| Dear Members,
The Directors have pleasure in presenting the 22nd Annual Report
together with the Audited Financial Statement for the year ended on
31st March, 2015.
FINANCIAL RESULTS
Consolidated
Year ended Year ended
31.3.2015 31.3.2014
Revenue from operations & other 36,886,665 43,583,390
Income
Profit (Loss) before Interest & 6,396,475 4,071,268
Depreciation
Less: Interest 4991441 59,98,567
Less: Depreciation 4,403,953 3,833,230
Profit (Loss) After Depreciation & (2,998,919) (5,760,529)
before Tax
Exceptional Item 5,696,734 63,94,442
Profit before Tax 2,697,815 633,913
- Taxation Current Year 100,000 390,600
- Deferred Tax 567,234 (886,805)
Profit /(Loss) after tax 2,030,581 1,130,118
Standalone
Year ended Year ended
31.3.2015 31.3.2014
Revenue from operations & other 36,954,021 4,37,03,207
Income
Profit (Loss) before Interest & 6,662,439 37,32,540
Depreciation
Less: Interest 4,991,441 59,98,567
Less: Depreciation 4,401,980 38,16,506
Profit (Loss) After Depreciation & (2,730,982) (60,82,533)
before Tax
Exceptional Item 5,696,734 63,94,442
Profit before Tax 2,965,752 3,11,909
- Taxation Current Year 100,000 3,20,000
- Deferred Tax 653,188 (6,06,493)
Profit /(Loss) after tax 2,212,564 5,98,402
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.
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 for 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 dematerialize 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.
DIVIDEND
The Company does not recommend any dividend on Cumulative Redeemable
Preference Shares and Equity Shares for the year ended 31st March,
2015.
TRANSFER TO RESERVE
The Company did not transfer any amount to reserve this year.
SHARE CAPITAL
The paid up Share Capital of the company as on 31st March, 2015 was Rs.
133,325,000. During the year under review, the Company has not issued
shares with differential voting rights nor granted stock options nor
sweat equity.
REPORT ON PERFORMANCE OF SUBSIDIARIES, ASSOCIATES COMPANIES AND JOINT
VENTURES:
As on March 31st, 2015, the Company had two Indian wholly owned non
material subsidiaries. There has been no change in the number of
subsidiaries or in the nature of business of the subsidiaries, during
the year under review. In accordance with Section 129(3) of the
Companies Act, 2013, the Company has prepared a consolidated financial
statement of the Company and all its subsidiary companies, which is
forming part of the Annual Report. A statement containing salient
features of the financial statements of the subsidiary companies is
also included in the Annual Report.
There is no new incorporation or Cessation of any Company as a
subsidiary, associate company or joint venture during the year.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND
Since there was no unpaid/unclaimed Dividend declared and paid last
year, the provisions of Section 125 of the Companies Act, 2013 do not
apply.
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, 2013, 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, 2015.
The statement containing the salient feature of the financial statement
of a company's subsidiaries under the first proviso to sub-section (3)
of section 129 set out as "Annexure A" in Form AOC-1.
FINANCIAL PERFORMANCE
This year witnessed huge volatility and further due to political
instability led the client base grows 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.
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 Equity to a large institutional and retail clientele in
India and also offer retail broking services in currency segment.
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. Action offers mobile trading facility to the clients.
Company has completed 18 years as a Depository Participant. Company is
holding approximately Rs. 2,045.99 Crores worth stock on behalf of
clients as on 31st March, 2015. 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 40
Promoters Accounts.
Mobile Application Facility
We are pleased to inform you that our Share Transfer Agent (STA) Link
Intime India Pvt (LIIPL) Ltd has launched a new mobile application
namely "blinkInsta". This mobile application is exclusively designed
for all such investors who have invested in the securities where LIIPL
is the Share Transfer Agent.
To have this facility on your mobile phone; you need to download
"blinkInsta" via "Play-store "for all android base phones and via "
App-Store" on all I-phones which are free of cost to the investors.
Once you download the application on your mobile phone the same will
prompt you toward the simple registration process for KYC. This is very
useful application which will enable you with lot of relevant
information such as dividend/interest payments, forthcoming AGMs etc.
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.
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.
