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Photon Kathaas (PKP)

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Thursday 23 December, 2010

Photon Kathaas

Interim Results

RNS Number : 5031Y
Photon Kathaas Productions Ltd
23 December 2010
 



24 December 2010

 

Photon Kathaas Productions

 

Interim results   

 

Photon Kathaas Productions Ltd. (AIM: PKP, "PKP"), the South Indian film company, announces it interim results for the six months ended 30 September 2010 and an update on trading since the period end.

 

Highlights

 

·      Listing on AIM, raising $2.4m

·      Two films already in post production (Nadunisi Naygal and Veppam) 

·      Azhagar Samiyin kuthirai in production; pre-production complete on Hindi remake of Vinnai Thandi Varuvaaya

·      Launch of Photon Kathaas Music label to capitalise on popularity of soundtracks and ringtones

·      Industry-leading studio model already attracting significant interest in collaboration with PKP

 

Venkat Somasundaram, PKP Chief Executive said: 

 

"We received an encouraging response from investors who backed our listing on AIM and we are already using the funds raised to make high-quality films for South Indian audiences around the world. 

 

"We have also diversified with the launch of our own music label and are confident our strategy of creating the first studio model for South Indian film production will generate significant momentum." 

 

Enquires

 

Photon Kathaas


Venkat Somasundaram, Chief Executive

+65 6224 4991

Reshma Ghatala, Head of Marketing

+91 44 2820 2988



Seymour Pierce Limited

020 7107 8000

Nandita Sahgal/Tom Sheldon (Corporate Finance)

Laetitia MacManus (Corporate Broking)




College Hill

020 7457 2020

Adrian Duffield/Carl Franklin


 

Chairman's statement  

 

PKP was incorporated on 17 November 2009 for the purpose of producing films in Southern India and distributing those both domestically and internationally. It joined the AIM market in London on 4 November 2010 and raised approximately US$2.4m net of expenses.

 

During the period to 30 September 2010 it was an unlisted company and the management team was focused on preparing for the listing process on AIM, while at the same time pursuing the production of a number of films.

 

As a result, the accounts for the period show only the start-up costs for the business and the initial expenses incurred in preparing the first two productions. A nominal revenue of about US$78,000 was generated in the period (from a short film commissioned by the Government of Tamil Nadu) and a loss of US$469,314 was incurred.

 

The Admission Document states that the Company's accounting reference date is 31 March 2010. The Board has decided to bring forward the accounting year end date for reporting purposes to 31 December 2010.

 

Update

 

Films currently in production are Azhagar Samiyin Kuthurai and a Hindi remake of Vinnai Thandi Varuvaaya. These are expected to be delivered by Spring 2011. PKP is also in advanced stages of finalising a small-budget Tamil film titled Thanga Meengal to be directed by Ram Subbu.

 

Also, the official trailer of Nadunisi Nayagal, a small-budget Tamil film, will be released on 24 December 2010. 

 

In December, PKP launched its own music label, Photon Kathaas Music, to promote its own soundtracks and associated products such as ringtones, and to acquire and market music properties from other productions. Music is a major ingredient in Indian film productions and the ownership and exploitation of these music rights is expected to be an important addition to revenues of PKP in the future.

 

The launch of Photon Kathaas Music is part of PKP's strategy to extend its ownership of intellectual property and diversify across other high-value revenue generators associated with film production.

 

Photon Kathaas Music acquired the music rights of a Tamil film titled Kandhein, which was launched on 9 December 2010. In addition, PKP has signed a five-year agreement with Hungama, the leading mobile content delivery platform, to deliver the music rights across new media and mobile channels.

 

The Group plans to launch the music and trailer of Veppam (a small budget Tamil film) at the end of December in Chennai. The music, by Joshua Sridhar, is being distributed by Photon Kathaas Music in association with Sony Music. PKP is also in discussions with Star Vijay TV (a Tamil TV channel run by Star TV - a Fox group company) to buy the unplugged music video. Star Vijay TV plans to telecast the programme at the same time. 

 

The Board remains confident on the outlook for 2011 and the planned film production pipeline.

