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

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)