Mar 31, 2023
Your Directors take pleasure in presenting their 28th Annual Report on the business and operations of your Company, together with the audited financial statements, for the year ended March 31, 2023.
Your Company endeavors to remain one of the leading players in the Asset Management business in India and keeps exploring opportunities for enhancing its global footprint as well.
Your Company is a subsidiary Company of Nippon Life Insurance Company ("NLI"). NLI is a, fortune 500 Company and one of the largest life insurers in the world managing assets of over USD 700 billion. It has a large global network with presence across US, Europe, Asia, and Australia along with a 130-year track record in Life Insurance business as well as global investments across Asset Management companies. This pedigree brings strong synergistic benefits that very well complements your Company''s domestic expertise in the Asse Management business and provides a thrust to its significant growth potential. Your Company expects substantial upside in terms of increased AUM & adoption of best governance & risk management practices based on NLI''s global positioning & relationships.
FINANCIAL PERFORMANCE AND STATE OF COMPANY''S AFFAIRS
The standalone and consolidated financial statements of the Company for the financial year ended March 31, 2023, have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act. The financial highlights (on a consolidated and standalone basis) of the Company for the year ended March 31, 2023, are as follows:
Crores) |
||||
Consolidated |
Standalone |
|||
Particulars |
Year ended March 31, 2023 |
Year ended March 31, 2022 |
Year ended March 31, 2023 |
Year ended March 31, 2022 |
Gross Income |
1516.61 |
1535.63 |
1431.18 |
1428.42 |
Profit before exceptional item and tax |
927.74 |
988.67 |
917.77 |
945.43 |
Exceptional Items |
- |
- |
- |
- |
Profit Before tax |
927.74 |
988.67 |
917.77 |
945.43 |
Current Tax |
212.14 |
206.66 |
212.53 |
200.38 |
Deferred Tax |
(7.33) |
38.64 |
(9.70) |
33.84 |
Profit for the year |
722.93 |
743.37 |
714.94 |
711.21 |
Share of Profit from Associates |
0.40 |
0.79 |
- |
- |
Profit attributable to non-controlling interest |
- |
- |
- |
- |
Other Comprehensive Income |
(186) |
(0.30) |
(185) |
(0.27) |
Balance carried to Balance Sheet |
721.47 |
743.86 |
713.09 |
710.94 |
Basic EPS of S 10 each |
11.61 |
12.00 |
11.48 |
11.47 |
Diluted EPS of S 10 each |
11.53 |
11.80 |
11.40 |
11.28 |
The Consolidated Financial Statements of the Company form part of this Annual Report.
The annual accounts of all the subsidiary companies will be placed on the website of the Company. OPERATION HIGHLIGHTS
As you are aware that your Company acts as the asset manager to Nippon India Mutual Fund ("NIMF"), which is one of the largest Mutual Fund in India, in terms of the Quarterly Average Assets under Management (QAAUM) as on March 31, 2023.
The QAAUM of NIMF as on March 31, 2023, was t 2,93,159 Crores comprising of t 1,30,087 Crores of Equity, t 54,068 Crores of Debt, t 38,979 Crores of Liquid Funds and t 70,024 Crores of ETF assets. It may be noted that the QAAUM of NIMF as on March 31, 2022 was t 2,83,261 Crores comprising of t 1,19,062 Crores of Equity, t 73,173 Crores of Debt, t 35,230 Crores of Liquid Funds and t 55,796 Crores of ETF assets.
Overall QAAUM of NIMF has increased by 3.39% during the financial year 2022-23, while the Indian Mutual Fund Industry witnessed an overall growth of 5.55% in terms of QAAUM (Source: AMFI).
New Schemes Launched:
During the year under review, Nippon India Mutual Fund launched the following new schemes:
Scheme Name |
Type |
Structure |
Nippon India Nifty Alpha Low Volatility 30 Index Fund |
OPEN |
An open-ended scheme replicating/tracking Nifty Alpha Low Volatility 30 Index |
Nippon India Fixed Horizon Fund - XLIV - Series 1 |
CLOSE |
A Close Ended Scheme. Relatively High interest rate risk and moderate Credit Risk |
Nippon India Nifty AAA PSU Bond Plus SDL - Sep 2026 Maturity 50:50 Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty AAA PSU Bond Plus SDL Sep 2026 50:50 Index. A Relatively High interest rate risk and Relatively Low Credit Risk. |
Nippon India Nifty SDL Plus G-Sec -Jun 2028 Maturity 70:30 Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty SDL Plus G-Sec Jun 2028 70:30 Index. A Relatively High interest rate risk and Relatively Low Credit Risk. |
Nippon India Fixed Horizon Fund XLIV -Series 4 |
CLOSE |
A Close Ended Scheme. Relatively High interest rate risk and moderate Credit Risk |
Nippon India Fixed Horizon Fund - XLIV - Series 2 |
CLOSE |
A Close Ended Scheme. Relatively Low interest rate risk and moderate Credit Risk |
Nippon India Nifty G-Sec Sep 2027 Maturity Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty G-Sec Sep 2027 Index. A Relatively High Interest rate risk and Relatively Low Credit Risk. |
Nippon India Nifty G-Sec Jun 2036 Maturity Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty G-Sec Jun 2036 Index. A Relatively High Interest rate risk and Relatively Low Credit Risk. |
Nippon India Nifty SDL Plus G-Sec -Jun 2029 Maturity 70:30 Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty SDL Plus G-Sec Jun 2029 70:30 Index. A Relatively High interest rate risk and Relatively Low Credit Risk |
Nippon India Nifty G-Sec Oct 2028 Maturity Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty G-Sec Oct 2028 Index. A Relatively High interest rate risk and Relatively Low Credit Risk |
Nippon India Fixed Horizon Fund XLV -Series 4 |
CLOSE |
A Close Ended Scheme. Relatively High interest rate risk and Relatively Low Credit Risk |
Nippon India Fixed Horizon Fund XLV -Series 5 |
CLOSE |
A Close Ended Scheme. Relatively High interest rate risk and Relatively High Credit Risk |
As on March 31, 2023, NIMF has a well-rounded portfolio of 98 schemes under various categories such as Equity, Debt, Hybrid, Exchange Traded Funds, Index Funds, Fixed Maturity Plans, and Interval Funds.
DETAILS OF MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments affecting the financial position of the Company since the date of the financial statements i.e, March 31, 2023.
DIVIDEND
During the year, the Company had declared and paid an interim dividend of t 4.00 per equity share (40%) amounting to t 249.23 Crores. The Board has also recommended a final dividend of t 7.50 per Equity Share (75%) of t 10/- each for the financial year ended March 31, 2023, for the approval of the
Shareholders at the ensuing Annual General meeting. With this the total dividend for the financial year 2022-23 would be approximately t 716 Crores, including the interim dividend of t 4.00 per equity share distributed in November 2022. The Final dividend, if declared, will be paid after the Annual General Meeting.
The dividend pay-out is in accordance with the Company''s Dividend Distribution Policy which forms part of this Annual Report.
AMOUNT TO BE CARRIED TO RESERVES
Your Directors do not propose any amount to be transferred to the General Reserves of the Company.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report for the year under review as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) is presented in a separate section forming part of this Annual Report.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENT
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act are given in the notes to the Financial Statements.
There is no difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions.
DEPOSITS
The Company has neither accepted nor renewed any fixed deposits during the year. There are no outstanding or unclaimed deposits, unclaimed / unpaid interest, refunds due to the deposit holders or to be deposited to the Investor Education and Protection Fund as on March 31, 2023.
EMPLOYEES STOCK OPTION SCHEME
With the perspective of promoting the culture of employee ownership and to attract, retain, motivate and incentivise senior as well as critical talent, the Company has formulated Nippon Life India Asset Management Limited - Employee Stock Option Plan 2017 ("NAM INDIA ESOP 2017") [formerly known as "Reliance Nippon Life Asset Management Limited -Employee Stock Option Plan 2017"] ("ESOP 2017" / "Plan") as its stock option scheme, which was launched in August 2017 and Nippon Life India Asset Management Limited - Employee Stock Option Plan 2019 ("NAM INDIA ESOP 2019") [formerly known as "Reliance Nippon Life Asset Management Limited - Employee Stock Option Plan 2019"] ("ESOP 2019" / "Plan") as its stock option scheme, which was launched in July 2019. The Nomination and Remuneration Committee of the Board monitors and administers these Plans and from time - to - time grants stock options to the employees.
Both ESOP 2017 as well as ESOP 2019 are in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (SEBI Regulations).
However, having regard to the provisions of first provision to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to all the Members of the Company and others entitled thereto. The certificate from the Statutory Auditors of the Company confirming the compliance
of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 with respect to the Company''s Employees Stock Option Scheme Plans will be available for inspection through electronic mode. Any member interested in obtaining the same may write to the Company Secretary and the same will be furnished on request. The details as required to be disclosed under SEBI Regulations are available on the Company''s website at https:// mf.nipponindiaim.com/investor-service/customer-service/nam-india-shareholders-investors
CAPITAL STRUCTURE
During the Financial year 2022-23, the Company issued and allotted 11,57,515 Equity Shares to eligible employees on exercise of options granted under the Employee Stock Option Plans of the Company. Hence, the issued, subscribed and paid-up capital of the Company was 62,31,75,443 Equity Shares of g 10 each at the end of the Financial Year.
The Equity History of the Company has been provided in the Corporate Governance Report.
COMPLIANCE CULTURE & RISK MANAGEMENT
Your Company maintains a strong focus on Compliance and Risk Management as these are essential elements for its long-term success. The compliance and risk functions are managed by a dedicated and experienced team of professionals. The management has a zero tolerance towards risk and compliance failures or breaches.
There exists a comprehensive Compliance Manual, which is reviewed by your Board of Directors from time to time and it facilitates the Company''s Compliance team to monitor various compliance requirements effectively & comprehensively. The Compliance team conducts periodical educative & training programmes on various regulatory compliances matters for various sections of employees.
Your Company also has a comprehensive Risk Management Policy that envisages a structured and consistent enterprise-wide risk management framework, based on the three lines of defense model, to ensure that risk management processes are consistently applied across the organisation and provide reasonable assurance regarding achievement of organisation''s objectives.
The risk management policy clearly sets out the objectives & elements of risk management within the organisation, including the constitution of an independent Risk Management department headed by Chief Risk Officer (reporting directly to the CEO and to the Board of Directors), Risk Management Committee at executive and Board levels. The policy
also define the roles and responsibility of all the CXOs towards risk management as part of first line of defense model.
Your Company promotes risk awareness culture throughout the organisation and risk management is an integral part of decision making and day-today operations of all activities at all levels across the organisation. There are well documented & Board approved policies & processes to address and mitigate various risks to which the Company is exposed. The Company also has a robust business continuity plan which is tested on a periodic basis to ensure uninterrupted operations. The risk department conducts various training programmes on various facets of risk management including cyber risk awareness, conduct risk, operational risk, Anti Money Laundering, etc.
The Company has a structured risk reporting mechanism to ensure risks are monitored and reviewed by CRO, Senior Management, RMCBs and Board on a periodic basis.
INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY
The Company has an Internal Control System which is commensurate with the size, scale and complexity of its business operations.
For effective risk management and control, the Company has established structures and responsibilities in line with the "Three Lines of Defense" model, where 1st line being business operations, 2nd line is the oversight functions like Risk Management and Compliance and 3rd line is Internal Audit. To maintain its objectivity and independence, the Internal Audit department reports to the Audit Committee. The Internal Audit department monitors and evaluates the efficacy and adequacy of the internal control system in the Company, its compliance with operating systems, accounting procedures and policies. Based on the report of the Internal Auditor, process owners undertake corrective action in their respective areas and thereby strengthen the controls. The Internal Audit department follows up on pending audit issues and ensures that corrective actions have been taken. Significant audit observations, if any, and corrective actions thereon, are presented to the Audit Committee of the Board.
CORPORATE GOVERNANCE
Your Directors wish to reiterate your Company''s commitment to the highest standards of corporate governance to enhance trust of all its stakeholders. Strong & robust corporate governance practices have facilitated your Company in standing up to the continued scrutiny of domestic & international investors and that of various Regulatory authorities.
The report on Corporate Governance as stipulated under Regulation 34(3) read with Para C of Schedule V of the Listing Regulations is presented in a separate section forming part of this Annual Report.
A Certificate from the auditors of the Company i.e. M/s. S. R. Batliboi & Co. LLP, Chartered Accountants conforming compliance to the conditions of Corporate Governance as stipulated under Para E of Schedule V of the Listing Regulations, is enclosed to this Report.
VIGIL MECHANISM
In accordance with Section 177 of the Act and the Listing Regulations, the Company has formulated a Vigil Mechanism to address the genuine concerns, if any. The Whistle Blower policy can be accessed on the Company''s website. It is affirmed that no person has been denied access to the Chairperson of the Audit Committee.
CORPORATE SOCIAL RESPONSIBILITY
As part of its initiatives under "Corporate Social Responsibility (CSR)", the Company has undertaken projects in the areas of promoting healthcare, education and rural development in accordance with Schedule VII of the Act.
The Annual Report on CSR activities is annexed herewith as Annexure A.
SUBSIDIARIES & ASSOCIATE COMPANY
As of March 31, 2023, your Company had two (2) subsidiaries. One of such subsidiaries is overseas i.e., one subsidiary in Singapore and one subsidiary in India. Both the subsidiaries of the Company are engaged in financial services and related activities. In addition, the Company also has an Associate company in India, which has already surrendered its business license/ regulatory approval to act as a Pension Fund Manager. This particular company currently has no business operations, and it is therefore proposed to be wound up, in accordance with the applicable laws.
During the year our subsidiary company, Nippon Life India Asset Management (Mauritius) Limited, has been voluntarily wound up.
A statement w.r.t. the performance and the financial position of the subsidiaries of the Company forms a part of the Consolidated Financial Statements of the Company.
The performance of the financial position of the subsidiary companies is presented in the Management Discussions and Analysis Report forming part of this Annual Report. The policy for determining material subsidiary companies may be accessed on the
Company''s website at https://mf.nipponindiaim.com/ InvestorServices/Pages/lnvestor-Policies.aspx
Further, The International Financial Services Centres Authority (IFSCA) has granted NAM India (IFSC Branch) the certificate of registration to carry out the activities as a Fund Management Entity (Non-Retail) under the IFSCA (Fund Management) Regulations, 2022 on March 1, 2023.
KEY MANAGERIAL PERSONNEL
During the year under review, the following employees were the ''Key Managerial Personnel'' of the Company:
a) Mr. Sundeep Sikka - Executive Director & Chief Executive Officer;
b) Mr. Ajay Patel - Manager;
c) Mr. Prateek Jain - Chief Financial Officer; and
d) Ms. Nilufer Shekhawat - Company Secretary
DIRECTORS
During the year, Mr. Kazuyuki Saigo who was a Director as on March 31, 2022, resigned from the directorship of the Company w.e.f. April 21, 2022. Mr. Tomohiro Yao and Mr. Minoru Kimura were first appointed as Additional Directors of the Company w.e.f. April 21, 2022. Mr. Tomohiro Yao and Mr. Minoru Kimura were then appointed as Non-Executive Nominee Director w.e.f. July 12, 2022.
As on the date of this Boards Report, Mr. Hiroki Yamauchi was appointed as an additional Director (Non-Executive Nominee Director) in place of Mr. Akira Shibata. Mr. Upendra Kumar Sinha was appointed as an additional Director (Non-Executive Independent Director) and Chairman of the Board to be effective May 1, 2023. Both these appointments are subject to approval of the Shareholders at the ensuing Annual General Meeting.
All the Independent Directors of your Company i.e., General Ved Prakash Malik (Retd.), Ms. Ameeta Chatterjee, Mr. Ashvin Parekh and Mr. B. Sriram have already furnished the required declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act.
In the opinion of the Board, the Independent Directors possess the requisite expertise and experience and are people of high integrity and repute. They fulfil the conditions specified in the Act and the Rules made thereunder and are independent of the management.
In terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by The
Indian Institute of Corporate Affairs, Manesar (''IICA''). The Independent Directors are also required to undertake online proficiency self-assessment test conducted by the IICA within a period of two years from the date of inclusion of their names in the data bank, unless they meet the criteria specified for exemption. All the Independent Directors of the Company are exempt from the requirement to undertake online proficiency self assessment test.
PERFORMANCE EVALUATION OF DIRECTORS, BOARD AND COMMITTEES
The Company has devised a policy for the performance evaluation of the individual directors, Board and its Committees, which also includes the criteria for carrying out the said performance evaluation. Pursuant to the provisions of the Act and Regulation 17(10) of Listing Regulations and as prescribed in the stated policy of the Board, the Board has carried out an annual performance evaluation of (i) the Directors (Independent and non-independent); (ii) itself (as a whole); (iii) its committees and (iv) fulfillment of Independence criteria. The Board performance was evaluated based on input received from the Board Members after considering criteria such as Board composition and structure, effectiveness of Board / Committee processes, and information provided to the Board, etc. In terms of the requirements of the Act, a separate meeting of the Independent Directors was also held during the year.
BOARD AND COMMITTEE MEETINGS
During the year under review, eight (8) Board meetings were held.
Your Directors wish to inform that the functioning of the Board is supplemented by various committees (Board sub-committees and management committees), which have been constituted from time to time, such as Audit Committee, Committee of Directors, CSR Committee, Stakeholders Relationship Committee, Nomination & Remuneration Committee, Risk Management Committee of the Board, Valuation Committee, Investment Committee, Risk Management Committee, Allotment Committee, Broker Empanelment Committee, Operating Committee, Compliance Committee, Stewardship Committee, Proxy Voting Committee, Information Security Risk Management Committee, etc. to name a few. Each of the aforesaid Committees has been constituted in order to ensure due compliance with the applicable laws and to ensure that the highest levels of corporate governance are followed and practiced. The minutes of the meetings of each of these Committees are duly placed before the Board for noting and confirmation.
AUDIT COMMITTEE
In terms of the requirements of Section 177 of the Act, the Audit Committee of the Company consists of the majority of Independent Directors. As on date of this report, it comprises Mr. Ashvin Parekh [Independent Director], Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. B. Sriram [Independent Director], Mr. Hiroki Yamauchi [Non- Independent Director] and Mr. Minoru Kimura [Non- Independent Director]. Mr. Ashvin Parekh acts as the Chairperson of this Committee.
During the year, eight (8) meetings of the Audit Committee were held, which includes 1 joint Audit Committee between the Audit Committee of the Asset Management Company (''AMC'') with the Audit Committee of the Trustees and one (1) meeting to interact with the Statutory and Internal Auditors of the Mutual Fund without the engagement of management of the AMC as stipulated in SEBI Circular No. SEBI/HO/IMD/IMD-IDOF2/P/CIR/2022/17 dated February 09, 2022.
Other relevant details in this regard have been provided in the Corporate Governance Report.
NOMINATION & REMUNERATION COMMITTEE
In terms of the requirements of Section 178 of the Act, the Nomination & Remuneration Committee of the Company consists of the majority of Independent Directors. As on date of this report, it comprises, Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Tomohiro Yao [Non-Independent Director] and Mr. Minoru Kimura [Non-Independent Director]. General Ved Prakash Malik (Retd.) acts as the Chairperson of this Committee.
During the year, three (3) meetings of the Nomination & Remuneration Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
The Nomination & Remuneration Policy has been provided as Annexure B to the Board''s Report.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
In terms of the requirements of Section 135 of the Act, the Corporate Social Responsibility ("CSR") Committee of the Company consists of eight (8) Members. As on date of this report, it comprises Mr. Tomohiro Yao [Non-Independent Director], Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Sundeep Sikka [CEO & Executive
Director], Mr. Hiroki Yamauchi [Non-Independent Director] and Mr. Minoru Kimura [Non-Independent Director]. Mr. Tomohiro Yao acts as the Chairperson of this Committee.
During the year 2022-23, two (2) meetings of the CSR Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
STAKEHOLDERS'' RELATIONSHIP COMMITTEE
In terms of the requirements of Section 178 of the Act, the Stakeholders'' Relationship Committee of the Company consists of five Members. As on date of this report, it comprises Ms. Ameeta Chatterjee [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Tomohiro Yao [Non-Independent Director] and Mr. Sundeep Sikka [CEO & Executive Director]. Ms. Ameeta Chatterjee acts as the Chairperson of this Committee.
During the year, two (2) meetings of the Stakeholders'' Relationship Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
RISK MANAGEMENT COMMITTEE
In terms of the relevant requirements under the Listing Regulations, the Company has constituted a Risk Management Committee of the Board. The Committee presently comprises of Mr. Tomohiro Yao [Non-Independent Director], Mr. Hiroki Yamauchi [Non-Independent Director], Mr. Sundeep Sikka [CEO & Executive Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director] and Mr. Rishi Garg [Chief Risk Officer] as its Members. Mr. Tomohiro Yao acts as the Chairperson of this Committee.
During the year, five (5) meetings of the Risk Management Committee of the Board were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
AUDITORS'' OF THE COMPANY - STATUTORY AND INTERNAL
Statutory Auditors:
M/s. S. R. Batliboi & Co. LLP, Chartered Accountants shall hold office as Statutory Auditors of the Company until the conclusion of this 28th Annual General Meeting.
The Company has already received a consent letter from M/s. S. R. Batliboi & Co. LLP, Chartered Accountants communicating their willingness to be re-appointed as the Statutory Auditors of the Company and that their re-appointment, if made, would be within
the limits as prescribed under Section 139 of the Companies Act, 2013.
Your Directors hereby recommends the reappointment of M/s. S. R. Batliboi & Co. LLP, Chartered Accountants as the Statutory Auditors of the Company for a second term of 5 (five) consecutive years, to hold office from the conclusion of this Annual General Meeting until the conclusion of the 33rd Annual General Meeting of the Company.
Internal Auditors:
JHS & Associates LLP, Chartered Accountants (JHS) were appointed as the Internal Auditors of your Company for the financial year 2022-23. Having regard to their longevity in office and as a matter of good governance, your Directors have approved the rotation of JHS and appointed PricewaterhouseCoopers Services LLP (PWC) as the Internal Auditors of your Company for the financial year 2023-24.
Your Directors wish to place on record the contributions made by JHS during their tenure as Internal Auditors of your Company.
AUDITORS OF THE SCHEMES OF NIPPON INDIA MUTUAL FUND-STATUTORY AND INTERNAL
In accordance with the applicable provisions of law, the Company has appointed Statutory and Internal Auditors for various Schemes of Nippon India Mutual Fund, who periodically submit their reports, which are placed before the Audit Committee for discussion, review and implementation of their recommendations.
Statutory Auditors:
M/s. Walker Chandiok & Co. LLP, Chartered Accountants were appointed as Statutory Auditors of the Schemes of Nippon India Mutual Fund for the financial year 2022-23.
Internal Auditors:
M/s. Deloitte Haskins & Sells LLP, Chartered Accountants (Deloitte) were appointed as Internal Auditors of the Schemes of Nippon India Mutual Fund and the Portfolio Management Services division of the Company, for the financial year 2022-23. Having regard to their longevity in office and as a matter of good governance, your Directors have approved the rotation of Deloitte and appointed PricewaterhouseCoopers Services LLP (PWC) as the Internal Auditors of the Schemes of Nippon India Mutual Fund and the Portfolio Management Services division of the Company for the financial year 2023-24.
Your Directors wish to place on record the contributions made by Deloitte during their tenure as Internal
Auditors of the Schemes of Nippon India Mutual Fund and the Portfolio Management Services division of the Company.
AUDITORS'' REPORT
The observations and comments given by the Statutory Auditors in their report read together with notes on financial statements are self-explanatory and hence does not require any further comments in terms of Section 134 of the Act.
SECRETARIAL STANDARDS
During the year under review, the Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Directors had appointed M/s. M. Siroya and Company, Mumbai, a firm of Company Secretaries in-practice to undertake the Secretarial Audit of the Company for the financial year 2022-23. In this regard, the Report submitted by the Secretarial Auditor is annexed as Annexure C.
Your Directors are pleased to inform you that the report from the Secretarial Auditors does not contain any qualifications or negative remarks.
ANNUAL RETURN
Pursuant to Section 134(3)(a) and Section 92(3) of the Act read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company has been placed on the website of the Company and can be accessed at https://mf.nipponindiaim.com/AboutUs/ FinancialReports/Pages/Annual-Return.aspx .
PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
CONSERVATION OF ENERGY:
The operations of the Company do not consume high levels of energy. Adequate measures have been taken to conserve energy wherever feasible. Your Company uses the latest technology and energy - efficient equipment''s. Your Company only uses LED lights and 5-star air-conditioning for majority of offices. As energy cost forms a very small part of the total costs, the impact on cost is not material.
TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION:
Business Easy Revamp - Business Easy 2.0 app, our Digital asset for our distributors, is an all-
encompassing solution that acts as a complete Customer Relationship Management tool. The app works as a Digital branch through which distributors can manage their Mutual Fund business virtually. With the objective of evolving the app from a business facilitator to a growth enabler, this year saw the addition of new enhancements and features to the app. A number of features such as Intern Distributor addition, quick investment module were added along with meaningful reports for distributors to maximise the usage of the App.
Investor App and Website Enhancement - Our
flagship assets, namely the InvestEasy App and the InvestEasy website are constantly upgraded to include enhancements and innovations. These include workflow enhancements such as Cart Buying where users can purchase more than one product at a time. A number of regulatory compliance requirements have been added in the year as well.
Process Automation across Organisation - As part of the automation initiative a number of processes have been automated across operations, finance, risk and technology. This has freed up resources to be redeployed elsewhere.
Implementation of cloud initiatives - Continuing on NAM India''s cloud journey a number of initiatives on cloud where the infrastructure for initiatives such as Data Lake, Analytics, new core applications have been implemented on the AWS cloud.
RESEARCH AND DEVELOPMENT DIGITAL ADOPTION AND INNOVATION:
Nippon India Mutual Fund, continue to envision and execute key Digital transformation endeavors year on year that are aimed to strengthen our already robust Digital ecosystem.
⢠Focus always remains on empowering our investors during moments of truth and on a ''here & now'' manner to take quicker, smarter, and well-informed decisions on how and where they should invest their money when they transact on our Digital assets. Such empowerment is fueled by our capabilities to crunch & run real-time analysis on the enormous amount of on-asset & offline data points we have regarding our consumers, their past purchases, and future propensities.
⢠Intelligent, data led digital assets, can learn, and predict user behavior powered by both the real time frameworks and archived analytical frameworks which are operating on an advanced algo network. This helps in e-serving highly personalised and customised experiences to give our millennial, zillennial and legacy investors or partners accurate recommendations,
suggestions, on-the-fly nudges, predictive service and much more as they advance in their journeys.
Implementation of Data Models for cross sell and upsell have been implemented as part of the innovation adoption initiatives. As part of this movement third party model creators have been engaged with enhancing the data models of the organisation. Use cases are created with the support of business to identify patterns and opportunities in the models and campaigns are triggered on the analytics ecosystem to connect with customers and track the efficacy of the models.
We at NAM India also are working on further enhancing our digital assets by bringing in innovation in the payment gateway space especially towards frictionless payments. The current payment gateway ecosystem gives us as Digital innovators a lot of play with respect to designing workflows especially in the UPI space.
FOREIGN EXCHANGE EARNINGS AND OUTGO:
During the year under review, the Company earned foreign exchange equivalent to g 18.09 Crores (Previous Year: g 22.85 Crores). The Company spent foreign exchange equivalent to g 11.25 Crores (Previous Year: g 6.98 Crores).
DIRECTORS'' RESPONSIBILITY STATEMENT
As per the requirements of Sub Section (5) of Section 134 of the Act, the Directors confirm that -
(i) In the preparation of the annual accounts for the financial year ended March 31,2023,the applicable accounting standards have been followed and that there are no material departures;
(ii) The Directors have selected such accounting policies in consultation with the Statutory Auditors'' and have applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2023 and of the profit of the Company for the year under review;
(iii) The Directors have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) The Directors have prepared the annual accounts of the Company on a ''going concern'' basis;
(v) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;
(vi) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
CONTRACT AND ARRANGEMENTS WITH RELATED PARTIES
All contracts/ arrangements/ transactions entered into/ by the Company during the financial year under review with related parties were on an arm''s length basis and in the ordinary course of business. There were no materially significant related party transactions which could have potential conflict with the interest of the Company at large. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.
All Related Party Transactions were placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee was obtained for the transactions which were of a repetitive nature. The transactions entered into pursuant to the omnibus approval so granted were reviewed and statements giving details of all related party transactions were placed before the Audit Committee and the Board of Directors for their review on a quarterly basis. The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website at the following link:
https://mf.nipponindiaim.com/InvestorServices/
Your Directors draw attention of the Members to Note No. 28 to the financial statement which sets out related party disclosures.
PARTICULARS OF FRAUDS REPORTED BY THE AUDITORS''
In terms of Section 143(12) of the Act, M/s. S R Batliboi & Co. LLP, Chartered Accountants, the Statutory Auditors of the Company have not reported any instance of fraud having taken place during the year under review, in their Audit Report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators/ Courts which would impact the going concern status of the Company and its future operations.
DETAILS OF APPLICATION MADE BY THE COMPANY OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONGWITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR
The Company on behalf of the schemes of Nippon India Mutual Fund invests in various debt market instruments (non-convertible debentures) issued by various issuers. In order to realise the debenture outstanding''s, the Company has filed certain applications under the Insolvency and Bankruptcy Code, 2016. The Mutual Fund Division of the Company has filed (a) an IBC proceeding against Avantha Holdings Limited in January 2020 before Hon''ble NCLT New Delhi which is withdrawn as Avantha Holdings Limited has paid its dues. The Company is also a respondent party to an IBC proceeding filed in the matter of Reserve Bank of India v. Dewan Housing Finance Corporation Limited pending before the Hon''ble NCLT, Mumbai.
The Portfolio Management Services Division of the Company has filed: (a) IBC proceedings against Fortuna Buildcon India Private Limited was filed in November 2017 before the Hon''ble NCLT, Bangalore, wherein currently the resolution plan has been submitted to the Hon''ble NCLT for approval (b) three IBC proceedings against three Biodiversity Conservation India Private Limited group companies (BCIL Zed Ria Properties Private Limited, BCIL Red Earth Developers India Pvt. Ltd. and Biodiversity Conservation India Private Limited) were filed in December 2017 before the Hon''ble NCLT, Bangalore. The NCLT has approved resolution plans in BCIL Zed Ria Properties Private Limited and in BCIL Red Earth Developers India Pvt. Ltd., which are currently under implementation while Biodiversity Conservation India Private Limited is currently under liquidation. The Company is also a respondent to 2 (two) appeals in BCIL Red Earth Developers India Private Limited and in 3 (three) appeals in BCIL Zed Ria Properties Private Limited, before Hon''ble NCLAT, Chennai, which have been filed challenging the approved resolution plans; (c) IBC proceedings have been filed against the promoters of Biodiversity Conservation India Private Limited in November 2020 before Hon''ble NCLT, Bangalore which are currently at a pre-admission stage; (d) IBC proceeding filed against Green Valley Shelters Private Limited in December 2019, before Hon''ble NCLT, Chennai, was admitted in August 2021, however the proceedings are currently temporarily stayed under an order of the Supreme Court. The Company is a respondent in a civil appeal filed by the promoters of Green Valley Shelters Private Limited before the Hon''ble Supreme Court, challenging the admission of IBC proceedings against Green Valley Shelters Private Limited, which is currently pending under directions of exploring a settlement; (e) an IBC proceeding filed against the promoters of Green Valley Shelters Private Limited in October 2020 before the
Hon''ble NCLT, Chennai and is at a pre-admission stage; (f) an IBC proceeding was filed against Arkie Atelier Design India Private Limited, being the corporate guarantor for the debentures issued by Green Valley Shelters Private Limited in November 2021 and is currently at a preadmission stage; (g) an IBC proceeding filed against Bharucha & Motivala Infrastructure Private Limited, being corporate guarantor for the debentures issued by Lake District Realty Private Limited, in November 2019 before Hon''ble NCLT, Mumbai was admitted in May 2021, but has been stayed pursuant to an order of the Hon''ble NCLAT in July 2021. The Company is a respondent in the appeal filed by the promoters of Lake District Realty Private Limited before the Hon''ble NCLAT, Delhi, challenging the admission of IBC proceedings against Bharucha & Motivala Infrastructure Private Limited, which is currently reserved for orders; (h) IBC proceedings have been filed against the promoters of Lake District Realty Private Limited in November 2021, which is currently at a pre-admission stage; (i) an IBC proceedings has been filed against Ashapura Options Private Limited, being the corporate guarantor for the debentures issued by Ashapura Housing Private Limited in February 2022 which is at a pre-admission stage. (j) IBC proceedings have also been filed against four (4) promoter guarantors of Ashapura Housing Private Limited, which are at a pre-admission stage.
COST RECORDS
The Company is not required to maintain cost records as specified by the Central Government under subsection (1) of section 148 of the Companies Act, 2013.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
In terms of the provisions of Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules are provided in the Annexure to the Board''s Report. Disclosures relating to the remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended also forms part of this Report. However, having regard to the provisions of Section 136 of the Act, the Annual Report excluding the aforesaid information is being sent to all the Members of the Company and others entitled thereto. Any member interested in obtaining the said information may write to the Company Secretary. Upon such request the information shall be furnished.
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
Your Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of
The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. Following is a summary of sexual harassment complaints received and disposed off during the year:
⢠No. of complaints received: 0
⢠No. of complaints disposed off: 0
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
Pursuant to Regulation 34(2)(f) of Listing Regulations, top 1000 listed entities by market capitalisation have to publish a Business Responsibility and Sustainability Report from FY 2022-23. Business Responsibility and Sustainability Report for the year under review as stipulated under Listing Regulations is presented in the separate section forming part of this Annual Report.
AWARDS AND RECOGNITIONS
Some of the awards & recognitions, which came to NAM India include,
⢠Included in the elite "Kincentric Best Employers Club- 2023" an exclusive and prestigious group of organisations chosen across all industries who have been Best Employers consistently in the last 3-5 years
⢠Awarded Best Employer 2022 Award - 5th time in last 7 years
⢠Won the Outstanding Employee Engagement Award from Ekincare for our Health & Wellbeing initiative (Amongst only 9 Companies recognised in the country)
ACKNOWLEDGEMENTS
Your Directors wish to place on record their sincere appreciation for the co-operation received from various regulatory and governmental authorities including SEBI, RBI, Registrar of Companies, Maharashtra at Mumbai, PFRDA, NPS Trust, EPFO, CMPFO, Stock Exchanges, Depositories, Custodians, Bankers, Registrar, Shareholders, Investors and all other business constituents during the year under review. We believe all of them have contributed to our continued growth.
Your Directors also wish to place on record their deep appreciation for the total commitment displayed by all the executives, officers and staff, resulting in yet another eventful performance for the year.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS OF NIPPON LIFE INDIA ASSET MANAGEMENT LIMITED
Ashvin Dhirajlal Parekh Sundeep Sikka
Director Executive Director & CEO
(DIN: 06559989) (DIN: 02553654)
Place : Mumbai Dated : April 25, 2023
Mar 31, 2023
Your Directors take pleasure in presenting their 28th Annual Report on the business and operations of your Company, together with the audited financial statements, for the year ended March 31, 2023.
Your Company endeavors to remain one of the leading players in the Asset Management business in India and keeps exploring opportunities for enhancing its global footprint as well.
Your Company is a subsidiary Company of Nippon Life Insurance Company ("NLI"). NLI is a, fortune 500 Company and one of the largest life insurers in the world managing assets of over USD 700 billion. It has a large global network with presence across US, Europe, Asia, and Australia along with a 130-year track record in Life Insurance business as well as global investments across Asset Management companies. This pedigree brings strong synergistic benefits that very well complements your Company''s domestic expertise in the Asse Management business and provides a thrust to its significant growth potential. Your Company expects substantial upside in terms of increased AUM & adoption of best governance & risk management practices based on NLI''s global positioning & relationships.
FINANCIAL PERFORMANCE AND STATE OF COMPANY''S AFFAIRS
The standalone and consolidated financial statements of the Company for the financial year ended March 31, 2023, have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act. The financial highlights (on a consolidated and standalone basis) of the Company for the year ended March 31, 2023, are as follows:
Crores) |
||||
Consolidated |
Standalone |
|||
Particulars |
Year ended March 31, 2023 |
Year ended March 31, 2022 |
Year ended March 31, 2023 |
Year ended March 31, 2022 |
Gross Income |
1516.61 |
1535.63 |
1431.18 |
1428.42 |
Profit before exceptional item and tax |
927.74 |
988.67 |
917.77 |
945.43 |
Exceptional Items |
- |
- |
- |
- |
Profit Before tax |
927.74 |
988.67 |
917.77 |
945.43 |
Current Tax |
212.14 |
206.66 |
212.53 |
200.38 |
Deferred Tax |
(7.33) |
38.64 |
(9.70) |
33.84 |
Profit for the year |
722.93 |
743.37 |
714.94 |
711.21 |
Share of Profit from Associates |
0.40 |
0.79 |
- |
- |
Profit attributable to non-controlling interest |
- |
- |
- |
- |
Other Comprehensive Income |
(186) |
(0.30) |
(185) |
(0.27) |
Balance carried to Balance Sheet |
721.47 |
743.86 |
713.09 |
710.94 |
Basic EPS of S 10 each |
11.61 |
12.00 |
11.48 |
11.47 |
Diluted EPS of S 10 each |
11.53 |
11.80 |
11.40 |
11.28 |
The Consolidated Financial Statements of the Company form part of this Annual Report.
The annual accounts of all the subsidiary companies will be placed on the website of the Company. OPERATION HIGHLIGHTS
As you are aware that your Company acts as the asset manager to Nippon India Mutual Fund ("NIMF"), which is one of the largest Mutual Fund in India, in terms of the Quarterly Average Assets under Management (QAAUM) as on March 31, 2023.
The QAAUM of NIMF as on March 31, 2023, was t 2,93,159 Crores comprising of t 1,30,087 Crores of Equity, t 54,068 Crores of Debt, t 38,979 Crores of Liquid Funds and t 70,024 Crores of ETF assets. It may be noted that the QAAUM of NIMF as on March 31, 2022 was t 2,83,261 Crores comprising of t 1,19,062 Crores of Equity, t 73,173 Crores of Debt, t 35,230 Crores of Liquid Funds and t 55,796 Crores of ETF assets.
Overall QAAUM of NIMF has increased by 3.39% during the financial year 2022-23, while the Indian Mutual Fund Industry witnessed an overall growth of 5.55% in terms of QAAUM (Source: AMFI).
New Schemes Launched:
During the year under review, Nippon India Mutual Fund launched the following new schemes:
Scheme Name |
Type |
Structure |
Nippon India Nifty Alpha Low Volatility 30 Index Fund |
OPEN |
An open-ended scheme replicating/tracking Nifty Alpha Low Volatility 30 Index |
Nippon India Fixed Horizon Fund - XLIV - Series 1 |
CLOSE |
A Close Ended Scheme. Relatively High interest rate risk and moderate Credit Risk |
Nippon India Nifty AAA PSU Bond Plus SDL - Sep 2026 Maturity 50:50 Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty AAA PSU Bond Plus SDL Sep 2026 50:50 Index. A Relatively High interest rate risk and Relatively Low Credit Risk. |
Nippon India Nifty SDL Plus G-Sec -Jun 2028 Maturity 70:30 Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty SDL Plus G-Sec Jun 2028 70:30 Index. A Relatively High interest rate risk and Relatively Low Credit Risk. |
Nippon India Fixed Horizon Fund XLIV -Series 4 |
CLOSE |
A Close Ended Scheme. Relatively High interest rate risk and moderate Credit Risk |
Nippon India Fixed Horizon Fund - XLIV - Series 2 |
CLOSE |
A Close Ended Scheme. Relatively Low interest rate risk and moderate Credit Risk |
Nippon India Nifty G-Sec Sep 2027 Maturity Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty G-Sec Sep 2027 Index. A Relatively High Interest rate risk and Relatively Low Credit Risk. |
Nippon India Nifty G-Sec Jun 2036 Maturity Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty G-Sec Jun 2036 Index. A Relatively High Interest rate risk and Relatively Low Credit Risk. |
Nippon India Nifty SDL Plus G-Sec -Jun 2029 Maturity 70:30 Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty SDL Plus G-Sec Jun 2029 70:30 Index. A Relatively High interest rate risk and Relatively Low Credit Risk |
Nippon India Nifty G-Sec Oct 2028 Maturity Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty G-Sec Oct 2028 Index. A Relatively High interest rate risk and Relatively Low Credit Risk |
Nippon India Fixed Horizon Fund XLV -Series 4 |
CLOSE |
A Close Ended Scheme. Relatively High interest rate risk and Relatively Low Credit Risk |
Nippon India Fixed Horizon Fund XLV -Series 5 |
CLOSE |
A Close Ended Scheme. Relatively High interest rate risk and Relatively High Credit Risk |
As on March 31, 2023, NIMF has a well-rounded portfolio of 98 schemes under various categories such as Equity, Debt, Hybrid, Exchange Traded Funds, Index Funds, Fixed Maturity Plans, and Interval Funds.
DETAILS OF MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments affecting the financial position of the Company since the date of the financial statements i.e, March 31, 2023.
DIVIDEND
During the year, the Company had declared and paid an interim dividend of t 4.00 per equity share (40%) amounting to t 249.23 Crores. The Board has also recommended a final dividend of t 7.50 per Equity Share (75%) of t 10/- each for the financial year ended March 31, 2023, for the approval of the
Shareholders at the ensuing Annual General meeting. With this the total dividend for the financial year 2022-23 would be approximately t 716 Crores, including the interim dividend of t 4.00 per equity share distributed in November 2022. The Final dividend, if declared, will be paid after the Annual General Meeting.
The dividend pay-out is in accordance with the Company''s Dividend Distribution Policy which forms part of this Annual Report.
AMOUNT TO BE CARRIED TO RESERVES
Your Directors do not propose any amount to be transferred to the General Reserves of the Company.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report for the year under review as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) is presented in a separate section forming part of this Annual Report.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENT
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act are given in the notes to the Financial Statements.
There is no difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions.
DEPOSITS
The Company has neither accepted nor renewed any fixed deposits during the year. There are no outstanding or unclaimed deposits, unclaimed / unpaid interest, refunds due to the deposit holders or to be deposited to the Investor Education and Protection Fund as on March 31, 2023.
EMPLOYEES STOCK OPTION SCHEME
With the perspective of promoting the culture of employee ownership and to attract, retain, motivate and incentivise senior as well as critical talent, the Company has formulated Nippon Life India Asset Management Limited - Employee Stock Option Plan 2017 ("NAM INDIA ESOP 2017") [formerly known as "Reliance Nippon Life Asset Management Limited -Employee Stock Option Plan 2017"] ("ESOP 2017" / "Plan") as its stock option scheme, which was launched in August 2017 and Nippon Life India Asset Management Limited - Employee Stock Option Plan 2019 ("NAM INDIA ESOP 2019") [formerly known as "Reliance Nippon Life Asset Management Limited - Employee Stock Option Plan 2019"] ("ESOP 2019" / "Plan") as its stock option scheme, which was launched in July 2019. The Nomination and Remuneration Committee of the Board monitors and administers these Plans and from time - to - time grants stock options to the employees.
Both ESOP 2017 as well as ESOP 2019 are in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (SEBI Regulations).
However, having regard to the provisions of first provision to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to all the Members of the Company and others entitled thereto. The certificate from the Statutory Auditors of the Company confirming the compliance
of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 with respect to the Company''s Employees Stock Option Scheme Plans will be available for inspection through electronic mode. Any member interested in obtaining the same may write to the Company Secretary and the same will be furnished on request. The details as required to be disclosed under SEBI Regulations are available on the Company''s website at https:// mf.nipponindiaim.com/investor-service/customer-service/nam-india-shareholders-investors
CAPITAL STRUCTURE
During the Financial year 2022-23, the Company issued and allotted 11,57,515 Equity Shares to eligible employees on exercise of options granted under the Employee Stock Option Plans of the Company. Hence, the issued, subscribed and paid-up capital of the Company was 62,31,75,443 Equity Shares of g 10 each at the end of the Financial Year.
The Equity History of the Company has been provided in the Corporate Governance Report.
COMPLIANCE CULTURE & RISK MANAGEMENT
Your Company maintains a strong focus on Compliance and Risk Management as these are essential elements for its long-term success. The compliance and risk functions are managed by a dedicated and experienced team of professionals. The management has a zero tolerance towards risk and compliance failures or breaches.
There exists a comprehensive Compliance Manual, which is reviewed by your Board of Directors from time to time and it facilitates the Company''s Compliance team to monitor various compliance requirements effectively & comprehensively. The Compliance team conducts periodical educative & training programmes on various regulatory compliances matters for various sections of employees.
Your Company also has a comprehensive Risk Management Policy that envisages a structured and consistent enterprise-wide risk management framework, based on the three lines of defense model, to ensure that risk management processes are consistently applied across the organisation and provide reasonable assurance regarding achievement of organisation''s objectives.
The risk management policy clearly sets out the objectives & elements of risk management within the organisation, including the constitution of an independent Risk Management department headed by Chief Risk Officer (reporting directly to the CEO and to the Board of Directors), Risk Management Committee at executive and Board levels. The policy
also define the roles and responsibility of all the CXOs towards risk management as part of first line of defense model.
Your Company promotes risk awareness culture throughout the organisation and risk management is an integral part of decision making and day-today operations of all activities at all levels across the organisation. There are well documented & Board approved policies & processes to address and mitigate various risks to which the Company is exposed. The Company also has a robust business continuity plan which is tested on a periodic basis to ensure uninterrupted operations. The risk department conducts various training programmes on various facets of risk management including cyber risk awareness, conduct risk, operational risk, Anti Money Laundering, etc.
The Company has a structured risk reporting mechanism to ensure risks are monitored and reviewed by CRO, Senior Management, RMCBs and Board on a periodic basis.
INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY
The Company has an Internal Control System which is commensurate with the size, scale and complexity of its business operations.
For effective risk management and control, the Company has established structures and responsibilities in line with the "Three Lines of Defense" model, where 1st line being business operations, 2nd line is the oversight functions like Risk Management and Compliance and 3rd line is Internal Audit. To maintain its objectivity and independence, the Internal Audit department reports to the Audit Committee. The Internal Audit department monitors and evaluates the efficacy and adequacy of the internal control system in the Company, its compliance with operating systems, accounting procedures and policies. Based on the report of the Internal Auditor, process owners undertake corrective action in their respective areas and thereby strengthen the controls. The Internal Audit department follows up on pending audit issues and ensures that corrective actions have been taken. Significant audit observations, if any, and corrective actions thereon, are presented to the Audit Committee of the Board.
CORPORATE GOVERNANCE
Your Directors wish to reiterate your Company''s commitment to the highest standards of corporate governance to enhance trust of all its stakeholders. Strong & robust corporate governance practices have facilitated your Company in standing up to the continued scrutiny of domestic & international investors and that of various Regulatory authorities.
The report on Corporate Governance as stipulated under Regulation 34(3) read with Para C of Schedule V of the Listing Regulations is presented in a separate section forming part of this Annual Report.
A Certificate from the auditors of the Company i.e. M/s. S. R. Batliboi & Co. LLP, Chartered Accountants conforming compliance to the conditions of Corporate Governance as stipulated under Para E of Schedule V of the Listing Regulations, is enclosed to this Report.
VIGIL MECHANISM
In accordance with Section 177 of the Act and the Listing Regulations, the Company has formulated a Vigil Mechanism to address the genuine concerns, if any. The Whistle Blower policy can be accessed on the Company''s website. It is affirmed that no person has been denied access to the Chairperson of the Audit Committee.
CORPORATE SOCIAL RESPONSIBILITY
As part of its initiatives under "Corporate Social Responsibility (CSR)", the Company has undertaken projects in the areas of promoting healthcare, education and rural development in accordance with Schedule VII of the Act.
The Annual Report on CSR activities is annexed herewith as Annexure A.
SUBSIDIARIES & ASSOCIATE COMPANY
As of March 31, 2023, your Company had two (2) subsidiaries. One of such subsidiaries is overseas i.e., one subsidiary in Singapore and one subsidiary in India. Both the subsidiaries of the Company are engaged in financial services and related activities. In addition, the Company also has an Associate company in India, which has already surrendered its business license/ regulatory approval to act as a Pension Fund Manager. This particular company currently has no business operations, and it is therefore proposed to be wound up, in accordance with the applicable laws.
During the year our subsidiary company, Nippon Life India Asset Management (Mauritius) Limited, has been voluntarily wound up.
A statement w.r.t. the performance and the financial position of the subsidiaries of the Company forms a part of the Consolidated Financial Statements of the Company.
The performance of the financial position of the subsidiary companies is presented in the Management Discussions and Analysis Report forming part of this Annual Report. The policy for determining material subsidiary companies may be accessed on the
Company''s website at https://mf.nipponindiaim.com/ InvestorServices/Pages/lnvestor-Policies.aspx
Further, The International Financial Services Centres Authority (IFSCA) has granted NAM India (IFSC Branch) the certificate of registration to carry out the activities as a Fund Management Entity (Non-Retail) under the IFSCA (Fund Management) Regulations, 2022 on March 1, 2023.
KEY MANAGERIAL PERSONNEL
During the year under review, the following employees were the ''Key Managerial Personnel'' of the Company:
a) Mr. Sundeep Sikka - Executive Director & Chief Executive Officer;
b) Mr. Ajay Patel - Manager;
c) Mr. Prateek Jain - Chief Financial Officer; and
d) Ms. Nilufer Shekhawat - Company Secretary
DIRECTORS
During the year, Mr. Kazuyuki Saigo who was a Director as on March 31, 2022, resigned from the directorship of the Company w.e.f. April 21, 2022. Mr. Tomohiro Yao and Mr. Minoru Kimura were first appointed as Additional Directors of the Company w.e.f. April 21, 2022. Mr. Tomohiro Yao and Mr. Minoru Kimura were then appointed as Non-Executive Nominee Director w.e.f. July 12, 2022.
As on the date of this Boards Report, Mr. Hiroki Yamauchi was appointed as an additional Director (Non-Executive Nominee Director) in place of Mr. Akira Shibata. Mr. Upendra Kumar Sinha was appointed as an additional Director (Non-Executive Independent Director) and Chairman of the Board to be effective May 1, 2023. Both these appointments are subject to approval of the Shareholders at the ensuing Annual General Meeting.
All the Independent Directors of your Company i.e., General Ved Prakash Malik (Retd.), Ms. Ameeta Chatterjee, Mr. Ashvin Parekh and Mr. B. Sriram have already furnished the required declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act.
In the opinion of the Board, the Independent Directors possess the requisite expertise and experience and are people of high integrity and repute. They fulfil the conditions specified in the Act and the Rules made thereunder and are independent of the management.
In terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by The
Indian Institute of Corporate Affairs, Manesar (''IICA''). The Independent Directors are also required to undertake online proficiency self-assessment test conducted by the IICA within a period of two years from the date of inclusion of their names in the data bank, unless they meet the criteria specified for exemption. All the Independent Directors of the Company are exempt from the requirement to undertake online proficiency self assessment test.
PERFORMANCE EVALUATION OF DIRECTORS, BOARD AND COMMITTEES
The Company has devised a policy for the performance evaluation of the individual directors, Board and its Committees, which also includes the criteria for carrying out the said performance evaluation. Pursuant to the provisions of the Act and Regulation 17(10) of Listing Regulations and as prescribed in the stated policy of the Board, the Board has carried out an annual performance evaluation of (i) the Directors (Independent and non-independent); (ii) itself (as a whole); (iii) its committees and (iv) fulfillment of Independence criteria. The Board performance was evaluated based on input received from the Board Members after considering criteria such as Board composition and structure, effectiveness of Board / Committee processes, and information provided to the Board, etc. In terms of the requirements of the Act, a separate meeting of the Independent Directors was also held during the year.
BOARD AND COMMITTEE MEETINGS
During the year under review, eight (8) Board meetings were held.
Your Directors wish to inform that the functioning of the Board is supplemented by various committees (Board sub-committees and management committees), which have been constituted from time to time, such as Audit Committee, Committee of Directors, CSR Committee, Stakeholders Relationship Committee, Nomination & Remuneration Committee, Risk Management Committee of the Board, Valuation Committee, Investment Committee, Risk Management Committee, Allotment Committee, Broker Empanelment Committee, Operating Committee, Compliance Committee, Stewardship Committee, Proxy Voting Committee, Information Security Risk Management Committee, etc. to name a few. Each of the aforesaid Committees has been constituted in order to ensure due compliance with the applicable laws and to ensure that the highest levels of corporate governance are followed and practiced. The minutes of the meetings of each of these Committees are duly placed before the Board for noting and confirmation.
AUDIT COMMITTEE
In terms of the requirements of Section 177 of the Act, the Audit Committee of the Company consists of the majority of Independent Directors. As on date of this report, it comprises Mr. Ashvin Parekh [Independent Director], Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. B. Sriram [Independent Director], Mr. Hiroki Yamauchi [Non- Independent Director] and Mr. Minoru Kimura [Non- Independent Director]. Mr. Ashvin Parekh acts as the Chairperson of this Committee.
During the year, eight (8) meetings of the Audit Committee were held, which includes 1 joint Audit Committee between the Audit Committee of the Asset Management Company (''AMC'') with the Audit Committee of the Trustees and one (1) meeting to interact with the Statutory and Internal Auditors of the Mutual Fund without the engagement of management of the AMC as stipulated in SEBI Circular No. SEBI/HO/IMD/IMD-IDOF2/P/CIR/2022/17 dated February 09, 2022.
Other relevant details in this regard have been provided in the Corporate Governance Report.
NOMINATION & REMUNERATION COMMITTEE
In terms of the requirements of Section 178 of the Act, the Nomination & Remuneration Committee of the Company consists of the majority of Independent Directors. As on date of this report, it comprises, Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Tomohiro Yao [Non-Independent Director] and Mr. Minoru Kimura [Non-Independent Director]. General Ved Prakash Malik (Retd.) acts as the Chairperson of this Committee.
During the year, three (3) meetings of the Nomination & Remuneration Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
The Nomination & Remuneration Policy has been provided as Annexure B to the Board''s Report.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
In terms of the requirements of Section 135 of the Act, the Corporate Social Responsibility ("CSR") Committee of the Company consists of eight (8) Members. As on date of this report, it comprises Mr. Tomohiro Yao [Non-Independent Director], Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Sundeep Sikka [CEO & Executive
Director], Mr. Hiroki Yamauchi [Non-Independent Director] and Mr. Minoru Kimura [Non-Independent Director]. Mr. Tomohiro Yao acts as the Chairperson of this Committee.
During the year 2022-23, two (2) meetings of the CSR Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
STAKEHOLDERS'' RELATIONSHIP COMMITTEE
In terms of the requirements of Section 178 of the Act, the Stakeholders'' Relationship Committee of the Company consists of five Members. As on date of this report, it comprises Ms. Ameeta Chatterjee [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Tomohiro Yao [Non-Independent Director] and Mr. Sundeep Sikka [CEO & Executive Director]. Ms. Ameeta Chatterjee acts as the Chairperson of this Committee.
During the year, two (2) meetings of the Stakeholders'' Relationship Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
RISK MANAGEMENT COMMITTEE
In terms of the relevant requirements under the Listing Regulations, the Company has constituted a Risk Management Committee of the Board. The Committee presently comprises of Mr. Tomohiro Yao [Non-Independent Director], Mr. Hiroki Yamauchi [Non-Independent Director], Mr. Sundeep Sikka [CEO & Executive Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director] and Mr. Rishi Garg [Chief Risk Officer] as its Members. Mr. Tomohiro Yao acts as the Chairperson of this Committee.
During the year, five (5) meetings of the Risk Management Committee of the Board were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
AUDITORS'' OF THE COMPANY - STATUTORY AND INTERNAL
Statutory Auditors:
M/s. S. R. Batliboi & Co. LLP, Chartered Accountants shall hold office as Statutory Auditors of the Company until the conclusion of this 28th Annual General Meeting.
The Company has already received a consent letter from M/s. S. R. Batliboi & Co. LLP, Chartered Accountants communicating their willingness to be re-appointed as the Statutory Auditors of the Company and that their re-appointment, if made, would be within
the limits as prescribed under Section 139 of the Companies Act, 2013.
Your Directors hereby recommends the reappointment of M/s. S. R. Batliboi & Co. LLP, Chartered Accountants as the Statutory Auditors of the Company for a second term of 5 (five) consecutive years, to hold office from the conclusion of this Annual General Meeting until the conclusion of the 33rd Annual General Meeting of the Company.
Internal Auditors:
JHS & Associates LLP, Chartered Accountants (JHS) were appointed as the Internal Auditors of your Company for the financial year 2022-23. Having regard to their longevity in office and as a matter of good governance, your Directors have approved the rotation of JHS and appointed PricewaterhouseCoopers Services LLP (PWC) as the Internal Auditors of your Company for the financial year 2023-24.
Your Directors wish to place on record the contributions made by JHS during their tenure as Internal Auditors of your Company.
AUDITORS OF THE SCHEMES OF NIPPON INDIA MUTUAL FUND-STATUTORY AND INTERNAL
In accordance with the applicable provisions of law, the Company has appointed Statutory and Internal Auditors for various Schemes of Nippon India Mutual Fund, who periodically submit their reports, which are placed before the Audit Committee for discussion, review and implementation of their recommendations.
Statutory Auditors:
M/s. Walker Chandiok & Co. LLP, Chartered Accountants were appointed as Statutory Auditors of the Schemes of Nippon India Mutual Fund for the financial year 2022-23.
Internal Auditors:
M/s. Deloitte Haskins & Sells LLP, Chartered Accountants (Deloitte) were appointed as Internal Auditors of the Schemes of Nippon India Mutual Fund and the Portfolio Management Services division of the Company, for the financial year 2022-23. Having regard to their longevity in office and as a matter of good governance, your Directors have approved the rotation of Deloitte and appointed PricewaterhouseCoopers Services LLP (PWC) as the Internal Auditors of the Schemes of Nippon India Mutual Fund and the Portfolio Management Services division of the Company for the financial year 2023-24.
Your Directors wish to place on record the contributions made by Deloitte during their tenure as Internal
Auditors of the Schemes of Nippon India Mutual Fund and the Portfolio Management Services division of the Company.
AUDITORS'' REPORT
The observations and comments given by the Statutory Auditors in their report read together with notes on financial statements are self-explanatory and hence does not require any further comments in terms of Section 134 of the Act.
SECRETARIAL STANDARDS
During the year under review, the Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Directors had appointed M/s. M. Siroya and Company, Mumbai, a firm of Company Secretaries in-practice to undertake the Secretarial Audit of the Company for the financial year 2022-23. In this regard, the Report submitted by the Secretarial Auditor is annexed as Annexure C.
Your Directors are pleased to inform you that the report from the Secretarial Auditors does not contain any qualifications or negative remarks.
ANNUAL RETURN
Pursuant to Section 134(3)(a) and Section 92(3) of the Act read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company has been placed on the website of the Company and can be accessed at https://mf.nipponindiaim.com/AboutUs/ FinancialReports/Pages/Annual-Return.aspx .
PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
CONSERVATION OF ENERGY:
The operations of the Company do not consume high levels of energy. Adequate measures have been taken to conserve energy wherever feasible. Your Company uses the latest technology and energy - efficient equipment''s. Your Company only uses LED lights and 5-star air-conditioning for majority of offices. As energy cost forms a very small part of the total costs, the impact on cost is not material.
TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION:
Business Easy Revamp - Business Easy 2.0 app, our Digital asset for our distributors, is an all-
encompassing solution that acts as a complete Customer Relationship Management tool. The app works as a Digital branch through which distributors can manage their Mutual Fund business virtually. With the objective of evolving the app from a business facilitator to a growth enabler, this year saw the addition of new enhancements and features to the app. A number of features such as Intern Distributor addition, quick investment module were added along with meaningful reports for distributors to maximise the usage of the App.
Investor App and Website Enhancement - Our
flagship assets, namely the InvestEasy App and the InvestEasy website are constantly upgraded to include enhancements and innovations. These include workflow enhancements such as Cart Buying where users can purchase more than one product at a time. A number of regulatory compliance requirements have been added in the year as well.
Process Automation across Organisation - As part of the automation initiative a number of processes have been automated across operations, finance, risk and technology. This has freed up resources to be redeployed elsewhere.
Implementation of cloud initiatives - Continuing on NAM India''s cloud journey a number of initiatives on cloud where the infrastructure for initiatives such as Data Lake, Analytics, new core applications have been implemented on the AWS cloud.
RESEARCH AND DEVELOPMENT DIGITAL ADOPTION AND INNOVATION:
Nippon India Mutual Fund, continue to envision and execute key Digital transformation endeavors year on year that are aimed to strengthen our already robust Digital ecosystem.
⢠Focus always remains on empowering our investors during moments of truth and on a ''here & now'' manner to take quicker, smarter, and well-informed decisions on how and where they should invest their money when they transact on our Digital assets. Such empowerment is fueled by our capabilities to crunch & run real-time analysis on the enormous amount of on-asset & offline data points we have regarding our consumers, their past purchases, and future propensities.
⢠Intelligent, data led digital assets, can learn, and predict user behavior powered by both the real time frameworks and archived analytical frameworks which are operating on an advanced algo network. This helps in e-serving highly personalised and customised experiences to give our millennial, zillennial and legacy investors or partners accurate recommendations,
suggestions, on-the-fly nudges, predictive service and much more as they advance in their journeys.
Implementation of Data Models for cross sell and upsell have been implemented as part of the innovation adoption initiatives. As part of this movement third party model creators have been engaged with enhancing the data models of the organisation. Use cases are created with the support of business to identify patterns and opportunities in the models and campaigns are triggered on the analytics ecosystem to connect with customers and track the efficacy of the models.
We at NAM India also are working on further enhancing our digital assets by bringing in innovation in the payment gateway space especially towards frictionless payments. The current payment gateway ecosystem gives us as Digital innovators a lot of play with respect to designing workflows especially in the UPI space.
FOREIGN EXCHANGE EARNINGS AND OUTGO:
During the year under review, the Company earned foreign exchange equivalent to g 18.09 Crores (Previous Year: g 22.85 Crores). The Company spent foreign exchange equivalent to g 11.25 Crores (Previous Year: g 6.98 Crores).
DIRECTORS'' RESPONSIBILITY STATEMENT
As per the requirements of Sub Section (5) of Section 134 of the Act, the Directors confirm that -
(i) In the preparation of the annual accounts for the financial year ended March 31,2023,the applicable accounting standards have been followed and that there are no material departures;
(ii) The Directors have selected such accounting policies in consultation with the Statutory Auditors'' and have applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2023 and of the profit of the Company for the year under review;
(iii) The Directors have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) The Directors have prepared the annual accounts of the Company on a ''going concern'' basis;
(v) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;
(vi) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
CONTRACT AND ARRANGEMENTS WITH RELATED PARTIES
All contracts/ arrangements/ transactions entered into/ by the Company during the financial year under review with related parties were on an arm''s length basis and in the ordinary course of business. There were no materially significant related party transactions which could have potential conflict with the interest of the Company at large. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.
All Related Party Transactions were placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee was obtained for the transactions which were of a repetitive nature. The transactions entered into pursuant to the omnibus approval so granted were reviewed and statements giving details of all related party transactions were placed before the Audit Committee and the Board of Directors for their review on a quarterly basis. The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website at the following link:
https://mf.nipponindiaim.com/InvestorServices/
Your Directors draw attention of the Members to Note No. 28 to the financial statement which sets out related party disclosures.
PARTICULARS OF FRAUDS REPORTED BY THE AUDITORS''
In terms of Section 143(12) of the Act, M/s. S R Batliboi & Co. LLP, Chartered Accountants, the Statutory Auditors of the Company have not reported any instance of fraud having taken place during the year under review, in their Audit Report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators/ Courts which would impact the going concern status of the Company and its future operations.
DETAILS OF APPLICATION MADE BY THE COMPANY OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONGWITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR
The Company on behalf of the schemes of Nippon India Mutual Fund invests in various debt market instruments (non-convertible debentures) issued by various issuers. In order to realise the debenture outstanding''s, the Company has filed certain applications under the Insolvency and Bankruptcy Code, 2016. The Mutual Fund Division of the Company has filed (a) an IBC proceeding against Avantha Holdings Limited in January 2020 before Hon''ble NCLT New Delhi which is withdrawn as Avantha Holdings Limited has paid its dues. The Company is also a respondent party to an IBC proceeding filed in the matter of Reserve Bank of India v. Dewan Housing Finance Corporation Limited pending before the Hon''ble NCLT, Mumbai.
The Portfolio Management Services Division of the Company has filed: (a) IBC proceedings against Fortuna Buildcon India Private Limited was filed in November 2017 before the Hon''ble NCLT, Bangalore, wherein currently the resolution plan has been submitted to the Hon''ble NCLT for approval (b) three IBC proceedings against three Biodiversity Conservation India Private Limited group companies (BCIL Zed Ria Properties Private Limited, BCIL Red Earth Developers India Pvt. Ltd. and Biodiversity Conservation India Private Limited) were filed in December 2017 before the Hon''ble NCLT, Bangalore. The NCLT has approved resolution plans in BCIL Zed Ria Properties Private Limited and in BCIL Red Earth Developers India Pvt. Ltd., which are currently under implementation while Biodiversity Conservation India Private Limited is currently under liquidation. The Company is also a respondent to 2 (two) appeals in BCIL Red Earth Developers India Private Limited and in 3 (three) appeals in BCIL Zed Ria Properties Private Limited, before Hon''ble NCLAT, Chennai, which have been filed challenging the approved resolution plans; (c) IBC proceedings have been filed against the promoters of Biodiversity Conservation India Private Limited in November 2020 before Hon''ble NCLT, Bangalore which are currently at a pre-admission stage; (d) IBC proceeding filed against Green Valley Shelters Private Limited in December 2019, before Hon''ble NCLT, Chennai, was admitted in August 2021, however the proceedings are currently temporarily stayed under an order of the Supreme Court. The Company is a respondent in a civil appeal filed by the promoters of Green Valley Shelters Private Limited before the Hon''ble Supreme Court, challenging the admission of IBC proceedings against Green Valley Shelters Private Limited, which is currently pending under directions of exploring a settlement; (e) an IBC proceeding filed against the promoters of Green Valley Shelters Private Limited in October 2020 before the
Hon''ble NCLT, Chennai and is at a pre-admission stage; (f) an IBC proceeding was filed against Arkie Atelier Design India Private Limited, being the corporate guarantor for the debentures issued by Green Valley Shelters Private Limited in November 2021 and is currently at a preadmission stage; (g) an IBC proceeding filed against Bharucha & Motivala Infrastructure Private Limited, being corporate guarantor for the debentures issued by Lake District Realty Private Limited, in November 2019 before Hon''ble NCLT, Mumbai was admitted in May 2021, but has been stayed pursuant to an order of the Hon''ble NCLAT in July 2021. The Company is a respondent in the appeal filed by the promoters of Lake District Realty Private Limited before the Hon''ble NCLAT, Delhi, challenging the admission of IBC proceedings against Bharucha & Motivala Infrastructure Private Limited, which is currently reserved for orders; (h) IBC proceedings have been filed against the promoters of Lake District Realty Private Limited in November 2021, which is currently at a pre-admission stage; (i) an IBC proceedings has been filed against Ashapura Options Private Limited, being the corporate guarantor for the debentures issued by Ashapura Housing Private Limited in February 2022 which is at a pre-admission stage. (j) IBC proceedings have also been filed against four (4) promoter guarantors of Ashapura Housing Private Limited, which are at a pre-admission stage.
COST RECORDS
The Company is not required to maintain cost records as specified by the Central Government under subsection (1) of section 148 of the Companies Act, 2013.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
In terms of the provisions of Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules are provided in the Annexure to the Board''s Report. Disclosures relating to the remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended also forms part of this Report. However, having regard to the provisions of Section 136 of the Act, the Annual Report excluding the aforesaid information is being sent to all the Members of the Company and others entitled thereto. Any member interested in obtaining the said information may write to the Company Secretary. Upon such request the information shall be furnished.
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
Your Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of
The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. Following is a summary of sexual harassment complaints received and disposed off during the year:
⢠No. of complaints received: 0
⢠No. of complaints disposed off: 0
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
Pursuant to Regulation 34(2)(f) of Listing Regulations, top 1000 listed entities by market capitalisation have to publish a Business Responsibility and Sustainability Report from FY 2022-23. Business Responsibility and Sustainability Report for the year under review as stipulated under Listing Regulations is presented in the separate section forming part of this Annual Report.
AWARDS AND RECOGNITIONS
Some of the awards & recognitions, which came to NAM India include,
⢠Included in the elite "Kincentric Best Employers Club- 2023" an exclusive and prestigious group of organisations chosen across all industries who have been Best Employers consistently in the last 3-5 years
⢠Awarded Best Employer 2022 Award - 5th time in last 7 years
⢠Won the Outstanding Employee Engagement Award from Ekincare for our Health & Wellbeing initiative (Amongst only 9 Companies recognised in the country)
ACKNOWLEDGEMENTS
Your Directors wish to place on record their sincere appreciation for the co-operation received from various regulatory and governmental authorities including SEBI, RBI, Registrar of Companies, Maharashtra at Mumbai, PFRDA, NPS Trust, EPFO, CMPFO, Stock Exchanges, Depositories, Custodians, Bankers, Registrar, Shareholders, Investors and all other business constituents during the year under review. We believe all of them have contributed to our continued growth.
Your Directors also wish to place on record their deep appreciation for the total commitment displayed by all the executives, officers and staff, resulting in yet another eventful performance for the year.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS OF NIPPON LIFE INDIA ASSET MANAGEMENT LIMITED
Ashvin Dhirajlal Parekh Sundeep Sikka
Director Executive Director & CEO
(DIN: 06559989) (DIN: 02553654)
Place : Mumbai Dated : April 25, 2023
Mar 31, 2023
Your Directors take pleasure in presenting their 28th Annual Report on the business and operations of your Company, together with the audited financial statements, for the year ended March 31, 2023.
Your Company endeavors to remain one of the leading players in the Asset Management business in India and keeps exploring opportunities for enhancing its global footprint as well.
Your Company is a subsidiary Company of Nippon Life Insurance Company ("NLI"). NLI is a, fortune 500 Company and one of the largest life insurers in the world managing assets of over USD 700 billion. It has a large global network with presence across US, Europe, Asia, and Australia along with a 130-year track record in Life Insurance business as well as global investments across Asset Management companies. This pedigree brings strong synergistic benefits that very well complements your Company''s domestic expertise in the Asse Management business and provides a thrust to its significant growth potential. Your Company expects substantial upside in terms of increased AUM & adoption of best governance & risk management practices based on NLI''s global positioning & relationships.
FINANCIAL PERFORMANCE AND STATE OF COMPANY''S AFFAIRS
The standalone and consolidated financial statements of the Company for the financial year ended March 31, 2023, have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act. The financial highlights (on a consolidated and standalone basis) of the Company for the year ended March 31, 2023, are as follows:
Crores) |
||||
Consolidated |
Standalone |
|||
Particulars |
Year ended March 31, 2023 |
Year ended March 31, 2022 |
Year ended March 31, 2023 |
Year ended March 31, 2022 |
Gross Income |
1516.61 |
1535.63 |
1431.18 |
1428.42 |
Profit before exceptional item and tax |
927.74 |
988.67 |
917.77 |
945.43 |
Exceptional Items |
- |
- |
- |
- |
Profit Before tax |
927.74 |
988.67 |
917.77 |
945.43 |
Current Tax |
212.14 |
206.66 |
212.53 |
200.38 |
Deferred Tax |
(7.33) |
38.64 |
(9.70) |
33.84 |
Profit for the year |
722.93 |
743.37 |
714.94 |
711.21 |
Share of Profit from Associates |
0.40 |
0.79 |
- |
- |
Profit attributable to non-controlling interest |
- |
- |
- |
- |
Other Comprehensive Income |
(186) |
(0.30) |
(185) |
(0.27) |
Balance carried to Balance Sheet |
721.47 |
743.86 |
713.09 |
710.94 |
Basic EPS of S 10 each |
11.61 |
12.00 |
11.48 |
11.47 |
Diluted EPS of S 10 each |
11.53 |
11.80 |
11.40 |
11.28 |
The Consolidated Financial Statements of the Company form part of this Annual Report.
The annual accounts of all the subsidiary companies will be placed on the website of the Company. OPERATION HIGHLIGHTS
As you are aware that your Company acts as the asset manager to Nippon India Mutual Fund ("NIMF"), which is one of the largest Mutual Fund in India, in terms of the Quarterly Average Assets under Management (QAAUM) as on March 31, 2023.
The QAAUM of NIMF as on March 31, 2023, was t 2,93,159 Crores comprising of t 1,30,087 Crores of Equity, t 54,068 Crores of Debt, t 38,979 Crores of Liquid Funds and t 70,024 Crores of ETF assets. It may be noted that the QAAUM of NIMF as on March 31, 2022 was t 2,83,261 Crores comprising of t 1,19,062 Crores of Equity, t 73,173 Crores of Debt, t 35,230 Crores of Liquid Funds and t 55,796 Crores of ETF assets.
Overall QAAUM of NIMF has increased by 3.39% during the financial year 2022-23, while the Indian Mutual Fund Industry witnessed an overall growth of 5.55% in terms of QAAUM (Source: AMFI).
New Schemes Launched:
During the year under review, Nippon India Mutual Fund launched the following new schemes:
Scheme Name |
Type |
Structure |
Nippon India Nifty Alpha Low Volatility 30 Index Fund |
OPEN |
An open-ended scheme replicating/tracking Nifty Alpha Low Volatility 30 Index |
Nippon India Fixed Horizon Fund - XLIV - Series 1 |
CLOSE |
A Close Ended Scheme. Relatively High interest rate risk and moderate Credit Risk |
Nippon India Nifty AAA PSU Bond Plus SDL - Sep 2026 Maturity 50:50 Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty AAA PSU Bond Plus SDL Sep 2026 50:50 Index. A Relatively High interest rate risk and Relatively Low Credit Risk. |
Nippon India Nifty SDL Plus G-Sec -Jun 2028 Maturity 70:30 Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty SDL Plus G-Sec Jun 2028 70:30 Index. A Relatively High interest rate risk and Relatively Low Credit Risk. |
Nippon India Fixed Horizon Fund XLIV -Series 4 |
CLOSE |
A Close Ended Scheme. Relatively High interest rate risk and moderate Credit Risk |
Nippon India Fixed Horizon Fund - XLIV - Series 2 |
CLOSE |
A Close Ended Scheme. Relatively Low interest rate risk and moderate Credit Risk |
Nippon India Nifty G-Sec Sep 2027 Maturity Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty G-Sec Sep 2027 Index. A Relatively High Interest rate risk and Relatively Low Credit Risk. |
Nippon India Nifty G-Sec Jun 2036 Maturity Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty G-Sec Jun 2036 Index. A Relatively High Interest rate risk and Relatively Low Credit Risk. |
Nippon India Nifty SDL Plus G-Sec -Jun 2029 Maturity 70:30 Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty SDL Plus G-Sec Jun 2029 70:30 Index. A Relatively High interest rate risk and Relatively Low Credit Risk |
Nippon India Nifty G-Sec Oct 2028 Maturity Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty G-Sec Oct 2028 Index. A Relatively High interest rate risk and Relatively Low Credit Risk |
Nippon India Fixed Horizon Fund XLV -Series 4 |
CLOSE |
A Close Ended Scheme. Relatively High interest rate risk and Relatively Low Credit Risk |
Nippon India Fixed Horizon Fund XLV -Series 5 |
CLOSE |
A Close Ended Scheme. Relatively High interest rate risk and Relatively High Credit Risk |
As on March 31, 2023, NIMF has a well-rounded portfolio of 98 schemes under various categories such as Equity, Debt, Hybrid, Exchange Traded Funds, Index Funds, Fixed Maturity Plans, and Interval Funds.
DETAILS OF MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments affecting the financial position of the Company since the date of the financial statements i.e, March 31, 2023.
DIVIDEND
During the year, the Company had declared and paid an interim dividend of t 4.00 per equity share (40%) amounting to t 249.23 Crores. The Board has also recommended a final dividend of t 7.50 per Equity Share (75%) of t 10/- each for the financial year ended March 31, 2023, for the approval of the
Shareholders at the ensuing Annual General meeting. With this the total dividend for the financial year 2022-23 would be approximately t 716 Crores, including the interim dividend of t 4.00 per equity share distributed in November 2022. The Final dividend, if declared, will be paid after the Annual General Meeting.
The dividend pay-out is in accordance with the Company''s Dividend Distribution Policy which forms part of this Annual Report.
AMOUNT TO BE CARRIED TO RESERVES
Your Directors do not propose any amount to be transferred to the General Reserves of the Company.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report for the year under review as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) is presented in a separate section forming part of this Annual Report.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENT
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act are given in the notes to the Financial Statements.
There is no difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions.
DEPOSITS
The Company has neither accepted nor renewed any fixed deposits during the year. There are no outstanding or unclaimed deposits, unclaimed / unpaid interest, refunds due to the deposit holders or to be deposited to the Investor Education and Protection Fund as on March 31, 2023.
EMPLOYEES STOCK OPTION SCHEME
With the perspective of promoting the culture of employee ownership and to attract, retain, motivate and incentivise senior as well as critical talent, the Company has formulated Nippon Life India Asset Management Limited - Employee Stock Option Plan 2017 ("NAM INDIA ESOP 2017") [formerly known as "Reliance Nippon Life Asset Management Limited -Employee Stock Option Plan 2017"] ("ESOP 2017" / "Plan") as its stock option scheme, which was launched in August 2017 and Nippon Life India Asset Management Limited - Employee Stock Option Plan 2019 ("NAM INDIA ESOP 2019") [formerly known as "Reliance Nippon Life Asset Management Limited - Employee Stock Option Plan 2019"] ("ESOP 2019" / "Plan") as its stock option scheme, which was launched in July 2019. The Nomination and Remuneration Committee of the Board monitors and administers these Plans and from time - to - time grants stock options to the employees.
Both ESOP 2017 as well as ESOP 2019 are in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (SEBI Regulations).
However, having regard to the provisions of first provision to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to all the Members of the Company and others entitled thereto. The certificate from the Statutory Auditors of the Company confirming the compliance
of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 with respect to the Company''s Employees Stock Option Scheme Plans will be available for inspection through electronic mode. Any member interested in obtaining the same may write to the Company Secretary and the same will be furnished on request. The details as required to be disclosed under SEBI Regulations are available on the Company''s website at https:// mf.nipponindiaim.com/investor-service/customer-service/nam-india-shareholders-investors
CAPITAL STRUCTURE
During the Financial year 2022-23, the Company issued and allotted 11,57,515 Equity Shares to eligible employees on exercise of options granted under the Employee Stock Option Plans of the Company. Hence, the issued, subscribed and paid-up capital of the Company was 62,31,75,443 Equity Shares of g 10 each at the end of the Financial Year.
The Equity History of the Company has been provided in the Corporate Governance Report.
COMPLIANCE CULTURE & RISK MANAGEMENT
Your Company maintains a strong focus on Compliance and Risk Management as these are essential elements for its long-term success. The compliance and risk functions are managed by a dedicated and experienced team of professionals. The management has a zero tolerance towards risk and compliance failures or breaches.
There exists a comprehensive Compliance Manual, which is reviewed by your Board of Directors from time to time and it facilitates the Company''s Compliance team to monitor various compliance requirements effectively & comprehensively. The Compliance team conducts periodical educative & training programmes on various regulatory compliances matters for various sections of employees.
Your Company also has a comprehensive Risk Management Policy that envisages a structured and consistent enterprise-wide risk management framework, based on the three lines of defense model, to ensure that risk management processes are consistently applied across the organisation and provide reasonable assurance regarding achievement of organisation''s objectives.
The risk management policy clearly sets out the objectives & elements of risk management within the organisation, including the constitution of an independent Risk Management department headed by Chief Risk Officer (reporting directly to the CEO and to the Board of Directors), Risk Management Committee at executive and Board levels. The policy
also define the roles and responsibility of all the CXOs towards risk management as part of first line of defense model.
Your Company promotes risk awareness culture throughout the organisation and risk management is an integral part of decision making and day-today operations of all activities at all levels across the organisation. There are well documented & Board approved policies & processes to address and mitigate various risks to which the Company is exposed. The Company also has a robust business continuity plan which is tested on a periodic basis to ensure uninterrupted operations. The risk department conducts various training programmes on various facets of risk management including cyber risk awareness, conduct risk, operational risk, Anti Money Laundering, etc.
The Company has a structured risk reporting mechanism to ensure risks are monitored and reviewed by CRO, Senior Management, RMCBs and Board on a periodic basis.
INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY
The Company has an Internal Control System which is commensurate with the size, scale and complexity of its business operations.
For effective risk management and control, the Company has established structures and responsibilities in line with the "Three Lines of Defense" model, where 1st line being business operations, 2nd line is the oversight functions like Risk Management and Compliance and 3rd line is Internal Audit. To maintain its objectivity and independence, the Internal Audit department reports to the Audit Committee. The Internal Audit department monitors and evaluates the efficacy and adequacy of the internal control system in the Company, its compliance with operating systems, accounting procedures and policies. Based on the report of the Internal Auditor, process owners undertake corrective action in their respective areas and thereby strengthen the controls. The Internal Audit department follows up on pending audit issues and ensures that corrective actions have been taken. Significant audit observations, if any, and corrective actions thereon, are presented to the Audit Committee of the Board.
CORPORATE GOVERNANCE
Your Directors wish to reiterate your Company''s commitment to the highest standards of corporate governance to enhance trust of all its stakeholders. Strong & robust corporate governance practices have facilitated your Company in standing up to the continued scrutiny of domestic & international investors and that of various Regulatory authorities.
The report on Corporate Governance as stipulated under Regulation 34(3) read with Para C of Schedule V of the Listing Regulations is presented in a separate section forming part of this Annual Report.
A Certificate from the auditors of the Company i.e. M/s. S. R. Batliboi & Co. LLP, Chartered Accountants conforming compliance to the conditions of Corporate Governance as stipulated under Para E of Schedule V of the Listing Regulations, is enclosed to this Report.
VIGIL MECHANISM
In accordance with Section 177 of the Act and the Listing Regulations, the Company has formulated a Vigil Mechanism to address the genuine concerns, if any. The Whistle Blower policy can be accessed on the Company''s website. It is affirmed that no person has been denied access to the Chairperson of the Audit Committee.
CORPORATE SOCIAL RESPONSIBILITY
As part of its initiatives under "Corporate Social Responsibility (CSR)", the Company has undertaken projects in the areas of promoting healthcare, education and rural development in accordance with Schedule VII of the Act.
The Annual Report on CSR activities is annexed herewith as Annexure A.
SUBSIDIARIES & ASSOCIATE COMPANY
As of March 31, 2023, your Company had two (2) subsidiaries. One of such subsidiaries is overseas i.e., one subsidiary in Singapore and one subsidiary in India. Both the subsidiaries of the Company are engaged in financial services and related activities. In addition, the Company also has an Associate company in India, which has already surrendered its business license/ regulatory approval to act as a Pension Fund Manager. This particular company currently has no business operations, and it is therefore proposed to be wound up, in accordance with the applicable laws.
During the year our subsidiary company, Nippon Life India Asset Management (Mauritius) Limited, has been voluntarily wound up.
A statement w.r.t. the performance and the financial position of the subsidiaries of the Company forms a part of the Consolidated Financial Statements of the Company.
The performance of the financial position of the subsidiary companies is presented in the Management Discussions and Analysis Report forming part of this Annual Report. The policy for determining material subsidiary companies may be accessed on the
Company''s website at https://mf.nipponindiaim.com/ InvestorServices/Pages/lnvestor-Policies.aspx
Further, The International Financial Services Centres Authority (IFSCA) has granted NAM India (IFSC Branch) the certificate of registration to carry out the activities as a Fund Management Entity (Non-Retail) under the IFSCA (Fund Management) Regulations, 2022 on March 1, 2023.
KEY MANAGERIAL PERSONNEL
During the year under review, the following employees were the ''Key Managerial Personnel'' of the Company:
a) Mr. Sundeep Sikka - Executive Director & Chief Executive Officer;
b) Mr. Ajay Patel - Manager;
c) Mr. Prateek Jain - Chief Financial Officer; and
d) Ms. Nilufer Shekhawat - Company Secretary
DIRECTORS
During the year, Mr. Kazuyuki Saigo who was a Director as on March 31, 2022, resigned from the directorship of the Company w.e.f. April 21, 2022. Mr. Tomohiro Yao and Mr. Minoru Kimura were first appointed as Additional Directors of the Company w.e.f. April 21, 2022. Mr. Tomohiro Yao and Mr. Minoru Kimura were then appointed as Non-Executive Nominee Director w.e.f. July 12, 2022.
