management Personnel Nature of

Transaction

Current

Year

Previous

Year

Equity

Warrant

Allotted

- 46,55,000

Brokerage 29,020 -

Brokerage 5,300 -



None



None

41. Company‘s primary business activates are Broking and Depository Services, both are covered under one board segment of Share broking activities hence segment reporting is not applicable.

42. Exceptional items consist of profit on sale of fixed assets (furniture + office premise) during the year and does not constitute sale of substantial part of Fixed Assets.

43. Previous year’s figures have been regrouped, reclassified and/or renamed to confirm to this year’s classification.

As per our Report attached. For and on behalf of the board


Chartered Accountants Milan R. Parekh

Firm Registration No. 102860W Chairman & Managing Director

DIN 00108368

A.D. Shenoy

Partner Bakul R. Parekh

Membership No.11549 Jt. Managing Director

DIN 00108609

Place: Mumbai Place: Mumbai


57


DIRECTORS' REPORT

To,The Members,Action Securities Limited,Dear Sir/Madam

The Directors have pleasure in presenting the 7th Annual Report together with the Audited Accounts for the year ended on 31st March, 2014.

FINANCIAL RESULTS

Financial PerformanceDuring the current year, the gross income of the company was Rs7,35,131/- and the company incurred a net profit (after Tax)of Rs 1,50,869/-.

Dividend:In view of insufficient profits, the Board of Directors do not recommend any dividend for the year ended 31st March, 2014.

DEPOSITS:During the year under review, your Company has not accepted any deposits within the meaning of Section 58A and Section 58AA of the Companies Act, 1956 and rules made there under.

Year ended 31.3.2014

Year ended 31.3.2013

Amount Rs. Amount Rs.

Revenue from operations & other Income 7,35,131

5,34,452

Profit (Loss) before Depreciation 2,78,912

65,885

Less: Depreciation 2,459

4,098

Profit After Depreciation & before Tax 2,76,453

61,787

- Taxation Current Year 42,400 -

- Deferred Tax 83,184 18,591

Profit /(Loss) after tax 1,50,869

43,196

Profit/(Loss) brought forward from PreviousYear

(4,75,501) (5,18,697)

Profit/(Loss) carried forward to the BalanceSheet

(3,24,632) (4,75,501)

58



Your Directors confirm:I) That in the preparation of the annual accounts, the applicable

accounting standards had been followed and that no material departures have been made from the same.




DIRECTORSIn accordance with the requirements of the Companies Act 2013, Mr. Bakul Parekh will retire by rotation and, being eligible, has offered himself for re-appointment.

AUDITORS:The present Auditors of the Company M/s. Ford, Rhodes, Parks & Co. (Firm Registration No.102860W), Chartered Accountants, Mumbai, will retire at the conclusion of ensuing Annual General Meeting and being eligible; offer, themselves for re-appointment to hold the office till the conclusion of 10th Annual General Meeting.The Company has also received a certificate from M/s. Ford, Rhodes, Parks & Co., Chartered Accountants, Mumbai, under Section 139(1) and Section 141 of the Companies Act, 2013 confirming their eligibility for re-appointment. M/s. Ford, Rhodes, Parks & Co., Chartered Accountants, Mumbai. Accordingly, M/s. Ford, Rhodes, Parks & Co., Chartered Accountants, Mumbai, are being re-appointed as the Statutory Auditors of the Company for a period of three years, subject to annual ratification of the same by the shareholders.

PARTICULARS OF EMPLOYEESNone of the employees of the Company was paid remuneration of Rs. 60,00,000/- p.a. or more for the year or Rs. 5,00,000/- p.m. or more and hence the information required under section 217 (2-A) of the Companies (Particulars of Employees) Rules, 1975 is not required to be given.

59


PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

(A) Conservation of EnergyConsidering the nature of business activities carried out by the Company, your directors have nothing to report with regard to conservation of energy as required under Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.

(B) Technology absorption, research and developmentThe management keeps itself abreast of the technological advancements in the industry and has adopted the state of the art transaction, billing and accounting systems and also risk management solutions.

(C) Foreign Exchange Earnings and Outgoa) The foreign exchange earnings of the Company was Nil (previous

year Nil)b) The foreign exchange expenditure was Nil (previous year Nil)

OTHER INFORMATIONThe other various information as required under section 217 is either Nil or Not applicable.

ACKNOWLEDGEMENTYour Directors would take this opportunity to express its deep appreciation for the co-operation and assistance received from the shareholders, Company’s clients, suppliers, bankers and other authorities during the year under review. Your Directors also wish to place on record their appreciation for the services rendered by all the employees of your Company.



DIN : 00108368


60


Independent Auditor’s Report

To,

The members of Action Securities Limited


We have audited the accompanying financial statements of Action Securities

Limited (“the Company”) which comprise the balance sheet as at 31st March

2014, the Statement of Profit and Loss and the Cash Flow Statement for the year

then ended and a summary of significant accounting policies and other

explanatory information.


Management is responsible for the preparation of these financial statements

that give a true and fair view of the financial position, financial performance and

cash flows of the Company 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 September, 2013 of the

Ministry of Corporate Affairs in respect 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 the financial

statements that give a true and fair view and are free from material

misstatement, whether due to fraud or error.


Our responsibility is to express an opinion on these financial statements based

on our audit. We 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 reasonable assurance about whether the financial

statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the

amounts and disclosures in the financial statements. The procedures selected

depend on the auditor’s judgment, including the assessment of the risks of

material misstatement of the financial statements, whether due to fraud or

error. In making those risk assessments, the auditor considers internal control

relevant to the Company’s preparation and fair presentation of the financial

statements in order to design audit procedures that are appropriate in the

circumstances. An audit 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

financial statements.

We believe that the audit evidence we have obtained is sufficient and

appropriate to provide a basis for our audit opinion.

61


Opinion

In our opinion and to the best of our information and according to the

explanations given to us, the financial 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:

i. in the case of the balance sheet, of the state of affairs of the Company as

at 31st March 2014;

ii. in the case of the statement of profit and loss, of the profit for the year

ended on that date; and

iii. in the case of the cash flow statement, of the cash flows for the year

ended on that date.


1. As required by the Companies (Auditor’s Report) Order, 2003 (“the Order”), as

amended, issued by the Central Government of India in terms of sub-section (4A)

of section 227 of the Act, we give in the Annexure a statement on the matters

specified in paragraphs 4 and 5 of the Order.


i. we have obtained all the information and explanations which to the best of

our knowledge and belief were necessary for the purpose of our audit;

ii. in our opinion proper books of account as required by law have been kept by

the Company so far as appears from our examination of those books;

iii. the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement

dealt with by this Report are in agreement with the books of account;

iv. in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow

Statement comply with the Accounting Standards referred to in subsection (3C)

of section 211 of the Companies Act, 1956 read with the General Circular

15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in

respect of Section 133 of the Companies Act, 2013; and

v. on the basis of written representations received from the directors as on 31

March 2014, and taken on record by the Board of Directors, none of the directors

is disqualified as on 31 March 2014, from being appointed as a director in terms

of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.


A.D. Shenoy

PartnerMembership No.11549


62


Annexure to the Auditors’ Report

[Referred to in paragraph pertaining to “Report on Other Legal and Regulatory Requirement” of our Report of even date to the members of

Action Securities Limited on the financial statements for the year ended 31st March, 2014]

1. a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.



2. The Company does not have any stocks of raw materials, stores, spare parts and finished goods. Hence the clause (ii) of the Order does not apply to the Company.

3. As informed to us, the Company has neither granted nor taken any loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Hence clause iii of the order is not applicable




7. In our opinion, the internal audit system is commensurate with the size and nature of its business.


9. a) According to the information and explanations given to us and records of the Company examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and any other material statutory dues as applicable with the appropriate authorities. There are no undisputed statutory dues payable for a period of more than six months from the date they became payable as at 31st March, 2014.

b) According the information and explanations given to us and the records of the Company examined by us, there are no dues of income tax, wealth tax, service tax, customs duty and cess as at 31st March 2014, which has not been deposited on account of dispute.

63


10. The company is in existence for more than 5 years. It has incurred cash profit during the year and also in the immediately preceding financial year. The accumulated loss as on 31st March 2014 of Rs. 3, 24,632/- (P.Y. Rs. 4, 75,501/-) exceeds 50% of the net-worth of the company.



13. The provisions of any special statute applicable to chit fund and nidhi /mutual benefit fund/societies are not applicable to the Company.

14. The Company has dealing/trading in shares and debentures during the year. In respect of dealing in securities and other investments, in our opinion and according to the information and explanations given to us, proper records have been maintained of the transactions and contracts and timely entries have been made therein. The securities and other investments have been held by the Company in its own name.


16. The Company has not obtained any term loans.

17. On the basis of an overall examination of the Balance Sheet of the Company, in our opinion and according to information and explanations given to us, we report that no funds obtained on short – term basis have been used by the company for long term investments.

18. The Company has not made any preferential allotment of shares to any parties or companies covered in the Register maintained under section 301 of the Companies Act, 1956.

19. The Company has not issued any debentures.

20. The Company has not raised any money through a public issue during the year.

21. Based upon the audit procedures performed and information and explanations given by the management, we report that we have not come across any instances of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by management.


A.D. ShenoyPartnerMembership No.11549


64



EQUITY AND LIABILITIESShareholders’ fundsShare capital 2 500,000 500,000 Reserves and surplus 3 (324,632) (475,501)

175,368 24,499

Current liabilitiesTrade payables 25,851 231,073 Other current liabilities 4 14,030 27,604 Short-term provisions 5 42,400 -

82,281 258,677

Total Equity & Liabilities 257,649 283,176

AssetsNon-current assetsFixed assetsTangible assets 6 3,688 6,147 Deferred tax assets (net) 7 62,619 145,803

66,307 151,950

Current assetsCash and Bank Balance 8 19,210 40,947 Short term Loans and Advances 9 26,872 - Other Current assets 10 145,260 90,279

191,342 131,226

Total Assets 257,649 283,176

As per our report of even date For and on behalf of the BoardFor Ford, Rhodes, Parks & Co.Chartered Accountants Milan R. Parekh Firm Registration No.102860W Chairman & Managing Director

DIN : 00108368

A. D. Shenoy Bakul R. Parekh Partner Director Membership No.11549 DIN : 00108609



65

ACTION SECURITIES LIMITED BALANCE SHEET AS AT 31ST MARCH 2014



Income

Revenue from operations 11 731,630 514,462

Other income 12 3,501 19,990

Total Revenue 735,131 534,452

Expenses:

Employee benefits expense 13 430,080 440,949

Depreciation and amortization expense 6 2,459 4,098

Other expenses 14 26,139 27,618

Total Expenses 458,678 472,665

Extraordinary Items - -

Profit before tax 276,453 61,787

Tax expense:

Current tax (MAT) 42,400 -

Deferred tax 83,184 18,591

Profit (Loss) for the year 150,869 43,196

Earnings per equity share of Rs. 10 each:

Basic/ Diluted 3.02 0.86

66



For Ford,Rhodes,Parks & Co.Chartered Accountants Milan R. Parekh Firm Registration No.102860W Chairman & Managing Director

DIN : 00108368

A. D. Shenoy Bakul R. Parekh Partner Director Membership No.11549 DIN : 00108609


Significant Accounting Policies 1Notes to Accounts 2-25Significant Accounting Policies & Notes to Accounts forms an integral part of the accounts.

ACTION SECURITIES LIMITED


Particulars C u r r e n t Year Previo u s Year

Rs. Rs.

