The Members of Pioneer Investcorp Ltd. Report on the Standalone Financial StatementsOpinion
We have audited the accompanying standalone financial statements of Pioneer InvestcorpLimited ('the Company') which comprise the Balance Sheet as at 31 March 2019 theStatement of Profit and Loss and the Cash Flow statement for the year then ended and notesto the Financial Statements including summary of Significant Accounting Policies and otherexplanatory information.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Financial Statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31stMarch 2019 and its Profit and its Cash Flows for the year ended on that date.
Basis for Opinion
We have conducted our Audit in accordance with the Standard 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 for theFinancial Statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled out 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 judgement were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our standalone financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.
We have determined the matters described below to be the key audit matters to becommunicated in our report.
Key Audit Matter
Accuracy of recognition measurement presentation and disclosure of revenues and otherrelated balances in respect of fee mandates and trading in securities involving criticalestimates as per AS 9 Revenue Recognition.
The Company recognises revenue with respect to income from sale of services (includingother operating revenue) in accordance to achievement of milestones defined in thecorresponding engagement letters or mandate letters entered with counter party whichreflects the proportionate stage of completion method.
Refer Note No. 19 to the Standalone Financial Statements
Principal Audit Procedures
Our audit approach consisted testing of the design and operating effectiveness of theinternal controls and substantive testing as follows:
Evaluated the design of internal controls relating to recording of revenue withrespect to income from sale of services (including other operating revenue) based upontime spent and efforts taken.
Selected a sample of continuing and new contracts and through inspection ofevidence of performance of these controls tested the operating effectiveness of theinternal controls relating to time spent and efforts taken.
Reviewed a sample of contracts with unbilled revenues to identify possibledelays in achieving milestones
Performed analytical procedures and test of details for reasonableness of timespent and efforts taken.
Information Other than the Standalone Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to the Board's ReportCorporate Governance and Shareholders' Information but does not include the standalonefinancial statements and our auditor's 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 during the course of our audit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.
Responsibility of Management 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 preparationand presentation of these standalone financial statements that give a true and fair viewof the financial position financial performance 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 read with Rule 7 of theCompanies (Accounts) Rules 2014. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.
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.
Those Board of Directors are 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 of the economic decisions of users taken on thebasis of these financial statements.
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 sub-section (11) of section 143 ofthe Act we give in the Annexure A a statement on the matters specified in the paragraph3 and 4 of the 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 bestof 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 theCompany so far as it appears from our examination of those books;
(c) the balance sheet the statement of profit and loss and the cash flow statementdealt with by this Report are in agreement with the books of account;
(d) in our opinion the aforesaid Standalone Financial Statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014;
(e) on the basis of the written representations received from the directors as on 31March 2019 taken on record by the Board of Directors none of the Directors aredisqualified as on 31 March 2019 from being appointed as a Director in terms of Section164 (2) of the Act;
(f) with respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in Annexure B;
(g) 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: and
(h) with respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
i. The Company does not have any pending litigations which would impact its financialposition;
ii. The Company did not have any long term contracts including derivative contracts; assuch the question of commenting on any material foreseeable losses thereon does on arise;
iii. There has not been any occasion in case of the Company during the year underreport to transfer any sums to the Investor Education and Protection Fund. The question ofdelay in transferring such sums does not arise.
For J. D. Jhaveri & Associates
Firm Reg. No.: 111850W
30th May 2019
ANNEXURE - A TO THE AUDITORS' REPORT
The Annexure referred to in Independent Auditors' Report to the members of the Companyon the standalone financial statements for the year ended 31 March 2019 we report that:
I. a) The Company has maintained proper records showing full particulars includingquantitative details and situation of Fixed of Assets;
b) All the Assets have been physically verified by the Management during the year atreasonable intervals. No material discrepancies were noticed on verification and the samehave been properly dealt with in the Books of Accounts.
c) The Company does not have any immovable property. Accordingly the provisions ofclause 1 (c) of the Order are not applicable to the Company and hence not commented upon;
ii. The management has conducted the physical verification of inventories at reasonableintervals and no discrepancies were noticed;
iii. The Company has granted loans to four bodies corporate covered in the registermaintained under section 189 of the Companies Act 2013 ('the Act').
