DIRECTORS' REPORT To the Members of A. K. Capital Services Limited, The Directors of your Company take pleasure in presenting the 22nd Annual Report on the business and operations of your Company along with the audited statement of accounts for the financial year 2014-15: FINANCIAL PERFORMANCE AND STATE OF AFFAIRS OFTHE COMPANY The consolidated turnover of your Company stood at Rs. 254.67 Crore for the financial year ended March 31,2015 as against Rs. 244.98 Crore for the previous year. The consolidated profit before tax is Rs. 59.10 Crore for the current year as against Rs. 53.08 Crore in the previous year. After making provision for tax, the consolidated net profit of your Company is Rs. 41.46 Crore as against Rs. 35.39 Crore in the previous year. On standalone basis, your Company earned gross income of Rs. 97.66 Crore during the year under review as against Rs. 97.55 Crore reported in the previous year.The profit before tax is Rs. 27.69 Crore as against the Rs. 30.82 Crore during the previous year. After making provision for tax, the net profit of your Company is Rs.18.30 Crore as against the net profit of Rs. 20.29 Crore in the previous year. DIVIDEND ON EQUITY SHARES The Board of Directors are pleased to recommend a final dividend of 60% i.e. Rs. 6/- per equity share (on the face value of Rs. 10/- per equity share) on 6,600,000 equity shares for the financial year 2014-15.The amount of dividend on equity shares and tax thereon aggregates to Rs. 4.75 Crore. The payment of the final dividend is subject to the approval of the members which is being sought at the forthcoming Annual General Meeting and shall be paid to those members whose names appear in the Register of Members as on Tuesday, September 15,2015.The Register of Members and Share Transfer Books will remain closed from Wednesday, September 16, 2015 to Saturday, September 19, 2015, both days inclusive. The Annual General Meeting of the Company is scheduled to be held on Saturday, September 19,2015. TRANSFERTO RESERVES The Company proposes to transfer Rs. 1.90 Crore to the General Reserve. SUBSIDIARIES As on March 31,2015, your Company had 5 subsidiaries viz. A. K. Stockmart Private Limited, A. K. Capital Corporation Private Limited, A. K. Wealth Management Private Limited, A. K. Capital (Singapore) Pte. Ltd. and A. K. Capital Finance Private Limited. On consolidated basis, your Company posted consolidated revenue of Rs. 254.67 Crore and a consolidated profit after tax (after minority interest) of Rs. 41.14 Crore. The Consolidated Financial Statements has been prepared in accordance with the Accounting Standard 21 - Consolidated Financial Statements prescribed by the Companies (Accounting Standards) Rules, 2006 and forms part of this Annual Report. In terms of Section 129(3) of the Companies Act, 2013 read with Rule 5 of Companies (Accounts) Rules, 2014 Statement containing salient features of financial statements of subsidiaries in form AOC -1 as prescribed in the Companies (Accounts) Rules, 2014 forms a part and annexed to the Annual Report under note no. 32 (b). The financial statement of the subsidiary companies have been placed on the website of the Company www.akcapindia.com. Any member interested in obtaining a copy of financial statement of the subsidiaries may write to the Company Secretary, at the Registered Office of the Company. MATERIAL SUBSIDIARIES As per Clause 49(V) of the Listing Agreement, the Company has two material non listed subsidiaries. The Policy for determining the material subsidiaries has been formulated and adopted by the Board. The Policy may be accessed on the Company's website at link: http://www.akcapindia.com/WebSiteDocuments/Policy%20for%20Determining%20Material%20Subsidiary.pdf DIRECTORS AND KEY MANAGERIAL PERSONNEL As on March 31, 2015, the Board of Directors of your Company comprised of six Directors of which two are Executive Directors, one Woman Director who is a Non-Executive Non-independent Director and three are Non-Executive Independent Directors. The Chairman of the Company is Non-Executive Independent Director and 50% of the total numbers of Director are Independent Directors. The composition of the Board is in consonance with Clause 49 of the Listing Agreement, as amended from time to time, and in accordance with the applicable provisions of the Companies Act, 2013. In accordance with the Articles of Association of the Company and the provisions of the Section 152(6)(e) of the Companies Act, 2013, Mrs. Anshu (DIN: 01227279), Non-Executive