Pioneer Investcorp Ltd Directors Report.

To The Members,

Your Directors have pleasure in presenting 34th Annual Report on the business and operations of the Company along with the Audited Statements of Accounts for the year ended 31st March, 2019.

Financial Highlights 2018-2019 2017-2018
(Rs. in lakhs) (Rs. in lakhs)
Profit before Tax 174.46 137.43
Less/(Add): Tax expenses (10.18) (15.22)
Net Profit after Tax 184.64 152.65

Economic Review

During the year end under review, the Indian democratic, has given resounding mandate to the running Government of India for another term of 5 years, that reflects the clarity of purpose of the people of India. It is an endorsement of this stable Government in pushing through the governments efforts for the developmental and economic agenda, and this Governments commitment to continue with the policy reforms in all critical sectors such as infrastructure, natural resources, manufacturing and financial services.

As against global economic growth at a steady 3 percent, our countrys Gross Domestic Product (GDP) is estimated to grow by 7.3% in 2019 and 7.5% in 2020, making our Country one of the few large emerging economies outperforming the others. The world is looking at India to play the role of the lead growth engine, a role China played for almost three decades.

Overview of Financial Performance

The above mentioned positive developments in the Indian economy, had a positive impact both on the business and revenues of the Company during the year end under review, that reflected in Companys both revenue segment that is Investment Banking Income both in Equity and Debt segment and other being investment activities in Government Securities / Corporate Bonds.

The companys standalone income from operations during the Financial Year 2018-19 was increased by 16% to Rs.3232.68 lakhs as compared to Rs.2780.52 lakhs during previous Financial Year 2017-18, and also consolidated Income from operations increased to Rs.3700.87 lakhs as against Rs. 3349.80 lakhs in the previous year.

No material changes and commitments have occurred after the close of the year till the date of this Report, which affect the financial position of the Company.

Share Capital

During the year under review, the Companys Issued, Subscribed and Paid up Equity Share Capital remains unchanged at Rs.1229.69 lakhs as at March 31st, 2019.

Dividend

Due to miniscule increase in profit the Board of Directors of the Company has decided not to recommend dividend for the Financial Year 2018-19.

Subsidiary Companies

During the Financial Year 2018-19, there were no changes in status of existing six wholly owned subsidiaries as compared to previous year.

Performance and Financial Position of Subsidiaries

As required under Rule 5 and Rule 8(1) of the Companies (Accounts) Rules, 2014, a report on the highlights of performance of subsidiaries, and their contribution to the overall performance of the Company is appended as “Annexure 7” to the Annual Report. Pursuant to the provisions of Section 129(3) of the Act, a statement containing salient features of financial statement of subsidiaries in Form AOC-1 is annexed to the Consolidated Financial Statement in the Annual Report.

Consolidated Financial Statements

Pursuant to Section 129(3) of the Companies Act, 2013, a consolidated financial statement of the Company along with its 6(six) Wholly owned Subsidiaries has been prepared in the same form and manner as that of the Company which shall be laid before the ensuing AGM along with the laying of the Companys Standalone Financial Statement under Section 129(2).

Further, pursuant to the provisions of Accounting Standard (AS-21), the Consolidated Financial Statements notified under Section 133 of the Companies Act, 2013, read together with Rule 7 of the Companies (Accounts) Rules, 2014 issued by the Ministry of Corporate Affairs, the Consolidated Financial Statements of the Company along with its six Wholly owned subsidiaries for the year ended March 31, 2019 forms part of this Annual Report.

The Board of Directors of the Company has resolved not to publish and attach copies of the standalone Annual Audited Accounts of all its existing subsidiaries and instead to publish the Consolidated Accounts pursuant to Section 136(1) of the Act. Annual Audited Accounts of all its existing subsidiaries can also be obtained by members of the Company by making written request to the Company. The Accounts of these subsidiaries are also available for inspection to members of the Company at the Registered Office of the Company during the Companys business hours. The Company has attached the Consolidated Financial Statements in this Annual Report, which includes Accounts of all its six existing subsidiaries.