(a) In our opinion the rate of interest and other terms and conditions on which theloans had been granted to the bodies corporate listed in the register maintained underSection 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 registermaintained under section 189 of the Act the borrowers have been regular in the payment ofthe principal and interest as stipulated.
(c) There are no overdue amounts in respect of the loan granted to a body corporatelisted in the register maintained under section 189 of the Act.
iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 & 186 of the Act with respectto the loans and investments made;
v. The Company has not accepted any deposits from the public covered under Section 73to 76 of the Companies Act 2013 and the Rules made thereunder;
vi. The Central Government has not prescribed maintenance of Cost records undersub-section (1) of Section 148 of the Act in respect of the activities carried on by thecompany;
vii. (a) According to information and explanations given to us and on the basis of ourexamination of the books of account and records the Company has been generally regularin depositing undisputed applicable statutory dues including Provident Fund EmployeesState Insurance Income-Tax Sales tax Service Tax Goods & Services Tax Duty ofCustoms Duty of Excise Value added Tax Cess and any other statutory dues with theappropriate authorities.
According to the information and explanations given to us no undisputed amountspayable in respect of the above were in arrears as at March 31 2019 for a period of morethan six months from the date on when they become payable;
(b) According to the information and explanation given to us there are no dues ofincome tax sales tax duty of customs duty of excise value added tax Goods &Services Tax outstanding on account of any dispute. However according to the informationand explanation given to us the following dues of service tax have not been deposited bythe company on account of any disputes:
|Name of the Statute ||Amount of Tax (Rs.) ||Period to which amount relates ||Forum where dispute is pending |
|Service Tax ||22220700 ||FY 2012-13 ||Commissioner (Appeals) |
viii. The Company has not defaulted in repayment to Banks/Financial Institutions;
ix. The Company has not raised any money by way of initial public offer or furtherpublic offer (including Debt instrument). The Company has availed of term loans during theyear and the same has been applied for the purpose it has been taken;
x. Based upon the audit procedures performed and the information and explanations givenby the management we report that no fraud by the Company or on the company by itsofficers or employees has been noticed or reported during the year;
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 the Company is not a Nidhi Company. Accordingly the provisions ofclause 3 (xii) of the Order are not applicable;
xiii. Based upon the audit procedures performed and the information and explanationsgiven by the management the transactions with Related Parties are in compliance withSections 177 & 188 of the Act where applicable and details of such transactions havebeen disclosed in the financial statements as required by the applicable AccountingStandards;
xiv. Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not made any preferential allotment or privateplacement of shares or full or partly convertible debentures during the year under revies;
xv. Based the audit procedures performed and the information and explanations given bythe management the company has not entered into any non-cash transactions with directorsor persons connected with him. Accordingly the provisions of clause 3 (xv) of the Orderare not applicable;
xvi. In our opinion the company is not required to be registered under section 45 IAof the Reserve Bank of India Act 1934 and accordingly the provisions of clause 3 (xvi)of the Order are not applicable to the Company.
For J. D. Jhaveri & Associates
Firm Reg. No.: 111850W
30th May 2019
ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THEFINANCIAL STATEMENTS OF PIONEER INVESTCORP LIMITED
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 (the Act)
We have audited the internal financial controls over financial reporting of PioneerInvestcorp Limited (the Company) as of March 31 2019 in conjunction with ouraudit of the financial statements of the Company for the year ended on that date.
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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.
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 both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively 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 judgement 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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial 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.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2019 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.
For J. D. Jhaveri & Associates
Firm Reg. No.: 111850W
30th May 2019