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Directors Report of Photon Capital Advisors Ltd.

Mar 31, 2014

The Members of

PHOTON CAPITAL ADVISORS LIMITED

The Directors are pleased to present the 29th Annual Report together with Audited Accounts of the Company for the year ended 31st March, 2014.

FINANCIAL RESULTS (Rs. in Lakhs) Standalone Consolidated PARTICULARS 2013-14 2012-13 2013-14

Income from operations 169.23 20.40 169.23

Other Income 16.50 78.88 19.12

Expenditure 363.64 1,170.03 365.83

Profit/(loss) before tax (181.04) (1,074.26) (180.68)

Provision for tax (50.60) (340.57) (50.43)

Profit/(loss) after tax (130.44) (733.69) (130.24)

REVIEW OF OPERATIONS

The major event that affected equity markets this year was the Indian election. A few months prior to the election the market dropped precipitously. As soon as indications started appearing that a more right-leaning government had a good chance of winning the election, the markets began a rally. This volatile environment led us to believe that there were very few trading opportunities. So we mostly abstained from trading. However, we are always considering and evaluating trading opportunities that might develop.

SUBSIDARIES:

During the year, the Company has acquired an equity interest of 49.5% on 27th March 2014 in Soven Management Associates Private Limited ("Soven"). Since one of the Directors of the Company can control the composition of Board of Directors of Soven, the equity interest so held has been consolidated as per the applicable Accounting Standards.

Your Board of Directors has reviewed the affairs of the Subsidiary Company and included the audited consolidated financial statements for the financial year 2013-14 in this Annual Report as required under Section 212 of the Companies Act 1956 read with Circular No. 2/2011 dated February 8, 2011.The Statement pursuant to Section 212 of the Companies Act, 1956, highlighting the summary of the financial performance of our subsidiaries is annexed to this report.

MANAGMENT DSICUSSION AND ANALYSIS:

Industry Structure and developments:

There have been no substantial changes in the NBFC industry as a whole.

Opportunities and threats:

The new government at the centre appears to be more business friendly but it is not clear what policies it is likely to follow. Until policies are more clearly articulated by the government it is difficult to analyze the opportunities and threats in this market. However, old issues such as a persistently high level of inflation, high deficits and slow down of the economy continue to remain issues. However, the dramatic decline in the Indian rupee against the dollar will create some opportunities. 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.

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 2013-14, your Board of directors do not recommend any dividend.

PUBLIC DEPOSITS:

Your company has not invited and accepted any deposits falling within the meaning of Sec.58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, during the financial year under review.

BOARD OF DIRECTORS:

Appointment of Mrs. Sobha Rani Nandury (DIN : 00567002) as a director

Pursuant to Section 152 of Companies Act, 2013, the Board, in a view to expand the Board and to comply with the provisions of new Companies Act, 2013, recommends the appointment of Mrs. Sobha Rani Nandury as the Director of the Company in the ensuing Annual General Meeting, liable to retire by rotation.

Appointment of Mrs. Suchitra Nandury (DIN : 00568167) as a director

Pursuant to sec 161 of the Companies Act, 2013, in a view to expand the Board and to comply with the provisions of new Companies Act, 2013 the Board appointed Mrs. Suchitra Nandury, as an additional Director of the Company, w.e.f. 29.05.2014 to hold office up to the ensuing Annual General Meeting. The Board of Directors recommend her infusion into the Board, as a Director of the Company in the ensuing Annual General Meeting, liable to retire by rotation.

Appointment of Mr. V. R. Shankara (DIN: 00041705) and Mr. Narasimha Rao Joga (DIN: 00024260) as independent directors

Pursuant to Section 149 of Companies Act, 2013, Mr. V. R. Shankara and Mr. Narasimha Rao Joga will retire in the ensuing Annual General Meeting and being eligible seek re-appointment. The Board of Directors recommend their re-appointment. Sub-section (10) of Section 149 of the Companies Act, 2013, provides that Independent Directors shall hold office for a term of 5 consecutive years on the Board of the Company, and shall be eligible for re-appointment of the said term only by passing a Special Resolution by the shareholders of the Company.

DIRECTORS RESPONSIBILITY STATEMENT :

Pursuant to the provisions of Sec.217 (2AA) of the Companies Act, 1956 the Board of Directors of your Company hereby certify and confirm that:

1. In the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

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 at the end of the financial year and of the loss of the Company for that period;

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, 1956 ( to the extent applicable) and the Companies Act, 2013 ( to the extent notified) 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.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO:

The required information as per Sec.217 (1) (e) of the Companies Act 1956 is provided hereunder:

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION:

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.