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 

           



30-Sep-2010

31-Mar-2010



US $

US $



Unaudited

Audited

ASSETS








Non-Current assets




Intangible Assets


              14,680

              14,680

Total non-current assets


               14,680

               14,680





Current assets




Loans & Advances


               38,980

               25,456

Inventory - Work in Progress


              525,000

               60,806

Accounts Receivable


             5,414

             100,000

Cash and Cash equivalents


                36,101

9,970

Total current assets


             605,495

196,232





    Total Assets


             620,175

             210,912





LIABILITIES AND EQUITY








SHAREHOLDERS' EQUITY




Share Capital


               16,401

               100

Accumulated losses


   (783,808)

   (314,494)

Total Shareholders' Equity


 (767,407)

 (314,394)





CURRENT LIABILITIES




Trade and Other Payables


1,387,582

525,306

Total Current Liabilities


             1,387,582

             525,306





Total Equity and Liabilities


             620,175

             210,912

 

(The accompanying notes are an integral part of this consolidated interim financial statements)

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 

                       

 


Notes

30-Sep-2010

31-Mar-2010



US $

US $



Unaudited

Audited

Revenue

 

3,10

                78,007

              100,000





Cost of Sales


               (75,124)

             

(95,000)





Gross Profit


                2,883

                  5,000

Administrative Expenses


             (472,197)

             (319,494)





Loss before Tax


           (469,314)

        (314,494)

Income tax expense


                       -  

                       -  





Loss for the period


           (469,314)

           (314,494)

Other comprehensive income


                       -  

                       -  





Total Comprehensive Loss for the period


          (469,314)

           (314,494)





Earnings per share

Basic and diluted (cents per share)

11

(4.719)

(3,145)

 

(The accompanying notes are an integral part of this consolidated interim financial statements)

 

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

 

 

Unaudited
Share Capital
  US $
Retained earnings loss
  US$
Total Shareholders'
Equity
 US$
Balance at 1 April 2010
   
100
    (314,494)
  (314,394)
Loss for the period
    -  
  (469,314)
 (469,314)
Other comprehensive income for the period
  -  
  -  
 -  
Total comprehensive income for the period
   -  
  (469,314) 
   (469,314)
Issue of Share capital
 16,301
-
   16,301
 
Balance at 30 Sept, 2010
16,401
    (783,808)
  (767,407)

           

                       

(The accompanying notes are an integral part of this consolidated interim financial statements)

 

CONSOLIDATED STATEMENT OF CASHFLOWS

 


30-Sep-2010

31-Mar-2010


US $

US $


Unaudited

Audited

 

Cashflow from operating activities



Loss before tax

           (469,314)

           (314,494)

Changes in operating assets and liabilities



Decrease / (Increase) in receivables

             94,586

           (100,000)

(Increase) in inventory

           (464,194)

            (60,806)

Increase in accounts payable

            437,704

            312,684

Increase in other payables

            422,126

            166,092

(Increase) in prepayments and advances

            (13,524)

            (25,456)

Net Cash generated/(used) in Operating Activities

7,384

(21,980)




Cashflow from investing activities



Purchase of Intangible assets

                    -  

            (14,680)

Net Cash used in investing activities

                    -  

          (14,680)




Cashflow from financing activities



Proceeds on issue of capital

             16,301

                  100

Proceeds from Director Loans

               2,446

             46,530

Net proceeds from financing activities

18,747

46,630




Net increase in cash and cash equivalents

            26,131

              9,970

Cash and cash equivalents at the beginning of the period

              9,970

                    -  

Cash and cash equivalents at the end of the period

36,101

9,970

           

1.      BAsis of preparation

 

Photon Kathaas Productions Ltd ("PKP" or "the Company") is a Singapore registered company established to produce and co-produce South Indian films and films primarily targeted at the South Indian audience. The principal activities of the Company and its subsidiaries are those relating to the business of production and co-production of films primarily targeted at the South Indian audience of varying genre, language and budget. The Company's registered office is situated at 31, Cantonment Road, Singapore 089747.

 

This condensed set of financial statements has been prepared using accounting policies consistent with International Financial Reporting Standards (IFRSs). The same accounting policies, presentation and methods of computation are followed in Part IV of the AIM Admission Document.

