Notes to Accounts of Action Financial Services (India) Ltd.

Mar 31, 2015

1. 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.

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

21. There are no amount payable towards Investor education and protection fund u/s 125 of the Companies Act, 2013.

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.

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Mar 31, 2014

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.

NOTES: 1 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/-

A The Board of Directors of the Company in its meeting held on 29th Seprember 2012 issued 12,30,000 warrants 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 to convert the same into equivalent number of Equity shares of nominal value at Rs 10/ - e a c h a t 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 rece-ived Rs. 9.5/ per warrant as upfront payment and is credited to Money received against share warrants.

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

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

D There are no forefeited shares as at Balance sheet date.

2. 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:

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. Capital Commitments:

The capital commitment with respect to software:- Particulars Amount Software Charges 3,00,000/-

4. 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%.

5. 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.

6. 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.

7. 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.

8. 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.

9. 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.

10. 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/-)

11. 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:

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

12. 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.

13. 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.

14. 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.

15. 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.

16. 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.

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

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Mar 31, 2013

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:

1. Contingent Liabilities not provided in respect of

a. Bank Guarantee amounting to Rs. 22,850,000 /- (previous year Rs. 23,250,000/-) Secured by fixed deposit of Rs. 15,974,655/-.

b. Allotment money payable on partly paid shares and debentures Rs. 1,782,000/-(Previous year Rs. 1,782,000/-).

c. Rs 4, 140,000/- being Arrears of Dividend on Cumulative 10% Redeemable Preference Shares as at 31st March 2013. (Previous Year Rs.3,312,000/-).

d. Disputed Income Tax Dues are tabulated as under:

2. Borrowings

1. Term Loan : Term Loans from ICICI Bank Ltd. aggregates to Rs. 3,095,561/- (Previous Year Rs 5,155,871) and are Secured byway of mortgage of office premises No. 46, 47 and 54, at Rajgir Chambers, Fort, Mumbai and Personal Guarantee of both the Directors and carries interest @ 18.75% p.a. There are no overdue in installment and no outstanding interest at the year end. Term loan outstanding of Rs. 669,052/- is maturing in June 2013 and term Loan outstanding of Rs 2,426,509/- is maturing in May 2032.

2. Vehicle Loan : The Company has availed vehicle loans from TATA capital limited. The said loans are secured against the vehicle purchased against them. There are no overdue in installment and no outstanding interest at the year end. Outstanding amount as on 31.03.2013 is Rs 359,991/-. (Previous Year Rs 750,169/-). Loan carries interest @ 10.70%p.a. The tenure of loan is up to January 2014.

3. Bank Overdraft : Overdraft of Rs. 9,927,919/- (previous year Rs. 16,462,359/-) as at 31.03.2013 from the Scheduled Banks are secured against Personal Guarantee of both Directors and pledge of Equity shares. Facility carries interest ranging from 14 to 14.75%.

3. ICDS : Inter corporate deposit 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.

4. Managerial Remuneration : Whole time directors are paid remuneration aggregating to Rs. 4,610,000/- 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.

5. In compliance with RBI guidelines in relation to Non-Banking Financial Companies, the company has provided Rs. 246,837/-(previous year 134,769/-) being 0.25% of standard asset as ''Contingent provision against standard assets'' and 10% on Non performing assets totaling to Rs. 590,367/- (previous year Rs. 462,744/-).

6. Investments:

(a) The aggregate market value of quoted investments as at 31.03.2013 is Rs. 15,620,028/-(Previous year Rs. 44,879,746/-) as against the total cost of quoted investment of Rs. 16,679,519/- (Previous Year Rs.45,938,847/-)

(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.

7. In case of Stock in Trade, full provision for diminution in value of stock amounting to Rs. 1,200,805/- has been made in the accounts.

8. 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 31.03.13 is Rs 13,730,365 /- (previous year Rs 24,585,522)

9. 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:

10. Provision for Taxation: Tax provision for the year has been made on the basis of MAT provision.

11. 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 information 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 information in this regard.