FOREIGN EXCHANGE EARNINGS AND OUTGO:

Earnings in Foreign Currency : Nil

Expenditure in Foreign Currency : 2,33,780/-

PARTICULARS OF EMPLOYEES:

No employee of the Company was in receipt of remuneration in excess of the limits as laid down under Sec.217 (2A) of the Companies Act, 1956 read with the Companies (particulars of Employees) Rules, 1975.

STATUTORY AUDITORS:

M/s. K. Vijayaraghavan & Associates, Chartered Accountants, Hyderabad, the present statutory auditors of the Company hold office in accordance with the provisions of the Companies Act, 1956, upto the conclusion of the ensuing annual general meeting and are eligible for re-appointment. A written consent letter and certificate under section 139(1) of the Companies Act, 2013 have been received from them. The Board of directors recommends their re-appointment for a period three years.

CORPORATE GOVERNANCE:

As a listed company, necessary measures have been taken to comply with the listing agreement with the Bombay Stock Exchange Ltd, Mumbai. A report on Corporate Governance, along with a certificate of compliance from the Auditors, forms part of this Report as Annexure.

SECRETARIAL AUDITORS:

During the year under review, the Board has appointed M/s. SGP & Associates, Company Secretaries as Secretarial Auditors for issuing Compliance Certificate in terms of Section 383A of the Companies Act, 1956 for the financial year 2013 - 2014. A copy of the Compliance Certificate is annexed to this report.

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/- Sd/- V R SHANKARA TEJASWY NANDURY Place: Hyderabad DIRECTOR WHOLE-TIME DIRECTOR Date : 30.07.2014 (DIN:00041705) (DIN: 00041571)


Mar 31, 2012

To The Members of PHOTON CAPITAL ADVISORS LIMITED.

The Directors are pleased to present the 27th Annual Report together with Audited Accounts of the Company for the year ended 31st March, 2012.

FINANCIAL RESULTS:

PARTICULARS 2011-12 2010-11 (Rs. in lakhs) (Rs. in lakhs)

Income from operations 1148.13 606.81

Other Income 122.05 52.70

Expenditure 141.38 674.16

Profit/(Loss) before Tax 1128.80 (14.65)

Provision for tax 393.46 6.69

Profit / (Loss) after tax 735.34 (21.34)



REVIEW OF OPERATIONS:

The year presented very few trading opportunities so for most of the year your company adopted a defensive position by staying in bank deposits. Aside from a few small trades, the company did not engage in active trading in order to protect from the operational risk in a year which was highly uncertain with very few directional moves that could be reasonably explained.

MANAGEMENT DISCUSSION AND ANALYSIS:

Industry Structure and developments:

There have been no substantial changes in the NBFC industry as a whole.

Opportunities and threats:

The year ahead is going to be a very interesting one. The world is no longer as stable as it was financially or economically before the excesses in the American housing industry resulted in permanent structural damage. In order to counter the continuing impact of the great recession of 2008, central bankers around the world are embarking

on various types of initiatives. This has resulted in total divergence of policies between the countries of the developed world and the countries in the emerging world. It is the first time since the 1990s that such a wide divergence has emerged in the policies being followed by various countries. Developed countries are trying to counter the possibility of deflation. Since their economies have been so affected by the deleveraging that followed the excesses of the 2003-2008 period, they have embarked on a process of almost continuous "pump priming" by trying to push more and more liquidity into their financial systems. The USA has joined Japan in becoming one of great sources of liquidity through their various quantitative easing programs.

The problem with quantitative easing, as the Japanese have found out, is that no one knows exactly where the liquidity will find a home. The Federal Reserve has hoped that it would find a home in American industry and in creation of new household credit. Though American industry has been doing well, it has hoarded cash rather than invest it because of its experience of the downturn and the fear psychosis that the recession created. Households, on the other hand, have such damaged balance sheets that their willingness to take on more credit, especially in the face of persistent unemployment and potentially reduced disposable income, has been minimal. As a result, the liquidity created by the Federal Reserve found a place in US Treasury bonds and commodities. This resulted in dramatically lowered yields and very high prices of commodities. The abnormal rise in commodity prices resulted in huge inflation in emerging economies such as India and China. Persistent inflation in these countries has created massive divergence in policy between developed countries and these emerging nations. This divergence may now begin to narrow if inflation cools off. However, it is not clear by when inflation will slow and to what extent a growth slowdown is required to curb price rises. Both China and India have adopted an easing stance. It remains to be seen if the developed world will follow.