As on the date of this Boards Report, Mr. Hiroki Yamauchi was appointed as an additional Director (Non-Executive Nominee Director) in place of Mr. Akira Shibata. Mr. Upendra Kumar Sinha was appointed as an additional Director (Non-Executive Independent Director) and Chairman of the Board to be effective May 1, 2023. Both these appointments are subject to approval of the Shareholders at the ensuing Annual General Meeting.
All the Independent Directors of your Company i.e., General Ved Prakash Malik (Retd.), Ms. Ameeta Chatterjee, Mr. Ashvin Parekh and Mr. B. Sriram have already furnished the required declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act.
In the opinion of the Board, the Independent Directors possess the requisite expertise and experience and are people of high integrity and repute. They fulfil the conditions specified in the Act and the Rules made thereunder and are independent of the management.
In terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by The
Indian Institute of Corporate Affairs, Manesar (''IICA''). The Independent Directors are also required to undertake online proficiency self-assessment test conducted by the IICA within a period of two years from the date of inclusion of their names in the data bank, unless they meet the criteria specified for exemption. All the Independent Directors of the Company are exempt from the requirement to undertake online proficiency self assessment test.
PERFORMANCE EVALUATION OF DIRECTORS, BOARD AND COMMITTEES
The Company has devised a policy for the performance evaluation of the individual directors, Board and its Committees, which also includes the criteria for carrying out the said performance evaluation. Pursuant to the provisions of the Act and Regulation 17(10) of Listing Regulations and as prescribed in the stated policy of the Board, the Board has carried out an annual performance evaluation of (i) the Directors (Independent and non-independent); (ii) itself (as a whole); (iii) its committees and (iv) fulfillment of Independence criteria. The Board performance was evaluated based on input received from the Board Members after considering criteria such as Board composition and structure, effectiveness of Board / Committee processes, and information provided to the Board, etc. In terms of the requirements of the Act, a separate meeting of the Independent Directors was also held during the year.
BOARD AND COMMITTEE MEETINGS
During the year under review, eight (8) Board meetings were held.
Your Directors wish to inform that the functioning of the Board is supplemented by various committees (Board sub-committees and management committees), which have been constituted from time to time, such as Audit Committee, Committee of Directors, CSR Committee, Stakeholders Relationship Committee, Nomination & Remuneration Committee, Risk Management Committee of the Board, Valuation Committee, Investment Committee, Risk Management Committee, Allotment Committee, Broker Empanelment Committee, Operating Committee, Compliance Committee, Stewardship Committee, Proxy Voting Committee, Information Security Risk Management Committee, etc. to name a few. Each of the aforesaid Committees has been constituted in order to ensure due compliance with the applicable laws and to ensure that the highest levels of corporate governance are followed and practiced. The minutes of the meetings of each of these Committees are duly placed before the Board for noting and confirmation.
AUDIT COMMITTEE
In terms of the requirements of Section 177 of the Act, the Audit Committee of the Company consists of the majority of Independent Directors. As on date of this report, it comprises Mr. Ashvin Parekh [Independent Director], Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. B. Sriram [Independent Director], Mr. Hiroki Yamauchi [Non- Independent Director] and Mr. Minoru Kimura [Non- Independent Director]. Mr. Ashvin Parekh acts as the Chairperson of this Committee.
During the year, eight (8) meetings of the Audit Committee were held, which includes 1 joint Audit Committee between the Audit Committee of the Asset Management Company (''AMC'') with the Audit Committee of the Trustees and one (1) meeting to interact with the Statutory and Internal Auditors of the Mutual Fund without the engagement of management of the AMC as stipulated in SEBI Circular No. SEBI/HO/IMD/IMD-IDOF2/P/CIR/2022/17 dated February 09, 2022.
Other relevant details in this regard have been provided in the Corporate Governance Report.
NOMINATION & REMUNERATION COMMITTEE
In terms of the requirements of Section 178 of the Act, the Nomination & Remuneration Committee of the Company consists of the majority of Independent Directors. As on date of this report, it comprises, Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Tomohiro Yao [Non-Independent Director] and Mr. Minoru Kimura [Non-Independent Director]. General Ved Prakash Malik (Retd.) acts as the Chairperson of this Committee.
During the year, three (3) meetings of the Nomination & Remuneration Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
The Nomination & Remuneration Policy has been provided as Annexure B to the Board''s Report.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
In terms of the requirements of Section 135 of the Act, the Corporate Social Responsibility ("CSR") Committee of the Company consists of eight (8) Members. As on date of this report, it comprises Mr. Tomohiro Yao [Non-Independent Director], Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Sundeep Sikka [CEO & Executive
Director], Mr. Hiroki Yamauchi [Non-Independent Director] and Mr. Minoru Kimura [Non-Independent Director]. Mr. Tomohiro Yao acts as the Chairperson of this Committee.
During the year 2022-23, two (2) meetings of the CSR Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
STAKEHOLDERS'' RELATIONSHIP COMMITTEE
In terms of the requirements of Section 178 of the Act, the Stakeholders'' Relationship Committee of the Company consists of five Members. As on date of this report, it comprises Ms. Ameeta Chatterjee [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Tomohiro Yao [Non-Independent Director] and Mr. Sundeep Sikka [CEO & Executive Director]. Ms. Ameeta Chatterjee acts as the Chairperson of this Committee.
During the year, two (2) meetings of the Stakeholders'' Relationship Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
RISK MANAGEMENT COMMITTEE
In terms of the relevant requirements under the Listing Regulations, the Company has constituted a Risk Management Committee of the Board. The Committee presently comprises of Mr. Tomohiro Yao [Non-Independent Director], Mr. Hiroki Yamauchi [Non-Independent Director], Mr. Sundeep Sikka [CEO & Executive Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director] and Mr. Rishi Garg [Chief Risk Officer] as its Members. Mr. Tomohiro Yao acts as the Chairperson of this Committee.
During the year, five (5) meetings of the Risk Management Committee of the Board were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
AUDITORS'' OF THE COMPANY - STATUTORY AND INTERNAL
Statutory Auditors:
M/s. S. R. Batliboi & Co. LLP, Chartered Accountants shall hold office as Statutory Auditors of the Company until the conclusion of this 28th Annual General Meeting.
The Company has already received a consent letter from M/s. S. R. Batliboi & Co. LLP, Chartered Accountants communicating their willingness to be re-appointed as the Statutory Auditors of the Company and that their re-appointment, if made, would be within
the limits as prescribed under Section 139 of the Companies Act, 2013.
Your Directors hereby recommends the reappointment of M/s. S. R. Batliboi & Co. LLP, Chartered Accountants as the Statutory Auditors of the Company for a second term of 5 (five) consecutive years, to hold office from the conclusion of this Annual General Meeting until the conclusion of the 33rd Annual General Meeting of the Company.
Internal Auditors:
JHS & Associates LLP, Chartered Accountants (JHS) were appointed as the Internal Auditors of your Company for the financial year 2022-23. Having regard to their longevity in office and as a matter of good governance, your Directors have approved the rotation of JHS and appointed PricewaterhouseCoopers Services LLP (PWC) as the Internal Auditors of your Company for the financial year 2023-24.
Your Directors wish to place on record the contributions made by JHS during their tenure as Internal Auditors of your Company.
AUDITORS OF THE SCHEMES OF NIPPON INDIA MUTUAL FUND-STATUTORY AND INTERNAL
In accordance with the applicable provisions of law, the Company has appointed Statutory and Internal Auditors for various Schemes of Nippon India Mutual Fund, who periodically submit their reports, which are placed before the Audit Committee for discussion, review and implementation of their recommendations.
Statutory Auditors:
M/s. Walker Chandiok & Co. LLP, Chartered Accountants were appointed as Statutory Auditors of the Schemes of Nippon India Mutual Fund for the financial year 2022-23.
Internal Auditors:
M/s. Deloitte Haskins & Sells LLP, Chartered Accountants (Deloitte) were appointed as Internal Auditors of the Schemes of Nippon India Mutual Fund and the Portfolio Management Services division of the Company, for the financial year 2022-23. Having regard to their longevity in office and as a matter of good governance, your Directors have approved the rotation of Deloitte and appointed PricewaterhouseCoopers Services LLP (PWC) as the Internal Auditors of the Schemes of Nippon India Mutual Fund and the Portfolio Management Services division of the Company for the financial year 2023-24.
Your Directors wish to place on record the contributions made by Deloitte during their tenure as Internal
Auditors of the Schemes of Nippon India Mutual Fund and the Portfolio Management Services division of the Company.
AUDITORS'' REPORT
The observations and comments given by the Statutory Auditors in their report read together with notes on financial statements are self-explanatory and hence does not require any further comments in terms of Section 134 of the Act.
SECRETARIAL STANDARDS
During the year under review, the Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Directors had appointed M/s. M. Siroya and Company, Mumbai, a firm of Company Secretaries in-practice to undertake the Secretarial Audit of the Company for the financial year 2022-23. In this regard, the Report submitted by the Secretarial Auditor is annexed as Annexure C.
Your Directors are pleased to inform you that the report from the Secretarial Auditors does not contain any qualifications or negative remarks.
ANNUAL RETURN
Pursuant to Section 134(3)(a) and Section 92(3) of the Act read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company has been placed on the website of the Company and can be accessed at https://mf.nipponindiaim.com/AboutUs/ FinancialReports/Pages/Annual-Return.aspx .
PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
CONSERVATION OF ENERGY:
The operations of the Company do not consume high levels of energy. Adequate measures have been taken to conserve energy wherever feasible. Your Company uses the latest technology and energy - efficient equipment''s. Your Company only uses LED lights and 5-star air-conditioning for majority of offices. As energy cost forms a very small part of the total costs, the impact on cost is not material.
TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION:
Business Easy Revamp - Business Easy 2.0 app, our Digital asset for our distributors, is an all-
encompassing solution that acts as a complete Customer Relationship Management tool. The app works as a Digital branch through which distributors can manage their Mutual Fund business virtually. With the objective of evolving the app from a business facilitator to a growth enabler, this year saw the addition of new enhancements and features to the app. A number of features such as Intern Distributor addition, quick investment module were added along with meaningful reports for distributors to maximise the usage of the App.
Investor App and Website Enhancement - Our
flagship assets, namely the InvestEasy App and the InvestEasy website are constantly upgraded to include enhancements and innovations. These include workflow enhancements such as Cart Buying where users can purchase more than one product at a time. A number of regulatory compliance requirements have been added in the year as well.
Process Automation across Organisation - As part of the automation initiative a number of processes have been automated across operations, finance, risk and technology. This has freed up resources to be redeployed elsewhere.
Implementation of cloud initiatives - Continuing on NAM India''s cloud journey a number of initiatives on cloud where the infrastructure for initiatives such as Data Lake, Analytics, new core applications have been implemented on the AWS cloud.
RESEARCH AND DEVELOPMENT DIGITAL ADOPTION AND INNOVATION:
Nippon India Mutual Fund, continue to envision and execute key Digital transformation endeavors year on year that are aimed to strengthen our already robust Digital ecosystem.
⢠Focus always remains on empowering our investors during moments of truth and on a ''here & now'' manner to take quicker, smarter, and well-informed decisions on how and where they should invest their money when they transact on our Digital assets. Such empowerment is fueled by our capabilities to crunch & run real-time analysis on the enormous amount of on-asset & offline data points we have regarding our consumers, their past purchases, and future propensities.
⢠Intelligent, data led digital assets, can learn, and predict user behavior powered by both the real time frameworks and archived analytical frameworks which are operating on an advanced algo network. This helps in e-serving highly personalised and customised experiences to give our millennial, zillennial and legacy investors or partners accurate recommendations,
suggestions, on-the-fly nudges, predictive service and much more as they advance in their journeys.
Implementation of Data Models for cross sell and upsell have been implemented as part of the innovation adoption initiatives. As part of this movement third party model creators have been engaged with enhancing the data models of the organisation. Use cases are created with the support of business to identify patterns and opportunities in the models and campaigns are triggered on the analytics ecosystem to connect with customers and track the efficacy of the models.
We at NAM India also are working on further enhancing our digital assets by bringing in innovation in the payment gateway space especially towards frictionless payments. The current payment gateway ecosystem gives us as Digital innovators a lot of play with respect to designing workflows especially in the UPI space.
FOREIGN EXCHANGE EARNINGS AND OUTGO:
During the year under review, the Company earned foreign exchange equivalent to g 18.09 Crores (Previous Year: g 22.85 Crores). The Company spent foreign exchange equivalent to g 11.25 Crores (Previous Year: g 6.98 Crores).
DIRECTORS'' RESPONSIBILITY STATEMENT
As per the requirements of Sub Section (5) of Section 134 of the Act, the Directors confirm that -
(i) In the preparation of the annual accounts for the financial year ended March 31,2023,the applicable accounting standards have been followed and that there are no material departures;
(ii) The Directors have selected such accounting policies in consultation with the Statutory Auditors'' and have applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2023 and of the profit of the Company for the year under review;
(iii) The Directors have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) The Directors have prepared the annual accounts of the Company on a ''going concern'' basis;
(v) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;
(vi) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
CONTRACT AND ARRANGEMENTS WITH RELATED PARTIES
All contracts/ arrangements/ transactions entered into/ by the Company during the financial year under review with related parties were on an arm''s length basis and in the ordinary course of business. There were no materially significant related party transactions which could have potential conflict with the interest of the Company at large. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.
All Related Party Transactions were placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee was obtained for the transactions which were of a repetitive nature. The transactions entered into pursuant to the omnibus approval so granted were reviewed and statements giving details of all related party transactions were placed before the Audit Committee and the Board of Directors for their review on a quarterly basis. The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website at the following link:
https://mf.nipponindiaim.com/InvestorServices/
Your Directors draw attention of the Members to Note No. 28 to the financial statement which sets out related party disclosures.
PARTICULARS OF FRAUDS REPORTED BY THE AUDITORS''
In terms of Section 143(12) of the Act, M/s. S R Batliboi & Co. LLP, Chartered Accountants, the Statutory Auditors of the Company have not reported any instance of fraud having taken place during the year under review, in their Audit Report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators/ Courts which would impact the going concern status of the Company and its future operations.
DETAILS OF APPLICATION MADE BY THE COMPANY OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONGWITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR
The Company on behalf of the schemes of Nippon India Mutual Fund invests in various debt market instruments (non-convertible debentures) issued by various issuers. In order to realise the debenture outstanding''s, the Company has filed certain applications under the Insolvency and Bankruptcy Code, 2016. The Mutual Fund Division of the Company has filed (a) an IBC proceeding against Avantha Holdings Limited in January 2020 before Hon''ble NCLT New Delhi which is withdrawn as Avantha Holdings Limited has paid its dues. The Company is also a respondent party to an IBC proceeding filed in the matter of Reserve Bank of India v. Dewan Housing Finance Corporation Limited pending before the Hon''ble NCLT, Mumbai.
The Portfolio Management Services Division of the Company has filed: (a) IBC proceedings against Fortuna Buildcon India Private Limited was filed in November 2017 before the Hon''ble NCLT, Bangalore, wherein currently the resolution plan has been submitted to the Hon''ble NCLT for approval (b) three IBC proceedings against three Biodiversity Conservation India Private Limited group companies (BCIL Zed Ria Properties Private Limited, BCIL Red Earth Developers India Pvt. Ltd. and Biodiversity Conservation India Private Limited) were filed in December 2017 before the Hon''ble NCLT, Bangalore. The NCLT has approved resolution plans in BCIL Zed Ria Properties Private Limited and in BCIL Red Earth Developers India Pvt. Ltd., which are currently under implementation while Biodiversity Conservation India Private Limited is currently under liquidation. The Company is also a respondent to 2 (two) appeals in BCIL Red Earth Developers India Private Limited and in 3 (three) appeals in BCIL Zed Ria Properties Private Limited, before Hon''ble NCLAT, Chennai, which have been filed challenging the approved resolution plans; (c) IBC proceedings have been filed against the promoters of Biodiversity Conservation India Private Limited in November 2020 before Hon''ble NCLT, Bangalore which are currently at a pre-admission stage; (d) IBC proceeding filed against Green Valley Shelters Private Limited in December 2019, before Hon''ble NCLT, Chennai, was admitted in August 2021, however the proceedings are currently temporarily stayed under an order of the Supreme Court. The Company is a respondent in a civil appeal filed by the promoters of Green Valley Shelters Private Limited before the Hon''ble Supreme Court, challenging the admission of IBC proceedings against Green Valley Shelters Private Limited, which is currently pending under directions of exploring a settlement; (e) an IBC proceeding filed against the promoters of Green Valley Shelters Private Limited in October 2020 before the
Hon''ble NCLT, Chennai and is at a pre-admission stage; (f) an IBC proceeding was filed against Arkie Atelier Design India Private Limited, being the corporate guarantor for the debentures issued by Green Valley Shelters Private Limited in November 2021 and is currently at a preadmission stage; (g) an IBC proceeding filed against Bharucha & Motivala Infrastructure Private Limited, being corporate guarantor for the debentures issued by Lake District Realty Private Limited, in November 2019 before Hon''ble NCLT, Mumbai was admitted in May 2021, but has been stayed pursuant to an order of the Hon''ble NCLAT in July 2021. The Company is a respondent in the appeal filed by the promoters of Lake District Realty Private Limited before the Hon''ble NCLAT, Delhi, challenging the admission of IBC proceedings against Bharucha & Motivala Infrastructure Private Limited, which is currently reserved for orders; (h) IBC proceedings have been filed against the promoters of Lake District Realty Private Limited in November 2021, which is currently at a pre-admission stage; (i) an IBC proceedings has been filed against Ashapura Options Private Limited, being the corporate guarantor for the debentures issued by Ashapura Housing Private Limited in February 2022 which is at a pre-admission stage. (j) IBC proceedings have also been filed against four (4) promoter guarantors of Ashapura Housing Private Limited, which are at a pre-admission stage.
COST RECORDS
The Company is not required to maintain cost records as specified by the Central Government under subsection (1) of section 148 of the Companies Act, 2013.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
In terms of the provisions of Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules are provided in the Annexure to the Board''s Report. Disclosures relating to the remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended also forms part of this Report. However, having regard to the provisions of Section 136 of the Act, the Annual Report excluding the aforesaid information is being sent to all the Members of the Company and others entitled thereto. Any member interested in obtaining the said information may write to the Company Secretary. Upon such request the information shall be furnished.
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
Your Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of
The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. Following is a summary of sexual harassment complaints received and disposed off during the year:
⢠No. of complaints received: 0
⢠No. of complaints disposed off: 0
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
Pursuant to Regulation 34(2)(f) of Listing Regulations, top 1000 listed entities by market capitalisation have to publish a Business Responsibility and Sustainability Report from FY 2022-23. Business Responsibility and Sustainability Report for the year under review as stipulated under Listing Regulations is presented in the separate section forming part of this Annual Report.
AWARDS AND RECOGNITIONS
Some of the awards & recognitions, which came to NAM India include,
⢠Included in the elite "Kincentric Best Employers Club- 2023" an exclusive and prestigious group of organisations chosen across all industries who have been Best Employers consistently in the last 3-5 years
⢠Awarded Best Employer 2022 Award - 5th time in last 7 years
⢠Won the Outstanding Employee Engagement Award from Ekincare for our Health & Wellbeing initiative (Amongst only 9 Companies recognised in the country)
ACKNOWLEDGEMENTS
Your Directors wish to place on record their sincere appreciation for the co-operation received from various regulatory and governmental authorities including SEBI, RBI, Registrar of Companies, Maharashtra at Mumbai, PFRDA, NPS Trust, EPFO, CMPFO, Stock Exchanges, Depositories, Custodians, Bankers, Registrar, Shareholders, Investors and all other business constituents during the year under review. We believe all of them have contributed to our continued growth.
Your Directors also wish to place on record their deep appreciation for the total commitment displayed by all the executives, officers and staff, resulting in yet another eventful performance for the year.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS OF NIPPON LIFE INDIA ASSET MANAGEMENT LIMITED
Ashvin Dhirajlal Parekh Sundeep Sikka
Director Executive Director & CEO
(DIN: 06559989) (DIN: 02553654)
Place : Mumbai Dated : April 25, 2023
Mar 31, 2023
Your Directors take pleasure in presenting their 28th Annual Report on the business and operations of your Company, together with the audited financial statements, for the year ended March 31, 2023.
Your Company endeavors to remain one of the leading players in the Asset Management business in India and keeps exploring opportunities for enhancing its global footprint as well.
Your Company is a subsidiary Company of Nippon Life Insurance Company ("NLI"). NLI is a, fortune 500 Company and one of the largest life insurers in the world managing assets of over USD 700 billion. It has a large global network with presence across US, Europe, Asia, and Australia along with a 130-year track record in Life Insurance business as well as global investments across Asset Management companies. This pedigree brings strong synergistic benefits that very well complements your Company''s domestic expertise in the Asse Management business and provides a thrust to its significant growth potential. Your Company expects substantial upside in terms of increased AUM & adoption of best governance & risk management practices based on NLI''s global positioning & relationships.
FINANCIAL PERFORMANCE AND STATE OF COMPANY''S AFFAIRS
The standalone and consolidated financial statements of the Company for the financial year ended March 31, 2023, have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act. The financial highlights (on a consolidated and standalone basis) of the Company for the year ended March 31, 2023, are as follows:
Crores) |
||||
Consolidated |
Standalone |
|||
Particulars |
Year ended March 31, 2023 |
Year ended March 31, 2022 |
Year ended March 31, 2023 |
Year ended March 31, 2022 |
Gross Income |
1516.61 |
1535.63 |
1431.18 |
1428.42 |
Profit before exceptional item and tax |
927.74 |
988.67 |
917.77 |
945.43 |
Exceptional Items |
- |
- |
- |
- |
Profit Before tax |
927.74 |
988.67 |
917.77 |
945.43 |
Current Tax |
212.14 |
206.66 |
212.53 |
200.38 |
Deferred Tax |
(7.33) |
38.64 |
(9.70) |
33.84 |
Profit for the year |
722.93 |
743.37 |
714.94 |
711.21 |
Share of Profit from Associates |
0.40 |
0.79 |
- |
- |
Profit attributable to non-controlling interest |
- |
- |
- |
- |
Other Comprehensive Income |
(186) |
(0.30) |
(185) |
(0.27) |
Balance carried to Balance Sheet |
721.47 |
743.86 |
713.09 |
710.94 |
Basic EPS of S 10 each |
11.61 |
12.00 |
11.48 |
11.47 |
Diluted EPS of S 10 each |
11.53 |
11.80 |
11.40 |
11.28 |
The Consolidated Financial Statements of the Company form part of this Annual Report.
The annual accounts of all the subsidiary companies will be placed on the website of the Company. OPERATION HIGHLIGHTS
As you are aware that your Company acts as the asset manager to Nippon India Mutual Fund ("NIMF"), which is one of the largest Mutual Fund in India, in terms of the Quarterly Average Assets under Management (QAAUM) as on March 31, 2023.
The QAAUM of NIMF as on March 31, 2023, was t 2,93,159 Crores comprising of t 1,30,087 Crores of Equity, t 54,068 Crores of Debt, t 38,979 Crores of Liquid Funds and t 70,024 Crores of ETF assets. It may be noted that the QAAUM of NIMF as on March 31, 2022 was t 2,83,261 Crores comprising of t 1,19,062 Crores of Equity, t 73,173 Crores of Debt, t 35,230 Crores of Liquid Funds and t 55,796 Crores of ETF assets.
Overall QAAUM of NIMF has increased by 3.39% during the financial year 2022-23, while the Indian Mutual Fund Industry witnessed an overall growth of 5.55% in terms of QAAUM (Source: AMFI).
New Schemes Launched:
During the year under review, Nippon India Mutual Fund launched the following new schemes:
Scheme Name |
Type |
Structure |
Nippon India Nifty Alpha Low Volatility 30 Index Fund |
OPEN |
An open-ended scheme replicating/tracking Nifty Alpha Low Volatility 30 Index |
Nippon India Fixed Horizon Fund - XLIV - Series 1 |
CLOSE |
A Close Ended Scheme. Relatively High interest rate risk and moderate Credit Risk |
Nippon India Nifty AAA PSU Bond Plus SDL - Sep 2026 Maturity 50:50 Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty AAA PSU Bond Plus SDL Sep 2026 50:50 Index. A Relatively High interest rate risk and Relatively Low Credit Risk. |
Nippon India Nifty SDL Plus G-Sec -Jun 2028 Maturity 70:30 Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty SDL Plus G-Sec Jun 2028 70:30 Index. A Relatively High interest rate risk and Relatively Low Credit Risk. |
Nippon India Fixed Horizon Fund XLIV -Series 4 |
CLOSE |
A Close Ended Scheme. Relatively High interest rate risk and moderate Credit Risk |
Nippon India Fixed Horizon Fund - XLIV - Series 2 |
CLOSE |
A Close Ended Scheme. Relatively Low interest rate risk and moderate Credit Risk |
Nippon India Nifty G-Sec Sep 2027 Maturity Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty G-Sec Sep 2027 Index. A Relatively High Interest rate risk and Relatively Low Credit Risk. |
Nippon India Nifty G-Sec Jun 2036 Maturity Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty G-Sec Jun 2036 Index. A Relatively High Interest rate risk and Relatively Low Credit Risk. |
Nippon India Nifty SDL Plus G-Sec -Jun 2029 Maturity 70:30 Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty SDL Plus G-Sec Jun 2029 70:30 Index. A Relatively High interest rate risk and Relatively Low Credit Risk |
Nippon India Nifty G-Sec Oct 2028 Maturity Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty G-Sec Oct 2028 Index. A Relatively High interest rate risk and Relatively Low Credit Risk |
Nippon India Fixed Horizon Fund XLV -Series 4 |
CLOSE |
A Close Ended Scheme. Relatively High interest rate risk and Relatively Low Credit Risk |
Nippon India Fixed Horizon Fund XLV -Series 5 |
CLOSE |
A Close Ended Scheme. Relatively High interest rate risk and Relatively High Credit Risk |
As on March 31, 2023, NIMF has a well-rounded portfolio of 98 schemes under various categories such as Equity, Debt, Hybrid, Exchange Traded Funds, Index Funds, Fixed Maturity Plans, and Interval Funds.
DETAILS OF MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments affecting the financial position of the Company since the date of the financial statements i.e, March 31, 2023.
DIVIDEND
During the year, the Company had declared and paid an interim dividend of t 4.00 per equity share (40%) amounting to t 249.23 Crores. The Board has also recommended a final dividend of t 7.50 per Equity Share (75%) of t 10/- each for the financial year ended March 31, 2023, for the approval of the
Shareholders at the ensuing Annual General meeting. With this the total dividend for the financial year 2022-23 would be approximately t 716 Crores, including the interim dividend of t 4.00 per equity share distributed in November 2022. The Final dividend, if declared, will be paid after the Annual General Meeting.
The dividend pay-out is in accordance with the Company''s Dividend Distribution Policy which forms part of this Annual Report.
AMOUNT TO BE CARRIED TO RESERVES
Your Directors do not propose any amount to be transferred to the General Reserves of the Company.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report for the year under review as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) is presented in a separate section forming part of this Annual Report.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENT
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act are given in the notes to the Financial Statements.
There is no difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions.
DEPOSITS
The Company has neither accepted nor renewed any fixed deposits during the year. There are no outstanding or unclaimed deposits, unclaimed / unpaid interest, refunds due to the deposit holders or to be deposited to the Investor Education and Protection Fund as on March 31, 2023.
EMPLOYEES STOCK OPTION SCHEME
With the perspective of promoting the culture of employee ownership and to attract, retain, motivate and incentivise senior as well as critical talent, the Company has formulated Nippon Life India Asset Management Limited - Employee Stock Option Plan 2017 ("NAM INDIA ESOP 2017") [formerly known as "Reliance Nippon Life Asset Management Limited -Employee Stock Option Plan 2017"] ("ESOP 2017" / "Plan") as its stock option scheme, which was launched in August 2017 and Nippon Life India Asset Management Limited - Employee Stock Option Plan 2019 ("NAM INDIA ESOP 2019") [formerly known as "Reliance Nippon Life Asset Management Limited - Employee Stock Option Plan 2019"] ("ESOP 2019" / "Plan") as its stock option scheme, which was launched in July 2019. The Nomination and Remuneration Committee of the Board monitors and administers these Plans and from time - to - time grants stock options to the employees.
Both ESOP 2017 as well as ESOP 2019 are in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (SEBI Regulations).
However, having regard to the provisions of first provision to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to all the Members of the Company and others entitled thereto. The certificate from the Statutory Auditors of the Company confirming the compliance
of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 with respect to the Company''s Employees Stock Option Scheme Plans will be available for inspection through electronic mode. Any member interested in obtaining the same may write to the Company Secretary and the same will be furnished on request. The details as required to be disclosed under SEBI Regulations are available on the Company''s website at https:// mf.nipponindiaim.com/investor-service/customer-service/nam-india-shareholders-investors
CAPITAL STRUCTURE
During the Financial year 2022-23, the Company issued and allotted 11,57,515 Equity Shares to eligible employees on exercise of options granted under the Employee Stock Option Plans of the Company. Hence, the issued, subscribed and paid-up capital of the Company was 62,31,75,443 Equity Shares of g 10 each at the end of the Financial Year.
The Equity History of the Company has been provided in the Corporate Governance Report.
COMPLIANCE CULTURE & RISK MANAGEMENT
Your Company maintains a strong focus on Compliance and Risk Management as these are essential elements for its long-term success. The compliance and risk functions are managed by a dedicated and experienced team of professionals. The management has a zero tolerance towards risk and compliance failures or breaches.
There exists a comprehensive Compliance Manual, which is reviewed by your Board of Directors from time to time and it facilitates the Company''s Compliance team to monitor various compliance requirements effectively & comprehensively. The Compliance team conducts periodical educative & training programmes on various regulatory compliances matters for various sections of employees.
Your Company also has a comprehensive Risk Management Policy that envisages a structured and consistent enterprise-wide risk management framework, based on the three lines of defense model, to ensure that risk management processes are consistently applied across the organisation and provide reasonable assurance regarding achievement of organisation''s objectives.
The risk management policy clearly sets out the objectives & elements of risk management within the organisation, including the constitution of an independent Risk Management department headed by Chief Risk Officer (reporting directly to the CEO and to the Board of Directors), Risk Management Committee at executive and Board levels. The policy
also define the roles and responsibility of all the CXOs towards risk management as part of first line of defense model.
Your Company promotes risk awareness culture throughout the organisation and risk management is an integral part of decision making and day-today operations of all activities at all levels across the organisation. There are well documented & Board approved policies & processes to address and mitigate various risks to which the Company is exposed. The Company also has a robust business continuity plan which is tested on a periodic basis to ensure uninterrupted operations. The risk department conducts various training programmes on various facets of risk management including cyber risk awareness, conduct risk, operational risk, Anti Money Laundering, etc.
The Company has a structured risk reporting mechanism to ensure risks are monitored and reviewed by CRO, Senior Management, RMCBs and Board on a periodic basis.
INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY
The Company has an Internal Control System which is commensurate with the size, scale and complexity of its business operations.
For effective risk management and control, the Company has established structures and responsibilities in line with the "Three Lines of Defense" model, where 1st line being business operations, 2nd line is the oversight functions like Risk Management and Compliance and 3rd line is Internal Audit. To maintain its objectivity and independence, the Internal Audit department reports to the Audit Committee. The Internal Audit department monitors and evaluates the efficacy and adequacy of the internal control system in the Company, its compliance with operating systems, accounting procedures and policies. Based on the report of the Internal Auditor, process owners undertake corrective action in their respective areas and thereby strengthen the controls. The Internal Audit department follows up on pending audit issues and ensures that corrective actions have been taken. Significant audit observations, if any, and corrective actions thereon, are presented to the Audit Committee of the Board.
CORPORATE GOVERNANCE
Your Directors wish to reiterate your Company''s commitment to the highest standards of corporate governance to enhance trust of all its stakeholders. Strong & robust corporate governance practices have facilitated your Company in standing up to the continued scrutiny of domestic & international investors and that of various Regulatory authorities.
The report on Corporate Governance as stipulated under Regulation 34(3) read with Para C of Schedule V of the Listing Regulations is presented in a separate section forming part of this Annual Report.
A Certificate from the auditors of the Company i.e. M/s. S. R. Batliboi & Co. LLP, Chartered Accountants conforming compliance to the conditions of Corporate Governance as stipulated under Para E of Schedule V of the Listing Regulations, is enclosed to this Report.
VIGIL MECHANISM
In accordance with Section 177 of the Act and the Listing Regulations, the Company has formulated a Vigil Mechanism to address the genuine concerns, if any. The Whistle Blower policy can be accessed on the Company''s website. It is affirmed that no person has been denied access to the Chairperson of the Audit Committee.
CORPORATE SOCIAL RESPONSIBILITY
As part of its initiatives under "Corporate Social Responsibility (CSR)", the Company has undertaken projects in the areas of promoting healthcare, education and rural development in accordance with Schedule VII of the Act.
The Annual Report on CSR activities is annexed herewith as Annexure A.
SUBSIDIARIES & ASSOCIATE COMPANY
As of March 31, 2023, your Company had two (2) subsidiaries. One of such subsidiaries is overseas i.e., one subsidiary in Singapore and one subsidiary in India. Both the subsidiaries of the Company are engaged in financial services and related activities. In addition, the Company also has an Associate company in India, which has already surrendered its business license/ regulatory approval to act as a Pension Fund Manager. This particular company currently has no business operations, and it is therefore proposed to be wound up, in accordance with the applicable laws.
During the year our subsidiary company, Nippon Life India Asset Management (Mauritius) Limited, has been voluntarily wound up.
A statement w.r.t. the performance and the financial position of the subsidiaries of the Company forms a part of the Consolidated Financial Statements of the Company.
The performance of the financial position of the subsidiary companies is presented in the Management Discussions and Analysis Report forming part of this Annual Report. The policy for determining material subsidiary companies may be accessed on the
Company''s website at https://mf.nipponindiaim.com/ InvestorServices/Pages/lnvestor-Policies.aspx
Further, The International Financial Services Centres Authority (IFSCA) has granted NAM India (IFSC Branch) the certificate of registration to carry out the activities as a Fund Management Entity (Non-Retail) under the IFSCA (Fund Management) Regulations, 2022 on March 1, 2023.
KEY MANAGERIAL PERSONNEL
During the year under review, the following employees were the ''Key Managerial Personnel'' of the Company:
a) Mr. Sundeep Sikka - Executive Director & Chief Executive Officer;
b) Mr. Ajay Patel - Manager;
c) Mr. Prateek Jain - Chief Financial Officer; and
d) Ms. Nilufer Shekhawat - Company Secretary
DIRECTORS
During the year, Mr. Kazuyuki Saigo who was a Director as on March 31, 2022, resigned from the directorship of the Company w.e.f. April 21, 2022. Mr. Tomohiro Yao and Mr. Minoru Kimura were first appointed as Additional Directors of the Company w.e.f. April 21, 2022. Mr. Tomohiro Yao and Mr. Minoru Kimura were then appointed as Non-Executive Nominee Director w.e.f. July 12, 2022.
As on the date of this Boards Report, Mr. Hiroki Yamauchi was appointed as an additional Director (Non-Executive Nominee Director) in place of Mr. Akira Shibata. Mr. Upendra Kumar Sinha was appointed as an additional Director (Non-Executive Independent Director) and Chairman of the Board to be effective May 1, 2023. Both these appointments are subject to approval of the Shareholders at the ensuing Annual General Meeting.
All the Independent Directors of your Company i.e., General Ved Prakash Malik (Retd.), Ms. Ameeta Chatterjee, Mr. Ashvin Parekh and Mr. B. Sriram have already furnished the required declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act.
In the opinion of the Board, the Independent Directors possess the requisite expertise and experience and are people of high integrity and repute. They fulfil the conditions specified in the Act and the Rules made thereunder and are independent of the management.
In terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by The
Indian Institute of Corporate Affairs, Manesar (''IICA''). The Independent Directors are also required to undertake online proficiency self-assessment test conducted by the IICA within a period of two years from the date of inclusion of their names in the data bank, unless they meet the criteria specified for exemption. All the Independent Directors of the Company are exempt from the requirement to undertake online proficiency self assessment test.
PERFORMANCE EVALUATION OF DIRECTORS, BOARD AND COMMITTEES
The Company has devised a policy for the performance evaluation of the individual directors, Board and its Committees, which also includes the criteria for carrying out the said performance evaluation. Pursuant to the provisions of the Act and Regulation 17(10) of Listing Regulations and as prescribed in the stated policy of the Board, the Board has carried out an annual performance evaluation of (i) the Directors (Independent and non-independent); (ii) itself (as a whole); (iii) its committees and (iv) fulfillment of Independence criteria. The Board performance was evaluated based on input received from the Board Members after considering criteria such as Board composition and structure, effectiveness of Board / Committee processes, and information provided to the Board, etc. In terms of the requirements of the Act, a separate meeting of the Independent Directors was also held during the year.
BOARD AND COMMITTEE MEETINGS
During the year under review, eight (8) Board meetings were held.
Your Directors wish to inform that the functioning of the Board is supplemented by various committees (Board sub-committees and management committees), which have been constituted from time to time, such as Audit Committee, Committee of Directors, CSR Committee, Stakeholders Relationship Committee, Nomination & Remuneration Committee, Risk Management Committee of the Board, Valuation Committee, Investment Committee, Risk Management Committee, Allotment Committee, Broker Empanelment Committee, Operating Committee, Compliance Committee, Stewardship Committee, Proxy Voting Committee, Information Security Risk Management Committee, etc. to name a few. Each of the aforesaid Committees has been constituted in order to ensure due compliance with the applicable laws and to ensure that the highest levels of corporate governance are followed and practiced. The minutes of the meetings of each of these Committees are duly placed before the Board for noting and confirmation.
AUDIT COMMITTEE
In terms of the requirements of Section 177 of the Act, the Audit Committee of the Company consists of the majority of Independent Directors. As on date of this report, it comprises Mr. Ashvin Parekh [Independent Director], Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. B. Sriram [Independent Director], Mr. Hiroki Yamauchi [Non- Independent Director] and Mr. Minoru Kimura [Non- Independent Director]. Mr. Ashvin Parekh acts as the Chairperson of this Committee.
During the year, eight (8) meetings of the Audit Committee were held, which includes 1 joint Audit Committee between the Audit Committee of the Asset Management Company (''AMC'') with the Audit Committee of the Trustees and one (1) meeting to interact with the Statutory and Internal Auditors of the Mutual Fund without the engagement of management of the AMC as stipulated in SEBI Circular No. SEBI/HO/IMD/IMD-IDOF2/P/CIR/2022/17 dated February 09, 2022.
Other relevant details in this regard have been provided in the Corporate Governance Report.
NOMINATION & REMUNERATION COMMITTEE
In terms of the requirements of Section 178 of the Act, the Nomination & Remuneration Committee of the Company consists of the majority of Independent Directors. As on date of this report, it comprises, Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Tomohiro Yao [Non-Independent Director] and Mr. Minoru Kimura [Non-Independent Director]. General Ved Prakash Malik (Retd.) acts as the Chairperson of this Committee.
During the year, three (3) meetings of the Nomination & Remuneration Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
The Nomination & Remuneration Policy has been provided as Annexure B to the Board''s Report.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
In terms of the requirements of Section 135 of the Act, the Corporate Social Responsibility ("CSR") Committee of the Company consists of eight (8) Members. As on date of this report, it comprises Mr. Tomohiro Yao [Non-Independent Director], Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Sundeep Sikka [CEO & Executive
Director], Mr. Hiroki Yamauchi [Non-Independent Director] and Mr. Minoru Kimura [Non-Independent Director]. Mr. Tomohiro Yao acts as the Chairperson of this Committee.
During the year 2022-23, two (2) meetings of the CSR Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
STAKEHOLDERS'' RELATIONSHIP COMMITTEE
In terms of the requirements of Section 178 of the Act, the Stakeholders'' Relationship Committee of the Company consists of five Members. As on date of this report, it comprises Ms. Ameeta Chatterjee [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Tomohiro Yao [Non-Independent Director] and Mr. Sundeep Sikka [CEO & Executive Director]. Ms. Ameeta Chatterjee acts as the Chairperson of this Committee.
During the year, two (2) meetings of the Stakeholders'' Relationship Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
RISK MANAGEMENT COMMITTEE
In terms of the relevant requirements under the Listing Regulations, the Company has constituted a Risk Management Committee of the Board. The Committee presently comprises of Mr. Tomohiro Yao [Non-Independent Director], Mr. Hiroki Yamauchi [Non-Independent Director], Mr. Sundeep Sikka [CEO & Executive Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director] and Mr. Rishi Garg [Chief Risk Officer] as its Members. Mr. Tomohiro Yao acts as the Chairperson of this Committee.
During the year, five (5) meetings of the Risk Management Committee of the Board were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
AUDITORS'' OF THE COMPANY - STATUTORY AND INTERNAL
Statutory Auditors:
M/s. S. R. Batliboi & Co. LLP, Chartered Accountants shall hold office as Statutory Auditors of the Company until the conclusion of this 28th Annual General Meeting.
The Company has already received a consent letter from M/s. S. R. Batliboi & Co. LLP, Chartered Accountants communicating their willingness to be re-appointed as the Statutory Auditors of the Company and that their re-appointment, if made, would be within
the limits as prescribed under Section 139 of the Companies Act, 2013.
Your Directors hereby recommends the reappointment of M/s. S. R. Batliboi & Co. LLP, Chartered Accountants as the Statutory Auditors of the Company for a second term of 5 (five) consecutive years, to hold office from the conclusion of this Annual General Meeting until the conclusion of the 33rd Annual General Meeting of the Company.
Internal Auditors:
JHS & Associates LLP, Chartered Accountants (JHS) were appointed as the Internal Auditors of your Company for the financial year 2022-23. Having regard to their longevity in office and as a matter of good governance, your Directors have approved the rotation of JHS and appointed PricewaterhouseCoopers Services LLP (PWC) as the Internal Auditors of your Company for the financial year 2023-24.
Your Directors wish to place on record the contributions made by JHS during their tenure as Internal Auditors of your Company.
AUDITORS OF THE SCHEMES OF NIPPON INDIA MUTUAL FUND-STATUTORY AND INTERNAL
In accordance with the applicable provisions of law, the Company has appointed Statutory and Internal Auditors for various Schemes of Nippon India Mutual Fund, who periodically submit their reports, which are placed before the Audit Committee for discussion, review and implementation of their recommendations.
Statutory Auditors:
M/s. Walker Chandiok & Co. LLP, Chartered Accountants were appointed as Statutory Auditors of the Schemes of Nippon India Mutual Fund for the financial year 2022-23.
Internal Auditors:
M/s. Deloitte Haskins & Sells LLP, Chartered Accountants (Deloitte) were appointed as Internal Auditors of the Schemes of Nippon India Mutual Fund and the Portfolio Management Services division of the Company, for the financial year 2022-23. Having regard to their longevity in office and as a matter of good governance, your Directors have approved the rotation of Deloitte and appointed PricewaterhouseCoopers Services LLP (PWC) as the Internal Auditors of the Schemes of Nippon India Mutual Fund and the Portfolio Management Services division of the Company for the financial year 2023-24.
Your Directors wish to place on record the contributions made by Deloitte during their tenure as Internal
Auditors of the Schemes of Nippon India Mutual Fund and the Portfolio Management Services division of the Company.
AUDITORS'' REPORT
The observations and comments given by the Statutory Auditors in their report read together with notes on financial statements are self-explanatory and hence does not require any further comments in terms of Section 134 of the Act.
SECRETARIAL STANDARDS
During the year under review, the Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Directors had appointed M/s. M. Siroya and Company, Mumbai, a firm of Company Secretaries in-practice to undertake the Secretarial Audit of the Company for the financial year 2022-23. In this regard, the Report submitted by the Secretarial Auditor is annexed as Annexure C.
Your Directors are pleased to inform you that the report from the Secretarial Auditors does not contain any qualifications or negative remarks.
ANNUAL RETURN
Pursuant to Section 134(3)(a) and Section 92(3) of the Act read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company has been placed on the website of the Company and can be accessed at https://mf.nipponindiaim.com/AboutUs/ FinancialReports/Pages/Annual-Return.aspx .
PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
CONSERVATION OF ENERGY:
The operations of the Company do not consume high levels of energy. Adequate measures have been taken to conserve energy wherever feasible. Your Company uses the latest technology and energy - efficient equipment''s. Your Company only uses LED lights and 5-star air-conditioning for majority of offices. As energy cost forms a very small part of the total costs, the impact on cost is not material.
TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION:
Business Easy Revamp - Business Easy 2.0 app, our Digital asset for our distributors, is an all-
encompassing solution that acts as a complete Customer Relationship Management tool. The app works as a Digital branch through which distributors can manage their Mutual Fund business virtually. With the objective of evolving the app from a business facilitator to a growth enabler, this year saw the addition of new enhancements and features to the app. A number of features such as Intern Distributor addition, quick investment module were added along with meaningful reports for distributors to maximise the usage of the App.
Investor App and Website Enhancement - Our
flagship assets, namely the InvestEasy App and the InvestEasy website are constantly upgraded to include enhancements and innovations. These include workflow enhancements such as Cart Buying where users can purchase more than one product at a time. A number of regulatory compliance requirements have been added in the year as well.
Process Automation across Organisation - As part of the automation initiative a number of processes have been automated across operations, finance, risk and technology. This has freed up resources to be redeployed elsewhere.
Implementation of cloud initiatives - Continuing on NAM India''s cloud journey a number of initiatives on cloud where the infrastructure for initiatives such as Data Lake, Analytics, new core applications have been implemented on the AWS cloud.
RESEARCH AND DEVELOPMENT DIGITAL ADOPTION AND INNOVATION:
Nippon India Mutual Fund, continue to envision and execute key Digital transformation endeavors year on year that are aimed to strengthen our already robust Digital ecosystem.
⢠Focus always remains on empowering our investors during moments of truth and on a ''here & now'' manner to take quicker, smarter, and well-informed decisions on how and where they should invest their money when they transact on our Digital assets. Such empowerment is fueled by our capabilities to crunch & run real-time analysis on the enormous amount of on-asset & offline data points we have regarding our consumers, their past purchases, and future propensities.
⢠Intelligent, data led digital assets, can learn, and predict user behavior powered by both the real time frameworks and archived analytical frameworks which are operating on an advanced algo network. This helps in e-serving highly personalised and customised experiences to give our millennial, zillennial and legacy investors or partners accurate recommendations,
suggestions, on-the-fly nudges, predictive service and much more as they advance in their journeys.
Implementation of Data Models for cross sell and upsell have been implemented as part of the innovation adoption initiatives. As part of this movement third party model creators have been engaged with enhancing the data models of the organisation. Use cases are created with the support of business to identify patterns and opportunities in the models and campaigns are triggered on the analytics ecosystem to connect with customers and track the efficacy of the models.
We at NAM India also are working on further enhancing our digital assets by bringing in innovation in the payment gateway space especially towards frictionless payments. The current payment gateway ecosystem gives us as Digital innovators a lot of play with respect to designing workflows especially in the UPI space.
FOREIGN EXCHANGE EARNINGS AND OUTGO:
During the year under review, the Company earned foreign exchange equivalent to g 18.09 Crores (Previous Year: g 22.85 Crores). The Company spent foreign exchange equivalent to g 11.25 Crores (Previous Year: g 6.98 Crores).
DIRECTORS'' RESPONSIBILITY STATEMENT
As per the requirements of Sub Section (5) of Section 134 of the Act, the Directors confirm that -
(i) In the preparation of the annual accounts for the financial year ended March 31,2023,the applicable accounting standards have been followed and that there are no material departures;
(ii) The Directors have selected such accounting policies in consultation with the Statutory Auditors'' and have applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2023 and of the profit of the Company for the year under review;
(iii) The Directors have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) The Directors have prepared the annual accounts of the Company on a ''going concern'' basis;
(v) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;
(vi) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
CONTRACT AND ARRANGEMENTS WITH RELATED PARTIES
All contracts/ arrangements/ transactions entered into/ by the Company during the financial year under review with related parties were on an arm''s length basis and in the ordinary course of business. There were no materially significant related party transactions which could have potential conflict with the interest of the Company at large. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.
All Related Party Transactions were placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee was obtained for the transactions which were of a repetitive nature. The transactions entered into pursuant to the omnibus approval so granted were reviewed and statements giving details of all related party transactions were placed before the Audit Committee and the Board of Directors for their review on a quarterly basis. The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website at the following link:
https://mf.nipponindiaim.com/InvestorServices/
Your Directors draw attention of the Members to Note No. 28 to the financial statement which sets out related party disclosures.
PARTICULARS OF FRAUDS REPORTED BY THE AUDITORS''
In terms of Section 143(12) of the Act, M/s. S R Batliboi & Co. LLP, Chartered Accountants, the Statutory Auditors of the Company have not reported any instance of fraud having taken place during the year under review, in their Audit Report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators/ Courts which would impact the going concern status of the Company and its future operations.
DETAILS OF APPLICATION MADE BY THE COMPANY OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONGWITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR
The Company on behalf of the schemes of Nippon India Mutual Fund invests in various debt market instruments (non-convertible debentures) issued by various issuers. In order to realise the debenture outstanding''s, the Company has filed certain applications under the Insolvency and Bankruptcy Code, 2016. The Mutual Fund Division of the Company has filed (a) an IBC proceeding against Avantha Holdings Limited in January 2020 before Hon''ble NCLT New Delhi which is withdrawn as Avantha Holdings Limited has paid its dues. The Company is also a respondent party to an IBC proceeding filed in the matter of Reserve Bank of India v. Dewan Housing Finance Corporation Limited pending before the Hon''ble NCLT, Mumbai.
The Portfolio Management Services Division of the Company has filed: (a) IBC proceedings against Fortuna Buildcon India Private Limited was filed in November 2017 before the Hon''ble NCLT, Bangalore, wherein currently the resolution plan has been submitted to the Hon''ble NCLT for approval (b) three IBC proceedings against three Biodiversity Conservation India Private Limited group companies (BCIL Zed Ria Properties Private Limited, BCIL Red Earth Developers India Pvt. Ltd. and Biodiversity Conservation India Private Limited) were filed in December 2017 before the Hon''ble NCLT, Bangalore. The NCLT has approved resolution plans in BCIL Zed Ria Properties Private Limited and in BCIL Red Earth Developers India Pvt. Ltd., which are currently under implementation while Biodiversity Conservation India Private Limited is currently under liquidation. The Company is also a respondent to 2 (two) appeals in BCIL Red Earth Developers India Private Limited and in 3 (three) appeals in BCIL Zed Ria Properties Private Limited, before Hon''ble NCLAT, Chennai, which have been filed challenging the approved resolution plans; (c) IBC proceedings have been filed against the promoters of Biodiversity Conservation India Private Limited in November 2020 before Hon''ble NCLT, Bangalore which are currently at a pre-admission stage; (d) IBC proceeding filed against Green Valley Shelters Private Limited in December 2019, before Hon''ble NCLT, Chennai, was admitted in August 2021, however the proceedings are currently temporarily stayed under an order of the Supreme Court. The Company is a respondent in a civil appeal filed by the promoters of Green Valley Shelters Private Limited before the Hon''ble Supreme Court, challenging the admission of IBC proceedings against Green Valley Shelters Private Limited, which is currently pending under directions of exploring a settlement; (e) an IBC proceeding filed against the promoters of Green Valley Shelters Private Limited in October 2020 before the
Hon''ble NCLT, Chennai and is at a pre-admission stage; (f) an IBC proceeding was filed against Arkie Atelier Design India Private Limited, being the corporate guarantor for the debentures issued by Green Valley Shelters Private Limited in November 2021 and is currently at a preadmission stage; (g) an IBC proceeding filed against Bharucha & Motivala Infrastructure Private Limited, being corporate guarantor for the debentures issued by Lake District Realty Private Limited, in November 2019 before Hon''ble NCLT, Mumbai was admitted in May 2021, but has been stayed pursuant to an order of the Hon''ble NCLAT in July 2021. The Company is a respondent in the appeal filed by the promoters of Lake District Realty Private Limited before the Hon''ble NCLAT, Delhi, challenging the admission of IBC proceedings against Bharucha & Motivala Infrastructure Private Limited, which is currently reserved for orders; (h) IBC proceedings have been filed against the promoters of Lake District Realty Private Limited in November 2021, which is currently at a pre-admission stage; (i) an IBC proceedings has been filed against Ashapura Options Private Limited, being the corporate guarantor for the debentures issued by Ashapura Housing Private Limited in February 2022 which is at a pre-admission stage. (j) IBC proceedings have also been filed against four (4) promoter guarantors of Ashapura Housing Private Limited, which are at a pre-admission stage.
COST RECORDS
The Company is not required to maintain cost records as specified by the Central Government under subsection (1) of section 148 of the Companies Act, 2013.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
In terms of the provisions of Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules are provided in the Annexure to the Board''s Report. Disclosures relating to the remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended also forms part of this Report. However, having regard to the provisions of Section 136 of the Act, the Annual Report excluding the aforesaid information is being sent to all the Members of the Company and others entitled thereto. Any member interested in obtaining the said information may write to the Company Secretary. Upon such request the information shall be furnished.
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
Your Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of
The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. Following is a summary of sexual harassment complaints received and disposed off during the year:
⢠No. of complaints received: 0
⢠No. of complaints disposed off: 0
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
Pursuant to Regulation 34(2)(f) of Listing Regulations, top 1000 listed entities by market capitalisation have to publish a Business Responsibility and Sustainability Report from FY 2022-23. Business Responsibility and Sustainability Report for the year under review as stipulated under Listing Regulations is presented in the separate section forming part of this Annual Report.
AWARDS AND RECOGNITIONS
Some of the awards & recognitions, which came to NAM India include,
⢠Included in the elite "Kincentric Best Employers Club- 2023" an exclusive and prestigious group of organisations chosen across all industries who have been Best Employers consistently in the last 3-5 years
⢠Awarded Best Employer 2022 Award - 5th time in last 7 years
⢠Won the Outstanding Employee Engagement Award from Ekincare for our Health & Wellbeing initiative (Amongst only 9 Companies recognised in the country)
ACKNOWLEDGEMENTS
Your Directors wish to place on record their sincere appreciation for the co-operation received from various regulatory and governmental authorities including SEBI, RBI, Registrar of Companies, Maharashtra at Mumbai, PFRDA, NPS Trust, EPFO, CMPFO, Stock Exchanges, Depositories, Custodians, Bankers, Registrar, Shareholders, Investors and all other business constituents during the year under review. We believe all of them have contributed to our continued growth.
Your Directors also wish to place on record their deep appreciation for the total commitment displayed by all the executives, officers and staff, resulting in yet another eventful performance for the year.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS OF NIPPON LIFE INDIA ASSET MANAGEMENT LIMITED
Ashvin Dhirajlal Parekh Sundeep Sikka
Director Executive Director & CEO
(DIN: 06559989) (DIN: 02553654)
Place : Mumbai Dated : April 25, 2023
Mar 31, 2023
Your Directors take pleasure in presenting their 28th Annual Report on the business and operations of your Company, together with the audited financial statements, for the year ended March 31, 2023.
Your Company endeavors to remain one of the leading players in the Asset Management business in India and keeps exploring opportunities for enhancing its global footprint as well.
Your Company is a subsidiary Company of Nippon Life Insurance Company ("NLI"). NLI is a, fortune 500 Company and one of the largest life insurers in the world managing assets of over USD 700 billion. It has a large global network with presence across US, Europe, Asia, and Australia along with a 130-year track record in Life Insurance business as well as global investments across Asset Management companies. This pedigree brings strong synergistic benefits that very well complements your Company''s domestic expertise in the Asse Management business and provides a thrust to its significant growth potential. Your Company expects substantial upside in terms of increased AUM & adoption of best governance & risk management practices based on NLI''s global positioning & relationships.
FINANCIAL PERFORMANCE AND STATE OF COMPANY''S AFFAIRS
The standalone and consolidated financial statements of the Company for the financial year ended March 31, 2023, have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act. The financial highlights (on a consolidated and standalone basis) of the Company for the year ended March 31, 2023, are as follows:
Crores) |
||||
Consolidated |
Standalone |
|||
Particulars |
Year ended March 31, 2023 |
Year ended March 31, 2022 |
Year ended March 31, 2023 |
Year ended March 31, 2022 |
Gross Income |
1516.61 |
1535.63 |
1431.18 |
1428.42 |
Profit before exceptional item and tax |
927.74 |
988.67 |
917.77 |
945.43 |
Exceptional Items |
- |
- |
- |
- |
Profit Before tax |
927.74 |
988.67 |
917.77 |
945.43 |
Current Tax |
212.14 |
206.66 |
212.53 |
200.38 |
Deferred Tax |
(7.33) |
38.64 |
(9.70) |
33.84 |
Profit for the year |
722.93 |
743.37 |
714.94 |
711.21 |
Share of Profit from Associates |
0.40 |
0.79 |
- |
- |
Profit attributable to non-controlling interest |
- |
- |
- |
- |
Other Comprehensive Income |
(186) |
(0.30) |
(185) |
(0.27) |
Balance carried to Balance Sheet |
721.47 |
743.86 |
713.09 |
710.94 |
Basic EPS of S 10 each |
11.61 |
12.00 |
11.48 |
11.47 |
Diluted EPS of S 10 each |
11.53 |
11.80 |
11.40 |
11.28 |
The Consolidated Financial Statements of the Company form part of this Annual Report.
The annual accounts of all the subsidiary companies will be placed on the website of the Company. OPERATION HIGHLIGHTS
As you are aware that your Company acts as the asset manager to Nippon India Mutual Fund ("NIMF"), which is one of the largest Mutual Fund in India, in terms of the Quarterly Average Assets under Management (QAAUM) as on March 31, 2023.
The QAAUM of NIMF as on March 31, 2023, was t 2,93,159 Crores comprising of t 1,30,087 Crores of Equity, t 54,068 Crores of Debt, t 38,979 Crores of Liquid Funds and t 70,024 Crores of ETF assets. It may be noted that the QAAUM of NIMF as on March 31, 2022 was t 2,83,261 Crores comprising of t 1,19,062 Crores of Equity, t 73,173 Crores of Debt, t 35,230 Crores of Liquid Funds and t 55,796 Crores of ETF assets.
Overall QAAUM of NIMF has increased by 3.39% during the financial year 2022-23, while the Indian Mutual Fund Industry witnessed an overall growth of 5.55% in terms of QAAUM (Source: AMFI).
New Schemes Launched:
During the year under review, Nippon India Mutual Fund launched the following new schemes:
Scheme Name |
Type |
Structure |
Nippon India Nifty Alpha Low Volatility 30 Index Fund |
OPEN |
An open-ended scheme replicating/tracking Nifty Alpha Low Volatility 30 Index |
Nippon India Fixed Horizon Fund - XLIV - Series 1 |
CLOSE |
A Close Ended Scheme. Relatively High interest rate risk and moderate Credit Risk |
Nippon India Nifty AAA PSU Bond Plus SDL - Sep 2026 Maturity 50:50 Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty AAA PSU Bond Plus SDL Sep 2026 50:50 Index. A Relatively High interest rate risk and Relatively Low Credit Risk. |
Nippon India Nifty SDL Plus G-Sec -Jun 2028 Maturity 70:30 Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty SDL Plus G-Sec Jun 2028 70:30 Index. A Relatively High interest rate risk and Relatively Low Credit Risk. |
Nippon India Fixed Horizon Fund XLIV -Series 4 |
CLOSE |
A Close Ended Scheme. Relatively High interest rate risk and moderate Credit Risk |
Nippon India Fixed Horizon Fund - XLIV - Series 2 |
CLOSE |
A Close Ended Scheme. Relatively Low interest rate risk and moderate Credit Risk |
Nippon India Nifty G-Sec Sep 2027 Maturity Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty G-Sec Sep 2027 Index. A Relatively High Interest rate risk and Relatively Low Credit Risk. |
Nippon India Nifty G-Sec Jun 2036 Maturity Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty G-Sec Jun 2036 Index. A Relatively High Interest rate risk and Relatively Low Credit Risk. |
Nippon India Nifty SDL Plus G-Sec -Jun 2029 Maturity 70:30 Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty SDL Plus G-Sec Jun 2029 70:30 Index. A Relatively High interest rate risk and Relatively Low Credit Risk |
Nippon India Nifty G-Sec Oct 2028 Maturity Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty G-Sec Oct 2028 Index. A Relatively High interest rate risk and Relatively Low Credit Risk |
Nippon India Fixed Horizon Fund XLV -Series 4 |
CLOSE |
A Close Ended Scheme. Relatively High interest rate risk and Relatively Low Credit Risk |
Nippon India Fixed Horizon Fund XLV -Series 5 |
CLOSE |
A Close Ended Scheme. Relatively High interest rate risk and Relatively High Credit Risk |
As on March 31, 2023, NIMF has a well-rounded portfolio of 98 schemes under various categories such as Equity, Debt, Hybrid, Exchange Traded Funds, Index Funds, Fixed Maturity Plans, and Interval Funds.
DETAILS OF MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments affecting the financial position of the Company since the date of the financial statements i.e, March 31, 2023.
DIVIDEND
During the year, the Company had declared and paid an interim dividend of t 4.00 per equity share (40%) amounting to t 249.23 Crores. The Board has also recommended a final dividend of t 7.50 per Equity Share (75%) of t 10/- each for the financial year ended March 31, 2023, for the approval of the
Shareholders at the ensuing Annual General meeting. With this the total dividend for the financial year 2022-23 would be approximately t 716 Crores, including the interim dividend of t 4.00 per equity share distributed in November 2022. The Final dividend, if declared, will be paid after the Annual General Meeting.
The dividend pay-out is in accordance with the Company''s Dividend Distribution Policy which forms part of this Annual Report.
AMOUNT TO BE CARRIED TO RESERVES
Your Directors do not propose any amount to be transferred to the General Reserves of the Company.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report for the year under review as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) is presented in a separate section forming part of this Annual Report.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENT
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act are given in the notes to the Financial Statements.
There is no difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions.
DEPOSITS
The Company has neither accepted nor renewed any fixed deposits during the year. There are no outstanding or unclaimed deposits, unclaimed / unpaid interest, refunds due to the deposit holders or to be deposited to the Investor Education and Protection Fund as on March 31, 2023.
EMPLOYEES STOCK OPTION SCHEME
With the perspective of promoting the culture of employee ownership and to attract, retain, motivate and incentivise senior as well as critical talent, the Company has formulated Nippon Life India Asset Management Limited - Employee Stock Option Plan 2017 ("NAM INDIA ESOP 2017") [formerly known as "Reliance Nippon Life Asset Management Limited -Employee Stock Option Plan 2017"] ("ESOP 2017" / "Plan") as its stock option scheme, which was launched in August 2017 and Nippon Life India Asset Management Limited - Employee Stock Option Plan 2019 ("NAM INDIA ESOP 2019") [formerly known as "Reliance Nippon Life Asset Management Limited - Employee Stock Option Plan 2019"] ("ESOP 2019" / "Plan") as its stock option scheme, which was launched in July 2019. The Nomination and Remuneration Committee of the Board monitors and administers these Plans and from time - to - time grants stock options to the employees.
Both ESOP 2017 as well as ESOP 2019 are in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (SEBI Regulations).
However, having regard to the provisions of first provision to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to all the Members of the Company and others entitled thereto. The certificate from the Statutory Auditors of the Company confirming the compliance
of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 with respect to the Company''s Employees Stock Option Scheme Plans will be available for inspection through electronic mode. Any member interested in obtaining the same may write to the Company Secretary and the same will be furnished on request. The details as required to be disclosed under SEBI Regulations are available on the Company''s website at https:// mf.nipponindiaim.com/investor-service/customer-service/nam-india-shareholders-investors
CAPITAL STRUCTURE
During the Financial year 2022-23, the Company issued and allotted 11,57,515 Equity Shares to eligible employees on exercise of options granted under the Employee Stock Option Plans of the Company. Hence, the issued, subscribed and paid-up capital of the Company was 62,31,75,443 Equity Shares of g 10 each at the end of the Financial Year.
The Equity History of the Company has been provided in the Corporate Governance Report.
COMPLIANCE CULTURE & RISK MANAGEMENT
Your Company maintains a strong focus on Compliance and Risk Management as these are essential elements for its long-term success. The compliance and risk functions are managed by a dedicated and experienced team of professionals. The management has a zero tolerance towards risk and compliance failures or breaches.
There exists a comprehensive Compliance Manual, which is reviewed by your Board of Directors from time to time and it facilitates the Company''s Compliance team to monitor various compliance requirements effectively & comprehensively. The Compliance team conducts periodical educative & training programmes on various regulatory compliances matters for various sections of employees.
Your Company also has a comprehensive Risk Management Policy that envisages a structured and consistent enterprise-wide risk management framework, based on the three lines of defense model, to ensure that risk management processes are consistently applied across the organisation and provide reasonable assurance regarding achievement of organisation''s objectives.
The risk management policy clearly sets out the objectives & elements of risk management within the organisation, including the constitution of an independent Risk Management department headed by Chief Risk Officer (reporting directly to the CEO and to the Board of Directors), Risk Management Committee at executive and Board levels. The policy
also define the roles and responsibility of all the CXOs towards risk management as part of first line of defense model.
Your Company promotes risk awareness culture throughout the organisation and risk management is an integral part of decision making and day-today operations of all activities at all levels across the organisation. There are well documented & Board approved policies & processes to address and mitigate various risks to which the Company is exposed. The Company also has a robust business continuity plan which is tested on a periodic basis to ensure uninterrupted operations. The risk department conducts various training programmes on various facets of risk management including cyber risk awareness, conduct risk, operational risk, Anti Money Laundering, etc.
The Company has a structured risk reporting mechanism to ensure risks are monitored and reviewed by CRO, Senior Management, RMCBs and Board on a periodic basis.
INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY
The Company has an Internal Control System which is commensurate with the size, scale and complexity of its business operations.
For effective risk management and control, the Company has established structures and responsibilities in line with the "Three Lines of Defense" model, where 1st line being business operations, 2nd line is the oversight functions like Risk Management and Compliance and 3rd line is Internal Audit. To maintain its objectivity and independence, the Internal Audit department reports to the Audit Committee. The Internal Audit department monitors and evaluates the efficacy and adequacy of the internal control system in the Company, its compliance with operating systems, accounting procedures and policies. Based on the report of the Internal Auditor, process owners undertake corrective action in their respective areas and thereby strengthen the controls. The Internal Audit department follows up on pending audit issues and ensures that corrective actions have been taken. Significant audit observations, if any, and corrective actions thereon, are presented to the Audit Committee of the Board.
CORPORATE GOVERNANCE
Your Directors wish to reiterate your Company''s commitment to the highest standards of corporate governance to enhance trust of all its stakeholders. Strong & robust corporate governance practices have facilitated your Company in standing up to the continued scrutiny of domestic & international investors and that of various Regulatory authorities.
The report on Corporate Governance as stipulated under Regulation 34(3) read with Para C of Schedule V of the Listing Regulations is presented in a separate section forming part of this Annual Report.
A Certificate from the auditors of the Company i.e. M/s. S. R. Batliboi & Co. LLP, Chartered Accountants conforming compliance to the conditions of Corporate Governance as stipulated under Para E of Schedule V of the Listing Regulations, is enclosed to this Report.
VIGIL MECHANISM
In accordance with Section 177 of the Act and the Listing Regulations, the Company has formulated a Vigil Mechanism to address the genuine concerns, if any. The Whistle Blower policy can be accessed on the Company''s website. It is affirmed that no person has been denied access to the Chairperson of the Audit Committee.
CORPORATE SOCIAL RESPONSIBILITY
As part of its initiatives under "Corporate Social Responsibility (CSR)", the Company has undertaken projects in the areas of promoting healthcare, education and rural development in accordance with Schedule VII of the Act.
The Annual Report on CSR activities is annexed herewith as Annexure A.
SUBSIDIARIES & ASSOCIATE COMPANY
As of March 31, 2023, your Company had two (2) subsidiaries. One of such subsidiaries is overseas i.e., one subsidiary in Singapore and one subsidiary in India. Both the subsidiaries of the Company are engaged in financial services and related activities. In addition, the Company also has an Associate company in India, which has already surrendered its business license/ regulatory approval to act as a Pension Fund Manager. This particular company currently has no business operations, and it is therefore proposed to be wound up, in accordance with the applicable laws.
During the year our subsidiary company, Nippon Life India Asset Management (Mauritius) Limited, has been voluntarily wound up.
A statement w.r.t. the performance and the financial position of the subsidiaries of the Company forms a part of the Consolidated Financial Statements of the Company.
The performance of the financial position of the subsidiary companies is presented in the Management Discussions and Analysis Report forming part of this Annual Report. The policy for determining material subsidiary companies may be accessed on the
Company''s website at https://mf.nipponindiaim.com/ InvestorServices/Pages/lnvestor-Policies.aspx
Further, The International Financial Services Centres Authority (IFSCA) has granted NAM India (IFSC Branch) the certificate of registration to carry out the activities as a Fund Management Entity (Non-Retail) under the IFSCA (Fund Management) Regulations, 2022 on March 1, 2023.
KEY MANAGERIAL PERSONNEL
During the year under review, the following employees were the ''Key Managerial Personnel'' of the Company:
a) Mr. Sundeep Sikka - Executive Director & Chief Executive Officer;
b) Mr. Ajay Patel - Manager;
c) Mr. Prateek Jain - Chief Financial Officer; and
d) Ms. Nilufer Shekhawat - Company Secretary
DIRECTORS
During the year, Mr. Kazuyuki Saigo who was a Director as on March 31, 2022, resigned from the directorship of the Company w.e.f. April 21, 2022. Mr. Tomohiro Yao and Mr. Minoru Kimura were first appointed as Additional Directors of the Company w.e.f. April 21, 2022. Mr. Tomohiro Yao and Mr. Minoru Kimura were then appointed as Non-Executive Nominee Director w.e.f. July 12, 2022.
As on the date of this Boards Report, Mr. Hiroki Yamauchi was appointed as an additional Director (Non-Executive Nominee Director) in place of Mr. Akira Shibata. Mr. Upendra Kumar Sinha was appointed as an additional Director (Non-Executive Independent Director) and Chairman of the Board to be effective May 1, 2023. Both these appointments are subject to approval of the Shareholders at the ensuing Annual General Meeting.
All the Independent Directors of your Company i.e., General Ved Prakash Malik (Retd.), Ms. Ameeta Chatterjee, Mr. Ashvin Parekh and Mr. B. Sriram have already furnished the required declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act.
In the opinion of the Board, the Independent Directors possess the requisite expertise and experience and are people of high integrity and repute. They fulfil the conditions specified in the Act and the Rules made thereunder and are independent of the management.
In terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by The
Indian Institute of Corporate Affairs, Manesar (''IICA''). The Independent Directors are also required to undertake online proficiency self-assessment test conducted by the IICA within a period of two years from the date of inclusion of their names in the data bank, unless they meet the criteria specified for exemption. All the Independent Directors of the Company are exempt from the requirement to undertake online proficiency self assessment test.
PERFORMANCE EVALUATION OF DIRECTORS, BOARD AND COMMITTEES
The Company has devised a policy for the performance evaluation of the individual directors, Board and its Committees, which also includes the criteria for carrying out the said performance evaluation. Pursuant to the provisions of the Act and Regulation 17(10) of Listing Regulations and as prescribed in the stated policy of the Board, the Board has carried out an annual performance evaluation of (i) the Directors (Independent and non-independent); (ii) itself (as a whole); (iii) its committees and (iv) fulfillment of Independence criteria. The Board performance was evaluated based on input received from the Board Members after considering criteria such as Board composition and structure, effectiveness of Board / Committee processes, and information provided to the Board, etc. In terms of the requirements of the Act, a separate meeting of the Independent Directors was also held during the year.
BOARD AND COMMITTEE MEETINGS
During the year under review, eight (8) Board meetings were held.
Your Directors wish to inform that the functioning of the Board is supplemented by various committees (Board sub-committees and management committees), which have been constituted from time to time, such as Audit Committee, Committee of Directors, CSR Committee, Stakeholders Relationship Committee, Nomination & Remuneration Committee, Risk Management Committee of the Board, Valuation Committee, Investment Committee, Risk Management Committee, Allotment Committee, Broker Empanelment Committee, Operating Committee, Compliance Committee, Stewardship Committee, Proxy Voting Committee, Information Security Risk Management Committee, etc. to name a few. Each of the aforesaid Committees has been constituted in order to ensure due compliance with the applicable laws and to ensure that the highest levels of corporate governance are followed and practiced. The minutes of the meetings of each of these Committees are duly placed before the Board for noting and confirmation.
AUDIT COMMITTEE
In terms of the requirements of Section 177 of the Act, the Audit Committee of the Company consists of the majority of Independent Directors. As on date of this report, it comprises Mr. Ashvin Parekh [Independent Director], Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. B. Sriram [Independent Director], Mr. Hiroki Yamauchi [Non- Independent Director] and Mr. Minoru Kimura [Non- Independent Director]. Mr. Ashvin Parekh acts as the Chairperson of this Committee.
During the year, eight (8) meetings of the Audit Committee were held, which includes 1 joint Audit Committee between the Audit Committee of the Asset Management Company (''AMC'') with the Audit Committee of the Trustees and one (1) meeting to interact with the Statutory and Internal Auditors of the Mutual Fund without the engagement of management of the AMC as stipulated in SEBI Circular No. SEBI/HO/IMD/IMD-IDOF2/P/CIR/2022/17 dated February 09, 2022.
Other relevant details in this regard have been provided in the Corporate Governance Report.
NOMINATION & REMUNERATION COMMITTEE
In terms of the requirements of Section 178 of the Act, the Nomination & Remuneration Committee of the Company consists of the majority of Independent Directors. As on date of this report, it comprises, Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Tomohiro Yao [Non-Independent Director] and Mr. Minoru Kimura [Non-Independent Director]. General Ved Prakash Malik (Retd.) acts as the Chairperson of this Committee.
During the year, three (3) meetings of the Nomination & Remuneration Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
The Nomination & Remuneration Policy has been provided as Annexure B to the Board''s Report.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
In terms of the requirements of Section 135 of the Act, the Corporate Social Responsibility ("CSR") Committee of the Company consists of eight (8) Members. As on date of this report, it comprises Mr. Tomohiro Yao [Non-Independent Director], Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Sundeep Sikka [CEO & Executive
Director], Mr. Hiroki Yamauchi [Non-Independent Director] and Mr. Minoru Kimura [Non-Independent Director]. Mr. Tomohiro Yao acts as the Chairperson of this Committee.
During the year 2022-23, two (2) meetings of the CSR Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
STAKEHOLDERS'' RELATIONSHIP COMMITTEE
In terms of the requirements of Section 178 of the Act, the Stakeholders'' Relationship Committee of the Company consists of five Members. As on date of this report, it comprises Ms. Ameeta Chatterjee [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Tomohiro Yao [Non-Independent Director] and Mr. Sundeep Sikka [CEO & Executive Director]. Ms. Ameeta Chatterjee acts as the Chairperson of this Committee.
During the year, two (2) meetings of the Stakeholders'' Relationship Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
RISK MANAGEMENT COMMITTEE
In terms of the relevant requirements under the Listing Regulations, the Company has constituted a Risk Management Committee of the Board. The Committee presently comprises of Mr. Tomohiro Yao [Non-Independent Director], Mr. Hiroki Yamauchi [Non-Independent Director], Mr. Sundeep Sikka [CEO & Executive Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director] and Mr. Rishi Garg [Chief Risk Officer] as its Members. Mr. Tomohiro Yao acts as the Chairperson of this Committee.
During the year, five (5) meetings of the Risk Management Committee of the Board were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
AUDITORS'' OF THE COMPANY - STATUTORY AND INTERNAL
Statutory Auditors:
M/s. S. R. Batliboi & Co. LLP, Chartered Accountants shall hold office as Statutory Auditors of the Company until the conclusion of this 28th Annual General Meeting.
The Company has already received a consent letter from M/s. S. R. Batliboi & Co. LLP, Chartered Accountants communicating their willingness to be re-appointed as the Statutory Auditors of the Company and that their re-appointment, if made, would be within
the limits as prescribed under Section 139 of the Companies Act, 2013.
Your Directors hereby recommends the reappointment of M/s. S. R. Batliboi & Co. LLP, Chartered Accountants as the Statutory Auditors of the Company for a second term of 5 (five) consecutive years, to hold office from the conclusion of this Annual General Meeting until the conclusion of the 33rd Annual General Meeting of the Company.
Internal Auditors:
JHS & Associates LLP, Chartered Accountants (JHS) were appointed as the Internal Auditors of your Company for the financial year 2022-23. Having regard to their longevity in office and as a matter of good governance, your Directors have approved the rotation of JHS and appointed PricewaterhouseCoopers Services LLP (PWC) as the Internal Auditors of your Company for the financial year 2023-24.
Your Directors wish to place on record the contributions made by JHS during their tenure as Internal Auditors of your Company.
AUDITORS OF THE SCHEMES OF NIPPON INDIA MUTUAL FUND-STATUTORY AND INTERNAL
In accordance with the applicable provisions of law, the Company has appointed Statutory and Internal Auditors for various Schemes of Nippon India Mutual Fund, who periodically submit their reports, which are placed before the Audit Committee for discussion, review and implementation of their recommendations.
Statutory Auditors:
M/s. Walker Chandiok & Co. LLP, Chartered Accountants were appointed as Statutory Auditors of the Schemes of Nippon India Mutual Fund for the financial year 2022-23.
Internal Auditors:
M/s. Deloitte Haskins & Sells LLP, Chartered Accountants (Deloitte) were appointed as Internal Auditors of the Schemes of Nippon India Mutual Fund and the Portfolio Management Services division of the Company, for the financial year 2022-23. Having regard to their longevity in office and as a matter of good governance, your Directors have approved the rotation of Deloitte and appointed PricewaterhouseCoopers Services LLP (PWC) as the Internal Auditors of the Schemes of Nippon India Mutual Fund and the Portfolio Management Services division of the Company for the financial year 2023-24.
Your Directors wish to place on record the contributions made by Deloitte during their tenure as Internal
Auditors of the Schemes of Nippon India Mutual Fund and the Portfolio Management Services division of the Company.
AUDITORS'' REPORT
The observations and comments given by the Statutory Auditors in their report read together with notes on financial statements are self-explanatory and hence does not require any further comments in terms of Section 134 of the Act.
SECRETARIAL STANDARDS
During the year under review, the Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Directors had appointed M/s. M. Siroya and Company, Mumbai, a firm of Company Secretaries in-practice to undertake the Secretarial Audit of the Company for the financial year 2022-23. In this regard, the Report submitted by the Secretarial Auditor is annexed as Annexure C.
Your Directors are pleased to inform you that the report from the Secretarial Auditors does not contain any qualifications or negative remarks.
ANNUAL RETURN
Pursuant to Section 134(3)(a) and Section 92(3) of the Act read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company has been placed on the website of the Company and can be accessed at https://mf.nipponindiaim.com/AboutUs/ FinancialReports/Pages/Annual-Return.aspx .
PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
CONSERVATION OF ENERGY:
The operations of the Company do not consume high levels of energy. Adequate measures have been taken to conserve energy wherever feasible. Your Company uses the latest technology and energy - efficient equipment''s. Your Company only uses LED lights and 5-star air-conditioning for majority of offices. As energy cost forms a very small part of the total costs, the impact on cost is not material.
TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION:
Business Easy Revamp - Business Easy 2.0 app, our Digital asset for our distributors, is an all-
encompassing solution that acts as a complete Customer Relationship Management tool. The app works as a Digital branch through which distributors can manage their Mutual Fund business virtually. With the objective of evolving the app from a business facilitator to a growth enabler, this year saw the addition of new enhancements and features to the app. A number of features such as Intern Distributor addition, quick investment module were added along with meaningful reports for distributors to maximise the usage of the App.
Investor App and Website Enhancement - Our
flagship assets, namely the InvestEasy App and the InvestEasy website are constantly upgraded to include enhancements and innovations. These include workflow enhancements such as Cart Buying where users can purchase more than one product at a time. A number of regulatory compliance requirements have been added in the year as well.
Process Automation across Organisation - As part of the automation initiative a number of processes have been automated across operations, finance, risk and technology. This has freed up resources to be redeployed elsewhere.
Implementation of cloud initiatives - Continuing on NAM India''s cloud journey a number of initiatives on cloud where the infrastructure for initiatives such as Data Lake, Analytics, new core applications have been implemented on the AWS cloud.
RESEARCH AND DEVELOPMENT DIGITAL ADOPTION AND INNOVATION:
Nippon India Mutual Fund, continue to envision and execute key Digital transformation endeavors year on year that are aimed to strengthen our already robust Digital ecosystem.
⢠Focus always remains on empowering our investors during moments of truth and on a ''here & now'' manner to take quicker, smarter, and well-informed decisions on how and where they should invest their money when they transact on our Digital assets. Such empowerment is fueled by our capabilities to crunch & run real-time analysis on the enormous amount of on-asset & offline data points we have regarding our consumers, their past purchases, and future propensities.
⢠Intelligent, data led digital assets, can learn, and predict user behavior powered by both the real time frameworks and archived analytical frameworks which are operating on an advanced algo network. This helps in e-serving highly personalised and customised experiences to give our millennial, zillennial and legacy investors or partners accurate recommendations,
suggestions, on-the-fly nudges, predictive service and much more as they advance in their journeys.
Implementation of Data Models for cross sell and upsell have been implemented as part of the innovation adoption initiatives. As part of this movement third party model creators have been engaged with enhancing the data models of the organisation. Use cases are created with the support of business to identify patterns and opportunities in the models and campaigns are triggered on the analytics ecosystem to connect with customers and track the efficacy of the models.
We at NAM India also are working on further enhancing our digital assets by bringing in innovation in the payment gateway space especially towards frictionless payments. The current payment gateway ecosystem gives us as Digital innovators a lot of play with respect to designing workflows especially in the UPI space.
FOREIGN EXCHANGE EARNINGS AND OUTGO:
During the year under review, the Company earned foreign exchange equivalent to g 18.09 Crores (Previous Year: g 22.85 Crores). The Company spent foreign exchange equivalent to g 11.25 Crores (Previous Year: g 6.98 Crores).
DIRECTORS'' RESPONSIBILITY STATEMENT
As per the requirements of Sub Section (5) of Section 134 of the Act, the Directors confirm that -
(i) In the preparation of the annual accounts for the financial year ended March 31,2023,the applicable accounting standards have been followed and that there are no material departures;
(ii) The Directors have selected such accounting policies in consultation with the Statutory Auditors'' and have applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2023 and of the profit of the Company for the year under review;
(iii) The Directors have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) The Directors have prepared the annual accounts of the Company on a ''going concern'' basis;
(v) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;
(vi) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
CONTRACT AND ARRANGEMENTS WITH RELATED PARTIES
All contracts/ arrangements/ transactions entered into/ by the Company during the financial year under review with related parties were on an arm''s length basis and in the ordinary course of business. There were no materially significant related party transactions which could have potential conflict with the interest of the Company at large. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.
All Related Party Transactions were placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee was obtained for the transactions which were of a repetitive nature. The transactions entered into pursuant to the omnibus approval so granted were reviewed and statements giving details of all related party transactions were placed before the Audit Committee and the Board of Directors for their review on a quarterly basis. The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website at the following link:
https://mf.nipponindiaim.com/InvestorServices/
Your Directors draw attention of the Members to Note No. 28 to the financial statement which sets out related party disclosures.
PARTICULARS OF FRAUDS REPORTED BY THE AUDITORS''
In terms of Section 143(12) of the Act, M/s. S R Batliboi & Co. LLP, Chartered Accountants, the Statutory Auditors of the Company have not reported any instance of fraud having taken place during the year under review, in their Audit Report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators/ Courts which would impact the going concern status of the Company and its future operations.
DETAILS OF APPLICATION MADE BY THE COMPANY OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONGWITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR
The Company on behalf of the schemes of Nippon India Mutual Fund invests in various debt market instruments (non-convertible debentures) issued by various issuers. In order to realise the debenture outstanding''s, the Company has filed certain applications under the Insolvency and Bankruptcy Code, 2016. The Mutual Fund Division of the Company has filed (a) an IBC proceeding against Avantha Holdings Limited in January 2020 before Hon''ble NCLT New Delhi which is withdrawn as Avantha Holdings Limited has paid its dues. The Company is also a respondent party to an IBC proceeding filed in the matter of Reserve Bank of India v. Dewan Housing Finance Corporation Limited pending before the Hon''ble NCLT, Mumbai.
