AEONIAN INVESTMENTS COMPANY LIMITED ANNUAL REPORT 2011-2012 DIRECTOR'S 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. Financial Highlights: (Rs. in Lakhs) Particulars 2011-2012 2010-2011 Income From Operations 250.10 194.94 Profit On Sale Of Investments 248.35 186.85 Total Revenue 498.45 381.79 Profit Before Depreciation And Tax 467.88 188.11 Less : Depreciation 31.89 35.41 Profit Before Tax 435.99 152.70 Less : Provisions For Tax Income Tax 54.00 5.00 Wealth Tax 7.00 7.00 Profit After Tax 374.99 140.70 Add: Balance Brought Forward From Previous Year 4889.43 5010.32 Add/Less : Short Provisions Written Off - 6.55 Profit Available For Appropriation 5264.42 5157.57 Appropriation Proposed Dividend 192.00 192.00 Tax On Proposed Dividend 31.15 31.15 Transfer To General Reserve 38.00 15.00 Transfer To Reserve Fund In Terms Of Section 45 Ic(1) Of R.B.I Act, 76.00 30.00 1934 Balance Carried Forward To Balance Sheet 4927.27 4889.43 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. FORM [See Rule 3] Compliance Certificate Authorised Share Capital : Rs. 1,00,00,000/- Corporate Identity Number: L65990MH1981PLC024860 To, The Members, Aeonian Investments Company Limited N.K. Mehta International House, 178, Backbay Reclamation, Babubhai M. Chinai Marg, Mumbai - 400 020 We have examined the registers, records, books and papers of M/s. Aeonian Investments Company Limited (the Company) asrequiredtobemaintainedunder the Companies Act, 1956 (the Act) and the rules made there under and also the provisions contained in the Memorandum and Articles of Association of the Company, for the financial year ended on 31st March 2012 (financial year). In our opinion and according to the examination carried out by us and explanations furnished to us by the Company, its officers and agents, and to the best of our knowledge and belief, we certify that in respect of the aforesaid financial year: 1. The Company has kept and maintained the registers as stated in Annexure 'A' to this certificate, as per the provisions of the Act and the rules made thereunder and entries therein have been duly recorded. 2. The Company has duly filed the forms and returns as stated in Annexure 'B' to this certificate, with the Registrar of Companies, Maharashtra, Mumbai, within time prescribed under the Companies Act, 1956 and the rules made there under. The Company has not filed any documents with the Regional Director, Central Government, Company Law Board or any other authorities under the Act. 3. The Company being a Public Limited Company, has the paid upcapital of Rs. 96,00,000/- (Rupees Ninety Six Lacs only) as on 31st March 2012 and the restrictive provisions of Section 3(1) (iii) of the Act are not applicable. 4. The Board of Directors duly met 5 (Five) times respectively on 10th May 2011, 25th July 2011, 24th October 2011, 30th January 2012 and 26th March 2012 and as per information and explanation given by the management, proper notices were given and the proceedings were properly recorded and signed, including the circular resolutions passed, in the Minutes Book maintained for the purpose. 5. The Company closed its Register of Members from 19th July 2011 to 26th July 2011 (both days inclusive) and necessary compliance of Section 154 of the Act has been made. 6. The Annual General Meeting for the financial year ended on 31st March 2011 was held on 26th July 2011 and as per information and explanation given by the management, the Company has given adequate notice to the members of the Company and the resolutions passed thereat were duly recorded in the Minutes Book maintained for the purpose. 7. No Extra - Ordinary General Meeting was held during the financial year. 8. The Company has not advanced any loan to its Directors and/or persons or firms or companies referred in the section 295 of the companies Act 1956. 9. The Company has not entered into any contracts falling within the purview of Section 297 of the Act in respect of contracts specified in that Section. 10. The Company has made necessary entries in the register maintained under Section 301 of the Act. 11. As there were no instances falling within the purview of Section 314 of the Act, the Company has not obtained any approvals from the Board of Directors, members or Central Government. 12. The duly constituted Investors Grievance Committee of Directors has approved the issue of duplicate share certificates. 13. The Company: (i) has delivered all the share certificates on lodgement thereof for transfer / transmission or any other purpose in accordance with the provisions of the Act. The Company has not made any allotment of shares during the financial year. (ii) has deposited the amount of dividend declared at the Annual General Meeting held on 26th July 2011 into a separate Bank account on 26th July 2011 which was within five days from the date of declaration of such dividend. (iii) has posted warrants for dividends to all members within a period of 30 (thirty) days from the date of declaration in respect of dividend declared at the Annual general Meeting held on 26th July 2011 and that all unclaimed / unpaid dividend has been transferred to Un-paid dividend Account of the Company with Kotak Mahindra Bank, Mumbai. (iv) pursuant to the provisions of section 205C of the Companies Act, 1956, unclaimed dividend pertaining to the financial year ended on 31st March 2004 which remained unclaimed or unpaid for a period of seven years, have