The Members of
PHOTON CAPITAL ADVISORS LIMITED
Your Directors are pleased to present the 31st Annual Report together withAudited Accounts of the Company for the year ended 31st March 2016.
(Rs in Lakhs)
|PARTICULARS ||Standalone ||Consolidated |
| ||2015-16 ||2014-15 ||2015-16 ||2014-15 |
|Income from operations ||32.13 ||46.66 ||32.13 ||46.66 |
|Other Income ||2.60 ||3.44 ||2.74 ||4.01 |
|Expenditure ||63.99 ||75.00 ||64.31 ||75.50 |
|Profit/(loss) before tax ||(32.98) ||(29.70) ||(33.15) ||(29.62) |
|Provision for tax(Incl. deferred Tax) ||(28.95) ||(11.09) ||(28.95) ||(11.02) |
|Profit/(loss) after tax ||(4.03) ||(18.60) ||(4.12) ||(18.99) |
REVIEW OF OPERATIONS :
During the year under review the company has made revenue of Rs. 32.13 lakhs fromoperations and Rs. 2.60 lakhs from other Income aggregating to Rs. 34.73 lakhs and posteda net loss of Rs. 4.03 lakhs as per the standalone financials for the financial year2015-16.
During the year under review the company has made revenue of Rs. 32.13 lakhs fromoperations and Rs. 2.74 lakhs from other Income aggregating to Rs. 34.88 lakhs and posteda net loss of Rs. 4.12 lakhs as per the consolidated financials for the financial year2015-16.
After more than a year of not showing any meaningful trends the Indian equity marketslowly began an upward climb to the highs made the previous year. The bond market alsorallied on the back of easing monetary policy. As a result our investment portfolio showedmark to market gains of Rs.163.23 Lakhs as of 31st March 2016. This is a gain of 28.20% onour investment.
Your Board of Directors has reviewed the affairs of the Subsidiary Company SovenManagement Associates Private Limited and included the audited consolidated financialstatements for the financial year 2015-16 in this Annual Report as required under Section134 of the Companies Act 2013. The statement containing the salient feature of thefinancial statement of a companys subsidiary in form AOC-1 is enclosed as Annexure-I.
MANAGMENT DISCUSSION AND ANALYSIS :
Industry structure and developments :
Except some regulatory changes made by the RBI there have been no substantial changesin the NBFC industry as a whole.
Opportunities and threats :
The Government at the centre has shown its commitment to fiscal conservatism and hassteadily been bringing down the fiscal deficit. Eventually this policy is going to showresults in terms of reduced inflation and interest rates. This is bound to impact Indianequity and bond markets positively. The government has also been steadily making smallreforms and promises to overhaul the indirect tax system. Both these factors are alsopositive for the Indian economy. However several external threats exist in the presentenvironment. There is a critical American election. The improving economies of thedeveloped world may also result in monetary tightening. The US Federal Reserve has beentaking some steps towards normalizing monetary policy from historically low levels. Thesefactors may increase volatility in global equities and shake up currency marketsworldwide.
Segmentwise or product-wise performance :
Since the Company does not operate in different sectors the segment wise performanceof the financials are not applicable.
The present government has clearly shown itself to be fiscally conservative andbusiness friendly. This combined with a benign global environment present a highlyfavourable environment for equity investors.
Risks and concerns :
Your Company has continued to minimize risks from external factors and has constantlypreferred and adopted methods and systems in its economic activities with low element ofrisk. In the current and future years your company will further strengthen and bolsterits efforts to minimize or negate all risk factors. However external factors of foreigncurrencies and impact of global slowdown currency corrections of other large growingeconomies do cause concern to all enterprises and your company does consider this as aconcern. Nevertheless such factors will be dealt with caution and adequate foresight.
Internal financial control systems and their adequacy :
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The scope and authority of the Internal Audit (IA) functionis defined in the Internal Audit Charter. To maintain its objectivity and independencethe Internal Audit function reports to the Chairman of the Audit Committee of the Board.
The Internal Audit Department monitors and evaluates the efficacy and adequacy ofinternal control system in the Company its compliance with operating systems accountingprocedures and policies at all locations of the Company and its subsidiaries. Based on thereport of internal audit function process owners undertake corrective action in theirrespective areas and thereby strengthen the controls. Significant audit observations andcorrective actions thereon are presented to the Audit Committee of the Board.
Material developments in Human Resources / Industrial Relations front including numberof people employed :
No new employees have been employed during the year under review. The company has notmade significant development in human resources.
As the company incurred loss during the financial year 2015-16 your Board of directorsdo not recommend any dividend.