 

While the financial figures included in this half-yearly report have been computed in accordance with IFRS applicable to interim periods and include information required to be disclosed by the AIM Rules for Companies, they do not contain sufficient information to constitute an interim financial report as that term is defined in IAS 34, 'Interim Financial Reporting'.

 

The consolidated interim financial statements of the Group for the six months to 30 September 2010 and comparative numbers, unless indicated, are unaudited and do not comprise statutory accounts within the provision of the Singapore Companies Act, Chapter 50.

 

The interim financial statement consolidates the Company and the subsidiary financial statements drawn up for the period ended September 30, 2010. The transactions and balances between the entities have been eliminated in the preparation of the consolidated interim financial statement.

 

2.      Standards and Interpretations issued by  IASB but not yet applied by the Group

 

The group has applied IFRS 1 for first time adoption in compiling its consolidated interim financial statement for the period ended September 30, 2010 . The following standards and interpretations which have not been applied in this consolidated interim financial statement were in issue but not yet effective:

 

IFRS 9  :           Financial Instruments - Classification and Measurement

 

IAS 24  :           Related Party Disclosures - Revised definition of related parties

 

IAS 32  :           Financial Instruments : Presentation - Amendments relating to classification of rights issue

 

Based on the Group's current business model and accounting policies, management does not expect material changes to the recognition and measurement principles on Group's financial statements when these Standards / Interpretations become effective. However, the Directors are aware that the application of the above standards and interpretations will significantly alter the amount and complexity of the disclosures contained in the Group's subsequent financial statements.

 

3.      Summary of Accounting Policies

 

a.   GOING CONCERN

 

At 30 September 2010, the company's total liabilities exceeded its total assets by US$767,407. However, the directors have concluded that the going concern basis is appropriate for the interim financial statements ended that date due to the AIM admission and fundraising that was underway at that date and was concluded on 4 November 2010, raising US$2.4 million, gross of costs. See note   14(a) for further information.

 

 

b.   Basis of Consolidation

 

The consolidated interim financial statements incorporates the interim financial statement of the Company and entities controlled by the company (its subsidiaries). Control is achieved where the company has the power to govern the financial and operating policies of an investee entity so as to obtain the benefits of its activities.

 

The Company and its subsidiaries (the "Group") comprise the following companies:

 

1.   Photon Kathaas Productions Limited, a company incorporated in Singapore and operating under the laws of Singapore, is the parent company.

 

2.   Photon Kathaas International Productions Limited, a company incorporated in Singapore and operating under the laws of Singapore, is a 100 percent subsidiary of the parent.

 

3.   Photon Kathaas Production Private Limited, a company incorporated in India and operating under the laws of India. This is a 100 percent indirect subsidiary of the Singapore parent with the parent holding 99.99 percent and Photon Kathaas International Productions Limited holding the balance of 0.01 percent.

 

c.   Functional and foreign currency

 

i.    Functional and presentation currency

 

      Items included in the interim financial statements of each entity in the Group are measured using the currency that best reflects the economics substance of the underlying events circumstances relevant in that entity (the "functional currency").  The consolidated interim financial statement of the Group and the balance sheet of the Company are presented in US dollars, which is the Company's functional and presentation currency.

 

ii.    Foreign currency transactions

 

      Transactions in foreign currencies are measured and recorded in US dollars using the exchange rate in effect at the date of transactions.  At each balance sheet date, recorded monetary balances that are denominated in foreign currency are adjusted to reflect the rate at the balance sheet date.  All exchange adjustments are taken to income statement.

 

iii.   Foreign currency translation

 

      The results of operations and financial position are translated into US dollars using the following procedures:

 

§ assets and liabilities for each balance sheet presented are translated at the closing rate at the date of balance sheet;

§ income and expenses for each income statement are translated at the average exchange rate (unless this average is not a reasonably approximation of the cumulative effect of the rate prevailing on the transaction dates, in which case income and expenses are translated using the exchange rates at the date of the transactions); and

§ all resulting exchange differences are taken to the foreign currency translation reserve within equity.

