PRINCIPAL PNB ASSET MANAGEMENT COMPANY PRIVATE ... Mr. Vimlesh Kumar Non - Executive Director The...

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Transcript of PRINCIPAL PNB ASSET MANAGEMENT COMPANY PRIVATE ... Mr. Vimlesh Kumar Non - Executive Director The...

  • PRINCIPAL PNB ASSET MANAGEMENT COMPANY PRIVATE LIMITED

  • DIRECTORS’ REPORT

    Dear Shareholders, Your Directors have pleasure in presenting the Twenty Fifth (25th) Annual Report on the business and performance of the Company together with the audited financial statements for the Financial Year ended March 31, 2017.

    FINANCIAL HIGHLIGHTS The Company's performance during the year ended March 31, 2017 as compared to the previous financial year, is summarized below:

    (Rs. in lakh)

    Particular For the Financial

    Year ended

    March 31, 2017

    For the Financial

    Year ended

    March 31, 2016

    Income 4,534.12 3,903.72

    Less: Expenses 4,874.14 5,247.13

    Profit/ (Loss) before tax and extraordinary items

    (340.02) (1,343.41)

    Less: Prior period Items 42.66 -

    Profit/ (Loss) before tax (382.68) (1,343.41)

    Less: Provision for tax - -

    Income Tax of earlier years w/off - (0.18)

    Profit after Tax (382.68) (1,343.22)

    Earnings per Equity Share (Basic and Diluted)

    (2.20) (7.72)

    APPROPRIATION

    (Rs. in lakh)

    Interim Dividend - -

    Final Dividend - -

    Tax on distribution of dividend - -

    Transfer of General Reserve - -

    Balance carried to Balance sheet (382.68) (1,343.22)

    FUND PERFORMANCE The performance of various funds of the Company during the financial year 2016-17 was as under:

    Name of Fund

    Year of Launch

    Return (%)