BOARD OF DIRECTORS :
As per the provisions of section 152 of the Companies Act 2013 Mrs. SobharaniNandury who retires by rotation at the ensuing Annual General Meeting and being eligibleoffer herself for re-appointment. The board recommends her reappointment.
BOARD MEETINGS :
Four (04) meetings of the Board of Directors were held during the financial year andthe 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 rule12(1) of the Companies (Management and Administration) Rules 2014 extract of annualreturn in form MGT-9 is enclosed as Annexure II.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS :
The company has not granted any loans or given any guarantees or made any investmentscovered under the provisions of Section 186 of the Companies Act 2013.
RELATED PARTY TRANSACTIONS :
All transactions entered into with Related Parties as defined under the Companies Act2013 and regulation 23 of SEBI (LODR) Regulations 2015 during the financial year were inthe ordinary course of business and on an arms length pricing basis. There were nomaterially significant transactions with related parties during the financial year whichwere in conflict with the interest of the Company. Suitable disclosure as required by theAccounting Standards (AS18) has been made in the notes to the financial statements.Thedetails of related party transactions entered is enclosed as Annexure-III
CORPORATE SOCIAL RESPONSIBILITY :
In terms of Section 135 of the companies Act 2013 every company having net worth ofrupees five hundred crore or more or turnover of rupees one thousand crore or more or anet profit of rupees five crore or more during any of the three immediately precedingfinancial years shall constitute CSR Committee and formulate a Corporate SocialResponsibility (CSR) Policy. Since the Company does not fall under the said criteriaduring any of the three immediately preceding financial years the provisions of Sec 135of the Companies Act 2013 Schedule VII and the rules made thereunder are not applicableto the Company.
Accordingly a report on CSR activities as per rule 9 of the Companies (CorporateSocial Responsibility) Rules 2014 is not applicable.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO :
The required information as per section 134(3)(m) of the Companies Act 2013 isprovided hereunder :
CONSERVATION OF ENERGY :
The Company has been continuously making efforts to reduce energy consumption. Themanagement is striving to achieve cost reduction by economical usage of energy and tobring 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 energyresources However the company making efforts to reduce the energy consumption.
(ii) The steps taken by the company for utilizing alternate source of energy : Notapplicable (iii) The capital investment on energy conservation equipment : No capitalinvestment 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 duringthe year under review. Hence the information as required under Section 134(3)(m) of theCompanies Act 2013 read with The Companies (Accounts) Rules 2014 is to be regarded asNil.
The Company has not entered into any technology transfer agreement.
PARTICULARS OF EMPLOYEES :
The Company has not employed any individual whose remuneration exceeds the limitsprescribed under the provisions of Section 197 of the Companies Act 2013 read with Rule5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
STATUTORY AUDITORS :
M/s. K. Vijayaraghavan & Associates LLP Chartered Accountants Hyderabad havebeen appointed as statutory Auditors of the company for a period of three years at theAnnual General Meeting held on 29th September 2014. Pursuant to section 139 ofthe Companies Act the Auditors appointment shall be ratified at the ensuing annualgeneral meeting. The Board recommended the ratification of the appointment of Auditor forthe financial year 2016-17.
INTERNAL AUDITORS :
Pursuant to section 138 of the Companies Act 2013 the Board in its meeting held on30.05.2016 has appointed M/s. M. Anandam & Co Chartered Accountants Hyderabad asInternal Auditors of the company for the financial year 2016-17.
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 hasappointed M/s SGP & Associates Company Secretaries a firm of Company Secretaries inPractice to undertake the Secretarial Audit of the Company and the Report on theSecretarial Audit for the financial year 2015-16 is enclosed herewith as Annexure IV.
DETAILS FRAUDS REPORTED BY AUDITORS U/S 143 :
The auditors have not reported any frauds pursuant to sec.143 (12) of the CompaniesAct 2013. Hence the information to be provided pursuant to Section 134 (3) (ca) of theCompanies Act 2013 may be treated as NIL.
CONSOLIDATED FINANCIAL STATEMENTS :
The Consolidated Financial Statements of the Company prepared in accordance withrelevant Accounting Standards (AS) viz. AS 21 and AS 23 issued by the Institute ofChartered Accountants of India form part of this Annual Report.
CORPORATE GOVERNANCE :
As a listed company necessary measures have been taken to comply with the SEBI (LODR)Regulations 2015. A report on Corporate Governance along with a certificate ofcompliance from the Auditors forms part of this Report as Annexure V.
STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS :
Pursuant to section 134 (3) (d) of the Companies Act 2013 a statement shall be madeon declaration given by Independent Directors under sec 149 (6) of the companies Act 2013in the Board report.