A. Cash Flow From Operating Activities:

Profit / (Loss) Before Tax 276,453 61,787

Add/(Less) Non-Cash And Non-Operating Items

Adjustments For Depreciation 2,459 4,098

B. Operatin g Profit / ( Loss)Before Working Capital

Changes (1 + 2) 278,912 65,885

C. Change s In Working Capital

(Increase) / Decrease In Other Cuurent Assets 18,509 (3,800)

Increase / (Decrease) In Trade Payables (205,222) (41,459)

(Increase) / Decrease In Short term loan and advance (26,872) -

Increase / (Decrease) In other Current Liabilities (13,574) 27,254

(227,158) (18,005)

D. Cash Generated From Operations(B+C) 51,753 47,880

E. Less: Taxes Paid (73,490) (47,590)

F. Ne t Cash Flow From Operating Activities (21,737) 290

G. Cash Flow From Investing Activities - -

Net Cash Used In Investing Activities - -

(21,737) 290

H. Net C ash Flow From Financing Activities

Proceeds from Short term Borrowings - -

Net Cash Generated /(Used) From Financing Activities - -

I. Ne t Changes In Cash & Cash Equivalents (21,737) 290

Cash & Cash Equivalents As At The Beginning Of Financial Year 40,947 40,657

Cash & Cash Equivalents As At End Of Financial Year 19,210 40,947

Component of Cash and Cash Equivalents

- Bank Balance 19,210 40,947:

Note

2. Figure s in brackets denotes outflows.

3.

4. Previou s years figures have been regrouped, reclassified and /or renamed to confirm to this years classification.

For


Firm Reg. No. : 102860W

A.D.Shenoy

(Partner)

Membership No.11549

Place: Mumbai Place : Mumbai

Date: 30th May 2014

For and on behalf of the Board

Milan R. Parekh

DirectorDIN : 00108368

Bakul R. ParekhDirectorDIN : 00108609

short term investments with an original maturity of three months or less. Bank fixed deposits with maturity

period over 12 months at balance sheet date is classified as other non-current asset.

Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects of

transactions of a non-cash nature and any deferrals or accruals.

Ford,Rhodes,Parks & Co.

1.

Cash Flow Statement for the year ended 31st March 2014

ACTION SECURITIES LIMITED

Cash and cash equivalents for the purpose of cash flow statement comprise of Cash at Bank and in hand and

67

Date: 30th May 2014


Note forming part of Financial Statements for the year ended 31st March 2014.



Action Securities Limited is wholly owned subsidiary of Action Financial

Services (India) Limited. The main objects of the company is share broking

and depository services; however the company is yet to start the full-

fledged activities.



The accounts have been prepared on accrual basis, in accordance with the

Accounting Standards referred to in Section 211 (3C) of the Companies Act,

1956, which have been prescribed by the Companies (Accounting Standards)

Rules, 2006 and the provisions of the Companies Act, 1956, to the extent

applicable. Accounting policies have been consistently applied except where

a newly issued accounting standard is initially adopted or a revision to the

existing accounting standard or a more appropriate presentation of the

financial statements requires a change in the accounting policy hitherto in

use.

b. Use of estimates

The preparation of financial statements requires estimates and assumptions

to be made that affect the reported amount of assets and liabilities on the

date of the financial statement and the reported amount of revenue and

expenses during the reporting periods. Difference between the actual

results and estimates are recognized in the period in which the results are

known / materialized.


Income from broking activities and depository services are recognized only

when it is reasonably certain that the ultimate collection will be made.

d. Fixed Assets

All the fixed assets are accounted at cost of acquisition less accumulated

depreciation.

e. Depreciation

Depreciation on all fixed assets are provided on prorata basis in

accordance with the rates prescribed under Schedule XIV of the

Companies Act, 1956 under Written Down Value Method.

f. Impairment of Fixed Assets

An asset is treated as impaired when the carrying cost of assets exceeds its

recoverable value. An impairment loss is charged to the Profit and Loss

account in the year in which an asset is identified as impaired. The

impairment loss recognized in prior accounting periods is reversed if there

has been a change in the estimate of recoverable amount


68

g. Taxation

(i) Provision for current tax is made on the basis of estimated taxable

income for the current accounting year in accordance with the Income-

tax Act, 1961.

(ii) Deferred tax is recognized, subject to prudence, on timing differences,

being the difference between the taxable income and the accounting

income that originate in one period and are capable of reversal in one or

more subsequent periods. Deferred tax assets are recognized for

unabsorbed depreciation and carry forward losses to the extent there is

virtual certainty that sufficient future taxable income will be available

against which deferred tax assets can be realized.

h. Employee benefits

There are no employees eligible for gratuity as such no provision for gratuity

is considered in accounts. Leave salary is accounted on payment basis. Also

there are no employees eligible for PF and ESIC. Other employee benefits are

accounted on accrual basis.

i. Earnings per Share

In determining the earning per share, the Company considers the net profit

after tax and includes the post tax effect of any extra ordinary/ exceptional

items. The number of shares used in computing basic earnings per share is

the weighted average number of shares outstanding during the period. The

number of shares used in computing diluted earnings per shares comprises

the weighted average shares considered for deriving the basic earnings per

share and also weighted average number of equity shares that could have

been issued on the conversion of all dilutive potential equity shares. The

diluted potential equity shares are deemed converted as of the beginning of

the period, unless issued at a later date. The number of shares and

potentially dilutive equity shares are adjusted for any stock split and bonus

shares issued.

j. Provisions for Contingent liabilities and Contingent assets

A provision is recognized for a present obligation as result of past events if it

is probable that an outflow of resources will be required to settle the

obligation and in respect of which reliable estimates can be made. Provisions

are determined based on net estimate of the amount required to settle the

obligation at the Balance sheet date. Contingent liabilities are not recognized

but are disclosed in the notes. Contingent assets are neither recognized nor

disclosed in the financial statements.

69


Action Securities Limited

2 Share Capital

(a) Details of shares authorised,issued,subscribed & paid up


Previous

Year

Authorized share capital500,000 Equity Shares of Re. 10 each 5,000,000 5,000,000

(Previous year 500,000 Equity Shares of Re. 10

each)

Issued share capital50,000 Equity Shares of Rs. 10 each 500,000 500,000

(b) Reconciliation of number of shares outstanding at beginning & end of the year

ParticularsAs at 31st

March 2014

As at 31st

March 2013

Opening balance 500,000 500,000

Add/ (less) : Issued / (buyback) - -Closing Balance 500,000 500,000

Notes:-

1

2

( c)

Notes to Financial Statements for the year ended 31st March 2014 (Contd.)

(No. of Shares)

The company has only one class of Equity shares having par value of Rs. 10/-. The equity share

have rights, Preferences and restrictions which are in accordance with the provision of law, in

particular the Companies Act 1956.,

Details of Shares issued for consideration other than cash,bonus issue or buy back in last 5

years

There are no share in above 3 category issued / bought back .

All 50,000 Equity Shares are held by the holding company, Action Financial Services(India) Ltd

and its nominees.

(d) Shareholder's Information

ParticularsAs at 31st

March 2014

As at 31st

March 2013

Shares held by Group Companies

Action Financial Services(India) Limited (100%) 500,000 500,000

(e)

(f)

(g)(h)

3 Reserves and Surplus


Previous

Year

Surplus as per Statement of Profit & Loss

Opening Balance (475,501) (518,697)

Add: Profit for the year 150,869 43,196Closing Balance (324,632) (475,501)

There are no forefeited shares on Balancesheet date.

There are no shares reserved for issue under options and contracts /commitments for sale of

Shares/disinvestment.There are no unpaid calls as at Balancesheet date.

There are no convertible securities issued and outstanding as on Balance sheet date.

70




Previous

Year

Others payables -Professional Tax 350 91

Others payables -Salary Payables 13,680 27,513

14,030Total 27,604



Previous

Year

Provision for Taxation 42,400

Total 42,400 -

-

Actio

nSe

curit

iesL

imite

d

Note

6

Fixe

dAs

sets

Tang

ible

Asse

ts

Com

pute

r73

,042

73,0

4266

,895

2,45

969

,354

3,68

86,

147

Tota

l73

,042

--

73,0

4266

,895

2,45

9-

69,3

543,

688

6,14

7

Prev

ious

Year

73,0

42-

-73

,042

62,7

984,

098

66,8

956,

147

Note

sto

Fina

ncia

lSta

tem

ents

fort

heye

aren

ded

31st

Mar

ch20

14(

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31.0

3.20

14

Gros

sBlo

ckBl

ock

Depr

ecia

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Net

Asat

31.0

3.20

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31.0

3.20

13Fo

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Year

With

dr

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at

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--

-

--

71


7 Deferred tax Asset / (Liability) (Net)

ParticularsAs at

31.03.2013For the year

As at

31.03.201

WDV differential (1,625) (605) (1,020)

Unabsorbed Depreciation 20,572

Business Loss

Deferred tax Asset / (Liability) (Net) 145,803 483,18 62,619



Previous

Year


Balances with ICICI bank 19,210 40,947Total 19,210 40,947



Previous

Year

Unsecured, considered good - employee loan 26,872 -

26,872 -

10 Other Current Assets


Previous

Year

TDS receivables A.Y. 2012-2013 20,650 38,889

TDS receivables A.Y. 2013-2014 51,120 51,390

TDS receivables A.Y. 2014-2015 73,490 -Total 145,260 90,279

NOTES TO STATEMENT OF PROFIT AND LOSS

11 Revenue From Operations


Previous

Year

Professional Income 731,630 514,462

Total 731,630 514,462

12 O t h e r Income


Previous

Year

Profit on F&O Transaction - 11,390

Interest on IT Refund 1,001 -

Miscellaneous income 2,500 8,600

Total 3,501 19,990

-,20 572

126,856 83,789 43,067

72


13 Emp l o y e e Benefits Expenses


Previous

Year

Salary & wages 428,993 437,846

Leave Encashment 1,088 1,104

Staff welfare Expenses - 2,000

Total 430,081 440,950

14 O t h e r Expenses


Previous

Year

Professional Fees 2,178 2,816

Int on Professional Tax 12 -

F& O Expenses - 1,627

Professional Tax (Company) 2,500 2,500

Rates & Taxes excluding taxes on income 1,116 -

Printing & Stationery - 450

Auditors Remuneration 19,112 19,101

Bank Charges 562 1,124

Other expense 659 -

Total 26,139 27,618

15.Contingent Liabilities and Commitments

(to the extent not provided for): NIL

16.Managerial Remuneration: NIL

73



74

2012-13

16,854

2013-14

Audit Fees 19,112

Particulars

18. Unsecured Loans: NIL

19. Employee Benefit

There are no employees eligible for gratuity, leave salary or provident fund

etc. as such no provision is considered for this year.

20. As the company has not started its full fledged activities, hence segment

reporting is not applicable.

21. Related Party disclosures

As per Accounting Standard 18, the disclosures of transaction with the

related parties as defined in the Accounting Standard are given below:

List of related parties with whom transactions have taken place and

relationships:

17.Auditors Remuneration:

Sr. Relationship Name of the Related Party

No.

1. Holding Company Action Financial Services (India) Limited

2. Key Management Mr. Milan R. Parekh (Director)

Personnel Mr. Bakul R. Parekh (Director)

3. Transaction with Holding Expenses on F&O:NIL (P.Y. Rs 1,627.41/-)

Company Professional Bill fees Income : 7,31,630/-

(P.Y. Rs. 5,14,462/-)

4. Transaction with Key NIL


22. Earnings per Share (EPS):

Sr. Particulars Year Ended Year Ended

No. 31.03.2014 31.03.2013

(A) Profit / (Loss) attributable to Equity 1,50,869 43,196

Shareholders (in Rs.) after tax

(B) Nominal Value of Equity Shares 10 10

(C) Weighted / Diluted Number of Equity Shares 50,000 50,000

outstanding during the Year

(D) Basic / Diluted Earnings Per Share (in Rs.) 3.02 0.86

(A/C)

23. Provisions for Deferred Tax:a) Income Tax:In view of the carried forward loss available for setoff for current year income, no provision for income tax is considered. However Mat Liability has been provided based on current book profit.

