Canara Robeco Asset Management Company Ltd Directors Report

TO THE MEMBERS:

Your Directors have pleasure presenting the twenty first Annual Report together with the Audited Statement of Accounts for the year ended 31^st March, 2014.

FINANCIAL RESULTS:

	Year ended31.3.2014	Year ended31.3.2013
	(Rs. Lacs)	(Rs. Lacs)
Profit/(Loss) before depreciation	1,033.63	1,238.92
Depreciation	62.90	71.72
Profit/(Loss) before exceptional and tax	970.73	1,167.20
Exceptional items (Profit on sale of Fixed Assets)	121.80	399.42
Profit/(Loss) before tax	1,092.53	1,566.62
Less : Provision for Income Tax	123.00	250.00
Provision for Wealth Tax	3.49	3.86
Less: Charge/(Credit) for deferred tax	(14.49)	(39.82)
Tax Adjustment for prior periods	-	(2.13)
Profit/(Loss) for the year	980.53	1,354.71
Add : Balance brought forward	2,673.61	1,318.90
Balance of Profit carried to Balance-Sheet	3,654.14	2,673.61

Canara Robeco Asset Management Company, the joint venture between Canara Bank and Robeco Groep N.V., completed 80 months of operations on 31^st March 2014.

BUSINESS RESULTS & DIVIDEND:

For the year ended March 31, 2014 the revenue of the company by way of management fees and other income earned was at Rs. 6,179.92 Lacs as compared to Rs. 5,584.86 Lacs earned in the year ended March 31, 2013. The average assets under management (AAUM) stood at Rs. 7,341.73 Crores (previous year: Rs. 8,302.53 Crores). The AAUM includes the AAUM of Rs. 145.74 Crores of the Fund of Funds scheme. The reason for fall in AAUM was mainly attributable to negative net inflows in various schemes of Canara Robeco Mutual Fund. The income from Offshore Advisory earned wasRs. 333.40 Lacs as compared to R Rs. 355.65 Lacs earned in the year ended March 31, 2013. The fall in advisory fees was on account of closure of couple of offshore mandates. The company has incurred expenses over the past year to the tune of Rs. 5,209.20 Lacs as compared to Rs. 4,417.66 Lacs incurred in the last financial year. While expenditure under personnel costs were kept under tight control, one of the significant expenses incurred which was higher than the previous year (FY 2013 - 14: 1,340.74 lacs; FY 2012 - 13: 572.36 lacs).

In view of the need to conserve resources of the Company to meet planned expenditure, your Directors express their inability to recommend any dividend for the year ended 31^st March, 2014.

KEY PERSONNEL:

1. Mr. Ritesh Jain resigned as Head - Investment with effect from25^th May, 2013.

2. Mr. Edwin Rietkerk ceased to be the Chief Operating Officer with effect ^th June, 2013. from

3. Mr. Jorg Sunderman was appointed as the Chief Operating Officerwith effect from 1 ^st July 2013. Mr. Sunderman was redesignated as Chief Operating Officer & Chief Financial Officer with effect from 31 ^st March 2014.

4. Mr. Avnish Jain was appointed as the Head Fixed Income with effect from 16^th September 2013.

5. Mr. Mohit Bhatia has been appointed as Head Sales & Marketing with effect from 15^th November 2013

OPERATIONS:

In tune with the market demand, the following schemes were launched during the year:

Name	Type	Initial Subscription
Canara Robeco Capital Protection Oriented Fund -series 2 (Plan-A)	Close Ended Capital Protection Oriented Scheme	Rs. 92.07 Crore
Canara Robeco Medium Term Opportunities Fund	Open Ended Debt Scheme	RRs. 106.11 Crore

Apart from capital appreciation under growth plans of various Schemes and daily/weekly dividends in Canara Robeco Liquid, Canara Robeco Treasury Advantage, Canara Robeco Floating Rate and Canara Robeco Interval Funds and Canara Robeco Fixed Maturity Plans, the following Schemes declared dividends during the year under dividend plans:

• Canara Robeco Balance	Rs. R1.00 per unit (twice during the year)
	Rs. R1.15 per unit (once during the year
	Rs. R0.95 per unit (once during the year)
• Canara Robeco Gilt PGS	Rs. 0.39 per unit (once during the year)
	Rs. 0.37 per unit (once during the year)
• Canara Robeco InDiGo Fund	Rs. 0.16 per unit (once during the year)
	Rs. 0.10 per unit (twice during the year)
	Rs. 0.17 per unit (once during the year)
• Canara Robeco Income	Rs. 0.25 per unit (once during the year)
	Rs. 0.20 per unit (thrice during the year)
• Canara Robeco Monthly Income Plan	Rs. 0.30 per unit (four times during the year)
• Canara Robeco Dynamic Bond Fund	Rs. 0.38 per unit (once during the year)
	Rs. 0.37 per unit (once during the year)
• Canara Robeco F.O.R.C.E. Fund	Rs. 0.85 per unit (once during the year)
• Canara Robeco Infrastructure	Rs. 0.85 per unit (once during the year)
• Canara Robeco Nifty Index	Rs. 0.95 per unit (once during the year)
• Canara Robeco Equity Diversified	Rs. 2.10 per unit (once during the year)
• Canara Robeco Gilt Advantage Fund	Rs. 0.60 per unit (once during the year)
• Canara Robeco Emerging Equities	Rs. 1.05 per unit (once during the year)
• Canara Robeco Equity TaxSaver	Rs. 0.75 per unit (once during the year)