The Portfolio Management Services Division of the Company has filed: (a) IBC proceedings against Fortuna Buildcon India Private Limited was filed in November 2017 before the Hon''ble NCLT, Bangalore, wherein currently the resolution plan has been submitted to the Hon''ble NCLT for approval (b) three IBC proceedings against three Biodiversity Conservation India Private Limited group companies (BCIL Zed Ria Properties Private Limited, BCIL Red Earth Developers India Pvt. Ltd. and Biodiversity Conservation India Private Limited) were filed in December 2017 before the Hon''ble NCLT, Bangalore. The NCLT has approved resolution plans in BCIL Zed Ria Properties Private Limited and in BCIL Red Earth Developers India Pvt. Ltd., which are currently under implementation while Biodiversity Conservation India Private Limited is currently under liquidation. The Company is also a respondent to 2 (two) appeals in BCIL Red Earth Developers India Private Limited and in 3 (three) appeals in BCIL Zed Ria Properties Private Limited, before Hon''ble NCLAT, Chennai, which have been filed challenging the approved resolution plans; (c) IBC proceedings have been filed against the promoters of Biodiversity Conservation India Private Limited in November 2020 before Hon''ble NCLT, Bangalore which are currently at a pre-admission stage; (d) IBC proceeding filed against Green Valley Shelters Private Limited in December 2019, before Hon''ble NCLT, Chennai, was admitted in August 2021, however the proceedings are currently temporarily stayed under an order of the Supreme Court. The Company is a respondent in a civil appeal filed by the promoters of Green Valley Shelters Private Limited before the Hon''ble Supreme Court, challenging the admission of IBC proceedings against Green Valley Shelters Private Limited, which is currently pending under directions of exploring a settlement; (e) an IBC proceeding filed against the promoters of Green Valley Shelters Private Limited in October 2020 before the
Hon''ble NCLT, Chennai and is at a pre-admission stage; (f) an IBC proceeding was filed against Arkie Atelier Design India Private Limited, being the corporate guarantor for the debentures issued by Green Valley Shelters Private Limited in November 2021 and is currently at a preadmission stage; (g) an IBC proceeding filed against Bharucha & Motivala Infrastructure Private Limited, being corporate guarantor for the debentures issued by Lake District Realty Private Limited, in November 2019 before Hon''ble NCLT, Mumbai was admitted in May 2021, but has been stayed pursuant to an order of the Hon''ble NCLAT in July 2021. The Company is a respondent in the appeal filed by the promoters of Lake District Realty Private Limited before the Hon''ble NCLAT, Delhi, challenging the admission of IBC proceedings against Bharucha & Motivala Infrastructure Private Limited, which is currently reserved for orders; (h) IBC proceedings have been filed against the promoters of Lake District Realty Private Limited in November 2021, which is currently at a pre-admission stage; (i) an IBC proceedings has been filed against Ashapura Options Private Limited, being the corporate guarantor for the debentures issued by Ashapura Housing Private Limited in February 2022 which is at a pre-admission stage. (j) IBC proceedings have also been filed against four (4) promoter guarantors of Ashapura Housing Private Limited, which are at a pre-admission stage.
COST RECORDS
The Company is not required to maintain cost records as specified by the Central Government under subsection (1) of section 148 of the Companies Act, 2013.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
In terms of the provisions of Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules are provided in the Annexure to the Board''s Report. Disclosures relating to the remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended also forms part of this Report. However, having regard to the provisions of Section 136 of the Act, the Annual Report excluding the aforesaid information is being sent to all the Members of the Company and others entitled thereto. Any member interested in obtaining the said information may write to the Company Secretary. Upon such request the information shall be furnished.
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
Your Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of
The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. Following is a summary of sexual harassment complaints received and disposed off during the year:
⢠No. of complaints received: 0
⢠No. of complaints disposed off: 0
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
Pursuant to Regulation 34(2)(f) of Listing Regulations, top 1000 listed entities by market capitalisation have to publish a Business Responsibility and Sustainability Report from FY 2022-23. Business Responsibility and Sustainability Report for the year under review as stipulated under Listing Regulations is presented in the separate section forming part of this Annual Report.
AWARDS AND RECOGNITIONS
Some of the awards & recognitions, which came to NAM India include,
⢠Included in the elite "Kincentric Best Employers Club- 2023" an exclusive and prestigious group of organisations chosen across all industries who have been Best Employers consistently in the last 3-5 years
⢠Awarded Best Employer 2022 Award - 5th time in last 7 years
⢠Won the Outstanding Employee Engagement Award from Ekincare for our Health & Wellbeing initiative (Amongst only 9 Companies recognised in the country)
ACKNOWLEDGEMENTS
Your Directors wish to place on record their sincere appreciation for the co-operation received from various regulatory and governmental authorities including SEBI, RBI, Registrar of Companies, Maharashtra at Mumbai, PFRDA, NPS Trust, EPFO, CMPFO, Stock Exchanges, Depositories, Custodians, Bankers, Registrar, Shareholders, Investors and all other business constituents during the year under review. We believe all of them have contributed to our continued growth.
Your Directors also wish to place on record their deep appreciation for the total commitment displayed by all the executives, officers and staff, resulting in yet another eventful performance for the year.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS OF NIPPON LIFE INDIA ASSET MANAGEMENT LIMITED
Ashvin Dhirajlal Parekh Sundeep Sikka
Director Executive Director & CEO
(DIN: 06559989) (DIN: 02553654)
Place : Mumbai Dated : April 25, 2023
Mar 31, 2023
Your Directors take pleasure in presenting their 28th Annual Report on the business and operations of your Company, together with the audited financial statements, for the year ended March 31, 2023.
Your Company endeavors to remain one of the leading players in the Asset Management business in India and keeps exploring opportunities for enhancing its global footprint as well.
Your Company is a subsidiary Company of Nippon Life Insurance Company ("NLI"). NLI is a, fortune 500 Company and one of the largest life insurers in the world managing assets of over USD 700 billion. It has a large global network with presence across US, Europe, Asia, and Australia along with a 130-year track record in Life Insurance business as well as global investments across Asset Management companies. This pedigree brings strong synergistic benefits that very well complements your Company''s domestic expertise in the Asse Management business and provides a thrust to its significant growth potential. Your Company expects substantial upside in terms of increased AUM & adoption of best governance & risk management practices based on NLI''s global positioning & relationships.
FINANCIAL PERFORMANCE AND STATE OF COMPANY''S AFFAIRS
The standalone and consolidated financial statements of the Company for the financial year ended March 31, 2023, have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act. The financial highlights (on a consolidated and standalone basis) of the Company for the year ended March 31, 2023, are as follows:
Crores) |
||||
Consolidated |
Standalone |
|||
Particulars |
Year ended March 31, 2023 |
Year ended March 31, 2022 |
Year ended March 31, 2023 |
Year ended March 31, 2022 |
Gross Income |
1516.61 |
1535.63 |
1431.18 |
1428.42 |
Profit before exceptional item and tax |
927.74 |
988.67 |
917.77 |
945.43 |
Exceptional Items |
- |
- |
- |
- |
Profit Before tax |
927.74 |
988.67 |
917.77 |
945.43 |
Current Tax |
212.14 |
206.66 |
212.53 |
200.38 |
Deferred Tax |
(7.33) |
38.64 |
(9.70) |
33.84 |
Profit for the year |
722.93 |
743.37 |
714.94 |
711.21 |
Share of Profit from Associates |
0.40 |
0.79 |
- |
- |
Profit attributable to non-controlling interest |
- |
- |
- |
- |
Other Comprehensive Income |
(186) |
(0.30) |
(185) |
(0.27) |
Balance carried to Balance Sheet |
721.47 |
743.86 |
713.09 |
710.94 |
Basic EPS of S 10 each |
11.61 |
12.00 |
11.48 |
11.47 |
Diluted EPS of S 10 each |
11.53 |
11.80 |
11.40 |
11.28 |
The Consolidated Financial Statements of the Company form part of this Annual Report.
The annual accounts of all the subsidiary companies will be placed on the website of the Company. OPERATION HIGHLIGHTS
As you are aware that your Company acts as the asset manager to Nippon India Mutual Fund ("NIMF"), which is one of the largest Mutual Fund in India, in terms of the Quarterly Average Assets under Management (QAAUM) as on March 31, 2023.
The QAAUM of NIMF as on March 31, 2023, was t 2,93,159 Crores comprising of t 1,30,087 Crores of Equity, t 54,068 Crores of Debt, t 38,979 Crores of Liquid Funds and t 70,024 Crores of ETF assets. It may be noted that the QAAUM of NIMF as on March 31, 2022 was t 2,83,261 Crores comprising of t 1,19,062 Crores of Equity, t 73,173 Crores of Debt, t 35,230 Crores of Liquid Funds and t 55,796 Crores of ETF assets.
Overall QAAUM of NIMF has increased by 3.39% during the financial year 2022-23, while the Indian Mutual Fund Industry witnessed an overall growth of 5.55% in terms of QAAUM (Source: AMFI).
New Schemes Launched:
During the year under review, Nippon India Mutual Fund launched the following new schemes:
Scheme Name |
Type |
Structure |
Nippon India Nifty Alpha Low Volatility 30 Index Fund |
OPEN |
An open-ended scheme replicating/tracking Nifty Alpha Low Volatility 30 Index |
Nippon India Fixed Horizon Fund - XLIV - Series 1 |
CLOSE |
A Close Ended Scheme. Relatively High interest rate risk and moderate Credit Risk |
Nippon India Nifty AAA PSU Bond Plus SDL - Sep 2026 Maturity 50:50 Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty AAA PSU Bond Plus SDL Sep 2026 50:50 Index. A Relatively High interest rate risk and Relatively Low Credit Risk. |
Nippon India Nifty SDL Plus G-Sec -Jun 2028 Maturity 70:30 Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty SDL Plus G-Sec Jun 2028 70:30 Index. A Relatively High interest rate risk and Relatively Low Credit Risk. |
Nippon India Fixed Horizon Fund XLIV -Series 4 |
CLOSE |
A Close Ended Scheme. Relatively High interest rate risk and moderate Credit Risk |
Nippon India Fixed Horizon Fund - XLIV - Series 2 |
CLOSE |
A Close Ended Scheme. Relatively Low interest rate risk and moderate Credit Risk |
Nippon India Nifty G-Sec Sep 2027 Maturity Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty G-Sec Sep 2027 Index. A Relatively High Interest rate risk and Relatively Low Credit Risk. |
Nippon India Nifty G-Sec Jun 2036 Maturity Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty G-Sec Jun 2036 Index. A Relatively High Interest rate risk and Relatively Low Credit Risk. |
Nippon India Nifty SDL Plus G-Sec -Jun 2029 Maturity 70:30 Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty SDL Plus G-Sec Jun 2029 70:30 Index. A Relatively High interest rate risk and Relatively Low Credit Risk |
Nippon India Nifty G-Sec Oct 2028 Maturity Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty G-Sec Oct 2028 Index. A Relatively High interest rate risk and Relatively Low Credit Risk |
Nippon India Fixed Horizon Fund XLV -Series 4 |
CLOSE |
A Close Ended Scheme. Relatively High interest rate risk and Relatively Low Credit Risk |
Nippon India Fixed Horizon Fund XLV -Series 5 |
CLOSE |
A Close Ended Scheme. Relatively High interest rate risk and Relatively High Credit Risk |
As on March 31, 2023, NIMF has a well-rounded portfolio of 98 schemes under various categories such as Equity, Debt, Hybrid, Exchange Traded Funds, Index Funds, Fixed Maturity Plans, and Interval Funds.
DETAILS OF MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments affecting the financial position of the Company since the date of the financial statements i.e, March 31, 2023.
DIVIDEND
During the year, the Company had declared and paid an interim dividend of t 4.00 per equity share (40%) amounting to t 249.23 Crores. The Board has also recommended a final dividend of t 7.50 per Equity Share (75%) of t 10/- each for the financial year ended March 31, 2023, for the approval of the
Shareholders at the ensuing Annual General meeting. With this the total dividend for the financial year 2022-23 would be approximately t 716 Crores, including the interim dividend of t 4.00 per equity share distributed in November 2022. The Final dividend, if declared, will be paid after the Annual General Meeting.
The dividend pay-out is in accordance with the Company''s Dividend Distribution Policy which forms part of this Annual Report.
AMOUNT TO BE CARRIED TO RESERVES
Your Directors do not propose any amount to be transferred to the General Reserves of the Company.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report for the year under review as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) is presented in a separate section forming part of this Annual Report.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENT
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act are given in the notes to the Financial Statements.
There is no difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions.
DEPOSITS
The Company has neither accepted nor renewed any fixed deposits during the year. There are no outstanding or unclaimed deposits, unclaimed / unpaid interest, refunds due to the deposit holders or to be deposited to the Investor Education and Protection Fund as on March 31, 2023.
EMPLOYEES STOCK OPTION SCHEME
With the perspective of promoting the culture of employee ownership and to attract, retain, motivate and incentivise senior as well as critical talent, the Company has formulated Nippon Life India Asset Management Limited - Employee Stock Option Plan 2017 ("NAM INDIA ESOP 2017") [formerly known as "Reliance Nippon Life Asset Management Limited -Employee Stock Option Plan 2017"] ("ESOP 2017" / "Plan") as its stock option scheme, which was launched in August 2017 and Nippon Life India Asset Management Limited - Employee Stock Option Plan 2019 ("NAM INDIA ESOP 2019") [formerly known as "Reliance Nippon Life Asset Management Limited - Employee Stock Option Plan 2019"] ("ESOP 2019" / "Plan") as its stock option scheme, which was launched in July 2019. The Nomination and Remuneration Committee of the Board monitors and administers these Plans and from time - to - time grants stock options to the employees.
Both ESOP 2017 as well as ESOP 2019 are in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (SEBI Regulations).
However, having regard to the provisions of first provision to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to all the Members of the Company and others entitled thereto. The certificate from the Statutory Auditors of the Company confirming the compliance
of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 with respect to the Company''s Employees Stock Option Scheme Plans will be available for inspection through electronic mode. Any member interested in obtaining the same may write to the Company Secretary and the same will be furnished on request. The details as required to be disclosed under SEBI Regulations are available on the Company''s website at https:// mf.nipponindiaim.com/investor-service/customer-service/nam-india-shareholders-investors
CAPITAL STRUCTURE
During the Financial year 2022-23, the Company issued and allotted 11,57,515 Equity Shares to eligible employees on exercise of options granted under the Employee Stock Option Plans of the Company. Hence, the issued, subscribed and paid-up capital of the Company was 62,31,75,443 Equity Shares of g 10 each at the end of the Financial Year.
The Equity History of the Company has been provided in the Corporate Governance Report.
COMPLIANCE CULTURE & RISK MANAGEMENT
Your Company maintains a strong focus on Compliance and Risk Management as these are essential elements for its long-term success. The compliance and risk functions are managed by a dedicated and experienced team of professionals. The management has a zero tolerance towards risk and compliance failures or breaches.
There exists a comprehensive Compliance Manual, which is reviewed by your Board of Directors from time to time and it facilitates the Company''s Compliance team to monitor various compliance requirements effectively & comprehensively. The Compliance team conducts periodical educative & training programmes on various regulatory compliances matters for various sections of employees.
Your Company also has a comprehensive Risk Management Policy that envisages a structured and consistent enterprise-wide risk management framework, based on the three lines of defense model, to ensure that risk management processes are consistently applied across the organisation and provide reasonable assurance regarding achievement of organisation''s objectives.
The risk management policy clearly sets out the objectives & elements of risk management within the organisation, including the constitution of an independent Risk Management department headed by Chief Risk Officer (reporting directly to the CEO and to the Board of Directors), Risk Management Committee at executive and Board levels. The policy
also define the roles and responsibility of all the CXOs towards risk management as part of first line of defense model.
Your Company promotes risk awareness culture throughout the organisation and risk management is an integral part of decision making and day-today operations of all activities at all levels across the organisation. There are well documented & Board approved policies & processes to address and mitigate various risks to which the Company is exposed. The Company also has a robust business continuity plan which is tested on a periodic basis to ensure uninterrupted operations. The risk department conducts various training programmes on various facets of risk management including cyber risk awareness, conduct risk, operational risk, Anti Money Laundering, etc.
The Company has a structured risk reporting mechanism to ensure risks are monitored and reviewed by CRO, Senior Management, RMCBs and Board on a periodic basis.
INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY
The Company has an Internal Control System which is commensurate with the size, scale and complexity of its business operations.
For effective risk management and control, the Company has established structures and responsibilities in line with the "Three Lines of Defense" model, where 1st line being business operations, 2nd line is the oversight functions like Risk Management and Compliance and 3rd line is Internal Audit. To maintain its objectivity and independence, the Internal Audit department reports to the Audit Committee. The Internal Audit department monitors and evaluates the efficacy and adequacy of the internal control system in the Company, its compliance with operating systems, accounting procedures and policies. Based on the report of the Internal Auditor, process owners undertake corrective action in their respective areas and thereby strengthen the controls. The Internal Audit department follows up on pending audit issues and ensures that corrective actions have been taken. Significant audit observations, if any, and corrective actions thereon, are presented to the Audit Committee of the Board.
CORPORATE GOVERNANCE
Your Directors wish to reiterate your Company''s commitment to the highest standards of corporate governance to enhance trust of all its stakeholders. Strong & robust corporate governance practices have facilitated your Company in standing up to the continued scrutiny of domestic & international investors and that of various Regulatory authorities.
The report on Corporate Governance as stipulated under Regulation 34(3) read with Para C of Schedule V of the Listing Regulations is presented in a separate section forming part of this Annual Report.
A Certificate from the auditors of the Company i.e. M/s. S. R. Batliboi & Co. LLP, Chartered Accountants conforming compliance to the conditions of Corporate Governance as stipulated under Para E of Schedule V of the Listing Regulations, is enclosed to this Report.
VIGIL MECHANISM
In accordance with Section 177 of the Act and the Listing Regulations, the Company has formulated a Vigil Mechanism to address the genuine concerns, if any. The Whistle Blower policy can be accessed on the Company''s website. It is affirmed that no person has been denied access to the Chairperson of the Audit Committee.
CORPORATE SOCIAL RESPONSIBILITY
As part of its initiatives under "Corporate Social Responsibility (CSR)", the Company has undertaken projects in the areas of promoting healthcare, education and rural development in accordance with Schedule VII of the Act.
The Annual Report on CSR activities is annexed herewith as Annexure A.
SUBSIDIARIES & ASSOCIATE COMPANY
As of March 31, 2023, your Company had two (2) subsidiaries. One of such subsidiaries is overseas i.e., one subsidiary in Singapore and one subsidiary in India. Both the subsidiaries of the Company are engaged in financial services and related activities. In addition, the Company also has an Associate company in India, which has already surrendered its business license/ regulatory approval to act as a Pension Fund Manager. This particular company currently has no business operations, and it is therefore proposed to be wound up, in accordance with the applicable laws.
During the year our subsidiary company, Nippon Life India Asset Management (Mauritius) Limited, has been voluntarily wound up.
A statement w.r.t. the performance and the financial position of the subsidiaries of the Company forms a part of the Consolidated Financial Statements of the Company.
The performance of the financial position of the subsidiary companies is presented in the Management Discussions and Analysis Report forming part of this Annual Report. The policy for determining material subsidiary companies may be accessed on the
Company''s website at https://mf.nipponindiaim.com/ InvestorServices/Pages/lnvestor-Policies.aspx
Further, The International Financial Services Centres Authority (IFSCA) has granted NAM India (IFSC Branch) the certificate of registration to carry out the activities as a Fund Management Entity (Non-Retail) under the IFSCA (Fund Management) Regulations, 2022 on March 1, 2023.
KEY MANAGERIAL PERSONNEL
During the year under review, the following employees were the ''Key Managerial Personnel'' of the Company:
a) Mr. Sundeep Sikka - Executive Director & Chief Executive Officer;
b) Mr. Ajay Patel - Manager;
c) Mr. Prateek Jain - Chief Financial Officer; and
d) Ms. Nilufer Shekhawat - Company Secretary
DIRECTORS
During the year, Mr. Kazuyuki Saigo who was a Director as on March 31, 2022, resigned from the directorship of the Company w.e.f. April 21, 2022. Mr. Tomohiro Yao and Mr. Minoru Kimura were first appointed as Additional Directors of the Company w.e.f. April 21, 2022. Mr. Tomohiro Yao and Mr. Minoru Kimura were then appointed as Non-Executive Nominee Director w.e.f. July 12, 2022.
As on the date of this Boards Report, Mr. Hiroki Yamauchi was appointed as an additional Director (Non-Executive Nominee Director) in place of Mr. Akira Shibata. Mr. Upendra Kumar Sinha was appointed as an additional Director (Non-Executive Independent Director) and Chairman of the Board to be effective May 1, 2023. Both these appointments are subject to approval of the Shareholders at the ensuing Annual General Meeting.
All the Independent Directors of your Company i.e., General Ved Prakash Malik (Retd.), Ms. Ameeta Chatterjee, Mr. Ashvin Parekh and Mr. B. Sriram have already furnished the required declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act.
In the opinion of the Board, the Independent Directors possess the requisite expertise and experience and are people of high integrity and repute. They fulfil the conditions specified in the Act and the Rules made thereunder and are independent of the management.
In terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by The
Indian Institute of Corporate Affairs, Manesar (''IICA''). The Independent Directors are also required to undertake online proficiency self-assessment test conducted by the IICA within a period of two years from the date of inclusion of their names in the data bank, unless they meet the criteria specified for exemption. All the Independent Directors of the Company are exempt from the requirement to undertake online proficiency self assessment test.
PERFORMANCE EVALUATION OF DIRECTORS, BOARD AND COMMITTEES
The Company has devised a policy for the performance evaluation of the individual directors, Board and its Committees, which also includes the criteria for carrying out the said performance evaluation. Pursuant to the provisions of the Act and Regulation 17(10) of Listing Regulations and as prescribed in the stated policy of the Board, the Board has carried out an annual performance evaluation of (i) the Directors (Independent and non-independent); (ii) itself (as a whole); (iii) its committees and (iv) fulfillment of Independence criteria. The Board performance was evaluated based on input received from the Board Members after considering criteria such as Board composition and structure, effectiveness of Board / Committee processes, and information provided to the Board, etc. In terms of the requirements of the Act, a separate meeting of the Independent Directors was also held during the year.
BOARD AND COMMITTEE MEETINGS
During the year under review, eight (8) Board meetings were held.
Your Directors wish to inform that the functioning of the Board is supplemented by various committees (Board sub-committees and management committees), which have been constituted from time to time, such as Audit Committee, Committee of Directors, CSR Committee, Stakeholders Relationship Committee, Nomination & Remuneration Committee, Risk Management Committee of the Board, Valuation Committee, Investment Committee, Risk Management Committee, Allotment Committee, Broker Empanelment Committee, Operating Committee, Compliance Committee, Stewardship Committee, Proxy Voting Committee, Information Security Risk Management Committee, etc. to name a few. Each of the aforesaid Committees has been constituted in order to ensure due compliance with the applicable laws and to ensure that the highest levels of corporate governance are followed and practiced. The minutes of the meetings of each of these Committees are duly placed before the Board for noting and confirmation.
AUDIT COMMITTEE
In terms of the requirements of Section 177 of the Act, the Audit Committee of the Company consists of the majority of Independent Directors. As on date of this report, it comprises Mr. Ashvin Parekh [Independent Director], Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. B. Sriram [Independent Director], Mr. Hiroki Yamauchi [Non- Independent Director] and Mr. Minoru Kimura [Non- Independent Director]. Mr. Ashvin Parekh acts as the Chairperson of this Committee.
During the year, eight (8) meetings of the Audit Committee were held, which includes 1 joint Audit Committee between the Audit Committee of the Asset Management Company (''AMC'') with the Audit Committee of the Trustees and one (1) meeting to interact with the Statutory and Internal Auditors of the Mutual Fund without the engagement of management of the AMC as stipulated in SEBI Circular No. SEBI/HO/IMD/IMD-IDOF2/P/CIR/2022/17 dated February 09, 2022.
Other relevant details in this regard have been provided in the Corporate Governance Report.
NOMINATION & REMUNERATION COMMITTEE
In terms of the requirements of Section 178 of the Act, the Nomination & Remuneration Committee of the Company consists of the majority of Independent Directors. As on date of this report, it comprises, Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Tomohiro Yao [Non-Independent Director] and Mr. Minoru Kimura [Non-Independent Director]. General Ved Prakash Malik (Retd.) acts as the Chairperson of this Committee.
During the year, three (3) meetings of the Nomination & Remuneration Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
The Nomination & Remuneration Policy has been provided as Annexure B to the Board''s Report.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
In terms of the requirements of Section 135 of the Act, the Corporate Social Responsibility ("CSR") Committee of the Company consists of eight (8) Members. As on date of this report, it comprises Mr. Tomohiro Yao [Non-Independent Director], Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Sundeep Sikka [CEO & Executive
Director], Mr. Hiroki Yamauchi [Non-Independent Director] and Mr. Minoru Kimura [Non-Independent Director]. Mr. Tomohiro Yao acts as the Chairperson of this Committee.
During the year 2022-23, two (2) meetings of the CSR Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
STAKEHOLDERS'' RELATIONSHIP COMMITTEE
In terms of the requirements of Section 178 of the Act, the Stakeholders'' Relationship Committee of the Company consists of five Members. As on date of this report, it comprises Ms. Ameeta Chatterjee [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Tomohiro Yao [Non-Independent Director] and Mr. Sundeep Sikka [CEO & Executive Director]. Ms. Ameeta Chatterjee acts as the Chairperson of this Committee.
During the year, two (2) meetings of the Stakeholders'' Relationship Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
RISK MANAGEMENT COMMITTEE
In terms of the relevant requirements under the Listing Regulations, the Company has constituted a Risk Management Committee of the Board. The Committee presently comprises of Mr. Tomohiro Yao [Non-Independent Director], Mr. Hiroki Yamauchi [Non-Independent Director], Mr. Sundeep Sikka [CEO & Executive Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director] and Mr. Rishi Garg [Chief Risk Officer] as its Members. Mr. Tomohiro Yao acts as the Chairperson of this Committee.
During the year, five (5) meetings of the Risk Management Committee of the Board were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
AUDITORS'' OF THE COMPANY - STATUTORY AND INTERNAL
Statutory Auditors:
M/s. S. R. Batliboi & Co. LLP, Chartered Accountants shall hold office as Statutory Auditors of the Company until the conclusion of this 28th Annual General Meeting.
The Company has already received a consent letter from M/s. S. R. Batliboi & Co. LLP, Chartered Accountants communicating their willingness to be re-appointed as the Statutory Auditors of the Company and that their re-appointment, if made, would be within
the limits as prescribed under Section 139 of the Companies Act, 2013.
Your Directors hereby recommends the reappointment of M/s. S. R. Batliboi & Co. LLP, Chartered Accountants as the Statutory Auditors of the Company for a second term of 5 (five) consecutive years, to hold office from the conclusion of this Annual General Meeting until the conclusion of the 33rd Annual General Meeting of the Company.
Internal Auditors:
JHS & Associates LLP, Chartered Accountants (JHS) were appointed as the Internal Auditors of your Company for the financial year 2022-23. Having regard to their longevity in office and as a matter of good governance, your Directors have approved the rotation of JHS and appointed PricewaterhouseCoopers Services LLP (PWC) as the Internal Auditors of your Company for the financial year 2023-24.
Your Directors wish to place on record the contributions made by JHS during their tenure as Internal Auditors of your Company.
AUDITORS OF THE SCHEMES OF NIPPON INDIA MUTUAL FUND-STATUTORY AND INTERNAL
In accordance with the applicable provisions of law, the Company has appointed Statutory and Internal Auditors for various Schemes of Nippon India Mutual Fund, who periodically submit their reports, which are placed before the Audit Committee for discussion, review and implementation of their recommendations.
Statutory Auditors:
M/s. Walker Chandiok & Co. LLP, Chartered Accountants were appointed as Statutory Auditors of the Schemes of Nippon India Mutual Fund for the financial year 2022-23.
Internal Auditors:
M/s. Deloitte Haskins & Sells LLP, Chartered Accountants (Deloitte) were appointed as Internal Auditors of the Schemes of Nippon India Mutual Fund and the Portfolio Management Services division of the Company, for the financial year 2022-23. Having regard to their longevity in office and as a matter of good governance, your Directors have approved the rotation of Deloitte and appointed PricewaterhouseCoopers Services LLP (PWC) as the Internal Auditors of the Schemes of Nippon India Mutual Fund and the Portfolio Management Services division of the Company for the financial year 2023-24.
Your Directors wish to place on record the contributions made by Deloitte during their tenure as Internal
Auditors of the Schemes of Nippon India Mutual Fund and the Portfolio Management Services division of the Company.
AUDITORS'' REPORT
The observations and comments given by the Statutory Auditors in their report read together with notes on financial statements are self-explanatory and hence does not require any further comments in terms of Section 134 of the Act.
SECRETARIAL STANDARDS
During the year under review, the Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Directors had appointed M/s. M. Siroya and Company, Mumbai, a firm of Company Secretaries in-practice to undertake the Secretarial Audit of the Company for the financial year 2022-23. In this regard, the Report submitted by the Secretarial Auditor is annexed as Annexure C.
Your Directors are pleased to inform you that the report from the Secretarial Auditors does not contain any qualifications or negative remarks.
ANNUAL RETURN
Pursuant to Section 134(3)(a) and Section 92(3) of the Act read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company has been placed on the website of the Company and can be accessed at https://mf.nipponindiaim.com/AboutUs/ FinancialReports/Pages/Annual-Return.aspx .
PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
CONSERVATION OF ENERGY:
The operations of the Company do not consume high levels of energy. Adequate measures have been taken to conserve energy wherever feasible. Your Company uses the latest technology and energy - efficient equipment''s. Your Company only uses LED lights and 5-star air-conditioning for majority of offices. As energy cost forms a very small part of the total costs, the impact on cost is not material.
TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION:
Business Easy Revamp - Business Easy 2.0 app, our Digital asset for our distributors, is an all-
encompassing solution that acts as a complete Customer Relationship Management tool. The app works as a Digital branch through which distributors can manage their Mutual Fund business virtually. With the objective of evolving the app from a business facilitator to a growth enabler, this year saw the addition of new enhancements and features to the app. A number of features such as Intern Distributor addition, quick investment module were added along with meaningful reports for distributors to maximise the usage of the App.
Investor App and Website Enhancement - Our
flagship assets, namely the InvestEasy App and the InvestEasy website are constantly upgraded to include enhancements and innovations. These include workflow enhancements such as Cart Buying where users can purchase more than one product at a time. A number of regulatory compliance requirements have been added in the year as well.
Process Automation across Organisation - As part of the automation initiative a number of processes have been automated across operations, finance, risk and technology. This has freed up resources to be redeployed elsewhere.
Implementation of cloud initiatives - Continuing on NAM India''s cloud journey a number of initiatives on cloud where the infrastructure for initiatives such as Data Lake, Analytics, new core applications have been implemented on the AWS cloud.
RESEARCH AND DEVELOPMENT DIGITAL ADOPTION AND INNOVATION:
Nippon India Mutual Fund, continue to envision and execute key Digital transformation endeavors year on year that are aimed to strengthen our already robust Digital ecosystem.
⢠Focus always remains on empowering our investors during moments of truth and on a ''here & now'' manner to take quicker, smarter, and well-informed decisions on how and where they should invest their money when they transact on our Digital assets. Such empowerment is fueled by our capabilities to crunch & run real-time analysis on the enormous amount of on-asset & offline data points we have regarding our consumers, their past purchases, and future propensities.
⢠Intelligent, data led digital assets, can learn, and predict user behavior powered by both the real time frameworks and archived analytical frameworks which are operating on an advanced algo network. This helps in e-serving highly personalised and customised experiences to give our millennial, zillennial and legacy investors or partners accurate recommendations,
suggestions, on-the-fly nudges, predictive service and much more as they advance in their journeys.
Implementation of Data Models for cross sell and upsell have been implemented as part of the innovation adoption initiatives. As part of this movement third party model creators have been engaged with enhancing the data models of the organisation. Use cases are created with the support of business to identify patterns and opportunities in the models and campaigns are triggered on the analytics ecosystem to connect with customers and track the efficacy of the models.
We at NAM India also are working on further enhancing our digital assets by bringing in innovation in the payment gateway space especially towards frictionless payments. The current payment gateway ecosystem gives us as Digital innovators a lot of play with respect to designing workflows especially in the UPI space.
FOREIGN EXCHANGE EARNINGS AND OUTGO:
During the year under review, the Company earned foreign exchange equivalent to g 18.09 Crores (Previous Year: g 22.85 Crores). The Company spent foreign exchange equivalent to g 11.25 Crores (Previous Year: g 6.98 Crores).
DIRECTORS'' RESPONSIBILITY STATEMENT
As per the requirements of Sub Section (5) of Section 134 of the Act, the Directors confirm that -
(i) In the preparation of the annual accounts for the financial year ended March 31,2023,the applicable accounting standards have been followed and that there are no material departures;
(ii) The Directors have selected such accounting policies in consultation with the Statutory Auditors'' and have applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2023 and of the profit of the Company for the year under review;
(iii) The Directors have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) The Directors have prepared the annual accounts of the Company on a ''going concern'' basis;
(v) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;
(vi) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
CONTRACT AND ARRANGEMENTS WITH RELATED PARTIES
All contracts/ arrangements/ transactions entered into/ by the Company during the financial year under review with related parties were on an arm''s length basis and in the ordinary course of business. There were no materially significant related party transactions which could have potential conflict with the interest of the Company at large. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.
All Related Party Transactions were placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee was obtained for the transactions which were of a repetitive nature. The transactions entered into pursuant to the omnibus approval so granted were reviewed and statements giving details of all related party transactions were placed before the Audit Committee and the Board of Directors for their review on a quarterly basis. The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website at the following link:
https://mf.nipponindiaim.com/InvestorServices/
Your Directors draw attention of the Members to Note No. 28 to the financial statement which sets out related party disclosures.
PARTICULARS OF FRAUDS REPORTED BY THE AUDITORS''
In terms of Section 143(12) of the Act, M/s. S R Batliboi & Co. LLP, Chartered Accountants, the Statutory Auditors of the Company have not reported any instance of fraud having taken place during the year under review, in their Audit Report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators/ Courts which would impact the going concern status of the Company and its future operations.
DETAILS OF APPLICATION MADE BY THE COMPANY OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONGWITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR
The Company on behalf of the schemes of Nippon India Mutual Fund invests in various debt market instruments (non-convertible debentures) issued by various issuers. In order to realise the debenture outstanding''s, the Company has filed certain applications under the Insolvency and Bankruptcy Code, 2016. The Mutual Fund Division of the Company has filed (a) an IBC proceeding against Avantha Holdings Limited in January 2020 before Hon''ble NCLT New Delhi which is withdrawn as Avantha Holdings Limited has paid its dues. The Company is also a respondent party to an IBC proceeding filed in the matter of Reserve Bank of India v. Dewan Housing Finance Corporation Limited pending before the Hon''ble NCLT, Mumbai.
The Portfolio Management Services Division of the Company has filed: (a) IBC proceedings against Fortuna Buildcon India Private Limited was filed in November 2017 before the Hon''ble NCLT, Bangalore, wherein currently the resolution plan has been submitted to the Hon''ble NCLT for approval (b) three IBC proceedings against three Biodiversity Conservation India Private Limited group companies (BCIL Zed Ria Properties Private Limited, BCIL Red Earth Developers India Pvt. Ltd. and Biodiversity Conservation India Private Limited) were filed in December 2017 before the Hon''ble NCLT, Bangalore. The NCLT has approved resolution plans in BCIL Zed Ria Properties Private Limited and in BCIL Red Earth Developers India Pvt. Ltd., which are currently under implementation while Biodiversity Conservation India Private Limited is currently under liquidation. The Company is also a respondent to 2 (two) appeals in BCIL Red Earth Developers India Private Limited and in 3 (three) appeals in BCIL Zed Ria Properties Private Limited, before Hon''ble NCLAT, Chennai, which have been filed challenging the approved resolution plans; (c) IBC proceedings have been filed against the promoters of Biodiversity Conservation India Private Limited in November 2020 before Hon''ble NCLT, Bangalore which are currently at a pre-admission stage; (d) IBC proceeding filed against Green Valley Shelters Private Limited in December 2019, before Hon''ble NCLT, Chennai, was admitted in August 2021, however the proceedings are currently temporarily stayed under an order of the Supreme Court. The Company is a respondent in a civil appeal filed by the promoters of Green Valley Shelters Private Limited before the Hon''ble Supreme Court, challenging the admission of IBC proceedings against Green Valley Shelters Private Limited, which is currently pending under directions of exploring a settlement; (e) an IBC proceeding filed against the promoters of Green Valley Shelters Private Limited in October 2020 before the
Hon''ble NCLT, Chennai and is at a pre-admission stage; (f) an IBC proceeding was filed against Arkie Atelier Design India Private Limited, being the corporate guarantor for the debentures issued by Green Valley Shelters Private Limited in November 2021 and is currently at a preadmission stage; (g) an IBC proceeding filed against Bharucha & Motivala Infrastructure Private Limited, being corporate guarantor for the debentures issued by Lake District Realty Private Limited, in November 2019 before Hon''ble NCLT, Mumbai was admitted in May 2021, but has been stayed pursuant to an order of the Hon''ble NCLAT in July 2021. The Company is a respondent in the appeal filed by the promoters of Lake District Realty Private Limited before the Hon''ble NCLAT, Delhi, challenging the admission of IBC proceedings against Bharucha & Motivala Infrastructure Private Limited, which is currently reserved for orders; (h) IBC proceedings have been filed against the promoters of Lake District Realty Private Limited in November 2021, which is currently at a pre-admission stage; (i) an IBC proceedings has been filed against Ashapura Options Private Limited, being the corporate guarantor for the debentures issued by Ashapura Housing Private Limited in February 2022 which is at a pre-admission stage. (j) IBC proceedings have also been filed against four (4) promoter guarantors of Ashapura Housing Private Limited, which are at a pre-admission stage.
COST RECORDS
The Company is not required to maintain cost records as specified by the Central Government under subsection (1) of section 148 of the Companies Act, 2013.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
In terms of the provisions of Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules are provided in the Annexure to the Board''s Report. Disclosures relating to the remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended also forms part of this Report. However, having regard to the provisions of Section 136 of the Act, the Annual Report excluding the aforesaid information is being sent to all the Members of the Company and others entitled thereto. Any member interested in obtaining the said information may write to the Company Secretary. Upon such request the information shall be furnished.
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
Your Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of
The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. Following is a summary of sexual harassment complaints received and disposed off during the year:
⢠No. of complaints received: 0
⢠No. of complaints disposed off: 0
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
Pursuant to Regulation 34(2)(f) of Listing Regulations, top 1000 listed entities by market capitalisation have to publish a Business Responsibility and Sustainability Report from FY 2022-23. Business Responsibility and Sustainability Report for the year under review as stipulated under Listing Regulations is presented in the separate section forming part of this Annual Report.
AWARDS AND RECOGNITIONS
Some of the awards & recognitions, which came to NAM India include,
⢠Included in the elite "Kincentric Best Employers Club- 2023" an exclusive and prestigious group of organisations chosen across all industries who have been Best Employers consistently in the last 3-5 years
⢠Awarded Best Employer 2022 Award - 5th time in last 7 years
⢠Won the Outstanding Employee Engagement Award from Ekincare for our Health & Wellbeing initiative (Amongst only 9 Companies recognised in the country)
ACKNOWLEDGEMENTS
Your Directors wish to place on record their sincere appreciation for the co-operation received from various regulatory and governmental authorities including SEBI, RBI, Registrar of Companies, Maharashtra at Mumbai, PFRDA, NPS Trust, EPFO, CMPFO, Stock Exchanges, Depositories, Custodians, Bankers, Registrar, Shareholders, Investors and all other business constituents during the year under review. We believe all of them have contributed to our continued growth.
Your Directors also wish to place on record their deep appreciation for the total commitment displayed by all the executives, officers and staff, resulting in yet another eventful performance for the year.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS OF NIPPON LIFE INDIA ASSET MANAGEMENT LIMITED
Ashvin Dhirajlal Parekh Sundeep Sikka
Director Executive Director & CEO
(DIN: 06559989) (DIN: 02553654)
Place : Mumbai Dated : April 25, 2023
Mar 31, 2023
Your Directors take pleasure in presenting their 28th Annual Report on the business and operations of your Company, together with the audited financial statements, for the year ended March 31, 2023.
Your Company endeavors to remain one of the leading players in the Asset Management business in India and keeps exploring opportunities for enhancing its global footprint as well.
Your Company is a subsidiary Company of Nippon Life Insurance Company ("NLI"). NLI is a, fortune 500 Company and one of the largest life insurers in the world managing assets of over USD 700 billion. It has a large global network with presence across US, Europe, Asia, and Australia along with a 130-year track record in Life Insurance business as well as global investments across Asset Management companies. This pedigree brings strong synergistic benefits that very well complements your Company''s domestic expertise in the Asse Management business and provides a thrust to its significant growth potential. Your Company expects substantial upside in terms of increased AUM & adoption of best governance & risk management practices based on NLI''s global positioning & relationships.
FINANCIAL PERFORMANCE AND STATE OF COMPANY''S AFFAIRS
The standalone and consolidated financial statements of the Company for the financial year ended March 31, 2023, have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act. The financial highlights (on a consolidated and standalone basis) of the Company for the year ended March 31, 2023, are as follows:
Crores) |
||||
Consolidated |
Standalone |
|||
Particulars |
Year ended March 31, 2023 |
Year ended March 31, 2022 |
Year ended March 31, 2023 |
Year ended March 31, 2022 |
Gross Income |
1516.61 |
1535.63 |
1431.18 |
1428.42 |
Profit before exceptional item and tax |
927.74 |
988.67 |
917.77 |
945.43 |
Exceptional Items |
- |
- |
- |
- |
Profit Before tax |
927.74 |
988.67 |
917.77 |
945.43 |
Current Tax |
212.14 |
206.66 |
212.53 |
200.38 |
Deferred Tax |
(7.33) |
38.64 |
(9.70) |
33.84 |
Profit for the year |
722.93 |
743.37 |
714.94 |
711.21 |
Share of Profit from Associates |
0.40 |
0.79 |
- |
- |
Profit attributable to non-controlling interest |
- |
- |
- |
- |
Other Comprehensive Income |
(186) |
(0.30) |
(185) |
(0.27) |
Balance carried to Balance Sheet |
721.47 |
743.86 |
713.09 |
710.94 |
Basic EPS of S 10 each |
11.61 |
12.00 |
11.48 |
11.47 |
Diluted EPS of S 10 each |
11.53 |
11.80 |
11.40 |
11.28 |
The Consolidated Financial Statements of the Company form part of this Annual Report.
The annual accounts of all the subsidiary companies will be placed on the website of the Company. OPERATION HIGHLIGHTS
As you are aware that your Company acts as the asset manager to Nippon India Mutual Fund ("NIMF"), which is one of the largest Mutual Fund in India, in terms of the Quarterly Average Assets under Management (QAAUM) as on March 31, 2023.
The QAAUM of NIMF as on March 31, 2023, was t 2,93,159 Crores comprising of t 1,30,087 Crores of Equity, t 54,068 Crores of Debt, t 38,979 Crores of Liquid Funds and t 70,024 Crores of ETF assets. It may be noted that the QAAUM of NIMF as on March 31, 2022 was t 2,83,261 Crores comprising of t 1,19,062 Crores of Equity, t 73,173 Crores of Debt, t 35,230 Crores of Liquid Funds and t 55,796 Crores of ETF assets.
Overall QAAUM of NIMF has increased by 3.39% during the financial year 2022-23, while the Indian Mutual Fund Industry witnessed an overall growth of 5.55% in terms of QAAUM (Source: AMFI).
New Schemes Launched:
During the year under review, Nippon India Mutual Fund launched the following new schemes:
Scheme Name |
Type |
Structure |
Nippon India Nifty Alpha Low Volatility 30 Index Fund |
OPEN |
An open-ended scheme replicating/tracking Nifty Alpha Low Volatility 30 Index |
Nippon India Fixed Horizon Fund - XLIV - Series 1 |
CLOSE |
A Close Ended Scheme. Relatively High interest rate risk and moderate Credit Risk |
Nippon India Nifty AAA PSU Bond Plus SDL - Sep 2026 Maturity 50:50 Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty AAA PSU Bond Plus SDL Sep 2026 50:50 Index. A Relatively High interest rate risk and Relatively Low Credit Risk. |
Nippon India Nifty SDL Plus G-Sec -Jun 2028 Maturity 70:30 Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty SDL Plus G-Sec Jun 2028 70:30 Index. A Relatively High interest rate risk and Relatively Low Credit Risk. |
Nippon India Fixed Horizon Fund XLIV -Series 4 |
CLOSE |
A Close Ended Scheme. Relatively High interest rate risk and moderate Credit Risk |
Nippon India Fixed Horizon Fund - XLIV - Series 2 |
CLOSE |
A Close Ended Scheme. Relatively Low interest rate risk and moderate Credit Risk |
Nippon India Nifty G-Sec Sep 2027 Maturity Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty G-Sec Sep 2027 Index. A Relatively High Interest rate risk and Relatively Low Credit Risk. |
Nippon India Nifty G-Sec Jun 2036 Maturity Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty G-Sec Jun 2036 Index. A Relatively High Interest rate risk and Relatively Low Credit Risk. |
Nippon India Nifty SDL Plus G-Sec -Jun 2029 Maturity 70:30 Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty SDL Plus G-Sec Jun 2029 70:30 Index. A Relatively High interest rate risk and Relatively Low Credit Risk |
Nippon India Nifty G-Sec Oct 2028 Maturity Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty G-Sec Oct 2028 Index. A Relatively High interest rate risk and Relatively Low Credit Risk |
Nippon India Fixed Horizon Fund XLV -Series 4 |
CLOSE |
A Close Ended Scheme. Relatively High interest rate risk and Relatively Low Credit Risk |
Nippon India Fixed Horizon Fund XLV -Series 5 |
CLOSE |
A Close Ended Scheme. Relatively High interest rate risk and Relatively High Credit Risk |
As on March 31, 2023, NIMF has a well-rounded portfolio of 98 schemes under various categories such as Equity, Debt, Hybrid, Exchange Traded Funds, Index Funds, Fixed Maturity Plans, and Interval Funds.
DETAILS OF MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments affecting the financial position of the Company since the date of the financial statements i.e, March 31, 2023.
DIVIDEND
During the year, the Company had declared and paid an interim dividend of t 4.00 per equity share (40%) amounting to t 249.23 Crores. The Board has also recommended a final dividend of t 7.50 per Equity Share (75%) of t 10/- each for the financial year ended March 31, 2023, for the approval of the
Shareholders at the ensuing Annual General meeting. With this the total dividend for the financial year 2022-23 would be approximately t 716 Crores, including the interim dividend of t 4.00 per equity share distributed in November 2022. The Final dividend, if declared, will be paid after the Annual General Meeting.
The dividend pay-out is in accordance with the Company''s Dividend Distribution Policy which forms part of this Annual Report.
AMOUNT TO BE CARRIED TO RESERVES
Your Directors do not propose any amount to be transferred to the General Reserves of the Company.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report for the year under review as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) is presented in a separate section forming part of this Annual Report.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENT
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act are given in the notes to the Financial Statements.
There is no difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions.
DEPOSITS
The Company has neither accepted nor renewed any fixed deposits during the year. There are no outstanding or unclaimed deposits, unclaimed / unpaid interest, refunds due to the deposit holders or to be deposited to the Investor Education and Protection Fund as on March 31, 2023.
EMPLOYEES STOCK OPTION SCHEME
With the perspective of promoting the culture of employee ownership and to attract, retain, motivate and incentivise senior as well as critical talent, the Company has formulated Nippon Life India Asset Management Limited - Employee Stock Option Plan 2017 ("NAM INDIA ESOP 2017") [formerly known as "Reliance Nippon Life Asset Management Limited -Employee Stock Option Plan 2017"] ("ESOP 2017" / "Plan") as its stock option scheme, which was launched in August 2017 and Nippon Life India Asset Management Limited - Employee Stock Option Plan 2019 ("NAM INDIA ESOP 2019") [formerly known as "Reliance Nippon Life Asset Management Limited - Employee Stock Option Plan 2019"] ("ESOP 2019" / "Plan") as its stock option scheme, which was launched in July 2019. The Nomination and Remuneration Committee of the Board monitors and administers these Plans and from time - to - time grants stock options to the employees.
Both ESOP 2017 as well as ESOP 2019 are in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (SEBI Regulations).
However, having regard to the provisions of first provision to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to all the Members of the Company and others entitled thereto. The certificate from the Statutory Auditors of the Company confirming the compliance
of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 with respect to the Company''s Employees Stock Option Scheme Plans will be available for inspection through electronic mode. Any member interested in obtaining the same may write to the Company Secretary and the same will be furnished on request. The details as required to be disclosed under SEBI Regulations are available on the Company''s website at https:// mf.nipponindiaim.com/investor-service/customer-service/nam-india-shareholders-investors
CAPITAL STRUCTURE
During the Financial year 2022-23, the Company issued and allotted 11,57,515 Equity Shares to eligible employees on exercise of options granted under the Employee Stock Option Plans of the Company. Hence, the issued, subscribed and paid-up capital of the Company was 62,31,75,443 Equity Shares of g 10 each at the end of the Financial Year.
The Equity History of the Company has been provided in the Corporate Governance Report.
COMPLIANCE CULTURE & RISK MANAGEMENT
Your Company maintains a strong focus on Compliance and Risk Management as these are essential elements for its long-term success. The compliance and risk functions are managed by a dedicated and experienced team of professionals. The management has a zero tolerance towards risk and compliance failures or breaches.
There exists a comprehensive Compliance Manual, which is reviewed by your Board of Directors from time to time and it facilitates the Company''s Compliance team to monitor various compliance requirements effectively & comprehensively. The Compliance team conducts periodical educative & training programmes on various regulatory compliances matters for various sections of employees.
Your Company also has a comprehensive Risk Management Policy that envisages a structured and consistent enterprise-wide risk management framework, based on the three lines of defense model, to ensure that risk management processes are consistently applied across the organisation and provide reasonable assurance regarding achievement of organisation''s objectives.
The risk management policy clearly sets out the objectives & elements of risk management within the organisation, including the constitution of an independent Risk Management department headed by Chief Risk Officer (reporting directly to the CEO and to the Board of Directors), Risk Management Committee at executive and Board levels. The policy
also define the roles and responsibility of all the CXOs towards risk management as part of first line of defense model.
Your Company promotes risk awareness culture throughout the organisation and risk management is an integral part of decision making and day-today operations of all activities at all levels across the organisation. There are well documented & Board approved policies & processes to address and mitigate various risks to which the Company is exposed. The Company also has a robust business continuity plan which is tested on a periodic basis to ensure uninterrupted operations. The risk department conducts various training programmes on various facets of risk management including cyber risk awareness, conduct risk, operational risk, Anti Money Laundering, etc.
The Company has a structured risk reporting mechanism to ensure risks are monitored and reviewed by CRO, Senior Management, RMCBs and Board on a periodic basis.
INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY
The Company has an Internal Control System which is commensurate with the size, scale and complexity of its business operations.
For effective risk management and control, the Company has established structures and responsibilities in line with the "Three Lines of Defense" model, where 1st line being business operations, 2nd line is the oversight functions like Risk Management and Compliance and 3rd line is Internal Audit. To maintain its objectivity and independence, the Internal Audit department reports to the Audit Committee. The Internal Audit department monitors and evaluates the efficacy and adequacy of the internal control system in the Company, its compliance with operating systems, accounting procedures and policies. Based on the report of the Internal Auditor, process owners undertake corrective action in their respective areas and thereby strengthen the controls. The Internal Audit department follows up on pending audit issues and ensures that corrective actions have been taken. Significant audit observations, if any, and corrective actions thereon, are presented to the Audit Committee of the Board.
CORPORATE GOVERNANCE
Your Directors wish to reiterate your Company''s commitment to the highest standards of corporate governance to enhance trust of all its stakeholders. Strong & robust corporate governance practices have facilitated your Company in standing up to the continued scrutiny of domestic & international investors and that of various Regulatory authorities.
The report on Corporate Governance as stipulated under Regulation 34(3) read with Para C of Schedule V of the Listing Regulations is presented in a separate section forming part of this Annual Report.
A Certificate from the auditors of the Company i.e. M/s. S. R. Batliboi & Co. LLP, Chartered Accountants conforming compliance to the conditions of Corporate Governance as stipulated under Para E of Schedule V of the Listing Regulations, is enclosed to this Report.
VIGIL MECHANISM
In accordance with Section 177 of the Act and the Listing Regulations, the Company has formulated a Vigil Mechanism to address the genuine concerns, if any. The Whistle Blower policy can be accessed on the Company''s website. It is affirmed that no person has been denied access to the Chairperson of the Audit Committee.
CORPORATE SOCIAL RESPONSIBILITY
As part of its initiatives under "Corporate Social Responsibility (CSR)", the Company has undertaken projects in the areas of promoting healthcare, education and rural development in accordance with Schedule VII of the Act.
The Annual Report on CSR activities is annexed herewith as Annexure A.
SUBSIDIARIES & ASSOCIATE COMPANY
As of March 31, 2023, your Company had two (2) subsidiaries. One of such subsidiaries is overseas i.e., one subsidiary in Singapore and one subsidiary in India. Both the subsidiaries of the Company are engaged in financial services and related activities. In addition, the Company also has an Associate company in India, which has already surrendered its business license/ regulatory approval to act as a Pension Fund Manager. This particular company currently has no business operations, and it is therefore proposed to be wound up, in accordance with the applicable laws.
During the year our subsidiary company, Nippon Life India Asset Management (Mauritius) Limited, has been voluntarily wound up.
A statement w.r.t. the performance and the financial position of the subsidiaries of the Company forms a part of the Consolidated Financial Statements of the Company.
The performance of the financial position of the subsidiary companies is presented in the Management Discussions and Analysis Report forming part of this Annual Report. The policy for determining material subsidiary companies may be accessed on the
Company''s website at https://mf.nipponindiaim.com/ InvestorServices/Pages/lnvestor-Policies.aspx
Further, The International Financial Services Centres Authority (IFSCA) has granted NAM India (IFSC Branch) the certificate of registration to carry out the activities as a Fund Management Entity (Non-Retail) under the IFSCA (Fund Management) Regulations, 2022 on March 1, 2023.
KEY MANAGERIAL PERSONNEL
During the year under review, the following employees were the ''Key Managerial Personnel'' of the Company:
a) Mr. Sundeep Sikka - Executive Director & Chief Executive Officer;
b) Mr. Ajay Patel - Manager;
c) Mr. Prateek Jain - Chief Financial Officer; and
d) Ms. Nilufer Shekhawat - Company Secretary
DIRECTORS
During the year, Mr. Kazuyuki Saigo who was a Director as on March 31, 2022, resigned from the directorship of the Company w.e.f. April 21, 2022. Mr. Tomohiro Yao and Mr. Minoru Kimura were first appointed as Additional Directors of the Company w.e.f. April 21, 2022. Mr. Tomohiro Yao and Mr. Minoru Kimura were then appointed as Non-Executive Nominee Director w.e.f. July 12, 2022.
As on the date of this Boards Report, Mr. Hiroki Yamauchi was appointed as an additional Director (Non-Executive Nominee Director) in place of Mr. Akira Shibata. Mr. Upendra Kumar Sinha was appointed as an additional Director (Non-Executive Independent Director) and Chairman of the Board to be effective May 1, 2023. Both these appointments are subject to approval of the Shareholders at the ensuing Annual General Meeting.
All the Independent Directors of your Company i.e., General Ved Prakash Malik (Retd.), Ms. Ameeta Chatterjee, Mr. Ashvin Parekh and Mr. B. Sriram have already furnished the required declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act.
In the opinion of the Board, the Independent Directors possess the requisite expertise and experience and are people of high integrity and repute. They fulfil the conditions specified in the Act and the Rules made thereunder and are independent of the management.
In terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by The
Indian Institute of Corporate Affairs, Manesar (''IICA''). The Independent Directors are also required to undertake online proficiency self-assessment test conducted by the IICA within a period of two years from the date of inclusion of their names in the data bank, unless they meet the criteria specified for exemption. All the Independent Directors of the Company are exempt from the requirement to undertake online proficiency self assessment test.
PERFORMANCE EVALUATION OF DIRECTORS, BOARD AND COMMITTEES
The Company has devised a policy for the performance evaluation of the individual directors, Board and its Committees, which also includes the criteria for carrying out the said performance evaluation. Pursuant to the provisions of the Act and Regulation 17(10) of Listing Regulations and as prescribed in the stated policy of the Board, the Board has carried out an annual performance evaluation of (i) the Directors (Independent and non-independent); (ii) itself (as a whole); (iii) its committees and (iv) fulfillment of Independence criteria. The Board performance was evaluated based on input received from the Board Members after considering criteria such as Board composition and structure, effectiveness of Board / Committee processes, and information provided to the Board, etc. In terms of the requirements of the Act, a separate meeting of the Independent Directors was also held during the year.
BOARD AND COMMITTEE MEETINGS
During the year under review, eight (8) Board meetings were held.
Your Directors wish to inform that the functioning of the Board is supplemented by various committees (Board sub-committees and management committees), which have been constituted from time to time, such as Audit Committee, Committee of Directors, CSR Committee, Stakeholders Relationship Committee, Nomination & Remuneration Committee, Risk Management Committee of the Board, Valuation Committee, Investment Committee, Risk Management Committee, Allotment Committee, Broker Empanelment Committee, Operating Committee, Compliance Committee, Stewardship Committee, Proxy Voting Committee, Information Security Risk Management Committee, etc. to name a few. Each of the aforesaid Committees has been constituted in order to ensure due compliance with the applicable laws and to ensure that the highest levels of corporate governance are followed and practiced. The minutes of the meetings of each of these Committees are duly placed before the Board for noting and confirmation.
AUDIT COMMITTEE
In terms of the requirements of Section 177 of the Act, the Audit Committee of the Company consists of the majority of Independent Directors. As on date of this report, it comprises Mr. Ashvin Parekh [Independent Director], Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. B. Sriram [Independent Director], Mr. Hiroki Yamauchi [Non- Independent Director] and Mr. Minoru Kimura [Non- Independent Director]. Mr. Ashvin Parekh acts as the Chairperson of this Committee.
During the year, eight (8) meetings of the Audit Committee were held, which includes 1 joint Audit Committee between the Audit Committee of the Asset Management Company (''AMC'') with the Audit Committee of the Trustees and one (1) meeting to interact with the Statutory and Internal Auditors of the Mutual Fund without the engagement of management of the AMC as stipulated in SEBI Circular No. SEBI/HO/IMD/IMD-IDOF2/P/CIR/2022/17 dated February 09, 2022.
Other relevant details in this regard have been provided in the Corporate Governance Report.
NOMINATION & REMUNERATION COMMITTEE
In terms of the requirements of Section 178 of the Act, the Nomination & Remuneration Committee of the Company consists of the majority of Independent Directors. As on date of this report, it comprises, Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Tomohiro Yao [Non-Independent Director] and Mr. Minoru Kimura [Non-Independent Director]. General Ved Prakash Malik (Retd.) acts as the Chairperson of this Committee.
During the year, three (3) meetings of the Nomination & Remuneration Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
The Nomination & Remuneration Policy has been provided as Annexure B to the Board''s Report.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
In terms of the requirements of Section 135 of the Act, the Corporate Social Responsibility ("CSR") Committee of the Company consists of eight (8) Members. As on date of this report, it comprises Mr. Tomohiro Yao [Non-Independent Director], Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Sundeep Sikka [CEO & Executive
Director], Mr. Hiroki Yamauchi [Non-Independent Director] and Mr. Minoru Kimura [Non-Independent Director]. Mr. Tomohiro Yao acts as the Chairperson of this Committee.
During the year 2022-23, two (2) meetings of the CSR Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
STAKEHOLDERS'' RELATIONSHIP COMMITTEE
In terms of the requirements of Section 178 of the Act, the Stakeholders'' Relationship Committee of the Company consists of five Members. As on date of this report, it comprises Ms. Ameeta Chatterjee [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Tomohiro Yao [Non-Independent Director] and Mr. Sundeep Sikka [CEO & Executive Director]. Ms. Ameeta Chatterjee acts as the Chairperson of this Committee.
During the year, two (2) meetings of the Stakeholders'' Relationship Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
RISK MANAGEMENT COMMITTEE
In terms of the relevant requirements under the Listing Regulations, the Company has constituted a Risk Management Committee of the Board. The Committee presently comprises of Mr. Tomohiro Yao [Non-Independent Director], Mr. Hiroki Yamauchi [Non-Independent Director], Mr. Sundeep Sikka [CEO & Executive Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director] and Mr. Rishi Garg [Chief Risk Officer] as its Members. Mr. Tomohiro Yao acts as the Chairperson of this Committee.
During the year, five (5) meetings of the Risk Management Committee of the Board were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
AUDITORS'' OF THE COMPANY - STATUTORY AND INTERNAL
Statutory Auditors:
M/s. S. R. Batliboi & Co. LLP, Chartered Accountants shall hold office as Statutory Auditors of the Company until the conclusion of this 28th Annual General Meeting.
The Company has already received a consent letter from M/s. S. R. Batliboi & Co. LLP, Chartered Accountants communicating their willingness to be re-appointed as the Statutory Auditors of the Company and that their re-appointment, if made, would be within
the limits as prescribed under Section 139 of the Companies Act, 2013.
Your Directors hereby recommends the reappointment of M/s. S. R. Batliboi & Co. LLP, Chartered Accountants as the Statutory Auditors of the Company for a second term of 5 (five) consecutive years, to hold office from the conclusion of this Annual General Meeting until the conclusion of the 33rd Annual General Meeting of the Company.
Internal Auditors:
JHS & Associates LLP, Chartered Accountants (JHS) were appointed as the Internal Auditors of your Company for the financial year 2022-23. Having regard to their longevity in office and as a matter of good governance, your Directors have approved the rotation of JHS and appointed PricewaterhouseCoopers Services LLP (PWC) as the Internal Auditors of your Company for the financial year 2023-24.
Your Directors wish to place on record the contributions made by JHS during their tenure as Internal Auditors of your Company.
AUDITORS OF THE SCHEMES OF NIPPON INDIA MUTUAL FUND-STATUTORY AND INTERNAL
In accordance with the applicable provisions of law, the Company has appointed Statutory and Internal Auditors for various Schemes of Nippon India Mutual Fund, who periodically submit their reports, which are placed before the Audit Committee for discussion, review and implementation of their recommendations.
Statutory Auditors:
M/s. Walker Chandiok & Co. LLP, Chartered Accountants were appointed as Statutory Auditors of the Schemes of Nippon India Mutual Fund for the financial year 2022-23.
Internal Auditors:
M/s. Deloitte Haskins & Sells LLP, Chartered Accountants (Deloitte) were appointed as Internal Auditors of the Schemes of Nippon India Mutual Fund and the Portfolio Management Services division of the Company, for the financial year 2022-23. Having regard to their longevity in office and as a matter of good governance, your Directors have approved the rotation of Deloitte and appointed PricewaterhouseCoopers Services LLP (PWC) as the Internal Auditors of the Schemes of Nippon India Mutual Fund and the Portfolio Management Services division of the Company for the financial year 2023-24.
Your Directors wish to place on record the contributions made by Deloitte during their tenure as Internal
Auditors of the Schemes of Nippon India Mutual Fund and the Portfolio Management Services division of the Company.
AUDITORS'' REPORT
The observations and comments given by the Statutory Auditors in their report read together with notes on financial statements are self-explanatory and hence does not require any further comments in terms of Section 134 of the Act.
SECRETARIAL STANDARDS
During the year under review, the Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Directors had appointed M/s. M. Siroya and Company, Mumbai, a firm of Company Secretaries in-practice to undertake the Secretarial Audit of the Company for the financial year 2022-23. In this regard, the Report submitted by the Secretarial Auditor is annexed as Annexure C.
Your Directors are pleased to inform you that the report from the Secretarial Auditors does not contain any qualifications or negative remarks.
ANNUAL RETURN
Pursuant to Section 134(3)(a) and Section 92(3) of the Act read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company has been placed on the website of the Company and can be accessed at https://mf.nipponindiaim.com/AboutUs/ FinancialReports/Pages/Annual-Return.aspx .
PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
CONSERVATION OF ENERGY:
The operations of the Company do not consume high levels of energy. Adequate measures have been taken to conserve energy wherever feasible. Your Company uses the latest technology and energy - efficient equipment''s. Your Company only uses LED lights and 5-star air-conditioning for majority of offices. As energy cost forms a very small part of the total costs, the impact on cost is not material.
TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION:
Business Easy Revamp - Business Easy 2.0 app, our Digital asset for our distributors, is an all-
encompassing solution that acts as a complete Customer Relationship Management tool. The app works as a Digital branch through which distributors can manage their Mutual Fund business virtually. With the objective of evolving the app from a business facilitator to a growth enabler, this year saw the addition of new enhancements and features to the app. A number of features such as Intern Distributor addition, quick investment module were added along with meaningful reports for distributors to maximise the usage of the App.
Investor App and Website Enhancement - Our
flagship assets, namely the InvestEasy App and the InvestEasy website are constantly upgraded to include enhancements and innovations. These include workflow enhancements such as Cart Buying where users can purchase more than one product at a time. A number of regulatory compliance requirements have been added in the year as well.
Process Automation across Organisation - As part of the automation initiative a number of processes have been automated across operations, finance, risk and technology. This has freed up resources to be redeployed elsewhere.
Implementation of cloud initiatives - Continuing on NAM India''s cloud journey a number of initiatives on cloud where the infrastructure for initiatives such as Data Lake, Analytics, new core applications have been implemented on the AWS cloud.
RESEARCH AND DEVELOPMENT DIGITAL ADOPTION AND INNOVATION:
Nippon India Mutual Fund, continue to envision and execute key Digital transformation endeavors year on year that are aimed to strengthen our already robust Digital ecosystem.
⢠Focus always remains on empowering our investors during moments of truth and on a ''here & now'' manner to take quicker, smarter, and well-informed decisions on how and where they should invest their money when they transact on our Digital assets. Such empowerment is fueled by our capabilities to crunch & run real-time analysis on the enormous amount of on-asset & offline data points we have regarding our consumers, their past purchases, and future propensities.
⢠Intelligent, data led digital assets, can learn, and predict user behavior powered by both the real time frameworks and archived analytical frameworks which are operating on an advanced algo network. This helps in e-serving highly personalised and customised experiences to give our millennial, zillennial and legacy investors or partners accurate recommendations,
suggestions, on-the-fly nudges, predictive service and much more as they advance in their journeys.
Implementation of Data Models for cross sell and upsell have been implemented as part of the innovation adoption initiatives. As part of this movement third party model creators have been engaged with enhancing the data models of the organisation. Use cases are created with the support of business to identify patterns and opportunities in the models and campaigns are triggered on the analytics ecosystem to connect with customers and track the efficacy of the models.
We at NAM India also are working on further enhancing our digital assets by bringing in innovation in the payment gateway space especially towards frictionless payments. The current payment gateway ecosystem gives us as Digital innovators a lot of play with respect to designing workflows especially in the UPI space.
FOREIGN EXCHANGE EARNINGS AND OUTGO:
During the year under review, the Company earned foreign exchange equivalent to g 18.09 Crores (Previous Year: g 22.85 Crores). The Company spent foreign exchange equivalent to g 11.25 Crores (Previous Year: g 6.98 Crores).
DIRECTORS'' RESPONSIBILITY STATEMENT
As per the requirements of Sub Section (5) of Section 134 of the Act, the Directors confirm that -
(i) In the preparation of the annual accounts for the financial year ended March 31,2023,the applicable accounting standards have been followed and that there are no material departures;
(ii) The Directors have selected such accounting policies in consultation with the Statutory Auditors'' and have applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2023 and of the profit of the Company for the year under review;
(iii) The Directors have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) The Directors have prepared the annual accounts of the Company on a ''going concern'' basis;
(v) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;
(vi) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
CONTRACT AND ARRANGEMENTS WITH RELATED PARTIES
All contracts/ arrangements/ transactions entered into/ by the Company during the financial year under review with related parties were on an arm''s length basis and in the ordinary course of business. There were no materially significant related party transactions which could have potential conflict with the interest of the Company at large. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.
All Related Party Transactions were placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee was obtained for the transactions which were of a repetitive nature. The transactions entered into pursuant to the omnibus approval so granted were reviewed and statements giving details of all related party transactions were placed before the Audit Committee and the Board of Directors for their review on a quarterly basis. The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website at the following link:
https://mf.nipponindiaim.com/InvestorServices/
Your Directors draw attention of the Members to Note No. 28 to the financial statement which sets out related party disclosures.
PARTICULARS OF FRAUDS REPORTED BY THE AUDITORS''
In terms of Section 143(12) of the Act, M/s. S R Batliboi & Co. LLP, Chartered Accountants, the Statutory Auditors of the Company have not reported any instance of fraud having taken place during the year under review, in their Audit Report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators/ Courts which would impact the going concern status of the Company and its future operations.
DETAILS OF APPLICATION MADE BY THE COMPANY OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONGWITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR
The Company on behalf of the schemes of Nippon India Mutual Fund invests in various debt market instruments (non-convertible debentures) issued by various issuers. In order to realise the debenture outstanding''s, the Company has filed certain applications under the Insolvency and Bankruptcy Code, 2016. The Mutual Fund Division of the Company has filed (a) an IBC proceeding against Avantha Holdings Limited in January 2020 before Hon''ble NCLT New Delhi which is withdrawn as Avantha Holdings Limited has paid its dues. The Company is also a respondent party to an IBC proceeding filed in the matter of Reserve Bank of India v. Dewan Housing Finance Corporation Limited pending before the Hon''ble NCLT, Mumbai.
The Portfolio Management Services Division of the Company has filed: (a) IBC proceedings against Fortuna Buildcon India Private Limited was filed in November 2017 before the Hon''ble NCLT, Bangalore, wherein currently the resolution plan has been submitted to the Hon''ble NCLT for approval (b) three IBC proceedings against three Biodiversity Conservation India Private Limited group companies (BCIL Zed Ria Properties Private Limited, BCIL Red Earth Developers India Pvt. Ltd. and Biodiversity Conservation India Private Limited) were filed in December 2017 before the Hon''ble NCLT, Bangalore. The NCLT has approved resolution plans in BCIL Zed Ria Properties Private Limited and in BCIL Red Earth Developers India Pvt. Ltd., which are currently under implementation while Biodiversity Conservation India Private Limited is currently under liquidation. The Company is also a respondent to 2 (two) appeals in BCIL Red Earth Developers India Private Limited and in 3 (three) appeals in BCIL Zed Ria Properties Private Limited, before Hon''ble NCLAT, Chennai, which have been filed challenging the approved resolution plans; (c) IBC proceedings have been filed against the promoters of Biodiversity Conservation India Private Limited in November 2020 before Hon''ble NCLT, Bangalore which are currently at a pre-admission stage; (d) IBC proceeding filed against Green Valley Shelters Private Limited in December 2019, before Hon''ble NCLT, Chennai, was admitted in August 2021, however the proceedings are currently temporarily stayed under an order of the Supreme Court. The Company is a respondent in a civil appeal filed by the promoters of Green Valley Shelters Private Limited before the Hon''ble Supreme Court, challenging the admission of IBC proceedings against Green Valley Shelters Private Limited, which is currently pending under directions of exploring a settlement; (e) an IBC proceeding filed against the promoters of Green Valley Shelters Private Limited in October 2020 before the
Hon''ble NCLT, Chennai and is at a pre-admission stage; (f) an IBC proceeding was filed against Arkie Atelier Design India Private Limited, being the corporate guarantor for the debentures issued by Green Valley Shelters Private Limited in November 2021 and is currently at a preadmission stage; (g) an IBC proceeding filed against Bharucha & Motivala Infrastructure Private Limited, being corporate guarantor for the debentures issued by Lake District Realty Private Limited, in November 2019 before Hon''ble NCLT, Mumbai was admitted in May 2021, but has been stayed pursuant to an order of the Hon''ble NCLAT in July 2021. The Company is a respondent in the appeal filed by the promoters of Lake District Realty Private Limited before the Hon''ble NCLAT, Delhi, challenging the admission of IBC proceedings against Bharucha & Motivala Infrastructure Private Limited, which is currently reserved for orders; (h) IBC proceedings have been filed against the promoters of Lake District Realty Private Limited in November 2021, which is currently at a pre-admission stage; (i) an IBC proceedings has been filed against Ashapura Options Private Limited, being the corporate guarantor for the debentures issued by Ashapura Housing Private Limited in February 2022 which is at a pre-admission stage. (j) IBC proceedings have also been filed against four (4) promoter guarantors of Ashapura Housing Private Limited, which are at a pre-admission stage.
COST RECORDS
The Company is not required to maintain cost records as specified by the Central Government under subsection (1) of section 148 of the Companies Act, 2013.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
In terms of the provisions of Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules are provided in the Annexure to the Board''s Report. Disclosures relating to the remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended also forms part of this Report. However, having regard to the provisions of Section 136 of the Act, the Annual Report excluding the aforesaid information is being sent to all the Members of the Company and others entitled thereto. Any member interested in obtaining the said information may write to the Company Secretary. Upon such request the information shall be furnished.
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
Your Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of
The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. Following is a summary of sexual harassment complaints received and disposed off during the year:
⢠No. of complaints received: 0
⢠No. of complaints disposed off: 0
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
Pursuant to Regulation 34(2)(f) of Listing Regulations, top 1000 listed entities by market capitalisation have to publish a Business Responsibility and Sustainability Report from FY 2022-23. Business Responsibility and Sustainability Report for the year under review as stipulated under Listing Regulations is presented in the separate section forming part of this Annual Report.
AWARDS AND RECOGNITIONS
Some of the awards & recognitions, which came to NAM India include,
⢠Included in the elite "Kincentric Best Employers Club- 2023" an exclusive and prestigious group of organisations chosen across all industries who have been Best Employers consistently in the last 3-5 years
⢠Awarded Best Employer 2022 Award - 5th time in last 7 years
⢠Won the Outstanding Employee Engagement Award from Ekincare for our Health & Wellbeing initiative (Amongst only 9 Companies recognised in the country)
ACKNOWLEDGEMENTS
Your Directors wish to place on record their sincere appreciation for the co-operation received from various regulatory and governmental authorities including SEBI, RBI, Registrar of Companies, Maharashtra at Mumbai, PFRDA, NPS Trust, EPFO, CMPFO, Stock Exchanges, Depositories, Custodians, Bankers, Registrar, Shareholders, Investors and all other business constituents during the year under review. We believe all of them have contributed to our continued growth.
Your Directors also wish to place on record their deep appreciation for the total commitment displayed by all the executives, officers and staff, resulting in yet another eventful performance for the year.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS OF NIPPON LIFE INDIA ASSET MANAGEMENT LIMITED
Ashvin Dhirajlal Parekh Sundeep Sikka
Director Executive Director & CEO
(DIN: 06559989) (DIN: 02553654)
Place : Mumbai Dated : April 25, 2023
Mar 31, 2023
Your Directors take pleasure in presenting their 28th Annual Report on the business and operations of your Company, together with the audited financial statements, for the year ended March 31, 2023.
Your Company endeavors to remain one of the leading players in the Asset Management business in India and keeps exploring opportunities for enhancing its global footprint as well.
Your Company is a subsidiary Company of Nippon Life Insurance Company ("NLI"). NLI is a, fortune 500 Company and one of the largest life insurers in the world managing assets of over USD 700 billion. It has a large global network with presence across US, Europe, Asia, and Australia along with a 130-year track record in Life Insurance business as well as global investments across Asset Management companies. This pedigree brings strong synergistic benefits that very well complements your Company''s domestic expertise in the Asse Management business and provides a thrust to its significant growth potential. Your Company expects substantial upside in terms of increased AUM & adoption of best governance & risk management practices based on NLI''s global positioning & relationships.
FINANCIAL PERFORMANCE AND STATE OF COMPANY''S AFFAIRS
The standalone and consolidated financial statements of the Company for the financial year ended March 31, 2023, have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act. The financial highlights (on a consolidated and standalone basis) of the Company for the year ended March 31, 2023, are as follows:
Crores) |
||||
Consolidated |
Standalone |
|||
Particulars |
Year ended March 31, 2023 |
Year ended March 31, 2022 |
Year ended March 31, 2023 |
Year ended March 31, 2022 |
Gross Income |
1516.61 |
1535.63 |
1431.18 |
1428.42 |
Profit before exceptional item and tax |
927.74 |
988.67 |
917.77 |
945.43 |
Exceptional Items |
- |
- |
- |
- |
Profit Before tax |
927.74 |
988.67 |
917.77 |
945.43 |
Current Tax |
212.14 |
206.66 |
212.53 |
200.38 |
Deferred Tax |
(7.33) |
38.64 |
(9.70) |
33.84 |
Profit for the year |
722.93 |
743.37 |
714.94 |
711.21 |
Share of Profit from Associates |
0.40 |
0.79 |
- |
- |
Profit attributable to non-controlling interest |
- |
- |
- |
- |
Other Comprehensive Income |
(186) |
(0.30) |
(185) |
(0.27) |
Balance carried to Balance Sheet |
721.47 |
743.86 |
713.09 |
710.94 |
Basic EPS of S 10 each |
11.61 |
12.00 |
11.48 |
11.47 |
Diluted EPS of S 10 each |
11.53 |
11.80 |
11.40 |
11.28 |
The Consolidated Financial Statements of the Company form part of this Annual Report.
The annual accounts of all the subsidiary companies will be placed on the website of the Company. OPERATION HIGHLIGHTS
As you are aware that your Company acts as the asset manager to Nippon India Mutual Fund ("NIMF"), which is one of the largest Mutual Fund in India, in terms of the Quarterly Average Assets under Management (QAAUM) as on March 31, 2023.
The QAAUM of NIMF as on March 31, 2023, was t 2,93,159 Crores comprising of t 1,30,087 Crores of Equity, t 54,068 Crores of Debt, t 38,979 Crores of Liquid Funds and t 70,024 Crores of ETF assets. It may be noted that the QAAUM of NIMF as on March 31, 2022 was t 2,83,261 Crores comprising of t 1,19,062 Crores of Equity, t 73,173 Crores of Debt, t 35,230 Crores of Liquid Funds and t 55,796 Crores of ETF assets.
Overall QAAUM of NIMF has increased by 3.39% during the financial year 2022-23, while the Indian Mutual Fund Industry witnessed an overall growth of 5.55% in terms of QAAUM (Source: AMFI).
New Schemes Launched:
During the year under review, Nippon India Mutual Fund launched the following new schemes:
Scheme Name |
Type |
Structure |
Nippon India Nifty Alpha Low Volatility 30 Index Fund |
OPEN |
An open-ended scheme replicating/tracking Nifty Alpha Low Volatility 30 Index |
Nippon India Fixed Horizon Fund - XLIV - Series 1 |
CLOSE |
A Close Ended Scheme. Relatively High interest rate risk and moderate Credit Risk |
Nippon India Nifty AAA PSU Bond Plus SDL - Sep 2026 Maturity 50:50 Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty AAA PSU Bond Plus SDL Sep 2026 50:50 Index. A Relatively High interest rate risk and Relatively Low Credit Risk. |
Nippon India Nifty SDL Plus G-Sec -Jun 2028 Maturity 70:30 Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty SDL Plus G-Sec Jun 2028 70:30 Index. A Relatively High interest rate risk and Relatively Low Credit Risk. |
Nippon India Fixed Horizon Fund XLIV -Series 4 |
CLOSE |
A Close Ended Scheme. Relatively High interest rate risk and moderate Credit Risk |
Nippon India Fixed Horizon Fund - XLIV - Series 2 |
CLOSE |
A Close Ended Scheme. Relatively Low interest rate risk and moderate Credit Risk |
Nippon India Nifty G-Sec Sep 2027 Maturity Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty G-Sec Sep 2027 Index. A Relatively High Interest rate risk and Relatively Low Credit Risk. |
Nippon India Nifty G-Sec Jun 2036 Maturity Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty G-Sec Jun 2036 Index. A Relatively High Interest rate risk and Relatively Low Credit Risk. |
Nippon India Nifty SDL Plus G-Sec -Jun 2029 Maturity 70:30 Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty SDL Plus G-Sec Jun 2029 70:30 Index. A Relatively High interest rate risk and Relatively Low Credit Risk |
Nippon India Nifty G-Sec Oct 2028 Maturity Index Fund |
OPEN |
An open-ended Target Maturity Index Fund investing in constituents of Nifty G-Sec Oct 2028 Index. A Relatively High interest rate risk and Relatively Low Credit Risk |
Nippon India Fixed Horizon Fund XLV -Series 4 |
CLOSE |
A Close Ended Scheme. Relatively High interest rate risk and Relatively Low Credit Risk |
Nippon India Fixed Horizon Fund XLV -Series 5 |
CLOSE |
A Close Ended Scheme. Relatively High interest rate risk and Relatively High Credit Risk |
As on March 31, 2023, NIMF has a well-rounded portfolio of 98 schemes under various categories such as Equity, Debt, Hybrid, Exchange Traded Funds, Index Funds, Fixed Maturity Plans, and Interval Funds.
DETAILS OF MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments affecting the financial position of the Company since the date of the financial statements i.e, March 31, 2023.
DIVIDEND
During the year, the Company had declared and paid an interim dividend of t 4.00 per equity share (40%) amounting to t 249.23 Crores. The Board has also recommended a final dividend of t 7.50 per Equity Share (75%) of t 10/- each for the financial year ended March 31, 2023, for the approval of the
Shareholders at the ensuing Annual General meeting. With this the total dividend for the financial year 2022-23 would be approximately t 716 Crores, including the interim dividend of t 4.00 per equity share distributed in November 2022. The Final dividend, if declared, will be paid after the Annual General Meeting.
The dividend pay-out is in accordance with the Company''s Dividend Distribution Policy which forms part of this Annual Report.
AMOUNT TO BE CARRIED TO RESERVES
Your Directors do not propose any amount to be transferred to the General Reserves of the Company.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report for the year under review as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) is presented in a separate section forming part of this Annual Report.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENT
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act are given in the notes to the Financial Statements.
There is no difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions.
DEPOSITS
The Company has neither accepted nor renewed any fixed deposits during the year. There are no outstanding or unclaimed deposits, unclaimed / unpaid interest, refunds due to the deposit holders or to be deposited to the Investor Education and Protection Fund as on March 31, 2023.
EMPLOYEES STOCK OPTION SCHEME
With the perspective of promoting the culture of employee ownership and to attract, retain, motivate and incentivise senior as well as critical talent, the Company has formulated Nippon Life India Asset Management Limited - Employee Stock Option Plan 2017 ("NAM INDIA ESOP 2017") [formerly known as "Reliance Nippon Life Asset Management Limited -Employee Stock Option Plan 2017"] ("ESOP 2017" / "Plan") as its stock option scheme, which was launched in August 2017 and Nippon Life India Asset Management Limited - Employee Stock Option Plan 2019 ("NAM INDIA ESOP 2019") [formerly known as "Reliance Nippon Life Asset Management Limited - Employee Stock Option Plan 2019"] ("ESOP 2019" / "Plan") as its stock option scheme, which was launched in July 2019. The Nomination and Remuneration Committee of the Board monitors and administers these Plans and from time - to - time grants stock options to the employees.
Both ESOP 2017 as well as ESOP 2019 are in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (SEBI Regulations).
However, having regard to the provisions of first provision to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to all the Members of the Company and others entitled thereto. The certificate from the Statutory Auditors of the Company confirming the compliance
of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 with respect to the Company''s Employees Stock Option Scheme Plans will be available for inspection through electronic mode. Any member interested in obtaining the same may write to the Company Secretary and the same will be furnished on request. The details as required to be disclosed under SEBI Regulations are available on the Company''s website at https:// mf.nipponindiaim.com/investor-service/customer-service/nam-india-shareholders-investors
CAPITAL STRUCTURE
During the Financial year 2022-23, the Company issued and allotted 11,57,515 Equity Shares to eligible employees on exercise of options granted under the Employee Stock Option Plans of the Company. Hence, the issued, subscribed and paid-up capital of the Company was 62,31,75,443 Equity Shares of g 10 each at the end of the Financial Year.