75

b) Deferred Tax

Deferred Tax has been considered on timing differences between book and

taxable profits. Component of Deferred Tax Assets/ (Liability) as at

31.03.2014 are as shown under note no. 6

24 a. Based on the details regarding the status of the suppliers, to the extent

obtained, no supplier is covered under the Micro, Small and Medium

Enterprises Development Act, 2006. The auditors have relied upon the

management representation in this regard.

b. To the extent information available with the company, the company

does not owe any sum to small scale industrial unit as defined in clause (j) of

Section 3 of the Industrial (Development & Regulation) Act, 1951. The

auditors have relied upon the management representation in this regard.

c. There are no balances outstanding in Investor education and protection

fund u/s 205 C of the Companies Act, 1956.

25. Previous year’s figures have been regrouped, reclassified and/or renamed to

confirm to this year’s classification

As per our Report attached For and on behalf of the board

For FORD, RHODES, PARKS & CO

Chartered Accountants Milan R. Parekh

Firm Registration No. 102860W Director

DIN 00108368

A.D. Shenoy Bakul R. Parekh

(Partner) Director

Membership No.11549 DIN 00108609

Place: Mumbai Place: Mumbai



DIRECTORS' REPORT

To,The Members,Action Commodities Limited,

Dear Sir/Madam

The Directors have pleasure in presenting the 5th Annual Report together with the Audited Accounts for the year ended on 31st March, 2014.

FINANCIAL RESULTS

Revenue from operations & other Income 7,80,120 8,39,855Profit (Loss) before Depreciation 59,815 1,65,084Less: Depreciation 14,265 23,776

Profit After Depreciation & before Tax 45,550 1,41,308- Taxation Current Year 28,200

-- Deferred Tax 3,63,496 1,91,767

Profit /(Loss) after tax 3,80,845 (50,459)Profit/(Loss) brought forward from Previous Year (7,62,372) (7,11,913)Profit/(Loss) carried forward to the Balance Sheet (3,81,527) (7,62,372)

Year ended31.3.2014

Year ended31.3.2013

Amount Rs. Amount Rs.

FINANCIAL PERFORMANCE

During the current year, gross revenue from operations of the company was in line with the last year.

Dividend:

In view of the carry forward losses of the company, the Board of Directors do not recommend any dividend for the year ended 31st March, 2014.

Future Outlook:

During the year due to debacle of National Spot Exchange, Company decided to withhold its decision to activate its MCX commodities Exchange membership. Your company plan to activate the same at the appropriate time in future.

76


DEPOSITS:

During the year under review, your Company has not accepted any deposits within the meaning of Section 58A and Section 58AA of the Companies Act, 1956 and rules made there under.


Your Directors confirm:

I) That in the preparation of the annual accounts, the applicable accounting standards had been followed and that no material departures have been made from the same.




DIRECTORS

In accordance with the requirements of the Companies Act 2013, Mr. Milan Parekh will retire by rotation and, being eligible, has offered himself for re-appointment.

AUDITORS:

The present Auditors of the Company M/s. Ford, Rhodes, Parks & Co. (Firm Registration No.102860W), Chartered Accountants, Mumbai, will retire at the conclusion of ensuing Annual General Meeting and being eligible; offer, themselves for re-appointment to hold the office till the conclusion of 8th Annual General Meeting.

The Company has also received a certificate from M/s. Ford, Rhodes, Parks & Co., Chartered Accountants, Mumbai, under Section 139(1) and Section 141 of the Companies Act, 2013 confirming their eligibility for re-appointment. M/s. Ford, Rhodes, Parks & Co., Chartered Accountants, Mumbai. Accordingly, M/s. Ford, Rhodes, Parks & Co., Chartered Accountants, Mumbai, are being re-appointed as the Statutory Auditors of the Company for a period of three years, subject to annual ratification of the same by the shareholders.

77


COMPLIANCE CERTIFICATE:

Pursuance to provisions of section 383A of the Companies Act, 1956, the Company has obtained the Compliance Certificate as on 31st March, 2014 from Jagdish Patel & Co., Vapi, Company Secretaries in Practice, the copy of the same has been attached with the Directors’ Report.

PARTICULARS OF EMPLOYEES:

None of the employees of the Company was paid remuneration of Rs. 60,00,000/- p.a. or more for the year or Rs. 5,00,000/- p.m. or more and hence the information required under section 217 (2-A) of the Companies (Particulars of Employees) Rules, 1975 is not required to be given.

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

(A) Conservation of Energy

Considering the nature of business activities carried out by the Company, your directors have nothing to report with regard to conservation of energy as required under Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.

(B) Technology absorption, research and development

The management keeps itself abreast of the technological advancements in the industry and has adopted the state of the art transaction, billing and accounting systems and also risk management solutions.

(C) Foreign Exchange Earnings and Outgo

a) The foreign exchange earnings of the Company was Nil (previous year Nil)

b) The foreign exchange expenditure was Nil (previous year Nil)

OTHER INFORMATION:

The other various information as required under section 217 either Nil or Not applicable.

ACKNOWLEDGEMENT:

Your Directors would take this opportunity to express its deep appreciation for the co-operation and assistance received from the shareholders, Company’s clients, suppliers, bankers and other authorities during the year under review. Your Directors also wish to place on record their appreciation for the services rendered by all the employees of your Company.



DIN : 00108368


78


80


81


82


83


Independent Auditor’s Report on financial statements

To

The members of Action Commodities Limited


We have audited the accompanying financial statements of Action Commodities Limited (“the Company”) which comprise the balance sheet as at 31st March 2014, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.


Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of sect ion 211 of the Companies Act, 1956 (“the Act”) read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect 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 the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.


Our responsibility is to express an opinion on these financial statements based on our audit. We 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 reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit 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 financial statements.


84


Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial 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:

I. in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2014;

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

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


1. As required by the Companies (Auditor’s Report) Order, 2003 (“the Order”), as amended, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.


i. we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

ii. in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

iii. the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

iv. in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956 read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013; and

v. on the basis of written representations received from the directors as on 31 March 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

For Ford, Rhodes, Parks & Co.Chartered Accountants

Firm Registration No.102860WA.D. Shenoy

PartnerMembership No.11549


85


Action Commodities Limited BALANCE SHEET AS AT 31ST MARCH 2014


EQUITY AND LIABILITIESShareholders’ fundsShare capital 2 1,000,000 1,000,000 Reserves and surplus 3 7,118,473 6,737,628

8,118,473 7,737,628

Non-current liabilities Deferred tax liabilities (Net) 4 - 204,128

- 204,128

Current liabilities Trade payables 22,276 41,522 Other current liabilities 5 25,000 31,675 Short-term provisions 6 28,200 -

75,476 73,197

TOTAL 8,193,949 8,014,953

ASSETSNon-current assetsFixed assetsTangible assets 7 21,398 35,663 Intangible assets 1,121,330 1,121,330

1,142,728 1,156,993

Non-current investments 8 6,608,032 191,987 Long-term loans and advances 9 75,000 5,400,000

7,825,760 6,748,980

Current assetsCash and Bank Balances 10 22,852 21,364 Deffered Tax Asset 4 159,368 - Trade receivables 11 - 1,100,000 Other current assets 12 185,969 144,609

368,189 1,265,973

TOTAL 8,193,949 8,014,953

As per our report of even date For and on behalf of the BoardFor Ford, Rhodes, Parks & Co.Chartered Accountants Milan R. Parekh Firm Registration No.102860W Director

DIN 00108368

A. D. Shenoy Bakul R. Parekh Partner Director Membership No.11549 DIN 00108609Mumbai MumbaiDate: 30th May 2014 Date: 30th May 2014

Significant Accounting Policies 1Notes to Accounts 2 - 30Notes of Accounts forms an integral part of the accounts.

86


Action Commodities Limited



IncomeRevenue from operations 13 773,253 685,978 Other income 14 6,867 153,877 Total Revenue 780,120 839,855

Expenses:Employee benefits expense 15 546,800 514,989 Depreciation and amortization expense 7 14,265 23,776 Other expenses 16 173,505 159,782 Total expenses 734,570 698,547 Profit before exceptional and 45,550 141,308extraordinary items and tax Exceptional items - - Profit before extraordinary items and tax 45,550 141,308 Extraordinary Items - -

Profit before tax 45,550 141,308 Tax expense:Current tax (MAT) - 28,200 Less : Mat credit entitlement - - Net current taxDeferred tax 363,496 191,767 Profit (Loss) for the year 380,845 (50,459)from continuing operationsProfit/(loss) from discontinuing operations - - Tax expense of discontinuing operations - Profit/(loss) from Discontinuing - -operations (after tax) Profit (Loss) for the year 380,845 (50,459)Earnings per equity share of Rs. 10 each:Basic/ diluted 3.81 (0.50)

As per our report of even date For and on behalf of the BoardFor Ford,Rhodes,Parks & Co.Chartered Accountants Milan R. Parekh Firm Registration No.102860W Director

DIN 00108368



Significant Accounting Policies 1Notes to Accounts 2- 30 Notes to Accounts forms an integral part of the accounts

87


ACTION COMMODITIES LIMITED

Cash flow statement for the year ended 31st March 2014

Particulars Current Previous Year Rs. Year Rs.

A. Cash Flow From Operating Activities:Profit / (Loss) Before Tax 45,550 141,308 Add/(Less) Non-Cash & Non-Operating Items

Adjustments For Depreciation 14,265 23,776 Deprecitation written off - (112,134)(Profit)/Loss on investment (2,500) (6,410)

B. Operating Profit / ( Loss)Before Working Capital Changes (1 + 2) 57,315 46,540

C. Changes In Working Capital(Increase) / Decrease In Current Assets 6,383,640 (76,665)Increase / (Decrease) In Current Liabilities (25,921) 3,883& Provisions

D. Cash Generated From Operations(B+C) 6,415,034 (26,243)E. Less: Taxes Paid - - F. Net Cash Flow From Operating Activities 6,415,034 (26,243)G. Cash Flow From Investing Activities

(Purchase)/sales of investment (net) (6,416,045) - Profit /(Loss) on sale of investment 2,500 6,410

Net Cash Used In Investing Activities (6,413,546) 6,410

H. Net Cash Flow From Financing Activities

Net Cash Generated /(Used) From - -Financing Activities

I. Net Changes In Cash & Cash Equivalents 1,488 (19,833)

J. Cash&Cash Equivalents As At End of Financial Year

- Bank Balance 22,852 21,364 - Cash Balance -

Less: Cash & Cash Equivalents As At The Beginning Of Financial Year 21,364 41,197 Net Changes In Cash & Cash Equivalents 1,488 (19,833)


Note : 1. Cash flows are reported using the indirect method, whereby net profit before tax is

adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals. 2. Figures in brackets denotes outflows.3. Previous years figures have been regrouped, reclassified and /or renamed to confirm to this

years classification.

For Ford,Rhodes,Parks & Co. For and on behalf of the Board Chartered AccountantsFirm Reg. No. : 102860W Milan R. Parekh

Director DIN 00108368

A.D.Shenoy(Partner) Bakul R. Parekh Membership No.11549 Director

DIN 00108609Place: Mumbai Place: MumbaiDate 30th May 2014 Date: 30th May 2014

88

89

Action Commodities Limited

2 SHARE CAPITAL

(a) Details of shares authorised,issued,subscribed & paid up

Particulars Current year Previous Year

Authorized share capitaleach 1,000,000 1,000,000

(Previous year 100,000 Equity Shares

of Re. 10 each)

Issued,Subscribed & fully paid up each 1,000,000 1,000,000

(b)


Opening balance 100,000 100,000

Add/ (less) : Issued / (buyback) - -Closing Balance 100,000 100,000

Notes

1

2

( c)There are no transactions in above

(d) Shareholder's Information


Shares held by Group Companies

Action Financial Services(India) Limited

(100%) 100,000 100,000

(e)

(f)

(g)

(h) There are no forefeited shares on Balancesheet date.