As on 31^st March, 2014, the Company was managing 23 schemes of Canara Robeco Mutual Fund, of which 9 were debt oriented schemes, 7 were equity oriented schemes and 5 were hybrid schemes, 1 was an Exchange Traded Fund & 1 was a domestic Fund of Fund.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO:

Your Company, being a non-banking non-financial Company, no specific comments in terms of the provisions of Section 217 (1) (e) of the Companies Act, 1956 are called for on conservation of energy and technology absorption. Your Company has, however, used information technology relevant to its business in keeping with the size of its operations. Earning in foreign currency aggregated to Rs. 333.40Lacs (previous year: Rs. 355.65 lacs).

Expenditure in foreign currency aggregated to Rs. 66.31 Lacs (previous year: Rs. 72.51 lacs).

FIXED DEPOSITS:

The Company has not invited/accepted deposits from members/public. The Reserve Bank of India has classified the Company as a non-banking non- financial company.

PARTICULARS OF EMPLOYEES:

Information as per Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 forms the part of this Report by way of an annexure. The Directors’ Report is being sent to the shareholders of the Company excluding the said annexure. Any shareholder interested in obtaining a copy of the said annexure may write to the Company Secretary at the registered office of the Company.

DIRECTORS:

During the year, the following changes in the composition of the Board of Directors took place:

Appointment:

1. Mr. Sudhanshu Kumar Awasthi has been appointed as an Independent Director on the Board with effect from 16 ^th October, 2013.

2. Ms. Naina Gadia has been appointed as an Independent Director on the Board with effect from 25th November, 2013.

3. Mr. G. Sreeram has been appointed as an Associate Director on the Board with effect from 26 th February 2014.

Resignation:

1. Mr. V H Ramakrishnan resigned as Director from the Board with effect from 17 ^th September 2013.

2. Mr. D K Kapila resigned as Director from the Board with effect from 11 ^th November 2013

3. Mr. M A K Prabhu resigned as Director from the Board with effect from 13^th January 2014.

Your Directors place on record their deep appreciation of the services rendered by Mr. V H Ramakrishnan, Mr. D K Kapila & Mr. M A K Prabhu during their tenure on the Board.

DIRECTORS’ RESPONSIBILITY STATEMENT:

Pursuant to Section 217 (2AA) of the Companies Act, 1956, your Directors, based on the representation received from the Management Team, confirm that:

(a) in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures ;

(b) they have, in the selection of accounting policies, consulted the statutory auditors and have applied them consistently and made judgements and estimates that are reasonable and prudent affairs of the Company at the end of the financial year and as to give true and view the state of the profit/(loss) for that period ; (c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, as amended, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities ;

(d) they have prepared the Annual Accounts on a going concern basis.

AUDIT COMMITTEE:

The Audit Committee of the Board comprises of Mr. Sudhanshu K. Awasthi, Ms. Hester W D G Borrie, Mr. S K Jain and Mr. G. Sreeram.

The Committee reviews the financials of the Company, the financials of schemes, regulatory inspection reports of the Company, reports of the internal and statutory auditors placed before them, from time to time.

AUDITORS:

Under Section 619 of the Companies Act, the Auditor of the Company shall be appointed by the Comptroller of Auditor General of India, New Delhi. Under Section 224(8) (aa) of the Companies Act, 1956, the remuneration of Auditors appointed under Section 619 by the Comptroller and Auditor General of India, shall be fixed by the Company in the General Meeting. Accordingly, notice of the Annual General Meeting will include an item pertaining to remuneration of the Auditors for the year 2014-2015.

ACKNOWLEDGEMENTS:

Your Directors wish to place on record their gratitude for the support and guidance received from SEBI, Board of Trustees of Canara Robeco Mutual Fund, joint venture partners, Canara Bank and Robeco Groep N.V., confidence reposed by the investor community and the dedicated work put in by the staff at all levels in the Company.

	For and on behalf of the Board of Directors
	Sd/-
Place: Bangalore	R. K. DUBEY
Date : 25th April 2014	CHAIRMAN