The Equity History of the Company has been provided in the Corporate Governance Report.
COMPLIANCE CULTURE & RISK MANAGEMENT
Your Company maintains a strong focus on Compliance and Risk Management as these are essential elements for its long-term success. The compliance and risk functions are managed by a dedicated and experienced team of professionals. The management has a zero tolerance towards risk and compliance failures or breaches.
There exists a comprehensive Compliance Manual, which is reviewed by your Board of Directors from time to time and it facilitates the Company''s Compliance team to monitor various compliance requirements effectively & comprehensively. The Compliance team conducts periodical educative & training programmes on various regulatory compliances matters for various sections of employees.
Your Company also has a comprehensive Risk Management Policy that envisages a structured and consistent enterprise-wide risk management framework, based on the three lines of defense model, to ensure that risk management processes are consistently applied across the organisation and provide reasonable assurance regarding achievement of organisation''s objectives.
The risk management policy clearly sets out the objectives & elements of risk management within the organisation, including the constitution of an independent Risk Management department headed by Chief Risk Officer (reporting directly to the CEO and to the Board of Directors), Risk Management Committee at executive and Board levels. The policy
also define the roles and responsibility of all the CXOs towards risk management as part of first line of defense model.
Your Company promotes risk awareness culture throughout the organisation and risk management is an integral part of decision making and day-today operations of all activities at all levels across the organisation. There are well documented & Board approved policies & processes to address and mitigate various risks to which the Company is exposed. The Company also has a robust business continuity plan which is tested on a periodic basis to ensure uninterrupted operations. The risk department conducts various training programmes on various facets of risk management including cyber risk awareness, conduct risk, operational risk, Anti Money Laundering, etc.
The Company has a structured risk reporting mechanism to ensure risks are monitored and reviewed by CRO, Senior Management, RMCBs and Board on a periodic basis.
INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY
The Company has an Internal Control System which is commensurate with the size, scale and complexity of its business operations.
For effective risk management and control, the Company has established structures and responsibilities in line with the "Three Lines of Defense" model, where 1st line being business operations, 2nd line is the oversight functions like Risk Management and Compliance and 3rd line is Internal Audit. To maintain its objectivity and independence, the Internal Audit department reports to the Audit Committee. The Internal Audit department monitors and evaluates the efficacy and adequacy of the internal control system in the Company, its compliance with operating systems, accounting procedures and policies. Based on the report of the Internal Auditor, process owners undertake corrective action in their respective areas and thereby strengthen the controls. The Internal Audit department follows up on pending audit issues and ensures that corrective actions have been taken. Significant audit observations, if any, and corrective actions thereon, are presented to the Audit Committee of the Board.
CORPORATE GOVERNANCE
Your Directors wish to reiterate your Company''s commitment to the highest standards of corporate governance to enhance trust of all its stakeholders. Strong & robust corporate governance practices have facilitated your Company in standing up to the continued scrutiny of domestic & international investors and that of various Regulatory authorities.
The report on Corporate Governance as stipulated under Regulation 34(3) read with Para C of Schedule V of the Listing Regulations is presented in a separate section forming part of this Annual Report.
A Certificate from the auditors of the Company i.e. M/s. S. R. Batliboi & Co. LLP, Chartered Accountants conforming compliance to the conditions of Corporate Governance as stipulated under Para E of Schedule V of the Listing Regulations, is enclosed to this Report.
VIGIL MECHANISM
In accordance with Section 177 of the Act and the Listing Regulations, the Company has formulated a Vigil Mechanism to address the genuine concerns, if any. The Whistle Blower policy can be accessed on the Company''s website. It is affirmed that no person has been denied access to the Chairperson of the Audit Committee.
CORPORATE SOCIAL RESPONSIBILITY
As part of its initiatives under "Corporate Social Responsibility (CSR)", the Company has undertaken projects in the areas of promoting healthcare, education and rural development in accordance with Schedule VII of the Act.
The Annual Report on CSR activities is annexed herewith as Annexure A.
SUBSIDIARIES & ASSOCIATE COMPANY
As of March 31, 2023, your Company had two (2) subsidiaries. One of such subsidiaries is overseas i.e., one subsidiary in Singapore and one subsidiary in India. Both the subsidiaries of the Company are engaged in financial services and related activities. In addition, the Company also has an Associate company in India, which has already surrendered its business license/ regulatory approval to act as a Pension Fund Manager. This particular company currently has no business operations, and it is therefore proposed to be wound up, in accordance with the applicable laws.
During the year our subsidiary company, Nippon Life India Asset Management (Mauritius) Limited, has been voluntarily wound up.
A statement w.r.t. the performance and the financial position of the subsidiaries of the Company forms a part of the Consolidated Financial Statements of the Company.
The performance of the financial position of the subsidiary companies is presented in the Management Discussions and Analysis Report forming part of this Annual Report. The policy for determining material subsidiary companies may be accessed on the
Company''s website at https://mf.nipponindiaim.com/ InvestorServices/Pages/lnvestor-Policies.aspx
Further, The International Financial Services Centres Authority (IFSCA) has granted NAM India (IFSC Branch) the certificate of registration to carry out the activities as a Fund Management Entity (Non-Retail) under the IFSCA (Fund Management) Regulations, 2022 on March 1, 2023.
KEY MANAGERIAL PERSONNEL
During the year under review, the following employees were the ''Key Managerial Personnel'' of the Company:
a) Mr. Sundeep Sikka - Executive Director & Chief Executive Officer;
b) Mr. Ajay Patel - Manager;
c) Mr. Prateek Jain - Chief Financial Officer; and
d) Ms. Nilufer Shekhawat - Company Secretary
DIRECTORS
During the year, Mr. Kazuyuki Saigo who was a Director as on March 31, 2022, resigned from the directorship of the Company w.e.f. April 21, 2022. Mr. Tomohiro Yao and Mr. Minoru Kimura were first appointed as Additional Directors of the Company w.e.f. April 21, 2022. Mr. Tomohiro Yao and Mr. Minoru Kimura were then appointed as Non-Executive Nominee Director w.e.f. July 12, 2022.
As on the date of this Boards Report, Mr. Hiroki Yamauchi was appointed as an additional Director (Non-Executive Nominee Director) in place of Mr. Akira Shibata. Mr. Upendra Kumar Sinha was appointed as an additional Director (Non-Executive Independent Director) and Chairman of the Board to be effective May 1, 2023. Both these appointments are subject to approval of the Shareholders at the ensuing Annual General Meeting.
All the Independent Directors of your Company i.e., General Ved Prakash Malik (Retd.), Ms. Ameeta Chatterjee, Mr. Ashvin Parekh and Mr. B. Sriram have already furnished the required declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act.
In the opinion of the Board, the Independent Directors possess the requisite expertise and experience and are people of high integrity and repute. They fulfil the conditions specified in the Act and the Rules made thereunder and are independent of the management.
In terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by The
Indian Institute of Corporate Affairs, Manesar (''IICA''). The Independent Directors are also required to undertake online proficiency self-assessment test conducted by the IICA within a period of two years from the date of inclusion of their names in the data bank, unless they meet the criteria specified for exemption. All the Independent Directors of the Company are exempt from the requirement to undertake online proficiency self assessment test.
PERFORMANCE EVALUATION OF DIRECTORS, BOARD AND COMMITTEES
The Company has devised a policy for the performance evaluation of the individual directors, Board and its Committees, which also includes the criteria for carrying out the said performance evaluation. Pursuant to the provisions of the Act and Regulation 17(10) of Listing Regulations and as prescribed in the stated policy of the Board, the Board has carried out an annual performance evaluation of (i) the Directors (Independent and non-independent); (ii) itself (as a whole); (iii) its committees and (iv) fulfillment of Independence criteria. The Board performance was evaluated based on input received from the Board Members after considering criteria such as Board composition and structure, effectiveness of Board / Committee processes, and information provided to the Board, etc. In terms of the requirements of the Act, a separate meeting of the Independent Directors was also held during the year.
BOARD AND COMMITTEE MEETINGS
During the year under review, eight (8) Board meetings were held.
Your Directors wish to inform that the functioning of the Board is supplemented by various committees (Board sub-committees and management committees), which have been constituted from time to time, such as Audit Committee, Committee of Directors, CSR Committee, Stakeholders Relationship Committee, Nomination & Remuneration Committee, Risk Management Committee of the Board, Valuation Committee, Investment Committee, Risk Management Committee, Allotment Committee, Broker Empanelment Committee, Operating Committee, Compliance Committee, Stewardship Committee, Proxy Voting Committee, Information Security Risk Management Committee, etc. to name a few. Each of the aforesaid Committees has been constituted in order to ensure due compliance with the applicable laws and to ensure that the highest levels of corporate governance are followed and practiced. The minutes of the meetings of each of these Committees are duly placed before the Board for noting and confirmation.
AUDIT COMMITTEE
In terms of the requirements of Section 177 of the Act, the Audit Committee of the Company consists of the majority of Independent Directors. As on date of this report, it comprises Mr. Ashvin Parekh [Independent Director], Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. B. Sriram [Independent Director], Mr. Hiroki Yamauchi [Non- Independent Director] and Mr. Minoru Kimura [Non- Independent Director]. Mr. Ashvin Parekh acts as the Chairperson of this Committee.
During the year, eight (8) meetings of the Audit Committee were held, which includes 1 joint Audit Committee between the Audit Committee of the Asset Management Company (''AMC'') with the Audit Committee of the Trustees and one (1) meeting to interact with the Statutory and Internal Auditors of the Mutual Fund without the engagement of management of the AMC as stipulated in SEBI Circular No. SEBI/HO/IMD/IMD-IDOF2/P/CIR/2022/17 dated February 09, 2022.
Other relevant details in this regard have been provided in the Corporate Governance Report.
NOMINATION & REMUNERATION COMMITTEE
In terms of the requirements of Section 178 of the Act, the Nomination & Remuneration Committee of the Company consists of the majority of Independent Directors. As on date of this report, it comprises, Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Tomohiro Yao [Non-Independent Director] and Mr. Minoru Kimura [Non-Independent Director]. General Ved Prakash Malik (Retd.) acts as the Chairperson of this Committee.
During the year, three (3) meetings of the Nomination & Remuneration Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
The Nomination & Remuneration Policy has been provided as Annexure B to the Board''s Report.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
In terms of the requirements of Section 135 of the Act, the Corporate Social Responsibility ("CSR") Committee of the Company consists of eight (8) Members. As on date of this report, it comprises Mr. Tomohiro Yao [Non-Independent Director], Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Sundeep Sikka [CEO & Executive
Director], Mr. Hiroki Yamauchi [Non-Independent Director] and Mr. Minoru Kimura [Non-Independent Director]. Mr. Tomohiro Yao acts as the Chairperson of this Committee.
During the year 2022-23, two (2) meetings of the CSR Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
STAKEHOLDERS'' RELATIONSHIP COMMITTEE
In terms of the requirements of Section 178 of the Act, the Stakeholders'' Relationship Committee of the Company consists of five Members. As on date of this report, it comprises Ms. Ameeta Chatterjee [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Tomohiro Yao [Non-Independent Director] and Mr. Sundeep Sikka [CEO & Executive Director]. Ms. Ameeta Chatterjee acts as the Chairperson of this Committee.
During the year, two (2) meetings of the Stakeholders'' Relationship Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
RISK MANAGEMENT COMMITTEE
In terms of the relevant requirements under the Listing Regulations, the Company has constituted a Risk Management Committee of the Board. The Committee presently comprises of Mr. Tomohiro Yao [Non-Independent Director], Mr. Hiroki Yamauchi [Non-Independent Director], Mr. Sundeep Sikka [CEO & Executive Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director] and Mr. Rishi Garg [Chief Risk Officer] as its Members. Mr. Tomohiro Yao acts as the Chairperson of this Committee.
During the year, five (5) meetings of the Risk Management Committee of the Board were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
AUDITORS'' OF THE COMPANY - STATUTORY AND INTERNAL
Statutory Auditors:
M/s. S. R. Batliboi & Co. LLP, Chartered Accountants shall hold office as Statutory Auditors of the Company until the conclusion of this 28th Annual General Meeting.
The Company has already received a consent letter from M/s. S. R. Batliboi & Co. LLP, Chartered Accountants communicating their willingness to be re-appointed as the Statutory Auditors of the Company and that their re-appointment, if made, would be within
the limits as prescribed under Section 139 of the Companies Act, 2013.
Your Directors hereby recommends the reappointment of M/s. S. R. Batliboi & Co. LLP, Chartered Accountants as the Statutory Auditors of the Company for a second term of 5 (five) consecutive years, to hold office from the conclusion of this Annual General Meeting until the conclusion of the 33rd Annual General Meeting of the Company.
Internal Auditors:
JHS & Associates LLP, Chartered Accountants (JHS) were appointed as the Internal Auditors of your Company for the financial year 2022-23. Having regard to their longevity in office and as a matter of good governance, your Directors have approved the rotation of JHS and appointed PricewaterhouseCoopers Services LLP (PWC) as the Internal Auditors of your Company for the financial year 2023-24.
Your Directors wish to place on record the contributions made by JHS during their tenure as Internal Auditors of your Company.
AUDITORS OF THE SCHEMES OF NIPPON INDIA MUTUAL FUND-STATUTORY AND INTERNAL
In accordance with the applicable provisions of law, the Company has appointed Statutory and Internal Auditors for various Schemes of Nippon India Mutual Fund, who periodically submit their reports, which are placed before the Audit Committee for discussion, review and implementation of their recommendations.
Statutory Auditors:
M/s. Walker Chandiok & Co. LLP, Chartered Accountants were appointed as Statutory Auditors of the Schemes of Nippon India Mutual Fund for the financial year 2022-23.
Internal Auditors:
M/s. Deloitte Haskins & Sells LLP, Chartered Accountants (Deloitte) were appointed as Internal Auditors of the Schemes of Nippon India Mutual Fund and the Portfolio Management Services division of the Company, for the financial year 2022-23. Having regard to their longevity in office and as a matter of good governance, your Directors have approved the rotation of Deloitte and appointed PricewaterhouseCoopers Services LLP (PWC) as the Internal Auditors of the Schemes of Nippon India Mutual Fund and the Portfolio Management Services division of the Company for the financial year 2023-24.
Your Directors wish to place on record the contributions made by Deloitte during their tenure as Internal
Auditors of the Schemes of Nippon India Mutual Fund and the Portfolio Management Services division of the Company.
AUDITORS'' REPORT
The observations and comments given by the Statutory Auditors in their report read together with notes on financial statements are self-explanatory and hence does not require any further comments in terms of Section 134 of the Act.
SECRETARIAL STANDARDS
During the year under review, the Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Directors had appointed M/s. M. Siroya and Company, Mumbai, a firm of Company Secretaries in-practice to undertake the Secretarial Audit of the Company for the financial year 2022-23. In this regard, the Report submitted by the Secretarial Auditor is annexed as Annexure C.
Your Directors are pleased to inform you that the report from the Secretarial Auditors does not contain any qualifications or negative remarks.
ANNUAL RETURN
Pursuant to Section 134(3)(a) and Section 92(3) of the Act read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company has been placed on the website of the Company and can be accessed at https://mf.nipponindiaim.com/AboutUs/ FinancialReports/Pages/Annual-Return.aspx .
PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
CONSERVATION OF ENERGY:
The operations of the Company do not consume high levels of energy. Adequate measures have been taken to conserve energy wherever feasible. Your Company uses the latest technology and energy - efficient equipment''s. Your Company only uses LED lights and 5-star air-conditioning for majority of offices. As energy cost forms a very small part of the total costs, the impact on cost is not material.
TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION:
Business Easy Revamp - Business Easy 2.0 app, our Digital asset for our distributors, is an all-
encompassing solution that acts as a complete Customer Relationship Management tool. The app works as a Digital branch through which distributors can manage their Mutual Fund business virtually. With the objective of evolving the app from a business facilitator to a growth enabler, this year saw the addition of new enhancements and features to the app. A number of features such as Intern Distributor addition, quick investment module were added along with meaningful reports for distributors to maximise the usage of the App.
Investor App and Website Enhancement - Our
flagship assets, namely the InvestEasy App and the InvestEasy website are constantly upgraded to include enhancements and innovations. These include workflow enhancements such as Cart Buying where users can purchase more than one product at a time. A number of regulatory compliance requirements have been added in the year as well.
Process Automation across Organisation - As part of the automation initiative a number of processes have been automated across operations, finance, risk and technology. This has freed up resources to be redeployed elsewhere.
Implementation of cloud initiatives - Continuing on NAM India''s cloud journey a number of initiatives on cloud where the infrastructure for initiatives such as Data Lake, Analytics, new core applications have been implemented on the AWS cloud.
RESEARCH AND DEVELOPMENT DIGITAL ADOPTION AND INNOVATION:
Nippon India Mutual Fund, continue to envision and execute key Digital transformation endeavors year on year that are aimed to strengthen our already robust Digital ecosystem.
⢠Focus always remains on empowering our investors during moments of truth and on a ''here & now'' manner to take quicker, smarter, and well-informed decisions on how and where they should invest their money when they transact on our Digital assets. Such empowerment is fueled by our capabilities to crunch & run real-time analysis on the enormous amount of on-asset & offline data points we have regarding our consumers, their past purchases, and future propensities.
⢠Intelligent, data led digital assets, can learn, and predict user behavior powered by both the real time frameworks and archived analytical frameworks which are operating on an advanced algo network. This helps in e-serving highly personalised and customised experiences to give our millennial, zillennial and legacy investors or partners accurate recommendations,
suggestions, on-the-fly nudges, predictive service and much more as they advance in their journeys.
Implementation of Data Models for cross sell and upsell have been implemented as part of the innovation adoption initiatives. As part of this movement third party model creators have been engaged with enhancing the data models of the organisation. Use cases are created with the support of business to identify patterns and opportunities in the models and campaigns are triggered on the analytics ecosystem to connect with customers and track the efficacy of the models.
We at NAM India also are working on further enhancing our digital assets by bringing in innovation in the payment gateway space especially towards frictionless payments. The current payment gateway ecosystem gives us as Digital innovators a lot of play with respect to designing workflows especially in the UPI space.
FOREIGN EXCHANGE EARNINGS AND OUTGO:
During the year under review, the Company earned foreign exchange equivalent to g 18.09 Crores (Previous Year: g 22.85 Crores). The Company spent foreign exchange equivalent to g 11.25 Crores (Previous Year: g 6.98 Crores).
DIRECTORS'' RESPONSIBILITY STATEMENT
As per the requirements of Sub Section (5) of Section 134 of the Act, the Directors confirm that -
(i) In the preparation of the annual accounts for the financial year ended March 31,2023,the applicable accounting standards have been followed and that there are no material departures;
(ii) The Directors have selected such accounting policies in consultation with the Statutory Auditors'' and have applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2023 and of the profit of the Company for the year under review;
(iii) The Directors have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) The Directors have prepared the annual accounts of the Company on a ''going concern'' basis;
(v) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;
(vi) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
CONTRACT AND ARRANGEMENTS WITH RELATED PARTIES
All contracts/ arrangements/ transactions entered into/ by the Company during the financial year under review with related parties were on an arm''s length basis and in the ordinary course of business. There were no materially significant related party transactions which could have potential conflict with the interest of the Company at large. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.
All Related Party Transactions were placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee was obtained for the transactions which were of a repetitive nature. The transactions entered into pursuant to the omnibus approval so granted were reviewed and statements giving details of all related party transactions were placed before the Audit Committee and the Board of Directors for their review on a quarterly basis. The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website at the following link:
https://mf.nipponindiaim.com/InvestorServices/
Your Directors draw attention of the Members to Note No. 28 to the financial statement which sets out related party disclosures.
PARTICULARS OF FRAUDS REPORTED BY THE AUDITORS''
In terms of Section 143(12) of the Act, M/s. S R Batliboi & Co. LLP, Chartered Accountants, the Statutory Auditors of the Company have not reported any instance of fraud having taken place during the year under review, in their Audit Report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators/ Courts which would impact the going concern status of the Company and its future operations.
DETAILS OF APPLICATION MADE BY THE COMPANY OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONGWITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR
The Company on behalf of the schemes of Nippon India Mutual Fund invests in various debt market instruments (non-convertible debentures) issued by various issuers. In order to realise the debenture outstanding''s, the Company has filed certain applications under the Insolvency and Bankruptcy Code, 2016. The Mutual Fund Division of the Company has filed (a) an IBC proceeding against Avantha Holdings Limited in January 2020 before Hon''ble NCLT New Delhi which is withdrawn as Avantha Holdings Limited has paid its dues. The Company is also a respondent party to an IBC proceeding filed in the matter of Reserve Bank of India v. Dewan Housing Finance Corporation Limited pending before the Hon''ble NCLT, Mumbai.
The Portfolio Management Services Division of the Company has filed: (a) IBC proceedings against Fortuna Buildcon India Private Limited was filed in November 2017 before the Hon''ble NCLT, Bangalore, wherein currently the resolution plan has been submitted to the Hon''ble NCLT for approval (b) three IBC proceedings against three Biodiversity Conservation India Private Limited group companies (BCIL Zed Ria Properties Private Limited, BCIL Red Earth Developers India Pvt. Ltd. and Biodiversity Conservation India Private Limited) were filed in December 2017 before the Hon''ble NCLT, Bangalore. The NCLT has approved resolution plans in BCIL Zed Ria Properties Private Limited and in BCIL Red Earth Developers India Pvt. Ltd., which are currently under implementation while Biodiversity Conservation India Private Limited is currently under liquidation. The Company is also a respondent to 2 (two) appeals in BCIL Red Earth Developers India Private Limited and in 3 (three) appeals in BCIL Zed Ria Properties Private Limited, before Hon''ble NCLAT, Chennai, which have been filed challenging the approved resolution plans; (c) IBC proceedings have been filed against the promoters of Biodiversity Conservation India Private Limited in November 2020 before Hon''ble NCLT, Bangalore which are currently at a pre-admission stage; (d) IBC proceeding filed against Green Valley Shelters Private Limited in December 2019, before Hon''ble NCLT, Chennai, was admitted in August 2021, however the proceedings are currently temporarily stayed under an order of the Supreme Court. The Company is a respondent in a civil appeal filed by the promoters of Green Valley Shelters Private Limited before the Hon''ble Supreme Court, challenging the admission of IBC proceedings against Green Valley Shelters Private Limited, which is currently pending under directions of exploring a settlement; (e) an IBC proceeding filed against the promoters of Green Valley Shelters Private Limited in October 2020 before the
Hon''ble NCLT, Chennai and is at a pre-admission stage; (f) an IBC proceeding was filed against Arkie Atelier Design India Private Limited, being the corporate guarantor for the debentures issued by Green Valley Shelters Private Limited in November 2021 and is currently at a preadmission stage; (g) an IBC proceeding filed against Bharucha & Motivala Infrastructure Private Limited, being corporate guarantor for the debentures issued by Lake District Realty Private Limited, in November 2019 before Hon''ble NCLT, Mumbai was admitted in May 2021, but has been stayed pursuant to an order of the Hon''ble NCLAT in July 2021. The Company is a respondent in the appeal filed by the promoters of Lake District Realty Private Limited before the Hon''ble NCLAT, Delhi, challenging the admission of IBC proceedings against Bharucha & Motivala Infrastructure Private Limited, which is currently reserved for orders; (h) IBC proceedings have been filed against the promoters of Lake District Realty Private Limited in November 2021, which is currently at a pre-admission stage; (i) an IBC proceedings has been filed against Ashapura Options Private Limited, being the corporate guarantor for the debentures issued by Ashapura Housing Private Limited in February 2022 which is at a pre-admission stage. (j) IBC proceedings have also been filed against four (4) promoter guarantors of Ashapura Housing Private Limited, which are at a pre-admission stage.
COST RECORDS
The Company is not required to maintain cost records as specified by the Central Government under subsection (1) of section 148 of the Companies Act, 2013.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
In terms of the provisions of Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules are provided in the Annexure to the Board''s Report. Disclosures relating to the remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended also forms part of this Report. However, having regard to the provisions of Section 136 of the Act, the Annual Report excluding the aforesaid information is being sent to all the Members of the Company and others entitled thereto. Any member interested in obtaining the said information may write to the Company Secretary. Upon such request the information shall be furnished.
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
Your Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of
The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. Following is a summary of sexual harassment complaints received and disposed off during the year:
⢠No. of complaints received: 0
⢠No. of complaints disposed off: 0
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
Pursuant to Regulation 34(2)(f) of Listing Regulations, top 1000 listed entities by market capitalisation have to publish a Business Responsibility and Sustainability Report from FY 2022-23. Business Responsibility and Sustainability Report for the year under review as stipulated under Listing Regulations is presented in the separate section forming part of this Annual Report.
AWARDS AND RECOGNITIONS
Some of the awards & recognitions, which came to NAM India include,
⢠Included in the elite "Kincentric Best Employers Club- 2023" an exclusive and prestigious group of organisations chosen across all industries who have been Best Employers consistently in the last 3-5 years
⢠Awarded Best Employer 2022 Award - 5th time in last 7 years
⢠Won the Outstanding Employee Engagement Award from Ekincare for our Health & Wellbeing initiative (Amongst only 9 Companies recognised in the country)
ACKNOWLEDGEMENTS
Your Directors wish to place on record their sincere appreciation for the co-operation received from various regulatory and governmental authorities including SEBI, RBI, Registrar of Companies, Maharashtra at Mumbai, PFRDA, NPS Trust, EPFO, CMPFO, Stock Exchanges, Depositories, Custodians, Bankers, Registrar, Shareholders, Investors and all other business constituents during the year under review. We believe all of them have contributed to our continued growth.
Your Directors also wish to place on record their deep appreciation for the total commitment displayed by all the executives, officers and staff, resulting in yet another eventful performance for the year.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS OF NIPPON LIFE INDIA ASSET MANAGEMENT LIMITED
Ashvin Dhirajlal Parekh Sundeep Sikka
Director Executive Director & CEO
(DIN: 06559989) (DIN: 02553654)
Place : Mumbai Dated : April 25, 2023
Mar 31, 2022
Your Directors take pleasure in presenting their 27th Annual Report on the business and operations of your Company, together with the audited financial statements, for the year ended March 31, 2022.
Your Company endeavors to remain one of the leading players in the Asset Management business in India and keep enhancing its global footprint as well.
Your Company is a subsidiary Company of Nippon Life Insurance Company ("NLI"). NLI, a fortune 500 Company and which is one of the largest life insurers in the world managing assets of over USD 700 bn. NLI has a large global network with presence across US, Europe, Asia, and Australia along with a 130-year track record in Life Insurance business as well as global investments across Asset Management companies. This pedigree brings strong synergistic benefits that very well complements your Company''s domestic expertise in Asset Management business and provides a thrust to its significant growth potential. Your Company expects substantial upside in terms of increased AUM & adoption of best governance & risk management practices based on NLI''s global positioning & relationships.
Your Company acts as the Asset Management Company of Nippon India Mutual Fund and it happens to be the largest foreign owned Asset Management Company in India.
FINANCIAL PERFORMANCE AND STATE OF COMPANY''S AFFAIRS
The standalone and consolidated financial statements of the Company for the financial year ended March 31, 2022, have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act. The financial highlights (on a consolidated and standalone basis) of the Company for the year ended March 31, 2022 are as follows:
('' Crores) |
||||
Description |
Consolidated |
Standalone |
||
Year ended |
Year ended |
Year ended |
Year ended |
|
March 31, 2022 |
March 31, 2021 |
March 31, 2022 |
March 31, 2021 |
|
Gross Income |
1535.63 |
1419.34 |
1428.42 |
1325.66 |
Profit before exceptional item and tax |
988.67 |
877.03 |
945.43 |
842.92 |
Exceptional Items |
- |
- |
- |
- |
Profit Before tax |
988.67 |
877.03 |
945.43 |
842.92 |
Current Tax |
206.66 |
157.41 |
200.38 |
151.51 |
Deferred Tax |
38.64 |
40.22 |
33.84 |
42.02 |
Profit for the year |
743.37 |
679.39 |
711.21 |
649.39 |
Share of Profit from Associates |
0.79 |
0.94 |
- |
- |
Profit attributable to non-controlling interest |
- |
- |
- |
- |
Other Comprehensive Income |
(0.30) |
0.72 |
(0.27) |
0.72 |
Balance carried to Balance Sheet |
743.86 |
681.05 |
710.94 |
650.11 |
Basic EPS of '' 10 each |
12.00 |
11.04 |
11.47 |
10.53 |
Diluted EPS of '' 10 each |
11.80 |
10.90 |
11.28 |
10.41 |
The Consolidated Financial Statements of the Company are forming part of this Annual Report. The annual accounts of all the subsidiary companies will be placed on the website of the Company.
DETAILS OF MATERIAL CHANGES ANDCOMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments affecting the financial position of the Company since the date of the financial statements i.e. March 31,2022.
During the year, the Company had declared and paid an interim dividend of Rs. 3.50 per equity share (35%) amounting to Rs. 217.41 Crore. The Board has also recommended a final dividend of Rs. 7.50 per Equity Share (75%) of Rs. 10/- each for the financial year ended March 31, 2022, for the approval of the Shareholders at the ensuing Annual General meeting. With this the total dividend for the financial year 2021-22 would be approximately Rs. 683.92 crores, including the interim dividend of Rs. 3.50 per equity share distributed in November 2021. The Final dividend, if declared, will be paid after the Annual General Meeting.
The dividend payout is in accordance with the Company''s Dividend Distribution Policy which forms part of this Annual Report.
AMOUNT TO BE CARRIED TO RESERVES
Your Directors do not propose any amount to be transferred to the General Reserves of the Company.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report for the year under review as stipulated under SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (Listing Regulations) is presented in a separate section forming part of this Annual Report.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENT
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act are given in the notes to the Financial Statements.
There is no difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions.
The Company has neither accepted nor renewed any fixed deposits during the year. There are no outstanding or unclaimed deposits, unclaimed / unpaid interest, refunds due to the deposit holders or to be deposited to the Investor Education and Protection Fund as on March 31, 2022.
With the perspective of promoting the culture of employee ownership and to attract, retain, motivate and incentivize senior as well as critical talent, the Company has formulated Nippon Life India Asset
Management Limited - Employee Stock Option Plan 2017 [formerly known as "Reliance Nippon Life Asset Management Limited - Employee Stock Option Plan 2017"] ("ESOP 2017" / "Plan") as its stock option scheme, which was launched in August 2017 and Nippon Life India Asset Management Limited - Employee Stock Option Plan 2019 [formerly known as "Reliance Nippon Life Asset Management Limited - Employee Stock Option Plan 2019"] ("ESOP 2019" / "Plan") as its stock option scheme, which was launched in July 2019. The Nomination and Remuneration Committee of the Board monitors and administers these Plans and from time to time grants stock options to the employees.
Both ESOP 2017 as well as ESOP 2019 are in compliance with The SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 [erstwhile The SEBI (Share Based Employee Benefits) Regulations, 2014] (SEBI Regulations).
However, having regard to the provisions of first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. The certificate from the Practicing Company Secretary confirming the compliance of The SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 [erstwhile The SEBI (Share Based Employee Benefits) Regulations, 2014] with respect to the Company''s Employees Stock Option Scheme Plans has been received and will be available for inspection through electronic mode. Any member interested in obtaining the same may write to the Company Secretary and the same will be furnished on request. The details as required to be disclosed under SEBI Regulations are put on the Company''s website at httos://mF.niooonindiaim. com/investor-service/customer-service/nam-india-shareholders-investors
COMPLIANCE CULTURE & RISK MANAGEMENT
Your Company is essentially Compliance centric and has a huge focus in this direction. The Compliance function is manned by a dedicated and experienced team of professionals. The Compliance team regularly conducts various educative training programs for various segments within the organization. Your Company thrives towards a culture of ''Total Compliance'' and it has a ''Zero Tolerance'' policy for non-compliances. There exists a comprehensive Compliance Manual, which is reviewed by your Board of Directors from time to time and it facilitates Company''s Compliance team to monitor various compliance requirements effectively & comprehensively. Your Board of Directors have also constituted a Compliance Committee, which is chaired by the CEO & Executive Director of the Company, and which has the Compliance Officer and other senior & relevant functionaries as its members. This committee meets at least once in a quarter to discuss and deliberate issues pertaining to compliance and other regulatory developments.
Your Company also has a comprehensive Risk Management Policy that envisages a structured and consistent enterprise-wide risk management framework, based on the three lines of defense model, to ensure that risk management processes are consistently applied across the organization and provide reasonable assurance regarding achievement of organization''s objectives.
The risk management policy clearly sets out the objectives & elements of risk management within the organization, including the constitution of an independent Risk Management department headed by Chief Risk Officer (reporting directly to the CEO and to the Board of Directors), Risk Management Committee (RMC).
Your Company promotes risk awareness culture throughout the organization and risk management is an integral part of decision making and day-today operations of all activities at all levels across the organization. There are well documented & Board approved policies & processes to address and mitigate various risks to which the company is exposed. The company also has a robust business continuity plan which is tested on a periodic basis to ensure business is not interrupted.
The company has a structured risk reporting mechanism to ensure risks are monitored and reviewed by CRO, Senior Management, RMCBs and Board on a periodic basis.
INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY
The Company has an Internal Control System which is commensurate with the size, scale and complexity of its business operations.
Foreffectiveriskmanagementandcontrol,theCompany has established structures and responsibilities in line with the "Three Lines of Defense" model, where 1st line being business operations, 2nd line is the oversight functions like Risk Management and Compliance and 3rd line is Internal Audit. To maintain its objectivity and independence, the Internal Audit department reports to the Audit Committee. The Internal Audit department monitors and evaluates the efficacy and adequacy of the internal control system in the Company, its compliance with operating systems, accounting procedures and policies. Based on the report of the Internal Auditor, process owners undertake corrective action in their respective areas and thereby strengthen the controls. The Internal Audit department follows up on pending audit issues and ensures that corrective actions have been taken. Significant audit observations, if any, and corrective actions thereon, are presented to the Audit Committee of the Board.
Your Directors wish to reiterate your Company''s commitment to the highest standards of corporate governance in order to enhance trust of all its stakeholders. Strong & robust corporate governance practices have facilitated your Company in standing up to the continued scrutiny of domestic & international investors and that of various Regulatory authorities.
The report on Corporate Governance as stipulated under Regulation 34(3) read with Para C of Schedule V of the Listing Regulations is presented in separate section forming part of this Annual Report.
A Certificate from the auditors of the Company i.e. M/s. S. R. Batliboi & Co. LLP, Chartered Accountants conforming compliance to the conditions of Corporate Governance as stipulated under Para E of Schedule V of the Listing Regulations, is enclosed to this Report.
In accordance with Section 177 of the Act and the Listing Regulations, the Company has formulated a Vigil Mechanism to address the genuine concerns, if any. The policy can be accessed on the Company''s website.
CORPORATE SOCIAL RESPONSIBILITY
As part of its initiatives under "Corporate Social Responsibility (CSR)", the Company has undertaken projects in the areas of promoting healthcare, education and rural development in accordance with Schedule VII of the Act.
The Annual Report on CSR activities is annexed herewith as Annexure A.
SUBSIDIARIES & ASSOCIATE COMPANY
As of March 31, 2022, your Company had three (3) subsidiaries. Two of such subsidiaries are overseas, being one each in Singapore and Mauritius and one subsidiary is in India. All the subsidiaries of the Company are engaged in financial services and related activities. In addition, the Company also has an Associate company in India, which has already surrendered its business license/ regulatory approval to act as a Pension Fund Manager. This particular company currently has no business operations and it is therefore proposed to wind it up, in accordance with the applicable laws.
A statement w.r.t. the performance and the financial position of the subsidiaries of the Company is forming a part of the Consolidated Financial Statements of the Company.
The performance of financial position of the subsidiary companies is presented in the Management Discussions and Analysis Report forming part of this Annual Report. The policy for determining material subsidiary companies
may be accessed on the Company''s website at https:// mf.nipponindiaim.com/InvestorServices/Pages/Investor-Policies.aspx
During the year under review, the following employees were the ''Key Managerial Personnel'' of the Company:
a) Mr. Sundeep Sikka - Executive Director & Chief Executive Officer;
b) Mr. Ajay Patel - Manager;
c) Mr. Prateek Jain - Chief Financial Officer; and
d) Ms. Nilufer Shekhawat - Company Secretary.
During the year, Mr. Sundeep Sikka has been reappointed as the Executive Director & CEO of the Company for a term of 5 years commencing from April 22, 2021.
During the year, Mr. Yutaka Ideguchi [Nominee Director of NLI] resigned from the directorship of the Company w.e.f. March 30, 2022. Mr. Kazuyuki Saigo [Nominee Director of NLI] who was a Director of the Company as on March 31, 2022, resigned as such effective April 21, 2022. Mr. Tomohiro Yao and Mr. Minoru Kimura [Nominee Directors of NLI] were appointed as Additional Directors of the Company w.e.f. April 21, 2022.
All the Independent Directors of your Company i.e. General Ved Prakash Malik (Retd.), Ms. Ameeta Chatterjee, Mr. Ashvin Parekh and Mr. B. Sriram, have already furnished the required declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act.
In the opinion of the Board, the Independent Directors possess the requisite expertise and experience and are persons of high integrity and repute. They fulfil the conditions specified in the Act and the Rules made thereunder and are independent of the management.
In terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by The Indian Institute of Corporate Affairs, Manesar (''IICA''). The Independent Directors are also required to undertake online proficiency self-assessment test conducted by the IICA within a period of Two years from the date of inclusion of their names in the data bank, unless they meet the criteria specified for exemption. All the Independent Directors of the Company are exempt from the requirement to undertake online proficiency self assessment test.
PERFORMANCE EVALUATION OF DIRECTORS, BOARD AND COMMITTEES
The Company has devised a policy for the performance evaluation of the individual directors, Board and its Committees, which also includes the criteria for carrying out the said performance evaluation. Pursuant to the provisions of the Act and Regulation 17(10) of Listing Regulations and as prescribed in the stated policy of the Board, the Board has carried out an annual performance evaluation of (i) the Directors (Independent and non-independent);(ii) itself (as a whole);(iii) its committees and (iv) fulfillment of Independence criteria. The Board performance was evaluated based on inputs received from the Board members after considering criteria such as Board composition and structure, effectiveness of Board / Committee processes, and information provided to the Board, etc. In terms of the requirements of the Act, a separate meeting of the Independent Directors was also held during the year.
During the year under review, nine (9) Board meetings were held.
Your Directors wish to inform that the functioning of the Board is supplemented by various committees (Board sub-committees and management committees), which have been constituted from time to time, such as Audit Committee, Committee of Directors, CSR Committee, Stakeholders Relationship Committee, Nomination & Remuneration Committee, Risk Management Committee of the Board, IT Strategy Committee, Valuation Committee, Investment Committee, Risk Management Committee, Allotment Committee, Broker Empanelment Committee, Operating Committee, Compliance Committee, Stewardship Committee, Proxy Voting Committee, Information Security Risk Management Committee, etc. to name a few. Each of the aforesaid Committees has been constituted in order to ensure due compliance with the applicable laws and to ensure that highest levels of corporate governance are followed and practiced. The minutes of the meetings of each of these Committees are duly placed before the Board for noting and confirmation.
In terms of the requirements of Section 177 of the Act, and Regulation 18 of the Listing Regulations, the Audit Committee of the Company consists of majority of Independent Directors. As on date of this report, it comprises Mr. Ashvin Parekh [Independent Director], Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. B. Sriram [Independent Director], Mr. Akira Shibata [Non- Independent Director] and Mr. Minoru Kimura [Non- Independent Director]. Mr. Ashvin Parekh acts as the Chairperson of this Committee.
During the year, seven (7) meetings of the Audit Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
NOMINATION & REMUNERATION COMMITTEE
In terms of the requirements of Section 178 of the Act, and Regulation 19 of the Listing Regulations, the Nomination & Remuneration Committee of the Company consists of majority of Independent Directors. As on date of this report, it comprises, Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Tomohiro Yao [NonIndependent Director] and Mr. Minoru Kimura [NonIndependent Director]. General Ved Prakash Malik (Retd.) acts as the Chairperson of this Committee.
During the year, four (4) meetings of the Nomination & Remuneration Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
The Nomination & Remuneration Policy has been provided as Annexure B to the Board''s Report.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
In terms of the requirements of Section 135 of the Act, the Corporate Social Responsibility ("CSR") Committee of the Company consists of Eight members. As on date of this report, it comprises Mr. Tomohiro Yao [Non-Independent Director], Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Sundeep Sikka [CEO & Executive Director], Mr. Akira Shibata [Non-Independent Director] and Mr. Minoru Kimura [Non-Independent Director]. Mr. Tomohiro Yao acts as the Chairman of this Committee.
During the year 2021-22, two (2) meetings of the CSR Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
STAKEHOLDERS'' RELATIONSHIP COMMITTEE
In terms of the requirements of Section 178 of the Act, and Regulation 20 of the Listing Regulations, the Stakeholders'' Relationship Committee of the Company consists of five members. As on date of this report, it comprises Ms. Ameeta Chatterjee [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Tomohiro Yao [Non-Independent Director] and Mr. Sundeep Sikka [CEO & Executive Director]. Ms. Ameeta Chatterjee acts as the Chairperson of this Committee.
During the year, two (2) meetings of the Stakeholders'' Relationship Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
In terms of the relevant requirements under the Listing Regulations, the Company has constituted a Risk Management Committee of the Board. The Committee presently comprises of Mr. Tomohiro Yao [Non-Independent Director] as the Chairperson, Mr. Akira Shibata [Non-Independent Director], Mr. Sundeep Sikka [CEO & Executive Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director] and Mr. Rishi Garg [Chief Risk Officer] as its members.
During the year, two (2) meeting of the Risk Management Committee of the Board were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
AUDITORS'' OF THE COMPANY - STATUTORY AND INTERNAL
Statutory Auditors:
M/s. S. R. Batliboi & Co. LLP, Chartered Accountants shall hold office as Statutory Auditors of the Company until the conclusion of the 28th Annual General Meeting.
JHS & Associates LLP, Chartered Accountants were appointed as the Internal Auditors'' of your Company for the financial year 2021-22. Your Directors have also approved their re-appointment as such for the financial year 2022-23.
AUDITORS OF THE SCHEMES OF NIPPON INDIA MUTUAL FUND- STATUTORY AND INTERNAL
In accordance with the applicable provisions of law, the Company has appointed Statutory and Internal Auditors for various Schemes of Nippon India Mutual Fund, who periodically submit their reports, which are placed before the Audit Committee for discussion, review and implementation of their recommendations.
M/s. Walker Chandiok & Co. LLP, Chartered Accountants were appointed as Statutory Auditors of the Schemes of Nippon India Mutual Fund for the financial year 2021-22.
During the year, M/s. Deloitte Haskins & Sells LLP, Chartered Accountants were appointed as Internal Auditors of the Scheme of Nippon India Mutual Fund and the portfolio management services division of the Company, for the financial year 2021-22. Your Directors have also approved their re-appointment as such for the financial year 2022-23.
AUDITORS'' REPORT
The observations and comments given by the Statutory Auditors in their report read together with notes on financial statements are self-explanatory and hence does not require any further comments in terms of Section 134 of the Act.
SECRETARIAL STANDARDS
During the year under review, the Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Directors had appointed M/s. M. Siroya and Company, Mumbai, a firm of Company Secretaries in-practice to undertake the Secretarial Audit of the Company for the financial year 2021-22. In this regard, the Report submitted by the Secretarial Auditor is annexed as Annexure C.
Your Directors are pleased to inform that the report from the Secretarial Auditors does not contain any qualifications or negative remarks.
ANNUAL RETURN
Pursuant to Section 134(3)(a) and Section 92(3) of the Act read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company has been placed on the website of the Company and can be accessed at https:// mf.nipponindiaim.com/investor-service/customer-service/nam-india-shareholders-investors
PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
CONSERVATION OF ENERGY:
The operations of the Company do not consume high levels of energy. Adequate measures have been taken to conserve energy wherever feasible. Your Company uses latest technology and energy efficient equipment''s. Your Company only uses LED lights and 5 star air-conditioning for majority of offices. As energy cost forms a very small part of the total costs, the impact on cost is not material.
TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION:
> Game changing initiatives:
⢠The All-new Investor App: This year marked the launch of our New Investor App (Android), a key Digital transformation endeavor that is aimed to strengthen our already robust Digital ecosystem. It is a new-age asset that is styled for millennials & zillennials and simplified for the legacy investor
base. We believe that the savvy consumers of today invest first in digital experiences and in mutual funds afterwards, and that''s exactly how we''ve built the new app - with next level, simplified and intuitive interface coupled with new age features and capabilities - to provide best in class, enhanced digital experience for our investors. With the best of e-commerce practices at its heart - contemporary design, quick product discovery, aided decision making, and personalized experiences based on intelligent analytics - this app is all that our investors will ever need to manage their investments with NIMF.
While contemporary design and new features and
enhancements are a part of the re-build, some of the
key highlights of the rebuild are:
¦ Completely self-serve and frictionless on boarding process
¦ ''Investor journey'' centric flows (and not inward out, classic Product & Service bouquet approach)
¦ Discoverability: Products & Services are available in line with user expectations
¦ Enhanced purchase experience: Cart Buying and Drop-off win-back;express checkout for repeat transactions
¦ Scalable framework: Leveraging Digital stack (Targeting, Campaigns, Analytics, etc.) for a more enriching and powerful experience
⢠New Fund Offers - Digital Launches: The Nippon India Flexi Cap Fund was one of the biggest success stories for Digital enabling lucid access for investors & partners across all our Digital assets. Apart from that we Digitally enabled other prominent products for FY21-22 including Nippon India Taiwan Equity Fund and Nippon India Silver ETF F-o-F. Apart from that, on the ETF front, we also enabled Nippon India Nifty Pharma ETF, Nippon India Nifty Auto ETF & Nippon India Silver ETF. We also had a very innovative Index offering made live viz. Nippon India Nifty AAA CPSE Bond Plus SDL - Apr 2027 Maturity 60:40 Index Fund
⢠Growth Enablers for Business Easy with 2.0 App: Business Easy 2.0 app, our Digital asset with our distributors, is an all-encompassing solution that acts as a complete Customer Relationship Management tool. The app works as a Digital branch through which distributors can manage their Mutual Fund business virtually. With the objective of evolving the app from a business facilitator to a growth enabler, this year saw the addition of new enhancements and features to the app. A quick overview of such features is as follows:
¦ Comprehensive Dashboard with Performance review distributor''s AUM, SIP Book value, Business health trends, in-depth customer base understanding
¦ SIP Corner for focused SIP sustenance, retention, and win-back
¦ Advanced Funds & Performance module with a more in-depth view of all products and granular understanding of fund facts & stats
⢠WhatsApp Scale-up: Having launched the pilot version of our WhatsApp advent which comprised of Liquid Fund purchase, e-KYC check & Digital asset access, we scaled up our WhatsApp capability with comprehensive transaction & service capabilities - purchase in all funds, all transaction types and multiple service modules. This implementation dovetails into our philosophy of building our Digital presence in line with the preference of our investors. This service paves the way for increased market penetration of NIMF products and unlocks opportunities by enabling reach out to a vast 500mn WhatsApp user base in India
⢠Intelligent interventions for business retention and growth: We have built system driven, smart and automated measures across various investor journeys with the objective of creating positive business impact. These interventions either nudge users to take prudent & effective decisions in a real-time manner to stay invested or help them with alternate options while if they encounter any outages or errors. Such measures delivered consistent growth in AUM retention and augmentation and saw an uplift of 60% in such positive impact when compared with last FY.
⢠Dynamic Real time mailers: In a real time world, it is important that consumers are given real time information that might help them to take conscious and informed investment decisions. NIMF pioneered deep tech enabled mailers. The same fetched real time data (viz Sensex movement, NAVs, returns etc.) from the server whenever opened. This gave a clear visibility to the investor on what were the relevant avenues for either fresh investment or additional investment. This was widely cherished by new and existing investors and yielded high usage
⢠Leveraging Beta products from Google: NIMF has been a pioneer at Conversational Commerce, and this was done in partnership using the Voice assistant capabilities from Google. On the base of this strong partnership NIMF in FY 21-22 was at the helm of leveraging Beta Products from Google like the newly launched Performance Max. A successful implementation and more than desired results got
NIMF mentioned in Google India Case study for the best use of Performance Max beta to drive incremental business using Artificial Intelligence & Machine learning.
⢠Strengthening our Digital Distribution through Strategic Alliances and Enhanced Support to
Partners: We added some key partners and more importantly products into their positioning suites, like Genius from ET Money. We also were one of the firsts to launch SIPs on PhonePe platform. Other key players like Paytm, Groww, Kuvera, IND Money Tarrakki, etc., continue to bolster our executional leadership and expansive reach. Our immense expertise in the core business of Asset Management and prowess in Digital Business gives us an unparalleled advantage to engage with our Partners at an even deeper level and help them set up and scale up their businesses. Our knowledge and know-how, shared with the Partners and their customers by our Fund Managers and Investment Experts on such Partners'' platforms coupled with integrated marketing campaigns have educated the investors and helped them make the right decisions. Our robust engagement strategy coupled with focused execution has not only helped us build great equity with Partners but also helped win the trust of investors which has resulted in growth of business volumes on such platforms, thereby benefitting both us and the Partners. We have a definitive lead in the Digital Partnerships space and have managed to forge a clear position for NIMF as being the partner of choice for such players.
⢠Setting up of New NAM India Technology Applications
A challenge posted due to the migration to our new Nippon environment was how to securely perform a complete data transfer of our SAP data. Thanks to careful planning, execution and a lot of communication with involved stakeholders we were able to successfully set up NAM India''s own SAP environment after mitigating several risks. This was performed with minimum downtime and no effect on NAM India''s books of accounts.
During the pandemic we have rolled out solutions and infrastructure enhancements that has allowed NAM India to continue working in an offline situation without exception. Initiatives such as secure VPN for data access, communication software, online approval workflow on block chain are a few initiatives that have been implemented.
⢠Managing regulatory requirements
There were several new regulations brought in by the regulatory body resulting in multiple
new enhancements that had to be performed under strict deadlines. Some key projects such as database encryption, recording of conversations on Teams calls and mobile phones, two factor authentication were executed and the regulations complied with.
⢠Optimizations in Investment and Digital Portfolio
During the year there were several enhancements performed in the investment portfolio to comply with regulation change and to bring in operating efficiency. On the digital portfolio side new functionality in the form of New Investor App, enhancement in workflows and new fund offers were launched with a great degree of success. Certain processes on the digital side that were affecting user experience were examined and enhanced to perform faster leading to an increase in the customer experience index of the digital offerings.
NAM India IT is working in a continuous improvement cycle to improve our various technology and process towards enhancing our contribution to the company, stakeholders and our customers. We have shown significant improvement in our issue resolution process and our results indicate a steady increase in our customer issue resolution index over the financial year. We also have maintained high up and response times on all our critical investment and digital platforms. This has resulted in consistent and predictive working of our offerings to our end customers.
Another initiative to build automation to further optimize processes is underway and several processes across operations, risk and investment functions are expected to be automated in the new financial year. This will lead to efficiency gains across functions. Technology will continue to identify processes that can be automated and continues to partner with functions on the same.
⢠Digital Business touched a record 2.9 million purchase transactions FY 2021-22, which is essentially 1 purchase every 6 seconds! This increase is a ~60 % YOY growth.
⢠Contribution of Digital Business to overall NIMF business stands at 58%, which is a growth of ~12% over last FY where Digital contribution was at 52%.
⢠Digital Business share in Lumpsum purchase and new SIP registrations stood at 60% and 48% respectively vis-a-vis total purchase transactions of NIMF.
⢠Long term assets focus resulted in 90% non-Liquid acquisitions compared to 75% in FY2020-2021.
⢠45% of our digital consumers are less than 35 years of age
NIMF Digital has been setting a benchmark across the BFSI industry in its Fintech endeavors across the Digital Ecosystem. It is now recognized as a Digital benchmark across industries. Both Global and Indian forums have further recognized NIMF''s expertise and supremacy in the Digital arena. As in the previous years, we have yet again been conferred with some coveted awards this year as well which further strengthens our position as a Digital leader in the BFSI space
⢠Global Digital Marketing Awards for ''Best use of Facebook AI tool in performance campaigns'' (April 2021)
⢠ACEF Global Customer Engagement Awards 2021 for ''Digital Marketing, Data driven Marketing, Email Marketing and Mobile Marketing'' - 5 awards (4 Golds and 1 Silver) (May 2021)
⢠Mint | TechCircle - Business Transformation Award 2021 for ''Revenue Generation - Product & Service Augmentation'' - Business Easy (June 2021)
⢠Indian Digital Marketing Awards for ''Best App Developed for Products / Services'' - Business Easy (July 2021)
⢠Indian Digital Marketing Awards for ''Best Use of sites for Mobiles'' - NIMF Purchase Mobile Site (M-site) (July 2021)
⢠Digital Crest Awards 2021 for ''Expertise in Online Commerce, Omni Channel Strategy and Mobile Marketing'' - 3 awards (1 Gold, 1 Silver and 1 Bronze) (August 2021)
⢠The Great Indian Marketing Awards for ''Best performing campaign for Google''s Performance-max'' (August 2021)
⢠Maddies Marketing Award 2021 for the ''Most Effective Voice Assistant App'' (in the Enabling Technologies category) - Simply Save Conversational Commerce (November 2021)
⢠Dynamic CIO Award for ''Smart Innovator'' (in the Technology Innovation category) - Simply Save Conversational Commerce (November 2021)
RESEARCH AND DEVELOPMENT:DIGITAL ADOPTION AND INNOVATION:
We, at Nippon India Mutual Fund, continue to envision and execute key Digital transformation endeavors year on year that are aimed to strengthen our already robust Digital ecosystem.
⢠Our focus always remains on empowering our investors during moments of truth and on a ''here & now'' manner to take quicker, smarter, and well-informed decisions on how and where they should invest their money when they transact on our Digital assets. Such empowerment is fueled by our capabilities to crunch & run real-time analysis on the enormous amount of on-asset & offline data points we have regarding our consumers, their past purchases, and future propensities.
⢠Our intelligent, data led digital assets, can learn, and predict user behavior powered by both the real time frameworks and archived analytical frameworks which are operating on an advanced algo network. This helps in e-serving highly personalized and customized experiences to give our millennial, zillennial and legacy investors or partners accurate recommendations, suggestions, on-the-fly nudges, predictive service and much more as they advance in their journeys.
NAM India Technology is continuously engaging in research and development to pick and choose the best of technology solutions to our stakeholders
- NAM India Technology continues to explore opportunities with Fintech and Technology vendors to identify the next best solution that can be a game changes in the industry
- The technology team also follows and explores software, hardware, security and network enhancements in the technology world and attempts to identify key components that can change the way we do work in the organization and industry.
FOREIGN EXCHANGE EARNINGS AND OUTGO:
During the year under review, the Company earned foreign exchange equivalent to Rs. 22.85 Cr (Previous Year: Rs. 21.79 Cr). The Company spent foreign exchange equivalent to Rs. 6.98 Cr (Previous Year: Rs. 6.49 Cr).
DIRECTORS'' RESPONSIBILITY STATEMENT
As per the requirements of Sub Section (5) of Section 134 of the Act, the Directors confirm that -
(i) In the preparation of the annual accounts for the financial year ended March 31,2022, the applicable accounting standards have been followed and that there are no material departures;
(ii) The Directors have selected such accounting policies in consultation with the Statutory Auditors'' and have applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of
the state of affairs of the Company as at March 31, 2022 and of the profit of the Company for the year under review;
(iii) The Directors have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) The Directors have prepared the annual accounts of the Company on a ''going concern'' basis;
(v) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;
(vi) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
CONTRACT AND ARRANGEMENTS WITH RELATED PARTIES
All contracts/ arrangements/ transactions entered into/ by the Company during the financial year under review with related parties were on arm''s length basis and in the ordinary course of business. There were no materially significant related party transactions which could have potential conflict with interest of the Company at large. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.
All Related Party Transactions were placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee was obtained for the transactions which were of a repetitive nature. The transactions entered into pursuant to the omnibus approval so granted were reviewed and statements giving details of all related party transactions were placed before the Audit Committee and the Board of Directors for their review on a quarterly basis. The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website at the following link:
https://mf.nipponindiaim.com/InvestorServices/
Your Directors draw attention of the members to Note No. 29 to the financial statement which sets out related party disclosures.
PARTICULARS OF FRAUDS REPORTED BY THE AUDITORS''
In terms of Section 143(12) of the Act, M/s. S R Batliboi & Co. LLP, Chartered Accountants, the Statutory Auditors of the Company have not reported any instance of fraud having taken place during the year under review, in their Audit Report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators/ Courts which would impact the going concern status of the Company and its future operations.
DETAILS OF APPLICATION MADE BY THE COMPANY OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONGWITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR The Company invests in various debt market instruments (non-convertible debentures) issued by various issuers. In order to realize the debenture outstanding''s, the Company has filed certain applications under the Insolvency and Bankruptcy Code, 2016. The Mutual Fund Division of the Company has filed (a) an IBC proceeding against Avantha Holdings Limited in January 2020 before Hon''ble NCLT New Delhi which is currently at pre-admission hearings stage. The Company is also a respondent party to an IBC proceeding filed in the matter of Reserve Bank of India v. Dewan Housing Finance Corporation Limited pending before the Hon''ble NCLT, Mumbai.
The Portfolio Management Services Division of the Company has filed: (a) IBC proceedings against Fortuna Buildcon India Private Limited which was filed in November 2017 before the Hon''ble NCLT, Bangalore, wherein currently the resolution plan has been submitted to the Hon''ble NCLT for approval (b) three IBC proceedings against three Biodiversity Conservation India Private Limited group companies (BCIL Zed Ria Properties Private Limited, BCIL Red Earth Developers India Pvt Ltd and Biodiversity Conservation India Private Limited) were filed in December 2017 before the Hon''ble NCLT, Bangalore. The NCLT has approved resolution plans in BCIL Zed Ria Properties Private Limited and in BCIL Red Earth Developers India Pvt Ltd, which are currently under implementation while Biodiversity Conservation India Private Limited is currently under liquidation. The Company is also a respondent to 2 (two) appeals in BCIL Red Earth Developers India Private Limited and in 3 (three) appeals in BCIL Zed Ria Properties Private Limited, before Hon''ble NCLAT, Delhi, which have been filed challenging the approved resolution plans; (c) IBC proceedings have been filed against the promoters of Biodiversity Conservation India Private
Limited in November 2020 before Hon''ble NCLT, Bangalore which are currently at a pre-admission stage; (d) IBC proceeding filed against Green Valley Shelters Private Limited in December 2019, before Hon''ble NCLT, Chennai, was admitted in August 2021, however the proceedings are currently temporarily stayed under an order of the Supreme Court. The Company is a respondent in a civil appeal filed by the promoters of Green Valley Shelters Private Limited before the Hon''ble Supreme Court, challenging the admission of IBC proceedings against Green Valley Shelters Private Limited, which is currently pending under directions of exploring a settlement; (e) an IBC proceeding filed against the promoters of Green Valley Shelters Private Limited in October 2020 before the Hon''ble NCLT, Chennai was admitted in January 2022 and is pending final orders appointing the resolution professional; (f) an IBC proceeding was filed against Arkie Atelier Design India Private Limited, being the corporate guarantor for the debentures issued by Green Valley Shelters Private Limited in November 2021 and is currently at a pre-admission stage; (g) an IBC proceeding filed against Bharucha & Motivala Infrastructure Private Limited, being corporate guarantor for the debentures issued by Lake District Realty Private Limited, in November 2019 before Hon''ble NCLT, Mumbai was admitted in May 2021, but has been stayed pursuant to an order of the Hon''ble NCLAT in July 2021. The Company is a respondent in the appeal filed by the promoters of Lake District Realty Private Limited before the Hon''ble NCLAT, Delhi, challenging the admission of IBC proceedings against Bharucha & Motivala Infrastructure Private Limited, which is currently at its final arguments stage; (h) IBC proceedings have been filed against the promoters of Lake District Realty Private Limited in November 2021, which is currently at a pre-admission stage; (i) an IBC proceedings has been filed against Ashapura Options Private Limited, being the corporate guarantor for the debentures issued by Ashapura Housing Private Limited in February 2022 which is at a pre-admission stage. (j) IBC proceedings have also been filed against four (4) promoter guarantors of Ashapura Housing Private Limited, which are at a pre-admission stage.
The Company is not required to maintain cost records as specified by the Central Government under subsection (1) of section 148 of the Companies Act, 2013.
During the year, the Company has made a downstream investment in AMC Repo Clearing Limited to the extent of Rs. 9,25,87,830. The certificate from the Statutory Auditor confirming the compliance of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017 with respect to the Company''s downstream investment
has been received and will be available for inspection. Any member interested in obtaining the same may write to the Company Secretary and the same will be furnished on request.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
In terms of the provisions of Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules are provided in the Annexure to the Board''s Report. Disclosures relating to the remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended also forms part of this Report. However, having regard to the provisions of Section 136 of the Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining the said information may write to the Company Secretary. Upon such request the information shall be furnished.
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
Your Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. Following is a summary of sexual harassment complaints received and disposed off during the year:
⢠No. of complaints received: 0
⢠No. of complaints disposed off: 0
BUSINESS RESPONSIBILITY REPORT
Business Responsibility Report for the year under review as stipulated under Listing Regulations is presented in the separate section forming part of this Annual Report.
Your Directors wish to place on record their sincere appreciation for the co-operation received from various regulatory and governmental authorities including SEBI, RBI, Registrar of Companies, Maharashtra at Mumbai, PFRDA, NPS Trust, EPFO, CMPFO, Stock Exchanges, Depositories, Custodians, Bankers, Registrar, Shareholders, Investors and all other business constituents during the year under review. We believe all of them have contributed to our continued growth.
Your Directors also wish to place on record their deep appreciation for the total commitment displayed by all the executives, officers and staff, resulting in yet another eventful performance for the year.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS OF NIPPON LIFE INDIA ASSET MANAGEMENT LIMITED
Ashvin Dhirajlal Parekh Sundeep Sikka
Director Executive Director & CEO (DIN:06559989) (DIN: 02553654)
Place : Mumbai Dated : April 26, 2022
Mar 31, 2022
Your Directors take pleasure in presenting their 27th Annual Report on the business and operations of your Company, together with the audited financial statements, for the year ended March 31, 2022.
Your Company endeavors to remain one of the leading players in the Asset Management business in India and keep enhancing its global footprint as well.
Your Company is a subsidiary Company of Nippon Life Insurance Company ("NLI"). NLI, a fortune 500 Company and which is one of the largest life insurers in the world managing assets of over USD 700 bn. NLI has a large global network with presence across US, Europe, Asia, and Australia along with a 130-year track record in Life Insurance business as well as global investments across Asset Management companies. This pedigree brings strong synergistic benefits that very well complements your Company''s domestic expertise in Asset Management business and provides a thrust to its significant growth potential. Your Company expects substantial upside in terms of increased AUM & adoption of best governance & risk management practices based on NLI''s global positioning & relationships.
Your Company acts as the Asset Management Company of Nippon India Mutual Fund and it happens to be the largest foreign owned Asset Management Company in India.
FINANCIAL PERFORMANCE AND STATE OF COMPANY''S AFFAIRS
The standalone and consolidated financial statements of the Company for the financial year ended March 31, 2022, have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act. The financial highlights (on a consolidated and standalone basis) of the Company for the year ended March 31, 2022 are as follows:
('' Crores) |
||||
Description |
Consolidated |
Standalone |
||
Year ended |
Year ended |
Year ended |
Year ended |
|
March 31, 2022 |
March 31, 2021 |
March 31, 2022 |
March 31, 2021 |
|
Gross Income |
1535.63 |
1419.34 |
1428.42 |
1325.66 |
Profit before exceptional item and tax |
988.67 |
877.03 |
945.43 |
842.92 |
Exceptional Items |
- |
- |
- |
- |
Profit Before tax |
988.67 |
877.03 |
945.43 |
842.92 |
Current Tax |
206.66 |
157.41 |
200.38 |
151.51 |
Deferred Tax |
38.64 |
40.22 |
33.84 |
42.02 |
Profit for the year |
743.37 |
679.39 |
711.21 |
649.39 |
Share of Profit from Associates |
0.79 |
0.94 |
- |
- |
Profit attributable to non-controlling interest |
- |
- |
- |
- |
Other Comprehensive Income |
(0.30) |
0.72 |
(0.27) |
0.72 |
Balance carried to Balance Sheet |
743.86 |
681.05 |
710.94 |
650.11 |
Basic EPS of '' 10 each |
12.00 |
11.04 |
11.47 |
10.53 |
Diluted EPS of '' 10 each |
11.80 |
10.90 |
11.28 |
10.41 |
The Consolidated Financial Statements of the Company are forming part of this Annual Report. The annual accounts of all the subsidiary companies will be placed on the website of the Company.
DETAILS OF MATERIAL CHANGES ANDCOMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments affecting the financial position of the Company since the date of the financial statements i.e. March 31,2022.
During the year, the Company had declared and paid an interim dividend of Rs. 3.50 per equity share (35%) amounting to Rs. 217.41 Crore. The Board has also recommended a final dividend of Rs. 7.50 per Equity Share (75%) of Rs. 10/- each for the financial year ended March 31, 2022, for the approval of the Shareholders at the ensuing Annual General meeting. With this the total dividend for the financial year 2021-22 would be approximately Rs. 683.92 crores, including the interim dividend of Rs. 3.50 per equity share distributed in November 2021. The Final dividend, if declared, will be paid after the Annual General Meeting.
The dividend payout is in accordance with the Company''s Dividend Distribution Policy which forms part of this Annual Report.
AMOUNT TO BE CARRIED TO RESERVES
Your Directors do not propose any amount to be transferred to the General Reserves of the Company.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report for the year under review as stipulated under SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (Listing Regulations) is presented in a separate section forming part of this Annual Report.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENT
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act are given in the notes to the Financial Statements.
There is no difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions.
The Company has neither accepted nor renewed any fixed deposits during the year. There are no outstanding or unclaimed deposits, unclaimed / unpaid interest, refunds due to the deposit holders or to be deposited to the Investor Education and Protection Fund as on March 31, 2022.
With the perspective of promoting the culture of employee ownership and to attract, retain, motivate and incentivize senior as well as critical talent, the Company has formulated Nippon Life India Asset
Management Limited - Employee Stock Option Plan 2017 [formerly known as "Reliance Nippon Life Asset Management Limited - Employee Stock Option Plan 2017"] ("ESOP 2017" / "Plan") as its stock option scheme, which was launched in August 2017 and Nippon Life India Asset Management Limited - Employee Stock Option Plan 2019 [formerly known as "Reliance Nippon Life Asset Management Limited - Employee Stock Option Plan 2019"] ("ESOP 2019" / "Plan") as its stock option scheme, which was launched in July 2019. The Nomination and Remuneration Committee of the Board monitors and administers these Plans and from time to time grants stock options to the employees.
Both ESOP 2017 as well as ESOP 2019 are in compliance with The SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 [erstwhile The SEBI (Share Based Employee Benefits) Regulations, 2014] (SEBI Regulations).
However, having regard to the provisions of first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. The certificate from the Practicing Company Secretary confirming the compliance of The SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 [erstwhile The SEBI (Share Based Employee Benefits) Regulations, 2014] with respect to the Company''s Employees Stock Option Scheme Plans has been received and will be available for inspection through electronic mode. Any member interested in obtaining the same may write to the Company Secretary and the same will be furnished on request. The details as required to be disclosed under SEBI Regulations are put on the Company''s website at httos://mF.niooonindiaim. com/investor-service/customer-service/nam-india-shareholders-investors
COMPLIANCE CULTURE & RISK MANAGEMENT
Your Company is essentially Compliance centric and has a huge focus in this direction. The Compliance function is manned by a dedicated and experienced team of professionals. The Compliance team regularly conducts various educative training programs for various segments within the organization. Your Company thrives towards a culture of ''Total Compliance'' and it has a ''Zero Tolerance'' policy for non-compliances. There exists a comprehensive Compliance Manual, which is reviewed by your Board of Directors from time to time and it facilitates Company''s Compliance team to monitor various compliance requirements effectively & comprehensively. Your Board of Directors have also constituted a Compliance Committee, which is chaired by the CEO & Executive Director of the Company, and which has the Compliance Officer and other senior & relevant functionaries as its members. This committee meets at least once in a quarter to discuss and deliberate issues pertaining to compliance and other regulatory developments.
Your Company also has a comprehensive Risk Management Policy that envisages a structured and consistent enterprise-wide risk management framework, based on the three lines of defense model, to ensure that risk management processes are consistently applied across the organization and provide reasonable assurance regarding achievement of organization''s objectives.
The risk management policy clearly sets out the objectives & elements of risk management within the organization, including the constitution of an independent Risk Management department headed by Chief Risk Officer (reporting directly to the CEO and to the Board of Directors), Risk Management Committee (RMC).
Your Company promotes risk awareness culture throughout the organization and risk management is an integral part of decision making and day-today operations of all activities at all levels across the organization. There are well documented & Board approved policies & processes to address and mitigate various risks to which the company is exposed. The company also has a robust business continuity plan which is tested on a periodic basis to ensure business is not interrupted.
The company has a structured risk reporting mechanism to ensure risks are monitored and reviewed by CRO, Senior Management, RMCBs and Board on a periodic basis.
INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY
The Company has an Internal Control System which is commensurate with the size, scale and complexity of its business operations.
Foreffectiveriskmanagementandcontrol,theCompany has established structures and responsibilities in line with the "Three Lines of Defense" model, where 1st line being business operations, 2nd line is the oversight functions like Risk Management and Compliance and 3rd line is Internal Audit. To maintain its objectivity and independence, the Internal Audit department reports to the Audit Committee. The Internal Audit department monitors and evaluates the efficacy and adequacy of the internal control system in the Company, its compliance with operating systems, accounting procedures and policies. Based on the report of the Internal Auditor, process owners undertake corrective action in their respective areas and thereby strengthen the controls. The Internal Audit department follows up on pending audit issues and ensures that corrective actions have been taken. Significant audit observations, if any, and corrective actions thereon, are presented to the Audit Committee of the Board.
Your Directors wish to reiterate your Company''s commitment to the highest standards of corporate governance in order to enhance trust of all its stakeholders. Strong & robust corporate governance practices have facilitated your Company in standing up to the continued scrutiny of domestic & international investors and that of various Regulatory authorities.
The report on Corporate Governance as stipulated under Regulation 34(3) read with Para C of Schedule V of the Listing Regulations is presented in separate section forming part of this Annual Report.
A Certificate from the auditors of the Company i.e. M/s. S. R. Batliboi & Co. LLP, Chartered Accountants conforming compliance to the conditions of Corporate Governance as stipulated under Para E of Schedule V of the Listing Regulations, is enclosed to this Report.
In accordance with Section 177 of the Act and the Listing Regulations, the Company has formulated a Vigil Mechanism to address the genuine concerns, if any. The policy can be accessed on the Company''s website.
CORPORATE SOCIAL RESPONSIBILITY
As part of its initiatives under "Corporate Social Responsibility (CSR)", the Company has undertaken projects in the areas of promoting healthcare, education and rural development in accordance with Schedule VII of the Act.
The Annual Report on CSR activities is annexed herewith as Annexure A.
SUBSIDIARIES & ASSOCIATE COMPANY
As of March 31, 2022, your Company had three (3) subsidiaries. Two of such subsidiaries are overseas, being one each in Singapore and Mauritius and one subsidiary is in India. All the subsidiaries of the Company are engaged in financial services and related activities. In addition, the Company also has an Associate company in India, which has already surrendered its business license/ regulatory approval to act as a Pension Fund Manager. This particular company currently has no business operations and it is therefore proposed to wind it up, in accordance with the applicable laws.
A statement w.r.t. the performance and the financial position of the subsidiaries of the Company is forming a part of the Consolidated Financial Statements of the Company.
The performance of financial position of the subsidiary companies is presented in the Management Discussions and Analysis Report forming part of this Annual Report. The policy for determining material subsidiary companies
may be accessed on the Company''s website at https:// mf.nipponindiaim.com/InvestorServices/Pages/Investor-Policies.aspx
During the year under review, the following employees were the ''Key Managerial Personnel'' of the Company:
a) Mr. Sundeep Sikka - Executive Director & Chief Executive Officer;
b) Mr. Ajay Patel - Manager;
c) Mr. Prateek Jain - Chief Financial Officer; and
d) Ms. Nilufer Shekhawat - Company Secretary.
During the year, Mr. Sundeep Sikka has been reappointed as the Executive Director & CEO of the Company for a term of 5 years commencing from April 22, 2021.
During the year, Mr. Yutaka Ideguchi [Nominee Director of NLI] resigned from the directorship of the Company w.e.f. March 30, 2022. Mr. Kazuyuki Saigo [Nominee Director of NLI] who was a Director of the Company as on March 31, 2022, resigned as such effective April 21, 2022. Mr. Tomohiro Yao and Mr. Minoru Kimura [Nominee Directors of NLI] were appointed as Additional Directors of the Company w.e.f. April 21, 2022.
All the Independent Directors of your Company i.e. General Ved Prakash Malik (Retd.), Ms. Ameeta Chatterjee, Mr. Ashvin Parekh and Mr. B. Sriram, have already furnished the required declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act.
In the opinion of the Board, the Independent Directors possess the requisite expertise and experience and are persons of high integrity and repute. They fulfil the conditions specified in the Act and the Rules made thereunder and are independent of the management.
In terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by The Indian Institute of Corporate Affairs, Manesar (''IICA''). The Independent Directors are also required to undertake online proficiency self-assessment test conducted by the IICA within a period of Two years from the date of inclusion of their names in the data bank, unless they meet the criteria specified for exemption. All the Independent Directors of the Company are exempt from the requirement to undertake online proficiency self assessment test.
PERFORMANCE EVALUATION OF DIRECTORS, BOARD AND COMMITTEES
The Company has devised a policy for the performance evaluation of the individual directors, Board and its Committees, which also includes the criteria for carrying out the said performance evaluation. Pursuant to the provisions of the Act and Regulation 17(10) of Listing Regulations and as prescribed in the stated policy of the Board, the Board has carried out an annual performance evaluation of (i) the Directors (Independent and non-independent);(ii) itself (as a whole);(iii) its committees and (iv) fulfillment of Independence criteria. The Board performance was evaluated based on inputs received from the Board members after considering criteria such as Board composition and structure, effectiveness of Board / Committee processes, and information provided to the Board, etc. In terms of the requirements of the Act, a separate meeting of the Independent Directors was also held during the year.
During the year under review, nine (9) Board meetings were held.
Your Directors wish to inform that the functioning of the Board is supplemented by various committees (Board sub-committees and management committees), which have been constituted from time to time, such as Audit Committee, Committee of Directors, CSR Committee, Stakeholders Relationship Committee, Nomination & Remuneration Committee, Risk Management Committee of the Board, IT Strategy Committee, Valuation Committee, Investment Committee, Risk Management Committee, Allotment Committee, Broker Empanelment Committee, Operating Committee, Compliance Committee, Stewardship Committee, Proxy Voting Committee, Information Security Risk Management Committee, etc. to name a few. Each of the aforesaid Committees has been constituted in order to ensure due compliance with the applicable laws and to ensure that highest levels of corporate governance are followed and practiced. The minutes of the meetings of each of these Committees are duly placed before the Board for noting and confirmation.
In terms of the requirements of Section 177 of the Act, and Regulation 18 of the Listing Regulations, the Audit Committee of the Company consists of majority of Independent Directors. As on date of this report, it comprises Mr. Ashvin Parekh [Independent Director], Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. B. Sriram [Independent Director], Mr. Akira Shibata [Non- Independent Director] and Mr. Minoru Kimura [Non- Independent Director]. Mr. Ashvin Parekh acts as the Chairperson of this Committee.
During the year, seven (7) meetings of the Audit Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
NOMINATION & REMUNERATION COMMITTEE
In terms of the requirements of Section 178 of the Act, and Regulation 19 of the Listing Regulations, the Nomination & Remuneration Committee of the Company consists of majority of Independent Directors. As on date of this report, it comprises, Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Tomohiro Yao [NonIndependent Director] and Mr. Minoru Kimura [NonIndependent Director]. General Ved Prakash Malik (Retd.) acts as the Chairperson of this Committee.
During the year, four (4) meetings of the Nomination & Remuneration Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
The Nomination & Remuneration Policy has been provided as Annexure B to the Board''s Report.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
In terms of the requirements of Section 135 of the Act, the Corporate Social Responsibility ("CSR") Committee of the Company consists of Eight members. As on date of this report, it comprises Mr. Tomohiro Yao [Non-Independent Director], Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Sundeep Sikka [CEO & Executive Director], Mr. Akira Shibata [Non-Independent Director] and Mr. Minoru Kimura [Non-Independent Director]. Mr. Tomohiro Yao acts as the Chairman of this Committee.
During the year 2021-22, two (2) meetings of the CSR Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
STAKEHOLDERS'' RELATIONSHIP COMMITTEE
In terms of the requirements of Section 178 of the Act, and Regulation 20 of the Listing Regulations, the Stakeholders'' Relationship Committee of the Company consists of five members. As on date of this report, it comprises Ms. Ameeta Chatterjee [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Tomohiro Yao [Non-Independent Director] and Mr. Sundeep Sikka [CEO & Executive Director]. Ms. Ameeta Chatterjee acts as the Chairperson of this Committee.
During the year, two (2) meetings of the Stakeholders'' Relationship Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
In terms of the relevant requirements under the Listing Regulations, the Company has constituted a Risk Management Committee of the Board. The Committee presently comprises of Mr. Tomohiro Yao [Non-Independent Director] as the Chairperson, Mr. Akira Shibata [Non-Independent Director], Mr. Sundeep Sikka [CEO & Executive Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director] and Mr. Rishi Garg [Chief Risk Officer] as its members.
During the year, two (2) meeting of the Risk Management Committee of the Board were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
AUDITORS'' OF THE COMPANY - STATUTORY AND INTERNAL
Statutory Auditors:
M/s. S. R. Batliboi & Co. LLP, Chartered Accountants shall hold office as Statutory Auditors of the Company until the conclusion of the 28th Annual General Meeting.
JHS & Associates LLP, Chartered Accountants were appointed as the Internal Auditors'' of your Company for the financial year 2021-22. Your Directors have also approved their re-appointment as such for the financial year 2022-23.
AUDITORS OF THE SCHEMES OF NIPPON INDIA MUTUAL FUND- STATUTORY AND INTERNAL
In accordance with the applicable provisions of law, the Company has appointed Statutory and Internal Auditors for various Schemes of Nippon India Mutual Fund, who periodically submit their reports, which are placed before the Audit Committee for discussion, review and implementation of their recommendations.
M/s. Walker Chandiok & Co. LLP, Chartered Accountants were appointed as Statutory Auditors of the Schemes of Nippon India Mutual Fund for the financial year 2021-22.
During the year, M/s. Deloitte Haskins & Sells LLP, Chartered Accountants were appointed as Internal Auditors of the Scheme of Nippon India Mutual Fund and the portfolio management services division of the Company, for the financial year 2021-22. Your Directors have also approved their re-appointment as such for the financial year 2022-23.
AUDITORS'' REPORT
The observations and comments given by the Statutory Auditors in their report read together with notes on financial statements are self-explanatory and hence does not require any further comments in terms of Section 134 of the Act.
SECRETARIAL STANDARDS
During the year under review, the Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Directors had appointed M/s. M. Siroya and Company, Mumbai, a firm of Company Secretaries in-practice to undertake the Secretarial Audit of the Company for the financial year 2021-22. In this regard, the Report submitted by the Secretarial Auditor is annexed as Annexure C.
Your Directors are pleased to inform that the report from the Secretarial Auditors does not contain any qualifications or negative remarks.
ANNUAL RETURN
Pursuant to Section 134(3)(a) and Section 92(3) of the Act read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company has been placed on the website of the Company and can be accessed at https:// mf.nipponindiaim.com/investor-service/customer-service/nam-india-shareholders-investors
PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
CONSERVATION OF ENERGY:
The operations of the Company do not consume high levels of energy. Adequate measures have been taken to conserve energy wherever feasible. Your Company uses latest technology and energy efficient equipment''s. Your Company only uses LED lights and 5 star air-conditioning for majority of offices. As energy cost forms a very small part of the total costs, the impact on cost is not material.
TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION:
> Game changing initiatives:
⢠The All-new Investor App: This year marked the launch of our New Investor App (Android), a key Digital transformation endeavor that is aimed to strengthen our already robust Digital ecosystem. It is a new-age asset that is styled for millennials & zillennials and simplified for the legacy investor
base. We believe that the savvy consumers of today invest first in digital experiences and in mutual funds afterwards, and that''s exactly how we''ve built the new app - with next level, simplified and intuitive interface coupled with new age features and capabilities - to provide best in class, enhanced digital experience for our investors. With the best of e-commerce practices at its heart - contemporary design, quick product discovery, aided decision making, and personalized experiences based on intelligent analytics - this app is all that our investors will ever need to manage their investments with NIMF.
While contemporary design and new features and
enhancements are a part of the re-build, some of the
key highlights of the rebuild are:
¦ Completely self-serve and frictionless on boarding process
¦ ''Investor journey'' centric flows (and not inward out, classic Product & Service bouquet approach)
¦ Discoverability: Products & Services are available in line with user expectations
¦ Enhanced purchase experience: Cart Buying and Drop-off win-back;express checkout for repeat transactions
¦ Scalable framework: Leveraging Digital stack (Targeting, Campaigns, Analytics, etc.) for a more enriching and powerful experience
⢠New Fund Offers - Digital Launches: The Nippon India Flexi Cap Fund was one of the biggest success stories for Digital enabling lucid access for investors & partners across all our Digital assets. Apart from that we Digitally enabled other prominent products for FY21-22 including Nippon India Taiwan Equity Fund and Nippon India Silver ETF F-o-F. Apart from that, on the ETF front, we also enabled Nippon India Nifty Pharma ETF, Nippon India Nifty Auto ETF & Nippon India Silver ETF. We also had a very innovative Index offering made live viz. Nippon India Nifty AAA CPSE Bond Plus SDL - Apr 2027 Maturity 60:40 Index Fund
⢠Growth Enablers for Business Easy with 2.0 App: Business Easy 2.0 app, our Digital asset with our distributors, is an all-encompassing solution that acts as a complete Customer Relationship Management tool. The app works as a Digital branch through which distributors can manage their Mutual Fund business virtually. With the objective of evolving the app from a business facilitator to a growth enabler, this year saw the addition of new enhancements and features to the app. A quick overview of such features is as follows:
¦ Comprehensive Dashboard with Performance review distributor''s AUM, SIP Book value, Business health trends, in-depth customer base understanding
¦ SIP Corner for focused SIP sustenance, retention, and win-back
¦ Advanced Funds & Performance module with a more in-depth view of all products and granular understanding of fund facts & stats
⢠WhatsApp Scale-up: Having launched the pilot version of our WhatsApp advent which comprised of Liquid Fund purchase, e-KYC check & Digital asset access, we scaled up our WhatsApp capability with comprehensive transaction & service capabilities - purchase in all funds, all transaction types and multiple service modules. This implementation dovetails into our philosophy of building our Digital presence in line with the preference of our investors. This service paves the way for increased market penetration of NIMF products and unlocks opportunities by enabling reach out to a vast 500mn WhatsApp user base in India
⢠Intelligent interventions for business retention and growth: We have built system driven, smart and automated measures across various investor journeys with the objective of creating positive business impact. These interventions either nudge users to take prudent & effective decisions in a real-time manner to stay invested or help them with alternate options while if they encounter any outages or errors. Such measures delivered consistent growth in AUM retention and augmentation and saw an uplift of 60% in such positive impact when compared with last FY.
⢠Dynamic Real time mailers: In a real time world, it is important that consumers are given real time information that might help them to take conscious and informed investment decisions. NIMF pioneered deep tech enabled mailers. The same fetched real time data (viz Sensex movement, NAVs, returns etc.) from the server whenever opened. This gave a clear visibility to the investor on what were the relevant avenues for either fresh investment or additional investment. This was widely cherished by new and existing investors and yielded high usage
⢠Leveraging Beta products from Google: NIMF has been a pioneer at Conversational Commerce, and this was done in partnership using the Voice assistant capabilities from Google. On the base of this strong partnership NIMF in FY 21-22 was at the helm of leveraging Beta Products from Google like the newly launched Performance Max. A successful implementation and more than desired results got
NIMF mentioned in Google India Case study for the best use of Performance Max beta to drive incremental business using Artificial Intelligence & Machine learning.
