The Members of
PHOTON CAPITAL ADVISORS LIMITED
Your Directors are pleased to present the 32nd Annual Report together with AuditedAccounts of the Company for the year ended 31st March 2017.
|FINANCIAL RESULTS || || || |
(Amount in Rupees)
|PARTICULARS ||Standalone ||Consolidated |
| ||2016-17 ||2015-16 ||2016-17 ||2015-16 |
|Revenue from operations ||30400845 ||3213250 ||30400845 ||3213250 |
|Other Income ||2408059 ||259958 ||6028092 ||274425 |
|Total Revenue ||32808903 ||3473208 ||36428936 ||3487675 |
|Total Expenses ||4001235 ||6399713 ||4327523 ||6431487 |
|Profit/(loss) before tax ||28454727 ||(3298048) ||31748472 ||(3315355) |
|Provision for tax (Incl. deferred Tax) ||2029176 ||(2894798) ||1963194 ||(2894798) |
|Profit/(loss) after tax ||26425551 ||(403250) ||29785279 ||(420557) |
|Profit/(loss) for the Period ||26425551 ||(403250) ||29785279 ||(420557) |
REVIEW OF OPERATIONS :
During the financial year under review the company has made a revenue of Rs.30400845/- from operations and Rs. 2408059/- from other Income aggregating to Rs.32808903 and posted a net profit of Rs. 26425551/- as per the standalone financialsfor the financial year 2016-17.
During the financial year under review the company has made revenue of Rs.30400845/- from operations and Rs. 6028092/- from other Income aggregating to Rs.36428936/- and posted a net profit of Rs. 29785279/- as per the consolidatedfinancials for the financial year 2016-17.
The stock market has rallied substantially this financial year and our results reflectthis upward trend. However it is not clear at the time of writing that this upward trendwill persist. The Indian economy faces headwinds arising out of demonetization andimplementation of GST which are likely to result in slower growth at least for a periodof time. Your company is taking all measures to ensure that it protects itself from theadverse effects of slower growth even if it means that some upside has to be sacrificedduring this period.
Your Board of Directors has reviewed the affairs of Soven Management Associates PrivateLimited Subsidiary Company and included the audited consolidated financial statements forthe financial year 2016-17 in this Annual Report as required under Section 134 of theCompanies Act 2013. The statement containing the salient features of the financialstatement of a company's subsidiaries in form AOC-1 is enclosed as Annexure-I.
MANAGMENT DSICUSSION 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:
While the Indian economy as always has several opportunities due to under penetrationof consumption in most sectors it faces temporary headwinds due to demonetization and GSTimplementation. Both these factors might have great positive effects in the future but arelikely to impede economic growth in the near future. Your company is evaluating thepotential adverse impact of these factors and protecting the portfolio from them.
Segmentwise or product-wise performance:
Since the Company does not operate in multiple sectors/segments the segment wiseperformances of the financials are not applicable.
The near term outlook remains cloudy because of various measures that the governmenthas taken to improve overall functioning of the economy. However in the long term givenfavourable demographics and under penetration of various sectors the investment outlookremains very bright. Excessive valuations in pubic markets are also a matter of concern.
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 financial year under review. The companyhas not made significant development in human resources.
Your Directors wish to plough back the profits for operations of the Company in orderto increase the Shareholders value and regret for not recommending any dividend for thefinancial year under review. The Directors hope to pay dividend in the coming years.
BOARD OF DIRECTORS:
During the financial year under review there is no change in constitution of Board ofDirectors of Company. As per the provisions of section 152 of the Companies Act 2013Mrs. Suchitra Nandury who retires by rotation at the ensuing Annual General Meeting andbeing eligible offer herself for re-appointment. The board recommends her re- appointment.
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 thisAnnual Report.
EXTRACT OF ANNUAL RETURN:
Pursuant to section 92(3) of the Companies Act 2013 (the Act') and rule 12(1) ofthe Companies (Management and Administration) Rules 2014 extract of annual return inform 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 arm's 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 has been made in the notes to the financial statements. The detailsof related party transactions for the FY 2016-17 is enclosed as
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:
(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 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.
Subject to approval of the members at the ensuring AGM the Board of Directors at theirmeeting held on 30.05.2017 have approved the appointment of M/s. M. Anandam & CoChartered Accountants Hyderabad as statutory auditors of Company in place of M/s. K.Vijayaraghavan & Associates LLP chartered Accountants the retiring auditors whosetenure is expiring at the ensuring AGM for a period of five financial years from the FY2017-18 to FY 2021-22. Accordingly the Board has recommended the appointment for approvalof members at the ensuring Annual General Meeting under sec 139 of the Companies Act. 2013and the rules made thereunder.