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

12. Company had contested demand for Rs.17,68,719/- with ITAT for AY 1999-00.The Company has since received order in its favour. Pending order giving effect to ITAT Order Provision of Rs.17,68,719/- is not reversed .Similarly the refund due is to be adjusted against outstanding demand of Rs.1,98,820/- for AY 2006-07.Company has approached Authority for adjustment of outstanding dues against refund arising from above order.

13. 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 Cancelable operating lease:

14. 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.

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

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Mar 31, 2012

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.

Note:-

1. The Company in its meeting of Board of directors held on 30th January 2012 allotted 77,200 Equity shares to its promoters on conversion of 77,200 warrants issued on 13th October 2010, at a price of Rs 29/- per warrant. Accordingly a sum of Rs. 14,66,800/- is credited to Securities Premium Account.

2. 10% Redeemable preference shares are redeemable on or before March 2015.

3. During last year company has issued 1,171, 000 Equity share of Rs 10/- each for cash at a premium of Rs 19/- per share vide board resolution dated 13th October 2010. Accordingly a sum of Rs. 22,249,000/- is credited to Securities Premium Account.

Milan Parekh's shareholding includes 267,600 shares having lock in period till 15.10.13 and Bakul Parekh's shareholding includes 172,400/- shares having lock in period till 15.10.13

A There are no convertible securities issued and outstanding as on Balance sheet date.

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

C There are no unpaid calls as at Balancesheet date.

D There are no forefeited shares on Balancesheet date.

1 Contingent Liabilities not provided in respect of

a. Bank Guarantee amounting to Rs. 23,250,000 /- (previous year Rs. 29,850,000/-) Secured by fixed deposit of Rs. 11,625,000/-.

b. Allotment money payable on partly paid shares and debentures Rs. 1,782,000/- (Previous year Rs. 1,782,000/-).

c. Rs.3,312,000/- being Arrears of Dividend on Cumulative redeemable Preference Shares as at 31st March 2012. (Previous Year Rs.2,484,000/-).

d. Disputed Income Tax Dues are tabulated as under:

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).

2. Borrowings

1. Term Loan: Term Loans from ICICI Bank Ltd. aggregates to Rs. 5,155,871/- (Previous Year Rs 68,87,180/-) and are Secured by way of mortgage of office premises No. 46, 47 and 54, at Rajgir Chambers, Fort, Mumbai and Personal Guarantee of both the Directors and carries interest @ 18.75% p.a. Term loan outstanding of Rs. 2,720,290/- is maturing in June 2013 and Term Loan outstanding of Rs 2,435,581/- is maturing in May 2032.

2. Vehicle Loan: The Company has availed vehicle loans from TATA capital limited. The said loans are secured against the vehicle purchased against them. Outstanding amount as on 31.03.2012 is Rs 750,169/-. (Previous Year Rs 1,099,025/-). Loan carries interest @ 10.70%p.a. The tenure of loan is up to January 2014.

3. Bank Overdraft: Overdraft of Rs.16,462,359/- (previous year Rs. 11,283,379/-) as at 31.03.2012 from the Scheduled Banks are secured against Personal Guarantee of both Directors and pledge of Equity shares. Facility carries interest ranging from 14 to 14.75%.

3. ICDS: Inter corporate deposit 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. Unsecured ICD taken from Golden overseas Pvt. Ltd of RS 50,30,738/- carries interest @12% p.a. There are no stipulations as to repayment of ICD.

4. Managerial Remuneration: Whole time directors are paid remuneration aggregating to Rs.4, 140,000 /- .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.

5. In compliance with RBI guidelines in relation to Non-Banking Financial Companies, the company has provided Rs. 134,769/-(previous year NIL) being 0.25% of standard asset as 'Contingent provision against standard assets' and 10% on Non performing assets totaling to Rs. 462,744/- (previous year Rs. 348,950/-).

6. Investments:

(a)The aggregate market value of quoted investments as at 31.03.2012 is Rs. 44,879,746/-(Previous year Rs. 48,278,089/-) as against the total cost of quoted investment of Rs. 45,938,847/- (Previous Year Rs.46,297,894 /- )

(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 stock of investments are given below: -

7. In case of Stock in Trade, full provision for diminution in value of stock amounting to Rs. 907,857/- has been made in the accounts.