⢠Strengthening our Digital Distribution through Strategic Alliances and Enhanced Support to
Partners: We added some key partners and more importantly products into their positioning suites, like Genius from ET Money. We also were one of the firsts to launch SIPs on PhonePe platform. Other key players like Paytm, Groww, Kuvera, IND Money Tarrakki, etc., continue to bolster our executional leadership and expansive reach. Our immense expertise in the core business of Asset Management and prowess in Digital Business gives us an unparalleled advantage to engage with our Partners at an even deeper level and help them set up and scale up their businesses. Our knowledge and know-how, shared with the Partners and their customers by our Fund Managers and Investment Experts on such Partners'' platforms coupled with integrated marketing campaigns have educated the investors and helped them make the right decisions. Our robust engagement strategy coupled with focused execution has not only helped us build great equity with Partners but also helped win the trust of investors which has resulted in growth of business volumes on such platforms, thereby benefitting both us and the Partners. We have a definitive lead in the Digital Partnerships space and have managed to forge a clear position for NIMF as being the partner of choice for such players.
⢠Setting up of New NAM India Technology Applications
A challenge posted due to the migration to our new Nippon environment was how to securely perform a complete data transfer of our SAP data. Thanks to careful planning, execution and a lot of communication with involved stakeholders we were able to successfully set up NAM India''s own SAP environment after mitigating several risks. This was performed with minimum downtime and no effect on NAM India''s books of accounts.
During the pandemic we have rolled out solutions and infrastructure enhancements that has allowed NAM India to continue working in an offline situation without exception. Initiatives such as secure VPN for data access, communication software, online approval workflow on block chain are a few initiatives that have been implemented.
⢠Managing regulatory requirements
There were several new regulations brought in by the regulatory body resulting in multiple
new enhancements that had to be performed under strict deadlines. Some key projects such as database encryption, recording of conversations on Teams calls and mobile phones, two factor authentication were executed and the regulations complied with.
⢠Optimizations in Investment and Digital Portfolio
During the year there were several enhancements performed in the investment portfolio to comply with regulation change and to bring in operating efficiency. On the digital portfolio side new functionality in the form of New Investor App, enhancement in workflows and new fund offers were launched with a great degree of success. Certain processes on the digital side that were affecting user experience were examined and enhanced to perform faster leading to an increase in the customer experience index of the digital offerings.
NAM India IT is working in a continuous improvement cycle to improve our various technology and process towards enhancing our contribution to the company, stakeholders and our customers. We have shown significant improvement in our issue resolution process and our results indicate a steady increase in our customer issue resolution index over the financial year. We also have maintained high up and response times on all our critical investment and digital platforms. This has resulted in consistent and predictive working of our offerings to our end customers.
Another initiative to build automation to further optimize processes is underway and several processes across operations, risk and investment functions are expected to be automated in the new financial year. This will lead to efficiency gains across functions. Technology will continue to identify processes that can be automated and continues to partner with functions on the same.
⢠Digital Business touched a record 2.9 million purchase transactions FY 2021-22, which is essentially 1 purchase every 6 seconds! This increase is a ~60 % YOY growth.
⢠Contribution of Digital Business to overall NIMF business stands at 58%, which is a growth of ~12% over last FY where Digital contribution was at 52%.
⢠Digital Business share in Lumpsum purchase and new SIP registrations stood at 60% and 48% respectively vis-a-vis total purchase transactions of NIMF.
⢠Long term assets focus resulted in 90% non-Liquid acquisitions compared to 75% in FY2020-2021.
⢠45% of our digital consumers are less than 35 years of age
NIMF Digital has been setting a benchmark across the BFSI industry in its Fintech endeavors across the Digital Ecosystem. It is now recognized as a Digital benchmark across industries. Both Global and Indian forums have further recognized NIMF''s expertise and supremacy in the Digital arena. As in the previous years, we have yet again been conferred with some coveted awards this year as well which further strengthens our position as a Digital leader in the BFSI space
⢠Global Digital Marketing Awards for ''Best use of Facebook AI tool in performance campaigns'' (April 2021)
⢠ACEF Global Customer Engagement Awards 2021 for ''Digital Marketing, Data driven Marketing, Email Marketing and Mobile Marketing'' - 5 awards (4 Golds and 1 Silver) (May 2021)
⢠Mint | TechCircle - Business Transformation Award 2021 for ''Revenue Generation - Product & Service Augmentation'' - Business Easy (June 2021)
⢠Indian Digital Marketing Awards for ''Best App Developed for Products / Services'' - Business Easy (July 2021)
⢠Indian Digital Marketing Awards for ''Best Use of sites for Mobiles'' - NIMF Purchase Mobile Site (M-site) (July 2021)
⢠Digital Crest Awards 2021 for ''Expertise in Online Commerce, Omni Channel Strategy and Mobile Marketing'' - 3 awards (1 Gold, 1 Silver and 1 Bronze) (August 2021)
⢠The Great Indian Marketing Awards for ''Best performing campaign for Google''s Performance-max'' (August 2021)
⢠Maddies Marketing Award 2021 for the ''Most Effective Voice Assistant App'' (in the Enabling Technologies category) - Simply Save Conversational Commerce (November 2021)
⢠Dynamic CIO Award for ''Smart Innovator'' (in the Technology Innovation category) - Simply Save Conversational Commerce (November 2021)
RESEARCH AND DEVELOPMENT:DIGITAL ADOPTION AND INNOVATION:
We, at Nippon India Mutual Fund, continue to envision and execute key Digital transformation endeavors year on year that are aimed to strengthen our already robust Digital ecosystem.
⢠Our focus always remains on empowering our investors during moments of truth and on a ''here & now'' manner to take quicker, smarter, and well-informed decisions on how and where they should invest their money when they transact on our Digital assets. Such empowerment is fueled by our capabilities to crunch & run real-time analysis on the enormous amount of on-asset & offline data points we have regarding our consumers, their past purchases, and future propensities.
⢠Our intelligent, data led digital assets, can learn, and predict user behavior powered by both the real time frameworks and archived analytical frameworks which are operating on an advanced algo network. This helps in e-serving highly personalized and customized experiences to give our millennial, zillennial and legacy investors or partners accurate recommendations, suggestions, on-the-fly nudges, predictive service and much more as they advance in their journeys.
NAM India Technology is continuously engaging in research and development to pick and choose the best of technology solutions to our stakeholders
- NAM India Technology continues to explore opportunities with Fintech and Technology vendors to identify the next best solution that can be a game changes in the industry
- The technology team also follows and explores software, hardware, security and network enhancements in the technology world and attempts to identify key components that can change the way we do work in the organization and industry.
FOREIGN EXCHANGE EARNINGS AND OUTGO:
During the year under review, the Company earned foreign exchange equivalent to Rs. 22.85 Cr (Previous Year: Rs. 21.79 Cr). The Company spent foreign exchange equivalent to Rs. 6.98 Cr (Previous Year: Rs. 6.49 Cr).
DIRECTORS'' RESPONSIBILITY STATEMENT
As per the requirements of Sub Section (5) of Section 134 of the Act, the Directors confirm that -
(i) In the preparation of the annual accounts for the financial year ended March 31,2022, the applicable accounting standards have been followed and that there are no material departures;
(ii) The Directors have selected such accounting policies in consultation with the Statutory Auditors'' and have applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of
the state of affairs of the Company as at March 31, 2022 and of the profit of the Company for the year under review;
(iii) The Directors have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) The Directors have prepared the annual accounts of the Company on a ''going concern'' basis;
(v) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;
(vi) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
CONTRACT AND ARRANGEMENTS WITH RELATED PARTIES
All contracts/ arrangements/ transactions entered into/ by the Company during the financial year under review with related parties were on arm''s length basis and in the ordinary course of business. There were no materially significant related party transactions which could have potential conflict with interest of the Company at large. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.
All Related Party Transactions were placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee was obtained for the transactions which were of a repetitive nature. The transactions entered into pursuant to the omnibus approval so granted were reviewed and statements giving details of all related party transactions were placed before the Audit Committee and the Board of Directors for their review on a quarterly basis. The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website at the following link:
https://mf.nipponindiaim.com/InvestorServices/
Your Directors draw attention of the members to Note No. 29 to the financial statement which sets out related party disclosures.
PARTICULARS OF FRAUDS REPORTED BY THE AUDITORS''
In terms of Section 143(12) of the Act, M/s. S R Batliboi & Co. LLP, Chartered Accountants, the Statutory Auditors of the Company have not reported any instance of fraud having taken place during the year under review, in their Audit Report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators/ Courts which would impact the going concern status of the Company and its future operations.
DETAILS OF APPLICATION MADE BY THE COMPANY OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONGWITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR The Company invests in various debt market instruments (non-convertible debentures) issued by various issuers. In order to realize the debenture outstanding''s, the Company has filed certain applications under the Insolvency and Bankruptcy Code, 2016. The Mutual Fund Division of the Company has filed (a) an IBC proceeding against Avantha Holdings Limited in January 2020 before Hon''ble NCLT New Delhi which is currently at pre-admission hearings stage. The Company is also a respondent party to an IBC proceeding filed in the matter of Reserve Bank of India v. Dewan Housing Finance Corporation Limited pending before the Hon''ble NCLT, Mumbai.
The Portfolio Management Services Division of the Company has filed: (a) IBC proceedings against Fortuna Buildcon India Private Limited which was filed in November 2017 before the Hon''ble NCLT, Bangalore, wherein currently the resolution plan has been submitted to the Hon''ble NCLT for approval (b) three IBC proceedings against three Biodiversity Conservation India Private Limited group companies (BCIL Zed Ria Properties Private Limited, BCIL Red Earth Developers India Pvt Ltd and Biodiversity Conservation India Private Limited) were filed in December 2017 before the Hon''ble NCLT, Bangalore. The NCLT has approved resolution plans in BCIL Zed Ria Properties Private Limited and in BCIL Red Earth Developers India Pvt Ltd, which are currently under implementation while Biodiversity Conservation India Private Limited is currently under liquidation. The Company is also a respondent to 2 (two) appeals in BCIL Red Earth Developers India Private Limited and in 3 (three) appeals in BCIL Zed Ria Properties Private Limited, before Hon''ble NCLAT, Delhi, which have been filed challenging the approved resolution plans; (c) IBC proceedings have been filed against the promoters of Biodiversity Conservation India Private
Limited in November 2020 before Hon''ble NCLT, Bangalore which are currently at a pre-admission stage; (d) IBC proceeding filed against Green Valley Shelters Private Limited in December 2019, before Hon''ble NCLT, Chennai, was admitted in August 2021, however the proceedings are currently temporarily stayed under an order of the Supreme Court. The Company is a respondent in a civil appeal filed by the promoters of Green Valley Shelters Private Limited before the Hon''ble Supreme Court, challenging the admission of IBC proceedings against Green Valley Shelters Private Limited, which is currently pending under directions of exploring a settlement; (e) an IBC proceeding filed against the promoters of Green Valley Shelters Private Limited in October 2020 before the Hon''ble NCLT, Chennai was admitted in January 2022 and is pending final orders appointing the resolution professional; (f) an IBC proceeding was filed against Arkie Atelier Design India Private Limited, being the corporate guarantor for the debentures issued by Green Valley Shelters Private Limited in November 2021 and is currently at a pre-admission stage; (g) an IBC proceeding filed against Bharucha & Motivala Infrastructure Private Limited, being corporate guarantor for the debentures issued by Lake District Realty Private Limited, in November 2019 before Hon''ble NCLT, Mumbai was admitted in May 2021, but has been stayed pursuant to an order of the Hon''ble NCLAT in July 2021. The Company is a respondent in the appeal filed by the promoters of Lake District Realty Private Limited before the Hon''ble NCLAT, Delhi, challenging the admission of IBC proceedings against Bharucha & Motivala Infrastructure Private Limited, which is currently at its final arguments stage; (h) IBC proceedings have been filed against the promoters of Lake District Realty Private Limited in November 2021, which is currently at a pre-admission stage; (i) an IBC proceedings has been filed against Ashapura Options Private Limited, being the corporate guarantor for the debentures issued by Ashapura Housing Private Limited in February 2022 which is at a pre-admission stage. (j) IBC proceedings have also been filed against four (4) promoter guarantors of Ashapura Housing Private Limited, which are at a pre-admission stage.
The Company is not required to maintain cost records as specified by the Central Government under subsection (1) of section 148 of the Companies Act, 2013.
During the year, the Company has made a downstream investment in AMC Repo Clearing Limited to the extent of Rs. 9,25,87,830. The certificate from the Statutory Auditor confirming the compliance of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017 with respect to the Company''s downstream investment
has been received and will be available for inspection. Any member interested in obtaining the same may write to the Company Secretary and the same will be furnished on request.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
In terms of the provisions of Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules are provided in the Annexure to the Board''s Report. Disclosures relating to the remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended also forms part of this Report. However, having regard to the provisions of Section 136 of the Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining the said information may write to the Company Secretary. Upon such request the information shall be furnished.
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
Your Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. Following is a summary of sexual harassment complaints received and disposed off during the year:
⢠No. of complaints received: 0
⢠No. of complaints disposed off: 0
BUSINESS RESPONSIBILITY REPORT
Business Responsibility Report for the year under review as stipulated under Listing Regulations is presented in the separate section forming part of this Annual Report.
Your Directors wish to place on record their sincere appreciation for the co-operation received from various regulatory and governmental authorities including SEBI, RBI, Registrar of Companies, Maharashtra at Mumbai, PFRDA, NPS Trust, EPFO, CMPFO, Stock Exchanges, Depositories, Custodians, Bankers, Registrar, Shareholders, Investors and all other business constituents during the year under review. We believe all of them have contributed to our continued growth.
Your Directors also wish to place on record their deep appreciation for the total commitment displayed by all the executives, officers and staff, resulting in yet another eventful performance for the year.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS OF NIPPON LIFE INDIA ASSET MANAGEMENT LIMITED
Ashvin Dhirajlal Parekh Sundeep Sikka
Director Executive Director & CEO (DIN:06559989) (DIN: 02553654)
Place : Mumbai Dated : April 26, 2022
Mar 31, 2022
Your Directors take pleasure in presenting their 27th Annual Report on the business and operations of your Company, together with the audited financial statements, for the year ended March 31, 2022.
Your Company endeavors to remain one of the leading players in the Asset Management business in India and keep enhancing its global footprint as well.
Your Company is a subsidiary Company of Nippon Life Insurance Company ("NLI"). NLI, a fortune 500 Company and which is one of the largest life insurers in the world managing assets of over USD 700 bn. NLI has a large global network with presence across US, Europe, Asia, and Australia along with a 130-year track record in Life Insurance business as well as global investments across Asset Management companies. This pedigree brings strong synergistic benefits that very well complements your Company''s domestic expertise in Asset Management business and provides a thrust to its significant growth potential. Your Company expects substantial upside in terms of increased AUM & adoption of best governance & risk management practices based on NLI''s global positioning & relationships.
Your Company acts as the Asset Management Company of Nippon India Mutual Fund and it happens to be the largest foreign owned Asset Management Company in India.
FINANCIAL PERFORMANCE AND STATE OF COMPANY''S AFFAIRS
The standalone and consolidated financial statements of the Company for the financial year ended March 31, 2022, have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act. The financial highlights (on a consolidated and standalone basis) of the Company for the year ended March 31, 2022 are as follows:
('' Crores) |
||||
Description |
Consolidated |
Standalone |
||
Year ended |
Year ended |
Year ended |
Year ended |
|
March 31, 2022 |
March 31, 2021 |
March 31, 2022 |
March 31, 2021 |
|
Gross Income |
1535.63 |
1419.34 |
1428.42 |
1325.66 |
Profit before exceptional item and tax |
988.67 |
877.03 |
945.43 |
842.92 |
Exceptional Items |
- |
- |
- |
- |
Profit Before tax |
988.67 |
877.03 |
945.43 |
842.92 |
Current Tax |
206.66 |
157.41 |
200.38 |
151.51 |
Deferred Tax |
38.64 |
40.22 |
33.84 |
42.02 |
Profit for the year |
743.37 |
679.39 |
711.21 |
649.39 |
Share of Profit from Associates |
0.79 |
0.94 |
- |
- |
Profit attributable to non-controlling interest |
- |
- |
- |
- |
Other Comprehensive Income |
(0.30) |
0.72 |
(0.27) |
0.72 |
Balance carried to Balance Sheet |
743.86 |
681.05 |
710.94 |
650.11 |
Basic EPS of '' 10 each |
12.00 |
11.04 |
11.47 |
10.53 |
Diluted EPS of '' 10 each |
11.80 |
10.90 |
11.28 |
10.41 |
The Consolidated Financial Statements of the Company are forming part of this Annual Report. The annual accounts of all the subsidiary companies will be placed on the website of the Company.
DETAILS OF MATERIAL CHANGES ANDCOMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments affecting the financial position of the Company since the date of the financial statements i.e. March 31,2022.
During the year, the Company had declared and paid an interim dividend of Rs. 3.50 per equity share (35%) amounting to Rs. 217.41 Crore. The Board has also recommended a final dividend of Rs. 7.50 per Equity Share (75%) of Rs. 10/- each for the financial year ended March 31, 2022, for the approval of the Shareholders at the ensuing Annual General meeting. With this the total dividend for the financial year 2021-22 would be approximately Rs. 683.92 crores, including the interim dividend of Rs. 3.50 per equity share distributed in November 2021. The Final dividend, if declared, will be paid after the Annual General Meeting.
The dividend payout is in accordance with the Company''s Dividend Distribution Policy which forms part of this Annual Report.
AMOUNT TO BE CARRIED TO RESERVES
Your Directors do not propose any amount to be transferred to the General Reserves of the Company.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report for the year under review as stipulated under SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (Listing Regulations) is presented in a separate section forming part of this Annual Report.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENT
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act are given in the notes to the Financial Statements.
There is no difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions.
The Company has neither accepted nor renewed any fixed deposits during the year. There are no outstanding or unclaimed deposits, unclaimed / unpaid interest, refunds due to the deposit holders or to be deposited to the Investor Education and Protection Fund as on March 31, 2022.
With the perspective of promoting the culture of employee ownership and to attract, retain, motivate and incentivize senior as well as critical talent, the Company has formulated Nippon Life India Asset
Management Limited - Employee Stock Option Plan 2017 [formerly known as "Reliance Nippon Life Asset Management Limited - Employee Stock Option Plan 2017"] ("ESOP 2017" / "Plan") as its stock option scheme, which was launched in August 2017 and Nippon Life India Asset Management Limited - Employee Stock Option Plan 2019 [formerly known as "Reliance Nippon Life Asset Management Limited - Employee Stock Option Plan 2019"] ("ESOP 2019" / "Plan") as its stock option scheme, which was launched in July 2019. The Nomination and Remuneration Committee of the Board monitors and administers these Plans and from time to time grants stock options to the employees.
Both ESOP 2017 as well as ESOP 2019 are in compliance with The SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 [erstwhile The SEBI (Share Based Employee Benefits) Regulations, 2014] (SEBI Regulations).
However, having regard to the provisions of first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. The certificate from the Practicing Company Secretary confirming the compliance of The SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 [erstwhile The SEBI (Share Based Employee Benefits) Regulations, 2014] with respect to the Company''s Employees Stock Option Scheme Plans has been received and will be available for inspection through electronic mode. Any member interested in obtaining the same may write to the Company Secretary and the same will be furnished on request. The details as required to be disclosed under SEBI Regulations are put on the Company''s website at httos://mF.niooonindiaim. com/investor-service/customer-service/nam-india-shareholders-investors
COMPLIANCE CULTURE & RISK MANAGEMENT
Your Company is essentially Compliance centric and has a huge focus in this direction. The Compliance function is manned by a dedicated and experienced team of professionals. The Compliance team regularly conducts various educative training programs for various segments within the organization. Your Company thrives towards a culture of ''Total Compliance'' and it has a ''Zero Tolerance'' policy for non-compliances. There exists a comprehensive Compliance Manual, which is reviewed by your Board of Directors from time to time and it facilitates Company''s Compliance team to monitor various compliance requirements effectively & comprehensively. Your Board of Directors have also constituted a Compliance Committee, which is chaired by the CEO & Executive Director of the Company, and which has the Compliance Officer and other senior & relevant functionaries as its members. This committee meets at least once in a quarter to discuss and deliberate issues pertaining to compliance and other regulatory developments.
Your Company also has a comprehensive Risk Management Policy that envisages a structured and consistent enterprise-wide risk management framework, based on the three lines of defense model, to ensure that risk management processes are consistently applied across the organization and provide reasonable assurance regarding achievement of organization''s objectives.
The risk management policy clearly sets out the objectives & elements of risk management within the organization, including the constitution of an independent Risk Management department headed by Chief Risk Officer (reporting directly to the CEO and to the Board of Directors), Risk Management Committee (RMC).
Your Company promotes risk awareness culture throughout the organization and risk management is an integral part of decision making and day-today operations of all activities at all levels across the organization. There are well documented & Board approved policies & processes to address and mitigate various risks to which the company is exposed. The company also has a robust business continuity plan which is tested on a periodic basis to ensure business is not interrupted.
The company has a structured risk reporting mechanism to ensure risks are monitored and reviewed by CRO, Senior Management, RMCBs and Board on a periodic basis.
INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY
The Company has an Internal Control System which is commensurate with the size, scale and complexity of its business operations.
Foreffectiveriskmanagementandcontrol,theCompany has established structures and responsibilities in line with the "Three Lines of Defense" model, where 1st line being business operations, 2nd line is the oversight functions like Risk Management and Compliance and 3rd line is Internal Audit. To maintain its objectivity and independence, the Internal Audit department reports to the Audit Committee. The Internal Audit department monitors and evaluates the efficacy and adequacy of the internal control system in the Company, its compliance with operating systems, accounting procedures and policies. Based on the report of the Internal Auditor, process owners undertake corrective action in their respective areas and thereby strengthen the controls. The Internal Audit department follows up on pending audit issues and ensures that corrective actions have been taken. Significant audit observations, if any, and corrective actions thereon, are presented to the Audit Committee of the Board.
Your Directors wish to reiterate your Company''s commitment to the highest standards of corporate governance in order to enhance trust of all its stakeholders. Strong & robust corporate governance practices have facilitated your Company in standing up to the continued scrutiny of domestic & international investors and that of various Regulatory authorities.
The report on Corporate Governance as stipulated under Regulation 34(3) read with Para C of Schedule V of the Listing Regulations is presented in separate section forming part of this Annual Report.
A Certificate from the auditors of the Company i.e. M/s. S. R. Batliboi & Co. LLP, Chartered Accountants conforming compliance to the conditions of Corporate Governance as stipulated under Para E of Schedule V of the Listing Regulations, is enclosed to this Report.
In accordance with Section 177 of the Act and the Listing Regulations, the Company has formulated a Vigil Mechanism to address the genuine concerns, if any. The policy can be accessed on the Company''s website.
CORPORATE SOCIAL RESPONSIBILITY
As part of its initiatives under "Corporate Social Responsibility (CSR)", the Company has undertaken projects in the areas of promoting healthcare, education and rural development in accordance with Schedule VII of the Act.
The Annual Report on CSR activities is annexed herewith as Annexure A.
SUBSIDIARIES & ASSOCIATE COMPANY
As of March 31, 2022, your Company had three (3) subsidiaries. Two of such subsidiaries are overseas, being one each in Singapore and Mauritius and one subsidiary is in India. All the subsidiaries of the Company are engaged in financial services and related activities. In addition, the Company also has an Associate company in India, which has already surrendered its business license/ regulatory approval to act as a Pension Fund Manager. This particular company currently has no business operations and it is therefore proposed to wind it up, in accordance with the applicable laws.
A statement w.r.t. the performance and the financial position of the subsidiaries of the Company is forming a part of the Consolidated Financial Statements of the Company.
The performance of financial position of the subsidiary companies is presented in the Management Discussions and Analysis Report forming part of this Annual Report. The policy for determining material subsidiary companies
may be accessed on the Company''s website at https:// mf.nipponindiaim.com/InvestorServices/Pages/Investor-Policies.aspx
During the year under review, the following employees were the ''Key Managerial Personnel'' of the Company:
a) Mr. Sundeep Sikka - Executive Director & Chief Executive Officer;
b) Mr. Ajay Patel - Manager;
c) Mr. Prateek Jain - Chief Financial Officer; and
d) Ms. Nilufer Shekhawat - Company Secretary.
During the year, Mr. Sundeep Sikka has been reappointed as the Executive Director & CEO of the Company for a term of 5 years commencing from April 22, 2021.
During the year, Mr. Yutaka Ideguchi [Nominee Director of NLI] resigned from the directorship of the Company w.e.f. March 30, 2022. Mr. Kazuyuki Saigo [Nominee Director of NLI] who was a Director of the Company as on March 31, 2022, resigned as such effective April 21, 2022. Mr. Tomohiro Yao and Mr. Minoru Kimura [Nominee Directors of NLI] were appointed as Additional Directors of the Company w.e.f. April 21, 2022.
All the Independent Directors of your Company i.e. General Ved Prakash Malik (Retd.), Ms. Ameeta Chatterjee, Mr. Ashvin Parekh and Mr. B. Sriram, have already furnished the required declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act.
In the opinion of the Board, the Independent Directors possess the requisite expertise and experience and are persons of high integrity and repute. They fulfil the conditions specified in the Act and the Rules made thereunder and are independent of the management.
In terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by The Indian Institute of Corporate Affairs, Manesar (''IICA''). The Independent Directors are also required to undertake online proficiency self-assessment test conducted by the IICA within a period of Two years from the date of inclusion of their names in the data bank, unless they meet the criteria specified for exemption. All the Independent Directors of the Company are exempt from the requirement to undertake online proficiency self assessment test.
PERFORMANCE EVALUATION OF DIRECTORS, BOARD AND COMMITTEES
The Company has devised a policy for the performance evaluation of the individual directors, Board and its Committees, which also includes the criteria for carrying out the said performance evaluation. Pursuant to the provisions of the Act and Regulation 17(10) of Listing Regulations and as prescribed in the stated policy of the Board, the Board has carried out an annual performance evaluation of (i) the Directors (Independent and non-independent);(ii) itself (as a whole);(iii) its committees and (iv) fulfillment of Independence criteria. The Board performance was evaluated based on inputs received from the Board members after considering criteria such as Board composition and structure, effectiveness of Board / Committee processes, and information provided to the Board, etc. In terms of the requirements of the Act, a separate meeting of the Independent Directors was also held during the year.
During the year under review, nine (9) Board meetings were held.
Your Directors wish to inform that the functioning of the Board is supplemented by various committees (Board sub-committees and management committees), which have been constituted from time to time, such as Audit Committee, Committee of Directors, CSR Committee, Stakeholders Relationship Committee, Nomination & Remuneration Committee, Risk Management Committee of the Board, IT Strategy Committee, Valuation Committee, Investment Committee, Risk Management Committee, Allotment Committee, Broker Empanelment Committee, Operating Committee, Compliance Committee, Stewardship Committee, Proxy Voting Committee, Information Security Risk Management Committee, etc. to name a few. Each of the aforesaid Committees has been constituted in order to ensure due compliance with the applicable laws and to ensure that highest levels of corporate governance are followed and practiced. The minutes of the meetings of each of these Committees are duly placed before the Board for noting and confirmation.
In terms of the requirements of Section 177 of the Act, and Regulation 18 of the Listing Regulations, the Audit Committee of the Company consists of majority of Independent Directors. As on date of this report, it comprises Mr. Ashvin Parekh [Independent Director], Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. B. Sriram [Independent Director], Mr. Akira Shibata [Non- Independent Director] and Mr. Minoru Kimura [Non- Independent Director]. Mr. Ashvin Parekh acts as the Chairperson of this Committee.
During the year, seven (7) meetings of the Audit Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
NOMINATION & REMUNERATION COMMITTEE
In terms of the requirements of Section 178 of the Act, and Regulation 19 of the Listing Regulations, the Nomination & Remuneration Committee of the Company consists of majority of Independent Directors. As on date of this report, it comprises, Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Tomohiro Yao [NonIndependent Director] and Mr. Minoru Kimura [NonIndependent Director]. General Ved Prakash Malik (Retd.) acts as the Chairperson of this Committee.
During the year, four (4) meetings of the Nomination & Remuneration Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
The Nomination & Remuneration Policy has been provided as Annexure B to the Board''s Report.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
In terms of the requirements of Section 135 of the Act, the Corporate Social Responsibility ("CSR") Committee of the Company consists of Eight members. As on date of this report, it comprises Mr. Tomohiro Yao [Non-Independent Director], Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Sundeep Sikka [CEO & Executive Director], Mr. Akira Shibata [Non-Independent Director] and Mr. Minoru Kimura [Non-Independent Director]. Mr. Tomohiro Yao acts as the Chairman of this Committee.
During the year 2021-22, two (2) meetings of the CSR Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
STAKEHOLDERS'' RELATIONSHIP COMMITTEE
In terms of the requirements of Section 178 of the Act, and Regulation 20 of the Listing Regulations, the Stakeholders'' Relationship Committee of the Company consists of five members. As on date of this report, it comprises Ms. Ameeta Chatterjee [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Tomohiro Yao [Non-Independent Director] and Mr. Sundeep Sikka [CEO & Executive Director]. Ms. Ameeta Chatterjee acts as the Chairperson of this Committee.
During the year, two (2) meetings of the Stakeholders'' Relationship Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
In terms of the relevant requirements under the Listing Regulations, the Company has constituted a Risk Management Committee of the Board. The Committee presently comprises of Mr. Tomohiro Yao [Non-Independent Director] as the Chairperson, Mr. Akira Shibata [Non-Independent Director], Mr. Sundeep Sikka [CEO & Executive Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director] and Mr. Rishi Garg [Chief Risk Officer] as its members.
During the year, two (2) meeting of the Risk Management Committee of the Board were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
AUDITORS'' OF THE COMPANY - STATUTORY AND INTERNAL
Statutory Auditors:
M/s. S. R. Batliboi & Co. LLP, Chartered Accountants shall hold office as Statutory Auditors of the Company until the conclusion of the 28th Annual General Meeting.
JHS & Associates LLP, Chartered Accountants were appointed as the Internal Auditors'' of your Company for the financial year 2021-22. Your Directors have also approved their re-appointment as such for the financial year 2022-23.
AUDITORS OF THE SCHEMES OF NIPPON INDIA MUTUAL FUND- STATUTORY AND INTERNAL
In accordance with the applicable provisions of law, the Company has appointed Statutory and Internal Auditors for various Schemes of Nippon India Mutual Fund, who periodically submit their reports, which are placed before the Audit Committee for discussion, review and implementation of their recommendations.
M/s. Walker Chandiok & Co. LLP, Chartered Accountants were appointed as Statutory Auditors of the Schemes of Nippon India Mutual Fund for the financial year 2021-22.
During the year, M/s. Deloitte Haskins & Sells LLP, Chartered Accountants were appointed as Internal Auditors of the Scheme of Nippon India Mutual Fund and the portfolio management services division of the Company, for the financial year 2021-22. Your Directors have also approved their re-appointment as such for the financial year 2022-23.
AUDITORS'' REPORT
The observations and comments given by the Statutory Auditors in their report read together with notes on financial statements are self-explanatory and hence does not require any further comments in terms of Section 134 of the Act.
SECRETARIAL STANDARDS
During the year under review, the Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Directors had appointed M/s. M. Siroya and Company, Mumbai, a firm of Company Secretaries in-practice to undertake the Secretarial Audit of the Company for the financial year 2021-22. In this regard, the Report submitted by the Secretarial Auditor is annexed as Annexure C.
Your Directors are pleased to inform that the report from the Secretarial Auditors does not contain any qualifications or negative remarks.
ANNUAL RETURN
Pursuant to Section 134(3)(a) and Section 92(3) of the Act read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company has been placed on the website of the Company and can be accessed at https:// mf.nipponindiaim.com/investor-service/customer-service/nam-india-shareholders-investors
PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
CONSERVATION OF ENERGY:
The operations of the Company do not consume high levels of energy. Adequate measures have been taken to conserve energy wherever feasible. Your Company uses latest technology and energy efficient equipment''s. Your Company only uses LED lights and 5 star air-conditioning for majority of offices. As energy cost forms a very small part of the total costs, the impact on cost is not material.
TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION:
> Game changing initiatives:
⢠The All-new Investor App: This year marked the launch of our New Investor App (Android), a key Digital transformation endeavor that is aimed to strengthen our already robust Digital ecosystem. It is a new-age asset that is styled for millennials & zillennials and simplified for the legacy investor
base. We believe that the savvy consumers of today invest first in digital experiences and in mutual funds afterwards, and that''s exactly how we''ve built the new app - with next level, simplified and intuitive interface coupled with new age features and capabilities - to provide best in class, enhanced digital experience for our investors. With the best of e-commerce practices at its heart - contemporary design, quick product discovery, aided decision making, and personalized experiences based on intelligent analytics - this app is all that our investors will ever need to manage their investments with NIMF.
While contemporary design and new features and
enhancements are a part of the re-build, some of the
key highlights of the rebuild are:
¦ Completely self-serve and frictionless on boarding process
¦ ''Investor journey'' centric flows (and not inward out, classic Product & Service bouquet approach)
¦ Discoverability: Products & Services are available in line with user expectations
¦ Enhanced purchase experience: Cart Buying and Drop-off win-back;express checkout for repeat transactions
¦ Scalable framework: Leveraging Digital stack (Targeting, Campaigns, Analytics, etc.) for a more enriching and powerful experience
⢠New Fund Offers - Digital Launches: The Nippon India Flexi Cap Fund was one of the biggest success stories for Digital enabling lucid access for investors & partners across all our Digital assets. Apart from that we Digitally enabled other prominent products for FY21-22 including Nippon India Taiwan Equity Fund and Nippon India Silver ETF F-o-F. Apart from that, on the ETF front, we also enabled Nippon India Nifty Pharma ETF, Nippon India Nifty Auto ETF & Nippon India Silver ETF. We also had a very innovative Index offering made live viz. Nippon India Nifty AAA CPSE Bond Plus SDL - Apr 2027 Maturity 60:40 Index Fund
⢠Growth Enablers for Business Easy with 2.0 App: Business Easy 2.0 app, our Digital asset with our distributors, is an all-encompassing solution that acts as a complete Customer Relationship Management tool. The app works as a Digital branch through which distributors can manage their Mutual Fund business virtually. With the objective of evolving the app from a business facilitator to a growth enabler, this year saw the addition of new enhancements and features to the app. A quick overview of such features is as follows:
¦ Comprehensive Dashboard with Performance review distributor''s AUM, SIP Book value, Business health trends, in-depth customer base understanding
¦ SIP Corner for focused SIP sustenance, retention, and win-back
¦ Advanced Funds & Performance module with a more in-depth view of all products and granular understanding of fund facts & stats
⢠WhatsApp Scale-up: Having launched the pilot version of our WhatsApp advent which comprised of Liquid Fund purchase, e-KYC check & Digital asset access, we scaled up our WhatsApp capability with comprehensive transaction & service capabilities - purchase in all funds, all transaction types and multiple service modules. This implementation dovetails into our philosophy of building our Digital presence in line with the preference of our investors. This service paves the way for increased market penetration of NIMF products and unlocks opportunities by enabling reach out to a vast 500mn WhatsApp user base in India
⢠Intelligent interventions for business retention and growth: We have built system driven, smart and automated measures across various investor journeys with the objective of creating positive business impact. These interventions either nudge users to take prudent & effective decisions in a real-time manner to stay invested or help them with alternate options while if they encounter any outages or errors. Such measures delivered consistent growth in AUM retention and augmentation and saw an uplift of 60% in such positive impact when compared with last FY.
⢠Dynamic Real time mailers: In a real time world, it is important that consumers are given real time information that might help them to take conscious and informed investment decisions. NIMF pioneered deep tech enabled mailers. The same fetched real time data (viz Sensex movement, NAVs, returns etc.) from the server whenever opened. This gave a clear visibility to the investor on what were the relevant avenues for either fresh investment or additional investment. This was widely cherished by new and existing investors and yielded high usage
⢠Leveraging Beta products from Google: NIMF has been a pioneer at Conversational Commerce, and this was done in partnership using the Voice assistant capabilities from Google. On the base of this strong partnership NIMF in FY 21-22 was at the helm of leveraging Beta Products from Google like the newly launched Performance Max. A successful implementation and more than desired results got
NIMF mentioned in Google India Case study for the best use of Performance Max beta to drive incremental business using Artificial Intelligence & Machine learning.
⢠Strengthening our Digital Distribution through Strategic Alliances and Enhanced Support to
Partners: We added some key partners and more importantly products into their positioning suites, like Genius from ET Money. We also were one of the firsts to launch SIPs on PhonePe platform. Other key players like Paytm, Groww, Kuvera, IND Money Tarrakki, etc., continue to bolster our executional leadership and expansive reach. Our immense expertise in the core business of Asset Management and prowess in Digital Business gives us an unparalleled advantage to engage with our Partners at an even deeper level and help them set up and scale up their businesses. Our knowledge and know-how, shared with the Partners and their customers by our Fund Managers and Investment Experts on such Partners'' platforms coupled with integrated marketing campaigns have educated the investors and helped them make the right decisions. Our robust engagement strategy coupled with focused execution has not only helped us build great equity with Partners but also helped win the trust of investors which has resulted in growth of business volumes on such platforms, thereby benefitting both us and the Partners. We have a definitive lead in the Digital Partnerships space and have managed to forge a clear position for NIMF as being the partner of choice for such players.
⢠Setting up of New NAM India Technology Applications
A challenge posted due to the migration to our new Nippon environment was how to securely perform a complete data transfer of our SAP data. Thanks to careful planning, execution and a lot of communication with involved stakeholders we were able to successfully set up NAM India''s own SAP environment after mitigating several risks. This was performed with minimum downtime and no effect on NAM India''s books of accounts.
During the pandemic we have rolled out solutions and infrastructure enhancements that has allowed NAM India to continue working in an offline situation without exception. Initiatives such as secure VPN for data access, communication software, online approval workflow on block chain are a few initiatives that have been implemented.
⢠Managing regulatory requirements
There were several new regulations brought in by the regulatory body resulting in multiple
new enhancements that had to be performed under strict deadlines. Some key projects such as database encryption, recording of conversations on Teams calls and mobile phones, two factor authentication were executed and the regulations complied with.
⢠Optimizations in Investment and Digital Portfolio
During the year there were several enhancements performed in the investment portfolio to comply with regulation change and to bring in operating efficiency. On the digital portfolio side new functionality in the form of New Investor App, enhancement in workflows and new fund offers were launched with a great degree of success. Certain processes on the digital side that were affecting user experience were examined and enhanced to perform faster leading to an increase in the customer experience index of the digital offerings.
NAM India IT is working in a continuous improvement cycle to improve our various technology and process towards enhancing our contribution to the company, stakeholders and our customers. We have shown significant improvement in our issue resolution process and our results indicate a steady increase in our customer issue resolution index over the financial year. We also have maintained high up and response times on all our critical investment and digital platforms. This has resulted in consistent and predictive working of our offerings to our end customers.
Another initiative to build automation to further optimize processes is underway and several processes across operations, risk and investment functions are expected to be automated in the new financial year. This will lead to efficiency gains across functions. Technology will continue to identify processes that can be automated and continues to partner with functions on the same.
⢠Digital Business touched a record 2.9 million purchase transactions FY 2021-22, which is essentially 1 purchase every 6 seconds! This increase is a ~60 % YOY growth.
⢠Contribution of Digital Business to overall NIMF business stands at 58%, which is a growth of ~12% over last FY where Digital contribution was at 52%.
⢠Digital Business share in Lumpsum purchase and new SIP registrations stood at 60% and 48% respectively vis-a-vis total purchase transactions of NIMF.
⢠Long term assets focus resulted in 90% non-Liquid acquisitions compared to 75% in FY2020-2021.
⢠45% of our digital consumers are less than 35 years of age
NIMF Digital has been setting a benchmark across the BFSI industry in its Fintech endeavors across the Digital Ecosystem. It is now recognized as a Digital benchmark across industries. Both Global and Indian forums have further recognized NIMF''s expertise and supremacy in the Digital arena. As in the previous years, we have yet again been conferred with some coveted awards this year as well which further strengthens our position as a Digital leader in the BFSI space
⢠Global Digital Marketing Awards for ''Best use of Facebook AI tool in performance campaigns'' (April 2021)
⢠ACEF Global Customer Engagement Awards 2021 for ''Digital Marketing, Data driven Marketing, Email Marketing and Mobile Marketing'' - 5 awards (4 Golds and 1 Silver) (May 2021)
⢠Mint | TechCircle - Business Transformation Award 2021 for ''Revenue Generation - Product & Service Augmentation'' - Business Easy (June 2021)
⢠Indian Digital Marketing Awards for ''Best App Developed for Products / Services'' - Business Easy (July 2021)
⢠Indian Digital Marketing Awards for ''Best Use of sites for Mobiles'' - NIMF Purchase Mobile Site (M-site) (July 2021)
⢠Digital Crest Awards 2021 for ''Expertise in Online Commerce, Omni Channel Strategy and Mobile Marketing'' - 3 awards (1 Gold, 1 Silver and 1 Bronze) (August 2021)
⢠The Great Indian Marketing Awards for ''Best performing campaign for Google''s Performance-max'' (August 2021)
⢠Maddies Marketing Award 2021 for the ''Most Effective Voice Assistant App'' (in the Enabling Technologies category) - Simply Save Conversational Commerce (November 2021)
⢠Dynamic CIO Award for ''Smart Innovator'' (in the Technology Innovation category) - Simply Save Conversational Commerce (November 2021)
RESEARCH AND DEVELOPMENT:DIGITAL ADOPTION AND INNOVATION:
We, at Nippon India Mutual Fund, continue to envision and execute key Digital transformation endeavors year on year that are aimed to strengthen our already robust Digital ecosystem.
⢠Our focus always remains on empowering our investors during moments of truth and on a ''here & now'' manner to take quicker, smarter, and well-informed decisions on how and where they should invest their money when they transact on our Digital assets. Such empowerment is fueled by our capabilities to crunch & run real-time analysis on the enormous amount of on-asset & offline data points we have regarding our consumers, their past purchases, and future propensities.
⢠Our intelligent, data led digital assets, can learn, and predict user behavior powered by both the real time frameworks and archived analytical frameworks which are operating on an advanced algo network. This helps in e-serving highly personalized and customized experiences to give our millennial, zillennial and legacy investors or partners accurate recommendations, suggestions, on-the-fly nudges, predictive service and much more as they advance in their journeys.
NAM India Technology is continuously engaging in research and development to pick and choose the best of technology solutions to our stakeholders
- NAM India Technology continues to explore opportunities with Fintech and Technology vendors to identify the next best solution that can be a game changes in the industry
- The technology team also follows and explores software, hardware, security and network enhancements in the technology world and attempts to identify key components that can change the way we do work in the organization and industry.
FOREIGN EXCHANGE EARNINGS AND OUTGO:
During the year under review, the Company earned foreign exchange equivalent to Rs. 22.85 Cr (Previous Year: Rs. 21.79 Cr). The Company spent foreign exchange equivalent to Rs. 6.98 Cr (Previous Year: Rs. 6.49 Cr).
DIRECTORS'' RESPONSIBILITY STATEMENT
As per the requirements of Sub Section (5) of Section 134 of the Act, the Directors confirm that -
(i) In the preparation of the annual accounts for the financial year ended March 31,2022, the applicable accounting standards have been followed and that there are no material departures;
(ii) The Directors have selected such accounting policies in consultation with the Statutory Auditors'' and have applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of
the state of affairs of the Company as at March 31, 2022 and of the profit of the Company for the year under review;
(iii) The Directors have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) The Directors have prepared the annual accounts of the Company on a ''going concern'' basis;
(v) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;
(vi) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
CONTRACT AND ARRANGEMENTS WITH RELATED PARTIES
All contracts/ arrangements/ transactions entered into/ by the Company during the financial year under review with related parties were on arm''s length basis and in the ordinary course of business. There were no materially significant related party transactions which could have potential conflict with interest of the Company at large. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.
All Related Party Transactions were placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee was obtained for the transactions which were of a repetitive nature. The transactions entered into pursuant to the omnibus approval so granted were reviewed and statements giving details of all related party transactions were placed before the Audit Committee and the Board of Directors for their review on a quarterly basis. The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website at the following link:
https://mf.nipponindiaim.com/InvestorServices/
Your Directors draw attention of the members to Note No. 29 to the financial statement which sets out related party disclosures.
PARTICULARS OF FRAUDS REPORTED BY THE AUDITORS''
In terms of Section 143(12) of the Act, M/s. S R Batliboi & Co. LLP, Chartered Accountants, the Statutory Auditors of the Company have not reported any instance of fraud having taken place during the year under review, in their Audit Report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators/ Courts which would impact the going concern status of the Company and its future operations.
DETAILS OF APPLICATION MADE BY THE COMPANY OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONGWITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR The Company invests in various debt market instruments (non-convertible debentures) issued by various issuers. In order to realize the debenture outstanding''s, the Company has filed certain applications under the Insolvency and Bankruptcy Code, 2016. The Mutual Fund Division of the Company has filed (a) an IBC proceeding against Avantha Holdings Limited in January 2020 before Hon''ble NCLT New Delhi which is currently at pre-admission hearings stage. The Company is also a respondent party to an IBC proceeding filed in the matter of Reserve Bank of India v. Dewan Housing Finance Corporation Limited pending before the Hon''ble NCLT, Mumbai.
The Portfolio Management Services Division of the Company has filed: (a) IBC proceedings against Fortuna Buildcon India Private Limited which was filed in November 2017 before the Hon''ble NCLT, Bangalore, wherein currently the resolution plan has been submitted to the Hon''ble NCLT for approval (b) three IBC proceedings against three Biodiversity Conservation India Private Limited group companies (BCIL Zed Ria Properties Private Limited, BCIL Red Earth Developers India Pvt Ltd and Biodiversity Conservation India Private Limited) were filed in December 2017 before the Hon''ble NCLT, Bangalore. The NCLT has approved resolution plans in BCIL Zed Ria Properties Private Limited and in BCIL Red Earth Developers India Pvt Ltd, which are currently under implementation while Biodiversity Conservation India Private Limited is currently under liquidation. The Company is also a respondent to 2 (two) appeals in BCIL Red Earth Developers India Private Limited and in 3 (three) appeals in BCIL Zed Ria Properties Private Limited, before Hon''ble NCLAT, Delhi, which have been filed challenging the approved resolution plans; (c) IBC proceedings have been filed against the promoters of Biodiversity Conservation India Private
Limited in November 2020 before Hon''ble NCLT, Bangalore which are currently at a pre-admission stage; (d) IBC proceeding filed against Green Valley Shelters Private Limited in December 2019, before Hon''ble NCLT, Chennai, was admitted in August 2021, however the proceedings are currently temporarily stayed under an order of the Supreme Court. The Company is a respondent in a civil appeal filed by the promoters of Green Valley Shelters Private Limited before the Hon''ble Supreme Court, challenging the admission of IBC proceedings against Green Valley Shelters Private Limited, which is currently pending under directions of exploring a settlement; (e) an IBC proceeding filed against the promoters of Green Valley Shelters Private Limited in October 2020 before the Hon''ble NCLT, Chennai was admitted in January 2022 and is pending final orders appointing the resolution professional; (f) an IBC proceeding was filed against Arkie Atelier Design India Private Limited, being the corporate guarantor for the debentures issued by Green Valley Shelters Private Limited in November 2021 and is currently at a pre-admission stage; (g) an IBC proceeding filed against Bharucha & Motivala Infrastructure Private Limited, being corporate guarantor for the debentures issued by Lake District Realty Private Limited, in November 2019 before Hon''ble NCLT, Mumbai was admitted in May 2021, but has been stayed pursuant to an order of the Hon''ble NCLAT in July 2021. The Company is a respondent in the appeal filed by the promoters of Lake District Realty Private Limited before the Hon''ble NCLAT, Delhi, challenging the admission of IBC proceedings against Bharucha & Motivala Infrastructure Private Limited, which is currently at its final arguments stage; (h) IBC proceedings have been filed against the promoters of Lake District Realty Private Limited in November 2021, which is currently at a pre-admission stage; (i) an IBC proceedings has been filed against Ashapura Options Private Limited, being the corporate guarantor for the debentures issued by Ashapura Housing Private Limited in February 2022 which is at a pre-admission stage. (j) IBC proceedings have also been filed against four (4) promoter guarantors of Ashapura Housing Private Limited, which are at a pre-admission stage.
The Company is not required to maintain cost records as specified by the Central Government under subsection (1) of section 148 of the Companies Act, 2013.
During the year, the Company has made a downstream investment in AMC Repo Clearing Limited to the extent of Rs. 9,25,87,830. The certificate from the Statutory Auditor confirming the compliance of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017 with respect to the Company''s downstream investment
has been received and will be available for inspection. Any member interested in obtaining the same may write to the Company Secretary and the same will be furnished on request.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
In terms of the provisions of Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules are provided in the Annexure to the Board''s Report. Disclosures relating to the remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended also forms part of this Report. However, having regard to the provisions of Section 136 of the Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining the said information may write to the Company Secretary. Upon such request the information shall be furnished.
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
Your Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. Following is a summary of sexual harassment complaints received and disposed off during the year:
⢠No. of complaints received: 0
⢠No. of complaints disposed off: 0
BUSINESS RESPONSIBILITY REPORT
Business Responsibility Report for the year under review as stipulated under Listing Regulations is presented in the separate section forming part of this Annual Report.
Your Directors wish to place on record their sincere appreciation for the co-operation received from various regulatory and governmental authorities including SEBI, RBI, Registrar of Companies, Maharashtra at Mumbai, PFRDA, NPS Trust, EPFO, CMPFO, Stock Exchanges, Depositories, Custodians, Bankers, Registrar, Shareholders, Investors and all other business constituents during the year under review. We believe all of them have contributed to our continued growth.
Your Directors also wish to place on record their deep appreciation for the total commitment displayed by all the executives, officers and staff, resulting in yet another eventful performance for the year.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS OF NIPPON LIFE INDIA ASSET MANAGEMENT LIMITED
Ashvin Dhirajlal Parekh Sundeep Sikka
Director Executive Director & CEO (DIN:06559989) (DIN: 02553654)
Place : Mumbai Dated : April 26, 2022
Mar 31, 2022
Your Directors take pleasure in presenting their 27th Annual Report on the business and operations of your Company, together with the audited financial statements, for the year ended March 31, 2022.
Your Company endeavors to remain one of the leading players in the Asset Management business in India and keep enhancing its global footprint as well.
Your Company is a subsidiary Company of Nippon Life Insurance Company ("NLI"). NLI, a fortune 500 Company and which is one of the largest life insurers in the world managing assets of over USD 700 bn. NLI has a large global network with presence across US, Europe, Asia, and Australia along with a 130-year track record in Life Insurance business as well as global investments across Asset Management companies. This pedigree brings strong synergistic benefits that very well complements your Company''s domestic expertise in Asset Management business and provides a thrust to its significant growth potential. Your Company expects substantial upside in terms of increased AUM & adoption of best governance & risk management practices based on NLI''s global positioning & relationships.
Your Company acts as the Asset Management Company of Nippon India Mutual Fund and it happens to be the largest foreign owned Asset Management Company in India.
FINANCIAL PERFORMANCE AND STATE OF COMPANY''S AFFAIRS
The standalone and consolidated financial statements of the Company for the financial year ended March 31, 2022, have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act. The financial highlights (on a consolidated and standalone basis) of the Company for the year ended March 31, 2022 are as follows:
('' Crores) |
||||
Description |
Consolidated |
Standalone |
||
Year ended |
Year ended |
Year ended |
Year ended |
|
March 31, 2022 |
March 31, 2021 |
March 31, 2022 |
March 31, 2021 |
|
Gross Income |
1535.63 |
1419.34 |
1428.42 |
1325.66 |
Profit before exceptional item and tax |
988.67 |
877.03 |
945.43 |
842.92 |
Exceptional Items |
- |
- |
- |
- |
Profit Before tax |
988.67 |
877.03 |
945.43 |
842.92 |
Current Tax |
206.66 |
157.41 |
200.38 |
151.51 |
Deferred Tax |
38.64 |
40.22 |
33.84 |
42.02 |
Profit for the year |
743.37 |
679.39 |
711.21 |
649.39 |
Share of Profit from Associates |
0.79 |
0.94 |
- |
- |
Profit attributable to non-controlling interest |
- |
- |
- |
- |
Other Comprehensive Income |
(0.30) |
0.72 |
(0.27) |
0.72 |
Balance carried to Balance Sheet |
743.86 |
681.05 |
710.94 |
650.11 |
Basic EPS of '' 10 each |
12.00 |
11.04 |
11.47 |
10.53 |
Diluted EPS of '' 10 each |
11.80 |
10.90 |
11.28 |
10.41 |
The Consolidated Financial Statements of the Company are forming part of this Annual Report. The annual accounts of all the subsidiary companies will be placed on the website of the Company.
DETAILS OF MATERIAL CHANGES ANDCOMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments affecting the financial position of the Company since the date of the financial statements i.e. March 31,2022.
During the year, the Company had declared and paid an interim dividend of Rs. 3.50 per equity share (35%) amounting to Rs. 217.41 Crore. The Board has also recommended a final dividend of Rs. 7.50 per Equity Share (75%) of Rs. 10/- each for the financial year ended March 31, 2022, for the approval of the Shareholders at the ensuing Annual General meeting. With this the total dividend for the financial year 2021-22 would be approximately Rs. 683.92 crores, including the interim dividend of Rs. 3.50 per equity share distributed in November 2021. The Final dividend, if declared, will be paid after the Annual General Meeting.
The dividend payout is in accordance with the Company''s Dividend Distribution Policy which forms part of this Annual Report.
AMOUNT TO BE CARRIED TO RESERVES
Your Directors do not propose any amount to be transferred to the General Reserves of the Company.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report for the year under review as stipulated under SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (Listing Regulations) is presented in a separate section forming part of this Annual Report.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENT
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act are given in the notes to the Financial Statements.
There is no difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions.
The Company has neither accepted nor renewed any fixed deposits during the year. There are no outstanding or unclaimed deposits, unclaimed / unpaid interest, refunds due to the deposit holders or to be deposited to the Investor Education and Protection Fund as on March 31, 2022.
With the perspective of promoting the culture of employee ownership and to attract, retain, motivate and incentivize senior as well as critical talent, the Company has formulated Nippon Life India Asset
Management Limited - Employee Stock Option Plan 2017 [formerly known as "Reliance Nippon Life Asset Management Limited - Employee Stock Option Plan 2017"] ("ESOP 2017" / "Plan") as its stock option scheme, which was launched in August 2017 and Nippon Life India Asset Management Limited - Employee Stock Option Plan 2019 [formerly known as "Reliance Nippon Life Asset Management Limited - Employee Stock Option Plan 2019"] ("ESOP 2019" / "Plan") as its stock option scheme, which was launched in July 2019. The Nomination and Remuneration Committee of the Board monitors and administers these Plans and from time to time grants stock options to the employees.
Both ESOP 2017 as well as ESOP 2019 are in compliance with The SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 [erstwhile The SEBI (Share Based Employee Benefits) Regulations, 2014] (SEBI Regulations).
However, having regard to the provisions of first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. The certificate from the Practicing Company Secretary confirming the compliance of The SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 [erstwhile The SEBI (Share Based Employee Benefits) Regulations, 2014] with respect to the Company''s Employees Stock Option Scheme Plans has been received and will be available for inspection through electronic mode. Any member interested in obtaining the same may write to the Company Secretary and the same will be furnished on request. The details as required to be disclosed under SEBI Regulations are put on the Company''s website at httos://mF.niooonindiaim. com/investor-service/customer-service/nam-india-shareholders-investors
COMPLIANCE CULTURE & RISK MANAGEMENT
Your Company is essentially Compliance centric and has a huge focus in this direction. The Compliance function is manned by a dedicated and experienced team of professionals. The Compliance team regularly conducts various educative training programs for various segments within the organization. Your Company thrives towards a culture of ''Total Compliance'' and it has a ''Zero Tolerance'' policy for non-compliances. There exists a comprehensive Compliance Manual, which is reviewed by your Board of Directors from time to time and it facilitates Company''s Compliance team to monitor various compliance requirements effectively & comprehensively. Your Board of Directors have also constituted a Compliance Committee, which is chaired by the CEO & Executive Director of the Company, and which has the Compliance Officer and other senior & relevant functionaries as its members. This committee meets at least once in a quarter to discuss and deliberate issues pertaining to compliance and other regulatory developments.
Your Company also has a comprehensive Risk Management Policy that envisages a structured and consistent enterprise-wide risk management framework, based on the three lines of defense model, to ensure that risk management processes are consistently applied across the organization and provide reasonable assurance regarding achievement of organization''s objectives.
The risk management policy clearly sets out the objectives & elements of risk management within the organization, including the constitution of an independent Risk Management department headed by Chief Risk Officer (reporting directly to the CEO and to the Board of Directors), Risk Management Committee (RMC).
Your Company promotes risk awareness culture throughout the organization and risk management is an integral part of decision making and day-today operations of all activities at all levels across the organization. There are well documented & Board approved policies & processes to address and mitigate various risks to which the company is exposed. The company also has a robust business continuity plan which is tested on a periodic basis to ensure business is not interrupted.
The company has a structured risk reporting mechanism to ensure risks are monitored and reviewed by CRO, Senior Management, RMCBs and Board on a periodic basis.
INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY
The Company has an Internal Control System which is commensurate with the size, scale and complexity of its business operations.
Foreffectiveriskmanagementandcontrol,theCompany has established structures and responsibilities in line with the "Three Lines of Defense" model, where 1st line being business operations, 2nd line is the oversight functions like Risk Management and Compliance and 3rd line is Internal Audit. To maintain its objectivity and independence, the Internal Audit department reports to the Audit Committee. The Internal Audit department monitors and evaluates the efficacy and adequacy of the internal control system in the Company, its compliance with operating systems, accounting procedures and policies. Based on the report of the Internal Auditor, process owners undertake corrective action in their respective areas and thereby strengthen the controls. The Internal Audit department follows up on pending audit issues and ensures that corrective actions have been taken. Significant audit observations, if any, and corrective actions thereon, are presented to the Audit Committee of the Board.
Your Directors wish to reiterate your Company''s commitment to the highest standards of corporate governance in order to enhance trust of all its stakeholders. Strong & robust corporate governance practices have facilitated your Company in standing up to the continued scrutiny of domestic & international investors and that of various Regulatory authorities.
The report on Corporate Governance as stipulated under Regulation 34(3) read with Para C of Schedule V of the Listing Regulations is presented in separate section forming part of this Annual Report.
A Certificate from the auditors of the Company i.e. M/s. S. R. Batliboi & Co. LLP, Chartered Accountants conforming compliance to the conditions of Corporate Governance as stipulated under Para E of Schedule V of the Listing Regulations, is enclosed to this Report.
In accordance with Section 177 of the Act and the Listing Regulations, the Company has formulated a Vigil Mechanism to address the genuine concerns, if any. The policy can be accessed on the Company''s website.
CORPORATE SOCIAL RESPONSIBILITY
As part of its initiatives under "Corporate Social Responsibility (CSR)", the Company has undertaken projects in the areas of promoting healthcare, education and rural development in accordance with Schedule VII of the Act.
The Annual Report on CSR activities is annexed herewith as Annexure A.
SUBSIDIARIES & ASSOCIATE COMPANY
As of March 31, 2022, your Company had three (3) subsidiaries. Two of such subsidiaries are overseas, being one each in Singapore and Mauritius and one subsidiary is in India. All the subsidiaries of the Company are engaged in financial services and related activities. In addition, the Company also has an Associate company in India, which has already surrendered its business license/ regulatory approval to act as a Pension Fund Manager. This particular company currently has no business operations and it is therefore proposed to wind it up, in accordance with the applicable laws.
A statement w.r.t. the performance and the financial position of the subsidiaries of the Company is forming a part of the Consolidated Financial Statements of the Company.
The performance of financial position of the subsidiary companies is presented in the Management Discussions and Analysis Report forming part of this Annual Report. The policy for determining material subsidiary companies
may be accessed on the Company''s website at https:// mf.nipponindiaim.com/InvestorServices/Pages/Investor-Policies.aspx
During the year under review, the following employees were the ''Key Managerial Personnel'' of the Company:
a) Mr. Sundeep Sikka - Executive Director & Chief Executive Officer;
b) Mr. Ajay Patel - Manager;
c) Mr. Prateek Jain - Chief Financial Officer; and
d) Ms. Nilufer Shekhawat - Company Secretary.
During the year, Mr. Sundeep Sikka has been reappointed as the Executive Director & CEO of the Company for a term of 5 years commencing from April 22, 2021.
During the year, Mr. Yutaka Ideguchi [Nominee Director of NLI] resigned from the directorship of the Company w.e.f. March 30, 2022. Mr. Kazuyuki Saigo [Nominee Director of NLI] who was a Director of the Company as on March 31, 2022, resigned as such effective April 21, 2022. Mr. Tomohiro Yao and Mr. Minoru Kimura [Nominee Directors of NLI] were appointed as Additional Directors of the Company w.e.f. April 21, 2022.
All the Independent Directors of your Company i.e. General Ved Prakash Malik (Retd.), Ms. Ameeta Chatterjee, Mr. Ashvin Parekh and Mr. B. Sriram, have already furnished the required declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act.
In the opinion of the Board, the Independent Directors possess the requisite expertise and experience and are persons of high integrity and repute. They fulfil the conditions specified in the Act and the Rules made thereunder and are independent of the management.
In terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by The Indian Institute of Corporate Affairs, Manesar (''IICA''). The Independent Directors are also required to undertake online proficiency self-assessment test conducted by the IICA within a period of Two years from the date of inclusion of their names in the data bank, unless they meet the criteria specified for exemption. All the Independent Directors of the Company are exempt from the requirement to undertake online proficiency self assessment test.
PERFORMANCE EVALUATION OF DIRECTORS, BOARD AND COMMITTEES
The Company has devised a policy for the performance evaluation of the individual directors, Board and its Committees, which also includes the criteria for carrying out the said performance evaluation. Pursuant to the provisions of the Act and Regulation 17(10) of Listing Regulations and as prescribed in the stated policy of the Board, the Board has carried out an annual performance evaluation of (i) the Directors (Independent and non-independent);(ii) itself (as a whole);(iii) its committees and (iv) fulfillment of Independence criteria. The Board performance was evaluated based on inputs received from the Board members after considering criteria such as Board composition and structure, effectiveness of Board / Committee processes, and information provided to the Board, etc. In terms of the requirements of the Act, a separate meeting of the Independent Directors was also held during the year.
During the year under review, nine (9) Board meetings were held.
Your Directors wish to inform that the functioning of the Board is supplemented by various committees (Board sub-committees and management committees), which have been constituted from time to time, such as Audit Committee, Committee of Directors, CSR Committee, Stakeholders Relationship Committee, Nomination & Remuneration Committee, Risk Management Committee of the Board, IT Strategy Committee, Valuation Committee, Investment Committee, Risk Management Committee, Allotment Committee, Broker Empanelment Committee, Operating Committee, Compliance Committee, Stewardship Committee, Proxy Voting Committee, Information Security Risk Management Committee, etc. to name a few. Each of the aforesaid Committees has been constituted in order to ensure due compliance with the applicable laws and to ensure that highest levels of corporate governance are followed and practiced. The minutes of the meetings of each of these Committees are duly placed before the Board for noting and confirmation.
In terms of the requirements of Section 177 of the Act, and Regulation 18 of the Listing Regulations, the Audit Committee of the Company consists of majority of Independent Directors. As on date of this report, it comprises Mr. Ashvin Parekh [Independent Director], Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. B. Sriram [Independent Director], Mr. Akira Shibata [Non- Independent Director] and Mr. Minoru Kimura [Non- Independent Director]. Mr. Ashvin Parekh acts as the Chairperson of this Committee.
During the year, seven (7) meetings of the Audit Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
NOMINATION & REMUNERATION COMMITTEE
In terms of the requirements of Section 178 of the Act, and Regulation 19 of the Listing Regulations, the Nomination & Remuneration Committee of the Company consists of majority of Independent Directors. As on date of this report, it comprises, Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Tomohiro Yao [NonIndependent Director] and Mr. Minoru Kimura [NonIndependent Director]. General Ved Prakash Malik (Retd.) acts as the Chairperson of this Committee.
During the year, four (4) meetings of the Nomination & Remuneration Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
The Nomination & Remuneration Policy has been provided as Annexure B to the Board''s Report.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
In terms of the requirements of Section 135 of the Act, the Corporate Social Responsibility ("CSR") Committee of the Company consists of Eight members. As on date of this report, it comprises Mr. Tomohiro Yao [Non-Independent Director], Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Sundeep Sikka [CEO & Executive Director], Mr. Akira Shibata [Non-Independent Director] and Mr. Minoru Kimura [Non-Independent Director]. Mr. Tomohiro Yao acts as the Chairman of this Committee.
During the year 2021-22, two (2) meetings of the CSR Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
STAKEHOLDERS'' RELATIONSHIP COMMITTEE
In terms of the requirements of Section 178 of the Act, and Regulation 20 of the Listing Regulations, the Stakeholders'' Relationship Committee of the Company consists of five members. As on date of this report, it comprises Ms. Ameeta Chatterjee [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Tomohiro Yao [Non-Independent Director] and Mr. Sundeep Sikka [CEO & Executive Director]. Ms. Ameeta Chatterjee acts as the Chairperson of this Committee.
During the year, two (2) meetings of the Stakeholders'' Relationship Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
In terms of the relevant requirements under the Listing Regulations, the Company has constituted a Risk Management Committee of the Board. The Committee presently comprises of Mr. Tomohiro Yao [Non-Independent Director] as the Chairperson, Mr. Akira Shibata [Non-Independent Director], Mr. Sundeep Sikka [CEO & Executive Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director] and Mr. Rishi Garg [Chief Risk Officer] as its members.
During the year, two (2) meeting of the Risk Management Committee of the Board were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
AUDITORS'' OF THE COMPANY - STATUTORY AND INTERNAL
Statutory Auditors:
M/s. S. R. Batliboi & Co. LLP, Chartered Accountants shall hold office as Statutory Auditors of the Company until the conclusion of the 28th Annual General Meeting.
JHS & Associates LLP, Chartered Accountants were appointed as the Internal Auditors'' of your Company for the financial year 2021-22. Your Directors have also approved their re-appointment as such for the financial year 2022-23.
AUDITORS OF THE SCHEMES OF NIPPON INDIA MUTUAL FUND- STATUTORY AND INTERNAL
In accordance with the applicable provisions of law, the Company has appointed Statutory and Internal Auditors for various Schemes of Nippon India Mutual Fund, who periodically submit their reports, which are placed before the Audit Committee for discussion, review and implementation of their recommendations.
M/s. Walker Chandiok & Co. LLP, Chartered Accountants were appointed as Statutory Auditors of the Schemes of Nippon India Mutual Fund for the financial year 2021-22.
During the year, M/s. Deloitte Haskins & Sells LLP, Chartered Accountants were appointed as Internal Auditors of the Scheme of Nippon India Mutual Fund and the portfolio management services division of the Company, for the financial year 2021-22. Your Directors have also approved their re-appointment as such for the financial year 2022-23.
AUDITORS'' REPORT
The observations and comments given by the Statutory Auditors in their report read together with notes on financial statements are self-explanatory and hence does not require any further comments in terms of Section 134 of the Act.
SECRETARIAL STANDARDS
During the year under review, the Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Directors had appointed M/s. M. Siroya and Company, Mumbai, a firm of Company Secretaries in-practice to undertake the Secretarial Audit of the Company for the financial year 2021-22. In this regard, the Report submitted by the Secretarial Auditor is annexed as Annexure C.
Your Directors are pleased to inform that the report from the Secretarial Auditors does not contain any qualifications or negative remarks.
ANNUAL RETURN
Pursuant to Section 134(3)(a) and Section 92(3) of the Act read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company has been placed on the website of the Company and can be accessed at https:// mf.nipponindiaim.com/investor-service/customer-service/nam-india-shareholders-investors
PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
CONSERVATION OF ENERGY:
The operations of the Company do not consume high levels of energy. Adequate measures have been taken to conserve energy wherever feasible. Your Company uses latest technology and energy efficient equipment''s. Your Company only uses LED lights and 5 star air-conditioning for majority of offices. As energy cost forms a very small part of the total costs, the impact on cost is not material.
TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION:
> Game changing initiatives:
⢠The All-new Investor App: This year marked the launch of our New Investor App (Android), a key Digital transformation endeavor that is aimed to strengthen our already robust Digital ecosystem. It is a new-age asset that is styled for millennials & zillennials and simplified for the legacy investor
base. We believe that the savvy consumers of today invest first in digital experiences and in mutual funds afterwards, and that''s exactly how we''ve built the new app - with next level, simplified and intuitive interface coupled with new age features and capabilities - to provide best in class, enhanced digital experience for our investors. With the best of e-commerce practices at its heart - contemporary design, quick product discovery, aided decision making, and personalized experiences based on intelligent analytics - this app is all that our investors will ever need to manage their investments with NIMF.
While contemporary design and new features and
enhancements are a part of the re-build, some of the
key highlights of the rebuild are:
¦ Completely self-serve and frictionless on boarding process
¦ ''Investor journey'' centric flows (and not inward out, classic Product & Service bouquet approach)
¦ Discoverability: Products & Services are available in line with user expectations
¦ Enhanced purchase experience: Cart Buying and Drop-off win-back;express checkout for repeat transactions
¦ Scalable framework: Leveraging Digital stack (Targeting, Campaigns, Analytics, etc.) for a more enriching and powerful experience
⢠New Fund Offers - Digital Launches: The Nippon India Flexi Cap Fund was one of the biggest success stories for Digital enabling lucid access for investors & partners across all our Digital assets. Apart from that we Digitally enabled other prominent products for FY21-22 including Nippon India Taiwan Equity Fund and Nippon India Silver ETF F-o-F. Apart from that, on the ETF front, we also enabled Nippon India Nifty Pharma ETF, Nippon India Nifty Auto ETF & Nippon India Silver ETF. We also had a very innovative Index offering made live viz. Nippon India Nifty AAA CPSE Bond Plus SDL - Apr 2027 Maturity 60:40 Index Fund
⢠Growth Enablers for Business Easy with 2.0 App: Business Easy 2.0 app, our Digital asset with our distributors, is an all-encompassing solution that acts as a complete Customer Relationship Management tool. The app works as a Digital branch through which distributors can manage their Mutual Fund business virtually. With the objective of evolving the app from a business facilitator to a growth enabler, this year saw the addition of new enhancements and features to the app. A quick overview of such features is as follows:
¦ Comprehensive Dashboard with Performance review distributor''s AUM, SIP Book value, Business health trends, in-depth customer base understanding
¦ SIP Corner for focused SIP sustenance, retention, and win-back
¦ Advanced Funds & Performance module with a more in-depth view of all products and granular understanding of fund facts & stats
⢠WhatsApp Scale-up: Having launched the pilot version of our WhatsApp advent which comprised of Liquid Fund purchase, e-KYC check & Digital asset access, we scaled up our WhatsApp capability with comprehensive transaction & service capabilities - purchase in all funds, all transaction types and multiple service modules. This implementation dovetails into our philosophy of building our Digital presence in line with the preference of our investors. This service paves the way for increased market penetration of NIMF products and unlocks opportunities by enabling reach out to a vast 500mn WhatsApp user base in India
⢠Intelligent interventions for business retention and growth: We have built system driven, smart and automated measures across various investor journeys with the objective of creating positive business impact. These interventions either nudge users to take prudent & effective decisions in a real-time manner to stay invested or help them with alternate options while if they encounter any outages or errors. Such measures delivered consistent growth in AUM retention and augmentation and saw an uplift of 60% in such positive impact when compared with last FY.
⢠Dynamic Real time mailers: In a real time world, it is important that consumers are given real time information that might help them to take conscious and informed investment decisions. NIMF pioneered deep tech enabled mailers. The same fetched real time data (viz Sensex movement, NAVs, returns etc.) from the server whenever opened. This gave a clear visibility to the investor on what were the relevant avenues for either fresh investment or additional investment. This was widely cherished by new and existing investors and yielded high usage
⢠Leveraging Beta products from Google: NIMF has been a pioneer at Conversational Commerce, and this was done in partnership using the Voice assistant capabilities from Google. On the base of this strong partnership NIMF in FY 21-22 was at the helm of leveraging Beta Products from Google like the newly launched Performance Max. A successful implementation and more than desired results got
NIMF mentioned in Google India Case study for the best use of Performance Max beta to drive incremental business using Artificial Intelligence & Machine learning.
⢠Strengthening our Digital Distribution through Strategic Alliances and Enhanced Support to
Partners: We added some key partners and more importantly products into their positioning suites, like Genius from ET Money. We also were one of the firsts to launch SIPs on PhonePe platform. Other key players like Paytm, Groww, Kuvera, IND Money Tarrakki, etc., continue to bolster our executional leadership and expansive reach. Our immense expertise in the core business of Asset Management and prowess in Digital Business gives us an unparalleled advantage to engage with our Partners at an even deeper level and help them set up and scale up their businesses. Our knowledge and know-how, shared with the Partners and their customers by our Fund Managers and Investment Experts on such Partners'' platforms coupled with integrated marketing campaigns have educated the investors and helped them make the right decisions. Our robust engagement strategy coupled with focused execution has not only helped us build great equity with Partners but also helped win the trust of investors which has resulted in growth of business volumes on such platforms, thereby benefitting both us and the Partners. We have a definitive lead in the Digital Partnerships space and have managed to forge a clear position for NIMF as being the partner of choice for such players.
⢠Setting up of New NAM India Technology Applications
A challenge posted due to the migration to our new Nippon environment was how to securely perform a complete data transfer of our SAP data. Thanks to careful planning, execution and a lot of communication with involved stakeholders we were able to successfully set up NAM India''s own SAP environment after mitigating several risks. This was performed with minimum downtime and no effect on NAM India''s books of accounts.
During the pandemic we have rolled out solutions and infrastructure enhancements that has allowed NAM India to continue working in an offline situation without exception. Initiatives such as secure VPN for data access, communication software, online approval workflow on block chain are a few initiatives that have been implemented.
⢠Managing regulatory requirements
There were several new regulations brought in by the regulatory body resulting in multiple
new enhancements that had to be performed under strict deadlines. Some key projects such as database encryption, recording of conversations on Teams calls and mobile phones, two factor authentication were executed and the regulations complied with.
⢠Optimizations in Investment and Digital Portfolio
During the year there were several enhancements performed in the investment portfolio to comply with regulation change and to bring in operating efficiency. On the digital portfolio side new functionality in the form of New Investor App, enhancement in workflows and new fund offers were launched with a great degree of success. Certain processes on the digital side that were affecting user experience were examined and enhanced to perform faster leading to an increase in the customer experience index of the digital offerings.
NAM India IT is working in a continuous improvement cycle to improve our various technology and process towards enhancing our contribution to the company, stakeholders and our customers. We have shown significant improvement in our issue resolution process and our results indicate a steady increase in our customer issue resolution index over the financial year. We also have maintained high up and response times on all our critical investment and digital platforms. This has resulted in consistent and predictive working of our offerings to our end customers.
Another initiative to build automation to further optimize processes is underway and several processes across operations, risk and investment functions are expected to be automated in the new financial year. This will lead to efficiency gains across functions. Technology will continue to identify processes that can be automated and continues to partner with functions on the same.
⢠Digital Business touched a record 2.9 million purchase transactions FY 2021-22, which is essentially 1 purchase every 6 seconds! This increase is a ~60 % YOY growth.
⢠Contribution of Digital Business to overall NIMF business stands at 58%, which is a growth of ~12% over last FY where Digital contribution was at 52%.
⢠Digital Business share in Lumpsum purchase and new SIP registrations stood at 60% and 48% respectively vis-a-vis total purchase transactions of NIMF.
⢠Long term assets focus resulted in 90% non-Liquid acquisitions compared to 75% in FY2020-2021.
⢠45% of our digital consumers are less than 35 years of age
NIMF Digital has been setting a benchmark across the BFSI industry in its Fintech endeavors across the Digital Ecosystem. It is now recognized as a Digital benchmark across industries. Both Global and Indian forums have further recognized NIMF''s expertise and supremacy in the Digital arena. As in the previous years, we have yet again been conferred with some coveted awards this year as well which further strengthens our position as a Digital leader in the BFSI space
⢠Global Digital Marketing Awards for ''Best use of Facebook AI tool in performance campaigns'' (April 2021)
⢠ACEF Global Customer Engagement Awards 2021 for ''Digital Marketing, Data driven Marketing, Email Marketing and Mobile Marketing'' - 5 awards (4 Golds and 1 Silver) (May 2021)
⢠Mint | TechCircle - Business Transformation Award 2021 for ''Revenue Generation - Product & Service Augmentation'' - Business Easy (June 2021)
⢠Indian Digital Marketing Awards for ''Best App Developed for Products / Services'' - Business Easy (July 2021)
⢠Indian Digital Marketing Awards for ''Best Use of sites for Mobiles'' - NIMF Purchase Mobile Site (M-site) (July 2021)
⢠Digital Crest Awards 2021 for ''Expertise in Online Commerce, Omni Channel Strategy and Mobile Marketing'' - 3 awards (1 Gold, 1 Silver and 1 Bronze) (August 2021)
⢠The Great Indian Marketing Awards for ''Best performing campaign for Google''s Performance-max'' (August 2021)
⢠Maddies Marketing Award 2021 for the ''Most Effective Voice Assistant App'' (in the Enabling Technologies category) - Simply Save Conversational Commerce (November 2021)
⢠Dynamic CIO Award for ''Smart Innovator'' (in the Technology Innovation category) - Simply Save Conversational Commerce (November 2021)
RESEARCH AND DEVELOPMENT:DIGITAL ADOPTION AND INNOVATION:
We, at Nippon India Mutual Fund, continue to envision and execute key Digital transformation endeavors year on year that are aimed to strengthen our already robust Digital ecosystem.
⢠Our focus always remains on empowering our investors during moments of truth and on a ''here & now'' manner to take quicker, smarter, and well-informed decisions on how and where they should invest their money when they transact on our Digital assets. Such empowerment is fueled by our capabilities to crunch & run real-time analysis on the enormous amount of on-asset & offline data points we have regarding our consumers, their past purchases, and future propensities.
⢠Our intelligent, data led digital assets, can learn, and predict user behavior powered by both the real time frameworks and archived analytical frameworks which are operating on an advanced algo network. This helps in e-serving highly personalized and customized experiences to give our millennial, zillennial and legacy investors or partners accurate recommendations, suggestions, on-the-fly nudges, predictive service and much more as they advance in their journeys.
NAM India Technology is continuously engaging in research and development to pick and choose the best of technology solutions to our stakeholders
- NAM India Technology continues to explore opportunities with Fintech and Technology vendors to identify the next best solution that can be a game changes in the industry
- The technology team also follows and explores software, hardware, security and network enhancements in the technology world and attempts to identify key components that can change the way we do work in the organization and industry.
FOREIGN EXCHANGE EARNINGS AND OUTGO:
During the year under review, the Company earned foreign exchange equivalent to Rs. 22.85 Cr (Previous Year: Rs. 21.79 Cr). The Company spent foreign exchange equivalent to Rs. 6.98 Cr (Previous Year: Rs. 6.49 Cr).
DIRECTORS'' RESPONSIBILITY STATEMENT
As per the requirements of Sub Section (5) of Section 134 of the Act, the Directors confirm that -
(i) In the preparation of the annual accounts for the financial year ended March 31,2022, the applicable accounting standards have been followed and that there are no material departures;
(ii) The Directors have selected such accounting policies in consultation with the Statutory Auditors'' and have applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of
the state of affairs of the Company as at March 31, 2022 and of the profit of the Company for the year under review;
(iii) The Directors have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) The Directors have prepared the annual accounts of the Company on a ''going concern'' basis;
(v) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;
(vi) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
CONTRACT AND ARRANGEMENTS WITH RELATED PARTIES
All contracts/ arrangements/ transactions entered into/ by the Company during the financial year under review with related parties were on arm''s length basis and in the ordinary course of business. There were no materially significant related party transactions which could have potential conflict with interest of the Company at large. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.
All Related Party Transactions were placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee was obtained for the transactions which were of a repetitive nature. The transactions entered into pursuant to the omnibus approval so granted were reviewed and statements giving details of all related party transactions were placed before the Audit Committee and the Board of Directors for their review on a quarterly basis. The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website at the following link:
https://mf.nipponindiaim.com/InvestorServices/
Your Directors draw attention of the members to Note No. 29 to the financial statement which sets out related party disclosures.
PARTICULARS OF FRAUDS REPORTED BY THE AUDITORS''
In terms of Section 143(12) of the Act, M/s. S R Batliboi & Co. LLP, Chartered Accountants, the Statutory Auditors of the Company have not reported any instance of fraud having taken place during the year under review, in their Audit Report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators/ Courts which would impact the going concern status of the Company and its future operations.
DETAILS OF APPLICATION MADE BY THE COMPANY OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONGWITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR The Company invests in various debt market instruments (non-convertible debentures) issued by various issuers. In order to realize the debenture outstanding''s, the Company has filed certain applications under the Insolvency and Bankruptcy Code, 2016. The Mutual Fund Division of the Company has filed (a) an IBC proceeding against Avantha Holdings Limited in January 2020 before Hon''ble NCLT New Delhi which is currently at pre-admission hearings stage. The Company is also a respondent party to an IBC proceeding filed in the matter of Reserve Bank of India v. Dewan Housing Finance Corporation Limited pending before the Hon''ble NCLT, Mumbai.
The Portfolio Management Services Division of the Company has filed: (a) IBC proceedings against Fortuna Buildcon India Private Limited which was filed in November 2017 before the Hon''ble NCLT, Bangalore, wherein currently the resolution plan has been submitted to the Hon''ble NCLT for approval (b) three IBC proceedings against three Biodiversity Conservation India Private Limited group companies (BCIL Zed Ria Properties Private Limited, BCIL Red Earth Developers India Pvt Ltd and Biodiversity Conservation India Private Limited) were filed in December 2017 before the Hon''ble NCLT, Bangalore. The NCLT has approved resolution plans in BCIL Zed Ria Properties Private Limited and in BCIL Red Earth Developers India Pvt Ltd, which are currently under implementation while Biodiversity Conservation India Private Limited is currently under liquidation. The Company is also a respondent to 2 (two) appeals in BCIL Red Earth Developers India Private Limited and in 3 (three) appeals in BCIL Zed Ria Properties Private Limited, before Hon''ble NCLAT, Delhi, which have been filed challenging the approved resolution plans; (c) IBC proceedings have been filed against the promoters of Biodiversity Conservation India Private
Limited in November 2020 before Hon''ble NCLT, Bangalore which are currently at a pre-admission stage; (d) IBC proceeding filed against Green Valley Shelters Private Limited in December 2019, before Hon''ble NCLT, Chennai, was admitted in August 2021, however the proceedings are currently temporarily stayed under an order of the Supreme Court. The Company is a respondent in a civil appeal filed by the promoters of Green Valley Shelters Private Limited before the Hon''ble Supreme Court, challenging the admission of IBC proceedings against Green Valley Shelters Private Limited, which is currently pending under directions of exploring a settlement; (e) an IBC proceeding filed against the promoters of Green Valley Shelters Private Limited in October 2020 before the Hon''ble NCLT, Chennai was admitted in January 2022 and is pending final orders appointing the resolution professional; (f) an IBC proceeding was filed against Arkie Atelier Design India Private Limited, being the corporate guarantor for the debentures issued by Green Valley Shelters Private Limited in November 2021 and is currently at a pre-admission stage; (g) an IBC proceeding filed against Bharucha & Motivala Infrastructure Private Limited, being corporate guarantor for the debentures issued by Lake District Realty Private Limited, in November 2019 before Hon''ble NCLT, Mumbai was admitted in May 2021, but has been stayed pursuant to an order of the Hon''ble NCLAT in July 2021. The Company is a respondent in the appeal filed by the promoters of Lake District Realty Private Limited before the Hon''ble NCLAT, Delhi, challenging the admission of IBC proceedings against Bharucha & Motivala Infrastructure Private Limited, which is currently at its final arguments stage; (h) IBC proceedings have been filed against the promoters of Lake District Realty Private Limited in November 2021, which is currently at a pre-admission stage; (i) an IBC proceedings has been filed against Ashapura Options Private Limited, being the corporate guarantor for the debentures issued by Ashapura Housing Private Limited in February 2022 which is at a pre-admission stage. (j) IBC proceedings have also been filed against four (4) promoter guarantors of Ashapura Housing Private Limited, which are at a pre-admission stage.