The Board has received declarations from the Independent Directors as required underSec 149 (7) of the Companies Act 2013 stating the fulfilment of criteria mentioned in thesub section (6) of Sec 149 of the Companies Act 2013 and the rules made thereunder andrecorded the same in the board meeting held on 30.05.2016.
NOMINATION AND REMUNERATION POLICY CRITERIA FOR SELECTION AND REMUNERATION OFDIRECTORS KMP AND EMPLOYEES :
The Nomination and Remuneration Committee of the Board comprises two IndependentNon-Executive Directors namely Mr. Narasimha Rao Joga Mr. V.R. Shankara and oneNon-Independent Non-Executive Director namely Mrs. Suchitra Nandury. The key features ofthe Nomination and Remuneration Policy as framed by the Nomination and RemunerationCommittee of the company are set out below :
Selection criteria for Directors :
The Company shall consider the following aspects while appointing a person as aDirector on the Board of the Company : Skills and Experience: The candidate shallhave appropriate skills and experience in one or more fields of finance law managementsales marketing administration public administrative services research corporategovernance technical operations or any other discipline related to the Companysbusiness.
Age Limit: The candidate should have completed the age of twenty-one (21) years andshould not have attained the age of seventy (70) years for appointment as ManagingDirector or Whole Time Director.
Conflict of Interest : The candidate should not hold Directorship in any competitorcompany and should not have any conflict of interest with the Company.
Directorship: The number of companies in which the candidate holds Directorshipshould not exceed the number prescribed under the Act.
Independence: The candidate proposed to be appointed as Independent Directorshould not have any direct or indirect material pecuniary relationship with the Companyand must satisfy the requirements imposed under the Act.
The policy provides that while appointing a Director to the Board due considerationwill be given to approvals of the Board and/or shareholders of the Company in accordancewith the Act.
Remuneration for Directors KMP and other Employees
The policy provides that the remuneration of Directors KMP and other employees shallbe based on the following key principles : l Pay for performance: Remuneration ofExecutive Directors KMP and other employees is a balance between fixed and incentive payreflecting short and long term performance objectives appropriate to the working of theCompany and its goal. The remuneration of Non-Executive Directors shall be decided by theBoard based on the profits of the Company and industry benchmarks. l Balanced rewards tocreate sustainable value: The level and composition of remuneration is reasonable andsufficient to attract retain and motivate the Directors and employees of the Company andencourage behaviour that is aligned to sustainable value creation. l Competitivecompensation: Total target compensation and benefits are comparable to peer companies inthe industry and commensurate to the qualifications and experience of the concernedindividual. l Business Ethics: Strong governance processes and stringent risk managementpolicies are adhered to in order to safeguard our stakeholders interest.
REPLIES TO THE QUALIFICATIONS OF THE AUDITORS UNDER 134 (3) (f) :
Since no qualifications have been reported in the Audit report the Board of Directorsneed not give any replies in the Annual report.
TRANSFER TO RESERVES
During the financial year under review no amount has been transferred to the reserves.
MATERIAL CHANGES AND COMMITMENTS OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR AND THEDATE OF THE REPORT AFFECTING THE FINANCIAL POSITION OF THE COMPANY :
There were no material changes from the end of the financial year till the date of thisreport affecting the financial position of the Company.
DETAILS OF DEPOSITS UNDER CHAPTER V :
The company has not accepted deposits from the members/public falling within themeaning of section 73 and/or Sec 76 of the companies Act 2013 and the companies(Acceptance of Deposits) Rule2014. Accordingly furnishing of the details of depositswhich are not in compliance with the requirements of Chapter V of the Companies Act 2013does not arise.
FORMAL ANNUAL EVALUATION MADE BY THE BOARD OF ITS OWN PERFORMANCE AND OF ITS COMMITTEESAND INDIVIDUAL DIRECTORS :
Keeping in view the various provisions of the Companies Act 2013 and SBI (LODR)Regulations 2015 dealing with powers duties and functions of the Board of the Companyyour Company has adopted criteria for evaluating the performance of its Board Committeesand other Directors including Independent Directors applicable from the financial year2015-16. The said criteria contemplates evaluation of Directors based on their performanceas directors apart from their specific role as independent non-executive and executivedirectors as mentioned below : a. Executive Directors being evaluated as Directors asmentioned above will also be evaluated on the basis of targets / Criteria given toexecutive Directors by the board from time to time as well as per their terms ofappointment. b. Independent Directors being evaluated as a Director will also beevaluated on meeting their obligations connected with their independence criteria as wellas adherence with the requirements of professional conduct roles functions and dutiesspecifically applicable to Independent Directors as contained in Schedule IV to theCompanies Act 2013. The criteria also specifies that the Board would evaluate eachcommittees performance based on the mandate on which the committee has beenconstituted and the contributions made by each member of the said committee in effectivedischarge of the responsibilities of the said committee. The Board of Directors of yourcompany has made annual evaluation of its performance its committees and directors forthe financial year 2015-16 based on afore stated criteria.
