Pioneer Investcorp Ltd

To The Members,

Your Directors have pleasure in presenting their Twenty Sixth Annual Report on thebusiness and operations of the Company along with the Audited Statements of Accounts forthe year ended 31st March, 2011.

Performance Review

After a strong recovery in the fiscal year 2010, the Indian Economy consolidatedfurther during fiscal 2011. Growth in Gross Domestic Product (GDP) during fiscal 2011 was8.5% compared with revised estimates of 8% during fiscal 2010. Recovery in agriculturaloutput, which increased 6.6% with higher crop output for the major food grains, led thegrowth in GDP. The manufacturing sector, after growing at double-digit rates of 11.3% inthe first half, recorded subdued performance during second half with growth of only 5.8%.From a high of 9.3% in the first quarter, GDP growth came down to 7.8% by the fourthquarter due to lower expansion in the manufacturing and mining sectors. Index ofindustrial production (IIP) grew 7.8% during fiscal 2011 as against 10.5% during fiscal2010 with growth in industrial activity coming down to low single digits in the later halfof 2011. To counter inflation, Reserve Bank of India (RBI) increased its key repo rate by225 bps from March 2010 to May 2011.

After touching record high levels in November 2010, the equity markets corrected due togeopolitical tensions in the world, adverse fiscal situation in developed countries, andrevelations of alleged scams in the country. These resulted in delay in fiscal reforms andgovernance issues in the country. Concerns on near-term growth due to rate increases byRBI to counter inflation also weighed down on the Equity Markets. The BSE Sensex increased10.9% from 17,428 at March 31, 2010 to 19,445 at March 31, 2011. The Indian rupee remainedstable against the US dollar at Rs. 45.30 per US dollar at March 31, 2011 as against Rs.45.10 per US dollar at March 31, 2010. Foreign Institutional Investors (FIIs) furtherinvested US$ 24.3bn in the Indian Equities during fiscal year 2011.

Despite a volatile economic and market environment during the year, the Company furtherbuilt on its relationship with various corporates by providing them with financialadvisory services including Equity, Debt and Bonds placements.

Key result highlights include a significant growth in both the top line and bottomline. Total income increased 32% to Rs. 4871.02 lakhs as against Rs. 3678.36 lakhs andProfit before tax increased 38% to Rs. 2131.65 lakhs as against Rs. 1548.80 lakhs.

Increase in Share Capital

During the year under review, the Company issued 66,875 Equity Shares on the exerciseof stock options to the Independent Directors and employees of the Company and itssubsidiary under the "Pioneer Investcorp Ltd. – Employee Stock Options Scheme -2006" and "Pioneer Investcorp Ltd. – Employee Stock Options Scheme -2007"; consequently, the issued, subscribed and paid up Equity Share Capitalincreased from Rs. 1223.00 lakhs to Rs. 1229.69 lakhs as on March 31st, 2011.

Dividend

During the year under review, the Company purchased office premises for use ofCompany's official purpose at Bandra Kurla Complex. Further, considering the Company'sexpansion plans and requirement of capital expenditure and working capital, the Board ofDirectors, has recommended a dividend @ 10% (Rs. 1.00 per Equity Share of face value ofRs. 10/- each) for the year ended March 31st 2011, subject to approval of the shareholdersat the ensuing Annual General Meeting.

Subsidiary Companies and Consolidated Financial Statements

During the year under review, the Company had six wholly-owned domestic subsidiariesand two wholly-owned overseas subsidiaries. In context of the globalization of the Indianeconomy and introduction of Accounting Standards on consolidated Financial Statements, TheMinistry of Corporate Affairs (MCA) by way of General circular no.2/2011 dated 8thFebruary, 2011, granted general exemption under Section 212(8) of the Companies Act, 1956to all Company's having subsidiaries from attaching the Balance Sheet, Accounts and otherdocuments of all existing subsidiaries to that of the Holding Company's Annual Accounts,including overseas subsidiaries.

Accordingly, the Board of Directors of the Company has resolved not to publish andattach copies of the standalone annual audited Accounts of all its existing Subsidiaries,including its overseas Subsidiaries. Instead, the Company will publish the ConsolidatedAccounts, in compliance with the above mentioned MCA circular. Copies of the annualaudited Accounts of all its existing Subsidiaries, including its overseas Subsidiaries,may be sought by a member of the Company on making a written request to the Company. TheAccounts of these Subsidiaries are also available for inspection to the members of theCompany at the Registered Office of the Company. The Company has attached the ConsolidatedFinancial Statements in this Annual Report, which includes the Financial Statements of allits existing Subsidiaries, including the overseas subsidiaries. From the ConsolidatedFinancial Statements, it may be observed that for the year under review revenue from totalincome was Rs. 8930.11 lakhs and profit before tax is Rs. 2656.93 lakhs.

Coal Consultancy and Coal Trading

This is to inform the members that the Company is engaged in offering Coal ConsultancyServices as part of the Investment Banking Services. The division has been functional formore than two years. The division provides consultancy services by identifying potentialtarget acquisition of coal mines in various countries with the purpose of offering them toIndian power producers looking to acquire coal mines. The said division offers the entiregamut of advisory services that includes disseminating knowledge on the mines, helping toevaluate the quality of coal, and assistance in logistics of transportation and intechnical and other commercial areas. The services include identifying the right source ofcoal, right quality of coal, negotiation on pricing, logistics and documentation.