The Company is not required to maintain cost records as specified by the Central Government under subsection (1) of section 148 of the Companies Act, 2013.
During the year, the Company has made a downstream investment in AMC Repo Clearing Limited to the extent of Rs. 9,25,87,830. The certificate from the Statutory Auditor confirming the compliance of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017 with respect to the Company''s downstream investment
has been received and will be available for inspection. Any member interested in obtaining the same may write to the Company Secretary and the same will be furnished on request.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
In terms of the provisions of Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules are provided in the Annexure to the Board''s Report. Disclosures relating to the remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended also forms part of this Report. However, having regard to the provisions of Section 136 of the Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining the said information may write to the Company Secretary. Upon such request the information shall be furnished.
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
Your Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. Following is a summary of sexual harassment complaints received and disposed off during the year:
⢠No. of complaints received: 0
⢠No. of complaints disposed off: 0
BUSINESS RESPONSIBILITY REPORT
Business Responsibility Report for the year under review as stipulated under Listing Regulations is presented in the separate section forming part of this Annual Report.
Your Directors wish to place on record their sincere appreciation for the co-operation received from various regulatory and governmental authorities including SEBI, RBI, Registrar of Companies, Maharashtra at Mumbai, PFRDA, NPS Trust, EPFO, CMPFO, Stock Exchanges, Depositories, Custodians, Bankers, Registrar, Shareholders, Investors and all other business constituents during the year under review. We believe all of them have contributed to our continued growth.
Your Directors also wish to place on record their deep appreciation for the total commitment displayed by all the executives, officers and staff, resulting in yet another eventful performance for the year.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS OF NIPPON LIFE INDIA ASSET MANAGEMENT LIMITED
Ashvin Dhirajlal Parekh Sundeep Sikka
Director Executive Director & CEO (DIN:06559989) (DIN: 02553654)
Place : Mumbai Dated : April 26, 2022
Mar 31, 2022
Your Directors take pleasure in presenting their 27th Annual Report on the business and operations of your Company, together with the audited financial statements, for the year ended March 31, 2022.
Your Company endeavors to remain one of the leading players in the Asset Management business in India and keep enhancing its global footprint as well.
Your Company is a subsidiary Company of Nippon Life Insurance Company ("NLI"). NLI, a fortune 500 Company and which is one of the largest life insurers in the world managing assets of over USD 700 bn. NLI has a large global network with presence across US, Europe, Asia, and Australia along with a 130-year track record in Life Insurance business as well as global investments across Asset Management companies. This pedigree brings strong synergistic benefits that very well complements your Company''s domestic expertise in Asset Management business and provides a thrust to its significant growth potential. Your Company expects substantial upside in terms of increased AUM & adoption of best governance & risk management practices based on NLI''s global positioning & relationships.
Your Company acts as the Asset Management Company of Nippon India Mutual Fund and it happens to be the largest foreign owned Asset Management Company in India.
FINANCIAL PERFORMANCE AND STATE OF COMPANY''S AFFAIRS
The standalone and consolidated financial statements of the Company for the financial year ended March 31, 2022, have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act. The financial highlights (on a consolidated and standalone basis) of the Company for the year ended March 31, 2022 are as follows:
('' Crores) |
||||
Description |
Consolidated |
Standalone |
||
Year ended |
Year ended |
Year ended |
Year ended |
|
March 31, 2022 |
March 31, 2021 |
March 31, 2022 |
March 31, 2021 |
|
Gross Income |
1535.63 |
1419.34 |
1428.42 |
1325.66 |
Profit before exceptional item and tax |
988.67 |
877.03 |
945.43 |
842.92 |
Exceptional Items |
- |
- |
- |
- |
Profit Before tax |
988.67 |
877.03 |
945.43 |
842.92 |
Current Tax |
206.66 |
157.41 |
200.38 |
151.51 |
Deferred Tax |
38.64 |
40.22 |
33.84 |
42.02 |
Profit for the year |
743.37 |
679.39 |
711.21 |
649.39 |
Share of Profit from Associates |
0.79 |
0.94 |
- |
- |
Profit attributable to non-controlling interest |
- |
- |
- |
- |
Other Comprehensive Income |
(0.30) |
0.72 |
(0.27) |
0.72 |
Balance carried to Balance Sheet |
743.86 |
681.05 |
710.94 |
650.11 |
Basic EPS of '' 10 each |
12.00 |
11.04 |
11.47 |
10.53 |
Diluted EPS of '' 10 each |
11.80 |
10.90 |
11.28 |
10.41 |
The Consolidated Financial Statements of the Company are forming part of this Annual Report. The annual accounts of all the subsidiary companies will be placed on the website of the Company.
DETAILS OF MATERIAL CHANGES ANDCOMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments affecting the financial position of the Company since the date of the financial statements i.e. March 31,2022.
During the year, the Company had declared and paid an interim dividend of Rs. 3.50 per equity share (35%) amounting to Rs. 217.41 Crore. The Board has also recommended a final dividend of Rs. 7.50 per Equity Share (75%) of Rs. 10/- each for the financial year ended March 31, 2022, for the approval of the Shareholders at the ensuing Annual General meeting. With this the total dividend for the financial year 2021-22 would be approximately Rs. 683.92 crores, including the interim dividend of Rs. 3.50 per equity share distributed in November 2021. The Final dividend, if declared, will be paid after the Annual General Meeting.
The dividend payout is in accordance with the Company''s Dividend Distribution Policy which forms part of this Annual Report.
AMOUNT TO BE CARRIED TO RESERVES
Your Directors do not propose any amount to be transferred to the General Reserves of the Company.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report for the year under review as stipulated under SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (Listing Regulations) is presented in a separate section forming part of this Annual Report.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENT
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act are given in the notes to the Financial Statements.
There is no difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions.
The Company has neither accepted nor renewed any fixed deposits during the year. There are no outstanding or unclaimed deposits, unclaimed / unpaid interest, refunds due to the deposit holders or to be deposited to the Investor Education and Protection Fund as on March 31, 2022.
With the perspective of promoting the culture of employee ownership and to attract, retain, motivate and incentivize senior as well as critical talent, the Company has formulated Nippon Life India Asset
Management Limited - Employee Stock Option Plan 2017 [formerly known as "Reliance Nippon Life Asset Management Limited - Employee Stock Option Plan 2017"] ("ESOP 2017" / "Plan") as its stock option scheme, which was launched in August 2017 and Nippon Life India Asset Management Limited - Employee Stock Option Plan 2019 [formerly known as "Reliance Nippon Life Asset Management Limited - Employee Stock Option Plan 2019"] ("ESOP 2019" / "Plan") as its stock option scheme, which was launched in July 2019. The Nomination and Remuneration Committee of the Board monitors and administers these Plans and from time to time grants stock options to the employees.
Both ESOP 2017 as well as ESOP 2019 are in compliance with The SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 [erstwhile The SEBI (Share Based Employee Benefits) Regulations, 2014] (SEBI Regulations).
However, having regard to the provisions of first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. The certificate from the Practicing Company Secretary confirming the compliance of The SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 [erstwhile The SEBI (Share Based Employee Benefits) Regulations, 2014] with respect to the Company''s Employees Stock Option Scheme Plans has been received and will be available for inspection through electronic mode. Any member interested in obtaining the same may write to the Company Secretary and the same will be furnished on request. The details as required to be disclosed under SEBI Regulations are put on the Company''s website at httos://mF.niooonindiaim. com/investor-service/customer-service/nam-india-shareholders-investors
COMPLIANCE CULTURE & RISK MANAGEMENT
Your Company is essentially Compliance centric and has a huge focus in this direction. The Compliance function is manned by a dedicated and experienced team of professionals. The Compliance team regularly conducts various educative training programs for various segments within the organization. Your Company thrives towards a culture of ''Total Compliance'' and it has a ''Zero Tolerance'' policy for non-compliances. There exists a comprehensive Compliance Manual, which is reviewed by your Board of Directors from time to time and it facilitates Company''s Compliance team to monitor various compliance requirements effectively & comprehensively. Your Board of Directors have also constituted a Compliance Committee, which is chaired by the CEO & Executive Director of the Company, and which has the Compliance Officer and other senior & relevant functionaries as its members. This committee meets at least once in a quarter to discuss and deliberate issues pertaining to compliance and other regulatory developments.
Your Company also has a comprehensive Risk Management Policy that envisages a structured and consistent enterprise-wide risk management framework, based on the three lines of defense model, to ensure that risk management processes are consistently applied across the organization and provide reasonable assurance regarding achievement of organization''s objectives.
The risk management policy clearly sets out the objectives & elements of risk management within the organization, including the constitution of an independent Risk Management department headed by Chief Risk Officer (reporting directly to the CEO and to the Board of Directors), Risk Management Committee (RMC).
Your Company promotes risk awareness culture throughout the organization and risk management is an integral part of decision making and day-today operations of all activities at all levels across the organization. There are well documented & Board approved policies & processes to address and mitigate various risks to which the company is exposed. The company also has a robust business continuity plan which is tested on a periodic basis to ensure business is not interrupted.
The company has a structured risk reporting mechanism to ensure risks are monitored and reviewed by CRO, Senior Management, RMCBs and Board on a periodic basis.
INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY
The Company has an Internal Control System which is commensurate with the size, scale and complexity of its business operations.
Foreffectiveriskmanagementandcontrol,theCompany has established structures and responsibilities in line with the "Three Lines of Defense" model, where 1st line being business operations, 2nd line is the oversight functions like Risk Management and Compliance and 3rd line is Internal Audit. To maintain its objectivity and independence, the Internal Audit department reports to the Audit Committee. The Internal Audit department monitors and evaluates the efficacy and adequacy of the internal control system in the Company, its compliance with operating systems, accounting procedures and policies. Based on the report of the Internal Auditor, process owners undertake corrective action in their respective areas and thereby strengthen the controls. The Internal Audit department follows up on pending audit issues and ensures that corrective actions have been taken. Significant audit observations, if any, and corrective actions thereon, are presented to the Audit Committee of the Board.
Your Directors wish to reiterate your Company''s commitment to the highest standards of corporate governance in order to enhance trust of all its stakeholders. Strong & robust corporate governance practices have facilitated your Company in standing up to the continued scrutiny of domestic & international investors and that of various Regulatory authorities.
The report on Corporate Governance as stipulated under Regulation 34(3) read with Para C of Schedule V of the Listing Regulations is presented in separate section forming part of this Annual Report.
A Certificate from the auditors of the Company i.e. M/s. S. R. Batliboi & Co. LLP, Chartered Accountants conforming compliance to the conditions of Corporate Governance as stipulated under Para E of Schedule V of the Listing Regulations, is enclosed to this Report.
In accordance with Section 177 of the Act and the Listing Regulations, the Company has formulated a Vigil Mechanism to address the genuine concerns, if any. The policy can be accessed on the Company''s website.
CORPORATE SOCIAL RESPONSIBILITY
As part of its initiatives under "Corporate Social Responsibility (CSR)", the Company has undertaken projects in the areas of promoting healthcare, education and rural development in accordance with Schedule VII of the Act.
The Annual Report on CSR activities is annexed herewith as Annexure A.
SUBSIDIARIES & ASSOCIATE COMPANY
As of March 31, 2022, your Company had three (3) subsidiaries. Two of such subsidiaries are overseas, being one each in Singapore and Mauritius and one subsidiary is in India. All the subsidiaries of the Company are engaged in financial services and related activities. In addition, the Company also has an Associate company in India, which has already surrendered its business license/ regulatory approval to act as a Pension Fund Manager. This particular company currently has no business operations and it is therefore proposed to wind it up, in accordance with the applicable laws.
A statement w.r.t. the performance and the financial position of the subsidiaries of the Company is forming a part of the Consolidated Financial Statements of the Company.
The performance of financial position of the subsidiary companies is presented in the Management Discussions and Analysis Report forming part of this Annual Report. The policy for determining material subsidiary companies
may be accessed on the Company''s website at https:// mf.nipponindiaim.com/InvestorServices/Pages/Investor-Policies.aspx
During the year under review, the following employees were the ''Key Managerial Personnel'' of the Company:
a) Mr. Sundeep Sikka - Executive Director & Chief Executive Officer;
b) Mr. Ajay Patel - Manager;
c) Mr. Prateek Jain - Chief Financial Officer; and
d) Ms. Nilufer Shekhawat - Company Secretary.
During the year, Mr. Sundeep Sikka has been reappointed as the Executive Director & CEO of the Company for a term of 5 years commencing from April 22, 2021.
During the year, Mr. Yutaka Ideguchi [Nominee Director of NLI] resigned from the directorship of the Company w.e.f. March 30, 2022. Mr. Kazuyuki Saigo [Nominee Director of NLI] who was a Director of the Company as on March 31, 2022, resigned as such effective April 21, 2022. Mr. Tomohiro Yao and Mr. Minoru Kimura [Nominee Directors of NLI] were appointed as Additional Directors of the Company w.e.f. April 21, 2022.
All the Independent Directors of your Company i.e. General Ved Prakash Malik (Retd.), Ms. Ameeta Chatterjee, Mr. Ashvin Parekh and Mr. B. Sriram, have already furnished the required declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act.
In the opinion of the Board, the Independent Directors possess the requisite expertise and experience and are persons of high integrity and repute. They fulfil the conditions specified in the Act and the Rules made thereunder and are independent of the management.
In terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by The Indian Institute of Corporate Affairs, Manesar (''IICA''). The Independent Directors are also required to undertake online proficiency self-assessment test conducted by the IICA within a period of Two years from the date of inclusion of their names in the data bank, unless they meet the criteria specified for exemption. All the Independent Directors of the Company are exempt from the requirement to undertake online proficiency self assessment test.
PERFORMANCE EVALUATION OF DIRECTORS, BOARD AND COMMITTEES
The Company has devised a policy for the performance evaluation of the individual directors, Board and its Committees, which also includes the criteria for carrying out the said performance evaluation. Pursuant to the provisions of the Act and Regulation 17(10) of Listing Regulations and as prescribed in the stated policy of the Board, the Board has carried out an annual performance evaluation of (i) the Directors (Independent and non-independent);(ii) itself (as a whole);(iii) its committees and (iv) fulfillment of Independence criteria. The Board performance was evaluated based on inputs received from the Board members after considering criteria such as Board composition and structure, effectiveness of Board / Committee processes, and information provided to the Board, etc. In terms of the requirements of the Act, a separate meeting of the Independent Directors was also held during the year.
During the year under review, nine (9) Board meetings were held.
Your Directors wish to inform that the functioning of the Board is supplemented by various committees (Board sub-committees and management committees), which have been constituted from time to time, such as Audit Committee, Committee of Directors, CSR Committee, Stakeholders Relationship Committee, Nomination & Remuneration Committee, Risk Management Committee of the Board, IT Strategy Committee, Valuation Committee, Investment Committee, Risk Management Committee, Allotment Committee, Broker Empanelment Committee, Operating Committee, Compliance Committee, Stewardship Committee, Proxy Voting Committee, Information Security Risk Management Committee, etc. to name a few. Each of the aforesaid Committees has been constituted in order to ensure due compliance with the applicable laws and to ensure that highest levels of corporate governance are followed and practiced. The minutes of the meetings of each of these Committees are duly placed before the Board for noting and confirmation.
In terms of the requirements of Section 177 of the Act, and Regulation 18 of the Listing Regulations, the Audit Committee of the Company consists of majority of Independent Directors. As on date of this report, it comprises Mr. Ashvin Parekh [Independent Director], Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. B. Sriram [Independent Director], Mr. Akira Shibata [Non- Independent Director] and Mr. Minoru Kimura [Non- Independent Director]. Mr. Ashvin Parekh acts as the Chairperson of this Committee.
During the year, seven (7) meetings of the Audit Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
NOMINATION & REMUNERATION COMMITTEE
In terms of the requirements of Section 178 of the Act, and Regulation 19 of the Listing Regulations, the Nomination & Remuneration Committee of the Company consists of majority of Independent Directors. As on date of this report, it comprises, Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Tomohiro Yao [NonIndependent Director] and Mr. Minoru Kimura [NonIndependent Director]. General Ved Prakash Malik (Retd.) acts as the Chairperson of this Committee.
During the year, four (4) meetings of the Nomination & Remuneration Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
The Nomination & Remuneration Policy has been provided as Annexure B to the Board''s Report.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
In terms of the requirements of Section 135 of the Act, the Corporate Social Responsibility ("CSR") Committee of the Company consists of Eight members. As on date of this report, it comprises Mr. Tomohiro Yao [Non-Independent Director], Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Sundeep Sikka [CEO & Executive Director], Mr. Akira Shibata [Non-Independent Director] and Mr. Minoru Kimura [Non-Independent Director]. Mr. Tomohiro Yao acts as the Chairman of this Committee.
During the year 2021-22, two (2) meetings of the CSR Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
STAKEHOLDERS'' RELATIONSHIP COMMITTEE
In terms of the requirements of Section 178 of the Act, and Regulation 20 of the Listing Regulations, the Stakeholders'' Relationship Committee of the Company consists of five members. As on date of this report, it comprises Ms. Ameeta Chatterjee [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Tomohiro Yao [Non-Independent Director] and Mr. Sundeep Sikka [CEO & Executive Director]. Ms. Ameeta Chatterjee acts as the Chairperson of this Committee.
During the year, two (2) meetings of the Stakeholders'' Relationship Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
In terms of the relevant requirements under the Listing Regulations, the Company has constituted a Risk Management Committee of the Board. The Committee presently comprises of Mr. Tomohiro Yao [Non-Independent Director] as the Chairperson, Mr. Akira Shibata [Non-Independent Director], Mr. Sundeep Sikka [CEO & Executive Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director] and Mr. Rishi Garg [Chief Risk Officer] as its members.
During the year, two (2) meeting of the Risk Management Committee of the Board were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
AUDITORS'' OF THE COMPANY - STATUTORY AND INTERNAL
Statutory Auditors:
M/s. S. R. Batliboi & Co. LLP, Chartered Accountants shall hold office as Statutory Auditors of the Company until the conclusion of the 28th Annual General Meeting.
JHS & Associates LLP, Chartered Accountants were appointed as the Internal Auditors'' of your Company for the financial year 2021-22. Your Directors have also approved their re-appointment as such for the financial year 2022-23.
AUDITORS OF THE SCHEMES OF NIPPON INDIA MUTUAL FUND- STATUTORY AND INTERNAL
In accordance with the applicable provisions of law, the Company has appointed Statutory and Internal Auditors for various Schemes of Nippon India Mutual Fund, who periodically submit their reports, which are placed before the Audit Committee for discussion, review and implementation of their recommendations.
M/s. Walker Chandiok & Co. LLP, Chartered Accountants were appointed as Statutory Auditors of the Schemes of Nippon India Mutual Fund for the financial year 2021-22.
During the year, M/s. Deloitte Haskins & Sells LLP, Chartered Accountants were appointed as Internal Auditors of the Scheme of Nippon India Mutual Fund and the portfolio management services division of the Company, for the financial year 2021-22. Your Directors have also approved their re-appointment as such for the financial year 2022-23.
AUDITORS'' REPORT
The observations and comments given by the Statutory Auditors in their report read together with notes on financial statements are self-explanatory and hence does not require any further comments in terms of Section 134 of the Act.
SECRETARIAL STANDARDS
During the year under review, the Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Directors had appointed M/s. M. Siroya and Company, Mumbai, a firm of Company Secretaries in-practice to undertake the Secretarial Audit of the Company for the financial year 2021-22. In this regard, the Report submitted by the Secretarial Auditor is annexed as Annexure C.
Your Directors are pleased to inform that the report from the Secretarial Auditors does not contain any qualifications or negative remarks.
ANNUAL RETURN
Pursuant to Section 134(3)(a) and Section 92(3) of the Act read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company has been placed on the website of the Company and can be accessed at https:// mf.nipponindiaim.com/investor-service/customer-service/nam-india-shareholders-investors
PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
CONSERVATION OF ENERGY:
The operations of the Company do not consume high levels of energy. Adequate measures have been taken to conserve energy wherever feasible. Your Company uses latest technology and energy efficient equipment''s. Your Company only uses LED lights and 5 star air-conditioning for majority of offices. As energy cost forms a very small part of the total costs, the impact on cost is not material.
TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION:
> Game changing initiatives:
⢠The All-new Investor App: This year marked the launch of our New Investor App (Android), a key Digital transformation endeavor that is aimed to strengthen our already robust Digital ecosystem. It is a new-age asset that is styled for millennials & zillennials and simplified for the legacy investor
base. We believe that the savvy consumers of today invest first in digital experiences and in mutual funds afterwards, and that''s exactly how we''ve built the new app - with next level, simplified and intuitive interface coupled with new age features and capabilities - to provide best in class, enhanced digital experience for our investors. With the best of e-commerce practices at its heart - contemporary design, quick product discovery, aided decision making, and personalized experiences based on intelligent analytics - this app is all that our investors will ever need to manage their investments with NIMF.
While contemporary design and new features and
enhancements are a part of the re-build, some of the
key highlights of the rebuild are:
¦ Completely self-serve and frictionless on boarding process
¦ ''Investor journey'' centric flows (and not inward out, classic Product & Service bouquet approach)
¦ Discoverability: Products & Services are available in line with user expectations
¦ Enhanced purchase experience: Cart Buying and Drop-off win-back;express checkout for repeat transactions
¦ Scalable framework: Leveraging Digital stack (Targeting, Campaigns, Analytics, etc.) for a more enriching and powerful experience
⢠New Fund Offers - Digital Launches: The Nippon India Flexi Cap Fund was one of the biggest success stories for Digital enabling lucid access for investors & partners across all our Digital assets. Apart from that we Digitally enabled other prominent products for FY21-22 including Nippon India Taiwan Equity Fund and Nippon India Silver ETF F-o-F. Apart from that, on the ETF front, we also enabled Nippon India Nifty Pharma ETF, Nippon India Nifty Auto ETF & Nippon India Silver ETF. We also had a very innovative Index offering made live viz. Nippon India Nifty AAA CPSE Bond Plus SDL - Apr 2027 Maturity 60:40 Index Fund
⢠Growth Enablers for Business Easy with 2.0 App: Business Easy 2.0 app, our Digital asset with our distributors, is an all-encompassing solution that acts as a complete Customer Relationship Management tool. The app works as a Digital branch through which distributors can manage their Mutual Fund business virtually. With the objective of evolving the app from a business facilitator to a growth enabler, this year saw the addition of new enhancements and features to the app. A quick overview of such features is as follows:
¦ Comprehensive Dashboard with Performance review distributor''s AUM, SIP Book value, Business health trends, in-depth customer base understanding
¦ SIP Corner for focused SIP sustenance, retention, and win-back
¦ Advanced Funds & Performance module with a more in-depth view of all products and granular understanding of fund facts & stats
⢠WhatsApp Scale-up: Having launched the pilot version of our WhatsApp advent which comprised of Liquid Fund purchase, e-KYC check & Digital asset access, we scaled up our WhatsApp capability with comprehensive transaction & service capabilities - purchase in all funds, all transaction types and multiple service modules. This implementation dovetails into our philosophy of building our Digital presence in line with the preference of our investors. This service paves the way for increased market penetration of NIMF products and unlocks opportunities by enabling reach out to a vast 500mn WhatsApp user base in India
⢠Intelligent interventions for business retention and growth: We have built system driven, smart and automated measures across various investor journeys with the objective of creating positive business impact. These interventions either nudge users to take prudent & effective decisions in a real-time manner to stay invested or help them with alternate options while if they encounter any outages or errors. Such measures delivered consistent growth in AUM retention and augmentation and saw an uplift of 60% in such positive impact when compared with last FY.
⢠Dynamic Real time mailers: In a real time world, it is important that consumers are given real time information that might help them to take conscious and informed investment decisions. NIMF pioneered deep tech enabled mailers. The same fetched real time data (viz Sensex movement, NAVs, returns etc.) from the server whenever opened. This gave a clear visibility to the investor on what were the relevant avenues for either fresh investment or additional investment. This was widely cherished by new and existing investors and yielded high usage
⢠Leveraging Beta products from Google: NIMF has been a pioneer at Conversational Commerce, and this was done in partnership using the Voice assistant capabilities from Google. On the base of this strong partnership NIMF in FY 21-22 was at the helm of leveraging Beta Products from Google like the newly launched Performance Max. A successful implementation and more than desired results got
NIMF mentioned in Google India Case study for the best use of Performance Max beta to drive incremental business using Artificial Intelligence & Machine learning.
⢠Strengthening our Digital Distribution through Strategic Alliances and Enhanced Support to
Partners: We added some key partners and more importantly products into their positioning suites, like Genius from ET Money. We also were one of the firsts to launch SIPs on PhonePe platform. Other key players like Paytm, Groww, Kuvera, IND Money Tarrakki, etc., continue to bolster our executional leadership and expansive reach. Our immense expertise in the core business of Asset Management and prowess in Digital Business gives us an unparalleled advantage to engage with our Partners at an even deeper level and help them set up and scale up their businesses. Our knowledge and know-how, shared with the Partners and their customers by our Fund Managers and Investment Experts on such Partners'' platforms coupled with integrated marketing campaigns have educated the investors and helped them make the right decisions. Our robust engagement strategy coupled with focused execution has not only helped us build great equity with Partners but also helped win the trust of investors which has resulted in growth of business volumes on such platforms, thereby benefitting both us and the Partners. We have a definitive lead in the Digital Partnerships space and have managed to forge a clear position for NIMF as being the partner of choice for such players.
⢠Setting up of New NAM India Technology Applications
A challenge posted due to the migration to our new Nippon environment was how to securely perform a complete data transfer of our SAP data. Thanks to careful planning, execution and a lot of communication with involved stakeholders we were able to successfully set up NAM India''s own SAP environment after mitigating several risks. This was performed with minimum downtime and no effect on NAM India''s books of accounts.
During the pandemic we have rolled out solutions and infrastructure enhancements that has allowed NAM India to continue working in an offline situation without exception. Initiatives such as secure VPN for data access, communication software, online approval workflow on block chain are a few initiatives that have been implemented.
⢠Managing regulatory requirements
There were several new regulations brought in by the regulatory body resulting in multiple
new enhancements that had to be performed under strict deadlines. Some key projects such as database encryption, recording of conversations on Teams calls and mobile phones, two factor authentication were executed and the regulations complied with.
⢠Optimizations in Investment and Digital Portfolio
During the year there were several enhancements performed in the investment portfolio to comply with regulation change and to bring in operating efficiency. On the digital portfolio side new functionality in the form of New Investor App, enhancement in workflows and new fund offers were launched with a great degree of success. Certain processes on the digital side that were affecting user experience were examined and enhanced to perform faster leading to an increase in the customer experience index of the digital offerings.
NAM India IT is working in a continuous improvement cycle to improve our various technology and process towards enhancing our contribution to the company, stakeholders and our customers. We have shown significant improvement in our issue resolution process and our results indicate a steady increase in our customer issue resolution index over the financial year. We also have maintained high up and response times on all our critical investment and digital platforms. This has resulted in consistent and predictive working of our offerings to our end customers.
Another initiative to build automation to further optimize processes is underway and several processes across operations, risk and investment functions are expected to be automated in the new financial year. This will lead to efficiency gains across functions. Technology will continue to identify processes that can be automated and continues to partner with functions on the same.
⢠Digital Business touched a record 2.9 million purchase transactions FY 2021-22, which is essentially 1 purchase every 6 seconds! This increase is a ~60 % YOY growth.
⢠Contribution of Digital Business to overall NIMF business stands at 58%, which is a growth of ~12% over last FY where Digital contribution was at 52%.
⢠Digital Business share in Lumpsum purchase and new SIP registrations stood at 60% and 48% respectively vis-a-vis total purchase transactions of NIMF.
⢠Long term assets focus resulted in 90% non-Liquid acquisitions compared to 75% in FY2020-2021.
⢠45% of our digital consumers are less than 35 years of age
NIMF Digital has been setting a benchmark across the BFSI industry in its Fintech endeavors across the Digital Ecosystem. It is now recognized as a Digital benchmark across industries. Both Global and Indian forums have further recognized NIMF''s expertise and supremacy in the Digital arena. As in the previous years, we have yet again been conferred with some coveted awards this year as well which further strengthens our position as a Digital leader in the BFSI space
⢠Global Digital Marketing Awards for ''Best use of Facebook AI tool in performance campaigns'' (April 2021)
⢠ACEF Global Customer Engagement Awards 2021 for ''Digital Marketing, Data driven Marketing, Email Marketing and Mobile Marketing'' - 5 awards (4 Golds and 1 Silver) (May 2021)
⢠Mint | TechCircle - Business Transformation Award 2021 for ''Revenue Generation - Product & Service Augmentation'' - Business Easy (June 2021)
⢠Indian Digital Marketing Awards for ''Best App Developed for Products / Services'' - Business Easy (July 2021)
⢠Indian Digital Marketing Awards for ''Best Use of sites for Mobiles'' - NIMF Purchase Mobile Site (M-site) (July 2021)
⢠Digital Crest Awards 2021 for ''Expertise in Online Commerce, Omni Channel Strategy and Mobile Marketing'' - 3 awards (1 Gold, 1 Silver and 1 Bronze) (August 2021)
⢠The Great Indian Marketing Awards for ''Best performing campaign for Google''s Performance-max'' (August 2021)
⢠Maddies Marketing Award 2021 for the ''Most Effective Voice Assistant App'' (in the Enabling Technologies category) - Simply Save Conversational Commerce (November 2021)
⢠Dynamic CIO Award for ''Smart Innovator'' (in the Technology Innovation category) - Simply Save Conversational Commerce (November 2021)
RESEARCH AND DEVELOPMENT:DIGITAL ADOPTION AND INNOVATION:
We, at Nippon India Mutual Fund, continue to envision and execute key Digital transformation endeavors year on year that are aimed to strengthen our already robust Digital ecosystem.
⢠Our focus always remains on empowering our investors during moments of truth and on a ''here & now'' manner to take quicker, smarter, and well-informed decisions on how and where they should invest their money when they transact on our Digital assets. Such empowerment is fueled by our capabilities to crunch & run real-time analysis on the enormous amount of on-asset & offline data points we have regarding our consumers, their past purchases, and future propensities.
⢠Our intelligent, data led digital assets, can learn, and predict user behavior powered by both the real time frameworks and archived analytical frameworks which are operating on an advanced algo network. This helps in e-serving highly personalized and customized experiences to give our millennial, zillennial and legacy investors or partners accurate recommendations, suggestions, on-the-fly nudges, predictive service and much more as they advance in their journeys.
NAM India Technology is continuously engaging in research and development to pick and choose the best of technology solutions to our stakeholders
- NAM India Technology continues to explore opportunities with Fintech and Technology vendors to identify the next best solution that can be a game changes in the industry
- The technology team also follows and explores software, hardware, security and network enhancements in the technology world and attempts to identify key components that can change the way we do work in the organization and industry.
FOREIGN EXCHANGE EARNINGS AND OUTGO:
During the year under review, the Company earned foreign exchange equivalent to Rs. 22.85 Cr (Previous Year: Rs. 21.79 Cr). The Company spent foreign exchange equivalent to Rs. 6.98 Cr (Previous Year: Rs. 6.49 Cr).
DIRECTORS'' RESPONSIBILITY STATEMENT
As per the requirements of Sub Section (5) of Section 134 of the Act, the Directors confirm that -
(i) In the preparation of the annual accounts for the financial year ended March 31,2022, the applicable accounting standards have been followed and that there are no material departures;
(ii) The Directors have selected such accounting policies in consultation with the Statutory Auditors'' and have applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of
the state of affairs of the Company as at March 31, 2022 and of the profit of the Company for the year under review;
(iii) The Directors have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) The Directors have prepared the annual accounts of the Company on a ''going concern'' basis;
(v) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;
(vi) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
CONTRACT AND ARRANGEMENTS WITH RELATED PARTIES
All contracts/ arrangements/ transactions entered into/ by the Company during the financial year under review with related parties were on arm''s length basis and in the ordinary course of business. There were no materially significant related party transactions which could have potential conflict with interest of the Company at large. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.
All Related Party Transactions were placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee was obtained for the transactions which were of a repetitive nature. The transactions entered into pursuant to the omnibus approval so granted were reviewed and statements giving details of all related party transactions were placed before the Audit Committee and the Board of Directors for their review on a quarterly basis. The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website at the following link:
https://mf.nipponindiaim.com/InvestorServices/
Your Directors draw attention of the members to Note No. 29 to the financial statement which sets out related party disclosures.
PARTICULARS OF FRAUDS REPORTED BY THE AUDITORS''
In terms of Section 143(12) of the Act, M/s. S R Batliboi & Co. LLP, Chartered Accountants, the Statutory Auditors of the Company have not reported any instance of fraud having taken place during the year under review, in their Audit Report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators/ Courts which would impact the going concern status of the Company and its future operations.
DETAILS OF APPLICATION MADE BY THE COMPANY OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONGWITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR The Company invests in various debt market instruments (non-convertible debentures) issued by various issuers. In order to realize the debenture outstanding''s, the Company has filed certain applications under the Insolvency and Bankruptcy Code, 2016. The Mutual Fund Division of the Company has filed (a) an IBC proceeding against Avantha Holdings Limited in January 2020 before Hon''ble NCLT New Delhi which is currently at pre-admission hearings stage. The Company is also a respondent party to an IBC proceeding filed in the matter of Reserve Bank of India v. Dewan Housing Finance Corporation Limited pending before the Hon''ble NCLT, Mumbai.
The Portfolio Management Services Division of the Company has filed: (a) IBC proceedings against Fortuna Buildcon India Private Limited which was filed in November 2017 before the Hon''ble NCLT, Bangalore, wherein currently the resolution plan has been submitted to the Hon''ble NCLT for approval (b) three IBC proceedings against three Biodiversity Conservation India Private Limited group companies (BCIL Zed Ria Properties Private Limited, BCIL Red Earth Developers India Pvt Ltd and Biodiversity Conservation India Private Limited) were filed in December 2017 before the Hon''ble NCLT, Bangalore. The NCLT has approved resolution plans in BCIL Zed Ria Properties Private Limited and in BCIL Red Earth Developers India Pvt Ltd, which are currently under implementation while Biodiversity Conservation India Private Limited is currently under liquidation. The Company is also a respondent to 2 (two) appeals in BCIL Red Earth Developers India Private Limited and in 3 (three) appeals in BCIL Zed Ria Properties Private Limited, before Hon''ble NCLAT, Delhi, which have been filed challenging the approved resolution plans; (c) IBC proceedings have been filed against the promoters of Biodiversity Conservation India Private
Limited in November 2020 before Hon''ble NCLT, Bangalore which are currently at a pre-admission stage; (d) IBC proceeding filed against Green Valley Shelters Private Limited in December 2019, before Hon''ble NCLT, Chennai, was admitted in August 2021, however the proceedings are currently temporarily stayed under an order of the Supreme Court. The Company is a respondent in a civil appeal filed by the promoters of Green Valley Shelters Private Limited before the Hon''ble Supreme Court, challenging the admission of IBC proceedings against Green Valley Shelters Private Limited, which is currently pending under directions of exploring a settlement; (e) an IBC proceeding filed against the promoters of Green Valley Shelters Private Limited in October 2020 before the Hon''ble NCLT, Chennai was admitted in January 2022 and is pending final orders appointing the resolution professional; (f) an IBC proceeding was filed against Arkie Atelier Design India Private Limited, being the corporate guarantor for the debentures issued by Green Valley Shelters Private Limited in November 2021 and is currently at a pre-admission stage; (g) an IBC proceeding filed against Bharucha & Motivala Infrastructure Private Limited, being corporate guarantor for the debentures issued by Lake District Realty Private Limited, in November 2019 before Hon''ble NCLT, Mumbai was admitted in May 2021, but has been stayed pursuant to an order of the Hon''ble NCLAT in July 2021. The Company is a respondent in the appeal filed by the promoters of Lake District Realty Private Limited before the Hon''ble NCLAT, Delhi, challenging the admission of IBC proceedings against Bharucha & Motivala Infrastructure Private Limited, which is currently at its final arguments stage; (h) IBC proceedings have been filed against the promoters of Lake District Realty Private Limited in November 2021, which is currently at a pre-admission stage; (i) an IBC proceedings has been filed against Ashapura Options Private Limited, being the corporate guarantor for the debentures issued by Ashapura Housing Private Limited in February 2022 which is at a pre-admission stage. (j) IBC proceedings have also been filed against four (4) promoter guarantors of Ashapura Housing Private Limited, which are at a pre-admission stage.
The Company is not required to maintain cost records as specified by the Central Government under subsection (1) of section 148 of the Companies Act, 2013.
During the year, the Company has made a downstream investment in AMC Repo Clearing Limited to the extent of Rs. 9,25,87,830. The certificate from the Statutory Auditor confirming the compliance of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017 with respect to the Company''s downstream investment
has been received and will be available for inspection. Any member interested in obtaining the same may write to the Company Secretary and the same will be furnished on request.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
In terms of the provisions of Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules are provided in the Annexure to the Board''s Report. Disclosures relating to the remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended also forms part of this Report. However, having regard to the provisions of Section 136 of the Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining the said information may write to the Company Secretary. Upon such request the information shall be furnished.
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
Your Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. Following is a summary of sexual harassment complaints received and disposed off during the year:
⢠No. of complaints received: 0
⢠No. of complaints disposed off: 0
BUSINESS RESPONSIBILITY REPORT
Business Responsibility Report for the year under review as stipulated under Listing Regulations is presented in the separate section forming part of this Annual Report.
Your Directors wish to place on record their sincere appreciation for the co-operation received from various regulatory and governmental authorities including SEBI, RBI, Registrar of Companies, Maharashtra at Mumbai, PFRDA, NPS Trust, EPFO, CMPFO, Stock Exchanges, Depositories, Custodians, Bankers, Registrar, Shareholders, Investors and all other business constituents during the year under review. We believe all of them have contributed to our continued growth.
Your Directors also wish to place on record their deep appreciation for the total commitment displayed by all the executives, officers and staff, resulting in yet another eventful performance for the year.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS OF NIPPON LIFE INDIA ASSET MANAGEMENT LIMITED
Ashvin Dhirajlal Parekh Sundeep Sikka
Director Executive Director & CEO (DIN:06559989) (DIN: 02553654)
Place : Mumbai Dated : April 26, 2022
Mar 31, 2022
Your Directors take pleasure in presenting their 27th Annual Report on the business and operations of your Company, together with the audited financial statements, for the year ended March 31, 2022.
Your Company endeavors to remain one of the leading players in the Asset Management business in India and keep enhancing its global footprint as well.
Your Company is a subsidiary Company of Nippon Life Insurance Company ("NLI"). NLI, a fortune 500 Company and which is one of the largest life insurers in the world managing assets of over USD 700 bn. NLI has a large global network with presence across US, Europe, Asia, and Australia along with a 130-year track record in Life Insurance business as well as global investments across Asset Management companies. This pedigree brings strong synergistic benefits that very well complements your Company''s domestic expertise in Asset Management business and provides a thrust to its significant growth potential. Your Company expects substantial upside in terms of increased AUM & adoption of best governance & risk management practices based on NLI''s global positioning & relationships.
Your Company acts as the Asset Management Company of Nippon India Mutual Fund and it happens to be the largest foreign owned Asset Management Company in India.
FINANCIAL PERFORMANCE AND STATE OF COMPANY''S AFFAIRS
The standalone and consolidated financial statements of the Company for the financial year ended March 31, 2022, have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act. The financial highlights (on a consolidated and standalone basis) of the Company for the year ended March 31, 2022 are as follows:
('' Crores) |
||||
Description |
Consolidated |
Standalone |
||
Year ended |
Year ended |
Year ended |
Year ended |
|
March 31, 2022 |
March 31, 2021 |
March 31, 2022 |
March 31, 2021 |
|
Gross Income |
1535.63 |
1419.34 |
1428.42 |
1325.66 |
Profit before exceptional item and tax |
988.67 |
877.03 |
945.43 |
842.92 |
Exceptional Items |
- |
- |
- |
- |
Profit Before tax |
988.67 |
877.03 |
945.43 |
842.92 |
Current Tax |
206.66 |
157.41 |
200.38 |
151.51 |
Deferred Tax |
38.64 |
40.22 |
33.84 |
42.02 |
Profit for the year |
743.37 |
679.39 |
711.21 |
649.39 |
Share of Profit from Associates |
0.79 |
0.94 |
- |
- |
Profit attributable to non-controlling interest |
- |
- |
- |
- |
Other Comprehensive Income |
(0.30) |
0.72 |
(0.27) |
0.72 |
Balance carried to Balance Sheet |
743.86 |
681.05 |
710.94 |
650.11 |
Basic EPS of '' 10 each |
12.00 |
11.04 |
11.47 |
10.53 |
Diluted EPS of '' 10 each |
11.80 |
10.90 |
11.28 |
10.41 |
The Consolidated Financial Statements of the Company are forming part of this Annual Report. The annual accounts of all the subsidiary companies will be placed on the website of the Company.
DETAILS OF MATERIAL CHANGES ANDCOMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments affecting the financial position of the Company since the date of the financial statements i.e. March 31,2022.
During the year, the Company had declared and paid an interim dividend of Rs. 3.50 per equity share (35%) amounting to Rs. 217.41 Crore. The Board has also recommended a final dividend of Rs. 7.50 per Equity Share (75%) of Rs. 10/- each for the financial year ended March 31, 2022, for the approval of the Shareholders at the ensuing Annual General meeting. With this the total dividend for the financial year 2021-22 would be approximately Rs. 683.92 crores, including the interim dividend of Rs. 3.50 per equity share distributed in November 2021. The Final dividend, if declared, will be paid after the Annual General Meeting.
The dividend payout is in accordance with the Company''s Dividend Distribution Policy which forms part of this Annual Report.
AMOUNT TO BE CARRIED TO RESERVES
Your Directors do not propose any amount to be transferred to the General Reserves of the Company.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report for the year under review as stipulated under SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (Listing Regulations) is presented in a separate section forming part of this Annual Report.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENT
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act are given in the notes to the Financial Statements.
There is no difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions.
The Company has neither accepted nor renewed any fixed deposits during the year. There are no outstanding or unclaimed deposits, unclaimed / unpaid interest, refunds due to the deposit holders or to be deposited to the Investor Education and Protection Fund as on March 31, 2022.
With the perspective of promoting the culture of employee ownership and to attract, retain, motivate and incentivize senior as well as critical talent, the Company has formulated Nippon Life India Asset
Management Limited - Employee Stock Option Plan 2017 [formerly known as "Reliance Nippon Life Asset Management Limited - Employee Stock Option Plan 2017"] ("ESOP 2017" / "Plan") as its stock option scheme, which was launched in August 2017 and Nippon Life India Asset Management Limited - Employee Stock Option Plan 2019 [formerly known as "Reliance Nippon Life Asset Management Limited - Employee Stock Option Plan 2019"] ("ESOP 2019" / "Plan") as its stock option scheme, which was launched in July 2019. The Nomination and Remuneration Committee of the Board monitors and administers these Plans and from time to time grants stock options to the employees.
Both ESOP 2017 as well as ESOP 2019 are in compliance with The SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 [erstwhile The SEBI (Share Based Employee Benefits) Regulations, 2014] (SEBI Regulations).
However, having regard to the provisions of first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. The certificate from the Practicing Company Secretary confirming the compliance of The SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 [erstwhile The SEBI (Share Based Employee Benefits) Regulations, 2014] with respect to the Company''s Employees Stock Option Scheme Plans has been received and will be available for inspection through electronic mode. Any member interested in obtaining the same may write to the Company Secretary and the same will be furnished on request. The details as required to be disclosed under SEBI Regulations are put on the Company''s website at httos://mF.niooonindiaim. com/investor-service/customer-service/nam-india-shareholders-investors
COMPLIANCE CULTURE & RISK MANAGEMENT
Your Company is essentially Compliance centric and has a huge focus in this direction. The Compliance function is manned by a dedicated and experienced team of professionals. The Compliance team regularly conducts various educative training programs for various segments within the organization. Your Company thrives towards a culture of ''Total Compliance'' and it has a ''Zero Tolerance'' policy for non-compliances. There exists a comprehensive Compliance Manual, which is reviewed by your Board of Directors from time to time and it facilitates Company''s Compliance team to monitor various compliance requirements effectively & comprehensively. Your Board of Directors have also constituted a Compliance Committee, which is chaired by the CEO & Executive Director of the Company, and which has the Compliance Officer and other senior & relevant functionaries as its members. This committee meets at least once in a quarter to discuss and deliberate issues pertaining to compliance and other regulatory developments.
Your Company also has a comprehensive Risk Management Policy that envisages a structured and consistent enterprise-wide risk management framework, based on the three lines of defense model, to ensure that risk management processes are consistently applied across the organization and provide reasonable assurance regarding achievement of organization''s objectives.
The risk management policy clearly sets out the objectives & elements of risk management within the organization, including the constitution of an independent Risk Management department headed by Chief Risk Officer (reporting directly to the CEO and to the Board of Directors), Risk Management Committee (RMC).
Your Company promotes risk awareness culture throughout the organization and risk management is an integral part of decision making and day-today operations of all activities at all levels across the organization. There are well documented & Board approved policies & processes to address and mitigate various risks to which the company is exposed. The company also has a robust business continuity plan which is tested on a periodic basis to ensure business is not interrupted.
The company has a structured risk reporting mechanism to ensure risks are monitored and reviewed by CRO, Senior Management, RMCBs and Board on a periodic basis.
INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY
The Company has an Internal Control System which is commensurate with the size, scale and complexity of its business operations.
Foreffectiveriskmanagementandcontrol,theCompany has established structures and responsibilities in line with the "Three Lines of Defense" model, where 1st line being business operations, 2nd line is the oversight functions like Risk Management and Compliance and 3rd line is Internal Audit. To maintain its objectivity and independence, the Internal Audit department reports to the Audit Committee. The Internal Audit department monitors and evaluates the efficacy and adequacy of the internal control system in the Company, its compliance with operating systems, accounting procedures and policies. Based on the report of the Internal Auditor, process owners undertake corrective action in their respective areas and thereby strengthen the controls. The Internal Audit department follows up on pending audit issues and ensures that corrective actions have been taken. Significant audit observations, if any, and corrective actions thereon, are presented to the Audit Committee of the Board.
Your Directors wish to reiterate your Company''s commitment to the highest standards of corporate governance in order to enhance trust of all its stakeholders. Strong & robust corporate governance practices have facilitated your Company in standing up to the continued scrutiny of domestic & international investors and that of various Regulatory authorities.
The report on Corporate Governance as stipulated under Regulation 34(3) read with Para C of Schedule V of the Listing Regulations is presented in separate section forming part of this Annual Report.
A Certificate from the auditors of the Company i.e. M/s. S. R. Batliboi & Co. LLP, Chartered Accountants conforming compliance to the conditions of Corporate Governance as stipulated under Para E of Schedule V of the Listing Regulations, is enclosed to this Report.
In accordance with Section 177 of the Act and the Listing Regulations, the Company has formulated a Vigil Mechanism to address the genuine concerns, if any. The policy can be accessed on the Company''s website.
CORPORATE SOCIAL RESPONSIBILITY
As part of its initiatives under "Corporate Social Responsibility (CSR)", the Company has undertaken projects in the areas of promoting healthcare, education and rural development in accordance with Schedule VII of the Act.
The Annual Report on CSR activities is annexed herewith as Annexure A.
SUBSIDIARIES & ASSOCIATE COMPANY
As of March 31, 2022, your Company had three (3) subsidiaries. Two of such subsidiaries are overseas, being one each in Singapore and Mauritius and one subsidiary is in India. All the subsidiaries of the Company are engaged in financial services and related activities. In addition, the Company also has an Associate company in India, which has already surrendered its business license/ regulatory approval to act as a Pension Fund Manager. This particular company currently has no business operations and it is therefore proposed to wind it up, in accordance with the applicable laws.
A statement w.r.t. the performance and the financial position of the subsidiaries of the Company is forming a part of the Consolidated Financial Statements of the Company.
The performance of financial position of the subsidiary companies is presented in the Management Discussions and Analysis Report forming part of this Annual Report. The policy for determining material subsidiary companies
may be accessed on the Company''s website at https:// mf.nipponindiaim.com/InvestorServices/Pages/Investor-Policies.aspx
During the year under review, the following employees were the ''Key Managerial Personnel'' of the Company:
a) Mr. Sundeep Sikka - Executive Director & Chief Executive Officer;
b) Mr. Ajay Patel - Manager;
c) Mr. Prateek Jain - Chief Financial Officer; and
d) Ms. Nilufer Shekhawat - Company Secretary.
During the year, Mr. Sundeep Sikka has been reappointed as the Executive Director & CEO of the Company for a term of 5 years commencing from April 22, 2021.
During the year, Mr. Yutaka Ideguchi [Nominee Director of NLI] resigned from the directorship of the Company w.e.f. March 30, 2022. Mr. Kazuyuki Saigo [Nominee Director of NLI] who was a Director of the Company as on March 31, 2022, resigned as such effective April 21, 2022. Mr. Tomohiro Yao and Mr. Minoru Kimura [Nominee Directors of NLI] were appointed as Additional Directors of the Company w.e.f. April 21, 2022.
All the Independent Directors of your Company i.e. General Ved Prakash Malik (Retd.), Ms. Ameeta Chatterjee, Mr. Ashvin Parekh and Mr. B. Sriram, have already furnished the required declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act.
In the opinion of the Board, the Independent Directors possess the requisite expertise and experience and are persons of high integrity and repute. They fulfil the conditions specified in the Act and the Rules made thereunder and are independent of the management.
In terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by The Indian Institute of Corporate Affairs, Manesar (''IICA''). The Independent Directors are also required to undertake online proficiency self-assessment test conducted by the IICA within a period of Two years from the date of inclusion of their names in the data bank, unless they meet the criteria specified for exemption. All the Independent Directors of the Company are exempt from the requirement to undertake online proficiency self assessment test.
PERFORMANCE EVALUATION OF DIRECTORS, BOARD AND COMMITTEES
The Company has devised a policy for the performance evaluation of the individual directors, Board and its Committees, which also includes the criteria for carrying out the said performance evaluation. Pursuant to the provisions of the Act and Regulation 17(10) of Listing Regulations and as prescribed in the stated policy of the Board, the Board has carried out an annual performance evaluation of (i) the Directors (Independent and non-independent);(ii) itself (as a whole);(iii) its committees and (iv) fulfillment of Independence criteria. The Board performance was evaluated based on inputs received from the Board members after considering criteria such as Board composition and structure, effectiveness of Board / Committee processes, and information provided to the Board, etc. In terms of the requirements of the Act, a separate meeting of the Independent Directors was also held during the year.
During the year under review, nine (9) Board meetings were held.
Your Directors wish to inform that the functioning of the Board is supplemented by various committees (Board sub-committees and management committees), which have been constituted from time to time, such as Audit Committee, Committee of Directors, CSR Committee, Stakeholders Relationship Committee, Nomination & Remuneration Committee, Risk Management Committee of the Board, IT Strategy Committee, Valuation Committee, Investment Committee, Risk Management Committee, Allotment Committee, Broker Empanelment Committee, Operating Committee, Compliance Committee, Stewardship Committee, Proxy Voting Committee, Information Security Risk Management Committee, etc. to name a few. Each of the aforesaid Committees has been constituted in order to ensure due compliance with the applicable laws and to ensure that highest levels of corporate governance are followed and practiced. The minutes of the meetings of each of these Committees are duly placed before the Board for noting and confirmation.
In terms of the requirements of Section 177 of the Act, and Regulation 18 of the Listing Regulations, the Audit Committee of the Company consists of majority of Independent Directors. As on date of this report, it comprises Mr. Ashvin Parekh [Independent Director], Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. B. Sriram [Independent Director], Mr. Akira Shibata [Non- Independent Director] and Mr. Minoru Kimura [Non- Independent Director]. Mr. Ashvin Parekh acts as the Chairperson of this Committee.
During the year, seven (7) meetings of the Audit Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
NOMINATION & REMUNERATION COMMITTEE
In terms of the requirements of Section 178 of the Act, and Regulation 19 of the Listing Regulations, the Nomination & Remuneration Committee of the Company consists of majority of Independent Directors. As on date of this report, it comprises, Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Tomohiro Yao [NonIndependent Director] and Mr. Minoru Kimura [NonIndependent Director]. General Ved Prakash Malik (Retd.) acts as the Chairperson of this Committee.
During the year, four (4) meetings of the Nomination & Remuneration Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
The Nomination & Remuneration Policy has been provided as Annexure B to the Board''s Report.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
In terms of the requirements of Section 135 of the Act, the Corporate Social Responsibility ("CSR") Committee of the Company consists of Eight members. As on date of this report, it comprises Mr. Tomohiro Yao [Non-Independent Director], Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Sundeep Sikka [CEO & Executive Director], Mr. Akira Shibata [Non-Independent Director] and Mr. Minoru Kimura [Non-Independent Director]. Mr. Tomohiro Yao acts as the Chairman of this Committee.
During the year 2021-22, two (2) meetings of the CSR Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
STAKEHOLDERS'' RELATIONSHIP COMMITTEE
In terms of the requirements of Section 178 of the Act, and Regulation 20 of the Listing Regulations, the Stakeholders'' Relationship Committee of the Company consists of five members. As on date of this report, it comprises Ms. Ameeta Chatterjee [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Tomohiro Yao [Non-Independent Director] and Mr. Sundeep Sikka [CEO & Executive Director]. Ms. Ameeta Chatterjee acts as the Chairperson of this Committee.
During the year, two (2) meetings of the Stakeholders'' Relationship Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
In terms of the relevant requirements under the Listing Regulations, the Company has constituted a Risk Management Committee of the Board. The Committee presently comprises of Mr. Tomohiro Yao [Non-Independent Director] as the Chairperson, Mr. Akira Shibata [Non-Independent Director], Mr. Sundeep Sikka [CEO & Executive Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director] and Mr. Rishi Garg [Chief Risk Officer] as its members.
During the year, two (2) meeting of the Risk Management Committee of the Board were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
AUDITORS'' OF THE COMPANY - STATUTORY AND INTERNAL
Statutory Auditors:
M/s. S. R. Batliboi & Co. LLP, Chartered Accountants shall hold office as Statutory Auditors of the Company until the conclusion of the 28th Annual General Meeting.
JHS & Associates LLP, Chartered Accountants were appointed as the Internal Auditors'' of your Company for the financial year 2021-22. Your Directors have also approved their re-appointment as such for the financial year 2022-23.
AUDITORS OF THE SCHEMES OF NIPPON INDIA MUTUAL FUND- STATUTORY AND INTERNAL
In accordance with the applicable provisions of law, the Company has appointed Statutory and Internal Auditors for various Schemes of Nippon India Mutual Fund, who periodically submit their reports, which are placed before the Audit Committee for discussion, review and implementation of their recommendations.
M/s. Walker Chandiok & Co. LLP, Chartered Accountants were appointed as Statutory Auditors of the Schemes of Nippon India Mutual Fund for the financial year 2021-22.
During the year, M/s. Deloitte Haskins & Sells LLP, Chartered Accountants were appointed as Internal Auditors of the Scheme of Nippon India Mutual Fund and the portfolio management services division of the Company, for the financial year 2021-22. Your Directors have also approved their re-appointment as such for the financial year 2022-23.
AUDITORS'' REPORT
The observations and comments given by the Statutory Auditors in their report read together with notes on financial statements are self-explanatory and hence does not require any further comments in terms of Section 134 of the Act.
SECRETARIAL STANDARDS
During the year under review, the Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Directors had appointed M/s. M. Siroya and Company, Mumbai, a firm of Company Secretaries in-practice to undertake the Secretarial Audit of the Company for the financial year 2021-22. In this regard, the Report submitted by the Secretarial Auditor is annexed as Annexure C.
Your Directors are pleased to inform that the report from the Secretarial Auditors does not contain any qualifications or negative remarks.
ANNUAL RETURN
Pursuant to Section 134(3)(a) and Section 92(3) of the Act read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company has been placed on the website of the Company and can be accessed at https:// mf.nipponindiaim.com/investor-service/customer-service/nam-india-shareholders-investors
PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
CONSERVATION OF ENERGY:
The operations of the Company do not consume high levels of energy. Adequate measures have been taken to conserve energy wherever feasible. Your Company uses latest technology and energy efficient equipment''s. Your Company only uses LED lights and 5 star air-conditioning for majority of offices. As energy cost forms a very small part of the total costs, the impact on cost is not material.
TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION:
> Game changing initiatives:
⢠The All-new Investor App: This year marked the launch of our New Investor App (Android), a key Digital transformation endeavor that is aimed to strengthen our already robust Digital ecosystem. It is a new-age asset that is styled for millennials & zillennials and simplified for the legacy investor
base. We believe that the savvy consumers of today invest first in digital experiences and in mutual funds afterwards, and that''s exactly how we''ve built the new app - with next level, simplified and intuitive interface coupled with new age features and capabilities - to provide best in class, enhanced digital experience for our investors. With the best of e-commerce practices at its heart - contemporary design, quick product discovery, aided decision making, and personalized experiences based on intelligent analytics - this app is all that our investors will ever need to manage their investments with NIMF.
While contemporary design and new features and
enhancements are a part of the re-build, some of the
key highlights of the rebuild are:
¦ Completely self-serve and frictionless on boarding process
¦ ''Investor journey'' centric flows (and not inward out, classic Product & Service bouquet approach)
¦ Discoverability: Products & Services are available in line with user expectations
¦ Enhanced purchase experience: Cart Buying and Drop-off win-back;express checkout for repeat transactions
¦ Scalable framework: Leveraging Digital stack (Targeting, Campaigns, Analytics, etc.) for a more enriching and powerful experience
⢠New Fund Offers - Digital Launches: The Nippon India Flexi Cap Fund was one of the biggest success stories for Digital enabling lucid access for investors & partners across all our Digital assets. Apart from that we Digitally enabled other prominent products for FY21-22 including Nippon India Taiwan Equity Fund and Nippon India Silver ETF F-o-F. Apart from that, on the ETF front, we also enabled Nippon India Nifty Pharma ETF, Nippon India Nifty Auto ETF & Nippon India Silver ETF. We also had a very innovative Index offering made live viz. Nippon India Nifty AAA CPSE Bond Plus SDL - Apr 2027 Maturity 60:40 Index Fund
⢠Growth Enablers for Business Easy with 2.0 App: Business Easy 2.0 app, our Digital asset with our distributors, is an all-encompassing solution that acts as a complete Customer Relationship Management tool. The app works as a Digital branch through which distributors can manage their Mutual Fund business virtually. With the objective of evolving the app from a business facilitator to a growth enabler, this year saw the addition of new enhancements and features to the app. A quick overview of such features is as follows:
¦ Comprehensive Dashboard with Performance review distributor''s AUM, SIP Book value, Business health trends, in-depth customer base understanding
¦ SIP Corner for focused SIP sustenance, retention, and win-back
¦ Advanced Funds & Performance module with a more in-depth view of all products and granular understanding of fund facts & stats
⢠WhatsApp Scale-up: Having launched the pilot version of our WhatsApp advent which comprised of Liquid Fund purchase, e-KYC check & Digital asset access, we scaled up our WhatsApp capability with comprehensive transaction & service capabilities - purchase in all funds, all transaction types and multiple service modules. This implementation dovetails into our philosophy of building our Digital presence in line with the preference of our investors. This service paves the way for increased market penetration of NIMF products and unlocks opportunities by enabling reach out to a vast 500mn WhatsApp user base in India
⢠Intelligent interventions for business retention and growth: We have built system driven, smart and automated measures across various investor journeys with the objective of creating positive business impact. These interventions either nudge users to take prudent & effective decisions in a real-time manner to stay invested or help them with alternate options while if they encounter any outages or errors. Such measures delivered consistent growth in AUM retention and augmentation and saw an uplift of 60% in such positive impact when compared with last FY.
⢠Dynamic Real time mailers: In a real time world, it is important that consumers are given real time information that might help them to take conscious and informed investment decisions. NIMF pioneered deep tech enabled mailers. The same fetched real time data (viz Sensex movement, NAVs, returns etc.) from the server whenever opened. This gave a clear visibility to the investor on what were the relevant avenues for either fresh investment or additional investment. This was widely cherished by new and existing investors and yielded high usage
⢠Leveraging Beta products from Google: NIMF has been a pioneer at Conversational Commerce, and this was done in partnership using the Voice assistant capabilities from Google. On the base of this strong partnership NIMF in FY 21-22 was at the helm of leveraging Beta Products from Google like the newly launched Performance Max. A successful implementation and more than desired results got
NIMF mentioned in Google India Case study for the best use of Performance Max beta to drive incremental business using Artificial Intelligence & Machine learning.
⢠Strengthening our Digital Distribution through Strategic Alliances and Enhanced Support to
Partners: We added some key partners and more importantly products into their positioning suites, like Genius from ET Money. We also were one of the firsts to launch SIPs on PhonePe platform. Other key players like Paytm, Groww, Kuvera, IND Money Tarrakki, etc., continue to bolster our executional leadership and expansive reach. Our immense expertise in the core business of Asset Management and prowess in Digital Business gives us an unparalleled advantage to engage with our Partners at an even deeper level and help them set up and scale up their businesses. Our knowledge and know-how, shared with the Partners and their customers by our Fund Managers and Investment Experts on such Partners'' platforms coupled with integrated marketing campaigns have educated the investors and helped them make the right decisions. Our robust engagement strategy coupled with focused execution has not only helped us build great equity with Partners but also helped win the trust of investors which has resulted in growth of business volumes on such platforms, thereby benefitting both us and the Partners. We have a definitive lead in the Digital Partnerships space and have managed to forge a clear position for NIMF as being the partner of choice for such players.
⢠Setting up of New NAM India Technology Applications
A challenge posted due to the migration to our new Nippon environment was how to securely perform a complete data transfer of our SAP data. Thanks to careful planning, execution and a lot of communication with involved stakeholders we were able to successfully set up NAM India''s own SAP environment after mitigating several risks. This was performed with minimum downtime and no effect on NAM India''s books of accounts.
During the pandemic we have rolled out solutions and infrastructure enhancements that has allowed NAM India to continue working in an offline situation without exception. Initiatives such as secure VPN for data access, communication software, online approval workflow on block chain are a few initiatives that have been implemented.
⢠Managing regulatory requirements
There were several new regulations brought in by the regulatory body resulting in multiple
new enhancements that had to be performed under strict deadlines. Some key projects such as database encryption, recording of conversations on Teams calls and mobile phones, two factor authentication were executed and the regulations complied with.
⢠Optimizations in Investment and Digital Portfolio
During the year there were several enhancements performed in the investment portfolio to comply with regulation change and to bring in operating efficiency. On the digital portfolio side new functionality in the form of New Investor App, enhancement in workflows and new fund offers were launched with a great degree of success. Certain processes on the digital side that were affecting user experience were examined and enhanced to perform faster leading to an increase in the customer experience index of the digital offerings.
NAM India IT is working in a continuous improvement cycle to improve our various technology and process towards enhancing our contribution to the company, stakeholders and our customers. We have shown significant improvement in our issue resolution process and our results indicate a steady increase in our customer issue resolution index over the financial year. We also have maintained high up and response times on all our critical investment and digital platforms. This has resulted in consistent and predictive working of our offerings to our end customers.
Another initiative to build automation to further optimize processes is underway and several processes across operations, risk and investment functions are expected to be automated in the new financial year. This will lead to efficiency gains across functions. Technology will continue to identify processes that can be automated and continues to partner with functions on the same.
⢠Digital Business touched a record 2.9 million purchase transactions FY 2021-22, which is essentially 1 purchase every 6 seconds! This increase is a ~60 % YOY growth.
⢠Contribution of Digital Business to overall NIMF business stands at 58%, which is a growth of ~12% over last FY where Digital contribution was at 52%.
⢠Digital Business share in Lumpsum purchase and new SIP registrations stood at 60% and 48% respectively vis-a-vis total purchase transactions of NIMF.
⢠Long term assets focus resulted in 90% non-Liquid acquisitions compared to 75% in FY2020-2021.
⢠45% of our digital consumers are less than 35 years of age
NIMF Digital has been setting a benchmark across the BFSI industry in its Fintech endeavors across the Digital Ecosystem. It is now recognized as a Digital benchmark across industries. Both Global and Indian forums have further recognized NIMF''s expertise and supremacy in the Digital arena. As in the previous years, we have yet again been conferred with some coveted awards this year as well which further strengthens our position as a Digital leader in the BFSI space
⢠Global Digital Marketing Awards for ''Best use of Facebook AI tool in performance campaigns'' (April 2021)
⢠ACEF Global Customer Engagement Awards 2021 for ''Digital Marketing, Data driven Marketing, Email Marketing and Mobile Marketing'' - 5 awards (4 Golds and 1 Silver) (May 2021)
⢠Mint | TechCircle - Business Transformation Award 2021 for ''Revenue Generation - Product & Service Augmentation'' - Business Easy (June 2021)
⢠Indian Digital Marketing Awards for ''Best App Developed for Products / Services'' - Business Easy (July 2021)
⢠Indian Digital Marketing Awards for ''Best Use of sites for Mobiles'' - NIMF Purchase Mobile Site (M-site) (July 2021)
⢠Digital Crest Awards 2021 for ''Expertise in Online Commerce, Omni Channel Strategy and Mobile Marketing'' - 3 awards (1 Gold, 1 Silver and 1 Bronze) (August 2021)
⢠The Great Indian Marketing Awards for ''Best performing campaign for Google''s Performance-max'' (August 2021)
⢠Maddies Marketing Award 2021 for the ''Most Effective Voice Assistant App'' (in the Enabling Technologies category) - Simply Save Conversational Commerce (November 2021)
⢠Dynamic CIO Award for ''Smart Innovator'' (in the Technology Innovation category) - Simply Save Conversational Commerce (November 2021)
RESEARCH AND DEVELOPMENT:DIGITAL ADOPTION AND INNOVATION:
We, at Nippon India Mutual Fund, continue to envision and execute key Digital transformation endeavors year on year that are aimed to strengthen our already robust Digital ecosystem.
⢠Our focus always remains on empowering our investors during moments of truth and on a ''here & now'' manner to take quicker, smarter, and well-informed decisions on how and where they should invest their money when they transact on our Digital assets. Such empowerment is fueled by our capabilities to crunch & run real-time analysis on the enormous amount of on-asset & offline data points we have regarding our consumers, their past purchases, and future propensities.
⢠Our intelligent, data led digital assets, can learn, and predict user behavior powered by both the real time frameworks and archived analytical frameworks which are operating on an advanced algo network. This helps in e-serving highly personalized and customized experiences to give our millennial, zillennial and legacy investors or partners accurate recommendations, suggestions, on-the-fly nudges, predictive service and much more as they advance in their journeys.
NAM India Technology is continuously engaging in research and development to pick and choose the best of technology solutions to our stakeholders
- NAM India Technology continues to explore opportunities with Fintech and Technology vendors to identify the next best solution that can be a game changes in the industry
- The technology team also follows and explores software, hardware, security and network enhancements in the technology world and attempts to identify key components that can change the way we do work in the organization and industry.
FOREIGN EXCHANGE EARNINGS AND OUTGO:
During the year under review, the Company earned foreign exchange equivalent to Rs. 22.85 Cr (Previous Year: Rs. 21.79 Cr). The Company spent foreign exchange equivalent to Rs. 6.98 Cr (Previous Year: Rs. 6.49 Cr).
DIRECTORS'' RESPONSIBILITY STATEMENT
As per the requirements of Sub Section (5) of Section 134 of the Act, the Directors confirm that -
(i) In the preparation of the annual accounts for the financial year ended March 31,2022, the applicable accounting standards have been followed and that there are no material departures;
(ii) The Directors have selected such accounting policies in consultation with the Statutory Auditors'' and have applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of
the state of affairs of the Company as at March 31, 2022 and of the profit of the Company for the year under review;
(iii) The Directors have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) The Directors have prepared the annual accounts of the Company on a ''going concern'' basis;
(v) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;
(vi) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
CONTRACT AND ARRANGEMENTS WITH RELATED PARTIES
All contracts/ arrangements/ transactions entered into/ by the Company during the financial year under review with related parties were on arm''s length basis and in the ordinary course of business. There were no materially significant related party transactions which could have potential conflict with interest of the Company at large. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.
All Related Party Transactions were placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee was obtained for the transactions which were of a repetitive nature. The transactions entered into pursuant to the omnibus approval so granted were reviewed and statements giving details of all related party transactions were placed before the Audit Committee and the Board of Directors for their review on a quarterly basis. The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website at the following link:
https://mf.nipponindiaim.com/InvestorServices/
Your Directors draw attention of the members to Note No. 29 to the financial statement which sets out related party disclosures.
PARTICULARS OF FRAUDS REPORTED BY THE AUDITORS''
In terms of Section 143(12) of the Act, M/s. S R Batliboi & Co. LLP, Chartered Accountants, the Statutory Auditors of the Company have not reported any instance of fraud having taken place during the year under review, in their Audit Report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators/ Courts which would impact the going concern status of the Company and its future operations.
DETAILS OF APPLICATION MADE BY THE COMPANY OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONGWITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR The Company invests in various debt market instruments (non-convertible debentures) issued by various issuers. In order to realize the debenture outstanding''s, the Company has filed certain applications under the Insolvency and Bankruptcy Code, 2016. The Mutual Fund Division of the Company has filed (a) an IBC proceeding against Avantha Holdings Limited in January 2020 before Hon''ble NCLT New Delhi which is currently at pre-admission hearings stage. The Company is also a respondent party to an IBC proceeding filed in the matter of Reserve Bank of India v. Dewan Housing Finance Corporation Limited pending before the Hon''ble NCLT, Mumbai.
The Portfolio Management Services Division of the Company has filed: (a) IBC proceedings against Fortuna Buildcon India Private Limited which was filed in November 2017 before the Hon''ble NCLT, Bangalore, wherein currently the resolution plan has been submitted to the Hon''ble NCLT for approval (b) three IBC proceedings against three Biodiversity Conservation India Private Limited group companies (BCIL Zed Ria Properties Private Limited, BCIL Red Earth Developers India Pvt Ltd and Biodiversity Conservation India Private Limited) were filed in December 2017 before the Hon''ble NCLT, Bangalore. The NCLT has approved resolution plans in BCIL Zed Ria Properties Private Limited and in BCIL Red Earth Developers India Pvt Ltd, which are currently under implementation while Biodiversity Conservation India Private Limited is currently under liquidation. The Company is also a respondent to 2 (two) appeals in BCIL Red Earth Developers India Private Limited and in 3 (three) appeals in BCIL Zed Ria Properties Private Limited, before Hon''ble NCLAT, Delhi, which have been filed challenging the approved resolution plans; (c) IBC proceedings have been filed against the promoters of Biodiversity Conservation India Private
Limited in November 2020 before Hon''ble NCLT, Bangalore which are currently at a pre-admission stage; (d) IBC proceeding filed against Green Valley Shelters Private Limited in December 2019, before Hon''ble NCLT, Chennai, was admitted in August 2021, however the proceedings are currently temporarily stayed under an order of the Supreme Court. The Company is a respondent in a civil appeal filed by the promoters of Green Valley Shelters Private Limited before the Hon''ble Supreme Court, challenging the admission of IBC proceedings against Green Valley Shelters Private Limited, which is currently pending under directions of exploring a settlement; (e) an IBC proceeding filed against the promoters of Green Valley Shelters Private Limited in October 2020 before the Hon''ble NCLT, Chennai was admitted in January 2022 and is pending final orders appointing the resolution professional; (f) an IBC proceeding was filed against Arkie Atelier Design India Private Limited, being the corporate guarantor for the debentures issued by Green Valley Shelters Private Limited in November 2021 and is currently at a pre-admission stage; (g) an IBC proceeding filed against Bharucha & Motivala Infrastructure Private Limited, being corporate guarantor for the debentures issued by Lake District Realty Private Limited, in November 2019 before Hon''ble NCLT, Mumbai was admitted in May 2021, but has been stayed pursuant to an order of the Hon''ble NCLAT in July 2021. The Company is a respondent in the appeal filed by the promoters of Lake District Realty Private Limited before the Hon''ble NCLAT, Delhi, challenging the admission of IBC proceedings against Bharucha & Motivala Infrastructure Private Limited, which is currently at its final arguments stage; (h) IBC proceedings have been filed against the promoters of Lake District Realty Private Limited in November 2021, which is currently at a pre-admission stage; (i) an IBC proceedings has been filed against Ashapura Options Private Limited, being the corporate guarantor for the debentures issued by Ashapura Housing Private Limited in February 2022 which is at a pre-admission stage. (j) IBC proceedings have also been filed against four (4) promoter guarantors of Ashapura Housing Private Limited, which are at a pre-admission stage.
The Company is not required to maintain cost records as specified by the Central Government under subsection (1) of section 148 of the Companies Act, 2013.
During the year, the Company has made a downstream investment in AMC Repo Clearing Limited to the extent of Rs. 9,25,87,830. The certificate from the Statutory Auditor confirming the compliance of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017 with respect to the Company''s downstream investment
has been received and will be available for inspection. Any member interested in obtaining the same may write to the Company Secretary and the same will be furnished on request.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
In terms of the provisions of Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules are provided in the Annexure to the Board''s Report. Disclosures relating to the remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended also forms part of this Report. However, having regard to the provisions of Section 136 of the Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining the said information may write to the Company Secretary. Upon such request the information shall be furnished.
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
Your Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. Following is a summary of sexual harassment complaints received and disposed off during the year:
⢠No. of complaints received: 0
⢠No. of complaints disposed off: 0
BUSINESS RESPONSIBILITY REPORT
Business Responsibility Report for the year under review as stipulated under Listing Regulations is presented in the separate section forming part of this Annual Report.
Your Directors wish to place on record their sincere appreciation for the co-operation received from various regulatory and governmental authorities including SEBI, RBI, Registrar of Companies, Maharashtra at Mumbai, PFRDA, NPS Trust, EPFO, CMPFO, Stock Exchanges, Depositories, Custodians, Bankers, Registrar, Shareholders, Investors and all other business constituents during the year under review. We believe all of them have contributed to our continued growth.
Your Directors also wish to place on record their deep appreciation for the total commitment displayed by all the executives, officers and staff, resulting in yet another eventful performance for the year.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS OF NIPPON LIFE INDIA ASSET MANAGEMENT LIMITED
Ashvin Dhirajlal Parekh Sundeep Sikka
Director Executive Director & CEO (DIN:06559989) (DIN: 02553654)
Place : Mumbai Dated : April 26, 2022
Mar 31, 2022
Your Directors take pleasure in presenting their 27th Annual Report on the business and operations of your Company, together with the audited financial statements, for the year ended March 31, 2022.
Your Company endeavors to remain one of the leading players in the Asset Management business in India and keep enhancing its global footprint as well.
Your Company is a subsidiary Company of Nippon Life Insurance Company ("NLI"). NLI, a fortune 500 Company and which is one of the largest life insurers in the world managing assets of over USD 700 bn. NLI has a large global network with presence across US, Europe, Asia, and Australia along with a 130-year track record in Life Insurance business as well as global investments across Asset Management companies. This pedigree brings strong synergistic benefits that very well complements your Company''s domestic expertise in Asset Management business and provides a thrust to its significant growth potential. Your Company expects substantial upside in terms of increased AUM & adoption of best governance & risk management practices based on NLI''s global positioning & relationships.
Your Company acts as the Asset Management Company of Nippon India Mutual Fund and it happens to be the largest foreign owned Asset Management Company in India.
FINANCIAL PERFORMANCE AND STATE OF COMPANY''S AFFAIRS
The standalone and consolidated financial statements of the Company for the financial year ended March 31, 2022, have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act. The financial highlights (on a consolidated and standalone basis) of the Company for the year ended March 31, 2022 are as follows:
('' Crores) |
||||
Description |
Consolidated |
Standalone |
||
Year ended |
Year ended |
Year ended |
Year ended |
|
March 31, 2022 |
March 31, 2021 |
March 31, 2022 |
March 31, 2021 |
|
Gross Income |
1535.63 |
1419.34 |
1428.42 |
1325.66 |
Profit before exceptional item and tax |
988.67 |
877.03 |
945.43 |
842.92 |
Exceptional Items |
- |
- |
- |
- |
Profit Before tax |
988.67 |
877.03 |
945.43 |
842.92 |
Current Tax |
206.66 |
157.41 |
200.38 |
151.51 |
Deferred Tax |
38.64 |
40.22 |
33.84 |
42.02 |
Profit for the year |
743.37 |
679.39 |
711.21 |
649.39 |
Share of Profit from Associates |
0.79 |
0.94 |
- |
- |
Profit attributable to non-controlling interest |
- |
- |
- |
- |
Other Comprehensive Income |
(0.30) |
0.72 |
(0.27) |
0.72 |
Balance carried to Balance Sheet |
743.86 |
681.05 |
710.94 |
650.11 |
Basic EPS of '' 10 each |
12.00 |
11.04 |
11.47 |
10.53 |
Diluted EPS of '' 10 each |
11.80 |
10.90 |
11.28 |
10.41 |
The Consolidated Financial Statements of the Company are forming part of this Annual Report. The annual accounts of all the subsidiary companies will be placed on the website of the Company.
DETAILS OF MATERIAL CHANGES ANDCOMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments affecting the financial position of the Company since the date of the financial statements i.e. March 31,2022.
During the year, the Company had declared and paid an interim dividend of Rs. 3.50 per equity share (35%) amounting to Rs. 217.41 Crore. The Board has also recommended a final dividend of Rs. 7.50 per Equity Share (75%) of Rs. 10/- each for the financial year ended March 31, 2022, for the approval of the Shareholders at the ensuing Annual General meeting. With this the total dividend for the financial year 2021-22 would be approximately Rs. 683.92 crores, including the interim dividend of Rs. 3.50 per equity share distributed in November 2021. The Final dividend, if declared, will be paid after the Annual General Meeting.
The dividend payout is in accordance with the Company''s Dividend Distribution Policy which forms part of this Annual Report.
AMOUNT TO BE CARRIED TO RESERVES
Your Directors do not propose any amount to be transferred to the General Reserves of the Company.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report for the year under review as stipulated under SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (Listing Regulations) is presented in a separate section forming part of this Annual Report.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENT
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act are given in the notes to the Financial Statements.
There is no difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions.
The Company has neither accepted nor renewed any fixed deposits during the year. There are no outstanding or unclaimed deposits, unclaimed / unpaid interest, refunds due to the deposit holders or to be deposited to the Investor Education and Protection Fund as on March 31, 2022.
With the perspective of promoting the culture of employee ownership and to attract, retain, motivate and incentivize senior as well as critical talent, the Company has formulated Nippon Life India Asset
Management Limited - Employee Stock Option Plan 2017 [formerly known as "Reliance Nippon Life Asset Management Limited - Employee Stock Option Plan 2017"] ("ESOP 2017" / "Plan") as its stock option scheme, which was launched in August 2017 and Nippon Life India Asset Management Limited - Employee Stock Option Plan 2019 [formerly known as "Reliance Nippon Life Asset Management Limited - Employee Stock Option Plan 2019"] ("ESOP 2019" / "Plan") as its stock option scheme, which was launched in July 2019. The Nomination and Remuneration Committee of the Board monitors and administers these Plans and from time to time grants stock options to the employees.
Both ESOP 2017 as well as ESOP 2019 are in compliance with The SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 [erstwhile The SEBI (Share Based Employee Benefits) Regulations, 2014] (SEBI Regulations).
However, having regard to the provisions of first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. The certificate from the Practicing Company Secretary confirming the compliance of The SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 [erstwhile The SEBI (Share Based Employee Benefits) Regulations, 2014] with respect to the Company''s Employees Stock Option Scheme Plans has been received and will be available for inspection through electronic mode. Any member interested in obtaining the same may write to the Company Secretary and the same will be furnished on request. The details as required to be disclosed under SEBI Regulations are put on the Company''s website at httos://mF.niooonindiaim. com/investor-service/customer-service/nam-india-shareholders-investors
COMPLIANCE CULTURE & RISK MANAGEMENT
Your Company is essentially Compliance centric and has a huge focus in this direction. The Compliance function is manned by a dedicated and experienced team of professionals. The Compliance team regularly conducts various educative training programs for various segments within the organization. Your Company thrives towards a culture of ''Total Compliance'' and it has a ''Zero Tolerance'' policy for non-compliances. There exists a comprehensive Compliance Manual, which is reviewed by your Board of Directors from time to time and it facilitates Company''s Compliance team to monitor various compliance requirements effectively & comprehensively. Your Board of Directors have also constituted a Compliance Committee, which is chaired by the CEO & Executive Director of the Company, and which has the Compliance Officer and other senior & relevant functionaries as its members. This committee meets at least once in a quarter to discuss and deliberate issues pertaining to compliance and other regulatory developments.
Your Company also has a comprehensive Risk Management Policy that envisages a structured and consistent enterprise-wide risk management framework, based on the three lines of defense model, to ensure that risk management processes are consistently applied across the organization and provide reasonable assurance regarding achievement of organization''s objectives.
The risk management policy clearly sets out the objectives & elements of risk management within the organization, including the constitution of an independent Risk Management department headed by Chief Risk Officer (reporting directly to the CEO and to the Board of Directors), Risk Management Committee (RMC).
Your Company promotes risk awareness culture throughout the organization and risk management is an integral part of decision making and day-today operations of all activities at all levels across the organization. There are well documented & Board approved policies & processes to address and mitigate various risks to which the company is exposed. The company also has a robust business continuity plan which is tested on a periodic basis to ensure business is not interrupted.
The company has a structured risk reporting mechanism to ensure risks are monitored and reviewed by CRO, Senior Management, RMCBs and Board on a periodic basis.
INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY
The Company has an Internal Control System which is commensurate with the size, scale and complexity of its business operations.
Foreffectiveriskmanagementandcontrol,theCompany has established structures and responsibilities in line with the "Three Lines of Defense" model, where 1st line being business operations, 2nd line is the oversight functions like Risk Management and Compliance and 3rd line is Internal Audit. To maintain its objectivity and independence, the Internal Audit department reports to the Audit Committee. The Internal Audit department monitors and evaluates the efficacy and adequacy of the internal control system in the Company, its compliance with operating systems, accounting procedures and policies. Based on the report of the Internal Auditor, process owners undertake corrective action in their respective areas and thereby strengthen the controls. The Internal Audit department follows up on pending audit issues and ensures that corrective actions have been taken. Significant audit observations, if any, and corrective actions thereon, are presented to the Audit Committee of the Board.
Your Directors wish to reiterate your Company''s commitment to the highest standards of corporate governance in order to enhance trust of all its stakeholders. Strong & robust corporate governance practices have facilitated your Company in standing up to the continued scrutiny of domestic & international investors and that of various Regulatory authorities.
The report on Corporate Governance as stipulated under Regulation 34(3) read with Para C of Schedule V of the Listing Regulations is presented in separate section forming part of this Annual Report.
A Certificate from the auditors of the Company i.e. M/s. S. R. Batliboi & Co. LLP, Chartered Accountants conforming compliance to the conditions of Corporate Governance as stipulated under Para E of Schedule V of the Listing Regulations, is enclosed to this Report.
In accordance with Section 177 of the Act and the Listing Regulations, the Company has formulated a Vigil Mechanism to address the genuine concerns, if any. The policy can be accessed on the Company''s website.
CORPORATE SOCIAL RESPONSIBILITY
As part of its initiatives under "Corporate Social Responsibility (CSR)", the Company has undertaken projects in the areas of promoting healthcare, education and rural development in accordance with Schedule VII of the Act.
The Annual Report on CSR activities is annexed herewith as Annexure A.
SUBSIDIARIES & ASSOCIATE COMPANY
As of March 31, 2022, your Company had three (3) subsidiaries. Two of such subsidiaries are overseas, being one each in Singapore and Mauritius and one subsidiary is in India. All the subsidiaries of the Company are engaged in financial services and related activities. In addition, the Company also has an Associate company in India, which has already surrendered its business license/ regulatory approval to act as a Pension Fund Manager. This particular company currently has no business operations and it is therefore proposed to wind it up, in accordance with the applicable laws.
A statement w.r.t. the performance and the financial position of the subsidiaries of the Company is forming a part of the Consolidated Financial Statements of the Company.
The performance of financial position of the subsidiary companies is presented in the Management Discussions and Analysis Report forming part of this Annual Report. The policy for determining material subsidiary companies
may be accessed on the Company''s website at https:// mf.nipponindiaim.com/InvestorServices/Pages/Investor-Policies.aspx
During the year under review, the following employees were the ''Key Managerial Personnel'' of the Company:
a) Mr. Sundeep Sikka - Executive Director & Chief Executive Officer;
b) Mr. Ajay Patel - Manager;
c) Mr. Prateek Jain - Chief Financial Officer; and
d) Ms. Nilufer Shekhawat - Company Secretary.
