Pioneer Investcorp Ltd

INTRODUCTION

The Company is a registered Merchant Banker, having Category – I registration fromSEBI and provides Investment Banking and financial advisory services. The Company'sservices include formulating capital structure, raising capital, debt restructuring,project financing and other corporate advisory services.

The Company and its Subsidiaries, over the years, have developed a strong understandingof many sectors due to their equity research capabilities and have leveraged thisexpertise to develop longstanding relationships with corporates as well as institutionalinvestors. The Company and its subsidiaries now have a presence in all areas of thefinancial sector other than foreign exchange services.

CORPORATE STRUCTURE

The structure of its Company's Subsidiaries and their nature of Activities are asbelow:

Domestic Subsidiaries:

1. Infinity.Com Financial Securities Ltd. – Trading cum Clearing Member of NSE,BSE & Depository Participant - CDSL, Trading member of MCX-SX;

2. Pioneer Wealth Management Services Ltd. – Registered Portfolio Manager;

3. Pioneer Fundinvest Pvt. Ltd. – a Non Banking Finance Company;

4. Pioneer Commodity Intermediaries Pvt. Ltd. – Trading cum Clearing Member ofNCDEX and MCX and Trading Member of ICEX;

5. Pioneer Money Management Ltd.- Advisory & Consultancy business;

6. Pioneer Investment Advisory Services Ltd. – Advisory & Consultancybusiness;

Overseas Subsidiaries:

7. PINC Fund Advisors LLC - Asset Management Company (Mauritius);

8. PINC International (Singapore) Pte. Ltd., awaiting Capital Market Service Licencefrom Monetary Authority of Singapore (MAS)

Global Factors

Global economic factors have become extremely challenging in the past one year than atany point in the past decade. While developed markets, led by the US, are showing signs ofstability and growth, but, it cannot ignored that this stability and growth are mainly dueto substantial monetary and quantitative easing being followed by various Central Banksaround the world. At the same time, emerging economies such as Brazil, Russia, India andChina (BRIC), continue to grow at a healthy rate. It is expected that the huge liquiditycreated by substantial monetary easing in the developed world would eventually find itsway to the growing BRIC economies. This is likely to create investment opportunities inall these countries, including India. The Company believes that it is well positioned tocapitalise on this global phenomenon and consolidate its position in all segments ofInvestment Banking in the coming year(s).

Indian Economy and Macro Factors

In terms of growth, India is one of the shining stars growing at a healthy pace. It isexpected that the Indian economy is likely to grow at 8-8.5% in the coming years. Toachieve this growth rate, significant investments are required in infrastructure – inpower generation, ports, and roads etc. with a growing economy and with improvingdemographics, the services sector in general and more the banking and financial servicessectors in particular are poised for significant growth.

Company's Outlook for its business segments

The Company and its subsidiaries already have a significant presence in all segments offinancial services such as Investment Banking, Equity Research, Portfolio Management, andInstitutional Broking. The Company expects to increase presence significantly not only byadding more clients to its strong existing client base but by also increasing the numberof service offerings.

The Company is taking steps in increasing its team strength in all segments, moreparticularly in Investment Banking, wherein the company expects significant growth in thecoming years.

Consolidated Financials

RISKS AND CONCERNS

The Indian financial markets are now integrated with the global markets. On one handthis increases opportunities for the Indian economy. On the other hand, however, thisbrings in risks for the economy due to closer linkages with the global economy. Thebusiness of the Company is dependent on the country's and global economic buoyancy.Despite strong long-term prospects for the Indian economy, the company is exposed toglobal economic cycles and volatility. Global factors such as geopolitical tension andglobal economic slowdown are a potential risk to the company's performance. Besides these,domestic issues such as inflationary trends and the consequent rate tightening by RBI andpolitical uncertainty pose a challenge to the Company.

Given the attractiveness of the Indian markets, a number of new players, domestic andglobal, have entered the Indian capital markets. This increase in competitive intensity infinancial intermediation business is a concern and can impact the performance of theCompany.

INTERNAL CONTROL SYSTEMS

As remarked by the auditors in their report, the Company has an internal control systemcommensurate with the requirements and size of the business.

DISCUSSION OF FINANCIAL PERFORMANCE

As reasoned in the paras' mentioned under performance review, during the year underreview, due to overall improved financial market conditions in India, the Company's grossrevenue increased 32% to Rs. 4871.02 lakhs as against Rs. 3678.36 lakhs and profit beforetax increased more than 38% to Rs. 2131.65 lakhs as against Rs. 1548.80 lakhs. Theconsolidated statement includes various subsidiaries, including the overseas subsidiariesin Mauritius and Singapore and the broking operations of the subsidiary having membershipof BSE and NSE.

MATERIAL DEVELOPMENT AND HUMAN RESOURCES

During the year under review, the Company continued to strengthen its InvestmentBanking Team by recruiting senior executives/professionals with rich and varied experienceof more than 15 to 20 years.

CAUTIONARY STATEMENT

The statements made in this Report describe the Company's objectives and projectionsthat may be forward looking statements within the meaning of applicable Securities lawsand regulations. The actual results might differ materially from those expressed orimplied depending on the economic conditions, government policies and other incidentalfactors, which are beyond the control of the Company and Management.