BOARD'S REPORT TO THE MEMBERS OF AXIS CAPITAL MARKETS (INDIA) LIMITED The Directors take pleasure in presenting the Twenty First Annual Report together with the audited financial statements for the year ended 31st March, 2015. The Management Discussion and Analysis has also been incorporated into this report. 2. HIGHLIGHTS OF PERFORMANCE The total income for the year increased by 98.46 % to Rs. 86.53 lakhs from Rs. 43.61 lakhs in the previous year. Net Profits for the year increased by 94.23 % to Rs. 73.84 lakhs as compared to Rs. 38.01 lakhs in the previous year. 3. BUSINESS OPERATIONS The company is the holding company of Axis Equities Pvt. Ltd. (AEPL). During the year under review a dividend of Rs. 74.68 lakhs was received from AEPL. AEPL, reported a significant improvement in its operations. Revenue from share trading, broking and portfolio management increased by more than 3 times to Rs. 1083.43 lakhs. This spurt in income was driven by higher arbitrage and share trading profits. AEPL made a Net Profit after Tax of Rs. 665.01 lakhs for the financial year and has proposed to pay a dividend of Rs. 5.75 per share. 4. DIVIDEND The Board of Directors recommend a dividend @ 12.5% i.e. Re. 1.25 per equity share for the financial year ended 31st March, 2015. The dividend payout is subject to approval of members at the ensuing Annual General Meeting. Total outgo on dividend payout including corporate dividend tax would aggregate to Rs. 72.54 lacs. 5. SHARE CAPITAL The paid up Equity Share Capital as on 31st March, 2015 was Rs. 580.32 Lakhs. During the year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity. As on 31st March, 2015, the Directors of the Company hold the equity shares of the Company as follows: Name of the Director Number of Shares % of Total Capital Mr. G. B. Desai* Nil 0.00 Mr. Dipan Mehta 21,24,100 36.60 Mrs. Radhika D Mehta 10,100 0.17 Mr. Anil Mehta 7,28,700 12.56 Mrs. Vina A Mehta 8,49,300 14.64 Mr. Dilip Kapadia Nil 0.00 * retired on 30th May, 2015 6. FINANCE Cash and cash equivalent as at 31st March, 2015 was Rs. 3.04 lakhs. 6.1 DEPOSITS The Company has not accepted deposits from the public and shareholders falling within the ambit of Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014. 6.2 PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. 7. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES The criteria prescribed for the applicability of Corporate Social Responsibility under Section 135 of the Companies Act, 2013 is not applicable to the Company. 8. BUSINESS RISK MANAGEMENT The subsidiaries of the Company are engaged in various financial services businesses such as stock and commodity broking, portfolio management and demat services. In addition to this, the subsidiaries also carry out arbitrage and proprietary trading. A sharp diminution in the value of the subsidiary companies is the key business risk for the company. The Company has not formed Risk Management Committee and considered it as optional item as prescribed under Clause 49 of Listing Agreement. The size and nature of business is such that a Risk Management Committee is not necessary. 9. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. 10. VIGIL MECHANISM / WHISTLE BLOWER POLICY The Company has a vigil mechanism to deal with instance of fraud and mismanagement, if any. The details of the Whistle Blower Policy are explained in the Corporate Governance Report. 11. SUBSIDIARY COMPANIES As on 31st March, 2015, the Company has following three subsidiaries: 1. Axis Equities Private Limited. 2. Dipan Mehta Commodities Private Limited 3. Axis Wealth Management Private Limited 12. DIRECTORS: In terms of the Articles of Association of the Company, Mr. Anil Mehta, Director, retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. Mr. G.B. Desai, Independent Director and Chairman of the Company retired on 30th May, 2015. The Board of Directors places on record its sincere thanks and gratitude to the contribution made by him to the progress and growth of the Company. The present constitution of the Board is not as per the Companies Act, 2013 and revised clause 49 of Listing Agreement. The company is in the process of appointing another independent director within the stipulated time period of three months The Company has received declarations from the Independent Director of the Company confirming that he meets with the criteria of independence as prescribed both, under subsection 6 of section 149 of the Companies Act, 2013 and under clause 49 of the listing agreement with the stock exchanges. 12.1 Board Evaluation Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, and that of the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and Stakeholders' Relationship Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. 12.2 Remuneration Policy The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report. 12.3 Meetings A calendar of Meetings is prepared and circulated in advance to the Directors. During the year four Board Meetings and four Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. 13. DIRECTORS' RESPONSIBILITY STATEMENT To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3) (c) of the Companies Act, 2013: a) that in the preparation of the annual financial statements for the year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; b) that such accounting policies as mentioned in Note 1 of the Notes to the Financial Statements have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2015 and of the profit of the Company for the year ended on that date; c) that proper and sufficient care has been taken 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; d) that the annual financial statements have been prepared on a going concern basis; e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively. f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively. 