8. 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 31.03.12 is Rs 245,85,521.85/- (previous year Rs 628,67,237.50/-)

9. 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

10. Provision for Taxation:

Tax provision for the year has been made on the basis of MAT provision.

11. 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 information 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 information in this regard.

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

12. Disclosures as required by Accounting Standards 19, "Leases":The company has no lease commitment as at year end.

13. 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.

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Mar 31, 2011

1. Contingent Liabilities in Respect of

a. Bank Guarantee amounting to Rs.29,850,000/- (previous year Rs.29,850,000/-).

b. Allotment money payable on partly paid shares and debentures Rs.1,782,000/- (Previous year Rs.1,782,000/-)

c. Unpaid Dividend on Preference Shares Rs.2,484,000/- for the year ending 31st March 2011 not provided. (Previous Year Rs.1,656,000/-)

2. Share Holders Fund

1. Share Capital:

1. Out of unissued portion of Authorised Preference Share Capital of the company 100,000 preference of Rs.100/- each aggregating to Rs.10,000,000/- has been reclassified in to and as 1,000,000 Equity Shares of Rs.10/- each aggregating to Rs.10,000,000/- vide resolution passed in AGM held on 30th September 2010.

2. Further to this Authorised share capital of the company has been increased from Rs.120,000,000/- divided in to 11,000,000 equity shares of Rs.10/- each and 100,000 redeemable preference shares of Rs.100/- each to Rs.130,000,000/- divided into 12,000,000 equity shares of Rs.10/- each and 100,000 redeemable preference shares of Rs.100/- each vide resolution passed in AGM held on 30th September 2010.

3. During the year company has issued 1,171, 000 Equity share of Rs.10/- each for cash at a premium of Rs.19/- per share vide board resolution dated 13th October 2010. Accordingly a sum of Rs.22,249,000/- is credited to Securities Premium Account.

2. Preference Share Capital:

10% Redeemable preference share capital is redeemable on or before March 2015.

3. Warrants:

1. The Company had issued 125,000 warrants in November 2009. As on 1st April 2010, 125,000 warrants were outstanding. The Company has received subscription of Rs.625,000/- against these warrants. The Company received request for cancellation of the said warrants. Accordingly the said warrants were forfeited vide resolution of Board of Directors dated 28th October 2010 and amount of Rs.625,000/- is transferred to capital Reserve Account on account of forfeiture of warrants.

2. The board of directors of the company in its meeting held on 13th October 2010, issued 77,200 convertibles warrants on preferential basis to one of the promoter at Rs.29/- per warrant with an option to convert the same into equivalent number of equity shares of nominal value of Rs.10/- each at a premium of Rs.19/- per share. The option of conversion shall be valid for a period of 18 months from the date of allotment of the warrants. The company has received full subscription of Rs.29/- per warrant. Pending receipt of option from warrant holder amount is shown under as Subscription Money towards warrants.

3. Secured Loans

1. Term Loan: Term Loan of ICICI Bank Ltd. of Rs.6,887,180/- (Previous Year 8,431,436) is Secured by mortgage of office premises at No. 46, 47 and 54, Rajgir Chambers, Fort, Mumbai and Personal Security and Personal Guarantee by Two Directors. Amount of term loan repayable within a period of one year is Rs.5,134,373/-.

2. Bank Overdraft: Overdraft of Rs.11,283,379/- (previous year Rs.10,613,060/-) as at 31.03.2011 from the Schedule Bank is secured against Personal Guarantee of Two Directors and Pledge of Company as well as third party Shares.

3. Vehicle Loan: The Company has availed vehicle loan from TATA capital limited. Said loan is secured against the vehicle purchased outstanding amount, as on 31.03.2011 is Rs.1,099,025/- Amount of vehicle loan repayable within a period of one year is Rs.7,47,738/-.

