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.

NOTE:

The Preference share carry right to receive 10% dividend on cumulative basis. The Redemption of preference shares has been extended up to on or before March 2018 as there was lack of profit for the redemption. A confirmation letter for the said extension has been received from all the preference share holders. The Company has not declared or paid dividend on preference capital.

2. Last 5 years details of Shares issued / bought back

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

3. There are no shares reserved for issue under options and contracts /commitments for sale of Shares/disinvestment.

4. There are no unpaid calls as at Balance sheet date.

5. There are no forfeited shares as at Balance sheet date.

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).

3. During the year company received notice u/s 131 of the Income Tax Act -1961.The survey was carried out at the premises of the company on 13th June, 2014 and the company officials attended to the notice. No further notice has yet been received from the Income tax Department with regards to this matter.

6. SEBI has imposed penalty on the company of Rs. 21 lacs under Section 15HA and HB of SEBI Act 1992 vide their order dated 16th May 2014.The Company has filed Appeal with Securities Appellate Tribunal vide Appeal No. 325 of 2014 on 1st September 14.The company is expecting favorable outcome in this respect and hence no provision is made against SEBI order.

7. Except as described above, there are no pending disputes as on 31st March, 2015 which the company believes would have material adverse effect on the results of operations, cash flow or the financial position of the company.

8. Capital Commitments : Nil

9. Share Warrants :

As per the provisions of the Companies Act 2013, the Company had issued 1,230,000 warrants convertible, within a period of eighteen months from the date of issue, into equal number of equity shares on preferential basis at a price of Rs.38 per warrant to promoter and promoter group on December 4, 2012. During the year the company has not received further subscription and on lapse of eighteen months period i.e. June 3, 2014, the amount of Rs. 11,685,000/- received as subscription is forfeited and is credited to Capital Reserve Account.

Capital Reserve Account consist of amounts on account of forfeiture of warrants Rs. 17,960,000/-.

10. Borrowings Bank Overdraft:

The company has overdraft facility from scheduled bank of Rs.1.27 Crores (P.Y. Rs. 2.10 Crores) against which outstanding balance as at 31st March, 2015 was Rs.1.27 Crores (P.Y. Rs. 2 Crores). The overdraft facility is secured against Personal Guarantee of both Directors and equitable mortgage of the property own by the company. Facility carries interest ranging from 14 to 14.75%.

11. ICD:

Inter corporate deposit of Rs.9,200,388/- (P.Y. Rs.5,000,388/-) as at 31.03.2015 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.

12. Managerial Remuneration:

Whole time directors are paid remuneration of Rs. 175,000/- per month and other perquisites and benefits. The computation of net profit under section 197/198 of the Companies Act, 2013 has not been given since no commission is paid / payable to any director in the current year.

13. Trade Receivables:

In compliance with RBI guidelines in relation to Non-Banking Financial Companies, the company has provided Rs. nil (P.Y. 157,082/-) as opening provision was more than 0.25% of standard asset as 'Contingent provision against standard assets'. The provision for Non performing assets is maintained at Rs. 857,945/- (P.Y. Rs. 570,554/-) being 10% of receivables outstanding for more than 6 months from due date. The company has written off Rs. 287,391/- being excess provision for Non performing assets included under Other Expenses.

14. Bad debts written off:

During the year the company has written off Rs. 1,77,698/- being bad debts net off write back.

15. Investments:

(a) The aggregate market value of quoted investments as at 31.03.2015 is Rs.49,004,103/-(P.Y. Rs.55,712,172/-) as against the total cost of quoted investment of Rs.48,687,708/-(P.Y. Rs. 53,968,744 /-).

(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.

16. 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 Encashment as under:

17. 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.

18. 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.

19. 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 statement of Profit and Loss under "Rent"

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

20. 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:

SN.                 Relation

1.            Enterprise controlling the company NA

2.            Key Management Personnel

3.            Enterpri se controlled by the company

4.            Relative of key management Personnel

5.           Enterprise under control of relative of Key
             Management Personnel

6.           Enterprise under common control of Key
             Management Personnel

SN.              Related Party

1.               NA

2.               1.Mr. Milan R. Parekh
                   Chairman & Managing Director

                 2. Mr. Bakul R. Parekh Joint Managing Director &
                    CFO w.e.f. 12/02/2015

                 3.  Jayantilal Suthar
                     CS w.e.f. 01/10/2014

3.               Subsidiaries:

                 1.  Action Securities Limited

                 2.  Action Co mmodities Limited

4.               1. Sagar Parekh

                 2. Nayana Parekh

5.               R. B. Parekh - HUF

6.               M/s. Milan R Parekh

22. Long term contracts and derivatives contracts:

The Company does not have long term contract including in the nature of derivative contracts except lease agreement for premises. There are no foreseeable losses on such contracts.

23. Public Deposits:

The Company has not accepted any deposits from public within the meaning of sections 73 to 76 of the Companies Act, 2013 and Rules framed there under.

24. Impact of Schedule II:

In accordance with requirements prescribed under Schedule II of the Companies Act 2013, the company has assessed the estimated useful life of its assets and has adopted the useful life as prescribed in the Schedule II in respect of all assets.

The impact of the change in estimated useful life of the fixed assets are as given below-

i. The depreciation charged to retained earnings includes the carrying amount of those assets whose remaining useful life has become nil at the beginning of the financial year amounting to Rs. 713,433/-and depreciation credited to retained earnings towards excess depreciation charged in earlier year of Rs. 385,493/- The net effect of above two is Rs. 327,940/-.

ii. The depreciation charged to Statement of Profit and Loss is higher by Rs. 618,947/- on account of changes in estimated useful life.

25. Company's primary business activities are Broking and Depository Services, both are covered under one broad segment of Share broking activities hence segment reporting is not applicable.

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

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