Directors
TO
THE MEMBERS
Your directors have great pleasure in presenting the Twenty Second Annual Report of the
Company together with the audited balance sheet as on 31.03.2014 and the statement of
profit & loss account for the year ended at that date.
FINANCIAL PERFORMANCE OF THE COMPANY FOR YEAR ENDED MARCH 31, 2014
| Particulars |
As at 31.3.2014 |
As at 31.3.2013 |
|
(Rs. in lakh) |
(Rs. in lakh) |
| Total Income |
2,621.22 |
1,720.60 |
| Profit / (loss) before Depreciation |
(904.79) |
(1,779.33) |
| Less Depreciation |
73.47 |
86.47 |
| Profit & loss before Tax |
(978.26) |
(1,865.80) |
| Less Provision for Tax |
(4.20) |
(6.18) |
| Profit & loss after Tax |
(982.46) |
(1,871.98) |
| Less Prior Period Adjustment |
- |
- |
| Profit after Tax & Adjustment |
(982.46) |
(1,871.98) |
| Profit after tax and adjustments carried to Balance sheet |
(982.46) |
(1,871.98) |
| Reserves & Surplus (before adjusting accumulated losses) |
3,961.66 |
4,009.57 |
SHARE CAPITAL
As on March 31, 2014, the paid-up equity share capital of your Company was Rs.
880,440,640/- and the net worth was Rs.661,622,435. Both the shareholders viz. Pioneer
Global Asset Management S.p.A and Bank of Baroda, infused additional capital to the tune
of Rs. 590,730,640/- by way of rights issue during the financial year ended March 31,
2014.
PROFITABILITY
During the year, the total income of the company grew by 52%. The net loss for the
financial year 2013-14 was Rs. 982.46 lakhs, as against a net loss of Rs. 1,871.98 lakhs
in financial year 2012-13.
DIVIDEND
Your directors do not recommend any dividend for the year 2013-14 on account of the net
loss suffered by your Company during the financial year 2013-14.
STATE OF ECONOMY
Quarterly trend in FY 2013-14 shows volatility in growth. After recording a growth of
4.7% and 5.2% in Q1 and Q2 respectively, GDP growth slowed down to 4.7% in Q3 and 4.6% in
Q4. This was due to all external factors, including global economy recovery. Key issue was
domestic structural constraints. The economy is expected to grow at 5.4%-5.9% in FY15
(Source - indiabudget.nic.in) which was predicated on revival in industrial sector, benign
outlook on crude and no external shocks (including effects of below normal monsoons).
CPI fell from 9-10% in the last couple of years to 8% in February 2014, a 25 month low,
on back of moderation in prices of vegetables, meat, eggs and fish. However, core
inflation (education, healthcare and household requisites) remained sticky.
Fiscal deficit was at 4.5% of GDP in FY2013-14 against budget target of 4.8% due to
focus on fiscal consolidation despite shortfall in tax revenues, divestment target, higher
than budget subsidies and interest and pension payment. Current Account Deficit was seen
at 1.7% of GDP (US$32.4bn) in FY2013-14, better than 4.7% of GDP (US$88.2bn) in FY2012-13.
This was achieved through lower import of gold & silver and better exports.
[Source: Bloomberg ]
MUTUAL FUND INDUSTRY
Amidst volatility and uncertainty in the markets, the mutual fund industry saw its
Average Assets Under Management ("AAUM") grow by 10% for the year ended
March 2014. The industry has witnessed a growth of around of 12% CAGR (Compound Annual
Growth Rate) from 2011-2014. The industry has seen positive net flows in the last two
years and has added Rs.76,539 crores in the FY13-14 . The industry AAUM of 2013-14 ended
at Rs.905,120 crores (as on March 2014) as compared to Rs 816,657 crores in the FY 2012-13
(as on March 2013).
Although the industry has seen an overall growth in the AAUM, there has been a shift in
the asset mix of the industry. Investors expectation of RBI rate cuts, tight liquidity
conditions, high commodity prices, and weak global cues impacted both the fixed income and
equity markets. The AAUM under the equity segment declined by 3.35%, while the debt/income
segment grew by 11.31% during 2014. . Liquid and money market AUM also grew by 29.31%
during the same period.
As we look into the future, factors like strong macro-economic conditions, high savings
and investment rate augur well for further development of the category in India. We expect
the focus of the industry in 2014-15 to be on increasing penetration particularly in B15
cities, enhancing distribution coverage, delivering better risk-adjusted returns, further
upgrading customer service and offering technology based transaction capabilities.
[Source: AMFI]
STATE OF COMPANY AFFAIRS
Your Company has focused its energies on building a sustainable business with a clearly
defined long-term growth and profit strategy and has aggressively focused on Systematic
Investment Plans to build up equity assets in a gradual and sustainable manner. Its
products cater to a diverse range of risk, return and liquidity preferences of investors.
