DIRECTORS
To the Members,
Your Directors have pleasure in presenting the Sixth Directors Report of your Company
together with the Audited Accounts for the year ended March 31, 2013.
FINANCIAL HIGHLIGHTS
| Particulars |
April 01, 2012 to March 31, 2013 |
April 01, 2011 to March 31, 2012 |
|
(INR in Millions) |
(INR in Millions) |
| Income |
271.54 |
279.73 |
| Expenditure |
259.57 |
317.95 |
| Profit/(Loss) before Tax |
11.97 |
(38.22) |
| Profit/(Loss) after Tax |
11.97 |
(38.22) |
In the year under review, gross revenue was INR 271.54 million (Previous Year INR
279.73 million) with an expenditure of INR 259.57million (Previous Year INR 317.95
million) leading to income of INR 11.97 million (Previous Year loss INR 38.22 million)
DIVIDEND
Your directors do not recommend any dividend for the financial year ended March 31,
2013.
OVERVIEW OF ECONOMIC ENVIRONMENT
The Indian Economy has been faced with a challenging environment over the last couple
of years (FY11-13) with domestic concerns such as high inflation, high current and fiscal
account deficits and slowing growth levels which in turn adversely effect the investor
sentiments. Your Directors are however of the view that going forward in FY 2013-14, there
will be an improvement in the overall economic environment that should result in a
positive impact on the Indian equity and debt markets.
For India, in recent times, the fiscal and the current account deficits have been the
two biggest problems for the economy. Fiscal Deficit is now at a more manageable 4.9% and
is no longer seen as a major cause for worry. Inflation is down from double digits to
under 5% levels. Further, the correction in Gold and Crude prices are likely to have a
positive impact on the Current and Fiscal Deficits and act as a support to the Rupee.
Over the last two years rupee corrected by almost 25%, more at a function of the high
Current Account Deficit and poor investment sentiment. Such a large depreciation in the
rupee for an economy, the size of like India appears though, to be excessive. What could
come to the help of the INR is the expected improvement in Current Account Deficit policy
decision that improve investor sentiment, reducing fuel subsidies and / or any moderation
in global crude oil prices and RBIs currency support initiatives.
In India earnings growth and absolute earnings arc quite resilient. Sensex companies
delivered the highest ever quarterly profit in Q4FY12 inspite of the global and domestic
uncertain environment. It is the local country macro and global risk aversion sentiments
that has affected the market and compressed the market PE.
The Prime Ministers Economic Advisory Council (PMEAC) projected the economy to grow at
6.4% in FY 13-14. This confers with the 5% GDP growth seen in FY 12-13. We believe the GDP
growth in the coming fiscal would be around 6.25% (+/- 25 bps). In regard to Inflation,
April 2013 WPI figures plunged to 41 month low to stand at 4.89% and hopefully this
reflects the beginning of the down cycle on inflation. RBI has cut policy rates by 75 bps
this calendar year arising from the softening inflation. The cut in rates will contribute
to a positive impact on the market.
Foreign investors had brought in over $24 billion in 2012, marking it the biggest
inflow year since the record $29.36 billion in 2010. This year so far YTD (till end May
2013), the country has received close to $14 billion USD. FIIs are investing with the hope
that government will act on fiscal consolidation. Fund flows chase steady earnings,
earnings growth and visibility of earnings and that was the biggest reason for the large
inflows into Indian markets. Indian Markets are currently showing strong earnings growth
of Indian companies in comparison to the poor earnings growth globally.
OVERVIEW OF MUTUAL FUND INDUSTRY
The Assets under Management (AUM) of Indian Mutual Fund Industry grew by 20% to Rs.
7.01 lakh crores as of 31st March 2013 from Rs.5.87 lakh crores of the previous year.
Investor preferences remained skewed towards fixed return products driven by cut in
interest rales. Gilt Funds & Income Funds saw the highest growth in AUM of 121% and
83%. Income Funds now contribute 38% of industry AUM.
As far the category of funds Gold ETFs continued to sec increment in AUM, showing 18%
growth to Rs. 11,650 crores from Rs.9,886 Cr in March 2012. The total share of Equity
Funds AUM in total MF Industry fell by 6.5% in the year taking the share to 24.5% (Rs.1.72
lakh crores as on 31st March 2013 compared to Rs.1.82 lakh crores a year ago).
The Industry has seen a fall in number of folios from 46.45 million as on 31st March
2012 to 42.83 million as on 31st March 2013. The steepest fall was in Equity Folios which
went down from 40.58 million to 35.95 million. Fixed Income saw growth in folios from 5.05
mil to 5.93 mil in the same period.
OVERVIEW OF COMPANY OPERATIONS
Against this backdrop, your company registered an overall AUM growth of 11.5% against
the backdrop of a very challenging business environment. Investor Accounts currently stand
at 53,415 from 57,350 and SIP Accounts at 15,739 from 15,703. The average SIP ticket SIPs
have increased by 13% during the year.
Mirac Asset India Opportunities Fund outperformed the schemes benchmark by close to
2.3% while Mirae Asset Emerging Bluechip Fund outperformed the schemes benchmark by close
to 13%, highlighting the strong fund performance.
Your flagship scheme Mirae Asset India Opportunities Fund has been conferred with Rank
1 by CRISIL for eleven quarters out of twelve as on March, 2013 (making it one of the most
consistent diversified funds). The fund has been ranked by Morning Star as 5 star rating
and Lipper 5 rating for 24 consecutive months from April 2011-March 2013.
