Replies received from the company to my queries. They are more or less in line with what @ayushmit has already said. But good to see that the company is responding to retail investor queries. I have found many small-caps not bothering to reply.
Q1. Directors’ remuneration – Directors’ remuneration as a % of PAT stands at 13.3% for FY21-22 which is significantly higher than the 11% cap as per Section 197 of Companies Act. While Company is free to pay its Directors more than the cap via a special resolution, higher than 11% remuneration is usually interpreted as being unfriendly to minority shareholders. Does the Management have any plans of bringing the Directors’ remuneration below 11% going forward?
A. Directors’ remuneration is commensurate with the size and nature of our business and the additional burden that Directors shoulder to ensure the Company performs at optimal levels so as to consistently deliver value to all concerned stakeholders.
Q2. Auditor fees – Auditor fees in FY20-21 was 6 Lakhs, in FY21-22 was 15 Lakhs and I can see in the AGM resolution, Auditor fees will be 22 Lakhs in FY22-23. What is the reason for 3.5x increase in Auditor fees in 2 years when Pix revenues are increasing only 20% YOY? As far as I am aware no. of subsidiaries and business complexity have remained the same, so why the steep increase?
A. With a view to further strengthen the Company’s adherence to accounting standards and to safeguard its interests, the Company enlisted the services of MSKA & Co which is considered to be one of the pioneers in their industry. As such, their professional fee is at the higher end of the spectrum.
Q3. European Subsidiary not audited – Why is Pix’s London based subsidiary not audited at all? This was mentioned in the Auditor’s comments for consolidated financials. This subsidiary contributes 20% of PIX revenues and 10% of PIX assets, so it is definitely a material subsidiary for the company. Why is this subsidiary’s financials not audited and will the Management start the practice of auditing for this subsidiar from FY22-23?
A. Your Company complies with all the laws prevailing in its countries of operation. Currently, the threshold has not been reached to perform a full audit of our European subsidiary. If and when the threshold is reached, your Company will take the requisite action.
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