There are no convertible securities issued and outstanding as on Balance sheet date.

Reconciliation of number of shares outstanding at beginning & end of the reporting

(No. of Shares)

Notes to Financial Statements for the year ended 31st March 2014 (Contd.)

Details of Shares issued for consideration other than cash,bonus issue or buy back in

There are no shares reserved for issue under options and contracts /commitments for

sale of Shares/disinvestment.

There are no unpaid calls as at Balancesheet date.

All 100,000 Equity Shares are held by the holding company, Action Services(India) Ltd

and its nominees.

The company has only one class of Equity shares having par value of Rs.10/-. The equity

share have rights, Preferences and restrictions which are in accordance with the

provision of law, in particular the Companies Act 1956.,


90


4 Deferred tax Asset / (Liability) (Net)

ParticularsAs at

31.03.2013For the year As at 31.03.2014

WDV differential (208,774) 51,597 (157,177)

Preliminary Expenses Written off 1,545 - 1,545

Unabsorbed Depreciation 3,101 199,195 202,296

Business Loss - 112,704 112,704

Short Term Loss - -

Deferred tax Asset / (Liability) (Net) (204,128) 363,496 159,368

5

Other Current Liabilities


Statutory Liabilities - Professional Tax 375 1,050

Others payables - Salary Payable 24,625 30,625 25,000 31,675

6 Short Term Liabilities


Provision for Taxation 28,200 -

28,200 -

3 RESERVES AND SURPLUS




Add: Addition on issue of shares - -

Closing Balance 7,500,000 7,500,000

b. Surplus as per Statement of Profit

& Loss

Opening Balance (762,372) (711,913)

Add: Profit for the year 380,845 (50,459)

Closing Balance (381,527) (762,372)

c. Total Reserves & Surplus (a+b) 7,118,473 6,737,628

91

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92


8 Non-current investments


Non- Current InvestmentInvestment inQuoted Equity Instruments 6,608,032 191,987

6,608,032 191,987

9Long -Term Loans & Advances


Security DepositsUnsecured to related parties 75,000 5,400,000

75,000 5,400,000

10

Cash & bank Balances



Balances with ICICI bank 22,853 21,365

22,853 21,365



Unsecured, Considered good - 1,100,000 Total - 1,100,000



Tds Receivable A.Y. 2012-2013 - 62,443Tds Receivable A.Y. 2013-2014 68,868 68,598Tds Receivable A.Y. 2014-2015 77,055 -Loan To Staff 4,000 7,764Other Receivables from relatedparties 36,046 5,803Total 185,969 144,608

93

NOTES TO STATEMENT OF PROFIT AND LOSS

13 REVENUE FROM OPERATIONS


Professional Income 773,253 685,978

Total 773,253 685,978

14 OTHER INCOME


Profit on F&O from related parites 2,500 6,410

Miscellenous Income - 35,333

Depreciation written back - 112,134

Interest on Income Tax 4,367 -

Total 6,867 153,877

15 EMPLOYEE BENEFITS EXPENSES


Salary & wages 546,800 512,132

Staff welfare Expenses - 2,857

Total 546,800 514,989

16 OTHER EXPENSES


Professional Fees 11,332 12,370Professional Tax (Company) 2,500 2,500Rent 120,000 120,000Shares Expenses on Trading from related parties 7,685 3,507Printing & Stationery - 618Conveyance expenses 5,054 -Auditors Remuneration 21,130 20,787Miscelleneous Expenses 5,803 -

Total 173,505 159,782


Annexure to the Independent Auditors’ Report[Referred to in paragraph pertaining to “Report on Other Legal and Regulatory

Requirement” of our Report of even date to the members ofAction Commodities Limited on the financial statements for the year ended

31st March, 2014]

1. a) The Company is maintaining proper records showing fullparticulars including quantitative details and situation of fixed assets.



2. The Company does not have any stocks of raw materials, stores, spare parts and finished goods. Hence the clause (ii) of the Order does not apply to the Company.

3. The Company has neither taken nor granted any unsecured loans Advances to its companies, firms or other parties covered in the Register maintained under Section 301 of the Act. Hence the clauses (iii) of the order are not applicable to the Company.




7. In our opinion, the internal audit system is commensurate with the size and nature of its business.


9. a) According to the information and explanations given to us and records of the Company examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and any other material statutory dues as applicable with the appropriate authorities. There are no undisputed statutory dues payable for a period of more than six months from the date they became payable as at 31st March, 2014.

94


b) According the information and explanations given to us and the records of the Company examined by us, there are no dues of income tax, wealth tax, service tax, customs duty and cess as at 31st March 2014, which has not been deposited on account of dispute.

10. The company is in existence for less than 5 years. It has earned cash profit during the year but incurred cash loss in the immediately preceding financial year. The accumulated losses as on 31st March 2014 is Rs. 381,527/- (P.Y. Rs. 7,62,372/-) which is less than 50% of its networth.



13. The provisions of any special statute applicable to chit fund and nidhi mutual benefit fund/societies are not applicable to the Company.

14. The Company has dealing/trading in shares and debentures during the year. In respect of dealing in securities and other investments, in our opinion and according to the information and explanations given to us, proper records have been maintained of the transactions and contracts and timely entries have been made therein. The securities and other investments have been held by the Company in its own name.


16. The Company has not obtained any term loans. 17. On the basis of an overall examination of the Balance Sheet of the

Company, in our opinion and according to information and explanations given to us, we report that no funds obtained on short – term basis have been used by the company for long term investments.

18. The Company has not made any preferential allotment of shares to any parties or companies covered in the Register maintained under section 301 of the Companies Act, 1956.

19. The Company has not issued any debentures.20. The Company has not raised any money through a public issue

during the year. 21. Based upon the audit procedures performed and information and

explanations given by the management, we report that we have not come across any instances of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by management.

For Ford, Rhodes, Parks & Co.Chartered AccountantsFirm Registration No.102860W A.D. ShenoyPartnerMembership No.11549


95


Action Commodities Ltd.

Note forming part of Financial Statements for the year ended 31st March 2014.



Action Commodities Limited is wholly owned subsidiary of Action Financial Services (India) Limited. The main objects of the company are share Broking and depository services, Market Research and studies; however the company is yet to start the full-fledged activities.



The Financial Statements have been prepared on accrual basis, in accordance with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956, which have been prescribed by the Companies (Accounting Standards) Rules, 2006 and the provisions of the Companies Act, 1956, to the extent applicable. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to the existing accounting standard or a more appropriate presentation of the financial statements requires a change in the accounting policy hitherto in use.

b. Use of estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statement and the reported amount of revenue and expenses during the reporting periods. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.


(i) Income from broking activities is recognized only when it is reasonably certain that the ultimate collection will be made.

(ii) Income from trading in Commodities and Derivatives comprises of profit or loss on sale of commodities held as stock in trade and profit or loss on Derivative instruments is accounted for based on the “Guidance note on accounting for Equity Index and Equity Stock Futures and Options”.

(iii) Interest income is recognized on time proportionate basis.

(iv) Dividend income is recognised as and when payment is received.

(v) Income from investing activities are recognized only when it is reasonably certain that the ultimate collection will be made.

96


d. Fixed Assets

All the fixed assets are accounted at cost of acquisition less accumulated depreciation.

e. Depreciation /Amortization

Depreciation on all fixed assets are provided on prorata basis in accordance with the rates prescribed under Schedule XIV of the Companies Act, 1956 under Written Down Value Method. As per company MCX membership would not depreciate in value. As such no depreciation considered for MCX membership.

f. Impairment of Fixed Assets

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit and Loss account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

g. Investments

Securities which are bought with an intention of keeping for long term are classified under Investments and are valued cost plus brokerage and stamp charges. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary in the opinion of the management.

h. Stock In Trade

Shares and Debentures are valued at cost or market price whichever is lower, whereby the cost of each script is compared vis-a-vis its market value and the resultant shortfall if any, is charged to revenue.

i. Taxation

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

(ii) Deferred tax is recognized, subject to prudence, on timing differences, being the difference between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are recognized for unabsorbed depreciation and carry forward losses to the extent there is virtual certainty that sufficient future taxable income will be available against which deferred tax assets can be realized.

j. Employee benefits

There are no employees eligible for gratuity as such no provision for gratuity is considered in accounts.There are no employees eligible for Leave Salary as such no provision for Leave salary is considered in

97


accounts.There are no employees eligible for PF and ESIC.

Other employee benefits are accounted on accrual basis.

k. Lease Rentals

Assets taken on lease under which the lessor effectively retains all the risk and rewards of ownership are classified as operating lease. Lease payments under operating leases are recognized as expenses on accrual basis in accordance with the respective lease agreement.

l. Derivative Transactions:

Gain /losses on futures transactions pertaining to Equity &Currency Futures are recognised on continuous basis. Gain / losses on options contracts are recognised on squaring off /settlement day.

m. Earning per Share

In determining the earning per share, the Company considers the net profit after tax and includes the post tax effect of any extra ordinary/ exceptional items. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the period. The number of shares used in computing diluted earning per shares comprises the weighted average shares considered for deriving the basic earning per share and also weighted average number of equity shares that could have been issued on the conversion of all dilutive potential equity shares. The diluted potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. The number of shares and potentially dilutive equity shares are adjusted for any stock split and bonus shares issued.

n. Provisions for Contingent liabilities and Contingent assets

A provision is recognized for a present obligation as result of past events if it is probable that an outflow of resources will be required to settle the obligation and in respect of which reliable estimates can be made. Provisions are determined based on net estimate of the amount required to settle the obligation at the Balance sheet date. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.

98


Action Commodities Ltd.Note forming part of Financial Statements for the year ended 31st March 2014.

17. Contingent Liabilities: NIL18. Capital Commitments: -

The company has acquired MCX membership card, however pending completion of procedural formalities business is not yet commenced. Following are the capital commitment to stock exchange for activation of the membership:-

19. Managerial Remuneration: NIL 20. Auditors Remuneration:

21. Unsecured Loans: NIL22. Investments:(a) The aggregate market value of quoted investments as at 31.03.2014

is Rs. 73,61,483/- (Previous year Rs. 67,298.60/-) as against the total cost of quoted investment of Rs.66,08,032 /- (Previous year Rs. 191,987/-). No provision for diminution in the value of quoted investment is considered necessary as in the management’s view the short fall in market value of few of the script is of temporary nature.

(b) Details of movements in investments during the year are given below: -

23. Employee Benefit

There are no employees eligible for gratuity, leave salary or provident fund etc. as such no provision is considered for this year.

24. As the company has not started its full ledged activities, hence segment reporting is not applicable.

25. As per Accounting Standard 18, the disclosures of transaction with the related parties as defined in the Accounting Standard are given below:

Particulars Amount Security Deposit (Cash) 15,00,000 Security Deposit (Non Cash) 15,00,000 Processing Charges 11,030

Particulars 2013-14 2012-13 Audit Fees 21,130 20,787

Opening Balance Closing Balance Particulars Face

Value Qty Value Qty Value

Continental Controls Ltd 10 46,124 184,957 46124 1,84,957

PVP Vent Ltd 10 500 7,030 500 7,030

Bharat Electronics 10 - - 3010 28,76,045

Tata Global 1 - - 25000 35,40,000

99


List of related parties with whom transactions have taken place and relationships:

26. Disclosures as required by Accounting Standards 19, “Leases” are given below:

I. The Company has taken office premises on rent for 11 months.

ii. Rent payments are recognized in the Profit and Loss Account under “Rent”

iii. T h e f u t u r e m i n i m u m l e a s e p a y m e n t s u n d e r N o n Cancellable operating lease is as under:


28. Provisions for Deferred Tax:

a) Income Tax:

In view of the carried forward loss available for setoff for current year income, no provision for income tax is considered. However Mat Liability has been provided based on current book profit.