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.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board 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 2016-17 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 issued by the Institute of Chartered Accountants of Indiaform part of this Annual Report.
As a listed company necessary measures have been taken to comply with the listingobligatory Disclosure Requirements (LODR Regulations) with the BSE Ltd Mumbai. A reporton Corporate Governance along with a certificate of compliance from the Auditors formspart 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 30.05.2017.
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 of the Nomination and Remuneration Policy as framed by the Nominationand Remuneration Committee 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 shall have appropriate skills and experiencein one or more fields of finance law management sales marketing administrationpublic administrative services research corporate governance technical operations orany other discipline related to the Company's business.
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:
Pay for performance: Remuneration of Executive Directors KMP and otheremployees is a balance between fixed and incentive pay reflecting short and long termperformance objectives appropriate to the working of the Company and its goal. Theremuneration of Non-Executive Directors shall be decided by the Board based on the profitsof the Company and industry benchmarks.
Balanced rewards to create sustainable value: The level and composition ofremuneration is reasonable and sufficient to attract retain and motivate the Directorsand employees of the Company and encourage behaviour that is aligned to sustainable valuecreation.
Competitive compensation: Total target compensation and benefits are comparableto peer companies in the industry and commensurate to the qualifications and experience ofthe concerned individual.
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:
The Company has invested an amount of Rs. 80000000/- in the capital of CalypsoTechnologies Inc. partnership firm as a Partner. The investment made is within thepowers of Board of Directors 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 LODR Regulationsdealing with powers duties and functions of the Board of the Company your Company hasadopted criteria for evaluating the performance of its Board Committees and otherDirectors including Independent Directors applicable from the financial year 2016-17. Thesaid criteria contemplates evaluation of Directors based on their performance as directorsapart from their specific role as independent non-executive and executive directors asmentioned below: a. Executive Directors being evaluated as Directors as mentioned abovewill also be evaluated on the basis of targets / criteria given to executive Directors bythe board from time to time as well as per their terms of appointment.
b. Independent Directors being evaluated as a Director will also be evaluated onmeeting their obligations connected with their independence criteria as well as adherencewith the requirements of professional conduct roles functions and duties specificallyapplicable to Independent Directors as contained in Schedule IV to the Companies Act2013.
The criteria also specifies that the Board would evaluate each committee's performancebased on the mandate on which the committee has been constituted and the contributionsmade by each member of the said committee in effective discharge of the responsibilitiesof the said committee. The Board of Directors of your company has made annual evaluationof its performance its committees and directors for the financial year 2016-17 based onafore stated criteria.
DISCLOSURES: Audit Committee:
The Audit Committee comprises three members namely 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 were takenon note 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 the Company'swebsite 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 DirectorChief Financial Officer and Company Secretary during the financial year 2016-17 and ratioof the remuneration of each Director to the median remuneration of the employees of theCompany for the financial year 2016-17 are as under:
|Sl No Name of Director/KMP and Designation ||Remuneration of Director/KMP for financial year 2016-17 ||% increase in Remuneration in the Financial Year 2016-17 ||Ratio of remuneration of each Director to median remuneration of employees |
|1. Mr. Tejaswy Nandury Whole Time Director ||Nil ||Nil ||Nil |
|2. Mr. Narasimha Rao Joga Director ||Nil ||Nil ||Nil |
|3. Mr. V.R. Shankara Director ||Nil ||Nil ||Nil |
|4. Mrs. Sobha Rani Nandury Director ||Nil ||Nil ||Nil |
|5. Mrs. Suchitra Nandury Director ||Nil ||Nil ||Nil |
|6. Mr. DM Basha Company Secretary ||180000 ||Nil ||- |
|7. Mr. K Sreedhar Babu Chief Financial Officer ||907500 ||9.09 ||- |
(ii) The median remuneration of employees of the Company during the financial yearwas Rs. 165597/-
(iii) In the financial year there was a decrease of 1.96% in the medianremuneration of employees;
(iv) There were 5 (Five) permanent employees on the rolls of Company as on March31 2017;
(v) Average percentage increase made in the salaries of employees other than themanagerial personnel in the last financial year i.e. 2016-17 was 6.17 % whereas theincrease in the managerial remuneration for the same financial year was 8.71 % and it ishereby 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 underreview:
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 Company's operations in future.
Your Directors further state that during the financial year under review there were nocases filed pursuant to the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) 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 standalone and consolidated Annual financial statementsthe applicable accounting standards have been followed along with proper explanationrelating 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 profit of the Company for that financial 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 financial statements on a going concernbasis.
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 thefinancial year and look forward to their continued support. Your Directors also place onrecord their appreciation of the dedication and commitment displayed by the employees ofthe 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 : 10.08.2017 ||(DIN:00041705) ||(DIN: 00041571) |