DEPOSITS
Your Company has not accepted any deposits in terms of the provisions
of Section 73 of the Companies Act, 2013 and The Companies (Acceptance
of Deposits) Rules, 2014 as amended, during the year under review.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the current financial year the following changes have occurred
in the constitution of directors of the company:
S. Name Designation Date of
No appointment
1. Mr. Atul A. Zatakia Director 29.01.2010
2. Mrs. Archana Andhare Company Secretary 01.01.2014
3. Mr. Jayantilal Suthar Company Secretary 01.10.2014
4. Mr. Keyur Doshi Chief Financial Officer 08.08.2014
5. Mr Bakul R. Parekh Chief Financial Officer 12.02.2015
6. Mrs. Parul Doshi Additional Director 20.03.2015
S. Name Date of Mode of
No cessation Cessation
1. Mr. Atul A. Zatakia 12.11.2014 Resignation
2. Mrs. Archana Andhare 30.09.2014 Resignation
3. Mr. Jayantilal Suthar -
4. Mr. Keyur Doshi 30.01.2015 Resignation
5. Mr Bakul R. Parekh -
6. Mrs. Parul Doshi -
Further, In accordance with the requirements of the Companies Act 2013,
Mr. Milan R. Parekh (DIN: 00108368) will retire by rotation being
eligible, has offered himself for re-appointment.
BOARD INDEPENDENCE
In terms of Section 149 of the Companies Act, 2013 and Clause 49 of the
Listing Agreement with Stock Exchanges and based on the confirmation /
disclosures received from the Directors and on evaluation of the
relationships disclosed, the following Non-Executive Directors are
Independent in terms of Clause 49 of the Listing Agreement and Section
149(6) of the Companies Act, 2013:-
a) Mr. Ketan Mehta
b) Mr. Harbhjan Singh Dhillon
c) Mrs. Parul Doshi
ANNUAL EVALUATION BY THE BOARD
The evaluation framework for assessing the performance of Directors
comprises of the following key areas:
i. Attendance of Board Meetings and Board Committee Meetings
ii. Quality of contribution to Board deliberations
iii. Strategic perspectives or inputs regarding future growth of
Company and its performance
iv. Providing perspectives and feedback going beyond information
provided by the management
v. Commitment to shareholder and other stakeholder interests The
evaluation involves Self-Evaluation by the Board Member and subsequently
assessment by the Board of Directors. A member of the Board will not
participate in the discussion of his / her.
DIRECTOR RESPONSIBILITY STATEMENT
The Directors Responsibility Statement referred to in clause (c) of sub
section (3)of section 134 of Companies Act, 2013 shall State that;
(a) in the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper explanation
relating to material departures;
(b) the directors 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 end of the financial year and of the profit and
loss of the company for that period;
(c) the directors 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 preventing and detecting fraud and other irregularities;
(d) the directors had prepared the annual accounts on a going concern
basis; and
(e) The directors, in the case of a listed company, had laid down
internal financial controls to be followed by the company and that such
internal financial controls are adequate and were operating
effectively.
(f) The directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
NUMBER OF MEETING OF THE BOARD
The Board meets at regular intervals to discuss and decide on Company /
business policy and strategy apart from other Board business. The
notice of Board meeting is given well in advance to all the Directors.
Usually, meetings of the Board are held in Mumbai. The Agenda of the
Board / Committee
meetings is circulated at least a week prior to the date of the
meeting. The Agenda for the Board and Committee meetings includes
detailed notes on the items to be discussed at the meeting to enable
the Directors to take an informed decision.
The Board met nine times in financial year 2014-2015 and the maximum
interval between any two meetings did not exceed 120 days as follows;
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
12.05.2014 08.08.2014 12.11.2014 12.02.2015
30.05.2014 05.09.2014 20.03.2015
12.06.2014 30.09.2014
Further, in terms of Schedule IV of the Companies Act, 2013, the
Separate meeting of the Independent Directors held on March 20, 2015
and all Independent Directors were presented without attendance of non-
Independent Directors of the Company .
COMMITTEES OF THE BOARD
During the year, in accordance with the Companies Act, 2013, the Board
reconstituted some of its Committees and also formed a Risk Management
Committee. There are currently Four Committees of the Board, as
follows:
* Audit Committee
* Nomination and Remuneration Committee
* Stakeholders' Relationship Committee
* Risk Management Committee
Details of all the Committees along with their charters, composition
and meetings held during the year, are provided in the "Report on
Corporate Governance", a part of this Annual Report.
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 177 of the Companies Act, 2013.
CORPORATE GOVERNANCE:
The Company is committed to maintaining the highest standards of
Corporate Governance and adhering to the Corporate Governance
requirements as set out by Securities and Exchange Board of India. The
Report on Corporate Governance as stipulated under Clause 49 of the
Listing Agreement forms part of the Annual Report. The Certificate from
the Auditors of the Company confirming compliance with the conditions
of Corporate Governance as stipulated under Clause 49 is also published
elsewhere in this Annual Report.
Certificate from Mr. Milan Parekh, Managing Director & CEO and Mr.
Bakul Parekh, Jt. Managing Director & Chief Financial Officer, pursuant
to provisions of Clause 49(IX) of the Listing Agreement, for the year
under review was placed before the Board of Directors of the Company at
its meeting held on 29th May, 2015.