Sr. No.

Relationship Name of the Related Party

1. Holding Company Action Financial Services (India) Limited 2. Key Management Personnel Mr.Milan R.Parekh (Director)

Mr. Bakul R.Parekh (Director) 3. Transaction with Holding

Company Rent Expense: Rs.1, 20,000/- (P.Y. Rs 1,20, 000/) Professional Income: Rs 773,253/- (P.Y : 685,978/-) Expenses on shares: - Rs 7,685/- (P.Y. 3,507/-) Deposit: Rs 75,000 (P.Y. –Rs 54,00,000/-)

4. Transaction with Key Management Personnel

NIL

(In Rupees)



Not later than one year 1,20,000 1,20,000

Later than one year and not later than five years

NIL NIL


Sr. No.



(A) Profit / (Loss) attributable to Equity Shareholders after tax

3,80,845 (50,459)

(B) Nominal Value of Equity Shares 10 10 (C) Weighted / Diluted Number of Equity Shares

outstanding during the Year 100,000 100,000

(D) Basic / Diluted Earnings Per Share (A/C)

3.81 (0.50)

100


b) Deferred Tax

Deferred Tax has been considered on timing differences between book and taxable profits.

Component of Deferred Tax Assets/ (Liability) as at 31.03.2014 are as shown under note no. 4

29 a. Based on the details regarding the status of the suppliers, to the extent obtained, no supplier is covered under the Micro, Small and Medium Enterprises Development Act, 2006. The auditors have relied upon the management representation in this regard.


c. There are no balances outstanding Investor education and protection fund u/s 205 C of the Companies Act, 1956.


As per our Report attached For and on behalf of the board

For FORD, RHODES, PARKS & CO Chartered AccountantsFirm Registration No. 102860W

Milan R. ParekhDirectorDIN 00108368

A.D. Shenoy(Partner) Membership No.11549

Place: Mumbai Date: 30th May 2014

Bakul R. ParekhDirectorDIN 00108609

Place: MumbaiDate: 30th May 2014

101


INDEPENDENT AUDITORS’ REPORT ON CONSOLIDATED FINANCIAL STATEMENTS

TO THE BOARD OF DIRECTORS OF ACTION FINANCIAL SERVICES (INDIA) LIMITED

We have audited the accompanying consolidated financial statements of ACTION FINANCIAL SERVICES (INDIA) LIMITED (the “Company”) and its subsidiaries (the Company and its subsidiaries constitute the “Group”), which comprise the Consolidated Balance Sheet as at March 31, 2014, the Consolidated Statement of Profit and Loss and the Consolidated Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Consolidated Financial Statements

The Company’s Management is responsible for the preparation of these consolidated financial statements that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Group in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the consolidated financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We 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 reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and presentation of the consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of the accounting

102


policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the consolidated financial statements.


Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid consolidated financial statements give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Consolidated Balance Sheet, of the state of affairs of the Group as at March 31, 2014;

(b) in the case of the Consolidated Statement of Profit and Loss, of the profit of the Group for the year ended on that date; and

© in the case of the Consolidated Cash Flow Statement, of the cash flows of the Group for the year ended on that date.



Firm Registration No. 102860W

A.D.SHENOY

Partner

Membership No. 11549

May 30, 2014

Mumbai

103


ACTION FINANCIAL SERVICES (INDIA) LIMITEDCONSOLIDATED BALANCE SHEET AS AT 31ST MARCH 2014


EQUITY AND LIABILITIESShareholders’ fundsShare capital 2 133,325,000 133,325,000 Reserves and surplus 3 114,092,881 109,942,225 Money received against share warrants 11,685,000 11,685,000

259,102,881 254,952,225 Non-current liabilitiesLong-term borrowings 4 - 1,972,021 Other Long term liabilities 5 10,378,454 12,718,659 Long-term provisions 6 4,244,156 3,954,027

14,622,610 18,644,707 Current liabilitiesShort-term borrowings 7 25,056,279 24,128,307 Trade payables 37,114,851 13,579,160 Other current liabilities 8 22,745,987 8,268,418 Short-term provisions 9 2,178,773 4,100,814

87,095,890 50,076,699 Total Equity & Liabilities 360,821,381 323,673,631 ASSETSNon-current assets Fixed assets 10Tangible assets 17,302,358 21,647,240 Intangible assets 7,629,786 7,187,928

24,932,144 28,835,168

Non-current investments 11 64,589,885 20,884,615 Deferred tax assets (net) 12 1,804,549 917,744 Long-term loans and advances 13 10,473,289 11,730,577 Other non-current assets 14 5,958,616 9,925,149

107,758,483 72,293,253 Current assetsInventories 15 164,092,343 98,245,604 Trade receivables 16 59,316,921 91,129,066 Cash and Bank Balance 17 15,396,728 47,590,020 Short-term loans and advances 18 2,976,253 7,015,487 Other current assets 19 11,280,653 7,400,201

253,062,898 251,380,378 Total Assets 360,821,381 323,673,631

As per our report of even date For and on behalf of the BoardFor Ford, Rhodes, Parks & Co.Chartered Accountants Milan R. Parekh Firm Registration No.102860W Chairman & Managing Director

DIN 00108368




104


ACTION FINANCIAL SERVICES (INDIA) LIMITEDCONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH 2014


Revenue

Revenue from operations 20 41,784,791 48,390,327

Other income21 1,798,599 12,469,973

Total Revenue 43,583,390 60,860,300

Expenses

Employee benefits expense 22 15,212,883 15,401,375

Finance costs 23 6,405,401 6,633,240

Depreciation and amortization expense 10 3,833,230 2,476,309

Other expenses 24 23,892,405 32,355,824

Total expenses 49,343,919 56,866,748

Profit before exceptional and (5,760,529) 3,993,552extraordinary items and tax

Exceptional items 42 6,394,442 -

Profit before tax 633,913 3,993,552

Less: Tax expense

Current tax 390,600 1,145,000

Deferred tax 12 (886,805) 1,747,710

Profit (Loss) for the Year 1,130,118 1,100,842

Earnings per equity share of Rs. 10 each:

(1) Basic 0.02 0.03

(2) Diluted 0.02 0.02

105


For Ford,Rhodes,Parks & Co.Chartered Accountants Milan R. Parekh Firm Registration No.102860W Chairman & Managing Director

DIN 00108368



Significant Accounting Policies 1Notes to Accounts 2 - 43Significant Accounting Policies & Notes to Accounts forms an integral part of the accounts.


Year ended

31.03.2014 31.03.2013

A. CASH FLOW FROM OPERATING ACTIVITIE S Rs. Rs.

Net Profit before Tax 633,913 3,993,552

Depreciation 3,833,230 2,476,309

Excess provsion for taxation considered as per R& S 3,020,53 8 (151,404)Interest and Dividend Income (1,626,881) (1,969,825)

Creditor wrtitten Back (12,191) (747,580)

(Profit)/ Loss on sale of Investments 440,448 (9,405,244)

Provision on Standard & Sub Standard Assets 137,269 246,837

(Profit)/ Loss on sale of Fixed Assets (6,394,442)

Interest Expenditure 6,405,401 6,633,240

Operating Profit before Working Capital Change s 6,437,285 1,075,885

Short Term Loan and Advances 4,039,234 (5,074,286)

Long-term loans and advances 1,257,288 (1,625,000)

Other current assets (3,880,452) (40,861)

Trade Receivables 31,674,876 (39,783,092)

Other non-current assets 3,966,533 (6,661,492)

Inventories (65,846,739) (12,631,258)

Trade payables 23,547,882 (20,737,765)

Other Payables (Exluding Current tax Provision ) 10,114,853 10,465,408

Cash Generated from Operations 11,310,760 (75,012,461)

Direct Taxes Paid (Net ) - -

Net Cash from Operating Activities [A] 11,310,760 (75,012,461)

B. CASH FLOW FROM INVESTING ACTIVITIES

Purchase & Creation of Fixed Assets (2,066,763) (11,929,348)Proceeds from sale of Fixed Assets 8,531,000 -

(Purchase) / Sale Of Investments (Net) (44,145,718) 38,664,572

Divivend Received 95,122 597,264Investment in Fixed deposit (7,534,017) 2,132,389

Interest Received 1,531,757 1,372,563

Net Cash used in Investing Activities [B] (43,588,619) 30,837,440

C. CASH FLOW FROM FINANCING ACTIVITIESProceeds from Secured Borrowing (Net) (1,972,021) (716,382)

Proceeds from UnSecured Borrowing (Net) 927,972 (13,424,082)

Proceeds from issue of warrants - 11,685,000

Proceeds from issue of Equity Shares - 24,463,000

Securities premium on Equity Shares - 68,496,400

Interest paid (6,405,401) (6,633,240)

Net Cash from Financing Activities [C] (7,449,451) 83,870,696

Net increase/(decrease) in cash and cash equivalents A+B+C] (39,727,309) 39,695,675

Action Financial Services (India) Limited.

Cash Flow Statement

For The Year ended 31st March 2014

Year ended

Cash and cash equivalents as at 1st April (Opening) 40,405,678 710,003

Cash and cash equivalents as at 31st March (Closing) 678,369 40,405,678

Net increase / (decrease) in cash and cash equivalents (39,727,309) 39,695,675

Notes:

i) Cash and Cash Equivalents include:

Balances with Schedule Banks on Current Accounts 678,129 40,404,270

Cash in Hand 241 1,408

678,369 40,405,678

106


ii)

iii)

iv) Previous year's figures regrouped /reclassified wherever required.

The above cash flow statement has been prepared under the 'Indirect Method' as set out in the Accounting

Standard - 3 on Cash Flow Statements.

Cash and cash equivalents for the purpose of cash flow statement comprise of Cash at bank and in hand and

short term investments with an original maturity of three months or less.

As per our report of even date

For Ford, Rhodes, Parks & Co.


Firm Registration No: 102860W

A.D.Shenoy

Partner

Membership No : 11549

Place : Mumbai

Date: 30th May 2014

For and on behalf of the Board

Bakul R Parekh

Director

Date: 30th May 2014

Milan R Parekh

Chairman & Managing DirectorDIN 00108368

Place : Mumbai

DIN 00108609

107


Action Financial Services (India) Ltd

Note forming part of consolidated financial statement for the year ended 31st March 2014

Note 1: Corporate Information and Significant Accounting Policies:-

1. Corporate Information:-

Action Financial Services (India) Limited group is engaged in share Broking and depository services and consists of Action Financial Services (India) Limited and its two wholly owned subsidiaries viz. Action Securities Limited and Action Commodities Limited.

2. Significant Accounting Policies:

a. Basis of Preparation of Financial statements and Accounting Concepts:

The consolidated financial statements relate to Action Financial Services (India) Limited and its wholly owned subsidiaries viz Action Securities Limited and Action Commodities Limited. The parent company with its subsidiary constitutes the group. The financial statements of the parent company and its subsidiaries are drawn up to 31st March 2014.

The accounts have been prepared on accrual basis, in accordance with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956 read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013, which have been prescribed by the Companies (Accounting Standards) Rules, 2006 and other provisions of the Companies Act, 1956, to the extent applicable. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to the existing accounting standard or a more appropriate presentation of the financial statements requires a change in the accounting policy hitherto in use.

b. Principles of consolidation:

The financial statements of the parent company and its wholly owned subsidiaries have been consolidated in accordance with Accounting standard 21 on “Consolidated financial statements”, on line-by-line basis by adding together the book values of like items of assets, liabilities, incomes and expenses after eliminating intra group balances, intra group transactions and are presented to the extent possible, in the same manner as the company’s independent financial statements. The financial statements of the parent company and its subsidiaries have been consolidated using uniform accounting policies except to the extent stated hereunder.