In 2013-14, your Company took some important steps in improving its reach across the
country and in the Bank of Baroda ("Bank") network. Your Company operates
out of 104 locations in India and has 203 official points for acceptance of transactions.
Your Company did not launch any other product in 2013-14 except for Fixed Maturity Plans.
In the coming years, your Company will continue to focus on meeting investor needs
through new products and services that are comparable with the best in the category.
CHANGE IN DIRECTORS
At the last Annual General Meeting ("AGM") of your Company held on
August 28, 2013, Mr. P. K. Gupta retired by rotation and chose not to be re-appointed on
the Board of Directors and appointment of Mr. Sandro Pierri, director appointed in casual
vacancy, was confirmed on the Board of the Company.
During the financial year ended March 31, 2014, the following changes took place in the
composition of the Board of Directors of the Company:
• Mr. S. K. Das, who represented the Bank on the Board of Directors of the
Company, ceased to be an associate director of the Company effective December 1, 2013, on
account of his superannuation from the Bank.
• Mr. S. S. Mundra, Chairman & Managing Director of the Bank, was appointed as
an associate director of the Company, in place of Mr. M. D. Mallya, effective February 25,
2014, and consequently, as a Bank nominee on all the Committees of the Board.
• Mr. Dhanpal Jhaveri (Wholetime Director and CEO of Everstone Capital Advisors
Private Ltd.) was appointed as an additional director of the Company with effect from
February 25, 2014.
In the current FY 2014-15 till date, Mr. Asit Pal (former Executive Director of
Corporation Bank) was appointed as an additional director while Mr. R. S. Abhyankar,
General Manager - Treasury and Investment Portfolio of Bank of Baroda, was appointed as an
associate director of the Company in place of Mr. S. K. Das with effect from July 23,
2014.
Your directors place on record their appreciation for the valuable contribution made by
Mr. P. K. Gupta and Mr. S. K. Das during their association with the Company.
PARTICULARS OF EMPLOYEES
Information as per Section 217(2A) of the Companies Act, 1956 ("Act") read
with the Companies (Particulars of Employees) Rules, 1975 forms part of this Report. This
Report and the accounts are being sent to the shareholders of the Company, excluding the
statement on particulars of employees under Section 217(2A) of the Act. Any shareholder
interested in obtaining a copy of the said statement may write to the Secretarial
Department at the Registered Office of your Company.
DIRECTORS RESPONSIBILITY STATEMENT PURSUANT TO SECTION 217(2AA) OF THE ACT
Pursuant to Section 217(2AA) of the Act, your directors confirm that:
1. In the preparation of the annual accounts for the year ended 31st March
2014, applicable accounting standards have been followed.
2. The accounting policies have been consistently followed so as to give a true and
fair view of the state of affairs of your Company at the end of the financial year ended
31st March 2014.
3. Proper and sufficient care has been taken by your directors for the maintenance of
adequate accounting records in accordance with the provisions of the Act, for safeguarding
the assets of your Company and for preventing and detecting fraud and other
irregularities.
4. The annual accounts of your Company have been prepared on an on-going basis.
AUDITORS
Your Companys present auditors, M/s. Deloitte Haskins & Sells LLP, Chartered
Accountants (Reg. No. 117366W), hold office until the conclusion of the ensuing Annual
General Meeting and have sought re-appointment. We propose to re-appoint M/s. Deloitte
Haskins & Sells LLP as the statutory auditors of the Company for the term of five
years effective FY 2014-15.
INFORMATION UNDER SECTION 217(1) (E) OF THE ACT
Conservation of Energy, Technology Absorption and Foreign Exchange Earnings/Outgo:
There are no specific comments in terms of the provisions of Section 217(1)(e) of the
Act that call for conservation of energy and technology absorption. Your Company has,
however, used information technology relevant to its business in keeping with the size of
its operations.
Expenditure and earnings in foreign currency aggregated to Rs. 52.52 lakhs (previous
year: Rs. 46.75 lakhs) and Rs. 169.03 lakhs (previous year: Rs. 212.54 lakhs),
respectively.
REPORT ON CORPORATE GOVERNANCE
Board of Directors
As on date of this report, the Board of Directors of the Company comprises of the
following ten directors, out of whom five directors are non-executive independent
directors.
| Mr. Jack Lin |
Chairman |
| Mr. Sandro Pierri |
Associate Director |
| Mr. S. S. Mundra |
Associate Director |
| Mr. Jaideep Bhattacharya |
Managing Director (Associate) |
| Mr. R S Abhyankar |
Associate Director |
| Mr. Rohit Arora |
Independent Director |
| Mr. Shiv Dayal |
Independent Director |
| Mr. M. P. Mehrotra |
Independent Director |
| Mr. Dhanpal Jhaveri |
Independent Director |
| Mr. Asit Pal |
Independent Director |
Board Meetings
The Board meets at least four times during a year. During the financial year 2013-14,
four meetings of the Board of Directors were held on April 25, 2013, July 24, 2013,
October 28, 2013 and February 25, 2014.