Directors Responsibility Statement

Your Directors state that:

I) In the preparation of the Annual Accounts for the year ended 31st March, 2019, the applicable Accounting Standards read with requirements set out under Schedule III of the Companies Act, 2013 have been followed and there are no material departures from the same;

ii) They have selected such accounting policies and have applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2019 and of the Profit of the Company for the year ended on that date;

iii) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) The annexed Annual Accounts for the Accounting Year ended on 31st March, 2019, have been prepared on a going concern basis;

v) They have laid down internal financial controls to be followed by the Company and the such internal financial controls are adequate and are operating effectively; and

vi) They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Management Discussion and Analysis

The Management Discussion and Analysis Report for the year under review, is given as a separate

Directors and Key Management Personnel

During the year end under review, there was no change in the composition of the Board of Directors of the Company. After the year end, Mr. Athreya Tyagarajan Krishnakumar (DIN: 00926304), was appointed as an Additional Director (Independent Non-executive) by the Board of Directors of the Company w.e.f. 23rd August, 2019 pursuant to the provisions of Section 161 and other applicable provisions of the Companies Act, 2013 (the Act), holds office up to the date of this Annual General Meeting of the Company or the last date on which the Annual General Meeting should have been held.

Mr. A. T. Krishnakumar is a MBA with nearly Four (4) decades of experience in of Management consultancy, Corporate Planning, Diversification and Restructuring, International Collaboration and technology tie ups, mergers and Acquisition.

The Nomination & Remuneration Committee (N&RC) had assessed the profile of Mr. Krishnakumar and having found him to be Fit and Proper, recommended his appointment to the Board of Directors. In terms of Sections 149, 152, 160 read with Schedule IV of the Act, the Board of Directors of the Company, basis the recommendation of the N&RC, have reviewed the profile of Mr. Krishnakumar and the declarations that he meets the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Act and under Regulation 16(1) (b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Board is of opinion that he fulfils the criteria of independence.

In the opinion of the Board, Mr. Krishnakumar meets the fit and proper criteria and is a person of integrity, and has the necessary knowledge, experience and expertise for being appointed as an Independent Director. Considering his vast expertise and knowledge in the field of Accountancy, Finance, Corporate Advisory, Taxation and Management Consultancy, it would be in the interest of the Company that Mr. Krishnakumar is appointed as an Independent Director on the Board of the Company.

During the year end under review, Mr. Rakesh Bhatia, Chief Financial Officer (CFO) of the Company has resigned w.e.f. 1st June, 2018 due to ill health consequently Board of Directors of the Company has appointed Mr. Sanjay Kabra as CFO of the Company.

The Board of Directors of the Company place on record sincere appreciation and gratitude to Mr. Rakesh Bhatia, for his valuable contribution in the growth and development of PINC Group during his tenure and wish him all the best.

Annual Evaluation

Your Company has laid down Policy in which criteria for performance evaluation of the Directors including Chairperson, Managing Director, Board Committees and Board as a whole in line with the provisions of the Companies Act, 2013, and SEBIs LODR Regulations. The Policy continued to assist the Company the manner in which formal annual evaluation should be made.

Corporate Governance

Corporate Governance is an ethically driven business process that is committed to values aimed at enhancing an organizations brand and reputation. This is ensured by taking ethical business decisions and conducting business with a firm commitment to values, while meeting stakeholders expectations. As part of the Companys efforts towards better corporate practice and transparency, a separate report on Corporate Governance compliances is included in the Annual Report.

Contracts and Arrangement with Related Parties

There were no materially significant transactions with related parties including promoters, directors, key managerial personnel, subsidiaries or relatives of the Directors during the financial year which could lead to a potential conflict with the interest between the company and these parties. The details of the transactions with related parties, if any, were placed before the Audit Committee from time to time. There were no material individual transactions with related parties, which were not in the ordinary course of business of the Company, nor were there any transactions with related parties, which were not on arms length basis. Accordingly the disclosure in Form AOC-2 is not applicable to the Company for the year under review. Suitable disclosure as required by the Accounting Standards (AS-18) has been made in the notes to the Financial Statements.

