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Pioneer Investcorp Ltd.

BSE: 507864 Sector: Financials
NSE: N.A. ISIN Code: INE746D01014
BSE 00:00 | 22 Oct 32.55 -0.85
(-2.54%)
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NSE 05:30 | 01 Jan Pioneer Investcorp Ltd
OPEN 33.45
PREVIOUS CLOSE 33.40
VOLUME 991
52-Week high 42.00
52-Week low 25.00
P/E 40.69
Mkt Cap.(Rs cr) 40
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 33.45
CLOSE 33.40
VOLUME 991
52-Week high 42.00
52-Week low 25.00
P/E 40.69
Mkt Cap.(Rs cr) 40
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Pioneer Investcorp Ltd. (PIONEERINVEST) - Auditors Report

Company auditors report

To

The Members of Pioneer Investcorp Ltd.

Report on the Standalone Financial Statements Opinion

We have audited the Standalone Financial Statements of M/s. Pioneer Investcorp Ltd("the Company") which comprise the Balance Sheet as at 31st March 2020 and theStatement of Profit and Loss (Including Other Comprehensive Income) Statement of changesin Equity and Statement of Cash flows for the year then ended and notes to the FinancialStatements including a Summary of Significant Accounting Policies and other explanatoryinformation (hereinafter referred to as "the Standalone Financial Statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Financial Statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2020 its Profit changes in Equity and its Cash Flows for the yearended on that date.

Basis for Opinion

We conducted our Audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our Audit of theFinancial Statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Sr No. Key Audit Matter Auditor's response
1. Transition to Indian Accounting Standards (“Ind AS”) Principal Audit Procedures
The Company has adopted Ind AS notified under Section 133 of the Companies Act 2013 (“the Act”) read with the Companies (Indian Accounting Standards) Rules 2015 from April 01 2019 and the effective date of such transition is April 01 2018. We have performed the following audit procedures in order to obtain sufficient audit evidence:
Ind AS is new and complex accounting standards which require considerable judgment and interpretation in its implementation. Further Ind AS 101 (“First-time Adoption of Indian Accounting Standards”) allows two categories of exceptions to the first-time adopters which mainly include prohibition to retrospective application of certain requirements of Ind AS and exemption from some requirements of Ind AS. We consider this transition and the required disclosure to be a key audit matter because new accounting policies have been developed by the Company to comply with these standards and judgment. Note 1 “Significant Accounting Policies” Note on “Fair value hierarchy” “Market risk” "Liquidity Risk" and“ Reconciliation of Balance Sheet Total Other Comprehensive Income Equity and Cash flows as per previous GAAP to Ind AS to the standalone Financial Statements provide detailed information on the significant policies critical judgment and estimation along with details of exemptions applied from certain requirements under Ind AS based on which this Standalone Financial Statements is prepared. • Assessed the Company's process to identify the impact of adoption and transition to the new accounting standards;
• Evaluated the design of internal controls and tested the operating effectiveness of key internal controls around the process of preparation of Standalone Financial Statements;
• Reviewed the exemptions availed by the Company from certain requirements under Ind AS;
• Obtained an understanding of the governance over the determination of key judgments;
• Evaluated and tested the key assumptions and judgments adopted by management;
• Assessed the disclosures made against the relevant Ind AS; and
Determined the appropriateness of the methodologies and models used along with the responsibility of the outputs.
2. Measurement of Investments in accordance with Ind AS 109 “Financial Instruments” Principal Audit Procedures
On initial recognition Investments are recognized at fair value in case of Investments which are recognised at fair value through profit and loss (FVTPL) its transaction cost is recognised in the statement of profit and loss. In other cases the transaction costs are attributed to the acquisition value of the investments. Obtained an understanding of Company's business model assessed in accordance with Ind AS 109.
The Company's investments are subsequently classified into following categories based the objective of its business model to manage the cash flows and options available in the standard: Evaluated the Company's assessment of business model.
Debt instruments at amortised cost Debt instruments and equity instruments at fair value through profit or loss (FVTPL) Obtained an understanding of the determination of the measurement of the investments and tested the reasonableness of the significant judgments applied by the management.
Equity instruments measured at fair value through other comprehensive income FVTOCI. Evaluated the design of internal controls relating to the measurement and also tested the operating effectiveness of the aforesaid controls.
The Company has assessed following two business model: Obtained valuation certificate of independent valuer in respect of fair value investments
- Held to collect contractual cash flows Ensured that the Company has used valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
- Realising cash flows through the sale of investments. The Company makes decisions based on the assets' fair values and manages the assets to realise those fair values. Assessed the appropriateness of the disclosure in the standalone financial statements in accordance with the applicable financial reporting framework.
Since valuation of investments at fair value involves critical assumptions significant risk in valuation and complexity in assessment of business model the valuation of investments as per Ind AS 109 is determined to be a key audit matter in our audit of the financial statements.
3. Loans and impairment loss allowance Principal Audit Procedures
The value of loans as at March 31 2020 is significant and there is a high degree of complexity and judgment involved for the Company in estimating individual and collective credit impairment provisions and write-offs against these loans. The Company's model to calculate expected credit loss (“ECL”) is inherently complex and judgment is applied in determining the correct construction of the three stage impairment model (“ECL Model”) including the selection and input of forward- looking information. ECL provision calculations require the use of large volumes of data. The completeness and reliability of data can significantly impact accuracy of the modeled impairment provisions. The accuracy of data flows and the implementation of related controls are critical for the integrity of the estimated impairment provisions. We have started our audit procedures with understanding of the internal control environment related to impairment loss allowance. Our procedures over internal controls focused on recognition and measurement of impairment loss allowance. We assessed the design and tested the operating effectiveness of the selected key controls implemented by the Company.
We also assessed whether the impairment methodology used by the Company is in line with Ind AS 109 “Financial instruments” requirements. Particularly we assessed the approach of the Company regarding definition of default Probability of Default Loss Given Default and incorporation of forward-looking information for the calculation of ECL.
For loans which are assessed for impairment on a portfolio basis we performed particularly the following procedures:
We read and understood the methodology and policy laid down for loans given by the Company.
We have verified the existence of recovery process plan in the event of default.
We have verified the historical trends of repayment of principal amount of loan and repayment of interest;
We tested the reliability of key data inputs and related management controls;
We checked the stage classification as at the balance sheet date as per definition of default of the Company;
We have assessed the assumptions made by the Company in making provision considering forward looking information.