    Principal Balanced Fund Regular Plan - 14/01/2000 27.07

    Direct Plan - 2/1/2013 28.33

  • Principal Index Fund – Midcap Regular Plan – 12/05/2014 34.05

    Direct Plan – 12/05/2014 34.72

    Principal Dividend Yield Fund Regular Plan - 15/10/2004 29.20

    Direct Plan – 02/01/2013 29.68

    Principal Global Opportunities Fund Regular Plan – 29/03/2004 13.69

    Direct Plan – 02/01/2013 14.21

    Principal Growth Fund Regular Plan – 25/10/2000 33.16

    Direct Plan – 02/01/2013 34.06

    Principal Index Fund – Nifty Regular Plan – 27/07/1999 18.75

    Direct Plan – 02/01/2013 19.34

    Principal Large Cap Fund Regular Plan – 11/11/2005 22.82

    Direct Plan – 02/01/2013 23.67

    Principal Personal Tax Saver Fund Regular Plan – 31/03/1996 22.46

    Direct Plan – 02/01/2013 23.27

    Principal Emerging Bluechip Fund Regular Plan – 12/11/2008 39.21

    Direct Plan – 02/01/2013 40.62

    Principal Low Duration Fund Regular Plan – 14/09/2004 8.45

    Direct Plan - 2/1/2013 8.91

    Principal Bank CD Fund Regular Plan – 06/11/2007 6.87

    Direct Plan - 2/1/2013 7.41

    Principal Government Securities Fund Regular Plan – 23/08/2001 12.45

    Direct Plan - 2/1/2013 13.35

    Principal Dynamic Bond Fund Regular Plan – 09/05/2003 11.26

    Direct Plan - 2/1/2013 12.09

    Principal Short Term Income Fund Regular Plan - 09/05/2003 8.72

    Direct Plan - 2/1/2013 9.59

    Principal Equity Savings Fund Regular Plan - 23/05/2003 11.15

    Direct Plan - 2/1/2013 12.00

    Principal Debt Savings Fund – Retail Plan

    Regular Plan – 30/12/2003 9.29

    Direct Plan - 2/1/2013 10.11

    Principal Cash Management Fund Regular Plan – 30/08/2004 7.34

    Direct Plan - 1/1/2013 7.41

    Principal Credit Opportunities Fund Regular Plan – 14/09/2004 8.36

    Direct Plan - 2/1/2013 8.62

    Principal Retail Money Manager Fund Regular Plan – 28/12/2007 7.72

    Direct Plan - 1/1/2013 7.86

    Principal Smart Equity Fund Regular Plan – 16/12/2010 12.05

    Direct Plan - 2/1/2013 13.26

    Principal Tax Savings Fund Regular Plan – 31/03/1996 33.09

    Direct Plan – 02/01/2013 33.62

    Principal Asset Allocation Fund-of-Funds – Conservative Plan

    Regular Plan – 1412/2015 10.99

    Direct Plan – 14/12/2015 11.30

    Principal Asset Allocation Fund-of-Funds – Moderate Plan

    Regular Plan – 1412/2015 14.91

    Direct Plan – 14/12/2015 15.71

    Principal Asset Allocation Fund-of-Funds – Aggressive Plan

    Regular Plan – 1412/2015 20.89

    Direct Plan – 14/12/2015 21.65

  • OUTLOOK

    At Principal Mutual Funds, our focus is not only to grow our AUM, but also to provide right products to the investors and staying relevant in their minds. We have taken several actions during the year to position the company for increasing its retail business while aligning our institutional business strategy towards higher margin products. Our plans for the next three to five years are to position the company as a dominant player in ‘long term’ asset management business. Besides developing new solutions to meet needs of the investors through our domestic funds, we continue to pursue bringing in unique global investment options from our international product suite for our clients. Additionally, we are investing aggressively to enhance our digital infrastructure and brand positioning to increase our relevance in minds of millennia investors.

    OPERATIONS

    Principal Mutual Fund as at March 31, 2017 offers thirty Schemes. These include twelve Equity Schemes (including two Equity Linked Savings Schemes, one Balanced Scheme), one Fund of Fund Overseas (investing in international fund/s), three Fund of Funds Domestic Schemes, thirteen Debt Schemes/ Plans (including five Fixed Maturity Plans) and one Liquid Scheme. The Assets under Management (AuM) from all these Schemes as on March 31, 2017 was Rs. 5,009.70 crore.

    The Company operates out of 11 branches, including Mumbai. To enhance our reach with distributors and customers, the AMC has 104 Investor Service Centers (of Karvy Computershare Private Limited) across India, as Official Point of Acceptance.

    Performance of some of our schemes were recognized for their excellence, in several Rankings and Star Ratings released by various independent third party agencies. Principal Emerging Blue chip Fund was 5-star rated fund. Principal Large Cap Fund, Principal Growth Fund, Principal Dynamic Bond Fund, Principal Low Duration Fund, Principal Cash Management Fund and Principal Tax Savings Fund were 4-star rated funds (as on March 31, 2017) as per Value Research. There was no change in nature of the business of the Company, during the year under review.

    DIRECTORS The Board represents an optimum combination of Executive and Non-Executive Directors, who possess varied professional knowledge and experience in diverse fields like finance, economics, administration etc. The Board consists of 6 Members including one non-executive Chairman and one Managing Director.

  • The existing Board consists of: Mr. M. M. Chitale

    Chairman (Independent Non - Executive Director)

    Mr. Lalit Vij Managing Director Mr. M. M. Kamath Independent Non - Executive Director Mr. Pedro Borda Non - Executive Director Mr. Rustam Gagrat Independent Non - Executive Director Mr. Vimlesh Kumar Non - Executive Director The Composition of the Board of Directors is in line with the requirements prescribed under the Companies Act 2013 and SEBI (Mutual Funds) Regulations, 1996. During the year, following changes took place in the composition of the Board of Directors: 1. Vacation of office of Mr. Kim Thean Soo as an Alternate Director to Mr. Pedro Borda

    with effect from September 19, 2016.

    2. Appointment of Mr. Kim Thean Soo as an Alternate Director to Mr. Pedro with effect from October 25, 2016, following Vacation of office of Mr. Kim as an Alternate Director to Mr. Pedro with effect from November 16, 2016.

    3. Appointment of Mr. Kim Thean Soo as an Alternate Director to Mr. Pedro with effect

    from June 28, 2017.

    KEY MANAGERIAL PERSONNEL In Compliance of the Section 203 read with Rule 8A of the Companies Act 2013, the Company has following Key Managerial Personnel: a) Mr. Lalit Vij, Managing Director b) Ms. Nidhi Shah, Company Secretary During the year, Ms. Niyati Shah resigned from the position of Company Secretary with effect from August 04, 2017. The Board of Directors in their meeting held on July 13, 2017, appointed Ms. Nidhi Shah as the Company Secretary of the Company, with effect from August 08, 2017. The terms of appointment (s) of Key Managerial Personnel are approved by the Board of Directors in compliance with the applicable requirements.

    DIRECTORS’ RESPONSIBILITY STATEMENT In terms of Section 134(5) of the Companies Act, 2013, in relation to the audited financial statements of the Company for the year ended March 31, 2017, the Board of Directors hereby confirms that:

  • a. in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

    b. such accounting policies have been selected and applied consistently and the Directors 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 March 31, 2017 and of the profit/loss of the Company for that year;

    c. proper and sufficient care was taken for the maintenance of adequate accounting

    records in acco