DISCLOSURES : Audit Committee:
The Audit Committee comprises three members namely Mr. J. Narasimha Rao (Chairman &Independent Director) Mr. V.R. Shankara (Independent Director) and Mrs. Suchitra Nandury(Non Independent Director). All the recommendations made by the Audit Committee wereaccepted by the Board.
The Vigil Mechanism of the Company which also incorporates a whistle blower policy interms of the SEBI (LODR) Regulations 2015 includes Vigilance and Ethics officer Seniorexecutive of the Company. Protected disclosures can be made by a whistle blower through ane-mail or telephone 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 theCompanys website at the link: http:// www.pcalindia.com
DETAILS PERTAINING TO REMUNERATION AS REQUIRED UNDER SECTION 197(12) OF THE COMPANIESACT 2013 READ WITH RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIALPERSONNEL) RULES 2014
(i) The percentage increase in remuneration of each Director Chief FinancialOfficer and Company Secretary during the financial year 2015-16 and ratio of theremuneration of each Director to the median remuneration of the employees of the Companyfor the financial year 2015-16 are as under :
|Name of Director/KMP and Designation ||Remuneration of Director/KMP for financial year 2015-16 ||% increase in Remuneration in the Financial Year 2015-16 ||Ratio of remuneration of each Director to median remuneration of employees |
|Mr. Tejaswy Nandury || || || |
|Whole Time Director ||Nil ||Nil ||Nil |
|Mr. Narasimha Rao Joga Director ||Nil ||Nil ||Nil |
|Mr. V.R. Shankara Director ||Nil ||Nil ||Nil |
|Mrs. Sobha Rani Nandury Director ||Nil ||Nil ||Nil |
|Mrs. Suchitra Nandury Director ||Nil ||Nil ||Nil |
|Mr. DM Basha Company Secretary ||180000 ||Nil ||0.90 |
|Mr. K Sreedhar Babu Chief Financial Officer ||825000 ||0.1 ||4.15 |
(ii) The median remuneration of employees of the Company during the financial yearwas Rs. 198900/-(iii) In the financial year there was an increase of 29.58% inthe median remuneration of employees; (iv) There were 6 (Six) permanent employeeson the rolls of Company as on March 31 2016;
(iv) Average percentage increase made in the salaries of employees other than themanagerial personnel in the last financial year i.e. 2015-16 was 11.41 % whereas theincrease in the managerial remuneration for the same financial year was 8.06 % and (v) Itis hereby affirmed that the remuneration paid is as per the Remuneration Policy forDirectors Key Managerial Personnel and other Employees.
Your Directors state that no disclosure or reporting is required in respect of thefollowing 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. Whole-time Directors of the Company did not receive any remuneration or commissionfrom any of its subsidiaries.
6. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Companys operations in future.
Your Directors further state that during the year under review there were no casesfiled pursuant to the sexual Harassment of women at workplace (Prevention Prohibition andRedressal) Act 2013.
DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to the provisions of Sec 134(3)(C) of the Companies Act 2013 the Board ofDirectors of your Company hereby certifies and confirms that:
a. In the preparation of the Annual Accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;
b. The Directors have selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe loss of the Company for that year;
c. The Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the Assets of the Company and for preventing and detecting fraud and otherirregularities;
d. The Directors have prepared the Annual accounts on a going concern basis.
e. The directors has laid down internal financial control to be followed by thecompany and that such internal financial controls are adequate and operating effectively;
f. The directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
Your Directors gratefully acknowledge the support and co-operation extended by all theshareholders customers bankers mutual funds share brokers to your company during theyear and look forward to their continued support.
Your Directors also place on record their appreciation of the dedication and commitmentdisplayed by the employees of the company.
| || ||//On behalf of the Board// |
| || ||For PHOTON CAPITAL ADVISORS LIMITED |
| ||Sd/- ||Sd/- |
| ||V R SHANKARA ||TEJASWY NANDURY |
|Place: Hyderabad ||DIRECTOR ||WHOLE-TIME DIRECTOR |
|Date : 10.08.2016 ||(DIN:00041705) ||(DIN: 00041571) |