DIRECTORS' REPORT To, The Members of PHOTON CAPITAL ADVISORS LIMITED Your Directors are pleased to present the 30th Annual Report together with Audited Accounts of the Company for the year ended 31st March, 2015. REVIEW OF OPERATIONS During the year under review, the company has made revenue of Rs. 46.66 lakhs from operations and Rs. 3.44 lakhs from other Income aggregating to Rs. 50.10 lakhs and posted a net loss of Rs.18.60 lakhs as per the standalone financials for the financial year 2014-15. During the year under review, the company has made revenue of Rs. 46.66 lakhs from operations and Rs. 4.01 lakhs from other Income aggregating to Rs. 50.67 lakhs and posted a net loss of Rs. 18.99 lakhs as per the consolidated financials for the financial year 2014-15. SUBSIDARIES: Your Board of Directors has reviewed the affairs of the Subsidiary Company Soven Management Associates Private Limited and included the audited consolidated financial statements for the financial year 2014-15 in this Annual Report as required under Section 134 of the Companies Act 2013. MANAGMENT DSICUSSION AND ANALYSIS : Industry Structure and developments: There have been no substantial changes in the NBFC industry as a whole except some regulatory changes made by RBI. Opportunities and threats : The new government at the centre has not given any clarity on major policy changes. During the year reforms have not happened at a pace that was initially expected. Until policies are more clearly articulated by the government it is difficult to analyze the opportunities and threats in this market. We are particularly hopeful that infrastructure development in India will pick up. This can create dramatic equity investment and trading opportunities. Outlook : The exact policy direction of this government is not clear. Therefore it is difficult to ascertain the outlook. However, it appears to be broadly more investment and business friendly than the former. So our hope is that the economy will see a revival. But given that there has been very little policy communication from this government, we cannot speak with certainty about the outlook. So far, growth has not picked up in the economy. Risks and concerns : Your Company has continued to minimize risks from external factors and has constantly preferred and adopted methods and systems in its economic activities with low element of risk. In the current and future years, your company will further strengthen and bolster its efforts to minimize or negate all risk factors. However, external factors of foreign currencies and impact of global slowdown, currency corrections of other large growing economies do cause concern to all enterprises and your company does consider this as a concern. Nevertheless, such factors will be dealt with caution and adequate foresight. DIVIDEND : As the company incurred loss during the financial year 2014-15, your Board of directors do not recommend any dividend. BOARD OF DIRECTORS : As per the provisions of section 152 of the Companies Act, 2013, Mrs. Suchitra Nandury, who retires by rotation at the ensuing Annual General Meeting and being eligible offer herself for reappointment. The board recommends her re-appointment. BOARD MEETINGS: Four (04) meetings of the Board of Directors were held during the financial year and the details are given in paragraph 2 (d) of Corporate Governance report attached to this Annual Report. EXTRACT OF ANNUAL RETURN : Pursuant to section 92(3) of the Companies Act, 2013 ('the Act') and rule 12(1) of the Companies (Management and Administration) Rules, 2014, extract of annual return in form MGT-9 is enclosed as Annexure I. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS: During the year, the company has not granted any Loans or given any Guarantees or made any Investments covered under the provisions of Section 186 of the Companies Act, 2013. RELATED PARTY TRANSACTIONS: There were no materially significant transactions with related parties during the financial year which were in conflict with the interest of the Company. Suitable disclosure as required by the Accounting Standards (AS18) has been made in the notes to the financial statements. The details of related party transactions entered is enclosed as Annexure-II CONSERVATION OF ENERGY, TECHNOLOGY, ABSORPTION and FOREIGN EXCHANGE EARNINGS AND OUT GO: The required information as per section 134(3)(m) of the Companies Act 2013, is provided hereunder: CONSERVATION OF ENERGY: The Company has been continuously making efforts to reduce energy consumption. The management is striving to achieve cost reduction by economical usage of energy and to bring a general awareness about energy conservation among employees. (i) The steps taken or impact on conservation of energy: The Company does not fall in those list of industries which consumes high energy resources, however the Company making efforts to reduce energy consumption. (ii) The steps taken