Other Information

The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sAnnual Report but does not include the Standalone Financial Statements and our Auditors'Report thereon.

Our opinion on the Standalone Financial Statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our Audit of the Standalone Financial Statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the Standalone Financial Statements or our knowledgeobtained in the Audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese Standalone Financial Statements that give a true and fair view of the financialposition financial performance changes in Equity and Cash Flows of the Company inaccordance with the accounting principles generally accepted in India including theaccounting Standards specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the Financial Statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror. In preparing the Financial Statements Management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless Managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

The Board of Directors is also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the FinancialStatements as a whole are free from material misstatement whether due to fraud or errorand to issue an Auditor's Report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these Financial Statements.

As part of an Audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the Audit. We also:

Identify and assess the risks of material misstatement of the Financial Statements whether due to fraud or error design and perform Audit procedures responsive to those risks and obtain Audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error as fraud may involve collusion forgery intentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the Audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act 2013 we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of Management's use of the going concern basis of accounting and based on the audit evidence obtained whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists we are required to draw attention in our Auditor's Report to the related disclosures in the Financial Statements or if such disclosures are inadequate to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our Auditor's Report. However future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of the Financial Statements including the disclosures and whether the Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the Audit and significant Audit findings including anysignificant deficiencies in internal control that we identify during our Audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of Section 143(11) of the Act we givein "Annexure A" a statement on the matters specified in paragraphs 3 and 4 ofthe Order to the extent applicable

2. As required by Section 143(3) of the Act we report that:

a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;
b. In our opinion proper Books of Account as required by law have been kept by the Company in so far as it appears from our examination of those books;
c. The Balance Sheet the Statement of Profit and Loss including Other Comprehensive Income the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account.
d. In our opinion the aforesaid standalone Ind AS Financial Statements comply with the Indian Accounting Standards prescribed under section 133 of the Act read with relevant rules issued thereunder.
e. On the basis of the written representations received from the Directors as on 31st March 2020 and taken on record by the Board of Directors none of the Directors is disqualified as on 31st March 2020 from being appointed as a Director in terms of Section 164(2) of the Act;
f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls refer to our separate Report in "Annexure B"
g. With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended in our opinion and to the best of our information and according to the explanations given to us:

(i) The Company has disclosed the impact of pending litigations on its financialposition in its Standalone Ind AS financial statements. Refer note 28 to the StandaloneInd AS Financial Statements.

(ii) The Company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses.

(iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

3. With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended:

In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act.

For J.D. Jhaveri & Associates
Chartered Accountants
Firm Reg. No.: 111850W
Jatin Jhaveri
Proprietor
M.No.: 045072
UDIN: 20045072AAAEO4573
Mumbai 30th July 2020

ANNEXURE - A TO THE AUDITORS' REPORT

The Annexure referred to in the Independent Auditors' Report to the members of theCompany on the Standalone IND-AS financial statements for the year ended 31st March 2020we report that:

(i)

(a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets;
(b) A substantial portion of these fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification.
(c) In our opinion and according to the information & explanation given to us and based on our examination of the records of the Company the title deeds of immovable properties are held in the name of the Company.