4. Unsecured Loans

Unsecured Loan of Rs.3075,580/- (Previous Year Rs.11,75,256/-) represents Book overdraft in current account of banks and Inter Corporate Deposit of Rs.16,800,000/- (Previous year Rs.15,750,620/-) as on 31st March 2011.

5. Income Tax

Note:-

1. The company had contested Income Tax demand of Rs.13,455,810/- for Assessment Year 2001-02. CIT (A) has heard the company's appeal and decided in favour of the company. The Income Tax Department has appealed in the tribunal against the said order.

2. The Company had contested Income Tax demand of Rs.10,130,835/- for Assessment Year 2008-09. The Company has paid Rs.36,00,000/- and balance amount is in abeyance till disposal of the case . The company has preferred an appeal in the CIT (A) against the said order.

7. Managerial Remuneration:

Provision for gratuity and leave salary is made on Actuarial Valuation for the entire company; hence individual figures are not ascertainable.

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.

8. Provision for Taxation :

(a) Tax provision for the year has been made on the basis of MAT provision.

9. (A) As per RBI guidelines in relation to Non-Banking Financial Companies the company has provided Rs.348,950/-, 10% as provision for Non - Performing Assets on debts for more than six months (previous year Rs.268,556/-) and Rs.80,394/- being additional provision is charged to Profit and Loss account.

(B) Investments:

(a) The aggregate market value of quoted investments as at 31.03.2011 is Rs.48,278,089/- (Previous year Rs.49,955,217/-) as against the total cost of quoted investment of Rs.46,297,894/- (Previous year Rs.48,175,244/-). 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.

(b) In case of Stock in Trade, full provision for diminution in value of stock has been made in the accounts.

(c) During the Year the Company invested Rs.80, 00,000/- in M/s Action Commodities Limited, wholly owned subsidiary in 50,000 Equity Shares of Rs.10/- at a premium of Rs.150/- per share.

12. There are no balances outstanding due to 1) Small scale industrial undertaking (SSI) 2) Small and Medium Micro Enterprises 3) Investor education and protection fund u/s 205 C of the Companies Act, 1956.

13. Disclosures as required by Accounting Standards 19, "Leases" are given below:

(i) The Company has taken various office premises under leave and license agreements. The lease period extends between 11 months and 3 years under leave and license.

(ii) Lease payments are recognized in the Profit and Loss Account under "Rent"

14. 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. Relation Related Party 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. Enterprise controlled by the company Subsidiaries:

1. Action Securities Limited

2. Action Commodities Limited

4. Relative of key management Personnel NA

5. Enterprise under control of relative of Key Management Personnel R. B. Parekh – HUF

6. Enterprise under common control of Key Management Personnel M/s. Milan R Parekh

15. 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.

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

---

Mar 31, 2010

1. Contingent Liabilities in respect of



a. Bank Guarantee amounting to Rs. 29,850,000 /- (previous year Rs. 20,200,000/-).

b. Allotment money payable on partly paid shares and debentures Rs. 1,782,000/- (Previous year Rs. 1,782,000/-)

c. Unpaid Dividend on Preference Shares Rs.1,656,000/-for the year ending 31" March 2010 not provided. (Previous Year Rs.828,000/-)

d. Claims against company not recognized as debts: Rs. 540,000/-

2. Share holders Fund A. Share capital

1. Equity Share Capital and Warrants:

a) The Company in its meeting of Board of directors held on 11th April 2009 allotted 360,000 Equity shares to its promoters, arising after conversion of 360,000 warrants out of total warrants which were issued on 12* October 2007, at a price of Rs 19.25 per warrant. Accordingly as sum of Rs. 3,330,000/- is credited to Securities Premium Account.

b) During the year balance 1,190,000 warrants, which were issued to promoters and investors on 12th October 2007 for which request for conversion was not received till the expiry date, were forfeited and the amount of Rs. 5,650,000/- is transferred to Capital Reserve Account on account of forfeiture of warrants.

