DIRECTORS' REPORT Your Directors have pleasure in presenting the Thirty first Annual Report together with the Audited Statement of Accounts for the year ended 31st March 2012. Management Discussion and Analysis Industry Structure and Development Aeonian Investments Company Ltd. is an Investment Company investing in shares, both quoted and unquoted and in units of Mutual Funds. The industry structure relevant to the Company's operations is mainly concerned with the capital market. The Company handles its investments in the capital market through a reputed portfolio manager. Industry Overview: Indian economy is adversely affected by persistent inflation over the last few years. The rising incomes propped the purchasing power of the population, driving consumption demand in sectors, where supply lagged particularly, in food-grain and non food-grain commodities, Sharp increase in international prices of fuels also contributed to inflationary pressure. The Government has been going very slow on various reforms, expected by large investors and market. Market participants were particularly concerned about subsidies—fertilizer, food and fuel; falling rupee against dollar; unreported corruptions; widening current account and fiscal deficits. Net Buys by the Foreign Institutional investors have been declining during the year as compared to these of the earlier years. Economic situations in Euro Zone countries and other priced the Capital Market towards losses. Operational performance Total Revenue increased from Rs. 381.79 Lakhs to Rs. 498.45 Lakhs during the year under consideration. Profit before depreciation and tax increased from Rs. 188.11 Lakhs in the financial year 2010-11 to Rs. 467.88 Lakhs in the year under review. The Profit after Tax: The Company's Profit after tax increased to Rs. 374.99 Lakhs during the year under review as compared to Rs. 140.70 Lakhs in the previous year. Reserves and Surplus as at 31st March, 2012 stand at Rs. 8931.77 Lakhs. The net worth of your Company at the year end stands at Rs. 78.22 crores which translates to a book value of Rs. 163 per share. The Company's investment portfolio managed by Portfolio Managers, M/s. Enam Securities Private Limited continues to be in equity shares of growth-oriented companies that are capable of withstanding the adverse impact of the slow down in the economy. Outlook Outlook for the Company is linked to Capital Market. The Portfolio Manager managing Company's investment in equity market believes that Company's Investments in the equity shares of various companies would reasonably perform in the ensuing years. Risk and Concerns As mentioned earlier, Company's performance is closely linked to the Indian Capital Market and consequently to the risks associated with market operations. The value of the company's investments may be affected by factors affecting capital markets such as price and volume volatility, interest rates, currency exchange rates, foreign investment, government policy changes, political and economic developments, crude oil prices and economic performance abroad; etc. A large part of the Company's investments are under the discretionary management of the reputed portfolio manager. The Company is however exposed to risks associated with the management of its portfolio by the manager. Segment The primary segment of the company's business is 'investment in the capital market.' Internal Control Systems and Adequacy An adequate system of internal control is in place which mandates maintaining proper accounting records and their periodical verification, by the Management and the Statutory Auditors. Cautionary Statement (The statement in this report, including the Management's Discussion and Analysis Report, reflects the company's projections, estimates, expectations and predictions and contains a forward looking statement that involves risk and uncertainty. The company undertakes no obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise. Actual results, performances of achievements could differ materially from those expressed or implied in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only of the expectations as on the date.) Dividend The Directors are pleased to recommend a dividend of Rs. 4/- (200%) per Equity Share (Previous year Rs. 4/- (200%) per Equity Share) for the financial year ended 31st March 2012. Outgo on account of payment of the dividend will absorb Rs. 223.15 Lakhs including Dividend Distribution Tax payable by the Company. Appropriation In accordance with the provisions of Section 45 IC (1) of the Reserve Bank of India Act, 1934, a sum of Rs. 76.00 lakhs being 20% of the profits for the year is transferred to Reserve Fund. Further an amount of Rs. 38.00 Lakhs has been transferred to General Reserve. The remaining balance of Rs. 4927.27 Lakhs has been carried forward. Directors In accordance with the Articles of Association of the Company, Smt Priti A Choksey and Shri Dhiren P Mehta, Directors of the Company, retire by rotation and being eligible, offer themselves for re - appointment. The Directors recommend their re-appointment. The Board of Directors in their meeting held on 26th March, 2012 have appointed Shri Vispi R. Patel as additional director of your Company. He will retire at the close of the ensuing Annual General Meeting and being eligible, offer himself for reappointment. Shri Vispi R. Patel is a Bachelor of Commerce from Mumbai University and has done Master of Business Administration (MBA) and has vast experience in the various spheres of the Management. The Board is of the view that your Company will benefit by his appointment. Directors' Responsibilities Statement The Directors confirm a) that in the preparation of the annual accounts, the applicable accounting standards have been followed and that no material departures have been made from the same; b) that they have selected such accounting polices and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the Company for that period; c) that 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; d) that they have prepared the annual accounts on a going concern basis. Information pursuant to the Non-Banking Financial Companies acceptance of Public Deposits (Reserve Bank) Directions, 1999. The Company has not accepted any deposits during the year under review. Particulars of Employees The Company has no employee covered under Section 217(2AA) of the Companies Act, 1956 Listing Arrangements The shares of the Company are listed on Bombay Stock Exchange Limited, Mumbai and the applicable listing fees have been paid till date. The Company has complied with the requirements of the Listing Agreement entered into with the said Stock Exchange. Conservation of Energy & Technology Absorption Being an investment company, the Company has no manufacturing activities. Foreign Exchange Earnings and outgo During the year there were no foreign exchange earnings and outgo. Auditors The Company's Auditors M/s. Ravi A. Shah & Associates, Chartered Accountants, Mumbai, retire at the conclusion of the ensuing Annual General Meeting of the Company and are eligible for re-appointment. The Directors recommend their re-appointment. Corporate Governance Your Company is committed to practice the principles of good Corporate Governance. Necessary measures are taken to comply with the requirements of revised clause 49 of the Listing Agreement entered into with the Bombay Stock Exchange Limited. The report on Corporate Governance is enclosed and form part of the Directors' Report. Certificate from the Company's Auditors dated May 11, 2012 regarding compliance of the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement entered into with Bombay Stock Exchange Ltd is annexed to this Report. Secretarial Compliance Certificate In accordance with the provisions of Section 383A of the Companies Act, 1956, a certificate from M/s. Manish Ghia & Associates, Practising Company Secretaries, certifying the status on compliance with respect to the applicable provisions of the Companies Act, 1956, is annexed and forms part of this Report. Acknowledgement Your Directors take on record their sincere thanks for the valuable services rendered by the portfolio managers, stock brokers and other business associates. For and on behalf of the Board of Directors Amit Choksey CHAIRMAN Mumbai, 11th May, 2012. |