Your AMC announced a dividend for Mirae Asset India Opportunities Fund at Rs. 1.40 per
unit. This is the 4th dividend since inception of the fund. Maiden dividends were also
declared in Mirae Asset Emerging Bluechip Fund & Mirae Asset India China Consumption
Fund
Mirae Asset India Opportunities has recently been recognized by leading publications o
Best Large and Midcap Funds Mutual Fund Insight, June 2013 o Best Large cap Funds Money
Today, June 2013 o Best 8 MF Schemes - Dalal Street, October 2012
Your company also adopted cost control measures, wherever required, by maintaining a
balance between business growth and cost efficiency. Your company also lays emphasis and
assigns utmost importance to compliance and hence has kept the internal and the concurrent
audit team in place to ensure compliance with all the regulations and thereby improve
controls and achieve efficiencies.
During the course of the year, your company has recorded its maiden operating profits.
Your company has won institutional mandates and also achieved significant distribution
break-throughs including key banking intermediaries & wealth management outfits. In a
very challenging external environment, your company has successfully laid a strong
foundation through a combination of well differentiated products, consistent performance
track record and strong distributor engagements. Your company looks forward to the coming
year with increased optimism and speculation of a further improvements in its financial
and operating performance.
ISSUE OF CAPITAL
No share capital was issued during the period under review.
DEPOSITS
Your Company has not accepted any deposits and, as such, no amount of principal or
interest was outstanding as at March 31, 2013.
CHANCE IN THE FINANCIAL YEAR OF THE COMPANY
For effective business collaborations with companies in the same industry, Mirae Asset
Global Investments Co. Ltd. (MAGICL, the parent company) changed its financial year from
April - March to January ~ December. In view of the same, the subsidiary companies were
advised to change their financial year to January ~ December for more coordinated
information generation and compilation. Your Board considering the above, has approved the
change in the financial year of the company from April - March to January December. The
next financial year period of the Company will cover 1st April 2013 to 31st December 2013
(9 months) and the subsequent financial year periods will be from 1st January to 31st
December.
PARTICULARS OF EMPLOYEES REMUNERATION
Total number of employees as on March 31, 2013 was 61.
In accordance with the provisions of Section 217(2A) of the Companies Act, 1956, read
with Companies (Particulars of Employees) Rules, 1975 as amended, the names and other
particulars of employees are set out in the Annexure - 1 to the Directors Report.
DIRECTORS RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956 and
based on the information provided by the management, your Directors state that:
• In the preparation of the annual accounts, the applicable accounting standards
have been followed;
• Such accounting policies have been selected and applied consistently and
judgments and estimates have been 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 period and of
the profit or loss of the Company for that period;
• Proper and sufficient care have been taken 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;
• The annual accounts have been prepared on a going concern basis.
DIRECTORS
During the year under review, there were no appointments / resignations of the
Directors since the last Annual General Meeting of the company held on 25th July, 2012.
None of the directors of the Company are disqualified from being appointed as director
as specified in Section 274(1 )(g) of the Companies Act, 1956.
AUDITORS
M/s. Deloitte Haskins & Sells, Chartered Accountants, the Statutory Auditors of
the Company, hold office, in accordance with the provisions of the Companies Act, 1956
(the Act), up to the conclusion of the forthcoming Annual General Meeting (AGM). M/s.
Deloitte Haskins & Sells, have expressed their willingness to act as Auditors of
the Company, if appointed and have confirmed their eligibility. Members arc requested to
appoint M/s. Deloitte Haskins & Sells, as the Statutory Auditors of the Company
from the conclusion of the forthcoming AGM until the conclusion of next AGM at such
remuneration as may be fixed by the Board of Directors of the Company.
AUDIT COMMITTEE
The Company has constituted an Audit Committee of the Independent Directors comprising
of Mr. B. N. Chakraborly and Mr. Nihar Jambusaria. There has been no change in the
structure of the Audit committee since the last Annual General Meeting held on 20th July,
2012.
The Committee met four (4) times during the year under review for considering the
various items pertaining to the scope of the Audit Committee.
PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN
EXCHANGE EARNINGS AND OUTGO
Particulars required to be furnished under the Companies (Disclosure of particulars in
the report of the Board of Directors) Rules, 1988 arc as under:
(1) As the Company does not have any manufacturing activities, particulars required to
be disclosed with respect to the conservation of energy and technology absorption in terms
of Section 217(1)(c) of the Companies Act, 1956 read with the Companies (Disclosure of
Particulars in the Report of the Board of Directors) Rules, 1988 are not applicable.
(2) Foreign Exchange earnings and expenditure: (INR in Millions) Earnings: Rs. 113.20
million (Previous period Rs. 134.28 million)
Expenditure: Rs 3.04 million (Previous period Rs. 5.57 million)
ACKNOWLEDGMENT
The Board of Directors takes this opportunity to thank the Shareholders, Central
Government, Stale Government, SEBI, RBI, the Trustee Company, Bankers, Registrars,
Custodians and Intermediaries for the co-operation and support extended by them to the
Fund and the Company from time to time. The Board also wishes to place on record its
appreciation of the dedication, commitment and untiring efforts of the employees to pursue
the organizational goals and objectives.
For and on behalf of the Board of Directors
| Place: Mumbai |
B. N. Chakraborty |
Jisang Yoo |
| Date: July 8, 2013 |
Director |
Director & CEO |
+91-9892691696