To add to this confusion, the European Union is showing increasing signs of breakdown. The European Union was created with a single currency but without a common treasury. The underlying economies have widely different characteristics. Germany, an export led powerhouse, shares a currency with countries like Greece and Italy, which are much weaker. The impact of the great recession has been very limited on Germany but PIIGS countries have never really recovered from it. As a result, the fiscal stimulus undertaken in those countries has completely undermined their public finances. PIIGS countries are not able to smoothly roll over their debt at rates that they consider reasonable. Since

they do not have their own currency, they are unable to regain export competitiveness through a fall in their currencies. Since they do not share a treasury with their stronger neighbours, they are unable to use the strength of their neighbours to pay bills that their governments have run up. A quasi treasury is being created through the European Financial Stability Fund but it is not fully funded to handle all the problems that are likely arise from the friction in rollover of debt in the PIIGS countries. Nor is it ever likely to get fully funded because funding it would weaken the strong countries. European politicians are also very reluctant to make decisions that would, in their eyes, lower the prestige of the Eurozone. This complicated set of events makes for a high amount of confusing and destabilizing events to come from Europe for a long time. It appears that the European Union is on course to eventually break up. But the path to breakup will not be smooth and will create enormous instability in global financial markets.

China, meanwhile has begun to slow down appreciably and its central bank is infusing liquidity into its banking system to counteract the government engineered slowdown. Growth in the rate of inflation seems to be abating.

Finally, we arrive at India. India is on the verge of frittering away its opportunities. Through a stroke of luck, our population bomb got transformed into a demographic dividend. The liberalization that occurred in the nineties paved the way for sustained growth over the next two decades. However, with great prosperity came great greed. Our politicians and bureaucrats, never the models of good government, skilful execution or great vision, have become completely focused on enriching themselves at the expense of the entire country. There is an attempt to make the country a welfare state through various subsidy schemes that are going to be impossible to roll back. As a result of the welfare economics model being followed for selfish purposes by our governments, our population is learning that it is possible to live on government largesse without being productive. This is a very dangerous incentive for the future. High inflation, combined with high interest rates is certain to reduce economic growth. Our economy, in any case, lacks the strength that comes from innovative mindsets. While this may seem a grim assessment of the country, it is not an argument that no one in India will prosper. Some individuals and companies will. But unless there is great reform undertaken to dismantle the crony capitalism that is becoming endemic in the country, the growth story that we are so enamoured with will be short lived.

Outlook:

All this creates an uncertain outlook for investments. But great trading opportunities will emerge. If these opportunities are exploited skilfully, it will be possible for your company to grow substantially. But these opportunities will come with a great amount of volatility, which will restrain the ability to exploit it. So our skills in managing trading positions will be tested greatly in the next few months and years.

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 slow down, 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:

Your Board decided to retain the profit with the Company to strengthen the capital base , hence not recommend any dividend.

PUBLIC DEPOSITS:

Your company has not invited and accepted any deposits falling within the meaning of Sec.58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, during the financial year under review.

DIRECTORS:

Mr. Madhukar Yarra, Director of the Company retires by rotation and being eligible offers himself for re-appointment.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the provisions of Sec.217 (2AA) of the Companies Act, 1956 the Board of Directors of your Company hereby certify and confirm that:

1. In the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

2. 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 profit of the Company for that period;

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, 1956 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.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUT GO:

The required information as per Sec.217 (1) (e) of the Companies Act 1956 is provided hereunder:

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION:

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.

FOREIGN EXCHANGE EARNINGS AND OUT GO:

Earnings in Foreign Currency : Nil

Expenditure in Foreign Currency : Nil

PARTICULARS OF EMPLOYEES:

No employee of the Company was in receipt of remuneration in excess of the limits as laid down under Sec.217 (2A) of the Companies Act, 1956 read with the Companies (particulars of Employees) Rules, 1975.

STATUTORY AUDITORS:

M/s. K.Vijayaraghavan & Associates, Chartered Accountants, Hyderabad, who are statutory auditors of the Company hold office in accordance with the provisions of the Companies Act, 1956, upto the conclusion of the ensuing annual general meeting and are eligible for re-appointment. A certificate under section 224 (1B) of the Companies Act, 1956 has been received from them. The Board of directors recommend their re-appointment.

CORPORATE GOVERNANCE:

As a listed company, necessary measures have been taken to comply with the listing agreement with the Bombay Stock Exchange Ltd, Mumbai. A report on Corporate Governance, along with a certificate of compliance from the Auditors, forms part of this Report as Annexure.

SECRETARIAL AUDITORS:

During the year under review, the Board has appointed M/s. SGP & Associates, Company Secretaries as Secretarial Auditors for issuing Compliance Certificate in terms of Section 383A of the Companies Act, 1956 for the financial year 2011 - 2012. A copy of the Compliance Certificate is annexed to this report.