Prior omnibus approval for normal day to day transactions is also obtained from the Audit Committee for the related party transactions which are repetitive in nature as well as for the business transactions which cannot be foreseen and accordingly the required disclosures are made to the Committee for their approval.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Companys website at www.pinc.co.in. Your Directors draw attention of the members to Note no.30 to the financial statement which sets out related party transactions disclosures.

Corporate Social Responsibility (CSR)

In compliance with Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, your Company has established Corporate Social Responsibility (CSR) Committee. During the financial year 2018-19, the Company has spent Rs.13.25 lakhs on CSR activities as approved by the Board of the Company. The disclosure in the Annual Report on CSR activities is annexed herewith marked as Annexure 2.

Risk Management Policy

Companys Risk Management Policy continued to guide the Board on risk assessment, management and contributes to controls, manage, measure and mitigate the risk faced by the company in the day to day operation. The Risk Management policy intends to cover serious concerns that could have risk impact on the operations and performance of the business of the Company as well as its Wholly Owned Subsidiaries.

Internal Financial Controls

Your Company has implemented adequate procedures and internal controls which provide reasonable assurance regarding reliability of financial reporting and preparation of financial statements. Further, the Board also ensures regularly that Internal Financial controls are functioning efficiently in the ordinary course of business.

Employee Stock Option Scheme

The Employee Stock Option Plans are administered by the Nomination & Remuneration Committee of the Board. The disclosures required to be made in the Directors Report in respect of Employees Option Schemes, in terms of the SEBI (Employee Stock Option Scheme) Guidelines, 1999, are mentioned in the Annexure 3, forming part of the Directors Report.

Out of the 13,14,000 Stock Options granted to the Employees of the Company by the Nomination and Remuneration Committee second tranche of 25% of granted Stock options has been vested during the year end under review, as per the terms and conditions of the grant.

Auditors and Auditors Report

provisions of the Companies Act, 2013 and the Rules made thereunder, relating to mandatory rotation of Statutory Auditors, the Company has obtained members approval in the AGM to appoint J. D. Jhaveri & Associates, Chartered Accountant (Firm Reg. no. 111850W) as the statutory auditors of the Company, to hold office for a period of five consecutive years commencing from the Financial Year 2017-18, on a remuneration that may be determined by the audit committee in consultation with the auditors, and that such remuneration may be paid on a progressive billing basis. However, such appointment is subject to ratification by the members of the Company at the Annual General Meeting of the Company as per the applicable provisions of the Companies Act, 2013 and the Rules made thereunder. Accordingly, the appointment of J. D. Jhaveri & Associates, Chartered Accountant (Firm Reg. no. 111850W) as the statutory auditors of the Company is being placed before the members of the Company for ratification.

The Notes to the Accounts referred to in the Auditors Report are self-explanatory and therefore, do not call for any further explanation. The Auditors Report does not contain any qualification, reservation or adverse remark.

Secretarial Auditor

Pursuant to Section 204 of the Companies Act, 2013, your Company had appointed Mr. Aspi Bhesania, Practicing Company Secretary, (ICSI membership number: 6119 C.P. no.9657) as its Secretarial Auditors to conduct the secretarial audit of the Company for the financial year 2018-19. The Company provided all assistance and facilities to the Secretarial Auditors for conducting audit. The Report of Secretarial Auditor for the financial year 2018-19 is annexed to this report as Annexure 4. There are no observations, reservations or adverse remarks in the Secretarial Audit Report.

DISCLOSURES:

Audit Committee

The Audit Committee comprises of Independent Directors namely Mr. C C. Dalal (Chairman), Mr. A. B. Desai, Mrs. K.C. Maniar and also Managing Director Mr. G. M. Gandhi. All the recommendations made by the Audit Committee were accepted by the Board during the Financial Year 2018-19.

Vigil Mechanism

In line with the provisions of Listing Regulations, the Companies Act, 2013 and the principles of good governance, your Company has devised and implemented a vigil mechanism, in the form of Whistle Blower Policy, for the directors and employees to report genuine concerns in such manner as, may be prescribed. Such a vigil mechanism shall provide for adequate safeguards against victimization of persons who use such mechanism and also make provision for direct access to the chairperson of the Audit Committee in appropriate or exceptional cases. The Policy on vigil mechanism and whistle blower policy may be accessed on the Companys website at www.pinc.co.in.