 

d.   Revenue recognition

        

Revenue represents sale of film rights, which include : (i) Theatrical rights, (ii) Music rights (iii) Satellite and Cable TV rights (iv) Pay TV rights, (v) Home Video rights etc. The revenue is recognised on the basis of assignment of the rights to the purchaser of the rights, and on the basis of a contract with the purchaser.

 

When the outcome of a project involving the rendering of services can be estimated reliably, revenue associated with the project is recognised by reference to the stage of completion of the project at the balance sheet date.  The outcome of a project can be estimated reliably when all the following conditions are satisfied:

 

i.    the amount of revenue can be measured reliably;

 

ii.    it is probable that the economic benefits associated with the project will flow to the enterprise;

 

iii.   the stage of completion of the project at the balance sheet date can be measured reliably; and

 

iv.   the costs incurred for the project and the costs to complete the project can be measured reliably.

 

e.   INTANGIBLE ASSETS

 

Intangible assets arising out of the acquisition of certain talent agreements, insignia and remake rights of certain movies are shown at historical cost. Intangible assets acquired in a business combination are stated at fair value at the date of acquisition. These intangible assets have a finite useful life and are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation is calculated using the straight-line method to allocate the cost of the intangible assets over their estimated useful lives, which range from one to fifteen years.

 

f.    TRADE RECEIVABLES

 

Trade receivables are measured at initial recognition at fair value. Appropriate allowances for estimated irrecoverable amounts are recognised in the Statement of Comprehensive Income when there is objective evidence that the asset is impaired. The allowance recognised is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows expected to be received from the asset.

 

g.   Inventories

 

Inventories are stated at the lower of cost and net realizable value. Cost comprises direct material costs. Net realizable value represents the estimated selling price less all estimated costs of completion.

 

Work in progress is the cost of production and development of movies. The production costs will get accumulated as work in progress and will be charged to the income statement as and when the revenues are recognizable and sale takes place.

 

h.   Cash and cash equivalents

        

Cash and cash equivalents comprise cash in hand and at bank in demand.

 

i.    Trade payables

 

Trade payables are initially measured at fair value, and are subsequently measured at amortised cost using the effective interest rate method.

 

j.    LEASES

 

Rentals under operating leases are charged to the income statement on a straight line basis over the lease term.

 

k.   Accounting for Income Taxes

 

Current income taxes and / or liabilities comprise those obligations to, or claims from, fiscal authorities relating to the current or prior reporting period that are unpaid / un-recovered at the balance sheet date. They are calculated according to the tax rates and tax laws applicable to the fiscal periods to which they relate, based on the taxable profit for the year. All changes to current tax assets or liabilities are recognised as a component of tax expense in the income statement.

 

Deferred income taxes are calculated using the liability method on temporary differences. This involves the comparison of the carrying amounts of assets and liabilities in the interim financial statemnet with the tax base. Deferred tax, is however, neither provided on the initial recognition of goodwill, nor in the initial recognition of the asset or liability unless the related transaction is a business combination or affects tax or accounting period. Tax losses available to be carried forward as well as other income tax credits to the Group are assessed for recognition as deferred tax assets.

 

Deferred tax liabilities are always provided for in full. Deferred tax assets are recognised to the extent that it is probable that they will be offset against future taxable income.  Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are expected to apply to their respective period of realization, provided they are enacted or substantively enacted at the balance sheet date.

 

Changes in deferred tax assets or liabilities are recognised as a component of tax expense in the income statement, except where they relate to items that are charged or credited directly to equity in which case the related deferred tax is also charged or credited directly to equity.

 

l.    SEGMENTAL REPORTING

 

Operating segments are reported in a manner consistent with the internal reporting provided to the board of directors. The board of directors is responsible for allocating resources and assessing performance of the operating segments and makes strategic decisions for the Company.

 

4.      accounting of estimates and judgements

 

         The preparation of the historical interim financial statement requires management to make estimates and assumptions, which may differ from actual results in future. Management is also required to use its discretion as to the application of the accounting principles used to prepare this interim financial statement.

 

   Inventory - Work in progress

 

         The Inventory - work in progress amount of USD 525,000 shown in the Statement of Financial Position is primarily the costs that have been incurred so far on two of the Company's film productions that were under way at the period end: Veppam (USD 150,000) and Nadunisinaaygal (USD 375,000). Both the films are under final post production stage and are due for release in the first quarter of 2011.