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.

For and on behalf of the board of

Photon Capital Advisors Limited



Place: Hyderabad V R Shankara Tejaswy Nandury

Date: 31.07.2012 Director Wholetime Director


Mar 31, 2010

The Directors are pleased to present the 25th Annual Report together with Audited Accounts of the Company for the year ended 31st March, 2010.

FINANCIAL RESULTS:

PARTICULARS 2009-10 2008-09

(Rs.in lakhs) (Rs.in lakhs)

Income from operations 266.35 972.47

Other Income 63.44 64.51

Expenditure 728.47 970.10

Profit / (Loss) before Tax (398.68) 66.88

Provision for tax (0.91) 211.30

Profit / (Loss) after tax (397.77) (144.42)

Profit brought forward (76.25) 68.17

Balance transferred to balance sheet (474.02) (76.25)

REVIEW OF OPERATIONS:

The year 2009-2010 has been a difficult one for your company. Even though the stock market has rebounded from its lows of the previous year, we took a call that the market could not rebound in a very sustainable manner in a very short period of time. We believed that several buying opportunities would emerge as prices stabilized at a low base and did not anticipate the spectacular rally that occurred. As a result, we missed the upside in the markets. However, on investments that we kept, we were able to recoup some of the mark-to-market losses.

Another factor exacerbated the situation. While we did not have a very strong point of view on the outcome of the Indian election, we believed that the rupee was going to depreciate. As a result, we had a long position in USDINR futures, which resulted in a loss created by the massive up move in the markets on the day that the election results were announced. In addition, we were also holding some positions from the previous year that we believed were fundamentally affected by the crash in the stock market. Selling them enabled us to create a tax credit because of the diminution in their value. All in all, we managed to rack up losses in both investing and trading activities. While this was disappointing, this experience has made us change our approach towards our operations, the details of which are discussed in the Management Discussion and Analysis section.

The financial services segment has been discontinued due to lack of opportunities to scale that business.

Dividend:

Your Board of directors do not recommend any dividend due to steep fall in income of the Company and thereby incurred a loss during the year 2009-2010.

PUBLIC DEPOSITS:

Your company has not invited and accepted any deposits falling within the meaning of Sec.58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, during the financial year under review.

DIRECTORS:

Mr. V.R. Shankara, Director of your Company retires by rotation and being eligible offer himself for reappointment.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the provisions of Sec.217 (2AA) of the Companies Act, 1956 the Board of Directors of your Company hereby certify and confirm that:

1. In the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

2. 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 period;

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, 1956 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.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUT GO:

The required information as per Sec.217 (1) (e) of the Companies Act 1956 is provided hereunder:

Conservation Of Energy and Technology Absorption:

Since the Company does not own any manufacturing facility, the other particulars relating to conservation of energy and technology absorption stipulated in the Companies (disclosure of particulars) in the Report of the Board of Directors Rules 1988 are not applicable. Foreign Exchange Earnings and Out Go:

Earnings in Foreign Currency : NIL

Expenditure in Foreign Currency : Nil

PARTICULARS OF EMPLOYEES:

No employee of the Company was in receipt of remuneration in excess of the limits as laid down under Sec.217 (2A) of the Companies Act, 1956 read with the Companies (particulars of Employees) Rules, 1975.

AUDITORS:

M/s. K.Vijayaraghavan & Associates, Chartered Accountants, Hyderabad, who are statutory auditors of the Company hold office in accordance with the provisions of the Companies Act, 1956, upto the conclusion of the ensuing annual general meeting and are eligible for re-appointment. A certificate under section 224 (1B) of the Companies Act, 1956 has been received from them. The Board of directors recommend their re- appointment.

CORPORATE GOVERNANCE:

As a listed company, necessary measures have been taken to comply with the listing agreement with the Bombay Stock Exchange Ltd., Mumbai. A report on Corporate Governance, along with a certificate of compliance from the Auditors, forms part of this Report as Annexure.

COMPANY SECRETARY:

During the year under review, the Board has appointed M/s. SGP & Associates, Company Secretaries as secretarial auditors for issuing Compliance Certificate in terms of Section 383A of the Companies Act, 1956 for the financial year 2009-2010. A copy of the Compliance Certificate is annexed to this report.

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.

For and on behalf of the board

Photon Capital Advisors Limited

Sd/- Sd/-

V R Shankara Tejaswy Nandury

Director Wholetime Director

Place: Hyderabad

Date: July 23, 2010

 
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