by the company for utilizing alternate source of energy: Not Applicable (iii) The capital investment on energy conservation equipment: No capital investment made as the Company is consuming very less energy. TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUT GO : There was no technology absorption and no foreign exchange earnings or outgo, during the year under review. Hence, the information as required under Section 134(3)(m) of the Companies Act, 2013 read with The Companies (Accounts) Rules, 2014 is to be regarded as Nil. The Company has not entered into any technology transfer agreement. PARTICULARS OF EMPLOYEES : The Company has not employed any individual whose remuneration exceeds the limits prescribed under the provisions of Section 197 of the Companies Act, 2013, read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. STATUTORY AUDITORS : M/s. K. Vijayaraghavan & Associates, Chartered Accountants, Hyderabad, have been appointed as statutory Auditors of the company for a period of three years at the last Annual General Meeting held on 29th September 2014. Pursuant to section 139 of the Companies Act, the Auditors appointment shall be ratified at the ensuing annual general meeting. The Board recommended the ratification of the appointment of Auditor for the financial year 2015-16. SECRETARIAL AUDITOR: 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 SGP & Associates, Company Secretaries, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company and the Report on the Secretarial Audit for the financial year 2014-15 is enclosed herewith as Annexure III. DETAILS OF FRAUDS REPORTED BY AUDITORS U/S 143: The Auditors have not reported any frauds during the period under review. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY: The Company has an Internal Control System commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is defined in the Internal Audit Charter. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board. The Internal Auditor monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies of the Company and its subsidiaries. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board. CONSOLIDATED FINANCIAL STATEMENTS: The Consolidated Financial Statements of the Company prepared in accordance with Accounting Standards 21 and 23 issued by the Institute of Chartered Accountants of India form part of this Annual Report. CORPORATE GOVERNANCE: As a listed company, necessary measures have been taken to comply with the listing agreement with the BSE Ltd, Mumbai. A report on Corporate Governance, along with a certificate of compliance from the Auditors, forms part of this Report as Annexure IV. FORMAL ANNUAL EAVALUATION MADE BY THE BOARD OF ITS OWN PERFORMANCE AND ITS COMMITTEES AND INDIVIDUAL DIRECTORS: Keeping in view the various provisions of the Companies Act, 2013 and listing agreement dealing with powers, duties and functions of the Board of the Company, your Company has adopted criteria for evaluating the performance of its Board, Committees and other Directors including Independent Directors applicable from the financial year 2014-15. The said criteria contemplates evaluation of Directors based on their performance as directors apart from their specific role as independent, non-executive and executive directors as mentioned below: a. Executive Directors, being evaluated as Directors as mentioned above, will also be evaluated on the basis of targets / Criteria given to executive Directors by the board from time to time and also as per their terms of appointment. b. Independent Directors, being evaluated as a Director, will also be evaluated on meeting their obligations connected with their independence criteria as well as adherence with the requirements of professional conduct, roles, functions and duties specifically applicable to Independent Directors as contained in Schedule IV of the Companies Act, 2013. The criteria also specifies that the Board would evaluate each committee's performance based on the mandate on which the committee has been constituted and the contributions made by each member of the said committee in effective discharge of the responsibilities of the said committee. The Board of Directors of your company has made annual evaluation of its performance, its committees and directors for the financial year 2014-15 based on afore stated criteria. DISCLOSURES: Audit Committee: The Audit Committee comprises three members namely J. Narasimha Rao (Chairman & Independent Director) and Mr. V. R. Shankara (Independent Director) and Mrs. Suchitra Nandury (Non Independent Director). All the recommendations made by the Audit Committee were accepted by the Board. Vigil Mechanism: The Vigil Mechanism of the Company, which also incorporates a whistle blower policy in terms of the Listing Agreement, includes vigilance and Ethics officer, senior executive of the Company. Protected disclosures can be made by a whistle blower