 

Intangible assets

 

In determining the economic useful lives and residual value of Intangible assets, management takes into account the current market prices, technological changes and other related aspects at the times the estimates are made.  

 

5.      Share Capital

 

PKP which is incorporated in Singapore is not required to have authorised share capital under the national jurisdiction. There is also no concept of a par value for the shares. For all matters submitted to vote in the shareholders meeting, every holder of the equity shares, as reflected in the records of the company on the date of the shareholders meeting has one vote in respect of each share held. All shares are equally eligible to receive dividends and the repayment of capital in the event of liquidation of companies.

 


Unaudited

Audited


 

Sep 30,2010

US$

 

Mar 31,2010

US$




Issued and fully paid



 

Balance at beginning of period - April 1, 2010

 

100

 

-

 

Additions in period

 

16,301

 

100

 

Balance at end of the period - Sept 30, 2010

 

16,401

 

100

 

On 26 April 2010, the company issued 1088,900 ordinary shares for a consideration of US$ 10,889.

 

On 16 September 2010, 200,900 of Madan Pandy's shares were transferred to Venkat Somasundaram.

 

On 17 September 2010, the company issued 200,900 shares each to Gautham Menon and Reshma Ghatala for a combined consideration of US $ 4,018.

 

On 17 September 2010, the company issued 49,203 shares to AR Rahman for a consideration of US$ 492.03 and 90,206 shares to Ravi Venkatraman for a consideration of US$ 902.06

 

On 19 September 2010, the company's share capital was split on a 10:1 ratio, resulting in the new share capital amounting to 16,401,090.

 

Post the above changes the shareholdings in the company was as follows:

 

Name of shareholder

Number of shares held

Percentage of share capital held

Gautham Vasudev Menon

Venkat Somasundaram

Reshma Ghatala

Madan Pandy

Ravi Venkatraman

A R Rahman

Total

16,401,090

100%

 

6.               Trade and other payables

 


Unaudited

Audited


Sep 30, 2010

US$

Mar 31, 2010

US$




Trade payables (Note 1)

750,387

309,987

Amounts Owed to Directors (Note 2)

588,218

160,637

Director's Loan

48,977

54,682


1,387,582

525,306

 

Note 1: Includes an amount of USD 53,584 payable to a related party M/s Photon Factory (PF) against the executive production agreement between PF and PKP.

 

Note 2: The amounts owed to Directors relates to unpaid salaries and expenses for the period from incorporation to 30 September 2010.

 

Note 3: Short Term Loan are amounts due to Directors against loans given by them to the Company.

 

7.      directors' salary

 


Unaudited

Audited

           

Sep 30, 2010

US$

Mar 31, 2010

US$




Directors' emoluments



Emoluments

291,601

125,499





291,601

125,499

           

PKP is yet to formalize a share-based payment mechanism and hence during the period, there are no costs associated on account of this to the Directors.     

 

8.      Related Party Transactions

 

Transactions between PKP and its subsidiaries which are related parties of the Company have been eliminated on consolidation and are not disclosed in this note. Details of transactions between the Group and the other related parties are disclosed below:

 

The Indian subsidiary of the company, M/s Photon Kathaas Production Private Limited occupies premises owned by Mr.Javeed Ghatala, relative of one of the key management employees of the company. Rent of US$ 2,006 was paid to Mr.Javeed Ghatala during the period.

 

Photon Kathaas Private, has also entered into an agreement with M/s Photon Factory, wherein one of the Directors is a partner, for the exclusive use of the production licence. The fee for the same will be paid on a movie to movie produced basis and is capped at approximately US$20 per annum.

 

Photon Kathaas Private has entered into an agreement with its executive director and Chief Creative Officer, Mr. Gautham Vasudev Menon, for the exclusive use of his insignia for an annual fee of US$1,000 payable in December every year.

 

The Company has bought the 50 per cent remake rights in three movies, held by Mr. Gautham Vasudev Menon for a consideration of US$10,000.

 

The remuneration of the Directors who are key management personnel of the Group is set out in note 6.           