Non-independent Director will retire by rotation at the ensuing Annual General Meeting and being eligible, offer herself for re-appointment. In accordance with the provisions of Section 196, 197, 198 and Schedule V of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company is seeking appointment of Mr. A. K. Mittal (DIN: 00698377) as Managing Director and Mr. Deepak Mittal (DIN: 00043685) as Whole-time Director for the period of five years. The said Directors fulfill the conditions specified in abovementioned provisions of the Companies Act, 2013 and the rules made thereunder for their appointment. The following persons are the Key Managerial Personnel (KMP's) of the Company as per the provisions of the Companies Act, 2013. Mr. A. K. Mittal - Managing Director Mr. Deepak Mittal - Whole-time Director Mr. Mahesh Bhootra - Chief Financial Officer Ms. Kanchan Singh - Company Secretary In terms of provisions of section 203 of Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Mr.Vikas S Agarwal, Chief Financial Officer (CFO) of the Company resigned with effect from May 24,2015 and Mr. Mahesh Bhootra (CA Membership No: 120867) has been appointed as Chief Financial Officer (CFO) of the Company with effect from May 24,2015. Mr.Vikas S Agarwal has been with the Company for the past 11 years and has contributed in multiple areas. The Company thanks him for his dedication and valuable contribution. DECLARATION BY INDEPENDENT DIRECTORS The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of Independence prescribed both under the Companies Act, 2013 and Clause 49 of the Listing Agreement. EVALUATION OFTHE PERFORMANCE OFTHE BOARD The Board has framed an Evaluation Policy (the Policy) for evaluating the performance of the Board, Chairman, Managing Director, Whole-time Director, Independent Directors, Non-Executive Director and its Committees. Based on the same, the performance was evaluated forthe financial year ended March 31,2015. A meeting of the Independent Directors was held during the year under review. The Policy inter alia provides the criteria for performance evaluation such as Board effectiveness, quality of discussion contribution at the meetings, business acumen, strategic thinking, time commitment, relationship with the stakeholders, corporate governance practices, contribution of the Committees to the Board in discharging its functions, etc. NOMINATION AND REMUNERATION POLICY The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection of Directors, determining Directors independence and payment of remuneration to Directors, Key Managerial Personnel and other employees. The Nomination and Remuneration Policy is attached as Annexure -1 to this Report. The details of the Nomination & Remuneration Committee are stated in the Corporate Governance Report. BOARD COMMITTEES Your Company has four Committees of Board, viz: 1. Audit Committee 2. Stakeholders' Relationship Committee 3. Nomination and Remuneration Committee 4. Corporate Social Responsibility Committee Details of all the Committees along with their composition, terms of reference and meetings held during the year are provided in 'Corporate Governance Report' forming part of the Annual Report. AUDIT COMMITTEE OFTHE COMPANY: The composition of the Audit Committee is in compliance with the requirements of Section 177 of the Companies Act, 2013 and amended Clause 49 of the Listing Agreement entered into with the Bombay Stock Exchange (BSE). NUMBER OF MEETINGS OFTHE BOARD The Board meets at regular intervals to discuss and decide on the Company's policies and business performance apart from other Board matters. During the financial year 2014-15, four Board Meetings were held on May 25, 2014, August 2, 2014, November 14, 2014 and February 7, 2015.The gap between the two board meetings did not exceed 120 days. The details of the meetings of the Board of Directors held during the financial year 2014-15 are set out in the Corporate Governance Report. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to the requirement under Section 134(5) of the Companies Act, 2013, with respect to Directors' Responsibility Statement, it is hereby confirmed that: 1. in preparation of the annual financial statements for the financial year 2014-15, the applicable accounting standards have been followed and there are no material departures from the same; 2. the Directors have 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 as at March 31,2015 and of the profit of the Company forthe financial year 2014-15 ended on that date; 3. the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; 4. the Directors have prepared the annual accounts on a 'going concern basis'; 5. the Directors have laid down proper internal financial controls to be followed by the Company and that such financial controls are adequate and are operating effectively; 6. the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that the systems are adequate and are operating effectively. CORPORATE SOCIAL RESPONSIBILITY In accordance with the provisions of section 135 of the Companies Act, 2013, the Board of Directors of the Company has constituted the Corporate Social Responsibility Committee (CSR Committee) and the CSR Committee has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which has been approved by the Board. The CSR Policy may be accessed on the Company's website at the link: http://www.akcapindia.comA/VebSiteDocuments/CSR_Policy.pdf As part of its initiatives under "Corporate Social Responsibility" (CSR), the Company has undertaken project in accordance with Schedule VII of the Companies Act, 2013. The Company has donated towards the following initiatives: 1. For promoting education. 2. For promoting preventive health care and sanitation 3. For empowering woman and setting up homes. The details of CSR activities undertaken by the Company is attached as Annexure - 2 and forms an integral part of this Report. WHISTLEBLOWER POLICY AND ESTABLISHMENT OF VIGIL MECHANISM In accordance with the provisions of Section 177 of the Companies Act, 2013 and amended Clause 49 of the Listing Agreement, the Company has established Vigil Mechanism and also adopted a Whistleblower Policy under the surveillance of the Audit Committee. The Company has adopted work culture which ensures highest standards of professionalism, honesty, integrity, moral and ethical behavior. The Policy may be accessed on the Company's website at the link: www.akcapindia.comAA/ebSiteDocumentsA'Vhistle%20Blower%20Policy%20and%20Establishment%20of%20Vigil%20Mechanism.pdf POLICY FOR PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE In accordance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 the Company has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace. During the financial year 201415 no cases in the nature of sexual harassment were reported at any work place of the Company. MANAGEMENT DISCUSSION & ANALYSIS AND CORPORATE GOVERNANCE REPORT The Management Discussion and Analysis for the financial year 2014-15 and the report of the Directors on Corporate Governance as required under Clause 49 of the Listing Agreement, are given in separate sections forming part of the Annual Report. A certificate from the Statutory Auditors of the Company, M/s. Suresh Surana & Associates LLP, Chartered Accountants (Firm Registration No. 121750WAAM 00010) confirming compliance with the conditions of Corporate Governance stipulated in Clause 49 of the Listing Agreement is annexed to the report of the Directors on Corporate Governance. RISK MANAGEMENT AND INTERNAL CONTROLS The Company has a well-defined risk management framework and maintains adequate internal control systems. The Risk Management and Internal Control System thereof are discussed in detail in the Management Discussion and Analysis report that forms part of the Annual Report. STATUTORY AUDITORS M/s. Suresh Surana & Associates LLP, Chartered Accountants, (Firm Registration No. 121750WAA/-100010), Mumbai, Statutory Auditors of your Company, retire at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. The Company has received a confirmation from M/s. Suresh Surana & Associates LLP, Chartered Accountants, (Firm Registration No. 121750WA/V-i 100010), to the effect that their appointment, if made, would be within the limits prescribed under Section 139 of the Companies Act, 2013 and the rules framed thereunder and that they satisfy the criteria given under Section 141 of the Companies Act, 2013. The Audit Committee and Board of Directors have recommended the re-appointment of M/s. Suresh Surana & Associates LLP, Chartered Accountants, (Firm Registration No. 121750WAA/-100010), as the Statutory Auditors of your Company. SECRETARIAL AUDITOR Pursuant to the provisions of section 204 of the Companies Act, 2013 and the rules made thereunder, the Company has appointed M/s s Ashish Bhatt & Associates (C.P.No: 2956), a firm of the Company Secretaries in Practice to conduct the Secretarial Audit of the Company. The Secretarial Audit Report is appended as Annexure - 3 to