through an e-mail, or dedicated telephone line or a letter to the officer or to the Chairman of the Audit Committee. The Policy on vigil mechanism and whistle blower policy may be accessed on the Company's website at the link: <http://> www.pcalindia.com DETAILS PERTAINING TO REMUNERATION 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 (i) The percentage increase in remuneration of each Director, Chief Financial Officer and Company Secretary during the financial year 2014-15, ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year 2014-15 and the comparison of remuneration of each Key Managerial Personnel (KMP) against the performance of the Company are as under: (ii) The median remuneration of employees of the Company during the financial year was Rs. 1,53,000/- (iii) In the financial year, there was an increase of 143% in the median remuneration of employees; (iv) There were 6 (Six) permanent employees on the rolls of Company as on March 31, 2015; (v) Relationship between average increase in remuneration and company performance:- The Company incurred loss both in current and previous year, whereas the increase in median remuneration was 143%. The average increase in median remuneration was due to resignation of eight employees left the organisation falling under low salary category. (vi) Comparison of Remuneration of the Key Managerial Personnel against the performance of the Company: The total remuneration of Key Managerial Personnel increased by 11.6 % from Rs. 6,72,000 in 2013-14 to Rs. 7,50,000 in 2014-15, where as the Company has reported loss both in current and previous financial years. (vii) a) Variations in the market capitalisation of the Company : The market capitalisation as on March 31, 2015 was Rs. 1,61,20,841 (Rs. 3,78,42,350 as on March 31, 2014) b) Price Earnings ratio of the Company was zero (being profits negative) as at March 31, 2015 and was zero (being profits negative) as at March 31, 2014 c) Percent increase / decrease in the market quotations of the shares of the company as compared to the rate at which the company came out with the last public offer. There is a decrease of 25.20% in market quotation as compared to the last public offer. (viii) Average percentage of increase in the salaries of employees other than the managerial personnel in the current financial year i.e. 2014-15 was 113%. No remuneration has been paid to the managerial personnel for financial year 2013-14 and 2014-15. (ix) The key parameters for the variable component of remuneration availed by the directors are considered by the Board of Directors based on the recommendations of the Human Resources, Nomination and Remuneration Committee as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees - No remuneration paid to the Directors and no variable remuneration for KMPs and other employees. (x) The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year -Not Applicable; and (xi) It is hereby affirmed that the remuneration paid is as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees. GENERAL: Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review: 1. Details relating to deposits covered under Chapter V of the Act. 2. Issue of equity shares with differential rights as to dividend, voting or otherwise. 3. Issue of Employee stock option Scheme 4. Issue of shares (including sweat equity shares) to employees of the Company underany scheme. 5. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries. 6. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future. Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. DIRECTORS RESPONSIBILITY STATEMENT: Pursuant to the provisions of Sec 134(3)(c) of the Companies Act, 2013 the Board of Directors of your Company hereby certifies and confirms that: a. In the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; b. The Directors have selected such accounting policies and applied them consistently and made judgements 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 loss of the Company for that year; c. 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; d. The Directors have prepared the Annual accounts on a going concern basis. e. The directors, in the case of listed company, has laid down internal financial control to be followed by the company and that such internal financial control 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. ACKNOWLEDGEMENTS: Your Directors gratefully acknowledge the support and co-operation extended by all the shareholders, customers, bankers, mutual funds, share brokers to your company during the year and look forward to their continued support. Your Directors also place on record their appreciation of the dedication and commitment displayed by the employees of the company. //On behalf of the Board// For PHOTON CAPITAL ADVISORS LIMITED Sd/- V R SHANKARA DIRECTOR (DIN:00041705) Sd/- TEJASWY NANDURY WHOLE-TIME DIRECTOR (DIN: 00041571) Place: Hyderabad Date : 29.07.2015 |