 

Photon Kathaas Private Limited has entered into an agreement with Photon Factory, wherein one of the promoter directors is a partner and Photon Factory will be the executive producer for the movie "Veppam" undertaken by the Company. At the period end, the production of the movie was in progress by the Group with Photon Factory being the executive producer of the movie. The amounts spent by Photon Factory towards the first schedule and payable to them at the period end is US$53,584.

 

The Company has entered into a co-production agreement with Escape Artists and RS Infotainment for the co-production of the film "Veppam". Madan Pandy, a member of the senior management of Photon Kathaas Private is a partner at Escape Artists. The amounts spent by Escape Artists towards this and payable to them at the period end is US$ 96,253.

 

The Company has entered into a co-production agreement with Escape Artists and RS Infotainment for the co-production of the film "Nadunisinaigal". Madan Pandy, a member of the senior management of Photon Kathaas Private is a partner at Escape Artists. The amounts spent by Escape Artists towards this and payable to them at the period end is US$ 375,000.

 

Two of the Directors have extended loans amounting to US$48,978 at the period end, these loans are non-interest bearing.

 

9.      Financial risk management

 

The Group's activities expose it to a variety of financial risks: market risks (including fair value interest risk and price risk). The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance.       

 

(a)Market risk

           

(i) Foreign exchange risk  

 

 

The Group has significant transactions in Indian Rupees and US Dollars. The Group does not hedge against the effects of movement in exchange rates. The risks are monitored by the management of the Group on a regular basis.

 

(b) Cash flow and fair value interest rate risk

 

As the Group has no significant interest-bearing assets, the Group's income and operating cash flows are substantially independent of changes in market interest rates.

 

10.     SEGMENT INFORMATION

 

Management has determined the operating segments based on the reports reviewed by the board of directors that is charged with the strategic decision making process for the Company and on the basis of reports that are expected to be reviewed when the business enters the revenue earning stage of its business cycle.

           

The board of directors considers the business from a geographic perspective. Geographically, the vast majority of the Group's operations up to the date of the statement of financial position have been located in India, with one purchase and sale of US theatrical rights. When the business enters the revenue earning stage from its own film releases, management expect to consider the performance of the business by reviewing its performance in India and Rest of the World ('RoW').

 

Currently the Group only has one operating segment: the production of motion picture films.

 

The segment information for the period ended 30 September 2010 is as follows:

 

 


India

US$

   ROW

US$

Total

US$





Segment revenue 

78,007

                 --

        78,007

Direct expenses

(75,124)

                 --

(75,124)

Indirect expenses

(342,918)

     (129,279)

(472,197)

 

Loss for the period

(340,035)

(129,279)

(469,314)





Cash and cash equivalents

3,422

32,679

36,101

Non cash assets

553,041

31,033

584,074






556,463

63,712

620,175

 

11.     EARNINGS PER SHARE

 

The earnings and weighted average number of ordinary shares used in the calculation of basic and diluted earnings per share are as follows:

 

 


Unaudited

Audited

           

Sep 30, 2010

US$

Mar 31, 2010

US$




Loss attributable to owners of the company

(469,314)

(314,494)




Weighted average number of ordinary shares

for the purpose of basic and diluted earnings per share

 

 

9,945,046

 

 

10,000

 

 

12.     OPERATING LEASE

 

On 16 December 2009 Photon Kathaas Production Private Limited entered into a twelve months operating lease for the office premises at No. 19, Avenue Road, Ghatala Towers, Nungambakkam, Chennai. The lease is cancellable at thirty days notice by either party.

 

13.    COMMITMENTS

 

(a)  At the period end, pre-production work was just started on another Tamil film - Azhagar Samiyin Kuthurai to be co-produced by the Company with another co-producer. The total cost of the movie is approx USD 1,000,000 and the company's co-production share is USD 500,000. Out of this the company is yet to commit the funds and accordingly no amounts have been capitalized at the period end.

 

(b)  At the period end production pre-production work was just startedon the Hindi re-make of Vinnaithandi Varuvaaya. The total cost of the movie is approx USD 2,750,000 and the company's co-production share is 50%. Out of this the company is yet to commit the funds and accordingly no amounts have been capitalized at the period end.