A copy of the certificate on the financial statements for the financial
year ended March 31, 2015 is annexed along with this Report.
MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT
The Management's Discussion and Analysis Report for the year under
review, as stipulated under Clause 49 of the Listing Agreement with the
Stock Exchanges in India, is annexed to this report.
AUDITORS
M/s Ford, Rhodes, Parks & Co. (Firm Registration No.102860W), Chartered
Accountants, Mumbai, were appointed as Statutory Auditors for a period
of 3 years in the Annual General Meeting held on 25th September, 2014.
Their continuance of appointment and payment of remuneration are to be
confirmed and approved in the ensuing Annual General Meeting.
The Company has received letter from them to the effect that their
appointment, if made, would be within the prescribed limits under
Section 141(3)(g) of the Companies Act, 2013 and that they are not
disqualified from appointment.
There are no qualifications or adverse remarks in the Auditors' Report
which require any clarification/ explanation. The Notes on financial
statements are self-explanatory, and needs no further explanation.
Further the Auditors' Report for the financial year ended, 31st March,
2015 is annexed herewith for your kind perusal and information.
DECLARATION BY INDEPENDENT DIRECTOR:
The declaration as required to affirm u/s 149(6) of the Companies Act,
2013, obtain from all Independent Directors.
INSURANCE
All the properties of your Company including Office Premises Furniture
& Fixtures Office Equipments and Computer are adequately insured.
SECRETARIAL AUDIT REPORT
The Board of Directors of the Company has appointed CS. Nisha R.
Nawani, Practicing Company Secretary; to conduct the Secretarial Audit
and her Report on Company's Secretarial Audit is appended to this
Report as
In accordance with the provisions of Section 197(12) of the Companies
Act, 2013 and Rule 5 of Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, the ratio of remuneration of each
director to the median employee's remuneration set out in "Annexure C"
to the Directors' Report.
PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION,
AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars regarding foreign exchange earnings and outgo appear as
separate items in the notes to the Accounts. Since the Company does not
own any manufacturing facility, the other particulars relating to
conservation of energy and technology absorption stipulated in the
Companies (Accounts) Rules, 2014 are not applicable.
EXTRACT OF ANNUAL RETURN
The extract of Annual Return as required under Section 92(3) is
attached in form MGT-9. Annexure D.
PARTICULAR OF LOAN, GUARANTEES & INVESTMENT
The company has not given any loan, guarantees and not made any
Investment covered under the provisions of section 186 of the Companies
Act, 2013.
DISCLOSURE OF RELATED PARTY TRANSACTION
All related party transactions that were entered into during the
financial year were on arm's length basis and were in the ordinary
course of the business. There are no materially significant related
party transactions made by the company with Promoters, Key Managerial
Personnel or other designated persons which may have potential conflict
with interest of the company at large.
RISK MANAGEMENT POLICY:
The Company has in place a mechanism to identify, assess, monitor and
mitigate various risks to key business objectives. Major risks
identified by the businesses and functions are systematically addressed
through mitigating actions on a continuing basis. These are discussed
at the meetings of the Audit Committee and the Board of Directors of
the Company.
INTERNAL CONTROL SYSTEM
The Company's internal control systems are commensurate with the nature
of its business and the size and complexity of its operations. These
are routinely tested and certified by Statutory as well as Internal
Auditors.
Significant audit observations and follow up actions thereon are
reported to the Audit Committee.
CODE OF CONDUCT:
The Board of Directors has approved a Code of Conduct which is
applicable to the Members of the Board and all employees in the course
of day to day business operations of the company. The Code has been
placed on the Company's website www.actionfin.com
The Code lays down the standard procedure of business conduct which is
expected to be followed by the Directors and the designated employees
in their business dealings and in particular on matters relating to
integrity in the work place, in business practices and in dealing with
stakeholders.
All the Board Members and the Senior Management personnel have
confirmed compliance with the Code.
PREVENTION OF INSIDER TRADING
The Company has adopted a Code of Conduct for Prevention of Insider
Trading with a view to regulate trading in securities by the Directors
and designated employees of the Company. The Code requires
pre-clearance for dealing in the Company's shares and prohibits the
purchase or sale of Company shares by the Directors and the designated
employees while in possession of unpublished price sensitive
information in relation to the Company and during the period when the
Trading Window is closed. The Board is responsible for implementation
of the Code.
All Board of Directors and the designated employees have confirmed
compliance with the Code.
VIGIL MECHANISM
The Company has established a vigil mechanism for Directors and
employees to report their genuine concerns, details of which have been
given in the Corporate Governance Report annexed to this Report.
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.
For and on Behalf of the Board
Place:Mumbai
Date: 29th May, 2015
Milan R. Parekh
Chairman & Managing Director
(DIN:00108368)
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