(ii) As explained to us the inventories have been physically verified during the yearby the management. The intervals at which the inventories are physically verified are inour opinion reasonable in relation to the size of the Company and the nature of itsbusiness. The Company is maintaining proper records of inventory and no materialdiscrepancies were noticed on physical verification.

(iii) As informed to us & on the basis of our examination of the books of accounts& other relevant records The Company has granted loans to five bodies corporatecovered in the register maintained under section 189 of the Companies Act 2013 ('theAct').

(a) In our opinion the rate of interest and other terms and conditions on which the loans had been granted to the bodies corporate listed in the register maintained under Section 189 of the Act were not prima facie prejudicial to the interest of the Company
(b) In the case of the loans granted to the bodies corporate listed in the register maintained under section 189 of the Act the borrowers have been regular in the payment of the principal and interest as stipulated.
(c) There are no overdue amounts in respect of the loan granted to a body corporate listed in the register maintained under section 189 of the Act.

(iv) In our opinion & according to the information and explanations given to usthe Company has complied with the provisions of section 185 and 186 of the Companies Act2013 in respect of loans given investments made guarantees and security given by theCompany.

(v) In our opinion & according to the information & explanation given to usthe Company has not accepted any deposits from the public during the year. Thereforeparagraph 3(v) of the Order is not applicable.

(vi) According to the information & explanation provided to us the CentralGovernment has not prescribed the maintenance of cost records under sub-section (1) ofsection 148 of the Companies Act 2013.

(vii)

(a) According to the information & explanations provided to us & on the basisof our examination of the books of accounts & other relevant records the Company isgenerally regular in depositing undisputed statutory dues including provident fundemployees' state insurance income tax sales-tax service tax duty of customs duty ofexcise value added tax cess and any other statutory dues to the appropriate authorities.As explained to us there were no undisputed statutory dues as mentioned above in arrearsas at 31st March 2020 for a period of more than 6 months from the date they becamepayable.

(b) According to the information and explanations given to us details of disputedstatutory dues which have not been deposited or partially deposited are as follows:

Name of the Statute Nature of Dues Amount disputed O Period to which the amount relates (F.Y.) Forum where dispute is pending
Income Tax Act 1961 Income Tax 7655100 2010-11 CIT(A)
Income Tax Act 1961 Income Tax 11702092 2011-12 CIT(A)
Income Tax Act 1961 Income Tax 216789 2012-13 CIT(A)

(viii) In our opinion and according to the information & explanation given to usand based on our examination of the records of the Company the company has not defaultedin repayment of loans or borrowings to banks or financial institutions.

(ix) The Company has not raised any money by way of initial public offer or furtherpublic offer including debt instruments during the year. The Company has availed of termloans during the year and the same has been applied for the purpose it has been taken;

(x) To the best of our knowledge and belief and according to the information andexplanations given to us no material fraud by the Company or on the Company by itsofficers or employees has been noticed or reported during the course of our audit.

(xi) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information & explanations given to usthe Company is not a Nidhi Company and therefore the compliance requirements relevant to aNidhi Company are not applicable.

(xiii) In our opinion and according to the information & explanations given to usand based on our examination of the records of the Company all transactions with relatedparties are in compliance with section 177 and 188 of the Companies Act 2013 whereapplicable and the details have been disclosed in the financial statements etc. asrequired by the applicable accounting standards.

(xiv) In our opinion and according to the information & explanation given to us andbased on our examination of the records of the Company no preferential allotment orprivate placement of shares or fully or partly convertible debentures has been made by theCompany during the year under review.

(xv) According to the information & explanations given to us and based on ourexamination of the records of the Company the Company has not entered into any non-cashtransactions with directors or persons connected with him/her as specified under theprovisions of section 192 of the Companies Act 2013

(xvi) The Company is not required to be registered under section 45-1(A) of the ReserveBank of India Act 1934 and therefore the provisions of paragraph 3(xvi) of the Order isnot applicable.

For J.D. Jhaveri & Associates
Chartered Accountants
Firm Reg. No.: 111850W
Jatin Jhaveri
Proprietor
M.No.: 045072
UDIN: 20045072AAAEO4573
Mumbai 30th July 2020

Annexure - B to the Independent Auditor's Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act") referred to in paragraph 2 (f) onReport on Other Legal and Regulatory Requirements of our report.

Opinion

We have audited the internal financial controls over financial reporting with referenceto the standalone financial statements of Pioneer Investcorp Ltd ("the Company")as of 31st March 2020 in conjunction with our audit of the standalone financialstatements of the Company for the year ended on that date.

In our opinion the Company has in all material respects an adequate internal financialcontrols system over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at 31st March 2020 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India ('ICAI'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

For J.D. Jhaveri & Associates
Chartered Accountants
Firm Reg. No.: 111850W
Jatin Jhaveri
Proprietor
M.No.: 045072
UDIN: 20045072AAAEO4573
Mumbai 30th July 2020

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