 

14.     EVENTS AFTER THE REPORTING PERIOD DATE

 

(a)  The company has submitted the application to the London Stock Exchange for all the existing Ordinary shares and the placing shares to be admitted to trading on AIM. The Listing had commenced on 4 November 2010 as below

 


Unaudited

Audited

 

           

Sep 30, 2010

Mar 31, 2010




 Gross proceeds raised by listing  ( US$ Mn)

2.40

-




Percentage on the enlarged share capital represented by the placing shares

23%

-

 

(b)  Pursuant to an amendment to the service agreement dated 2 November 2010, Gautham Vasudev Menon, Venkat Somasundaram and Reshma Ghatala, the promoters of the Company have agreed that their right to receive salary and other benefits accrued, but not paid, for the period from 1 January 2010 to 31 October 2010, shall be deferred until the Board of Directors of Photon Kathaas Private approves payment of remuneration pursuant to a review of its financial condition and results of operations of the company.

 

(c)  Pursuant to an amendment to the service agreement dated 2 November 2010, its is agreed that in lieu of Ramanujam TST's salary accrued, but not paid, for the period from 1 January, 2010 until 31 March 2010, he shall be entitled to receive such number of ordinary shares of the Company in lieu of fees totalling £15,625. Such ordinary shares shall be issued in the beginning of the quarter starting Jan 2011 on the Placing Price of US$0.49. His salary accrued, but not paid, for the period of 1 April 2010 to 31 October 2010 has been deferred until the Board of Photon Kathaas Private approving payment of remuneration pursuant to a review of its financial condition and results of operations.

 

(d)  Michael Rosenberg was appointed as a non-executive Director on September 1, 2010. Michael Rosenberg's services as a non-executive Director and as the non-executive Chairman of the Company will be provided by Eastkings Limited on terms that Michael's appointment may be terminated by either Eastkings Limited or the Company giving to the other not less than 12 months notice in writing. Staring Nov 1, 2010, Eastkings Limited will be paid fees at the rate of £37,500 per annum for the first two years of Michael Rosenberg's appointment and fees at the rate of £40,000 per annum for the third and each subsequent year of his appointment. Michael Rosenberg has agreed that the fees of £37,500 due to him in the first year of his appointment will be satisfied, in lieu of cash, by the allotment and issue to Eastkings Limited of Ordinary Shares quarterly in arrears, based on the Placing Price of US$0.49. If any regulatory or legal provision restricts dealings by Directors at the relevant date of allotment, the relevant number of Ordinary Shares will be allotted by the Company immediately after such restrictions have ceased to be applicable. In addition, the Company will reimburse all business expenses incurred by Michael Rosenberg in connection with the Company's business. As Michael Rosenberg is over 70 years of age his appointment as a Director is subject to shareholders re-electing him at the next and each subsequent Annual General Meeting of the Company.

 

(e)  Nathalie Schwarz has entered into a letter of appointment under which she is appointed as a non-executive Director of the Company with effect from Nov 1, 2010. The appointment may be terminated by either party giving to the other not less than 12 months' notice in writing. Nathalie is entitled to director's fees at the rate of £27,500 per annum for the first two years of her appointment and £30,000 per annum for the third and each subsequent year of her appointment. Natalie Schwarz has agreed that 50 per cent. of the fees of £27,500 due to her in the first year of her appointment (£13,750) will be satisfied, in lieu of cash, by the allotment and issue to her of Ordinary Shares quarterly in arrears based on the Placing Price of US$0.49. If any regulatory or legal provision restricts dealings by Directors at the relevant date of allotment, the relevant number of Ordinary Shares will be allotted by the Company immediately after such restrictions have ceased to be applicable. In addition, the Company will reimburse all business expenses reasonably incurred by Nathalie Schwarz in connection with the Company's business.

 

(f)   The Company post listing has also approved for an Employee Stock Option Plan (ESOP). The scheme would be monitored by the company based on the recommendations of the Remuneration Committee. The ESOP pool will be 10% of the enhanced share capital post the listing. There are no options issued as of date since the remuneration committee is yet to make recommendations. 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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