been transferred to the Investor Education and Protection Fund. (v) has duly complied with the requirements of section 217 of the Act. 14. The Board of Directors of the Company is duly constituted. The Company has appointed Mr. Vispi Patel as an Additional Director w.e.f. 26.03.2012 and appointment of directors retiring by rotation was duly made during the financial year. 15. The Company has not appointed any Managing Director / Whole-time Director / Manager during the financial year. 16. The Company has not appointed any sole selling agent during the financial year. 17. The Company was not required to obtain any approvals of the Central Government, Company Law Board, Regional Director, Registrar or such other authorities as prescribed under the various provisions of the Act during the financial year. 18. The Directors have disclosed their interest in other firms / Companies to the Board of Directors pursuant to the provisions of the Act and the rules made thereunder. 19. The Company has not issued any shares or other securities during the financial year. 20. The Company has not bought back any shares during the financial year. 21. There was no redemption of preference shares or debentures during the financial year. 22. There were no transactions necessitating the Company to keep in abeyance the rights to dividend, rights shares & bonus shares pending registration. 23. The Company has not invited / accepted any deposits including any unsecured loans during the financial year which is falling within the purview of section 58A read with the Companies (Acceptance of Deposit) Rules, 1975 / the applicable directions issued by the Reserve Bank of India/ any other authorities. 24. The Company has not made any borrowings during the financial year. 25. The principal business of the Company being acquisition and investment in shares, stock, debentures or other securities, the provisions of Section 372A of the Companies Act, 1956, are not applicable to the Company. 26. The Company has not altered the provisions of the Memorandum with respect to situation of the Company's registered office from one State to another during the financial year. 27. The Company has not altered the provisions of the Memorandum with respect to the objects of the Company during the financial year. 28. The Company has not altered the provisions of the Memorandum with respect to name of the Company during the financial year. 29. The Company has not altered the provisions of the Memorandum with respect to share capital of the Company during the financial year. 30. The Company has not altered its Articles of Association during the financial year. 31. There were no prosecution initiated against or show cause notices received by the Company and no fines or penalties or any other punishment was imposed on the Company during the financial year, for offences under the Act. 32. The Company has not received any money as security from its employees during the financial year. 33. The provisions of section 418 of the Companies Act, 1956 are not applicable since the Company has no employees. For MANISH GHIA & ASSOCIATES Company Secretaries Place: Mumbai Manish L. Ghia Date : 11th May 2012 Partner M. No. FCS 6252 C. P. No. 3531 ANNEXURE 'A' Registers Maintained by M/s. Aeonian Investments Company Limited 1) Register of Members under section 150 of the Companies Act, 1956. 2) Index of Members under section 151 of the Companies Act, 1956. 3) Register of Share Transfers/transmission. 4) Register and Returns under section 163 of the Companies Act, 1956 (including copies of all annual returns prepared under Section 159 & Section 160 of the Companies Act, 1956). 5) Register of Directors under Section 303 of the Companies Act, 1956. 6) Register of Contracts and Disclosure of Directors Interest under section 301 of the Companies Act, 1956. 7) Register of Directors shareholdings under section 307 of the Companies Act, 1956. 8) Minutes Book of the Meetings of Board of Directors and General Meetings under Section 193 of the Companies Act, 1956. 9) Register of Directors Attendance. 10) Register of Shareholders'/Proxy Attendance. 11) Register of Renewal, Split, Consolidation and Duplicate Share Certificates. ANNEXURE 'B' Forms and Returns filed by M/s. Aeonian Investments Company Limited during the financial year ended on 31st March 2011: A) With the Registrar of Companies, Maharashtra, Mumbai E-form Relevant Description Date of A B No. Section filing 1-INV 205C Particulars of Transfer of 12.07.2011 Yes N.A. Unclaimed Dividend of Rs.78,000/- pertaining to financial year 2003-04 to the Investor Education and Protection Fund. 66 383A Compliance Certificate under 28.07.2011 Yes N.A. Section 383A of the Companies Act, 1956 for the year ended on 31st March 2011. 23AC/ 220 (1) Schedule - VI (Annual Accounts) 16.08.2011 Yes N.A. ACA for the financial year ended 31st March 2011. 20B 159 (1) Schedule - V (Annual Return) as 13.09.2011 Yes N.A. on the date of Annual General Meeting i.e. 26th July 2011. 32 303 (2) Appointment of Mr. Vispi Patel 27.03.2012 Yes N.A. as an Additional Director w.e.f. 26.03.2012 A = Whether filed within prescribed time Yes/No B = If delay in filing whether requisite additional fee paid Yes/No B) With the Office of the Regional Director, Western Region Nil C) With the Office of the Ministry of Corporate Affairs (Central Government) at Delhi Nil D) With any other Authorities as prescribed under the Act. Nil