108


c. Use of estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statement and the reported amount of revenue and expenses during the reporting periods. Difference between the actual results and estimates are recognized in the period in which the results are known/ materialized.

d. Revenue Recognition:

(i) Income from broking activities and depository services are recognized only when it is reasonably certain that the ultimate collection will be made.

(ii) Interest income is recognised on time proportionate basis.

(iii) Dividend income is accounted on receipt basis.

(iv) Income from trading in Securities and Derivatives (Commodities, Currency and Equity) comprises of profit or loss on sale of securities held as stock in trade and profit or loss on Derivative instruments. Profit or loss on Derivative instruments is accounted for based on the “Guidance note on accounting for Equity Index and Equity Stock Futures and Options”.

f. Fixed Assets:

All the fixed assets are accounted at cost of acquisition less accumulated depreciation

g. Depreciation / Amortisation

Depreciation on all fixed assets are provided on prorata basis in accordance with the rates prescribed under Schedule XIV of the Companies Act, 1956 under Straight Line Method. However subsidiaries are providing Depreciation on written Down Value Method. Assets acquired under Finance lease are amortised over the period of lease or estimated useful life of Asset whichever is lower. Goodwill is amortized over a period of Twenty years. As per the company MCX membership would not depreciate in value. As such no depreciation is considered for MCX membership.

h. Leased Assets:

Assets taken on lease under which the lessor effectively retains all the risk and rewards of ownership are classified as operating lease. Lease payments under operating leases are recognized as expenses on accrual basis in accordance with the respective lease agreement.

109


i. Impairment of Fixed Assets

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit and Loss account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

j. Investments

Securities, which are bought with an intention of keeping for long term, are classified under Investments and are valued at cost plus brokerage and stamp charges. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary in the opinion of the management.

k. Stock In Trade

Shares and Debentures are valued at cost or market price whichever is lower, whereby the cost of each script is compared vis-à-vis its market value and the resultant shortfall if any, is charged to revenue.

l. Taxation

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

(ii) Deferred tax on timing difference between taxable income and accounting income is accounted for, using the tax rates and the tax laws enacted or substantially enacted as on the balance sheet date. Deferred tax assets are recognized for unabsorbed depreciation and carry forward losses to the extent there is virtual certainty that sufficient future taxable income will be available against which deferred tax assets can be realized.

m Employee benefits

(I) Gratuity to employees is provided as per AS 15 and liability as on Balance Sheet date has been determined on the basis of actuarial valuation. The liability is not funded.

(ii) Leave encashment benefits payable to employees of the Company with respect to accumulated leave outstanding at the year-end are accounted for on the basis of an actuarial valuation as at the Balance Sheet date.

(iii) Contributions payable by the Company to the concerned government authorities in respect of provident fund, family pension fund and ESIC are charged to Profit and Loss account.

110


(iv) Other employee benefits are accounted on accrual basis.

(v) In respect of two subsidiaries none of the employee is eligible for gratuity& Leave encashment, as such no provision is considered is required.

n. Derivative Transactions:

Gain /losses on transactions pertaining to Equity &Currency Futures are recognised on continuous basis. Gain / losses on options contracts are recognised on squaring off /settlement day.

o. Earning per Share

In determining the earning per share, the Company considers the net profit after tax and includes the post tax effect of any extra ordinary/ exceptional items. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the period. The number of shares used in computing diluted earning per shares comprises the weighted average shares considered for deriving the basic earning per share and also weighted average number of equity shares that could have been issued on the conversion of all dilutive potential equity shares. The diluted potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. The number of shares and potentially dilutive equity shares are adjusted for any stock split and bonus shares issued.

p. Provisions for Contingent liabilities and Contingent assets

A provision is recognized for a present obligation as result of past events if it is probable that an outflow of resources will be required to settle the obligation and in respect of which reliable estimates can be made. Provisions are determined based on net estimate of the amount required to settle the obligation at the Balance sheet date. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.

111



2 Details of share Capital

A Details of Authorised,issued,subscribed and paid up capital


(Rs)

Previous Year

(Rs)

SHARE CAPITALAuthorized share capital

14,000,000 (14,000,000) Equity Shares of Rs.10/-

each 140,000,000100,000 (100,000) Preference Shares of Rs. 100/-

each 10,000,000

Issued share capital

1,25,04,500 ( P.Y. 1,25,04,500) Equity Shares of


82,800 (P.Y. 82,800) 10 % Redeemable


133,325,000 133,325,000

Subscribed & fully paid up



82,800 (P.Y. 82,800) 10 % Redeemable


133,325,000 133,325,000

B

I) Equity Shares


Opening balance as on 01.04.13 12,504,500 10,058,200

Add :- Shares issued on Preferential basis - 2,446,300Closing Balance 31.03.14 12,504,500 12,504,500

NOTES:

1

2

II) Preference Shares

During the year there is no movement.


Opening balance as on 01.04.13 82,800 82,800

Add :- Shares issued - -Closing Balance 31.03.14 82,800 82,800

NOTES:


Reconciliation of number of shares outstanding at beginning & end of the reporting period

The Company did not Issue any Equity shares during the Financial Year 2013-14. During the previous year

company had issued 244,6300 equity shares of Rs. 10/- each for cash at a premium of Rs. 28/- on preferential

basis vide board resolution dated 4th December 2012. Accordingly a sum of Rs. 68,496,400/- was credited to

Securities Premium Account.

The Preference shares carry right to receive 10% dividend on cummulative basis. The Preference shares are

redeemable on or before March 2015. The Company has not declared or paid dividend on preference capital on

account of insufficient profits after tax. Cummulative Outstanding dividend on preference capital as at 31st March

2014 is Rs. 49,68,000/-

The company has only one class of Equity shares having par value of Rs.10/-. The equity share have rights,

Preferences and restrictions which are in accordance with the provision of law, in particular the Companies Act

1956.

(No. of Shares)

(No. of Shares)

140,000,000

10,000,000

112


113

C

D Shareholder's Information


1. Shares held by Group Companies NA NA

2. Share holders holding 5% or more shares

Shares Percentage Shares Percentage

Equity Shares

Promoters

Milan R Parekh 2,679,056 21.42 2,679,056 21.42

Bakul R Parekh 2,038,889 16.30 2,038,889 16.30

Others

Prime Capital Market Limited 830,000 6.64 830,000 6.64Laxmiramuna Investment Pvt. Ltd. 730,000 5.84 730,000 5.84

TOTAL 6,277,945 50.20 6,277,945 50.20

Preference shares

Promoters

Milan R Parekh 64,827 78.29 64,827 78.29

Bakul R Parekh 14,193 17.14 14,193 17.14

E

F

G

H

Last 5 years details of Shares issued / bought back

Milan Parekh's shareholding includes 77200 shares having lock period till 30/01/2015

The Board of Directors of the Company in its meeting held on 29th September 2012 issued 12,30,000 warrants on

4th December 2012 on preferential basis to its Promoter at the rate- o f R s . 3 8 / per warrant with an option to

convert the same into equivalent number of Equity shares of nominal value - a t R s 1 0 / each at a premium of Rs.

28/-per shares. The option of conversion shall be valid for a period of 18 months (i.e. on or before 3rd June 2014)

from the date of allotment of the warrants. The company received Rs. 9.5 /- p e r w arrant as upfront payment and is

credited to Money received against share warrants.There are no shares reserved for issue under options and contracts /commitments for sale of

Shares/disinvestment.

There are no unpaid calls as at Balance sheet date.

There are no forefeited shares as at Balance sheet date.

There are no issues for consideration other than cash, Bonus shares or buy back in past 5 years.

(No. of Shares)

Name

As at 31st March 2014 As at 31st March 2013


114


3

b. Payables under finance lease obligations


4 LONG -TERM BORROWINGS


(Rs)

Previous Year

(Rs)

a. Term Loans from Banks (Secured) - 3,095,561

(1,123,540)

- 1,972,021

- 359,991

(359,991)

- -

Total - 1,972,021

5 Other Long term Liabilites


(Rs)

Previous Year

(Rs)

Deposit from Clients 10,378,454 12,718,659

Total 10,378,454 12,718,659

Less: Current maturities of Long Term Debt disclosed under OCL

Less: Current maturities of finance lease obligations disclosed under OCL

RESERVES AND SURPLUS


(Rs)

Previous Year

(Rs)


Opening Balance 99,704,700 31,208,300Add: Addition on Shares issued on Preferential

basis - 68,496,400Closing Balance 99,704,700 99,704,700

b. Capital Redemption Reserve Account* 10,120,000 10,120,000

c. Capital Reserve A/c**


Add: Addition on Forefeiture of Warrants - -

6,275,000 6,275,000

d. Surplus as per Statement of Profit & Loss

Opening Balance (6,157,475) (7,106,913)

Add: Profit 1,130,118 1,100,842

Add: Adjustment of eariler income tax 3,020,538 (151,404)

Closing Balance (2,006,819) (6,157,475)

Total Reserves & Surplus 114,092,881 109,942,225

*CRR represents Reserve created on redemption of 101,200 Preference shares in 2008.

**CR represents forefeited amount of 11,90,000 warrants in year 2010 and 125,000 warrants in year

Closing Balance


7 Short Term Borrowings


(Rs)

Previous Year

(Rs)

Loans repayable on demand from Banks (Secured ) 20,055,891 9,927,919

Inter corporate deposit (Secured) 5,000,388 14,200,388

Total 25,056,279 24,128,307



(Rs)

Previous Year

(Rs)

Current maturities of Long- Term debt - 1,123,540

Others Loans & Advances : Book overdraft 15,074,968 4,273,214

Current maturities of finance lease obligations - 359,991

Deposit Received 1,700,000 -

Others payables 5,971,019 2,511,673

Total 22,745,987 8,268,418



(Rs)

Previous Year

(Rs)

Provision for Gratuity 300,980 349,886

Provision for leave benefits 186,563 631,579

Provision for Taxation 1,691,230 3,119,349

Total 2,178,773 4,100,814

6 Long - term Provisions


(Rs)

Previous Year

(Rs)

Contigent Provision aganist Standard Assets 538,688 381,606

Provison for gratuity 3,153,715 3,342,080

Provisoin for leave benefits 551,753 230,341

Total 4,244,156 3,954,027

115


Act

ion

Fina

ncia

lSer

vice

s(I

ndia

)Li

mit

ed

Not

e10

Fixe

dA

sset

s

Tang

ible

Ass

ets

Off

ice

Prem

ises

11,7

40,8

862,

502,

436

9,23

8,45

01,

559,

621

180,

871

530,

905

1,20

9,58

78,

028,

863

10,1

81,2

65

Leas

eH

old

Impr

ovem

ent

1,19

7,22

7-

1,19

7,22

711

0,12

527

1,25

238

1,37

781

5,84

91,

087,

102

Furn

itur

e&

Fixt

ures

3,68

5,81

85,

600

699,

005

2,99

2,41

33,

130,

064

222,

579

561,

094

2,79

1,54

920

0,86

455

5,75

4

Vehi

cles

1,51

0,57

31,

510,

573

306,

667

143,

504

450,

171

1,06

0,40

21,

203,

906

Off

ice

Equi

tmen

ts2,

283,

711

-42

,500

2,24

1,21

11,

139,

457

116,

622

15,3

841,

240,

695

1,00

0,51

61,

144,

254

Com

pute

r14

,420

,655

8,00

022

,500

14,4

06,1

556,

945,

694

1,28

7,09

722

,500

8,21

0,29

16,

195,

864

7,47

4,96

1

Tota

l34

,838

,870

13,6

003,

266,

441

31,5

86,0

2913

,191

,628

2,22

1,92

51,

129,

883

14,2

83,6

7017

,302

,358

21,6

47,2

40

Inta

ngib

leA

sset

s

Goo

dwill

12,9

18,6

45-

-12

,918

,645

10,1

76,9

7064

5,93

210

,822

,902

2,09

5,74

32,

741,

675

Com

pute

rSo

ftw

are

4,49

4,61

02,

053,

163

6,54

7,77

31,

169,

687

965,

373

2,13

5,06

04,

412,

713

3,32

4,92

3

Mem

bers

hip

Card

1,12

1,33

0-

-1,

121,

330

--

--

1,12

1,33

01,

121,

330

Tota

l18

,534

,585

2,05

3,16

3-

20,5

87,7

4811

,346

,657

1,61

1,30

5-

12,9

57,9

627,

629,

786

7,18

7,92

8

Sub

Tota

l53

,373

,455

2,06

6,76

33,

266,

441

52,1

73,7

7724

,538

,285

3,83

3,23

01,

129,

883

27,2

41,6

3224

,932

,144

27,7

13,8

40

Prev

ious

Year

35,5

41,9

304,

522,

805

-40

,064

,735

20,2

67,9

901,

605,

628

-21

,873

,618

18,1

91,1

17

Add

itio

nsD

ispo

sal

Clos

ing

Bal

ance

As

at

31.0

3.20

14W

ithd

raw

nTo

tal

As

at

31.0

3.20

13

Net

Blo

ckG

ross

Blo

ckD

epre

ciat

ion

Not

esto

Fina

ncia

lSta

tem

ents

for

the

year

ende

d31

stM

arch

2014

(Con

td.)