this Report. PUBLIC DEPOSITS During the financial year 2014-15, your Company did not invite or accept any public deposits. PARTICULARS OF LOANS, GUARANTEE AND INVESTMENTS BYTHE COMPANY Details of Loans, Gurantees and Investments covered underthe provisions of Section 186 of the Companies Act, 2013 are given in "Notes e to the Financial Statements". RELATED PARTYTRANSACTION All contracts/transactions entered by the Company during the year with related parties were on an arm's length basis. The Company has complied with the provisions of section 188 of the Companies Act, 2013 read with rule of Companies (Meetings of Board and its Powers) e Rules, 2014 and the amendments made thereto from time to time. The Company has not entered into any transaction which can be considered as material in accordance with Clause 49 of Listing agreement and the Policy of the Company. The particulars of contracts or arrangements with related parties referred to in Section 188(1), as prescribed in Form AOC - 2 are appended as Annexure - 4 to this report. The details of related party transactions carried out by the Company are also set out in note no.31 to the Financial Statements. The policy on materiality and dealing with related party transactions may be accessed on the Company's website at the link:http://www.akcapindia.comAA/ebSiteDocuments/Policy%20on%20Materiality%20and%20Dealing%20with%20Related%20Party%20Transactions.pdf MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OFTHE COMPANY During the year under review there were no significant or material changes affecting the financial position of the Company. CONSERVATION OF ENERGYJECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO In view of the nature of activities which are being carried on by the Company, the particulars as prescribed under Section 134(3)(m) of the Companies Act, 2013 read with Companies' (Accounts) Rules, 2014 regarding Conservation of Energy and Technology Absorption, and research and development are not applicable to the Company. Your Company has no foreign exchange earnings during the financial year 2014-15.The information on foreign exchange outgo is furnished in the "Notes to the Financial Statements" under note no. 28 which forms part of this Annual Report. TRANSFER OF AMOUNTSTO INVESTOR EDUCATION AND PROTECTION FUND Pursuant to the provisions of Section 205A(5) and 205C of the Companies Act, 1956, relevant amounts which remained unpaid or unclaimed for a period of 7 years have been transferred by the Company to the Investor Education and Protection Fund. Pursuant to the provisions of Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on September 20,2014 (date of last Annual General Meeting) on the website of the Company (www.akcapindia.com), as also on the Ministry of Corporate Affairs website. EXTRACT OF ANNUAL RETURN Pursuant to the requirements under Section 92(3) and Section 134(3) of the Companies Act, 2013 read with Rule 12 of Companies (Management and Administration) Rules, 2014, an extract of Annual Return in prescribed Form MGT - 9 is given in the Annual Report as Annexure-5. PARTICULARS OF EMPLOYEES Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annual Report and is attached as Annexure - 6 and forms an integral part of this Report. In terms of the provisions of Section 197(12) of the Companies Act, 2013, read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is available for inspection by the Members at the Registered Office of the Company between 2.00 p.m. to 4.00 p.m. on any working day (Monday to Friday) upto the date of 22nd Annual General Meeting of the Company. Any Member is interested in obtaining such information may write to the Company Secretary and the same will be furnished on such request. ACKNOWLEDGEMENT Your Directors would like to express their appreciation for the assistance and co-operation received from the Government Authorities, Regulators, Stock Exchanges, Bankers of the Company, Other Statutory Bodies, etc. during the year under review. Your Directors would also like to take this opportunity to express their gratitude to the members of the Company for their trust and support. The Board also wishes to thank the employees of the Company and its subsidiaries at all levels for the dedicated services rendered by them. Your Directors look forward to your continuing support. On behalf of the Board of Directors A. K. Mittal Managing Director (DIN: 00698377) Deepak Mittal Whole-time Director (DIN: 00043685) . Date: August 14, 2015 Place: Mumbai |