During the year, Mr. Sundeep Sikka has been reappointed as the Executive Director & CEO of the Company for a term of 5 years commencing from April 22, 2021.
During the year, Mr. Yutaka Ideguchi [Nominee Director of NLI] resigned from the directorship of the Company w.e.f. March 30, 2022. Mr. Kazuyuki Saigo [Nominee Director of NLI] who was a Director of the Company as on March 31, 2022, resigned as such effective April 21, 2022. Mr. Tomohiro Yao and Mr. Minoru Kimura [Nominee Directors of NLI] were appointed as Additional Directors of the Company w.e.f. April 21, 2022.
All the Independent Directors of your Company i.e. General Ved Prakash Malik (Retd.), Ms. Ameeta Chatterjee, Mr. Ashvin Parekh and Mr. B. Sriram, have already furnished the required declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act.
In the opinion of the Board, the Independent Directors possess the requisite expertise and experience and are persons of high integrity and repute. They fulfil the conditions specified in the Act and the Rules made thereunder and are independent of the management.
In terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by The Indian Institute of Corporate Affairs, Manesar (''IICA''). The Independent Directors are also required to undertake online proficiency self-assessment test conducted by the IICA within a period of Two years from the date of inclusion of their names in the data bank, unless they meet the criteria specified for exemption. All the Independent Directors of the Company are exempt from the requirement to undertake online proficiency self assessment test.
PERFORMANCE EVALUATION OF DIRECTORS, BOARD AND COMMITTEES
The Company has devised a policy for the performance evaluation of the individual directors, Board and its Committees, which also includes the criteria for carrying out the said performance evaluation. Pursuant to the provisions of the Act and Regulation 17(10) of Listing Regulations and as prescribed in the stated policy of the Board, the Board has carried out an annual performance evaluation of (i) the Directors (Independent and non-independent);(ii) itself (as a whole);(iii) its committees and (iv) fulfillment of Independence criteria. The Board performance was evaluated based on inputs received from the Board members after considering criteria such as Board composition and structure, effectiveness of Board / Committee processes, and information provided to the Board, etc. In terms of the requirements of the Act, a separate meeting of the Independent Directors was also held during the year.
During the year under review, nine (9) Board meetings were held.
Your Directors wish to inform that the functioning of the Board is supplemented by various committees (Board sub-committees and management committees), which have been constituted from time to time, such as Audit Committee, Committee of Directors, CSR Committee, Stakeholders Relationship Committee, Nomination & Remuneration Committee, Risk Management Committee of the Board, IT Strategy Committee, Valuation Committee, Investment Committee, Risk Management Committee, Allotment Committee, Broker Empanelment Committee, Operating Committee, Compliance Committee, Stewardship Committee, Proxy Voting Committee, Information Security Risk Management Committee, etc. to name a few. Each of the aforesaid Committees has been constituted in order to ensure due compliance with the applicable laws and to ensure that highest levels of corporate governance are followed and practiced. The minutes of the meetings of each of these Committees are duly placed before the Board for noting and confirmation.
In terms of the requirements of Section 177 of the Act, and Regulation 18 of the Listing Regulations, the Audit Committee of the Company consists of majority of Independent Directors. As on date of this report, it comprises Mr. Ashvin Parekh [Independent Director], Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. B. Sriram [Independent Director], Mr. Akira Shibata [Non- Independent Director] and Mr. Minoru Kimura [Non- Independent Director]. Mr. Ashvin Parekh acts as the Chairperson of this Committee.
During the year, seven (7) meetings of the Audit Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
NOMINATION & REMUNERATION COMMITTEE
In terms of the requirements of Section 178 of the Act, and Regulation 19 of the Listing Regulations, the Nomination & Remuneration Committee of the Company consists of majority of Independent Directors. As on date of this report, it comprises, Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Tomohiro Yao [NonIndependent Director] and Mr. Minoru Kimura [NonIndependent Director]. General Ved Prakash Malik (Retd.) acts as the Chairperson of this Committee.
During the year, four (4) meetings of the Nomination & Remuneration Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
The Nomination & Remuneration Policy has been provided as Annexure B to the Board''s Report.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
In terms of the requirements of Section 135 of the Act, the Corporate Social Responsibility ("CSR") Committee of the Company consists of Eight members. As on date of this report, it comprises Mr. Tomohiro Yao [Non-Independent Director], Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Sundeep Sikka [CEO & Executive Director], Mr. Akira Shibata [Non-Independent Director] and Mr. Minoru Kimura [Non-Independent Director]. Mr. Tomohiro Yao acts as the Chairman of this Committee.
During the year 2021-22, two (2) meetings of the CSR Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
STAKEHOLDERS'' RELATIONSHIP COMMITTEE
In terms of the requirements of Section 178 of the Act, and Regulation 20 of the Listing Regulations, the Stakeholders'' Relationship Committee of the Company consists of five members. As on date of this report, it comprises Ms. Ameeta Chatterjee [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Tomohiro Yao [Non-Independent Director] and Mr. Sundeep Sikka [CEO & Executive Director]. Ms. Ameeta Chatterjee acts as the Chairperson of this Committee.
During the year, two (2) meetings of the Stakeholders'' Relationship Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
In terms of the relevant requirements under the Listing Regulations, the Company has constituted a Risk Management Committee of the Board. The Committee presently comprises of Mr. Tomohiro Yao [Non-Independent Director] as the Chairperson, Mr. Akira Shibata [Non-Independent Director], Mr. Sundeep Sikka [CEO & Executive Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director] and Mr. Rishi Garg [Chief Risk Officer] as its members.
During the year, two (2) meeting of the Risk Management Committee of the Board were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
AUDITORS'' OF THE COMPANY - STATUTORY AND INTERNAL
Statutory Auditors:
M/s. S. R. Batliboi & Co. LLP, Chartered Accountants shall hold office as Statutory Auditors of the Company until the conclusion of the 28th Annual General Meeting.
JHS & Associates LLP, Chartered Accountants were appointed as the Internal Auditors'' of your Company for the financial year 2021-22. Your Directors have also approved their re-appointment as such for the financial year 2022-23.
AUDITORS OF THE SCHEMES OF NIPPON INDIA MUTUAL FUND- STATUTORY AND INTERNAL
In accordance with the applicable provisions of law, the Company has appointed Statutory and Internal Auditors for various Schemes of Nippon India Mutual Fund, who periodically submit their reports, which are placed before the Audit Committee for discussion, review and implementation of their recommendations.
M/s. Walker Chandiok & Co. LLP, Chartered Accountants were appointed as Statutory Auditors of the Schemes of Nippon India Mutual Fund for the financial year 2021-22.
During the year, M/s. Deloitte Haskins & Sells LLP, Chartered Accountants were appointed as Internal Auditors of the Scheme of Nippon India Mutual Fund and the portfolio management services division of the Company, for the financial year 2021-22. Your Directors have also approved their re-appointment as such for the financial year 2022-23.
AUDITORS'' REPORT
The observations and comments given by the Statutory Auditors in their report read together with notes on financial statements are self-explanatory and hence does not require any further comments in terms of Section 134 of the Act.
SECRETARIAL STANDARDS
During the year under review, the Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Directors had appointed M/s. M. Siroya and Company, Mumbai, a firm of Company Secretaries in-practice to undertake the Secretarial Audit of the Company for the financial year 2021-22. In this regard, the Report submitted by the Secretarial Auditor is annexed as Annexure C.
Your Directors are pleased to inform that the report from the Secretarial Auditors does not contain any qualifications or negative remarks.
ANNUAL RETURN
Pursuant to Section 134(3)(a) and Section 92(3) of the Act read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company has been placed on the website of the Company and can be accessed at https:// mf.nipponindiaim.com/investor-service/customer-service/nam-india-shareholders-investors
PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
CONSERVATION OF ENERGY:
The operations of the Company do not consume high levels of energy. Adequate measures have been taken to conserve energy wherever feasible. Your Company uses latest technology and energy efficient equipment''s. Your Company only uses LED lights and 5 star air-conditioning for majority of offices. As energy cost forms a very small part of the total costs, the impact on cost is not material.
TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION:
> Game changing initiatives:
⢠The All-new Investor App: This year marked the launch of our New Investor App (Android), a key Digital transformation endeavor that is aimed to strengthen our already robust Digital ecosystem. It is a new-age asset that is styled for millennials & zillennials and simplified for the legacy investor
base. We believe that the savvy consumers of today invest first in digital experiences and in mutual funds afterwards, and that''s exactly how we''ve built the new app - with next level, simplified and intuitive interface coupled with new age features and capabilities - to provide best in class, enhanced digital experience for our investors. With the best of e-commerce practices at its heart - contemporary design, quick product discovery, aided decision making, and personalized experiences based on intelligent analytics - this app is all that our investors will ever need to manage their investments with NIMF.
While contemporary design and new features and
enhancements are a part of the re-build, some of the
key highlights of the rebuild are:
¦ Completely self-serve and frictionless on boarding process
¦ ''Investor journey'' centric flows (and not inward out, classic Product & Service bouquet approach)
¦ Discoverability: Products & Services are available in line with user expectations
¦ Enhanced purchase experience: Cart Buying and Drop-off win-back;express checkout for repeat transactions
¦ Scalable framework: Leveraging Digital stack (Targeting, Campaigns, Analytics, etc.) for a more enriching and powerful experience
⢠New Fund Offers - Digital Launches: The Nippon India Flexi Cap Fund was one of the biggest success stories for Digital enabling lucid access for investors & partners across all our Digital assets. Apart from that we Digitally enabled other prominent products for FY21-22 including Nippon India Taiwan Equity Fund and Nippon India Silver ETF F-o-F. Apart from that, on the ETF front, we also enabled Nippon India Nifty Pharma ETF, Nippon India Nifty Auto ETF & Nippon India Silver ETF. We also had a very innovative Index offering made live viz. Nippon India Nifty AAA CPSE Bond Plus SDL - Apr 2027 Maturity 60:40 Index Fund
⢠Growth Enablers for Business Easy with 2.0 App: Business Easy 2.0 app, our Digital asset with our distributors, is an all-encompassing solution that acts as a complete Customer Relationship Management tool. The app works as a Digital branch through which distributors can manage their Mutual Fund business virtually. With the objective of evolving the app from a business facilitator to a growth enabler, this year saw the addition of new enhancements and features to the app. A quick overview of such features is as follows:
¦ Comprehensive Dashboard with Performance review distributor''s AUM, SIP Book value, Business health trends, in-depth customer base understanding
¦ SIP Corner for focused SIP sustenance, retention, and win-back
¦ Advanced Funds & Performance module with a more in-depth view of all products and granular understanding of fund facts & stats
⢠WhatsApp Scale-up: Having launched the pilot version of our WhatsApp advent which comprised of Liquid Fund purchase, e-KYC check & Digital asset access, we scaled up our WhatsApp capability with comprehensive transaction & service capabilities - purchase in all funds, all transaction types and multiple service modules. This implementation dovetails into our philosophy of building our Digital presence in line with the preference of our investors. This service paves the way for increased market penetration of NIMF products and unlocks opportunities by enabling reach out to a vast 500mn WhatsApp user base in India
⢠Intelligent interventions for business retention and growth: We have built system driven, smart and automated measures across various investor journeys with the objective of creating positive business impact. These interventions either nudge users to take prudent & effective decisions in a real-time manner to stay invested or help them with alternate options while if they encounter any outages or errors. Such measures delivered consistent growth in AUM retention and augmentation and saw an uplift of 60% in such positive impact when compared with last FY.
⢠Dynamic Real time mailers: In a real time world, it is important that consumers are given real time information that might help them to take conscious and informed investment decisions. NIMF pioneered deep tech enabled mailers. The same fetched real time data (viz Sensex movement, NAVs, returns etc.) from the server whenever opened. This gave a clear visibility to the investor on what were the relevant avenues for either fresh investment or additional investment. This was widely cherished by new and existing investors and yielded high usage
⢠Leveraging Beta products from Google: NIMF has been a pioneer at Conversational Commerce, and this was done in partnership using the Voice assistant capabilities from Google. On the base of this strong partnership NIMF in FY 21-22 was at the helm of leveraging Beta Products from Google like the newly launched Performance Max. A successful implementation and more than desired results got
NIMF mentioned in Google India Case study for the best use of Performance Max beta to drive incremental business using Artificial Intelligence & Machine learning.
⢠Strengthening our Digital Distribution through Strategic Alliances and Enhanced Support to
Partners: We added some key partners and more importantly products into their positioning suites, like Genius from ET Money. We also were one of the firsts to launch SIPs on PhonePe platform. Other key players like Paytm, Groww, Kuvera, IND Money Tarrakki, etc., continue to bolster our executional leadership and expansive reach. Our immense expertise in the core business of Asset Management and prowess in Digital Business gives us an unparalleled advantage to engage with our Partners at an even deeper level and help them set up and scale up their businesses. Our knowledge and know-how, shared with the Partners and their customers by our Fund Managers and Investment Experts on such Partners'' platforms coupled with integrated marketing campaigns have educated the investors and helped them make the right decisions. Our robust engagement strategy coupled with focused execution has not only helped us build great equity with Partners but also helped win the trust of investors which has resulted in growth of business volumes on such platforms, thereby benefitting both us and the Partners. We have a definitive lead in the Digital Partnerships space and have managed to forge a clear position for NIMF as being the partner of choice for such players.
⢠Setting up of New NAM India Technology Applications
A challenge posted due to the migration to our new Nippon environment was how to securely perform a complete data transfer of our SAP data. Thanks to careful planning, execution and a lot of communication with involved stakeholders we were able to successfully set up NAM India''s own SAP environment after mitigating several risks. This was performed with minimum downtime and no effect on NAM India''s books of accounts.
During the pandemic we have rolled out solutions and infrastructure enhancements that has allowed NAM India to continue working in an offline situation without exception. Initiatives such as secure VPN for data access, communication software, online approval workflow on block chain are a few initiatives that have been implemented.
⢠Managing regulatory requirements
There were several new regulations brought in by the regulatory body resulting in multiple
new enhancements that had to be performed under strict deadlines. Some key projects such as database encryption, recording of conversations on Teams calls and mobile phones, two factor authentication were executed and the regulations complied with.
⢠Optimizations in Investment and Digital Portfolio
During the year there were several enhancements performed in the investment portfolio to comply with regulation change and to bring in operating efficiency. On the digital portfolio side new functionality in the form of New Investor App, enhancement in workflows and new fund offers were launched with a great degree of success. Certain processes on the digital side that were affecting user experience were examined and enhanced to perform faster leading to an increase in the customer experience index of the digital offerings.
NAM India IT is working in a continuous improvement cycle to improve our various technology and process towards enhancing our contribution to the company, stakeholders and our customers. We have shown significant improvement in our issue resolution process and our results indicate a steady increase in our customer issue resolution index over the financial year. We also have maintained high up and response times on all our critical investment and digital platforms. This has resulted in consistent and predictive working of our offerings to our end customers.
Another initiative to build automation to further optimize processes is underway and several processes across operations, risk and investment functions are expected to be automated in the new financial year. This will lead to efficiency gains across functions. Technology will continue to identify processes that can be automated and continues to partner with functions on the same.
⢠Digital Business touched a record 2.9 million purchase transactions FY 2021-22, which is essentially 1 purchase every 6 seconds! This increase is a ~60 % YOY growth.
⢠Contribution of Digital Business to overall NIMF business stands at 58%, which is a growth of ~12% over last FY where Digital contribution was at 52%.
⢠Digital Business share in Lumpsum purchase and new SIP registrations stood at 60% and 48% respectively vis-a-vis total purchase transactions of NIMF.
⢠Long term assets focus resulted in 90% non-Liquid acquisitions compared to 75% in FY2020-2021.
⢠45% of our digital consumers are less than 35 years of age
NIMF Digital has been setting a benchmark across the BFSI industry in its Fintech endeavors across the Digital Ecosystem. It is now recognized as a Digital benchmark across industries. Both Global and Indian forums have further recognized NIMF''s expertise and supremacy in the Digital arena. As in the previous years, we have yet again been conferred with some coveted awards this year as well which further strengthens our position as a Digital leader in the BFSI space
⢠Global Digital Marketing Awards for ''Best use of Facebook AI tool in performance campaigns'' (April 2021)
⢠ACEF Global Customer Engagement Awards 2021 for ''Digital Marketing, Data driven Marketing, Email Marketing and Mobile Marketing'' - 5 awards (4 Golds and 1 Silver) (May 2021)
⢠Mint | TechCircle - Business Transformation Award 2021 for ''Revenue Generation - Product & Service Augmentation'' - Business Easy (June 2021)
⢠Indian Digital Marketing Awards for ''Best App Developed for Products / Services'' - Business Easy (July 2021)
⢠Indian Digital Marketing Awards for ''Best Use of sites for Mobiles'' - NIMF Purchase Mobile Site (M-site) (July 2021)
⢠Digital Crest Awards 2021 for ''Expertise in Online Commerce, Omni Channel Strategy and Mobile Marketing'' - 3 awards (1 Gold, 1 Silver and 1 Bronze) (August 2021)
⢠The Great Indian Marketing Awards for ''Best performing campaign for Google''s Performance-max'' (August 2021)
⢠Maddies Marketing Award 2021 for the ''Most Effective Voice Assistant App'' (in the Enabling Technologies category) - Simply Save Conversational Commerce (November 2021)
⢠Dynamic CIO Award for ''Smart Innovator'' (in the Technology Innovation category) - Simply Save Conversational Commerce (November 2021)
RESEARCH AND DEVELOPMENT:DIGITAL ADOPTION AND INNOVATION:
We, at Nippon India Mutual Fund, continue to envision and execute key Digital transformation endeavors year on year that are aimed to strengthen our already robust Digital ecosystem.
⢠Our focus always remains on empowering our investors during moments of truth and on a ''here & now'' manner to take quicker, smarter, and well-informed decisions on how and where they should invest their money when they transact on our Digital assets. Such empowerment is fueled by our capabilities to crunch & run real-time analysis on the enormous amount of on-asset & offline data points we have regarding our consumers, their past purchases, and future propensities.
⢠Our intelligent, data led digital assets, can learn, and predict user behavior powered by both the real time frameworks and archived analytical frameworks which are operating on an advanced algo network. This helps in e-serving highly personalized and customized experiences to give our millennial, zillennial and legacy investors or partners accurate recommendations, suggestions, on-the-fly nudges, predictive service and much more as they advance in their journeys.
NAM India Technology is continuously engaging in research and development to pick and choose the best of technology solutions to our stakeholders
- NAM India Technology continues to explore opportunities with Fintech and Technology vendors to identify the next best solution that can be a game changes in the industry
- The technology team also follows and explores software, hardware, security and network enhancements in the technology world and attempts to identify key components that can change the way we do work in the organization and industry.
FOREIGN EXCHANGE EARNINGS AND OUTGO:
During the year under review, the Company earned foreign exchange equivalent to Rs. 22.85 Cr (Previous Year: Rs. 21.79 Cr). The Company spent foreign exchange equivalent to Rs. 6.98 Cr (Previous Year: Rs. 6.49 Cr).
DIRECTORS'' RESPONSIBILITY STATEMENT
As per the requirements of Sub Section (5) of Section 134 of the Act, the Directors confirm that -
(i) In the preparation of the annual accounts for the financial year ended March 31,2022, the applicable accounting standards have been followed and that there are no material departures;
(ii) The Directors have selected such accounting policies in consultation with the Statutory Auditors'' and have applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of
the state of affairs of the Company as at March 31, 2022 and of the profit of the Company for the year under review;
(iii) The Directors have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) The Directors have prepared the annual accounts of the Company on a ''going concern'' basis;
(v) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;
(vi) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
CONTRACT AND ARRANGEMENTS WITH RELATED PARTIES
All contracts/ arrangements/ transactions entered into/ by the Company during the financial year under review with related parties were on arm''s length basis and in the ordinary course of business. There were no materially significant related party transactions which could have potential conflict with interest of the Company at large. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.
All Related Party Transactions were placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee was obtained for the transactions which were of a repetitive nature. The transactions entered into pursuant to the omnibus approval so granted were reviewed and statements giving details of all related party transactions were placed before the Audit Committee and the Board of Directors for their review on a quarterly basis. The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website at the following link:
https://mf.nipponindiaim.com/InvestorServices/
Your Directors draw attention of the members to Note No. 29 to the financial statement which sets out related party disclosures.
PARTICULARS OF FRAUDS REPORTED BY THE AUDITORS''
In terms of Section 143(12) of the Act, M/s. S R Batliboi & Co. LLP, Chartered Accountants, the Statutory Auditors of the Company have not reported any instance of fraud having taken place during the year under review, in their Audit Report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators/ Courts which would impact the going concern status of the Company and its future operations.
DETAILS OF APPLICATION MADE BY THE COMPANY OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONGWITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR The Company invests in various debt market instruments (non-convertible debentures) issued by various issuers. In order to realize the debenture outstanding''s, the Company has filed certain applications under the Insolvency and Bankruptcy Code, 2016. The Mutual Fund Division of the Company has filed (a) an IBC proceeding against Avantha Holdings Limited in January 2020 before Hon''ble NCLT New Delhi which is currently at pre-admission hearings stage. The Company is also a respondent party to an IBC proceeding filed in the matter of Reserve Bank of India v. Dewan Housing Finance Corporation Limited pending before the Hon''ble NCLT, Mumbai.
The Portfolio Management Services Division of the Company has filed: (a) IBC proceedings against Fortuna Buildcon India Private Limited which was filed in November 2017 before the Hon''ble NCLT, Bangalore, wherein currently the resolution plan has been submitted to the Hon''ble NCLT for approval (b) three IBC proceedings against three Biodiversity Conservation India Private Limited group companies (BCIL Zed Ria Properties Private Limited, BCIL Red Earth Developers India Pvt Ltd and Biodiversity Conservation India Private Limited) were filed in December 2017 before the Hon''ble NCLT, Bangalore. The NCLT has approved resolution plans in BCIL Zed Ria Properties Private Limited and in BCIL Red Earth Developers India Pvt Ltd, which are currently under implementation while Biodiversity Conservation India Private Limited is currently under liquidation. The Company is also a respondent to 2 (two) appeals in BCIL Red Earth Developers India Private Limited and in 3 (three) appeals in BCIL Zed Ria Properties Private Limited, before Hon''ble NCLAT, Delhi, which have been filed challenging the approved resolution plans; (c) IBC proceedings have been filed against the promoters of Biodiversity Conservation India Private
Limited in November 2020 before Hon''ble NCLT, Bangalore which are currently at a pre-admission stage; (d) IBC proceeding filed against Green Valley Shelters Private Limited in December 2019, before Hon''ble NCLT, Chennai, was admitted in August 2021, however the proceedings are currently temporarily stayed under an order of the Supreme Court. The Company is a respondent in a civil appeal filed by the promoters of Green Valley Shelters Private Limited before the Hon''ble Supreme Court, challenging the admission of IBC proceedings against Green Valley Shelters Private Limited, which is currently pending under directions of exploring a settlement; (e) an IBC proceeding filed against the promoters of Green Valley Shelters Private Limited in October 2020 before the Hon''ble NCLT, Chennai was admitted in January 2022 and is pending final orders appointing the resolution professional; (f) an IBC proceeding was filed against Arkie Atelier Design India Private Limited, being the corporate guarantor for the debentures issued by Green Valley Shelters Private Limited in November 2021 and is currently at a pre-admission stage; (g) an IBC proceeding filed against Bharucha & Motivala Infrastructure Private Limited, being corporate guarantor for the debentures issued by Lake District Realty Private Limited, in November 2019 before Hon''ble NCLT, Mumbai was admitted in May 2021, but has been stayed pursuant to an order of the Hon''ble NCLAT in July 2021. The Company is a respondent in the appeal filed by the promoters of Lake District Realty Private Limited before the Hon''ble NCLAT, Delhi, challenging the admission of IBC proceedings against Bharucha & Motivala Infrastructure Private Limited, which is currently at its final arguments stage; (h) IBC proceedings have been filed against the promoters of Lake District Realty Private Limited in November 2021, which is currently at a pre-admission stage; (i) an IBC proceedings has been filed against Ashapura Options Private Limited, being the corporate guarantor for the debentures issued by Ashapura Housing Private Limited in February 2022 which is at a pre-admission stage. (j) IBC proceedings have also been filed against four (4) promoter guarantors of Ashapura Housing Private Limited, which are at a pre-admission stage.
The Company is not required to maintain cost records as specified by the Central Government under subsection (1) of section 148 of the Companies Act, 2013.
During the year, the Company has made a downstream investment in AMC Repo Clearing Limited to the extent of Rs. 9,25,87,830. The certificate from the Statutory Auditor confirming the compliance of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017 with respect to the Company''s downstream investment
has been received and will be available for inspection. Any member interested in obtaining the same may write to the Company Secretary and the same will be furnished on request.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
In terms of the provisions of Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules are provided in the Annexure to the Board''s Report. Disclosures relating to the remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended also forms part of this Report. However, having regard to the provisions of Section 136 of the Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining the said information may write to the Company Secretary. Upon such request the information shall be furnished.
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
Your Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. Following is a summary of sexual harassment complaints received and disposed off during the year:
⢠No. of complaints received: 0
⢠No. of complaints disposed off: 0
BUSINESS RESPONSIBILITY REPORT
Business Responsibility Report for the year under review as stipulated under Listing Regulations is presented in the separate section forming part of this Annual Report.
Your Directors wish to place on record their sincere appreciation for the co-operation received from various regulatory and governmental authorities including SEBI, RBI, Registrar of Companies, Maharashtra at Mumbai, PFRDA, NPS Trust, EPFO, CMPFO, Stock Exchanges, Depositories, Custodians, Bankers, Registrar, Shareholders, Investors and all other business constituents during the year under review. We believe all of them have contributed to our continued growth.
Your Directors also wish to place on record their deep appreciation for the total commitment displayed by all the executives, officers and staff, resulting in yet another eventful performance for the year.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS OF NIPPON LIFE INDIA ASSET MANAGEMENT LIMITED
Ashvin Dhirajlal Parekh Sundeep Sikka
Director Executive Director & CEO (DIN:06559989) (DIN: 02553654)
Place : Mumbai Dated : April 26, 2022
Mar 31, 2022
Your Directors take pleasure in presenting their 27th Annual Report on the business and operations of your Company, together with the audited financial statements, for the year ended March 31, 2022.
Your Company endeavors to remain one of the leading players in the Asset Management business in India and keep enhancing its global footprint as well.
Your Company is a subsidiary Company of Nippon Life Insurance Company ("NLI"). NLI, a fortune 500 Company and which is one of the largest life insurers in the world managing assets of over USD 700 bn. NLI has a large global network with presence across US, Europe, Asia, and Australia along with a 130-year track record in Life Insurance business as well as global investments across Asset Management companies. This pedigree brings strong synergistic benefits that very well complements your Company''s domestic expertise in Asset Management business and provides a thrust to its significant growth potential. Your Company expects substantial upside in terms of increased AUM & adoption of best governance & risk management practices based on NLI''s global positioning & relationships.
Your Company acts as the Asset Management Company of Nippon India Mutual Fund and it happens to be the largest foreign owned Asset Management Company in India.
FINANCIAL PERFORMANCE AND STATE OF COMPANY''S AFFAIRS
The standalone and consolidated financial statements of the Company for the financial year ended March 31, 2022, have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act. The financial highlights (on a consolidated and standalone basis) of the Company for the year ended March 31, 2022 are as follows:
('' Crores) |
||||
Description |
Consolidated |
Standalone |
||
Year ended |
Year ended |
Year ended |
Year ended |
|
March 31, 2022 |
March 31, 2021 |
March 31, 2022 |
March 31, 2021 |
|
Gross Income |
1535.63 |
1419.34 |
1428.42 |
1325.66 |
Profit before exceptional item and tax |
988.67 |
877.03 |
945.43 |
842.92 |
Exceptional Items |
- |
- |
- |
- |
Profit Before tax |
988.67 |
877.03 |
945.43 |
842.92 |
Current Tax |
206.66 |
157.41 |
200.38 |
151.51 |
Deferred Tax |
38.64 |
40.22 |
33.84 |
42.02 |
Profit for the year |
743.37 |
679.39 |
711.21 |
649.39 |
Share of Profit from Associates |
0.79 |
0.94 |
- |
- |
Profit attributable to non-controlling interest |
- |
- |
- |
- |
Other Comprehensive Income |
(0.30) |
0.72 |
(0.27) |
0.72 |
Balance carried to Balance Sheet |
743.86 |
681.05 |
710.94 |
650.11 |
Basic EPS of '' 10 each |
12.00 |
11.04 |
11.47 |
10.53 |
Diluted EPS of '' 10 each |
11.80 |
10.90 |
11.28 |
10.41 |
The Consolidated Financial Statements of the Company are forming part of this Annual Report. The annual accounts of all the subsidiary companies will be placed on the website of the Company.
DETAILS OF MATERIAL CHANGES ANDCOMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments affecting the financial position of the Company since the date of the financial statements i.e. March 31,2022.
During the year, the Company had declared and paid an interim dividend of Rs. 3.50 per equity share (35%) amounting to Rs. 217.41 Crore. The Board has also recommended a final dividend of Rs. 7.50 per Equity Share (75%) of Rs. 10/- each for the financial year ended March 31, 2022, for the approval of the Shareholders at the ensuing Annual General meeting. With this the total dividend for the financial year 2021-22 would be approximately Rs. 683.92 crores, including the interim dividend of Rs. 3.50 per equity share distributed in November 2021. The Final dividend, if declared, will be paid after the Annual General Meeting.
The dividend payout is in accordance with the Company''s Dividend Distribution Policy which forms part of this Annual Report.
AMOUNT TO BE CARRIED TO RESERVES
Your Directors do not propose any amount to be transferred to the General Reserves of the Company.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report for the year under review as stipulated under SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (Listing Regulations) is presented in a separate section forming part of this Annual Report.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENT
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act are given in the notes to the Financial Statements.
There is no difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions.
The Company has neither accepted nor renewed any fixed deposits during the year. There are no outstanding or unclaimed deposits, unclaimed / unpaid interest, refunds due to the deposit holders or to be deposited to the Investor Education and Protection Fund as on March 31, 2022.
With the perspective of promoting the culture of employee ownership and to attract, retain, motivate and incentivize senior as well as critical talent, the Company has formulated Nippon Life India Asset
Management Limited - Employee Stock Option Plan 2017 [formerly known as "Reliance Nippon Life Asset Management Limited - Employee Stock Option Plan 2017"] ("ESOP 2017" / "Plan") as its stock option scheme, which was launched in August 2017 and Nippon Life India Asset Management Limited - Employee Stock Option Plan 2019 [formerly known as "Reliance Nippon Life Asset Management Limited - Employee Stock Option Plan 2019"] ("ESOP 2019" / "Plan") as its stock option scheme, which was launched in July 2019. The Nomination and Remuneration Committee of the Board monitors and administers these Plans and from time to time grants stock options to the employees.
Both ESOP 2017 as well as ESOP 2019 are in compliance with The SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 [erstwhile The SEBI (Share Based Employee Benefits) Regulations, 2014] (SEBI Regulations).
However, having regard to the provisions of first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. The certificate from the Practicing Company Secretary confirming the compliance of The SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 [erstwhile The SEBI (Share Based Employee Benefits) Regulations, 2014] with respect to the Company''s Employees Stock Option Scheme Plans has been received and will be available for inspection through electronic mode. Any member interested in obtaining the same may write to the Company Secretary and the same will be furnished on request. The details as required to be disclosed under SEBI Regulations are put on the Company''s website at httos://mF.niooonindiaim. com/investor-service/customer-service/nam-india-shareholders-investors
COMPLIANCE CULTURE & RISK MANAGEMENT
Your Company is essentially Compliance centric and has a huge focus in this direction. The Compliance function is manned by a dedicated and experienced team of professionals. The Compliance team regularly conducts various educative training programs for various segments within the organization. Your Company thrives towards a culture of ''Total Compliance'' and it has a ''Zero Tolerance'' policy for non-compliances. There exists a comprehensive Compliance Manual, which is reviewed by your Board of Directors from time to time and it facilitates Company''s Compliance team to monitor various compliance requirements effectively & comprehensively. Your Board of Directors have also constituted a Compliance Committee, which is chaired by the CEO & Executive Director of the Company, and which has the Compliance Officer and other senior & relevant functionaries as its members. This committee meets at least once in a quarter to discuss and deliberate issues pertaining to compliance and other regulatory developments.
Your Company also has a comprehensive Risk Management Policy that envisages a structured and consistent enterprise-wide risk management framework, based on the three lines of defense model, to ensure that risk management processes are consistently applied across the organization and provide reasonable assurance regarding achievement of organization''s objectives.
The risk management policy clearly sets out the objectives & elements of risk management within the organization, including the constitution of an independent Risk Management department headed by Chief Risk Officer (reporting directly to the CEO and to the Board of Directors), Risk Management Committee (RMC).
Your Company promotes risk awareness culture throughout the organization and risk management is an integral part of decision making and day-today operations of all activities at all levels across the organization. There are well documented & Board approved policies & processes to address and mitigate various risks to which the company is exposed. The company also has a robust business continuity plan which is tested on a periodic basis to ensure business is not interrupted.
The company has a structured risk reporting mechanism to ensure risks are monitored and reviewed by CRO, Senior Management, RMCBs and Board on a periodic basis.
INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY
The Company has an Internal Control System which is commensurate with the size, scale and complexity of its business operations.
Foreffectiveriskmanagementandcontrol,theCompany has established structures and responsibilities in line with the "Three Lines of Defense" model, where 1st line being business operations, 2nd line is the oversight functions like Risk Management and Compliance and 3rd line is Internal Audit. To maintain its objectivity and independence, the Internal Audit department reports to the Audit Committee. The Internal Audit department monitors and evaluates the efficacy and adequacy of the internal control system in the Company, its compliance with operating systems, accounting procedures and policies. Based on the report of the Internal Auditor, process owners undertake corrective action in their respective areas and thereby strengthen the controls. The Internal Audit department follows up on pending audit issues and ensures that corrective actions have been taken. Significant audit observations, if any, and corrective actions thereon, are presented to the Audit Committee of the Board.
Your Directors wish to reiterate your Company''s commitment to the highest standards of corporate governance in order to enhance trust of all its stakeholders. Strong & robust corporate governance practices have facilitated your Company in standing up to the continued scrutiny of domestic & international investors and that of various Regulatory authorities.
The report on Corporate Governance as stipulated under Regulation 34(3) read with Para C of Schedule V of the Listing Regulations is presented in separate section forming part of this Annual Report.
A Certificate from the auditors of the Company i.e. M/s. S. R. Batliboi & Co. LLP, Chartered Accountants conforming compliance to the conditions of Corporate Governance as stipulated under Para E of Schedule V of the Listing Regulations, is enclosed to this Report.
In accordance with Section 177 of the Act and the Listing Regulations, the Company has formulated a Vigil Mechanism to address the genuine concerns, if any. The policy can be accessed on the Company''s website.
CORPORATE SOCIAL RESPONSIBILITY
As part of its initiatives under "Corporate Social Responsibility (CSR)", the Company has undertaken projects in the areas of promoting healthcare, education and rural development in accordance with Schedule VII of the Act.
The Annual Report on CSR activities is annexed herewith as Annexure A.
SUBSIDIARIES & ASSOCIATE COMPANY
As of March 31, 2022, your Company had three (3) subsidiaries. Two of such subsidiaries are overseas, being one each in Singapore and Mauritius and one subsidiary is in India. All the subsidiaries of the Company are engaged in financial services and related activities. In addition, the Company also has an Associate company in India, which has already surrendered its business license/ regulatory approval to act as a Pension Fund Manager. This particular company currently has no business operations and it is therefore proposed to wind it up, in accordance with the applicable laws.
A statement w.r.t. the performance and the financial position of the subsidiaries of the Company is forming a part of the Consolidated Financial Statements of the Company.
The performance of financial position of the subsidiary companies is presented in the Management Discussions and Analysis Report forming part of this Annual Report. The policy for determining material subsidiary companies
may be accessed on the Company''s website at https:// mf.nipponindiaim.com/InvestorServices/Pages/Investor-Policies.aspx
During the year under review, the following employees were the ''Key Managerial Personnel'' of the Company:
a) Mr. Sundeep Sikka - Executive Director & Chief Executive Officer;
b) Mr. Ajay Patel - Manager;
c) Mr. Prateek Jain - Chief Financial Officer; and
d) Ms. Nilufer Shekhawat - Company Secretary.
During the year, Mr. Sundeep Sikka has been reappointed as the Executive Director & CEO of the Company for a term of 5 years commencing from April 22, 2021.
During the year, Mr. Yutaka Ideguchi [Nominee Director of NLI] resigned from the directorship of the Company w.e.f. March 30, 2022. Mr. Kazuyuki Saigo [Nominee Director of NLI] who was a Director of the Company as on March 31, 2022, resigned as such effective April 21, 2022. Mr. Tomohiro Yao and Mr. Minoru Kimura [Nominee Directors of NLI] were appointed as Additional Directors of the Company w.e.f. April 21, 2022.
All the Independent Directors of your Company i.e. General Ved Prakash Malik (Retd.), Ms. Ameeta Chatterjee, Mr. Ashvin Parekh and Mr. B. Sriram, have already furnished the required declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act.
In the opinion of the Board, the Independent Directors possess the requisite expertise and experience and are persons of high integrity and repute. They fulfil the conditions specified in the Act and the Rules made thereunder and are independent of the management.
In terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by The Indian Institute of Corporate Affairs, Manesar (''IICA''). The Independent Directors are also required to undertake online proficiency self-assessment test conducted by the IICA within a period of Two years from the date of inclusion of their names in the data bank, unless they meet the criteria specified for exemption. All the Independent Directors of the Company are exempt from the requirement to undertake online proficiency self assessment test.
PERFORMANCE EVALUATION OF DIRECTORS, BOARD AND COMMITTEES
The Company has devised a policy for the performance evaluation of the individual directors, Board and its Committees, which also includes the criteria for carrying out the said performance evaluation. Pursuant to the provisions of the Act and Regulation 17(10) of Listing Regulations and as prescribed in the stated policy of the Board, the Board has carried out an annual performance evaluation of (i) the Directors (Independent and non-independent);(ii) itself (as a whole);(iii) its committees and (iv) fulfillment of Independence criteria. The Board performance was evaluated based on inputs received from the Board members after considering criteria such as Board composition and structure, effectiveness of Board / Committee processes, and information provided to the Board, etc. In terms of the requirements of the Act, a separate meeting of the Independent Directors was also held during the year.
During the year under review, nine (9) Board meetings were held.
Your Directors wish to inform that the functioning of the Board is supplemented by various committees (Board sub-committees and management committees), which have been constituted from time to time, such as Audit Committee, Committee of Directors, CSR Committee, Stakeholders Relationship Committee, Nomination & Remuneration Committee, Risk Management Committee of the Board, IT Strategy Committee, Valuation Committee, Investment Committee, Risk Management Committee, Allotment Committee, Broker Empanelment Committee, Operating Committee, Compliance Committee, Stewardship Committee, Proxy Voting Committee, Information Security Risk Management Committee, etc. to name a few. Each of the aforesaid Committees has been constituted in order to ensure due compliance with the applicable laws and to ensure that highest levels of corporate governance are followed and practiced. The minutes of the meetings of each of these Committees are duly placed before the Board for noting and confirmation.
In terms of the requirements of Section 177 of the Act, and Regulation 18 of the Listing Regulations, the Audit Committee of the Company consists of majority of Independent Directors. As on date of this report, it comprises Mr. Ashvin Parekh [Independent Director], Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. B. Sriram [Independent Director], Mr. Akira Shibata [Non- Independent Director] and Mr. Minoru Kimura [Non- Independent Director]. Mr. Ashvin Parekh acts as the Chairperson of this Committee.
During the year, seven (7) meetings of the Audit Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
NOMINATION & REMUNERATION COMMITTEE
In terms of the requirements of Section 178 of the Act, and Regulation 19 of the Listing Regulations, the Nomination & Remuneration Committee of the Company consists of majority of Independent Directors. As on date of this report, it comprises, Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Tomohiro Yao [NonIndependent Director] and Mr. Minoru Kimura [NonIndependent Director]. General Ved Prakash Malik (Retd.) acts as the Chairperson of this Committee.
During the year, four (4) meetings of the Nomination & Remuneration Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
The Nomination & Remuneration Policy has been provided as Annexure B to the Board''s Report.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
In terms of the requirements of Section 135 of the Act, the Corporate Social Responsibility ("CSR") Committee of the Company consists of Eight members. As on date of this report, it comprises Mr. Tomohiro Yao [Non-Independent Director], Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Sundeep Sikka [CEO & Executive Director], Mr. Akira Shibata [Non-Independent Director] and Mr. Minoru Kimura [Non-Independent Director]. Mr. Tomohiro Yao acts as the Chairman of this Committee.
During the year 2021-22, two (2) meetings of the CSR Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
STAKEHOLDERS'' RELATIONSHIP COMMITTEE
In terms of the requirements of Section 178 of the Act, and Regulation 20 of the Listing Regulations, the Stakeholders'' Relationship Committee of the Company consists of five members. As on date of this report, it comprises Ms. Ameeta Chatterjee [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Tomohiro Yao [Non-Independent Director] and Mr. Sundeep Sikka [CEO & Executive Director]. Ms. Ameeta Chatterjee acts as the Chairperson of this Committee.
During the year, two (2) meetings of the Stakeholders'' Relationship Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
In terms of the relevant requirements under the Listing Regulations, the Company has constituted a Risk Management Committee of the Board. The Committee presently comprises of Mr. Tomohiro Yao [Non-Independent Director] as the Chairperson, Mr. Akira Shibata [Non-Independent Director], Mr. Sundeep Sikka [CEO & Executive Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director] and Mr. Rishi Garg [Chief Risk Officer] as its members.
During the year, two (2) meeting of the Risk Management Committee of the Board were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
AUDITORS'' OF THE COMPANY - STATUTORY AND INTERNAL
Statutory Auditors:
M/s. S. R. Batliboi & Co. LLP, Chartered Accountants shall hold office as Statutory Auditors of the Company until the conclusion of the 28th Annual General Meeting.
JHS & Associates LLP, Chartered Accountants were appointed as the Internal Auditors'' of your Company for the financial year 2021-22. Your Directors have also approved their re-appointment as such for the financial year 2022-23.
AUDITORS OF THE SCHEMES OF NIPPON INDIA MUTUAL FUND- STATUTORY AND INTERNAL
In accordance with the applicable provisions of law, the Company has appointed Statutory and Internal Auditors for various Schemes of Nippon India Mutual Fund, who periodically submit their reports, which are placed before the Audit Committee for discussion, review and implementation of their recommendations.
M/s. Walker Chandiok & Co. LLP, Chartered Accountants were appointed as Statutory Auditors of the Schemes of Nippon India Mutual Fund for the financial year 2021-22.
During the year, M/s. Deloitte Haskins & Sells LLP, Chartered Accountants were appointed as Internal Auditors of the Scheme of Nippon India Mutual Fund and the portfolio management services division of the Company, for the financial year 2021-22. Your Directors have also approved their re-appointment as such for the financial year 2022-23.
AUDITORS'' REPORT
The observations and comments given by the Statutory Auditors in their report read together with notes on financial statements are self-explanatory and hence does not require any further comments in terms of Section 134 of the Act.
SECRETARIAL STANDARDS
During the year under review, the Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Directors had appointed M/s. M. Siroya and Company, Mumbai, a firm of Company Secretaries in-practice to undertake the Secretarial Audit of the Company for the financial year 2021-22. In this regard, the Report submitted by the Secretarial Auditor is annexed as Annexure C.
Your Directors are pleased to inform that the report from the Secretarial Auditors does not contain any qualifications or negative remarks.
ANNUAL RETURN
Pursuant to Section 134(3)(a) and Section 92(3) of the Act read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company has been placed on the website of the Company and can be accessed at https:// mf.nipponindiaim.com/investor-service/customer-service/nam-india-shareholders-investors
PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
CONSERVATION OF ENERGY:
The operations of the Company do not consume high levels of energy. Adequate measures have been taken to conserve energy wherever feasible. Your Company uses latest technology and energy efficient equipment''s. Your Company only uses LED lights and 5 star air-conditioning for majority of offices. As energy cost forms a very small part of the total costs, the impact on cost is not material.
TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION:
> Game changing initiatives:
⢠The All-new Investor App: This year marked the launch of our New Investor App (Android), a key Digital transformation endeavor that is aimed to strengthen our already robust Digital ecosystem. It is a new-age asset that is styled for millennials & zillennials and simplified for the legacy investor
base. We believe that the savvy consumers of today invest first in digital experiences and in mutual funds afterwards, and that''s exactly how we''ve built the new app - with next level, simplified and intuitive interface coupled with new age features and capabilities - to provide best in class, enhanced digital experience for our investors. With the best of e-commerce practices at its heart - contemporary design, quick product discovery, aided decision making, and personalized experiences based on intelligent analytics - this app is all that our investors will ever need to manage their investments with NIMF.
While contemporary design and new features and
enhancements are a part of the re-build, some of the
key highlights of the rebuild are:
¦ Completely self-serve and frictionless on boarding process
¦ ''Investor journey'' centric flows (and not inward out, classic Product & Service bouquet approach)
¦ Discoverability: Products & Services are available in line with user expectations
¦ Enhanced purchase experience: Cart Buying and Drop-off win-back;express checkout for repeat transactions
¦ Scalable framework: Leveraging Digital stack (Targeting, Campaigns, Analytics, etc.) for a more enriching and powerful experience
⢠New Fund Offers - Digital Launches: The Nippon India Flexi Cap Fund was one of the biggest success stories for Digital enabling lucid access for investors & partners across all our Digital assets. Apart from that we Digitally enabled other prominent products for FY21-22 including Nippon India Taiwan Equity Fund and Nippon India Silver ETF F-o-F. Apart from that, on the ETF front, we also enabled Nippon India Nifty Pharma ETF, Nippon India Nifty Auto ETF & Nippon India Silver ETF. We also had a very innovative Index offering made live viz. Nippon India Nifty AAA CPSE Bond Plus SDL - Apr 2027 Maturity 60:40 Index Fund
⢠Growth Enablers for Business Easy with 2.0 App: Business Easy 2.0 app, our Digital asset with our distributors, is an all-encompassing solution that acts as a complete Customer Relationship Management tool. The app works as a Digital branch through which distributors can manage their Mutual Fund business virtually. With the objective of evolving the app from a business facilitator to a growth enabler, this year saw the addition of new enhancements and features to the app. A quick overview of such features is as follows:
¦ Comprehensive Dashboard with Performance review distributor''s AUM, SIP Book value, Business health trends, in-depth customer base understanding
¦ SIP Corner for focused SIP sustenance, retention, and win-back
¦ Advanced Funds & Performance module with a more in-depth view of all products and granular understanding of fund facts & stats
⢠WhatsApp Scale-up: Having launched the pilot version of our WhatsApp advent which comprised of Liquid Fund purchase, e-KYC check & Digital asset access, we scaled up our WhatsApp capability with comprehensive transaction & service capabilities - purchase in all funds, all transaction types and multiple service modules. This implementation dovetails into our philosophy of building our Digital presence in line with the preference of our investors. This service paves the way for increased market penetration of NIMF products and unlocks opportunities by enabling reach out to a vast 500mn WhatsApp user base in India
⢠Intelligent interventions for business retention and growth: We have built system driven, smart and automated measures across various investor journeys with the objective of creating positive business impact. These interventions either nudge users to take prudent & effective decisions in a real-time manner to stay invested or help them with alternate options while if they encounter any outages or errors. Such measures delivered consistent growth in AUM retention and augmentation and saw an uplift of 60% in such positive impact when compared with last FY.
⢠Dynamic Real time mailers: In a real time world, it is important that consumers are given real time information that might help them to take conscious and informed investment decisions. NIMF pioneered deep tech enabled mailers. The same fetched real time data (viz Sensex movement, NAVs, returns etc.) from the server whenever opened. This gave a clear visibility to the investor on what were the relevant avenues for either fresh investment or additional investment. This was widely cherished by new and existing investors and yielded high usage
⢠Leveraging Beta products from Google: NIMF has been a pioneer at Conversational Commerce, and this was done in partnership using the Voice assistant capabilities from Google. On the base of this strong partnership NIMF in FY 21-22 was at the helm of leveraging Beta Products from Google like the newly launched Performance Max. A successful implementation and more than desired results got
NIMF mentioned in Google India Case study for the best use of Performance Max beta to drive incremental business using Artificial Intelligence & Machine learning.
⢠Strengthening our Digital Distribution through Strategic Alliances and Enhanced Support to
Partners: We added some key partners and more importantly products into their positioning suites, like Genius from ET Money. We also were one of the firsts to launch SIPs on PhonePe platform. Other key players like Paytm, Groww, Kuvera, IND Money Tarrakki, etc., continue to bolster our executional leadership and expansive reach. Our immense expertise in the core business of Asset Management and prowess in Digital Business gives us an unparalleled advantage to engage with our Partners at an even deeper level and help them set up and scale up their businesses. Our knowledge and know-how, shared with the Partners and their customers by our Fund Managers and Investment Experts on such Partners'' platforms coupled with integrated marketing campaigns have educated the investors and helped them make the right decisions. Our robust engagement strategy coupled with focused execution has not only helped us build great equity with Partners but also helped win the trust of investors which has resulted in growth of business volumes on such platforms, thereby benefitting both us and the Partners. We have a definitive lead in the Digital Partnerships space and have managed to forge a clear position for NIMF as being the partner of choice for such players.
⢠Setting up of New NAM India Technology Applications
A challenge posted due to the migration to our new Nippon environment was how to securely perform a complete data transfer of our SAP data. Thanks to careful planning, execution and a lot of communication with involved stakeholders we were able to successfully set up NAM India''s own SAP environment after mitigating several risks. This was performed with minimum downtime and no effect on NAM India''s books of accounts.
During the pandemic we have rolled out solutions and infrastructure enhancements that has allowed NAM India to continue working in an offline situation without exception. Initiatives such as secure VPN for data access, communication software, online approval workflow on block chain are a few initiatives that have been implemented.
⢠Managing regulatory requirements
There were several new regulations brought in by the regulatory body resulting in multiple
new enhancements that had to be performed under strict deadlines. Some key projects such as database encryption, recording of conversations on Teams calls and mobile phones, two factor authentication were executed and the regulations complied with.
⢠Optimizations in Investment and Digital Portfolio
During the year there were several enhancements performed in the investment portfolio to comply with regulation change and to bring in operating efficiency. On the digital portfolio side new functionality in the form of New Investor App, enhancement in workflows and new fund offers were launched with a great degree of success. Certain processes on the digital side that were affecting user experience were examined and enhanced to perform faster leading to an increase in the customer experience index of the digital offerings.
NAM India IT is working in a continuous improvement cycle to improve our various technology and process towards enhancing our contribution to the company, stakeholders and our customers. We have shown significant improvement in our issue resolution process and our results indicate a steady increase in our customer issue resolution index over the financial year. We also have maintained high up and response times on all our critical investment and digital platforms. This has resulted in consistent and predictive working of our offerings to our end customers.
Another initiative to build automation to further optimize processes is underway and several processes across operations, risk and investment functions are expected to be automated in the new financial year. This will lead to efficiency gains across functions. Technology will continue to identify processes that can be automated and continues to partner with functions on the same.
⢠Digital Business touched a record 2.9 million purchase transactions FY 2021-22, which is essentially 1 purchase every 6 seconds! This increase is a ~60 % YOY growth.
⢠Contribution of Digital Business to overall NIMF business stands at 58%, which is a growth of ~12% over last FY where Digital contribution was at 52%.
⢠Digital Business share in Lumpsum purchase and new SIP registrations stood at 60% and 48% respectively vis-a-vis total purchase transactions of NIMF.
⢠Long term assets focus resulted in 90% non-Liquid acquisitions compared to 75% in FY2020-2021.
⢠45% of our digital consumers are less than 35 years of age
NIMF Digital has been setting a benchmark across the BFSI industry in its Fintech endeavors across the Digital Ecosystem. It is now recognized as a Digital benchmark across industries. Both Global and Indian forums have further recognized NIMF''s expertise and supremacy in the Digital arena. As in the previous years, we have yet again been conferred with some coveted awards this year as well which further strengthens our position as a Digital leader in the BFSI space
⢠Global Digital Marketing Awards for ''Best use of Facebook AI tool in performance campaigns'' (April 2021)
⢠ACEF Global Customer Engagement Awards 2021 for ''Digital Marketing, Data driven Marketing, Email Marketing and Mobile Marketing'' - 5 awards (4 Golds and 1 Silver) (May 2021)
⢠Mint | TechCircle - Business Transformation Award 2021 for ''Revenue Generation - Product & Service Augmentation'' - Business Easy (June 2021)
⢠Indian Digital Marketing Awards for ''Best App Developed for Products / Services'' - Business Easy (July 2021)
⢠Indian Digital Marketing Awards for ''Best Use of sites for Mobiles'' - NIMF Purchase Mobile Site (M-site) (July 2021)
⢠Digital Crest Awards 2021 for ''Expertise in Online Commerce, Omni Channel Strategy and Mobile Marketing'' - 3 awards (1 Gold, 1 Silver and 1 Bronze) (August 2021)
⢠The Great Indian Marketing Awards for ''Best performing campaign for Google''s Performance-max'' (August 2021)
⢠Maddies Marketing Award 2021 for the ''Most Effective Voice Assistant App'' (in the Enabling Technologies category) - Simply Save Conversational Commerce (November 2021)
⢠Dynamic CIO Award for ''Smart Innovator'' (in the Technology Innovation category) - Simply Save Conversational Commerce (November 2021)
RESEARCH AND DEVELOPMENT:DIGITAL ADOPTION AND INNOVATION:
We, at Nippon India Mutual Fund, continue to envision and execute key Digital transformation endeavors year on year that are aimed to strengthen our already robust Digital ecosystem.
⢠Our focus always remains on empowering our investors during moments of truth and on a ''here & now'' manner to take quicker, smarter, and well-informed decisions on how and where they should invest their money when they transact on our Digital assets. Such empowerment is fueled by our capabilities to crunch & run real-time analysis on the enormous amount of on-asset & offline data points we have regarding our consumers, their past purchases, and future propensities.
⢠Our intelligent, data led digital assets, can learn, and predict user behavior powered by both the real time frameworks and archived analytical frameworks which are operating on an advanced algo network. This helps in e-serving highly personalized and customized experiences to give our millennial, zillennial and legacy investors or partners accurate recommendations, suggestions, on-the-fly nudges, predictive service and much more as they advance in their journeys.
NAM India Technology is continuously engaging in research and development to pick and choose the best of technology solutions to our stakeholders
- NAM India Technology continues to explore opportunities with Fintech and Technology vendors to identify the next best solution that can be a game changes in the industry
- The technology team also follows and explores software, hardware, security and network enhancements in the technology world and attempts to identify key components that can change the way we do work in the organization and industry.
FOREIGN EXCHANGE EARNINGS AND OUTGO:
During the year under review, the Company earned foreign exchange equivalent to Rs. 22.85 Cr (Previous Year: Rs. 21.79 Cr). The Company spent foreign exchange equivalent to Rs. 6.98 Cr (Previous Year: Rs. 6.49 Cr).
DIRECTORS'' RESPONSIBILITY STATEMENT
As per the requirements of Sub Section (5) of Section 134 of the Act, the Directors confirm that -
(i) In the preparation of the annual accounts for the financial year ended March 31,2022, the applicable accounting standards have been followed and that there are no material departures;
(ii) The Directors have selected such accounting policies in consultation with the Statutory Auditors'' and have applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of
the state of affairs of the Company as at March 31, 2022 and of the profit of the Company for the year under review;
(iii) The Directors have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) The Directors have prepared the annual accounts of the Company on a ''going concern'' basis;
(v) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;
(vi) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
CONTRACT AND ARRANGEMENTS WITH RELATED PARTIES
All contracts/ arrangements/ transactions entered into/ by the Company during the financial year under review with related parties were on arm''s length basis and in the ordinary course of business. There were no materially significant related party transactions which could have potential conflict with interest of the Company at large. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.
All Related Party Transactions were placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee was obtained for the transactions which were of a repetitive nature. The transactions entered into pursuant to the omnibus approval so granted were reviewed and statements giving details of all related party transactions were placed before the Audit Committee and the Board of Directors for their review on a quarterly basis. The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website at the following link:
https://mf.nipponindiaim.com/InvestorServices/
Your Directors draw attention of the members to Note No. 29 to the financial statement which sets out related party disclosures.
PARTICULARS OF FRAUDS REPORTED BY THE AUDITORS''
In terms of Section 143(12) of the Act, M/s. S R Batliboi & Co. LLP, Chartered Accountants, the Statutory Auditors of the Company have not reported any instance of fraud having taken place during the year under review, in their Audit Report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators/ Courts which would impact the going concern status of the Company and its future operations.
DETAILS OF APPLICATION MADE BY THE COMPANY OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONGWITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR The Company invests in various debt market instruments (non-convertible debentures) issued by various issuers. In order to realize the debenture outstanding''s, the Company has filed certain applications under the Insolvency and Bankruptcy Code, 2016. The Mutual Fund Division of the Company has filed (a) an IBC proceeding against Avantha Holdings Limited in January 2020 before Hon''ble NCLT New Delhi which is currently at pre-admission hearings stage. The Company is also a respondent party to an IBC proceeding filed in the matter of Reserve Bank of India v. Dewan Housing Finance Corporation Limited pending before the Hon''ble NCLT, Mumbai.
The Portfolio Management Services Division of the Company has filed: (a) IBC proceedings against Fortuna Buildcon India Private Limited which was filed in November 2017 before the Hon''ble NCLT, Bangalore, wherein currently the resolution plan has been submitted to the Hon''ble NCLT for approval (b) three IBC proceedings against three Biodiversity Conservation India Private Limited group companies (BCIL Zed Ria Properties Private Limited, BCIL Red Earth Developers India Pvt Ltd and Biodiversity Conservation India Private Limited) were filed in December 2017 before the Hon''ble NCLT, Bangalore. The NCLT has approved resolution plans in BCIL Zed Ria Properties Private Limited and in BCIL Red Earth Developers India Pvt Ltd, which are currently under implementation while Biodiversity Conservation India Private Limited is currently under liquidation. The Company is also a respondent to 2 (two) appeals in BCIL Red Earth Developers India Private Limited and in 3 (three) appeals in BCIL Zed Ria Properties Private Limited, before Hon''ble NCLAT, Delhi, which have been filed challenging the approved resolution plans; (c) IBC proceedings have been filed against the promoters of Biodiversity Conservation India Private
Limited in November 2020 before Hon''ble NCLT, Bangalore which are currently at a pre-admission stage; (d) IBC proceeding filed against Green Valley Shelters Private Limited in December 2019, before Hon''ble NCLT, Chennai, was admitted in August 2021, however the proceedings are currently temporarily stayed under an order of the Supreme Court. The Company is a respondent in a civil appeal filed by the promoters of Green Valley Shelters Private Limited before the Hon''ble Supreme Court, challenging the admission of IBC proceedings against Green Valley Shelters Private Limited, which is currently pending under directions of exploring a settlement; (e) an IBC proceeding filed against the promoters of Green Valley Shelters Private Limited in October 2020 before the Hon''ble NCLT, Chennai was admitted in January 2022 and is pending final orders appointing the resolution professional; (f) an IBC proceeding was filed against Arkie Atelier Design India Private Limited, being the corporate guarantor for the debentures issued by Green Valley Shelters Private Limited in November 2021 and is currently at a pre-admission stage; (g) an IBC proceeding filed against Bharucha & Motivala Infrastructure Private Limited, being corporate guarantor for the debentures issued by Lake District Realty Private Limited, in November 2019 before Hon''ble NCLT, Mumbai was admitted in May 2021, but has been stayed pursuant to an order of the Hon''ble NCLAT in July 2021. The Company is a respondent in the appeal filed by the promoters of Lake District Realty Private Limited before the Hon''ble NCLAT, Delhi, challenging the admission of IBC proceedings against Bharucha & Motivala Infrastructure Private Limited, which is currently at its final arguments stage; (h) IBC proceedings have been filed against the promoters of Lake District Realty Private Limited in November 2021, which is currently at a pre-admission stage; (i) an IBC proceedings has been filed against Ashapura Options Private Limited, being the corporate guarantor for the debentures issued by Ashapura Housing Private Limited in February 2022 which is at a pre-admission stage. (j) IBC proceedings have also been filed against four (4) promoter guarantors of Ashapura Housing Private Limited, which are at a pre-admission stage.
The Company is not required to maintain cost records as specified by the Central Government under subsection (1) of section 148 of the Companies Act, 2013.
During the year, the Company has made a downstream investment in AMC Repo Clearing Limited to the extent of Rs. 9,25,87,830. The certificate from the Statutory Auditor confirming the compliance of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017 with respect to the Company''s downstream investment
has been received and will be available for inspection. Any member interested in obtaining the same may write to the Company Secretary and the same will be furnished on request.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
In terms of the provisions of Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules are provided in the Annexure to the Board''s Report. Disclosures relating to the remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended also forms part of this Report. However, having regard to the provisions of Section 136 of the Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining the said information may write to the Company Secretary. Upon such request the information shall be furnished.
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
Your Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. Following is a summary of sexual harassment complaints received and disposed off during the year:
⢠No. of complaints received: 0
⢠No. of complaints disposed off: 0
BUSINESS RESPONSIBILITY REPORT
Business Responsibility Report for the year under review as stipulated under Listing Regulations is presented in the separate section forming part of this Annual Report.
Your Directors wish to place on record their sincere appreciation for the co-operation received from various regulatory and governmental authorities including SEBI, RBI, Registrar of Companies, Maharashtra at Mumbai, PFRDA, NPS Trust, EPFO, CMPFO, Stock Exchanges, Depositories, Custodians, Bankers, Registrar, Shareholders, Investors and all other business constituents during the year under review. We believe all of them have contributed to our continued growth.
Your Directors also wish to place on record their deep appreciation for the total commitment displayed by all the executives, officers and staff, resulting in yet another eventful performance for the year.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS OF NIPPON LIFE INDIA ASSET MANAGEMENT LIMITED
Ashvin Dhirajlal Parekh Sundeep Sikka
Director Executive Director & CEO (DIN:06559989) (DIN: 02553654)
Place : Mumbai Dated : April 26, 2022
Mar 31, 2022
Your Directors take pleasure in presenting their 27th Annual Report on the business and operations of your Company, together with the audited financial statements, for the year ended March 31, 2022.
Your Company endeavors to remain one of the leading players in the Asset Management business in India and keep enhancing its global footprint as well.
Your Company is a subsidiary Company of Nippon Life Insurance Company ("NLI"). NLI, a fortune 500 Company and which is one of the largest life insurers in the world managing assets of over USD 700 bn. NLI has a large global network with presence across US, Europe, Asia, and Australia along with a 130-year track record in Life Insurance business as well as global investments across Asset Management companies. This pedigree brings strong synergistic benefits that very well complements your Company''s domestic expertise in Asset Management business and provides a thrust to its significant growth potential. Your Company expects substantial upside in terms of increased AUM & adoption of best governance & risk management practices based on NLI''s global positioning & relationships.
Your Company acts as the Asset Management Company of Nippon India Mutual Fund and it happens to be the largest foreign owned Asset Management Company in India.
FINANCIAL PERFORMANCE AND STATE OF COMPANY''S AFFAIRS
The standalone and consolidated financial statements of the Company for the financial year ended March 31, 2022, have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act. The financial highlights (on a consolidated and standalone basis) of the Company for the year ended March 31, 2022 are as follows:
('' Crores) |
||||
Description |
Consolidated |
Standalone |
||
Year ended |
Year ended |
Year ended |
Year ended |
|
March 31, 2022 |
March 31, 2021 |
March 31, 2022 |
March 31, 2021 |
|
Gross Income |
1535.63 |
1419.34 |
1428.42 |
1325.66 |
Profit before exceptional item and tax |
988.67 |
877.03 |
945.43 |
842.92 |
Exceptional Items |
- |
- |
- |
- |
Profit Before tax |
988.67 |
877.03 |
945.43 |
842.92 |
Current Tax |
206.66 |
157.41 |
200.38 |
151.51 |
Deferred Tax |
38.64 |
40.22 |
33.84 |
42.02 |
Profit for the year |
743.37 |
679.39 |
711.21 |
649.39 |
Share of Profit from Associates |
0.79 |
0.94 |
- |
- |
Profit attributable to non-controlling interest |
- |
- |
- |
- |
Other Comprehensive Income |
(0.30) |
0.72 |
(0.27) |
0.72 |
Balance carried to Balance Sheet |
743.86 |
681.05 |
710.94 |
650.11 |
Basic EPS of '' 10 each |
12.00 |
11.04 |
11.47 |
10.53 |
Diluted EPS of '' 10 each |
11.80 |
10.90 |
11.28 |
10.41 |
The Consolidated Financial Statements of the Company are forming part of this Annual Report. The annual accounts of all the subsidiary companies will be placed on the website of the Company.
DETAILS OF MATERIAL CHANGES ANDCOMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments affecting the financial position of the Company since the date of the financial statements i.e. March 31,2022.
During the year, the Company had declared and paid an interim dividend of Rs. 3.50 per equity share (35%) amounting to Rs. 217.41 Crore. The Board has also recommended a final dividend of Rs. 7.50 per Equity Share (75%) of Rs. 10/- each for the financial year ended March 31, 2022, for the approval of the Shareholders at the ensuing Annual General meeting. With this the total dividend for the financial year 2021-22 would be approximately Rs. 683.92 crores, including the interim dividend of Rs. 3.50 per equity share distributed in November 2021. The Final dividend, if declared, will be paid after the Annual General Meeting.
The dividend payout is in accordance with the Company''s Dividend Distribution Policy which forms part of this Annual Report.
AMOUNT TO BE CARRIED TO RESERVES
Your Directors do not propose any amount to be transferred to the General Reserves of the Company.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report for the year under review as stipulated under SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (Listing Regulations) is presented in a separate section forming part of this Annual Report.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENT
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act are given in the notes to the Financial Statements.
There is no difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions.
The Company has neither accepted nor renewed any fixed deposits during the year. There are no outstanding or unclaimed deposits, unclaimed / unpaid interest, refunds due to the deposit holders or to be deposited to the Investor Education and Protection Fund as on March 31, 2022.
With the perspective of promoting the culture of employee ownership and to attract, retain, motivate and incentivize senior as well as critical talent, the Company has formulated Nippon Life India Asset
Management Limited - Employee Stock Option Plan 2017 [formerly known as "Reliance Nippon Life Asset Management Limited - Employee Stock Option Plan 2017"] ("ESOP 2017" / "Plan") as its stock option scheme, which was launched in August 2017 and Nippon Life India Asset Management Limited - Employee Stock Option Plan 2019 [formerly known as "Reliance Nippon Life Asset Management Limited - Employee Stock Option Plan 2019"] ("ESOP 2019" / "Plan") as its stock option scheme, which was launched in July 2019. The Nomination and Remuneration Committee of the Board monitors and administers these Plans and from time to time grants stock options to the employees.
Both ESOP 2017 as well as ESOP 2019 are in compliance with The SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 [erstwhile The SEBI (Share Based Employee Benefits) Regulations, 2014] (SEBI Regulations).
However, having regard to the provisions of first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. The certificate from the Practicing Company Secretary confirming the compliance of The SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 [erstwhile The SEBI (Share Based Employee Benefits) Regulations, 2014] with respect to the Company''s Employees Stock Option Scheme Plans has been received and will be available for inspection through electronic mode. Any member interested in obtaining the same may write to the Company Secretary and the same will be furnished on request. The details as required to be disclosed under SEBI Regulations are put on the Company''s website at httos://mF.niooonindiaim. com/investor-service/customer-service/nam-india-shareholders-investors
COMPLIANCE CULTURE & RISK MANAGEMENT
Your Company is essentially Compliance centric and has a huge focus in this direction. The Compliance function is manned by a dedicated and experienced team of professionals. The Compliance team regularly conducts various educative training programs for various segments within the organization. Your Company thrives towards a culture of ''Total Compliance'' and it has a ''Zero Tolerance'' policy for non-compliances. There exists a comprehensive Compliance Manual, which is reviewed by your Board of Directors from time to time and it facilitates Company''s Compliance team to monitor various compliance requirements effectively & comprehensively. Your Board of Directors have also constituted a Compliance Committee, which is chaired by the CEO & Executive Director of the Company, and which has the Compliance Officer and other senior & relevant functionaries as its members. This committee meets at least once in a quarter to discuss and deliberate issues pertaining to compliance and other regulatory developments.
Your Company also has a comprehensive Risk Management Policy that envisages a structured and consistent enterprise-wide risk management framework, based on the three lines of defense model, to ensure that risk management processes are consistently applied across the organization and provide reasonable assurance regarding achievement of organization''s objectives.
The risk management policy clearly sets out the objectives & elements of risk management within the organization, including the constitution of an independent Risk Management department headed by Chief Risk Officer (reporting directly to the CEO and to the Board of Directors), Risk Management Committee (RMC).
Your Company promotes risk awareness culture throughout the organization and risk management is an integral part of decision making and day-today operations of all activities at all levels across the organization. There are well documented & Board approved policies & processes to address and mitigate various risks to which the company is exposed. The company also has a robust business continuity plan which is tested on a periodic basis to ensure business is not interrupted.
The company has a structured risk reporting mechanism to ensure risks are monitored and reviewed by CRO, Senior Management, RMCBs and Board on a periodic basis.
INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY
The Company has an Internal Control System which is commensurate with the size, scale and complexity of its business operations.
Foreffectiveriskmanagementandcontrol,theCompany has established structures and responsibilities in line with the "Three Lines of Defense" model, where 1st line being business operations, 2nd line is the oversight functions like Risk Management and Compliance and 3rd line is Internal Audit. To maintain its objectivity and independence, the Internal Audit department reports to the Audit Committee. The Internal Audit department monitors and evaluates the efficacy and adequacy of the internal control system in the Company, its compliance with operating systems, accounting procedures and policies. Based on the report of the Internal Auditor, process owners undertake corrective action in their respective areas and thereby strengthen the controls. The Internal Audit department follows up on pending audit issues and ensures that corrective actions have been taken. Significant audit observations, if any, and corrective actions thereon, are presented to the Audit Committee of the Board.
Your Directors wish to reiterate your Company''s commitment to the highest standards of corporate governance in order to enhance trust of all its stakeholders. Strong & robust corporate governance practices have facilitated your Company in standing up to the continued scrutiny of domestic & international investors and that of various Regulatory authorities.
The report on Corporate Governance as stipulated under Regulation 34(3) read with Para C of Schedule V of the Listing Regulations is presented in separate section forming part of this Annual Report.
A Certificate from the auditors of the Company i.e. M/s. S. R. Batliboi & Co. LLP, Chartered Accountants conforming compliance to the conditions of Corporate Governance as stipulated under Para E of Schedule V of the Listing Regulations, is enclosed to this Report.
In accordance with Section 177 of the Act and the Listing Regulations, the Company has formulated a Vigil Mechanism to address the genuine concerns, if any. The policy can be accessed on the Company''s website.
CORPORATE SOCIAL RESPONSIBILITY
As part of its initiatives under "Corporate Social Responsibility (CSR)", the Company has undertaken projects in the areas of promoting healthcare, education and rural development in accordance with Schedule VII of the Act.
The Annual Report on CSR activities is annexed herewith as Annexure A.
SUBSIDIARIES & ASSOCIATE COMPANY
As of March 31, 2022, your Company had three (3) subsidiaries. Two of such subsidiaries are overseas, being one each in Singapore and Mauritius and one subsidiary is in India. All the subsidiaries of the Company are engaged in financial services and related activities. In addition, the Company also has an Associate company in India, which has already surrendered its business license/ regulatory approval to act as a Pension Fund Manager. This particular company currently has no business operations and it is therefore proposed to wind it up, in accordance with the applicable laws.
A statement w.r.t. the performance and the financial position of the subsidiaries of the Company is forming a part of the Consolidated Financial Statements of the Company.
The performance of financial position of the subsidiary companies is presented in the Management Discussions and Analysis Report forming part of this Annual Report. The policy for determining material subsidiary companies
may be accessed on the Company''s website at https:// mf.nipponindiaim.com/InvestorServices/Pages/Investor-Policies.aspx
During the year under review, the following employees were the ''Key Managerial Personnel'' of the Company:
a) Mr. Sundeep Sikka - Executive Director & Chief Executive Officer;
b) Mr. Ajay Patel - Manager;
c) Mr. Prateek Jain - Chief Financial Officer; and
d) Ms. Nilufer Shekhawat - Company Secretary.
During the year, Mr. Sundeep Sikka has been reappointed as the Executive Director & CEO of the Company for a term of 5 years commencing from April 22, 2021.
During the year, Mr. Yutaka Ideguchi [Nominee Director of NLI] resigned from the directorship of the Company w.e.f. March 30, 2022. Mr. Kazuyuki Saigo [Nominee Director of NLI] who was a Director of the Company as on March 31, 2022, resigned as such effective April 21, 2022. Mr. Tomohiro Yao and Mr. Minoru Kimura [Nominee Directors of NLI] were appointed as Additional Directors of the Company w.e.f. April 21, 2022.
All the Independent Directors of your Company i.e. General Ved Prakash Malik (Retd.), Ms. Ameeta Chatterjee, Mr. Ashvin Parekh and Mr. B. Sriram, have already furnished the required declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act.
In the opinion of the Board, the Independent Directors possess the requisite expertise and experience and are persons of high integrity and repute. They fulfil the conditions specified in the Act and the Rules made thereunder and are independent of the management.
In terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by The Indian Institute of Corporate Affairs, Manesar (''IICA''). The Independent Directors are also required to undertake online proficiency self-assessment test conducted by the IICA within a period of Two years from the date of inclusion of their names in the data bank, unless they meet the criteria specified for exemption. All the Independent Directors of the Company are exempt from the requirement to undertake online proficiency self assessment test.
PERFORMANCE EVALUATION OF DIRECTORS, BOARD AND COMMITTEES
The Company has devised a policy for the performance evaluation of the individual directors, Board and its Committees, which also includes the criteria for carrying out the said performance evaluation. Pursuant to the provisions of the Act and Regulation 17(10) of Listing Regulations and as prescribed in the stated policy of the Board, the Board has carried out an annual performance evaluation of (i) the Directors (Independent and non-independent);(ii) itself (as a whole);(iii) its committees and (iv) fulfillment of Independence criteria. The Board performance was evaluated based on inputs received from the Board members after considering criteria such as Board composition and structure, effectiveness of Board / Committee processes, and information provided to the Board, etc. In terms of the requirements of the Act, a separate meeting of the Independent Directors was also held during the year.
During the year under review, nine (9) Board meetings were held.
Your Directors wish to inform that the functioning of the Board is supplemented by various committees (Board sub-committees and management committees), which have been constituted from time to time, such as Audit Committee, Committee of Directors, CSR Committee, Stakeholders Relationship Committee, Nomination & Remuneration Committee, Risk Management Committee of the Board, IT Strategy Committee, Valuation Committee, Investment Committee, Risk Management Committee, Allotment Committee, Broker Empanelment Committee, Operating Committee, Compliance Committee, Stewardship Committee, Proxy Voting Committee, Information Security Risk Management Committee, etc. to name a few. Each of the aforesaid Committees has been constituted in order to ensure due compliance with the applicable laws and to ensure that highest levels of corporate governance are followed and practiced. The minutes of the meetings of each of these Committees are duly placed before the Board for noting and confirmation.
In terms of the requirements of Section 177 of the Act, and Regulation 18 of the Listing Regulations, the Audit Committee of the Company consists of majority of Independent Directors. As on date of this report, it comprises Mr. Ashvin Parekh [Independent Director], Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. B. Sriram [Independent Director], Mr. Akira Shibata [Non- Independent Director] and Mr. Minoru Kimura [Non- Independent Director]. Mr. Ashvin Parekh acts as the Chairperson of this Committee.
During the year, seven (7) meetings of the Audit Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
NOMINATION & REMUNERATION COMMITTEE
In terms of the requirements of Section 178 of the Act, and Regulation 19 of the Listing Regulations, the Nomination & Remuneration Committee of the Company consists of majority of Independent Directors. As on date of this report, it comprises, Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Tomohiro Yao [NonIndependent Director] and Mr. Minoru Kimura [NonIndependent Director]. General Ved Prakash Malik (Retd.) acts as the Chairperson of this Committee.
During the year, four (4) meetings of the Nomination & Remuneration Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
The Nomination & Remuneration Policy has been provided as Annexure B to the Board''s Report.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
In terms of the requirements of Section 135 of the Act, the Corporate Social Responsibility ("CSR") Committee of the Company consists of Eight members. As on date of this report, it comprises Mr. Tomohiro Yao [Non-Independent Director], Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Sundeep Sikka [CEO & Executive Director], Mr. Akira Shibata [Non-Independent Director] and Mr. Minoru Kimura [Non-Independent Director]. Mr. Tomohiro Yao acts as the Chairman of this Committee.
During the year 2021-22, two (2) meetings of the CSR Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
STAKEHOLDERS'' RELATIONSHIP COMMITTEE
In terms of the requirements of Section 178 of the Act, and Regulation 20 of the Listing Regulations, the Stakeholders'' Relationship Committee of the Company consists of five members. As on date of this report, it comprises Ms. Ameeta Chatterjee [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Tomohiro Yao [Non-Independent Director] and Mr. Sundeep Sikka [CEO & Executive Director]. Ms. Ameeta Chatterjee acts as the Chairperson of this Committee.
During the year, two (2) meetings of the Stakeholders'' Relationship Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
In terms of the relevant requirements under the Listing Regulations, the Company has constituted a Risk Management Committee of the Board. The Committee presently comprises of Mr. Tomohiro Yao [Non-Independent Director] as the Chairperson, Mr. Akira Shibata [Non-Independent Director], Mr. Sundeep Sikka [CEO & Executive Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director] and Mr. Rishi Garg [Chief Risk Officer] as its members.
During the year, two (2) meeting of the Risk Management Committee of the Board were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
AUDITORS'' OF THE COMPANY - STATUTORY AND INTERNAL
Statutory Auditors:
M/s. S. R. Batliboi & Co. LLP, Chartered Accountants shall hold office as Statutory Auditors of the Company until the conclusion of the 28th Annual General Meeting.
JHS & Associates LLP, Chartered Accountants were appointed as the Internal Auditors'' of your Company for the financial year 2021-22. Your Directors have also approved their re-appointment as such for the financial year 2022-23.
AUDITORS OF THE SCHEMES OF NIPPON INDIA MUTUAL FUND- STATUTORY AND INTERNAL
In accordance with the applicable provisions of law, the Company has appointed Statutory and Internal Auditors for various Schemes of Nippon India Mutual Fund, who periodically submit their reports, which are placed before the Audit Committee for discussion, review and implementation of their recommendations.
M/s. Walker Chandiok & Co. LLP, Chartered Accountants were appointed as Statutory Auditors of the Schemes of Nippon India Mutual Fund for the financial year 2021-22.
During the year, M/s. Deloitte Haskins & Sells LLP, Chartered Accountants were appointed as Internal Auditors of the Scheme of Nippon India Mutual Fund and the portfolio management services division of the Company, for the financial year 2021-22. Your Directors have also approved their re-appointment as such for the financial year 2022-23.
AUDITORS'' REPORT
The observations and comments given by the Statutory Auditors in their report read together with notes on financial statements are self-explanatory and hence does not require any further comments in terms of Section 134 of the Act.
SECRETARIAL STANDARDS
During the year under review, the Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Directors had appointed M/s. M. Siroya and Company, Mumbai, a firm of Company Secretaries in-practice to undertake the Secretarial Audit of the Company for the financial year 2021-22. In this regard, the Report submitted by the Secretarial Auditor is annexed as Annexure C.
Your Directors are pleased to inform that the report from the Secretarial Auditors does not contain any qualifications or negative remarks.
ANNUAL RETURN
Pursuant to Section 134(3)(a) and Section 92(3) of the Act read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company has been placed on the website of the Company and can be accessed at https:// mf.nipponindiaim.com/investor-service/customer-service/nam-india-shareholders-investors
PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
CONSERVATION OF ENERGY:
The operations of the Company do not consume high levels of energy. Adequate measures have been taken to conserve energy wherever feasible. Your Company uses latest technology and energy efficient equipment''s. Your Company only uses LED lights and 5 star air-conditioning for majority of offices. As energy cost forms a very small part of the total costs, the impact on cost is not material.
TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION:
> Game changing initiatives:
⢠The All-new Investor App: This year marked the launch of our New Investor App (Android), a key Digital transformation endeavor that is aimed to strengthen our already robust Digital ecosystem. It is a new-age asset that is styled for millennials & zillennials and simplified for the legacy investor
base. We believe that the savvy consumers of today invest first in digital experiences and in mutual funds afterwards, and that''s exactly how we''ve built the new app - with next level, simplified and intuitive interface coupled with new age features and capabilities - to provide best in class, enhanced digital experience for our investors. With the best of e-commerce practices at its heart - contemporary design, quick product discovery, aided decision making, and personalized experiences based on intelligent analytics - this app is all that our investors will ever need to manage their investments with NIMF.
While contemporary design and new features and
enhancements are a part of the re-build, some of the
key highlights of the rebuild are:
¦ Completely self-serve and frictionless on boarding process
¦ ''Investor journey'' centric flows (and not inward out, classic Product & Service bouquet approach)
¦ Discoverability: Products & Services are available in line with user expectations
¦ Enhanced purchase experience: Cart Buying and Drop-off win-back;express checkout for repeat transactions
¦ Scalable framework: Leveraging Digital stack (Targeting, Campaigns, Analytics, etc.) for a more enriching and powerful experience
⢠New Fund Offers - Digital Launches: The Nippon India Flexi Cap Fund was one of the biggest success stories for Digital enabling lucid access for investors & partners across all our Digital assets. Apart from that we Digitally enabled other prominent products for FY21-22 including Nippon India Taiwan Equity Fund and Nippon India Silver ETF F-o-F. Apart from that, on the ETF front, we also enabled Nippon India Nifty Pharma ETF, Nippon India Nifty Auto ETF & Nippon India Silver ETF. We also had a very innovative Index offering made live viz. Nippon India Nifty AAA CPSE Bond Plus SDL - Apr 2027 Maturity 60:40 Index Fund
⢠Growth Enablers for Business Easy with 2.0 App: Business Easy 2.0 app, our Digital asset with our distributors, is an all-encompassing solution that acts as a complete Customer Relationship Management tool. The app works as a Digital branch through which distributors can manage their Mutual Fund business virtually. With the objective of evolving the app from a business facilitator to a growth enabler, this year saw the addition of new enhancements and features to the app. A quick overview of such features is as follows:
¦ Comprehensive Dashboard with Performance review distributor''s AUM, SIP Book value, Business health trends, in-depth customer base understanding
¦ SIP Corner for focused SIP sustenance, retention, and win-back
¦ Advanced Funds & Performance module with a more in-depth view of all products and granular understanding of fund facts & stats
⢠WhatsApp Scale-up: Having launched the pilot version of our WhatsApp advent which comprised of Liquid Fund purchase, e-KYC check & Digital asset access, we scaled up our WhatsApp capability with comprehensive transaction & service capabilities - purchase in all funds, all transaction types and multiple service modules. This implementation dovetails into our philosophy of building our Digital presence in line with the preference of our investors. This service paves the way for increased market penetration of NIMF products and unlocks opportunities by enabling reach out to a vast 500mn WhatsApp user base in India
⢠Intelligent interventions for business retention and growth: We have built system driven, smart and automated measures across various investor journeys with the objective of creating positive business impact. These interventions either nudge users to take prudent & effective decisions in a real-time manner to stay invested or help them with alternate options while if they encounter any outages or errors. Such measures delivered consistent growth in AUM retention and augmentation and saw an uplift of 60% in such positive impact when compared with last FY.
⢠Dynamic Real time mailers: In a real time world, it is important that consumers are given real time information that might help them to take conscious and informed investment decisions. NIMF pioneered deep tech enabled mailers. The same fetched real time data (viz Sensex movement, NAVs, returns etc.) from the server whenever opened. This gave a clear visibility to the investor on what were the relevant avenues for either fresh investment or additional investment. This was widely cherished by new and existing investors and yielded high usage
⢠Leveraging Beta products from Google: NIMF has been a pioneer at Conversational Commerce, and this was done in partnership using the Voice assistant capabilities from Google. On the base of this strong partnership NIMF in FY 21-22 was at the helm of leveraging Beta Products from Google like the newly launched Performance Max. A successful implementation and more than desired results got
NIMF mentioned in Google India Case study for the best use of Performance Max beta to drive incremental business using Artificial Intelligence & Machine learning.