Upt

o

31.0

3.20

13

For

the

Year

Part

icul

ars

As

at

01.0

4.20

13

- ---

-

-

- -

- - --

116


11 Non- Current Investment


(Rs)

Previous Year

(Rs)

Non- Current Investment

Trade Investments

BSE shares 2,683,500 2,683,500

BGSE Shares 1,229,609 1,229,609

3,913,109 3,913,109

Unquoted Equity Instruments

Others 100,000 100,000

100,000 100,000

Quoted Equity Instruments

Equity Instruments 60,576,776 16,871,506

(Market value Rs. 5,98,04,903/-)

Total 64,589,885 20,884,615

12 Deferred Tax Assets (Net)

ParticularsAs at

01.04.2013

For the year at As

31.03.2014WDV differential (3,449,529) (1,666,068) (5,115,597)Retirement benefits 1,370,265 (108,588) 1,261,677

Preliminary expenses w/off 1,545 - 1,545

Unabsorbed Depreciation 499,329 199,195 698,524

Business Loss 2,338,221 1,623,180 3,961,401

Short Term Loss 157,913 839,086 996,999

Net Deferred tax Asset / (Liability)

13 Long -Term Loans & Advances


(Rs)

Previous Year

(Rs)

Security Deposits

Secured, Considered good 10,473,289 11,730,577

Total 10,473,289 11,730,577

14 Other non- current assets


(Rs)

Previous Year

(Rs)

4,823,780 8,790,313

Advances towards MCX Membership 1,134,836 1,134,836Total 5,958,616 9,925,149

Fixed Deposits having maturies after 12 month from balance sheet

date & held as margin money

917,744 886,805 1,804,549

15 Inventories


(Rs)

Previous Year

(Rs)

Shares as at 31.03.2014 valued at Cost or Market value, 164,092,343 98,245,605

whichever is lower.

Total 164,092,343 98,245,605

117




(Rs)

Previous Year

(Rs)

Receivables outstanding for more than 6 months from

the due date

Unsecured, considered good 5,705,542 5,903,674

Less : Provision for Non- Performing Debtors (570,554) (590,367)5,134,988 5,313,307

OthersUnsecured, Considered good 54,181,933 85,815,759

Total 59,316,921 91,129,066



(Rs)

Previous Year

(Rs)


Balances with bank 678,129 40,404,270

Cash on hand 241 1,408

678,369 40,405,678

Other bank balance

14,718,359 7,184,342

4,823,780 8,790,313

(4,823,780) (8,790,313)

14,718,359 7,184,342

Total 15,396,728 47,590,020

FD held having maturity less than 12 mths from balance sheet

date held as margin moneyFD held as margin money maturity more than 12 mths from

balance sheet date

Less: Amount considered seperate under non current asset



(Rs)

Previous Year

(Rs)

OthersUnsecured, Considered good

Employee Loan 56,486 100,645

Statutory Dues 62,746 261,603

Prepaid Expenses 553,048 577,979

Others 2,303,973 6,075,260

2,976,253 7,015,487

Total 2,976,253 7,015,487



(Rs)

Previous Year

(Rs)

Interest Accrued on Deposits 1,067,518 899,175

Advance Tax Paid 8,751,819 5,400,000

Others 13,567

Tax Deducted at Source 1,461,316 1,087,459

Total 11,280,653 7,400,201

-

118


20 Re v e n u e from Operations


(Rs)

Previous Year

(Rs)

1. Revenue from Services

Income from broking activities 10,965,410 11,436,770

Income from depository Services 3,520,672 3,535,532

14,486,082 14,972,302

2. Other operating revenue

Mutual Fund Commission 44,628 57,588

Profit on sale of securities (Net) 27,254,081 33,360,437

27,298,709 33,418,025

Total 41,784,791 48,390,327

21 O t h e r Income


(Rs)

Previous Year

(Rs)

Interest income 1,531,757 1,372,563

Interst on Income tax 5,368 -

Miscellaneous income 70,211 347,325

Net gain or loss on sale of investments - 9,405,244

Dividend Income 95,124 597,262

Depreciation w/off - 112,134

Stock Exchange Expenses Recovered From Remisiers 83,948 -

Creditors Written Back 12,191 635,446

Total 1,798,599 12,469,974

22 Emp l o y e e Benefit Expenses


(Rs)

Previous Year

(Rs)

Salary & Wages 14,445,885 13,285,818

Contribution to provident & other Funds 250,563 206,985

Leave Encashment 50,836 488,990

Staff welfare Expenses 188,077 169,749

Incentive to staff 33,850 -

Gratuity 243,672 1,249,834

Total 15,212,883 14,445,436

119


23 Fi n a n c e Cost


(Rs)

Previous Year

(Rs)

Interest Paid to Bank 2,086,215 1,928,696

Interest Paid to Others 3,493,021 3,426,951

Interest Paid on Car Loan 15,049 59,870

Loan Processing Charges - 6,000

Prepayment charges 54,358 -

Bank Guarantee Commission 352,476 414,532

Interest Paid on Term Loan 404,282 797,191

Total 6,405,401 6,633,240

24 O t h e r Expenses


(Rs)

Previous Year

(Rs)

Advertisements 1,444,382 5,298,450

Auditors Remuneration 489,682 391,800

Bank Charges 433,280 338,950

Communication Expenses 1,174,820 1,096,203

Electricity Expenses 1,300,866 753,148

Loss on Currency Derivatives 680,994 6,306,543

Loss on Derivatives 3,942,081 3,085,552

Loss on sales of investment 440,448 -

Maintainence Expenses 1,703,012 1,522,903

Miscellaneous Expenses 593,319 1,616,948

NSDL Expenses 635,082 798,086

Printing & Stationery 404,410 581,790

Professional Fees 3,336,518 4,891,037

Provision for Non-Performing Assets - 127,623

Contigent Provision against Standard Assets 157,082 246,837

Rent , Rates & Taxes 3,269,131 2,042,537

Settlement Charges 970,531 1,109,342

Sub Brokerage 1,005,269 1,657,522

Travelling and Conveyance 286,806 325,722

Dimunation in value 1,624,690 1,200,80523,892,405 33,391,798

120


25. Contingent Liabilities not provided in respect of

a. Bank Guarantee amounting to Rs. 36,200,000 /- (previous year Rs.

22,850,000/-) Secured by fixed deposit of Rs. 19,542,139/-.

b. Allotment money payable on partly paid shares and debentures Rs.

1,782,000/- (Previous year Rs. 1,782,000/-)

c. Rs 4,968,000/- being Arrears of Dividend on Cumulative 10%

redeemable Preference Shares as at 31st March 2014. (Previous Year

Rs.4,14,000/-).

d. Income Tax:-

Sr.No. Name of dues Forum where Dispute is pending

Period to which amount relates

Amount involved

1 Income Tax ITAT Mumbai A.Y. 2008-09 10,130,835/- 2 TAX Deducted

at Sources Commissioner of Income tax (Appeals), Mumbai

A.Y. 2010-11 129,990/-

3 TAX Deducted at Sources

Commissioner of Income tax (Appeals), Mumbai

A.Y. 2011-12 143,056/-

Note:-

1. The Company had contested Income Tax demand of Rs 10,130,835/- for Assessment Year 2008-09. The Company has paid Rs.87,51,819/- and balance amount is in abeyance till disposal of the case . The company has preferred an appeal in the ITAT against the CIT(A) order.

2. The Company had contested Income Tax Deducted at Sources of Rs 129,990/- and Rs 143,056/- for Assessment Year 2010-11 and 2011-12. The company has preferred an appeal in the ITAT against the CIT (A) order.

26. Capital Commitments: -

During previous year one of the subsidiary company (Action Commodities Limited) has acquired MCX membership card, however pending completion of procedural formalities business is not yet commenced. Following are the capital commitment to stock exchange for activation of the membership:-

Particulars Amount Security Deposit (Cash) 15,00,000 Security Deposit (Non Cash) 15,00,000 Processing Charges 11,030

Particulars Amount Software Charges 3,00,000/-

Following are the capital commitment with respect to software:-

121


27. Borrowings

Term Loan: The Company has repaid its term loan during the year. There is no outstanding balance as on 31st March 2014.

Bank Overdraft: Overdraft of Rs. 20,055,891/- (P.Y. Rs. 9,927,919/-) as at 31.03.2014 from the Scheduled Banks are secured against Personal Guarantee of both Directors and pledge of Equity shares of the Company. Facility carries interest ranging from 14 to 14.75%.

28. ICDS: Inter corporate deposit of Rs. 5,000,388/- (P.Y. 14,200,388/-) as at 31.03.2014 received from Enpee Enterprises Pvt. Limited is secured a g a i n s t Pledge of Equity shares as well as Company premises in BSE Building. It carries interest @21% p.a. There are no stipulations as to repayment of ICD.

29. Managerial Remuneration: Whole time directors are paid remuneration aggregating to Rs. 4,640,000/- .The computation of net profit under s e c t i o n 198 / 349 of the Companies Act, 1956 has not been given since no commission is paid / payable to any director in the current year.

30. Auditor’s remuneration:-

Particulars 2013-14 2012-13 Audit Fees 1,90,242 110,500Tax Audit Fees 50,000 25,000Other Charges , Certification etc 2,00,000 165,000Total 4,40,242 300,500

31 In compliance with RBI guidelines in relation to Non-B a n k i n g F i n a n c i a l C o m p a n i e s , t h e c o m p a n y h a s provided Rs. 157,082/- (P.Y. 246,837/-) being 0.25% of standard asset as ‘Contingent provision against standard assets’. The provision for Non performing assets is maintained at Rs. 570,554/- (P.Y. Rs. 590,367/-) being 10% of receivables outstanding for more than 6 months from due date. The company has written back Rs. 19,813/- being excess provision for Non performing assets included under Other Income.

Sr. no.

Name Country Proportion of ownership Interest as at 31st March 2014

Proportion of ownership Interest as at 31st March 2013


India 100 % 100 %


India 100% 100%

Note forming part of financial statement for the year ended 31st March 2014

The consolidated financial statements have been prepared in accordance with the Accounting Standard (AS) 21 and the Accounting Standard (AS) 23, notified under section 211(3C) of the Companies Act, 1956. The consolidated financial statements of Action Financial Services (India) Ltd. Holding company include its wholly owned subsidiaries as under:-

122


32. Investments:

(a) The aggregate market value of quoted investments as at 31.03.2014 is Rs. 55,712,172/-(Previous year Rs. 15,620,028/-) as against the total cost of quoted investment of Rs. 53,968,744/- (Previous Year Rs.16,679,519/-)

(b) No provision for diminution in the value of quoted investment is considered necessary as in the management’s view the short fall is temporary in nature.