Meetings of the Board

Four meetings of the Board of Directors were held during the year. For further details, please refer separate report on Corporate Governance forming part of Annual Report.

Declaration from Independent Directors

The Company has received declaration from all the Independent Directors of the Company confirming that they meet with the criteria of independence as per sub-section (6) of Section 149 of the Companies Act, 2013 and also the criteria of independence as mentioned in Regulation 16(1)(b) and Regulation 25(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations).

Particulars of Loans given, Investments made, Guarantees given and Securities provided

Particulars of loans given, investments made, guarantees given and securities provided covered under the provision of Section 186 of the Act are given in the notes to the Standalone Financial Statement.

Conservation of Energy, Technology Absorption, Foreign Earnings and Expenditures.

The Company has no activities involving conservation of Energy and Technology absorption.

The details of Companys foreign exchange earnings and expenditures during the year under review are given in Note no. 25 to the standalone financial statement.

Secretarial Standard

The Company complies with all applicable mandatory secretarial standards issued by the Institute of Company Secretaries of India.

Extract of Annual Return

Extract of Annual Return of the Company is annexed herewith as Annexure 5 to this Report.

Familiarization Programs for Independent Directors

Details of programs that were undertaken for familiarizing the Independent Directors can be accessed on the Companys website at www.pinc.co.in.

Investor Education and Protection Fund (IEPF)

Pursuant to the applicable provisions of the Companies Act, 2013, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (“the Rules”), all unpaid or unclaimed dividends which remains unclaimed or unpaid for seven years from the date of transfer to unpaid account, are required to be transferred by the Company to the IEPF established by the Central Government.

Further, according to the Rules, the shares in respect of which dividend have not been claimed or paid by the shareholders for seven consecutive years or more shall also be transferred to the Demat Account created by the IEPF Authority.

a) Dividend

The following are the details of dividend paid by the Company and its respective due date of transfer of such fund to the Central Government, which remains unpaid:

Sr. No Date of Declaration Dividend for the year Due date of transfer to the government
1 07th September, 2012 Dividend 2011-12 07th October, 2019.

Members wishing to claim dividends, which have remained unclaimed, are requested to correspond with Registrar and Share Transfer Agents (RTA) or Company Secretary at the Companys registered office.

b) Shares

Further, the corresponding shares will be transferred as per the requirements of IEPF rules, details of which will be provided on Companys website www.pinc.co.in.

Particulars of Employees and related disclosures

In accordance with the provisions of Section 197(12) of the Act, the ratio of the remuneration of each Director to the median employees remuneration and other details in terms of sub-section 12 of Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended as “Annexure 6” to the Annual Report.

In terms of first proviso to Section 136 of the Act, the Report and Financial Statements are being sent to the Members and others entitled thereto, excluding the information on employees particulars as required pursuant to provisions of Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

In accordance with the provisions of Section 197 of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the annexure pertaining to the names and other particulars of employees is available for inspection at the Registered Office of the Company during the business hours on working days of the Company up to the date of the ensuing AGM. Any shareholder interested in obtaining a copy of the said Annexure may write to the Company Secretary & Compliance Officer in this regard.

The Board of Directors affirms that the remuneration paid to employees of the Company is as per the Nomination and Remuneration Policy of the Company.

General

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Details relating to deposits covered under Chapter V of the Act.

2. Issue of equity shares with differential rights as to dividend, voting or otherwise.

3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except ESOS referred to in this Report.

4. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries.

5. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operations in future.

Your Directors further state that during the year under review, there was no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Acknowledgments

The Board wishes to express its deep appreciation to all the staff members for their excellent contribution and to the Bankers, shareholders and customers for their continued support.

On behalf of the Board of Directors
Mumbai G. M. Gandhi C. C. Dalal
23rd August, 2019. Managing Director Director
(DIN - 00008057) (DIN - 00091132)