14. RELATED PARTY TRANSACTIONS All transactions entered with related parties for the year under review were on arms length basis and in the ordinary course of business and that the provisions of Section 188 of the Companies Act. 2013 are not attracted. Thus Disclosure in AOC-2 is not required. However, during the year the Company has entered into material related party transaction with Axis Equities Pvt. Limited, subsidiary of the Company. Other than this there are no material related party transactions during the year under review with the promoters, directors or key managerial personnel. The necessary items for approval of members have been included in Item no. 6 of the Notice. 15. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations. 16. AUDITORS 16.1 Statutory Auditors The Company's Auditors, M/s P. C. Surana & Co., Chartered Accountants, Mumbai who retire at the ensuing Annual General Meeting of the Company, are eligible for reappointment. They have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules framed there under for reappointment as Auditors of the Company. As required under Clause 49 of the Listing Agreement, the auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India. 16.2 Secretarial Audit Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s P P Shah & Co., Company Secretary in Practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed herewith as "Annexure A". 16.3 Qualifications in Secretarial Audit Report A. Appointment of Company Secretary & Chief Financial Officer: As per section 203(1)(ii) & (iii), the Company is require to appoint Company Secretary & Chief Financial Officer. The Company has not appointed Company Secretary & Chief Financial Officer. In this regard the management of the Company has provided the following reply: (i) The Company has appointed Mr. Dipan Mehta, a Chartered Accountant as well as Director, as Compliance Officer of the Company to ensure compliance of the Companies Act, 2013 and SEBI Act and rules made there under. (ii) The Company has availed of the services of Practicing Company Secretary for advise on the compliance of the Companies Act, 2013 and the SEBI Act and rules made there under. (iii) The volume and scope of work for the Company Secretary and Chief Financial Officer is minimal and therefore a full time Company Secretary and Chief Financial Officer is not required. B. Appointment of Internal Auditor: As per section 138 of the Companies Act, 2013, the Company is required to appoint Internal Auditor. The Company has not appointed Internal Auditor. In this regard the management of the Company has provided the following reply: As the size of operation of the Company is very small, it is not viable to appoint Internal Auditor. However, the Company has established adequate internal control systems. C. Composition of Board of Directors, Audit Committee & Nomination and Remuneration Committee: The composition of the Board of Directors is not as per the provisions of Companies Act, 2013 and clause 49 of Listing Agreement. In this regard the management of the Company has provided the following reply: The company is in the process of complying with these requirements of the Companies Act, 2013. 17. ENHANCING SHAREHOLDERS VALUE Your Company believes that its members are its most important stakeholders. Accordingly, your Company and its Subsidiaries operations are committed to the pursuit of achieving high levels of operating performance, cost competitiveness and consolidating for future growth. Our aim is to enhance the productive assets, resource base and nurturing and improving its corporate reputation. Your Company is also committed to creating value for its other stakeholders by ensuring that its corporate actions positively impact the society, environment. 18. CORPORATE GOVERNANCE As per Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section on corporate governance practices followed by the Company, together with a certificate from the Company's Auditors confirming compliance forms an integral part of this Report. 19. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014 is not applicable to the Company: Foreign Exchange Earnings/Outgo : ? Foreign Exchange Earned : Nil Foreign Exchange Outgo : Nil 20. EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as "Annexure B". 21. PARTICULARS OF EMPLOYEES There is no employee in the Company drawing monthly remuneration of Rs.5,00,000 per month or Rs. 60,00,000 per annum. Hence the Company is not required to disclose any information as per Rule, 5(2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. 22. REMUNERATION OF THE DIRECTORS/ KEY MANAGERIAL PERSONNEL (KMP)/ EMPLOYEES The information required pursuant to Section 197 read with Rule 5 (1) (i) of The Companies (Appointment and Remuneration) Rules, 2014 in respect of ratio of remuneration of each director to the median remuneration of the employees of the Company for the Financial Year are as follows: 23. ACKNOWLEDGEMENTS Your Directors thank the various Central and State Government Departments, Organizations and Agencies for the continued help and co-operation extended by them. The Directors also gratefully acknowledge all stakeholders of the Company viz. customers, members, dealers, vendors, banks and other business partners for the excellent support received from them during the year. 24. CAUTIONARY STATEMENT Statements in the Board's Report and the Management Discussion & Analysis describing the Company's objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. For and on behalf of the Board of Directors Dipan Mehta Director Radhika Mehta Director Place : Mumbai Date : 30th May, 2015 |