The Coal Consultancy Division clocked revenue of Rs. 4.75 Cr. during the financial yearended March 31, 2011.

The Board of the opinion that the Company having established firmly in the area of CoalConsultancy, the time is right for it to venture into coal trading. The large unmet demandfor good quality thermal coal for various existing Indian Power Producers and future plansof various power producers to put up power plants presents a good opportunity for coaltrading. Further, the business of coal trading is a logical extension of coal consultancy.

The Board after the year end initiated its first step into coal trading by acquiring amajority stake in PINC Energy Resources Pvt. Ltd., a company already in the business ofdomestic coal trading.

Directors Responsibility Statement

As required by Section 217 (2AA) of the Companies Act, 1956, your Directors confirmthat:

i) In the preparation of the Annual Accounts, the applicable Accounting Standards havebeen followed along with proper explanations relating to material departures;

ii) The Directors selected such accounting policies and applied them consistently andmade judgements and estimates that are reasonable and prudent, to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theprofit of the Company for the year under review;

iii) The Directors took proper and sufficient care for maintaining adequate accountingrecords in accordance with the provisions of the Companies Act, 1956, for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities; and

iv) The annexed Annual Accounts for the accounting year ended on 31st March, 2011 havebeen prepared on a going-concern basis.

Management Discussion and Analysis

The Management Discussion and Analysis Report for the year under review as requiredunder Clause 49 of the Listing Agreement, is given as a separate statement in the AnnualReport.

Fixed Deposits

The Company has not accepted any Fixed Deposits during the year.

Director

Mr. M. M. Gandhi, Promoter and founder of Pioneer Group passed away on May 7, 2011 atMumbai. He was associated with your Company as its Managing Director for many years. YourCompany has benefited from his rich experience and the Board places on record itsappreciation for his valuable contribution, astute guidance in the growth of the Companyand also for yeomen services rendered by him during his association with your Company. TheBoard places on record its sense of grief to his family members and prays to Almighty togive strength to the bereaved family members to bear this irreparable loss. May his soulrest in eternal peace and harmony.

In accordance with Section 255 and 256 of the Companies Act 1956 and read with Articles107, 108, 109 and 110 of the Articles of Association of the Company, Mr. C. C. Dalal andMr. N. A. Rathod, Directors of the Company retire by rotation and being eligible, offerthemselves for re-appointment at the ensuing Annual General Meeting of the Company.

As per the requirements of the Clause 49 of the Listing Agreement, a brief resume ofboth the Directors proposed to be re-appointed, showing their qualification, experienceand the names of the Companies in which they hold directorship, membership of the boardcommittees, is provided in the Corporate Governance Report forming part of the AnnualReport.

Auditors and Auditors Report

M/s. Jayesh Dadia & Associates, Chartered Accountants, and Auditors of the Company,will retire at the conclusion of the ensuing Annual General meeting, and being eligible,offer themselves for reappointment. The Company received a certificate from the Auditorsto the effect that their reappointment, if made, would be in accordance with Section 224(1B) of the Companies Act, 1956. The Board recommends their appointment.

The Notes to the Accounts referred to in the Auditors' Report are self-explanatory andtherefore, do not call for any further explanation.

Particulars of Employees

In accordance with the provisions of Section 217(2A) of the Companies Act, 1956, andthe rules framed there under, the names and other particulars of employees are set out inthe Annexure to the Directors' Report. In terms of the provisions of Section 219(1)(b)(iv) of the Companies Act. 1956, the Directors' Report is being sent to allshareholders of the Company excluding the aforesaid annexure. The annexure is availablefor inspection at the Registered Office of the Company. Any Shareholder interested inobtaining a copy of the said annexure may write to the Company Secretary at the RegisteredOffice of the Company.

Conservation of Energy, Technology Absorption, Foreign Earnings and Outgoings

The Company has no activities relating to Conservation of Energy and TechnologyAbsorption.

The details of Company's foreign exchange earnings and outgo during the year underreview are given in Note no.19 of Schedule 11 – Significant Accounting Policies andNotes to Accounts.

Employee Stock Option Schemes

The disclosures required to be made in the Directors' Report in respect of EmployeesStock Option Schemes 2006 and 2007, in terms of the SEBI (Employee Stock Option Scheme)Guidelines, 1999, are mentioned in the Annexure, forming part of the Directors' Report.

During the year, the Company has also availed Shareholders approval for "PioneerInvestcorp Ltd. Employee Stock Option Scheme – 2010" for 20,00,000 Stock Optionsfor the Directors and Employees of the Company and its Subsidiaries.

Corporate Governance Report

The Company has complied with all the mandatory provisions of the revised Clause 49 ofthe Listing Agreement. As part of the Company's efforts towards better corporate practiceand transparency, a separate report on Corporate Governance compliances is included as apart of Annual Report.

Acknowledgments

The Board wishes to express its deep appreciation to all staff members for theirexcellent contribution and to the bankers, shareholders and customers for their continuedsupport.