( C ) Details of opening and closing investments during the year are given below: -

(A) Quoted Shares (Fully Paid) at cost

As on 31st March 2014 As on 31st March 2013

Name of the Company No. of Shares

Face Value Cost

No. of Shares

Face Value Cost

Rs. Rs. Rs. Rs.

BALRAMPUR C* 16,230 1 883,120 220 1 9,614

BHART 7,231 5 2,715,905 117 5 34,141

BHEL 7,122 2 931,792 58 2 10,263

BHU STEE STR 27,503 2 13,566,321 32,362 2 15,729,850

CHAMB.FER(DM 27,150 10 1,238,693 177 10 8,841

SAPAN CHEMICALS LIMITED 500 10 645 500 10 645

HINDUS CONST 935 1 12,856 935 1 12,856

HOTEL LEELAV 741 2 14,894 741 2 14,894

HOUSING DEVE 9,100 2 8,011,003 5 2 4,129

IFCI LTD 12,122 10 404,674 292 10 7,621

INDIA SECURI 1,300 2 15,925 37,300 2 456,925

INFOSYS TECH 27 5 9,602 - - -

JAIPRAK ASSO 15,230 2 561,690 1,186 2 77,683

MCLEOD RUSEL 175 5 51,894 - - -

PENINSULA LAND 19,616 2 864,990 252 2 9,198

RELIANCE 4,460 10 3,901,688 335 10 259,190

SAKTI SUGAL 17,381 10 356,442 300 10 5,940

TECH MAHINDRA 26,015 10 3,168,163 50 10 6,405

MARKSANS PHARMA 27,300 1 230,724 200 1 780TATA GLOBAL BECERAGES LIMITED 17,540 1 2,770,885 205 1 26,240

TTML 545 10 4,306 545 10 4,305

TCS LTD 7,766 1 14,172,534 - - -

Total (A) 53,968,744 16,679,519

(B) Unquoted Shares (Fully Paid)

Banglore Stock Exchange Ltd 7228 1 1,229,609 7228 1 1,229,609

BSE Limited 23257 1 2,683,500 23257 1 2,683,500

Action Securities Limited 50000 10 500,000 50000 10 500,000

Action Commodities Ltd. 100000 10 8,500,000 100000 10 8,500,000

Suman Resort 10000 10 100,000 10000 10 100,000

Total (B) 13,013,109 13,013,109

Grand Total (A+B) 66,981,853 29,692,628

123


33. In case of Stock in Trade, full provision for diminution in value of stock amounting to Rs. 1,624,690/- (P.Y. Rs. 1,200,805) has been made in the accounts.

34. During the year the Company has entered into futures and option contracts on National stock exchange in equity segment and currency segment. The open position as on 31.03.14 is Rs

(84, 95,282)/- (previous year Rs. 13,730,365/-)

35. Provision for Taxation:

Tax provision for the year has been made on the basis of Minimum Alternate Tax (MAT provision) of the Income Tax Act, 1961.


Sr. No.



(A) Profit /(Loss) After tax 11,30,118 1,100,843(B) Unpaid Dividend of preference Share (Not

Provided) 828,000 828,000

(C) Profit attributable to Equity Shareholders (in Rs.) after tax

302,118 272,843

(D) Nominal Value of Equity Shares (in Rs.) 10 10(E) Weighted Number of Equity Shares

outstanding during the Year 12,504,500 10,835,654

(F) Diluted Number of Equity Shares outstanding during the Year

13,734,500 11,226,558

(G) Basic Earnings Per Share (in Rs.) (C/E) 0.02 0.03(H) Diluted Earnings Per Share (in Rs.) (C/F) 0.02 0.02

37 a. Based on the details regarding the status of the suppliers, to the extent obtained, no supplier is covered under the Micro, Small and Medium Enterprises Development Act, 2006. The auditors have relied upon the management representation in this regard.


38 There are no balances outstanding Investor education and protection fund u/s 205 C of the Companies Act, 1956.

39. Disclosures as required by Accounting Standards 19, “Leases”: are given below: -

a. The Company has taken various office premises under leave and license agreements.

b. Lease payments are recognized in the Profit and Loss Account under “Rent”

c. The future minimum lease payments under Non Cancelable operating lease:

124




Particulars Amount (Rs.) Amount (Rs.)

Not later than one year 2,520,000 2,520,000

Later than one year and not later than five years

1,260,000 3,780,000


40. As per Accounting Standard 18, the disclosures of transaction with the related parties as defined in the Accounting Standard are given below:a. Relationship & name of related party:

Sr.

No.


1. Enterprise controlling the company NA

2. Key Management Personnel 1. Managing Director: Mr.Milan R.Parekh 2.Jt.Managing Director:

Mr.Bakul R.Parekh

3. Exceutive Director

Ms. Esha Kedia ( Resign w.e.f

04.09.2013)

3. Enterprise controlled by the company Subsidiaries:



4. Relative of key management Personnel 1.Aman Kedia 2. Sagar Parekh 3.Nayana Parekh



1. R. B. Parekh – HUF

2. Rajkumar Kedia- HUF

3. Shrim Investment Solutions Pvt Ltd.

4. Esha Securities.



M/s. Milan R Parekh

b. Details of transactions with related parties are as follows:

Sr.

No.


1. Enterprise controlling the Company NA

2. Key Management Personnel Mr Milan R Parkeh

Nature of

Transaction

Current

Year

Previous

Year

Remuneration 24,37,960 2,459,360

Mr. Bakul R Parkeh

Nature of

Transaction

Current

Year

Previous

Year

Remuneration 24,37,960 24,07,960

Ms. Esha Kedia

Nature of

Transaction

Current

Year

Previous

Year

Salary - 330,000

Remuneration 440,000 440,000

125


41. Company‘s primary business activates are Broking and Depository Services, both are covered under one board segment of Share broking activities hence segment reporting is not applicable.

42. Exceptional items consist of profit on sale of fixed assets (furniture + office premise) during the year and does not constitute sale of substantial part of Fixed Assets.


Equity share

Allotted

- 34,20,000

Equity Warrant

Allotted

- 70,30,000

3. Enterprise controlled by the company Nature of

Transaction

Current

Year

Previous

Year

Professional

Expenses

15,04,883 1,200,440

Brokerage

income on

shares

7,685 5,135

Rent received 1,20,000 1,20,000

Balance (103,540) 217,456

4. Relative of key management Personnel Nature of

Transaction

Current

Year

Previous

Year

Equity

Warrant

Allotted

- 46,55,000

Brokerage 29,020 -

Brokerage 5,300 -



None



None

As per our Report attached. For and on behalf of the board

MilanR .P arekh For FORD, RHODES, PARKS & CO. Chartered AccountantsFirm Registration No. 102860W

Chairman & Managing Director

A.D. Shenoy P artner

Membership No.1 1 549

P l a ce:M umbai Date:.30thM ay2 0 1 4

Bakul R. ParekhJt. Managing Director

P l a ce:M umbai Date:.30thM ay2 0 1 4

DIN 00108368

DIN 00108609

126


Action Financial Services (India) Limited(CIN: L65944MH1992PLC068879)

46 & 47, 6th floor, Rajgir chambers, 12/14, Shahid Bhagat Singh Road, opp. old Custom House, FortMumbai-400023

Website: www.actionfin.com; Email:[email protected] Tel:91 22 4365 4444 Fax: 91 22 4365 4446

ATTENDANCE SLIP

PLEASE FILL IN ATTENDANCE SLIP AND HAND IT OVER AT THE ENTRANCE OF THE MEETING HALL.

Joint shareholder may obtain additional slip on request.

I hereby record my presence at TWENTY-FIRST ANNUAL GENERAL MEETING of the Company held at the

Road, opp. old Custom House, Fort Mumbai-400023 25th September, 2014 at 11:00 a.m.

SIGNATURE OF THE ATTENDING MEMBER/PROXY

* Applicable for investors holding shares in electronic form.

---------------------------------------------------------------------------------------------------------------------------------------

FORM No. MGT-11PROXY FORM

[Pursuant to section 105(6) of the Companies Act, 2013 and rule 19(3) of the Companies (Managementand Administration) Rules, 2014]CIN L65944MH1992PLC068879Name of the Company Action Financial Services (India) LimitedRegistered office 46 & 47, 6th floor, Rajgir chambers, 12/14, Shahid Bhagat Singh

Road, opp. old Custom House, Fort Mumbai-400023

Name of the member(s)

Registered Address

Email ID

Folio No./ Client ID

DP ID

I/We, being the member(s) of …......................... shares of the above named company, hereby appoint1. Name :

Address :Email ID :Signature : …............................................,or failing him

D.P. Id*

Client Id*

Folio No.

No. of Share/(s) held

NAME OF THE SHAREHOLDER: NAME OF THE PROXY:

12/14,at 1st floor, Rajgir chambers, Shahid Bhagat Singh2A, 2B & 2C

127


2. Name :Address :Email ID :Signature : ….............................................,or failing him

3. Name :Address :Email ID :Signature : …...............................................

as my/ our proxy to attend and vote (on a poll) for me/ us and on my/ our behalf at TWENTY FIRSTANNUAL GENERAL MEETING of the Company held at 1st floor, Rajgir chambers, 12/14,Shahid Bhagat Singh Road, opp. old Custom House, Fort Mumbai- 400023 on 25 th September, 2014

at 11:00 a.m. and at any adjournment thereof in respect of such resolutions as areindicated below:

Resolution No.

1. To receive, consider and adopt Financial Statements as at 31st March, 2014 together with theDirectors' Report and Auditors' Report thereon.

2. To appoint a Director in place of Mr. Bakul Parekh, (DIN No.: 00108609) who retires by rotation,and being eligible offers himself for re-appointment

3. To appoint Auditors and to fix their remuneration.

4. To appoint Mr. Atul Anoopchand Zatakia, (DIN No.: 00588390) as the Independent Director.5. To appoint Mr. Ketan Himmatlal Mehta, (DIN No.: 02903954) as the Independent Director6. To appoint Mr. Harbhajan Singh J Dhillon, (DIN No.: 05322003) as the Independent Director.7. To authorize Board to borrow in excess of the limit under section 180(1)(c) of the Companies Act,

2013.

Signed this ….......... day of …............... 2014

Signature of shareholder : …...............................................

Signature of Proxy holder(s) : …................................................

Note: This form of proxy in order to be effective should be duly completed and deposited at theRegistered Office of the Company, not less than 48 hours before the commencement of the meeting.

AffixRevenue

Stamp

2A, 2B & 2C

128


Company Master Details

CIN : L65944MH1992PLC068879

Company Name : ACTION FINANCIAL SERVICES (INDIA) LTD

ROC Code : ROC -Mumbai

Registration Number : 068879

Company Category : Company Limited by shares

Company Subcategory : Indian Non-Government

Company

Class of Company : Public

Authorised Capital(in Rs.) : 150,000,000.00

Paid up capital(in Rs.) : 133,325,000.00

Number of Members(Applicable only in case of company without Share Capital) : 0

Date of Incorporation : 01/10/1992

Address 1 : 46 & 47,6th FLOOR,RAJGIR CHAMBERS,12/14,SHAHID

Address 2 : BHAGAT SINGH ROAD,OPP.OLD CUSTOM HOUSE,FORT

City : MUMBAI

State : Maharashtra

Country : India

Pin : 400023

Email Id : [email protected]

Whether listed or not : Listed

Date of Last AGM : 30/09/2013

Date of Balance sheet : 31/03/2014

Company Status (for eFiling) : Active

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