Board Committees
1. Audit Committee
The Audit Committee of the Board of Directors has been constituted in line with the
provisions of Section 292A of the Act. The Audit Committee comprises of Mr. Rohit Arora,
Mr. Jack Lin and Mr. S. S. Mundra. Mr. S. S. Mundra was appointed in place of Mr. S. K.
Das as a nominee member representing the Bank. During the financial year 2013-14, four
meetings of the Audit Committee were held on April 25, 2013, July 24, 2013, October 28,
2013 and February 25, 2014.
2. Investment Committee
The Investment Committee of the Board of Directors has been constituted in line with
the Shareholders Agreement and the SEBI (Mutual Funds) Regulations, 1996. The Investment
Committee currently comprises of Mr. Jack Lin, Mr. S. S. Mundra, Mr. Jaideep Bhattacharya
and Chief Investment Officer of the Company. Mr. S. S. Mundra was appointed in place of
Mr. S. K. Das as a nominee member representing the Bank. During the financial year
2013-14, three meetings of the Investment Committee were held on July 24, 2013, October
28, 2013 and February 25, 2014.
3. Risk & Compliance Committee
The Risk & Compliance Committee of the Board of Directors has been constituted in
line with the Shareholders Agreement. The Risk & Compliance Committee currently
comprises of Mr. Jack Lin, Mr. S. S. Mundra, Mr. Jaideep Bhattacharya, Chief Operating
Officer and the Compliance Officer of the Company. Mr. S. S. Mundra was appointed in place
of Mr. S. K. Das as a nominee member representing the Bank. During the financial year
2013-14, three meetings of the Risk & Compliance Committee were held on July 24, 2013,
October 28, 2013 and February 25, 2014.
4. Remuneration Committee
The Remuneration Committee of the Board of Directors has been constituted in line with
Schedule XIII to the Companies Act, 1956. The Remuneration Committee comprises of Mr. Jack
Lin, Mr. S. S. Mundra, Mr. Rohit Arora, Mr. Shiv Dayal and Mr. M. P. Mehrotra. Mr. S. S.
Mundra was appointed in place of Mr. S. K. Das as a nominee member representing Bank of
Baroda. During the financial year 2013-14, no meetings of the Remuneration Committee were
held.
Annual General Meetings
Details of the AGMs held during the last three years are given below:
| AGM |
DATE |
VENUE |
| 19th AGM |
27.09.2011 |
Bank of Baroda, Baroda Sun Tower, G- Block, Bandra Kurla Complex, Bandra (East),
Mumbai - 400 051 |
| 20th AGM |
24.09.2012 |
501, Titanium, 5th Floor, Western Express Highway, Goregaon (E), Mumbai - 400 063 |
| 21st AGM |
28.08.2013 |
Bank of Baroda, Baroda Sun Tower, G- Block, Bandra Kurla Complex, Bandra (East),
Mumbai - 400 051 |
ACKNOWLEDGMENT
The Directors place on record their appreciation for the assistance and guidance
rendered by the Securities and Exchange Board of India, Association of Mutual Funds in
India, Reserve Bank of India, Pioneer Global Asset Management SpA, Bank of Baroda and
Directors of Baroda Pioneer Trustee Company Private Ltd, Trustee to Baroda Pioneer Mutual
Fund. The Directors also thank the investors for having reposed their confidence in Baroda
Pioneer Mutual Fund.
The Directors wish to take this opportunity to thank:
• M/s Karvy Computershare Private Limited, for the services rendered by them as
the Registrar and Share Transfer Agents of Baroda Pioneer Mutual Fund, and for providing
collection centers for various schemes of Baroda Pioneer Mutual Fund.
• M/s SHAREX Dynamic (India) Pvt. Ltd., the Registrar and Share Transfer Agents of
the Company, for the services rendered by them.
• Bank of Baroda, for helping in the sales and marketing of the schemes of Baroda
Pioneer Mutual Fund and collection of investments all over the country.
• Citibank N.A, custodian and fund accountant of the schemes of Baroda Pioneer
Mutual Fund, for the services rendered by them.
The Directors also appreciate the dedication and sense of commitment shown by the
employees at all levels and acknowledge their contribution towards the progress and
performance of the Company.
For and on behalf of the Board of Directors
Chairman
Place : Mumbai
Date : July 23, 2014
+91-9892691696