2. Preference Share Capital:

The Preference Share Holders meeting was held on 13" March 2009, wherein the Board of Directors have been authorized to redeem the said shares, decide, modify/ alter the terms of the issue of said shares including early redemption of said shares, or extension of period of redemption and in no case the period of redemption of the said shares be extended beyond 31" March 2015, the said resolution was ratified in the AGM held on 30" September 2009. Accordingly the Board of Directors have extended the date of redemption to not beyond 31" March 2015, keeping all other terms and conditions unchanged.

B. Warrants:

The Board of Directors of the company in its meeting held on 9h November 2009 issued 125,000 warrants on preferential basis to investors at the rate of Rs. 19.25 per warrant with an option to convert the same into equivalent number of Equity shares of nominal at Rs. 10/- each at a premium of Rs. 9.25 per share. The option of conversion shall be valid for a period of 18 months from the date of allotment of the warrants. The company received Rs. 5/- per warrant as upfront payment and is credited to Subscription Money towards warrants.

3. Secured Loans

(i) Term Loan: Term Loan of ICICI Bank Ltd. of Rs. 8,431,436/- (Previous Year 9,654,955) is Secured by mortgage of office premises at No. 46,47 and 54, Rajgir Chambers, Fort, Mumbaiand Personal Security and Personal Guarantee by Two Directors.

(ii) Bank Overdraft: Overdraft of Rs. 10,613,060/-(previous year Rs. 1,775,869/-) as at 31.03.2010 from the Schedule Bank is secured against Personal Guarantee of Two Directors and Pledge of Company as well as third party Shares.

4. Unsecured Loans

Unsecured Loan of Rs. 1,176,256 (Previous Year Rs. 7,347,205) represents Book overdraft in current of banks and Inter Corporate Deposit of Rs. 15,750,620 (Previous year Rs. 11,000,000) as on 31" March 2010.

5. Income Tax:

The company had contested Income Tax demand of Rs. 13,455,810/- for Assessment Year 2001-02. CIT(A) has heard the companys appeal and decided in favour of the company. The Income Tax Department has appealed in the tribunal against the said order.

6. (A) As per RBI guidelines in relation to Non-Banking Financial Companies the company has provided Rs. 268,556/-, 10% as provision for Non - Performing Assets on debts for more than six months (previous year Rs 208,811-) and Rs. 59,745/- being additional provision is charged to Profit and Loss account.

(B) Investments:

(a) The aggregate market value of quoted investments as at 31.03.2010 is Rs. 49,955,217/- (Previous year Rs. 27,252,867/-) as against the total cost of quoted investment of Rs.48,175,244 /- (Previous year Rs. 52,799,660/-)

No provision for diminution in the value of quoted investment is considered necessary as in the managements view the short fall is temporary in nature.

(b) In case of Stock in Trade, full provision for diminution in value of stock has been made in the accounts.

(c) During the Year the Company invested Rs. 500,000 in M/s Action Commodities Limited in 50,000 Equity Shares of Rs. 10/- being wholly owned subsidiary.

7. There are no balances outstanding due to 1) Small scale industrial undertaking (SSI) 2) Small and Medium Micro Enterprises 3) Investor education and protection fund u/s 205 C of the Companies Act, 1956.

8. Disclosures as required by Accounting Standards 19, "Leases" are given below:

(i) The Company has taken various office premises under leave and

license agreements.

The lease period extends between 11 months and 3 years under

leave and license.

(ii) Lease payments are recognized in the Profit and Loss Account under "Rent"

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

a. Relationship & name of related party:



Sr. Relation Related Party

No.

1. Enterprise controlling the company NA

1. Managing Director:

2. Key Management Personnel Mr Mi|an RParekn

2.Jt.Managing Director: Mr.Bakul R.Parekh

3. Enterprise controlled by the company Subsidiaries:

1. Action Securities Limited 2. Action Commodities Limited

4. Relative of key management Personnel NA

5. Enterprise under control of relative of R. B. Parekh - HUF Key Management Personnel

6. Enterprise under common control of M/s. Milan R Parekh Key Management Personnel



10. Companys 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.

11. Previous years figures have been regrouped, reclassified and /or renamed to confirm to this years classification