⢠Strengthening our Digital Distribution through Strategic Alliances and Enhanced Support to
Partners: We added some key partners and more importantly products into their positioning suites, like Genius from ET Money. We also were one of the firsts to launch SIPs on PhonePe platform. Other key players like Paytm, Groww, Kuvera, IND Money Tarrakki, etc., continue to bolster our executional leadership and expansive reach. Our immense expertise in the core business of Asset Management and prowess in Digital Business gives us an unparalleled advantage to engage with our Partners at an even deeper level and help them set up and scale up their businesses. Our knowledge and know-how, shared with the Partners and their customers by our Fund Managers and Investment Experts on such Partners'' platforms coupled with integrated marketing campaigns have educated the investors and helped them make the right decisions. Our robust engagement strategy coupled with focused execution has not only helped us build great equity with Partners but also helped win the trust of investors which has resulted in growth of business volumes on such platforms, thereby benefitting both us and the Partners. We have a definitive lead in the Digital Partnerships space and have managed to forge a clear position for NIMF as being the partner of choice for such players.
⢠Setting up of New NAM India Technology Applications
A challenge posted due to the migration to our new Nippon environment was how to securely perform a complete data transfer of our SAP data. Thanks to careful planning, execution and a lot of communication with involved stakeholders we were able to successfully set up NAM India''s own SAP environment after mitigating several risks. This was performed with minimum downtime and no effect on NAM India''s books of accounts.
During the pandemic we have rolled out solutions and infrastructure enhancements that has allowed NAM India to continue working in an offline situation without exception. Initiatives such as secure VPN for data access, communication software, online approval workflow on block chain are a few initiatives that have been implemented.
⢠Managing regulatory requirements
There were several new regulations brought in by the regulatory body resulting in multiple
new enhancements that had to be performed under strict deadlines. Some key projects such as database encryption, recording of conversations on Teams calls and mobile phones, two factor authentication were executed and the regulations complied with.
⢠Optimizations in Investment and Digital Portfolio
During the year there were several enhancements performed in the investment portfolio to comply with regulation change and to bring in operating efficiency. On the digital portfolio side new functionality in the form of New Investor App, enhancement in workflows and new fund offers were launched with a great degree of success. Certain processes on the digital side that were affecting user experience were examined and enhanced to perform faster leading to an increase in the customer experience index of the digital offerings.
NAM India IT is working in a continuous improvement cycle to improve our various technology and process towards enhancing our contribution to the company, stakeholders and our customers. We have shown significant improvement in our issue resolution process and our results indicate a steady increase in our customer issue resolution index over the financial year. We also have maintained high up and response times on all our critical investment and digital platforms. This has resulted in consistent and predictive working of our offerings to our end customers.
Another initiative to build automation to further optimize processes is underway and several processes across operations, risk and investment functions are expected to be automated in the new financial year. This will lead to efficiency gains across functions. Technology will continue to identify processes that can be automated and continues to partner with functions on the same.
⢠Digital Business touched a record 2.9 million purchase transactions FY 2021-22, which is essentially 1 purchase every 6 seconds! This increase is a ~60 % YOY growth.
⢠Contribution of Digital Business to overall NIMF business stands at 58%, which is a growth of ~12% over last FY where Digital contribution was at 52%.
⢠Digital Business share in Lumpsum purchase and new SIP registrations stood at 60% and 48% respectively vis-a-vis total purchase transactions of NIMF.
⢠Long term assets focus resulted in 90% non-Liquid acquisitions compared to 75% in FY2020-2021.
⢠45% of our digital consumers are less than 35 years of age
NIMF Digital has been setting a benchmark across the BFSI industry in its Fintech endeavors across the Digital Ecosystem. It is now recognized as a Digital benchmark across industries. Both Global and Indian forums have further recognized NIMF''s expertise and supremacy in the Digital arena. As in the previous years, we have yet again been conferred with some coveted awards this year as well which further strengthens our position as a Digital leader in the BFSI space
⢠Global Digital Marketing Awards for ''Best use of Facebook AI tool in performance campaigns'' (April 2021)
⢠ACEF Global Customer Engagement Awards 2021 for ''Digital Marketing, Data driven Marketing, Email Marketing and Mobile Marketing'' - 5 awards (4 Golds and 1 Silver) (May 2021)
⢠Mint | TechCircle - Business Transformation Award 2021 for ''Revenue Generation - Product & Service Augmentation'' - Business Easy (June 2021)
⢠Indian Digital Marketing Awards for ''Best App Developed for Products / Services'' - Business Easy (July 2021)
⢠Indian Digital Marketing Awards for ''Best Use of sites for Mobiles'' - NIMF Purchase Mobile Site (M-site) (July 2021)
⢠Digital Crest Awards 2021 for ''Expertise in Online Commerce, Omni Channel Strategy and Mobile Marketing'' - 3 awards (1 Gold, 1 Silver and 1 Bronze) (August 2021)
⢠The Great Indian Marketing Awards for ''Best performing campaign for Google''s Performance-max'' (August 2021)
⢠Maddies Marketing Award 2021 for the ''Most Effective Voice Assistant App'' (in the Enabling Technologies category) - Simply Save Conversational Commerce (November 2021)
⢠Dynamic CIO Award for ''Smart Innovator'' (in the Technology Innovation category) - Simply Save Conversational Commerce (November 2021)
RESEARCH AND DEVELOPMENT:DIGITAL ADOPTION AND INNOVATION:
We, at Nippon India Mutual Fund, continue to envision and execute key Digital transformation endeavors year on year that are aimed to strengthen our already robust Digital ecosystem.
⢠Our focus always remains on empowering our investors during moments of truth and on a ''here & now'' manner to take quicker, smarter, and well-informed decisions on how and where they should invest their money when they transact on our Digital assets. Such empowerment is fueled by our capabilities to crunch & run real-time analysis on the enormous amount of on-asset & offline data points we have regarding our consumers, their past purchases, and future propensities.
⢠Our intelligent, data led digital assets, can learn, and predict user behavior powered by both the real time frameworks and archived analytical frameworks which are operating on an advanced algo network. This helps in e-serving highly personalized and customized experiences to give our millennial, zillennial and legacy investors or partners accurate recommendations, suggestions, on-the-fly nudges, predictive service and much more as they advance in their journeys.
NAM India Technology is continuously engaging in research and development to pick and choose the best of technology solutions to our stakeholders
- NAM India Technology continues to explore opportunities with Fintech and Technology vendors to identify the next best solution that can be a game changes in the industry
- The technology team also follows and explores software, hardware, security and network enhancements in the technology world and attempts to identify key components that can change the way we do work in the organization and industry.
FOREIGN EXCHANGE EARNINGS AND OUTGO:
During the year under review, the Company earned foreign exchange equivalent to Rs. 22.85 Cr (Previous Year: Rs. 21.79 Cr). The Company spent foreign exchange equivalent to Rs. 6.98 Cr (Previous Year: Rs. 6.49 Cr).
DIRECTORS'' RESPONSIBILITY STATEMENT
As per the requirements of Sub Section (5) of Section 134 of the Act, the Directors confirm that -
(i) In the preparation of the annual accounts for the financial year ended March 31,2022, the applicable accounting standards have been followed and that there are no material departures;
(ii) The Directors have selected such accounting policies in consultation with the Statutory Auditors'' and have applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of
the state of affairs of the Company as at March 31, 2022 and of the profit of the Company for the year under review;
(iii) The Directors have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) The Directors have prepared the annual accounts of the Company on a ''going concern'' basis;
(v) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;
(vi) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
CONTRACT AND ARRANGEMENTS WITH RELATED PARTIES
All contracts/ arrangements/ transactions entered into/ by the Company during the financial year under review with related parties were on arm''s length basis and in the ordinary course of business. There were no materially significant related party transactions which could have potential conflict with interest of the Company at large. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.
All Related Party Transactions were placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee was obtained for the transactions which were of a repetitive nature. The transactions entered into pursuant to the omnibus approval so granted were reviewed and statements giving details of all related party transactions were placed before the Audit Committee and the Board of Directors for their review on a quarterly basis. The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website at the following link:
https://mf.nipponindiaim.com/InvestorServices/
Your Directors draw attention of the members to Note No. 29 to the financial statement which sets out related party disclosures.
PARTICULARS OF FRAUDS REPORTED BY THE AUDITORS''
In terms of Section 143(12) of the Act, M/s. S R Batliboi & Co. LLP, Chartered Accountants, the Statutory Auditors of the Company have not reported any instance of fraud having taken place during the year under review, in their Audit Report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators/ Courts which would impact the going concern status of the Company and its future operations.
DETAILS OF APPLICATION MADE BY THE COMPANY OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONGWITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR The Company invests in various debt market instruments (non-convertible debentures) issued by various issuers. In order to realize the debenture outstanding''s, the Company has filed certain applications under the Insolvency and Bankruptcy Code, 2016. The Mutual Fund Division of the Company has filed (a) an IBC proceeding against Avantha Holdings Limited in January 2020 before Hon''ble NCLT New Delhi which is currently at pre-admission hearings stage. The Company is also a respondent party to an IBC proceeding filed in the matter of Reserve Bank of India v. Dewan Housing Finance Corporation Limited pending before the Hon''ble NCLT, Mumbai.
The Portfolio Management Services Division of the Company has filed: (a) IBC proceedings against Fortuna Buildcon India Private Limited which was filed in November 2017 before the Hon''ble NCLT, Bangalore, wherein currently the resolution plan has been submitted to the Hon''ble NCLT for approval (b) three IBC proceedings against three Biodiversity Conservation India Private Limited group companies (BCIL Zed Ria Properties Private Limited, BCIL Red Earth Developers India Pvt Ltd and Biodiversity Conservation India Private Limited) were filed in December 2017 before the Hon''ble NCLT, Bangalore. The NCLT has approved resolution plans in BCIL Zed Ria Properties Private Limited and in BCIL Red Earth Developers India Pvt Ltd, which are currently under implementation while Biodiversity Conservation India Private Limited is currently under liquidation. The Company is also a respondent to 2 (two) appeals in BCIL Red Earth Developers India Private Limited and in 3 (three) appeals in BCIL Zed Ria Properties Private Limited, before Hon''ble NCLAT, Delhi, which have been filed challenging the approved resolution plans; (c) IBC proceedings have been filed against the promoters of Biodiversity Conservation India Private
Limited in November 2020 before Hon''ble NCLT, Bangalore which are currently at a pre-admission stage; (d) IBC proceeding filed against Green Valley Shelters Private Limited in December 2019, before Hon''ble NCLT, Chennai, was admitted in August 2021, however the proceedings are currently temporarily stayed under an order of the Supreme Court. The Company is a respondent in a civil appeal filed by the promoters of Green Valley Shelters Private Limited before the Hon''ble Supreme Court, challenging the admission of IBC proceedings against Green Valley Shelters Private Limited, which is currently pending under directions of exploring a settlement; (e) an IBC proceeding filed against the promoters of Green Valley Shelters Private Limited in October 2020 before the Hon''ble NCLT, Chennai was admitted in January 2022 and is pending final orders appointing the resolution professional; (f) an IBC proceeding was filed against Arkie Atelier Design India Private Limited, being the corporate guarantor for the debentures issued by Green Valley Shelters Private Limited in November 2021 and is currently at a pre-admission stage; (g) an IBC proceeding filed against Bharucha & Motivala Infrastructure Private Limited, being corporate guarantor for the debentures issued by Lake District Realty Private Limited, in November 2019 before Hon''ble NCLT, Mumbai was admitted in May 2021, but has been stayed pursuant to an order of the Hon''ble NCLAT in July 2021. The Company is a respondent in the appeal filed by the promoters of Lake District Realty Private Limited before the Hon''ble NCLAT, Delhi, challenging the admission of IBC proceedings against Bharucha & Motivala Infrastructure Private Limited, which is currently at its final arguments stage; (h) IBC proceedings have been filed against the promoters of Lake District Realty Private Limited in November 2021, which is currently at a pre-admission stage; (i) an IBC proceedings has been filed against Ashapura Options Private Limited, being the corporate guarantor for the debentures issued by Ashapura Housing Private Limited in February 2022 which is at a pre-admission stage. (j) IBC proceedings have also been filed against four (4) promoter guarantors of Ashapura Housing Private Limited, which are at a pre-admission stage.
The Company is not required to maintain cost records as specified by the Central Government under subsection (1) of section 148 of the Companies Act, 2013.
During the year, the Company has made a downstream investment in AMC Repo Clearing Limited to the extent of Rs. 9,25,87,830. The certificate from the Statutory Auditor confirming the compliance of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017 with respect to the Company''s downstream investment
has been received and will be available for inspection. Any member interested in obtaining the same may write to the Company Secretary and the same will be furnished on request.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
In terms of the provisions of Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules are provided in the Annexure to the Board''s Report. Disclosures relating to the remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended also forms part of this Report. However, having regard to the provisions of Section 136 of the Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining the said information may write to the Company Secretary. Upon such request the information shall be furnished.
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
Your Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. Following is a summary of sexual harassment complaints received and disposed off during the year:
⢠No. of complaints received: 0
⢠No. of complaints disposed off: 0
BUSINESS RESPONSIBILITY REPORT
Business Responsibility Report for the year under review as stipulated under Listing Regulations is presented in the separate section forming part of this Annual Report.
Your Directors wish to place on record their sincere appreciation for the co-operation received from various regulatory and governmental authorities including SEBI, RBI, Registrar of Companies, Maharashtra at Mumbai, PFRDA, NPS Trust, EPFO, CMPFO, Stock Exchanges, Depositories, Custodians, Bankers, Registrar, Shareholders, Investors and all other business constituents during the year under review. We believe all of them have contributed to our continued growth.
Your Directors also wish to place on record their deep appreciation for the total commitment displayed by all the executives, officers and staff, resulting in yet another eventful performance for the year.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS OF NIPPON LIFE INDIA ASSET MANAGEMENT LIMITED
Ashvin Dhirajlal Parekh Sundeep Sikka
Director Executive Director & CEO (DIN:06559989) (DIN: 02553654)
Place : Mumbai Dated : April 26, 2022
Mar 31, 2022
Your Directors take pleasure in presenting their 27th Annual Report on the business and operations of your Company, together with the audited financial statements, for the year ended March 31, 2022.
Your Company endeavors to remain one of the leading players in the Asset Management business in India and keep enhancing its global footprint as well.
Your Company is a subsidiary Company of Nippon Life Insurance Company ("NLI"). NLI, a fortune 500 Company and which is one of the largest life insurers in the world managing assets of over USD 700 bn. NLI has a large global network with presence across US, Europe, Asia, and Australia along with a 130-year track record in Life Insurance business as well as global investments across Asset Management companies. This pedigree brings strong synergistic benefits that very well complements your Company''s domestic expertise in Asset Management business and provides a thrust to its significant growth potential. Your Company expects substantial upside in terms of increased AUM & adoption of best governance & risk management practices based on NLI''s global positioning & relationships.
Your Company acts as the Asset Management Company of Nippon India Mutual Fund and it happens to be the largest foreign owned Asset Management Company in India.
FINANCIAL PERFORMANCE AND STATE OF COMPANY''S AFFAIRS
The standalone and consolidated financial statements of the Company for the financial year ended March 31, 2022, have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act. The financial highlights (on a consolidated and standalone basis) of the Company for the year ended March 31, 2022 are as follows:
('' Crores) |
||||
Description |
Consolidated |
Standalone |
||
Year ended |
Year ended |
Year ended |
Year ended |
|
March 31, 2022 |
March 31, 2021 |
March 31, 2022 |
March 31, 2021 |
|
Gross Income |
1535.63 |
1419.34 |
1428.42 |
1325.66 |
Profit before exceptional item and tax |
988.67 |
877.03 |
945.43 |
842.92 |
Exceptional Items |
- |
- |
- |
- |
Profit Before tax |
988.67 |
877.03 |
945.43 |
842.92 |
Current Tax |
206.66 |
157.41 |
200.38 |
151.51 |
Deferred Tax |
38.64 |
40.22 |
33.84 |
42.02 |
Profit for the year |
743.37 |
679.39 |
711.21 |
649.39 |
Share of Profit from Associates |
0.79 |
0.94 |
- |
- |
Profit attributable to non-controlling interest |
- |
- |
- |
- |
Other Comprehensive Income |
(0.30) |
0.72 |
(0.27) |
0.72 |
Balance carried to Balance Sheet |
743.86 |
681.05 |
710.94 |
650.11 |
Basic EPS of '' 10 each |
12.00 |
11.04 |
11.47 |
10.53 |
Diluted EPS of '' 10 each |
11.80 |
10.90 |
11.28 |
10.41 |
The Consolidated Financial Statements of the Company are forming part of this Annual Report. The annual accounts of all the subsidiary companies will be placed on the website of the Company.
DETAILS OF MATERIAL CHANGES ANDCOMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments affecting the financial position of the Company since the date of the financial statements i.e. March 31,2022.
During the year, the Company had declared and paid an interim dividend of Rs. 3.50 per equity share (35%) amounting to Rs. 217.41 Crore. The Board has also recommended a final dividend of Rs. 7.50 per Equity Share (75%) of Rs. 10/- each for the financial year ended March 31, 2022, for the approval of the Shareholders at the ensuing Annual General meeting. With this the total dividend for the financial year 2021-22 would be approximately Rs. 683.92 crores, including the interim dividend of Rs. 3.50 per equity share distributed in November 2021. The Final dividend, if declared, will be paid after the Annual General Meeting.
The dividend payout is in accordance with the Company''s Dividend Distribution Policy which forms part of this Annual Report.
AMOUNT TO BE CARRIED TO RESERVES
Your Directors do not propose any amount to be transferred to the General Reserves of the Company.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report for the year under review as stipulated under SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (Listing Regulations) is presented in a separate section forming part of this Annual Report.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENT
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act are given in the notes to the Financial Statements.
There is no difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions.
The Company has neither accepted nor renewed any fixed deposits during the year. There are no outstanding or unclaimed deposits, unclaimed / unpaid interest, refunds due to the deposit holders or to be deposited to the Investor Education and Protection Fund as on March 31, 2022.
With the perspective of promoting the culture of employee ownership and to attract, retain, motivate and incentivize senior as well as critical talent, the Company has formulated Nippon Life India Asset
Management Limited - Employee Stock Option Plan 2017 [formerly known as "Reliance Nippon Life Asset Management Limited - Employee Stock Option Plan 2017"] ("ESOP 2017" / "Plan") as its stock option scheme, which was launched in August 2017 and Nippon Life India Asset Management Limited - Employee Stock Option Plan 2019 [formerly known as "Reliance Nippon Life Asset Management Limited - Employee Stock Option Plan 2019"] ("ESOP 2019" / "Plan") as its stock option scheme, which was launched in July 2019. The Nomination and Remuneration Committee of the Board monitors and administers these Plans and from time to time grants stock options to the employees.
Both ESOP 2017 as well as ESOP 2019 are in compliance with The SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 [erstwhile The SEBI (Share Based Employee Benefits) Regulations, 2014] (SEBI Regulations).
However, having regard to the provisions of first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. The certificate from the Practicing Company Secretary confirming the compliance of The SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 [erstwhile The SEBI (Share Based Employee Benefits) Regulations, 2014] with respect to the Company''s Employees Stock Option Scheme Plans has been received and will be available for inspection through electronic mode. Any member interested in obtaining the same may write to the Company Secretary and the same will be furnished on request. The details as required to be disclosed under SEBI Regulations are put on the Company''s website at httos://mF.niooonindiaim. com/investor-service/customer-service/nam-india-shareholders-investors
COMPLIANCE CULTURE & RISK MANAGEMENT
Your Company is essentially Compliance centric and has a huge focus in this direction. The Compliance function is manned by a dedicated and experienced team of professionals. The Compliance team regularly conducts various educative training programs for various segments within the organization. Your Company thrives towards a culture of ''Total Compliance'' and it has a ''Zero Tolerance'' policy for non-compliances. There exists a comprehensive Compliance Manual, which is reviewed by your Board of Directors from time to time and it facilitates Company''s Compliance team to monitor various compliance requirements effectively & comprehensively. Your Board of Directors have also constituted a Compliance Committee, which is chaired by the CEO & Executive Director of the Company, and which has the Compliance Officer and other senior & relevant functionaries as its members. This committee meets at least once in a quarter to discuss and deliberate issues pertaining to compliance and other regulatory developments.
Your Company also has a comprehensive Risk Management Policy that envisages a structured and consistent enterprise-wide risk management framework, based on the three lines of defense model, to ensure that risk management processes are consistently applied across the organization and provide reasonable assurance regarding achievement of organization''s objectives.
The risk management policy clearly sets out the objectives & elements of risk management within the organization, including the constitution of an independent Risk Management department headed by Chief Risk Officer (reporting directly to the CEO and to the Board of Directors), Risk Management Committee (RMC).
Your Company promotes risk awareness culture throughout the organization and risk management is an integral part of decision making and day-today operations of all activities at all levels across the organization. There are well documented & Board approved policies & processes to address and mitigate various risks to which the company is exposed. The company also has a robust business continuity plan which is tested on a periodic basis to ensure business is not interrupted.
The company has a structured risk reporting mechanism to ensure risks are monitored and reviewed by CRO, Senior Management, RMCBs and Board on a periodic basis.
INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY
The Company has an Internal Control System which is commensurate with the size, scale and complexity of its business operations.
Foreffectiveriskmanagementandcontrol,theCompany has established structures and responsibilities in line with the "Three Lines of Defense" model, where 1st line being business operations, 2nd line is the oversight functions like Risk Management and Compliance and 3rd line is Internal Audit. To maintain its objectivity and independence, the Internal Audit department reports to the Audit Committee. The Internal Audit department monitors and evaluates the efficacy and adequacy of the internal control system in the Company, its compliance with operating systems, accounting procedures and policies. Based on the report of the Internal Auditor, process owners undertake corrective action in their respective areas and thereby strengthen the controls. The Internal Audit department follows up on pending audit issues and ensures that corrective actions have been taken. Significant audit observations, if any, and corrective actions thereon, are presented to the Audit Committee of the Board.
Your Directors wish to reiterate your Company''s commitment to the highest standards of corporate governance in order to enhance trust of all its stakeholders. Strong & robust corporate governance practices have facilitated your Company in standing up to the continued scrutiny of domestic & international investors and that of various Regulatory authorities.
The report on Corporate Governance as stipulated under Regulation 34(3) read with Para C of Schedule V of the Listing Regulations is presented in separate section forming part of this Annual Report.
A Certificate from the auditors of the Company i.e. M/s. S. R. Batliboi & Co. LLP, Chartered Accountants conforming compliance to the conditions of Corporate Governance as stipulated under Para E of Schedule V of the Listing Regulations, is enclosed to this Report.
In accordance with Section 177 of the Act and the Listing Regulations, the Company has formulated a Vigil Mechanism to address the genuine concerns, if any. The policy can be accessed on the Company''s website.
CORPORATE SOCIAL RESPONSIBILITY
As part of its initiatives under "Corporate Social Responsibility (CSR)", the Company has undertaken projects in the areas of promoting healthcare, education and rural development in accordance with Schedule VII of the Act.
The Annual Report on CSR activities is annexed herewith as Annexure A.
SUBSIDIARIES & ASSOCIATE COMPANY
As of March 31, 2022, your Company had three (3) subsidiaries. Two of such subsidiaries are overseas, being one each in Singapore and Mauritius and one subsidiary is in India. All the subsidiaries of the Company are engaged in financial services and related activities. In addition, the Company also has an Associate company in India, which has already surrendered its business license/ regulatory approval to act as a Pension Fund Manager. This particular company currently has no business operations and it is therefore proposed to wind it up, in accordance with the applicable laws.
A statement w.r.t. the performance and the financial position of the subsidiaries of the Company is forming a part of the Consolidated Financial Statements of the Company.
The performance of financial position of the subsidiary companies is presented in the Management Discussions and Analysis Report forming part of this Annual Report. The policy for determining material subsidiary companies
may be accessed on the Company''s website at https:// mf.nipponindiaim.com/InvestorServices/Pages/Investor-Policies.aspx
During the year under review, the following employees were the ''Key Managerial Personnel'' of the Company:
a) Mr. Sundeep Sikka - Executive Director & Chief Executive Officer;
b) Mr. Ajay Patel - Manager;
c) Mr. Prateek Jain - Chief Financial Officer; and
d) Ms. Nilufer Shekhawat - Company Secretary.
During the year, Mr. Sundeep Sikka has been reappointed as the Executive Director & CEO of the Company for a term of 5 years commencing from April 22, 2021.
During the year, Mr. Yutaka Ideguchi [Nominee Director of NLI] resigned from the directorship of the Company w.e.f. March 30, 2022. Mr. Kazuyuki Saigo [Nominee Director of NLI] who was a Director of the Company as on March 31, 2022, resigned as such effective April 21, 2022. Mr. Tomohiro Yao and Mr. Minoru Kimura [Nominee Directors of NLI] were appointed as Additional Directors of the Company w.e.f. April 21, 2022.
All the Independent Directors of your Company i.e. General Ved Prakash Malik (Retd.), Ms. Ameeta Chatterjee, Mr. Ashvin Parekh and Mr. B. Sriram, have already furnished the required declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act.
In the opinion of the Board, the Independent Directors possess the requisite expertise and experience and are persons of high integrity and repute. They fulfil the conditions specified in the Act and the Rules made thereunder and are independent of the management.
In terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by The Indian Institute of Corporate Affairs, Manesar (''IICA''). The Independent Directors are also required to undertake online proficiency self-assessment test conducted by the IICA within a period of Two years from the date of inclusion of their names in the data bank, unless they meet the criteria specified for exemption. All the Independent Directors of the Company are exempt from the requirement to undertake online proficiency self assessment test.
PERFORMANCE EVALUATION OF DIRECTORS, BOARD AND COMMITTEES
The Company has devised a policy for the performance evaluation of the individual directors, Board and its Committees, which also includes the criteria for carrying out the said performance evaluation. Pursuant to the provisions of the Act and Regulation 17(10) of Listing Regulations and as prescribed in the stated policy of the Board, the Board has carried out an annual performance evaluation of (i) the Directors (Independent and non-independent);(ii) itself (as a whole);(iii) its committees and (iv) fulfillment of Independence criteria. The Board performance was evaluated based on inputs received from the Board members after considering criteria such as Board composition and structure, effectiveness of Board / Committee processes, and information provided to the Board, etc. In terms of the requirements of the Act, a separate meeting of the Independent Directors was also held during the year.
During the year under review, nine (9) Board meetings were held.
Your Directors wish to inform that the functioning of the Board is supplemented by various committees (Board sub-committees and management committees), which have been constituted from time to time, such as Audit Committee, Committee of Directors, CSR Committee, Stakeholders Relationship Committee, Nomination & Remuneration Committee, Risk Management Committee of the Board, IT Strategy Committee, Valuation Committee, Investment Committee, Risk Management Committee, Allotment Committee, Broker Empanelment Committee, Operating Committee, Compliance Committee, Stewardship Committee, Proxy Voting Committee, Information Security Risk Management Committee, etc. to name a few. Each of the aforesaid Committees has been constituted in order to ensure due compliance with the applicable laws and to ensure that highest levels of corporate governance are followed and practiced. The minutes of the meetings of each of these Committees are duly placed before the Board for noting and confirmation.
In terms of the requirements of Section 177 of the Act, and Regulation 18 of the Listing Regulations, the Audit Committee of the Company consists of majority of Independent Directors. As on date of this report, it comprises Mr. Ashvin Parekh [Independent Director], Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. B. Sriram [Independent Director], Mr. Akira Shibata [Non- Independent Director] and Mr. Minoru Kimura [Non- Independent Director]. Mr. Ashvin Parekh acts as the Chairperson of this Committee.
During the year, seven (7) meetings of the Audit Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
NOMINATION & REMUNERATION COMMITTEE
In terms of the requirements of Section 178 of the Act, and Regulation 19 of the Listing Regulations, the Nomination & Remuneration Committee of the Company consists of majority of Independent Directors. As on date of this report, it comprises, Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Tomohiro Yao [NonIndependent Director] and Mr. Minoru Kimura [NonIndependent Director]. General Ved Prakash Malik (Retd.) acts as the Chairperson of this Committee.
During the year, four (4) meetings of the Nomination & Remuneration Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
The Nomination & Remuneration Policy has been provided as Annexure B to the Board''s Report.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
In terms of the requirements of Section 135 of the Act, the Corporate Social Responsibility ("CSR") Committee of the Company consists of Eight members. As on date of this report, it comprises Mr. Tomohiro Yao [Non-Independent Director], Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Sundeep Sikka [CEO & Executive Director], Mr. Akira Shibata [Non-Independent Director] and Mr. Minoru Kimura [Non-Independent Director]. Mr. Tomohiro Yao acts as the Chairman of this Committee.
During the year 2021-22, two (2) meetings of the CSR Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
STAKEHOLDERS'' RELATIONSHIP COMMITTEE
In terms of the requirements of Section 178 of the Act, and Regulation 20 of the Listing Regulations, the Stakeholders'' Relationship Committee of the Company consists of five members. As on date of this report, it comprises Ms. Ameeta Chatterjee [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Tomohiro Yao [Non-Independent Director] and Mr. Sundeep Sikka [CEO & Executive Director]. Ms. Ameeta Chatterjee acts as the Chairperson of this Committee.
During the year, two (2) meetings of the Stakeholders'' Relationship Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
In terms of the relevant requirements under the Listing Regulations, the Company has constituted a Risk Management Committee of the Board. The Committee presently comprises of Mr. Tomohiro Yao [Non-Independent Director] as the Chairperson, Mr. Akira Shibata [Non-Independent Director], Mr. Sundeep Sikka [CEO & Executive Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director] and Mr. Rishi Garg [Chief Risk Officer] as its members.
During the year, two (2) meeting of the Risk Management Committee of the Board were held. Other relevant details in this regard have been provided in the Corporate Governance Report.
AUDITORS'' OF THE COMPANY - STATUTORY AND INTERNAL
Statutory Auditors:
M/s. S. R. Batliboi & Co. LLP, Chartered Accountants shall hold office as Statutory Auditors of the Company until the conclusion of the 28th Annual General Meeting.
JHS & Associates LLP, Chartered Accountants were appointed as the Internal Auditors'' of your Company for the financial year 2021-22. Your Directors have also approved their re-appointment as such for the financial year 2022-23.
AUDITORS OF THE SCHEMES OF NIPPON INDIA MUTUAL FUND- STATUTORY AND INTERNAL
In accordance with the applicable provisions of law, the Company has appointed Statutory and Internal Auditors for various Schemes of Nippon India Mutual Fund, who periodically submit their reports, which are placed before the Audit Committee for discussion, review and implementation of their recommendations.
M/s. Walker Chandiok & Co. LLP, Chartered Accountants were appointed as Statutory Auditors of the Schemes of Nippon India Mutual Fund for the financial year 2021-22.
During the year, M/s. Deloitte Haskins & Sells LLP, Chartered Accountants were appointed as Internal Auditors of the Scheme of Nippon India Mutual Fund and the portfolio management services division of the Company, for the financial year 2021-22. Your Directors have also approved their re-appointment as such for the financial year 2022-23.
AUDITORS'' REPORT
The observations and comments given by the Statutory Auditors in their report read together with notes on financial statements are self-explanatory and hence does not require any further comments in terms of Section 134 of the Act.
SECRETARIAL STANDARDS
During the year under review, the Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Directors had appointed M/s. M. Siroya and Company, Mumbai, a firm of Company Secretaries in-practice to undertake the Secretarial Audit of the Company for the financial year 2021-22. In this regard, the Report submitted by the Secretarial Auditor is annexed as Annexure C.
Your Directors are pleased to inform that the report from the Secretarial Auditors does not contain any qualifications or negative remarks.
ANNUAL RETURN
Pursuant to Section 134(3)(a) and Section 92(3) of the Act read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company has been placed on the website of the Company and can be accessed at https:// mf.nipponindiaim.com/investor-service/customer-service/nam-india-shareholders-investors
PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
CONSERVATION OF ENERGY:
The operations of the Company do not consume high levels of energy. Adequate measures have been taken to conserve energy wherever feasible. Your Company uses latest technology and energy efficient equipment''s. Your Company only uses LED lights and 5 star air-conditioning for majority of offices. As energy cost forms a very small part of the total costs, the impact on cost is not material.
TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION:
> Game changing initiatives:
⢠The All-new Investor App: This year marked the launch of our New Investor App (Android), a key Digital transformation endeavor that is aimed to strengthen our already robust Digital ecosystem. It is a new-age asset that is styled for millennials & zillennials and simplified for the legacy investor
base. We believe that the savvy consumers of today invest first in digital experiences and in mutual funds afterwards, and that''s exactly how we''ve built the new app - with next level, simplified and intuitive interface coupled with new age features and capabilities - to provide best in class, enhanced digital experience for our investors. With the best of e-commerce practices at its heart - contemporary design, quick product discovery, aided decision making, and personalized experiences based on intelligent analytics - this app is all that our investors will ever need to manage their investments with NIMF.
While contemporary design and new features and
enhancements are a part of the re-build, some of the
key highlights of the rebuild are:
¦ Completely self-serve and frictionless on boarding process
¦ ''Investor journey'' centric flows (and not inward out, classic Product & Service bouquet approach)
¦ Discoverability: Products & Services are available in line with user expectations
¦ Enhanced purchase experience: Cart Buying and Drop-off win-back;express checkout for repeat transactions
¦ Scalable framework: Leveraging Digital stack (Targeting, Campaigns, Analytics, etc.) for a more enriching and powerful experience
⢠New Fund Offers - Digital Launches: The Nippon India Flexi Cap Fund was one of the biggest success stories for Digital enabling lucid access for investors & partners across all our Digital assets. Apart from that we Digitally enabled other prominent products for FY21-22 including Nippon India Taiwan Equity Fund and Nippon India Silver ETF F-o-F. Apart from that, on the ETF front, we also enabled Nippon India Nifty Pharma ETF, Nippon India Nifty Auto ETF & Nippon India Silver ETF. We also had a very innovative Index offering made live viz. Nippon India Nifty AAA CPSE Bond Plus SDL - Apr 2027 Maturity 60:40 Index Fund
⢠Growth Enablers for Business Easy with 2.0 App: Business Easy 2.0 app, our Digital asset with our distributors, is an all-encompassing solution that acts as a complete Customer Relationship Management tool. The app works as a Digital branch through which distributors can manage their Mutual Fund business virtually. With the objective of evolving the app from a business facilitator to a growth enabler, this year saw the addition of new enhancements and features to the app. A quick overview of such features is as follows:
¦ Comprehensive Dashboard with Performance review distributor''s AUM, SIP Book value, Business health trends, in-depth customer base understanding
¦ SIP Corner for focused SIP sustenance, retention, and win-back
¦ Advanced Funds & Performance module with a more in-depth view of all products and granular understanding of fund facts & stats
⢠WhatsApp Scale-up: Having launched the pilot version of our WhatsApp advent which comprised of Liquid Fund purchase, e-KYC check & Digital asset access, we scaled up our WhatsApp capability with comprehensive transaction & service capabilities - purchase in all funds, all transaction types and multiple service modules. This implementation dovetails into our philosophy of building our Digital presence in line with the preference of our investors. This service paves the way for increased market penetration of NIMF products and unlocks opportunities by enabling reach out to a vast 500mn WhatsApp user base in India
⢠Intelligent interventions for business retention and growth: We have built system driven, smart and automated measures across various investor journeys with the objective of creating positive business impact. These interventions either nudge users to take prudent & effective decisions in a real-time manner to stay invested or help them with alternate options while if they encounter any outages or errors. Such measures delivered consistent growth in AUM retention and augmentation and saw an uplift of 60% in such positive impact when compared with last FY.
⢠Dynamic Real time mailers: In a real time world, it is important that consumers are given real time information that might help them to take conscious and informed investment decisions. NIMF pioneered deep tech enabled mailers. The same fetched real time data (viz Sensex movement, NAVs, returns etc.) from the server whenever opened. This gave a clear visibility to the investor on what were the relevant avenues for either fresh investment or additional investment. This was widely cherished by new and existing investors and yielded high usage
⢠Leveraging Beta products from Google: NIMF has been a pioneer at Conversational Commerce, and this was done in partnership using the Voice assistant capabilities from Google. On the base of this strong partnership NIMF in FY 21-22 was at the helm of leveraging Beta Products from Google like the newly launched Performance Max. A successful implementation and more than desired results got
NIMF mentioned in Google India Case study for the best use of Performance Max beta to drive incremental business using Artificial Intelligence & Machine learning.
⢠Strengthening our Digital Distribution through Strategic Alliances and Enhanced Support to
Partners: We added some key partners and more importantly products into their positioning suites, like Genius from ET Money. We also were one of the firsts to launch SIPs on PhonePe platform. Other key players like Paytm, Groww, Kuvera, IND Money Tarrakki, etc., continue to bolster our executional leadership and expansive reach. Our immense expertise in the core business of Asset Management and prowess in Digital Business gives us an unparalleled advantage to engage with our Partners at an even deeper level and help them set up and scale up their businesses. Our knowledge and know-how, shared with the Partners and their customers by our Fund Managers and Investment Experts on such Partners'' platforms coupled with integrated marketing campaigns have educated the investors and helped them make the right decisions. Our robust engagement strategy coupled with focused execution has not only helped us build great equity with Partners but also helped win the trust of investors which has resulted in growth of business volumes on such platforms, thereby benefitting both us and the Partners. We have a definitive lead in the Digital Partnerships space and have managed to forge a clear position for NIMF as being the partner of choice for such players.
⢠Setting up of New NAM India Technology Applications
A challenge posted due to the migration to our new Nippon environment was how to securely perform a complete data transfer of our SAP data. Thanks to careful planning, execution and a lot of communication with involved stakeholders we were able to successfully set up NAM India''s own SAP environment after mitigating several risks. This was performed with minimum downtime and no effect on NAM India''s books of accounts.
During the pandemic we have rolled out solutions and infrastructure enhancements that has allowed NAM India to continue working in an offline situation without exception. Initiatives such as secure VPN for data access, communication software, online approval workflow on block chain are a few initiatives that have been implemented.
⢠Managing regulatory requirements
There were several new regulations brought in by the regulatory body resulting in multiple
new enhancements that had to be performed under strict deadlines. Some key projects such as database encryption, recording of conversations on Teams calls and mobile phones, two factor authentication were executed and the regulations complied with.
⢠Optimizations in Investment and Digital Portfolio
During the year there were several enhancements performed in the investment portfolio to comply with regulation change and to bring in operating efficiency. On the digital portfolio side new functionality in the form of New Investor App, enhancement in workflows and new fund offers were launched with a great degree of success. Certain processes on the digital side that were affecting user experience were examined and enhanced to perform faster leading to an increase in the customer experience index of the digital offerings.
NAM India IT is working in a continuous improvement cycle to improve our various technology and process towards enhancing our contribution to the company, stakeholders and our customers. We have shown significant improvement in our issue resolution process and our results indicate a steady increase in our customer issue resolution index over the financial year. We also have maintained high up and response times on all our critical investment and digital platforms. This has resulted in consistent and predictive working of our offerings to our end customers.
Another initiative to build automation to further optimize processes is underway and several processes across operations, risk and investment functions are expected to be automated in the new financial year. This will lead to efficiency gains across functions. Technology will continue to identify processes that can be automated and continues to partner with functions on the same.
⢠Digital Business touched a record 2.9 million purchase transactions FY 2021-22, which is essentially 1 purchase every 6 seconds! This increase is a ~60 % YOY growth.
⢠Contribution of Digital Business to overall NIMF business stands at 58%, which is a growth of ~12% over last FY where Digital contribution was at 52%.
⢠Digital Business share in Lumpsum purchase and new SIP registrations stood at 60% and 48% respectively vis-a-vis total purchase transactions of NIMF.
⢠Long term assets focus resulted in 90% non-Liquid acquisitions compared to 75% in FY2020-2021.
⢠45% of our digital consumers are less than 35 years of age
NIMF Digital has been setting a benchmark across the BFSI industry in its Fintech endeavors across the Digital Ecosystem. It is now recognized as a Digital benchmark across industries. Both Global and Indian forums have further recognized NIMF''s expertise and supremacy in the Digital arena. As in the previous years, we have yet again been conferred with some coveted awards this year as well which further strengthens our position as a Digital leader in the BFSI space
⢠Global Digital Marketing Awards for ''Best use of Facebook AI tool in performance campaigns'' (April 2021)
⢠ACEF Global Customer Engagement Awards 2021 for ''Digital Marketing, Data driven Marketing, Email Marketing and Mobile Marketing'' - 5 awards (4 Golds and 1 Silver) (May 2021)
⢠Mint | TechCircle - Business Transformation Award 2021 for ''Revenue Generation - Product & Service Augmentation'' - Business Easy (June 2021)
⢠Indian Digital Marketing Awards for ''Best App Developed for Products / Services'' - Business Easy (July 2021)
⢠Indian Digital Marketing Awards for ''Best Use of sites for Mobiles'' - NIMF Purchase Mobile Site (M-site) (July 2021)
⢠Digital Crest Awards 2021 for ''Expertise in Online Commerce, Omni Channel Strategy and Mobile Marketing'' - 3 awards (1 Gold, 1 Silver and 1 Bronze) (August 2021)
⢠The Great Indian Marketing Awards for ''Best performing campaign for Google''s Performance-max'' (August 2021)
⢠Maddies Marketing Award 2021 for the ''Most Effective Voice Assistant App'' (in the Enabling Technologies category) - Simply Save Conversational Commerce (November 2021)
⢠Dynamic CIO Award for ''Smart Innovator'' (in the Technology Innovation category) - Simply Save Conversational Commerce (November 2021)
RESEARCH AND DEVELOPMENT:DIGITAL ADOPTION AND INNOVATION:
We, at Nippon India Mutual Fund, continue to envision and execute key Digital transformation endeavors year on year that are aimed to strengthen our already robust Digital ecosystem.
⢠Our focus always remains on empowering our investors during moments of truth and on a ''here & now'' manner to take quicker, smarter, and well-informed decisions on how and where they should invest their money when they transact on our Digital assets. Such empowerment is fueled by our capabilities to crunch & run real-time analysis on the enormous amount of on-asset & offline data points we have regarding our consumers, their past purchases, and future propensities.
⢠Our intelligent, data led digital assets, can learn, and predict user behavior powered by both the real time frameworks and archived analytical frameworks which are operating on an advanced algo network. This helps in e-serving highly personalized and customized experiences to give our millennial, zillennial and legacy investors or partners accurate recommendations, suggestions, on-the-fly nudges, predictive service and much more as they advance in their journeys.
NAM India Technology is continuously engaging in research and development to pick and choose the best of technology solutions to our stakeholders
- NAM India Technology continues to explore opportunities with Fintech and Technology vendors to identify the next best solution that can be a game changes in the industry
- The technology team also follows and explores software, hardware, security and network enhancements in the technology world and attempts to identify key components that can change the way we do work in the organization and industry.
FOREIGN EXCHANGE EARNINGS AND OUTGO:
During the year under review, the Company earned foreign exchange equivalent to Rs. 22.85 Cr (Previous Year: Rs. 21.79 Cr). The Company spent foreign exchange equivalent to Rs. 6.98 Cr (Previous Year: Rs. 6.49 Cr).
DIRECTORS'' RESPONSIBILITY STATEMENT
As per the requirements of Sub Section (5) of Section 134 of the Act, the Directors confirm that -
(i) In the preparation of the annual accounts for the financial year ended March 31,2022, the applicable accounting standards have been followed and that there are no material departures;
(ii) The Directors have selected such accounting policies in consultation with the Statutory Auditors'' and have applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of
the state of affairs of the Company as at March 31, 2022 and of the profit of the Company for the year under review;
(iii) The Directors have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) The Directors have prepared the annual accounts of the Company on a ''going concern'' basis;
(v) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;
(vi) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
CONTRACT AND ARRANGEMENTS WITH RELATED PARTIES
All contracts/ arrangements/ transactions entered into/ by the Company during the financial year under review with related parties were on arm''s length basis and in the ordinary course of business. There were no materially significant related party transactions which could have potential conflict with interest of the Company at large. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.
All Related Party Transactions were placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee was obtained for the transactions which were of a repetitive nature. The transactions entered into pursuant to the omnibus approval so granted were reviewed and statements giving details of all related party transactions were placed before the Audit Committee and the Board of Directors for their review on a quarterly basis. The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website at the following link:
https://mf.nipponindiaim.com/InvestorServices/
Your Directors draw attention of the members to Note No. 29 to the financial statement which sets out related party disclosures.
PARTICULARS OF FRAUDS REPORTED BY THE AUDITORS''
In terms of Section 143(12) of the Act, M/s. S R Batliboi & Co. LLP, Chartered Accountants, the Statutory Auditors of the Company have not reported any instance of fraud having taken place during the year under review, in their Audit Report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators/ Courts which would impact the going concern status of the Company and its future operations.
DETAILS OF APPLICATION MADE BY THE COMPANY OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONGWITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR The Company invests in various debt market instruments (non-convertible debentures) issued by various issuers. In order to realize the debenture outstanding''s, the Company has filed certain applications under the Insolvency and Bankruptcy Code, 2016. The Mutual Fund Division of the Company has filed (a) an IBC proceeding against Avantha Holdings Limited in January 2020 before Hon''ble NCLT New Delhi which is currently at pre-admission hearings stage. The Company is also a respondent party to an IBC proceeding filed in the matter of Reserve Bank of India v. Dewan Housing Finance Corporation Limited pending before the Hon''ble NCLT, Mumbai.
The Portfolio Management Services Division of the Company has filed: (a) IBC proceedings against Fortuna Buildcon India Private Limited which was filed in November 2017 before the Hon''ble NCLT, Bangalore, wherein currently the resolution plan has been submitted to the Hon''ble NCLT for approval (b) three IBC proceedings against three Biodiversity Conservation India Private Limited group companies (BCIL Zed Ria Properties Private Limited, BCIL Red Earth Developers India Pvt Ltd and Biodiversity Conservation India Private Limited) were filed in December 2017 before the Hon''ble NCLT, Bangalore. The NCLT has approved resolution plans in BCIL Zed Ria Properties Private Limited and in BCIL Red Earth Developers India Pvt Ltd, which are currently under implementation while Biodiversity Conservation India Private Limited is currently under liquidation. The Company is also a respondent to 2 (two) appeals in BCIL Red Earth Developers India Private Limited and in 3 (three) appeals in BCIL Zed Ria Properties Private Limited, before Hon''ble NCLAT, Delhi, which have been filed challenging the approved resolution plans; (c) IBC proceedings have been filed against the promoters of Biodiversity Conservation India Private
Limited in November 2020 before Hon''ble NCLT, Bangalore which are currently at a pre-admission stage; (d) IBC proceeding filed against Green Valley Shelters Private Limited in December 2019, before Hon''ble NCLT, Chennai, was admitted in August 2021, however the proceedings are currently temporarily stayed under an order of the Supreme Court. The Company is a respondent in a civil appeal filed by the promoters of Green Valley Shelters Private Limited before the Hon''ble Supreme Court, challenging the admission of IBC proceedings against Green Valley Shelters Private Limited, which is currently pending under directions of exploring a settlement; (e) an IBC proceeding filed against the promoters of Green Valley Shelters Private Limited in October 2020 before the Hon''ble NCLT, Chennai was admitted in January 2022 and is pending final orders appointing the resolution professional; (f) an IBC proceeding was filed against Arkie Atelier Design India Private Limited, being the corporate guarantor for the debentures issued by Green Valley Shelters Private Limited in November 2021 and is currently at a pre-admission stage; (g) an IBC proceeding filed against Bharucha & Motivala Infrastructure Private Limited, being corporate guarantor for the debentures issued by Lake District Realty Private Limited, in November 2019 before Hon''ble NCLT, Mumbai was admitted in May 2021, but has been stayed pursuant to an order of the Hon''ble NCLAT in July 2021. The Company is a respondent in the appeal filed by the promoters of Lake District Realty Private Limited before the Hon''ble NCLAT, Delhi, challenging the admission of IBC proceedings against Bharucha & Motivala Infrastructure Private Limited, which is currently at its final arguments stage; (h) IBC proceedings have been filed against the promoters of Lake District Realty Private Limited in November 2021, which is currently at a pre-admission stage; (i) an IBC proceedings has been filed against Ashapura Options Private Limited, being the corporate guarantor for the debentures issued by Ashapura Housing Private Limited in February 2022 which is at a pre-admission stage. (j) IBC proceedings have also been filed against four (4) promoter guarantors of Ashapura Housing Private Limited, which are at a pre-admission stage.
The Company is not required to maintain cost records as specified by the Central Government under subsection (1) of section 148 of the Companies Act, 2013.
During the year, the Company has made a downstream investment in AMC Repo Clearing Limited to the extent of Rs. 9,25,87,830. The certificate from the Statutory Auditor confirming the compliance of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017 with respect to the Company''s downstream investment
has been received and will be available for inspection. Any member interested in obtaining the same may write to the Company Secretary and the same will be furnished on request.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
In terms of the provisions of Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules are provided in the Annexure to the Board''s Report. Disclosures relating to the remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended also forms part of this Report. However, having regard to the provisions of Section 136 of the Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining the said information may write to the Company Secretary. Upon such request the information shall be furnished.
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
Your Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. Following is a summary of sexual harassment complaints received and disposed off during the year:
⢠No. of complaints received: 0
⢠No. of complaints disposed off: 0
BUSINESS RESPONSIBILITY REPORT
Business Responsibility Report for the year under review as stipulated under Listing Regulations is presented in the separate section forming part of this Annual Report.
Your Directors wish to place on record their sincere appreciation for the co-operation received from various regulatory and governmental authorities including SEBI, RBI, Registrar of Companies, Maharashtra at Mumbai, PFRDA, NPS Trust, EPFO, CMPFO, Stock Exchanges, Depositories, Custodians, Bankers, Registrar, Shareholders, Investors and all other business constituents during the year under review. We believe all of them have contributed to our continued growth.
Your Directors also wish to place on record their deep appreciation for the total commitment displayed by all the executives, officers and staff, resulting in yet another eventful performance for the year.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS OF NIPPON LIFE INDIA ASSET MANAGEMENT LIMITED
Ashvin Dhirajlal Parekh Sundeep Sikka
Director Executive Director & CEO (DIN:06559989) (DIN: 02553654)
Place : Mumbai Dated : April 26, 2022
Mar 31, 2018
Dear Shareholders,
The Directors take pleasure in presenting their 23rd Annual Report on the business and operations of your Company, together with the audited financial statements, for the year ended March 31, 2018.
Your Company endeavors to remain one of the leading players in the Asset Management business in India and enhance its global footprint as well.
financial performance and state of companyâs affairs
The standalone and consolidated financial statements of the Company for the financial year ended March 31, 2018, have been prepared under the historical cost convention, in accordance with the generally accepted accounting principles in India and in line with the provisions of the Companies Act, 2013 (Act). The financial highlights (on a consolidated and standalone basis) of the Company for the year ended March 31, 2018 are as follows:
(Rs.Crores)
Consolidated |
Standalone |
|||
Description |
Year ended March 31, 2018 |
Year ended March 31, 2017 |
Year ended March 31, 2018 |
Year ended March 31, 2017 |
Gross Income |
1,814.67 |
1,435.91 |
1,745.99 |
1,400.44 |
Profit before exceptional item and tax |
725.75 |
581.31 |
706.65 |
582.11 |
Exceptional Items |
- |
- |
- |
- |
Profit Before Tax |
725.75 |
581.31 |
706.65 |
582.11 |
Provision for taxation |
196.65 |
174.50 |
193.82 |
172.71 |
Provision for Deferred Tax Asset/ (Liability) |
7.16 |
4.85 |
7.98 |
4.62 |
Profit After Tax before share of minority shareholders |
521.94 |
401.96 |
504.85 |
404.78 |
Share of Profit from Associates |
0.18 |
- |
- |
- |
Net Profit |
522.12 |
401.96 |
504.85 |
404.78 |
Balance carried to Balance Sheet |
965.24 |
1,111.68 |
962.89 |
1126.60 |
Basic EPS of Rs.10 each |
8.74 |
6.85 |
8.45 |
6.90 |
Diluted EPS of Rs.10 each |
8.73 |
6.85 |
8.44 |
6.90 |
The Consolidated Financial Statements of the Company are forming part of this Annual Report.
The annual accounts of all the subsidiary companies will be placed on the website of the Company and will also be kept at the Registered Office of the Company for inspection by the Members.
DETAILS OF MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments affecting the financial position of the Company since the date of the financial statements i.e. March 31, 2018.
DIVIDEND
During the year the Company had declared and paid an interim dividend of Rs.5/- per equity share amounting to Rs.368.29 Crore (including dividend distribution tax and other applicable taxes/ surcharges). Further, the Board has also recommended final dividend of Rs.1/- per equity share subject to approval of the Members at the forthcoming Annual General Meeting. Accordingly, the total dividend payout pertaining to financial year 2017-18 i.e. interim dividend along with the final dividend (if declared) for the year would amount to Rs.442.07 Crore (including dividend distribution tax and other applicable taxes/ surcharges).
The final dividend of Rs.1/- per share, if approved at the ensuing 23rd Annual General Meeting, will be paid to (i) all those equity shareholders whose names appear in the Register of Members as on September 14, 2018 and (ii) to those whose names appear as beneficial owners, as on September 14, 2018 as furnished by the National Securities Depository Limited and Central Depository Services (India) Limited for this purpose.
The dividend payout is in accondance with the Companyâs Dividend Distribution Policy which forms part of this Annual Report.
amount to be carried to reserves
Your Directors do not propose any amount to be transferred to the General Reserves of the Company.
management discussion and analysis
Management Discussion and Analysis Report for the year under review as stipulated under SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (Listing Regulations) is presented in a separate section forming part of this Annual Report.
particulars of loans, guarantees and investment
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.
deposits
The Company has neither accepted nor renewed any fixed deposits during the year. There are no outstanding or unclaimed deposits, unclaimed / unpaid interest, refunds due to the deposit holders or to be deposited to the Investor Education and Protection Fund as on March 31, 2018.
material developments
Investment by Nippon Life insurance company
On July 13, 2017, Nippon Life Insurance Company (NLI), an existing equity shareholder holding 44.57% stake in the Company acquired an additional 4.43% stake by way of purchase of equity shares from Reliance Capital Limited (RCL). Post this acquisition, the equity stake of NLI in the Company was increased to 49.00%, and subsequently NLI was also classified as one of the Promoters of the Company along with RCL.
Issue of Bonus Shares
During the year, the Company had allotted 57,60,00,000 number of fully paid up equity shares of face value of Rs.10/- each in August 2017 to the Members of the Company in proportion of 1:50. After this allotment, your Companyâs total number of capital base was increased from 1,15,20,000 equity shares to 58,75,20,000 equity shares.
Initial Public Offering
The year 2017-18 has been historic for your Company as the Company came out with its initial public offering (IPO) and diluted the 10% post issue capital in favor of the public. Both the promoters of the Company (i.e. RCL and NLI) also participated in the IPO by way of an offer for sale component and diluted part of their holdings in favor of the public. The total IPO size was Rs.1542.24 Crores out of which the Company raised Rs.616.89 Crores as primary subscription and the remaining proceeds of Rs.925.37 Crores were towards offer for sale.
After the IPO, both the promoters cumulatively hold 85.76% of the equity paid up share capital of the Company.
Redemption of preference shares
During the year under review the Company has redeemed all the outstanding 30,00,000 number of preference shares, which were issued by the Company in the previous years.
employees stock option scheme
With the perspective of promoting the culture of employee ownership and to attract, retain, motivate and incentivize senior as well as critical talent, the Company has formulated âReliance Nippon Life Asset Management Limited - Employee Stock Option Plan 2017â(âESOP 2017â / âPlanâ) as its stock option scheme, which was launched in August 2017. The Nomination and Remuneration Committee of the Board monitors this Plan.
ESOP 2017 is in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (SEBI Regulations).
However, having regard to the provisions of first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. The said information is available for inspection at the registered office of the Company on all working days, except Saturdays between 11:00 A.M. and 1:00 P.M. up to the date of the Meeting. Any member interested in obtaining the same may write to the Company Secretary and the same will be furnished on request.
The Company has received a certificate from the auditors of the Company that the ESOP 2017 has been implemented in accordance with the SEBI Regulations and as per the resolution passed by the members of the Company authorising issuance of the said Options.
compliance culture & risk management
Your Company is essentially Compliance centric and has a huge focus in this direction. The Compliance function is manned by a dedicated and experienced team of professionals. The Compliance team regularly conducts various educative training programs for various segments within the organization. Your Company thrives towards a culture of âTotal Complianceâand it has a âZero Toleranceâpolicy for non-compliances.
Your Company has a comprehensive Risk Management Policy that envisages an enterprise risk management framework and clearly sets out the objectives & elements of risk management within the organization, including the constitution of a Risk Management department (reporting directly to the CEO and to the Board of Directors), a Risk Management Committee (RMC) and the underlying mechanisms & processes to be used for identification, monitoring and reporting of various categories of risks including credit, market, liquidity and operational risks. There are well documented & Board approved policies & processes which are in place. In addition, proper & adequate Insurance Policies and business continuity planning have also been adequately put into place.
You will note that the basic revenue model of an asset management company is charging of management fees on assets under management provided by the investors. In case of an eventuality where the Company repeatedly fails to comply with regulatory norms with regard to investment restrictions and/ or code of conduct, or if there are repeated & glaring instances of fraud/ front-running then the same may be a catastrophic risk for the enterprise. However, your Directors would like to assure you that such risks are being mitigated by putting into place robust & time tested policies & processes, qualified & professional manpower to run these processes under the aegis & guidance of your Board of Directors, Board Committees and various other internal committees, consisting of its senior employees.
internal control systems & their adequacy
The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. To maintain its objectivity and independence, the Internal Auditor reports to the Audit Committee.
The Internal Auditor monitors and evaluates the efficacy and adequacy of the internal control system in the Company, its compliance with operating systems, accounting procedures and policies. Based on the report of the Internal Auditor, process owners undertake corrective action in their respective areas and thereby strengthen the controls. The Risk Management department follows up on pending audit issues and ensures that corrective actions have been taken. Significant audit observations, if any, and corrective actions thereon, are presented to the Audit Committee of the Board.
corporate governance
Your Directors wish to reiterate your Companyâs commitment to the highest standards of corporate governance in order to enhance the trust of all its stakeholders. Strong and robust corporate governance practices have facilitated your Company in standing up to the continued scrutiny of domestic & international investors and that of the Regulatory authorities.
The report on Corporate Governance as stipulated under Regulation 34(3) read with Para C of Schedule V of the Listing Regulations is presented in separate section forming part of this Annual Report.
A Certificate from the auditors of the Company M/s. B S R & Co. LLP, Chartered Accountants conforming compliance to the conditions of Corporate Governance as stipulated under Para E of Schedule V of the Listing Regulations, is enclosed to this Report.
vigil mechanism
In accordance with Section 177 of the Act and the Listing Regulations, the Company has formulated a Vigil Mechanism to address the genuine concerns, if any. The details of the same have been stated in the Report on Corporate Governance and the policy can be accessed on the Companyâs website.
corporate social responsibility
As part of its initiatives under âCorporate Social Responsibility (CSR)â, the Company has undertaken projects in the areas of promoting healthcare, education and rural development in accordance with Schedule VII of the Act.
The Annual Report on CSR activities is annexed herewith as Annexure A.
subsidiaries & associate company
As of March 31, 2018, your Company had three (3) subsidiaries. Two of such subsidiaries are overseas, being one each in Singapore and Mauritius and one subsidiary being in India. All the subsidiaries of the Company are engaged in financial services and related activities.
During the year under review, Reliance Capital Pension Fund Limited ceased to be a subsidiary of the Company and became Companyâs associate company.
A statement w.r.t. the performance and the financial position of the subsidiaries of the Company is forming a part of the Consolidated Financial Statements of the Company.
The performance of financial position of the subsidiary companies is presented in the Management Discussions and Analysis Report forming part of this Annual Report. The policy for determining material subsidiary companies may be accessed on the Companyâs website at https://www.reliancemutual.com/InvestorServices/ Pages/Investor-Policies.aspx
key managerial personnel
During the year under review, the following officials/ employees were the âKey Managerial Personnelâof the Company:
a) Mr. Sundeep Sikka - Executive Director & Chief Executive Officer;
b) Mr. Ajay Patel - Manager;
c) Mr. Prateek Jain - Chief Financial Officer; and
d) Mr. Deepak Mukhija - Company Secretary.
directors
During the year, Mr. Tomonao Gotoda (a Nominee Director of NLI) resigned from the directorship w.e.f. April 22, 2017. In his place, NLI nominated Mr. Takayuki Murai, who was appointed a Director of the Company on the even date.
During the year, RCL had nominated Mr. V. N. Kaul for the directorship of the Company and he was appointed as such, effective from June 07, 2017. On the very same date, Mr. V. N. Kaul was also appointed as the Chairman of the Board.
After the closure of the year 2017-18, following changes have taken place in respect of your Companyâs Board:
- Mr. V. N. Kaul, Director (a Nominee of RCL) & Chairman of the Board resigned w.e.f. April 25, 2018.
- Mr. Kazuhide Toda, Director (a Nominee of NLI) of the Company, resigned w.e.f. April 25, 2018.
- Mr. Takayuki Murai, Director (a Nominee of NLI) of the Company, resigned w.e.f. April 25, 2018.
- Mr. Jai Anmol Ambani (a Nominee of RCL), Mr. Akira Shibata (a Nominee of NLI) and Mr. Minoru Kimura (a Nominee of NLI) were appointed as the Additional Directors of the Company w.e.f. April 25, 2018.
Mr. Jai Anmol Ambani, Mr. Akira Shibata and Mr. Minoru Kimura shall hold office as Directors, up to the date of ensuing Annual General Meeting and are eligible to be appointed as Director thereat. In terms of Section 160 of the Act, your Company has received a notice in writing from one of the Members, proposing the candidature of Mr. Jai Anmol Ambani, Mr. Akira Shibata and Mr. Minoru Kimura for their appointment as Directors.
In accordance with the provisions of Section 152 of the Act, Mr. V. N. Kaul, Mr. Kazuhide Toda & Mr. Takayuki Murai, all Non-executive Directors, liable to retire by rotation have already ceased to be Directors, on April 25, 2018, therefore during the year 2018-19, none of the Directors are due to retire by rotation, and proposed to be re-appointed.
The last re-appointment of Mr. Kanu H. Doshi and Mr. S. C. Tripathi as Independent Directors of the Company was made in 2014 and their five year term will come to an end on March 31, 2019. They are eligible for re-appointment with the approval of the Members by passing a special resolution. In terms of the circulars issued by the Securities & Exchanges Board of India on âEnhancing fund governance for Mutual Fundsâ, both Mr. Kanu H. Doshi and Mr. S. C. Tripathi, if reappointed as Independent Directors, will be able to hold the position upto November 30, 2019.
Keeping in view of their vast knowledge and experience, the Directors recommend their re-appointment as Independent Directors at the ensuing Annual General Meeting, for a period from April 01, 2019 to the date of Annual General Meeting to be held during 2019.
All the Independent Directors of your Company i.e. Mr. Kanu H. Doshi, General Ved Prakash Malik (Retd.), Mr. Sushil Chandra Tripathi and Ms. Ameeta Chatterjee, have duly furnished the required declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act.
During the Year, in terms of the requirements of the Act, a meeting of the Independent Directors was duly held, wherein the performance of the Board and that of the non-independent Directors were evaluated. In this very meeting itself, the Independent Directors of the Company also thoroughly discussed the quantity, quality & the timelines of the flow of information between the Companyâs management and the Board and arrived at a view that the same is adequate and sufficient to enable effective decision making by the Board.
evaluation of directors, board and committees
The Company has devised a policy for performance evaluation of the individual directors, Board and its Committees, which includes criteria for performance evaluation.
Pursuant to the provisions of the Companies Act, 2013 and Regulation 17(10) of Listing Regulations, the Board has carried out an annual performance evaluation of (i) the Directors; (ii) itself (as a whole); and (iii) its committees. The Board performance was evaluated based on inputs received from the Board members after considering criteria such as Board composition and structure, effectiveness of Board / Committee processes, and information provided to the Board, etc. A separate meeting of the Independent Directors was also held during the year for the evaluation of the performance of non-independent Directors, performance of the Board as a whole and that of the Chairman.
board and committee meetings
During the year under review, Eleven (11) Board meetings and Five (5) meetings of the Committee of Directors were held.
Your Directors wish to inform that the functioning of the Board is supplemented by various committees (Board sub-committees and management committees), which have been constituted from time to time, such as Audit Committee, Committee of Directors, CSR Committee, Stakeholders Relationship Committee, Nomination & Remuneration Committee, Valuation Committee, Investment Committee, Risk Management Committee, Broker Empanelment Committee, Operating Committee, Compliance Committee, Proxy Voting Committee, Information Security Risk Management Committee, etc. to name a few. Each of the aforesaid Committees has been constituted in order to ensure due compliance with the applicable laws and to ensure the highest levels of corporate governance. The minutes of the meetings of each of these Committees are duly placed before the Board for noting and confirmation.
AUDIT COMMITTEE
In terms of the requirements of Section 177 of the Act, the Audit Committee of the Company consists of majority of Independent Directors. As on date of this report, it comprises Mr. Kanu H. Doshi [Independent Director], Mr. Sushil Chandra Tripathi [Independent Director], Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. Jai Anmol Ambani [Director] and Mr. Akira Shibata [Director].
During the year, Eight (8) meetings of the Audit Committee were held.
Other relevant details in this regard have been provided in the Corporate Governance Report.
nomination & remuneration committee
In terms of the requirements of Section 178 of the Act, the Nomination & Remuneration Committee of the Company consists of majority of Independent Directors. As on date of this report, it comprises Mr. Kanu H. Doshi [Independent Director], Mr. Sushil Chandra Tripathi [Independent Director], Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. Jai Anmol Ambani [Director] and Mr. Minoru Kimura [Director].
During the year, five (5) meetings of the Nomination & Remuneration Committee were held.
Other relevant details in this regard have been provided in the Corporate Governance Report.
The Nomination & Remuneration Policy has been provided as Annexure B to the DirectorsâReport.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
In terms of the requirements of Section 135 of the Act, the Corporate Social Responsibility (âCSRâ) Committee of the Company consists of eight members. As on date of this report, it comprises Mr. Kanu H. Doshi [Independent Director], Mr. Sushil Chandra Tripathi [Independent Director], Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. Jai Anmol Ambani [Director], Mr. Sundeep Sikka [Whole-time Director], Mr. Minoru Kimura [Director] and Mr. Akira Shibata [Director].
During the year 2017-18, two (2) meetings of the CSR Committee were held.
Other relevant details in this regard have been provided in the Corporate Governance Report.
STAKEHoLDERSâRELATIoNSHIP coMMITTEE
In terms of the requirements of Section 178 of the Act, the StakeholdersâRelationship Committee of the Company consists of four members. As on date of this report, it comprises Mr. Kanu H. Doshi [Independent Director], Ms. Ameeta Chatterjee [Independent Director], Mr. Minoru Kimura [Director] and Mr. Sundeep Sikka [Whole-time Director].
During the year, one (1) meeting of the Stakeholdersâ Relationship Committee was held.
Other relevant details in this regard have been provided in the Corporate Governance Report.
auditorsâof the company - statutory and internal
statutory auditors:
M/s. B S R & Co. LLP, Chartered Accountants shall hold office as Statutory Auditors of the Company until the conclusion of the ensuing Annual General Meeting.
The Company has already received a letter from M/s. S. R. Batliboi & Co. LLP communicating their willingness to be appointed as the Statutory Auditors of the Company and that their appointment, if made, would be within the limits, as prescribed under Section 139 of the Companies Act, 2013.
In terms of Section 139 of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014, your Directors hereby recommends the appointment of M/s. S. R. Batliboi & Co. LLP, Chartered Accountants as the Statutory Auditors of the Company for a period of five years i.e. from the conclusion of ensuing Annual General Meeting of the Company until conclusion of 28th Annual General Meeting of the Company.
INTERNAL AUDITORS:
JHS & Associates LLP, Chartered Accountants were appointed as the Internal Auditorsâof your Company for the year 2017-18. Your Directors have also approved their re-appointment as such for the financial year 2018-19.
auditors of the schemes of reliance mutual fund - statutory and internal
In accordance with the applicable provisions of law, the Company has appointed Statutory and Internal Auditors for various Schemes of Reliance Mutual Fund, who periodically submit their reports, which are placed before the Audit Committee for discussion, review and implementation of their recommendations.
statutory auditors:
M/s. Haribhakti & Co. LLP, Chartered Accountants held office as Statutory Auditors of the Schemes of Reliance Mutual Fund for the financial year 2017-18.
INTERNAL auditors:
During the year, M/s. Deloitte Haskins & Sells LLP, Chartered Accountants were appointed as Internal Auditors of the Scheme of Reliance Mutual Fund and the portfolio management services division of the Company, for the financial year 2017-18. Your Directors have also approved their re-appointment as such for the financial year 2018-19.
auditorsâreport
The observations and comments given by the Statutory Auditors in their report read together with notes on financial statements are self explanatory and hence do not call for any further comments under Section 134 of the Act.
secretarial standards
During the year under review, the Company has compliod with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
secretarial audit report
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Directors had appointed M/s. M. Siroya and Company, Mumbai, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the financial year 2017-18. In this regard, the Report submitted by the Secretarial Auditor is annexed as Annexure C.
Your Directors are pleased to inform that the report from the Secretarial Auditors does not contain any qualifications or negative remarks.
extract of annual return
The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as Annexure D.
particulars regarding conservation of energy, technology absorption, foreign exchange earnings and outgo conservation of ENERGY:
The operations of the Company do not consume high levels of energy. Adequate measures have been taken to conserve energy wherever feasible. Your Company uses latest technology and energy efficient equipments. As energy cost forms a very small part of the total costs, the impact on cost is not material.
technology absorption, adaptation and innovation:
(i) The efforts made towards technology absorption:
The year 2017-18 witnessed a transformation in terms of communicating mutual funds as a solution to the investors than a product. Across various life stages individuals come across various goals and aspirations and the Company tried to build a strategy to address that need in the form of a mutual fund solution and reach out to new to industry investors. During the year the digital acquisition was further aided by eKYC and Biometric enabled KYCs with solutions providing a simplified process to invest. In line with the above objective, the Company launched various initiatives in this direction and many of these initiatives were first time in the Industry. Some of those initiatives are as follows:
- Launch of Smart Tax & Gold Invest solutions on Simply Save app for customers
- Enabled Aadhaar OTP based eKYC and Aadhaar Biometric based full KYC to assist distributors acquiring new investors and provide the ease of on-boarding for the investor(s)
- Revamped website for the distributor(s) to provide ease of transactions, campaigns and other such transactions & add-on features
- Aadhaar OTP based E-mandate for all banks under the eNACH gateway of NPCI to enable easy registration for regular payments like SIP, also single mandate good enough for multiple offerings up to the total limit of the mandate, hence ease of further investments
- Enabled digital campaigns for distribution partners on through our systems enabling them to reach out to existing and new investors and enable transactions in a paperless form.
(ii) Benefits derived out of the above initiatives:
Financial year 2017-18 witnessed a substantial growth in the number of purchases done digitally on our assets, some statistics as follows:
- 2X growth in purchase transactions.
- Average number of purchase transactions on own assets per month being over 53,000 with highest being over 82,000.
- Integration of our Assets on partners websites contributing over 10K purchase transactions per month.
- Digital purchases being >1.2 times more than largest distributors total Purchases.
- Mobile to Web ratio increasing towards mobile with every third digital purchase transaction concluding on mobile.
research and development:
Digital as a segment is gaining even higher importance with data charges getting lower, access getting household & communication becoming even critical. With Aadhaar aiding digital prowess it is but natural that digital aid would be instrumental in reaching out the large untapped blue ocean with respect to financial services, especially mutual funds. We as an AMC are one of the first to react to this opportunity and are very much committed to continuously provide simplified process and solutions over the digital platform to our investors. The team is focused and the management continues to drive the idea of taking mutual fund solutions to the household through digital interfaces.
foreign exchange earnings and OUTGO:
During the year under review, the Company earned foreign exchange equivalent to Rs.28.69 Crore (Previous Year: Rs.26.06 Crore). The Company spent foreign exchange equivalent to Rs.8.35 Crore/- (Previous Year: 6.59 Crore)
directorsâresponsibility statement
As per the requirements of Sub Section (5) of Section 134 of the Act, the Directors confirm that -
(i) In the preparation of the annual accounts for the financial year ended March 31, 2018, the applicable accounting standards have been followed and that there are no material departures;
(ii) The Directors have selected such accounting policies in consultation with the Statutory Auditorsâand have applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2018 and of the profit of the Company for the year under review;
(iii) The Directors have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
(iv) The Directors have prepared the annual accounts of the Company on a âgoing concernâbasis.
(v) The Directors, have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.
(vi) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
contract and arrangements with related parties
All contracts/ arrangements/ transactions entered into/ by the Company during the financial year under review with related parties were on an armâs length basis and in the ordinary course of business. There were no materially significant related party transactions which could have potential conflict with interest of the Company at large. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.
All Related Party Transactions were placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee was obtained for the transactions which were of a repetitive nature. The transactions entered into pursuant to the omnibus approval so granted were reviewed and statements giving details of all related party transactions were placed before the Audit Committee and the Board of Directors for their review on a quarterly basis. The policy on Related Party Transactions as approved by the Board is uploaded on the Companyâs website at the following link: https://www.reliancemutual.com/InvestorServices/Pages/Investor-Policies.aspx
Your Directors draw attention of the members to Note No. 3.24 to the financial statement which sets out related party disclosures.
particulars of frauds reported by the auditorsâ
In terms of Section 143(12) of the Act, M/s. B S R & Co. LLP, Chartered Accountants, the Statutory Auditors of the Company have not reported any instance of fraud having taken place during the year under review, in their Audit Report.
significant and material orders passed by the regulators or courts
There are no significant material orders passed by the Regulators/ Courts which would impact the going concern status of the Company and its future operations.
particulars of employees and related disclosures
In terms of the provisions of Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules are provided in the Annexure to the DirectorsâReport. Disclosures relating to the remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, are also provided in the Annual Report, which forms part of this Report. However, having regard to the provisions of Section 136 of the Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. The said information is available for inspection at the registered office of the Company on all working days, except Saturdays between 11:00 A.M. and 1:00 P.M. up to the date of the Meeting and any member interested in obtaining the same may write to the Company Secretary. Upon such request the information shall be furnished.
prevention of sexual harassment of women at workplace
Your Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. Following is a summary of sexual harassment complaints received and disposed off during the year:
- No. of complaints received: Nil
- No. of complaints disposed of: N.A.
The Company has also constituted an Internal Compliance Committee under the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013.
BUSINESS RESPONSIBILITY REPORT
Business Responsibility Report for the year under review as stipulated under Listing Regulations is presented in the separate section forming part of this Annual Report.
acknowledgements
Your Directors wish to place on record their sincere appreciation for the co-operation received from various regulatory and governmental authorities including SEBI, RBI, Registrar of Companies, Maharashtra at Mumbai, PFRDA, NPS Trust, EPFO, CMPFO, Stock Exchanges, Depositories, Custodians, Bankers, Registrar, Shareholders, Investors and all other business constituents during the year under review. We believe all of them have contributed to our continued growth.
Your Directors also wish to place on record their deep appreciation for the total commitment displayed by all the executives, officers and staff, resulting in yet another eventful performance for the year.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
OF RELIANCE NIPPON LIFE ASSET MANAGEMENT LIMITED
Kanu H. Doshi Sundeep Sikka
Director Executive Director & CEO
(DIN: 00577409) (DIN: 02553654)
Place : Mumbai
Dated : June 28, 2018
Mar 31, 2018
Dear Shareowners,
The Directors have pleasure in presenting the 32nd Annual Report and the audited financial statement for the financial year ended March 31, 2018.
Financial Performance and State of Companyâs Affairs
The standalone performance of the Company for the financial year ended March 31, 2018 is summarised below:
Particulars |
Financial Year ended March 31, 2018 |
âFinancial Year ended March 31, 2017 |
||
(Rs. in crore) |
(US$ in million**) |
(Rs. in crore) |
(US$ in million**) |
|
Total revenue |
3 315 |
510 |
2 071 |
319 |
Profit before tax |
1 054 |
162 |
517 |
80 |
Tax expense |
226 |
35 |
98 |
15 |
Profit after tax |
828 |
127 |
419 |
65 |
Add: Opening surplus in Statement of Profit and Loss |
2 437 |
374 |
2 101 |
324 |
Profit available for appropriation |
3 265 |
502 |
2 520 |
389 |
Transfer to statutory reserve fund |
166 |
25 |
84 |
13 |
âPrevious year figures has been regrouped / reclassified wherever required.
âExchange Rate Rs.65.0441 = US$ 1 as on March 31, 2018 (Rs.64.910 = US$1 as on March 31, 2017).
Financial Performance
The Companyâs gross income for the financial year ended March 31, 2018 increased to Rs.3,315 crore, from Rs.2,071 crore in the previous year, increase of 60 per cent. The operating profit (PBDIT) of the Company increased by 53 per cent to Rs.2,910 crore during the year, from Rs.1,904 crore, in the previous year. Depreciation was at Rs.21 crore as against Rs.27 crore in the previous year. The net profit for the year increased by 98 per cent to Rs.828 crore from Rs.419 crore, in the previous year. An amount of Rs.166 crore was transferred to the Statutory Reserve Fund pursuant to Section 45-IC of the Reserve Bank of India Act, 1 934.
Dividend
Your Directors have recommended a dividend of Rs.11 (1 10 per cent) per equity share each of Rs.10 aggregating to Rs.330 crore (inclusive of dividend tax) for the financial year ended March 31, 2018, which, if approved at the ensuing 32nd Annual General Meeting (AGM), will be paid to (i) all those equity shareholders whose names appear in the Register of Members as on September 14, 2018, and (ii) to those whose names appear as beneficial owners, as on September 14, 2018 as furnished by the National Securities Depository Limited and Central Depository Services (India) Limited for the purpose.
The dividend payout is in accordance with the Companyâs Dividend Distribution Policy which forms part of this Annual Report.
Core Investment Company
The Company, in terms of Para 5 of Chapter III of Master Direction - Core Investment Companies (Reserve Bank) Directions, 201 6, made an application to the Reserve Bank of India for registering itself as Systemically Important Core Investment Company (CIC-ND-SI The Company is awaiting Certificate of Registration (âCoRâ) CIC-ND-SI and continues to position itself as CIC-ND-SI and complies with the prudential norms applicable to CIC-ND-SI.
Management Discussion and Analysis
Management Discussion and Analysis Report for the year under review as stipulated under the Listing Regulations and Master Circular - Non-Banking Financial Companies - Corporate Governance (Reserve Bank) Directions, 2015 is presented in a separate section forming part of this Annual Report.
Resources and Liquidity
The Companyâs Net Worth as on March 31, 2018, stood at Rs.14,006 crore. The Company has raised Rs.8,351 crore during the financial year 201 7-1 8 by issuance of Commercial Papers, Non-Convertible Debentures (NCDs) and other money market instruments.
During the year under review, the Company has allotted 71,882 equity shares arising out of the exercise of Employees Stock Options granted to the employees of the Company and its subsidiaries.
RCLâs debt equity ratio as on March 31, 2018 stood at 1.48:1.
Deposits
The Company has neither accepted nor renewed any fixed deposits during the year. There are no unclaimed deposits, unclaimed / unpaid interest, refunds due to the deposit holders or to be deposited to the Investor Education and Protection Fund as on March 31, 2018.
Particulars of Loans, Guarantees or Investments
Pursuant to Section 186(11) of the Companies Act, 2013 (the âActâ) loans made, and acquisition of securities by a Non-Banking Financial Company in the ordinary course of its business are exempted from disclosure in the Annual Report.
Subsidiary and Associate companies
During the year under review, Reliance Health Insurance Limited became a subsidiary and Reliance Asset Management (Mauritius) Limited, Reliance Asset Management (Singapore) Pte Limited and Reliance AIF Management Company Limited ceased to be subsidiaries of the Company. Reliance Nippon Life Asset Management Limited ceased to be a subsidiary and became an associate and Quant Commodity Broking Private Limited ceased to be an associate of the Company.
The performance and financial position of the major subsidiary companies are presented in Management Discussion and Analysis Report forming part of this Annual Report. Also, a report on the performance and financial position of each of the subsidiary and associate companies as per the Act is provided in the consolidated financial statement. The Policy for determining material subsidiary companies may be accessed on the Companyâs website at http://www.reliancecapital.co.in/pdf/ Policy-for-Determination-of-Material-Subsidiary.pdf.
Reliance Home Finance
The Scheme of Arrangement under Sections 391 to 394 of the Companies Act, 1 956 (the âSchemeâ) for demerger of Real Estate Lending Business of the Company to Reliance Home Finance Limited (RHFL) has been sanctioned by the National Company Law Tribunal, Mumbai Bench on August 10, 2017. The Scheme became effective on September 5, 201 7 on filing with the Registrar of Companies, Maharashtra at Mumbai with effect from April 1, 201 7 i.e. Appointed Date. RHFL had issued and allotted to all equity shareholders of the Company, 1 (One) fully paid Equity Share of RHFL for every 1 (One) equity share of Rs.10 each fully paid up held in the Company as on Record Date i.e. September 6, 201 7. After receiving requisite approvals, equity shares of RHFL were listed on the Stock Exchanges on September 22, 2017.
Reliance Nippon Life Asset Management (RNLAM)
Reliance Nippon Life Asset Management Limited on June 7, 201 7 made the initial public offer comprising a fresh issue and an offer for sale of its 6,1 2,00,000 equity shares of Rs.1 0 each in the price band of Rs.247 to Rs.252. The IPO was oversubscribed 81 times excluding the Anchor Investor Offer and the equity shares of RNLAM were listed on the Stock Exchanges on November 6, 2017.
Consolidated Financial Statement
The Audited Consolidated Financial Statement for the financial year ended March 31, 201 8, based on the financial statement received from subsidiary and associate companies, as approved by their respective Board of Directors have been prepared in accordance with Accounting Standard (AS) - 21 on âConsolidated Financial Statementsâ read with AS-23 on âAccounting for Investments in Associatesâ, notified under the Act, read with the Accounting Standards Rules as applicable.
Directors
The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of Independence as prescribed under the Act and the Listing Regulations.
The details of programme for familiarisation of Independent Directors with the Company, nature of the industry in which the Company operates and related matters are put up on the website of the Company at the link http://www.reliancecapital. co.in/Policies.aspx.
In terms of the provisions of the Companies Act, 2013, Mr. Jai Anmol Ambani, Director of the Company, retires by rotation and being eligible, offers himself for re-appointment at the ensuing AGM.
A brief resume of Mr. Jai Anmol Ambani, along with requisite details, as stipulated under Regulation 36(3) of the Listing Regulations, is given in the section on Corporate Governance Report forming part of this Annual Report.
Dr. Bidhubhusan Samal and Mr. V. N. Kaul, who were appointed as Independent Director(s) of the Company by the Members for a term of 5 (five) years up to September 30, 2019 and have attained the age of seventy five years. In terms of the amended Regulation 1 7 of the Listing Regulations vide SEBI Notification No. SEBI/LAD-NRO/GN/2018/10 dated May 9, 2018, it is proposed to obtain Membersâ approval for continuation of directorship after April 1, 201 9 of Dr. Samal and Mr. Kaul as Independent Director(s) at the ensuing AGM.
Key Managerial Personnel
During the year, there was no change in the Key Managerial Personnel.
Evaluation of Directors, Board and Committees
The Company has devised a policy for performance evaluation of the individual Directors, Board and its Committees, which includes criteria for performance evaluation.
Pursuant to the provisions of the Act and Regulation 17(10) of the Listing Regulations, the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of the Committees of the Board. The Board performance was evaluated based on inputs received from all the Directors after considering criteria such as Board composition and structure, effectiveness of Board / Committee processes, and information provided to the Board, etc. A separate meeting of the Independent Directors was also held during the financial year for the evaluation of the performance of non-independent Directors, performance of the Board as a whole and that of the Chairman.
The Nomination and Remuneration Committee has also reviewed the performance of the individual Directors based on their knowledge, level of preparation and effective participation in meetings, understanding of their roles as directors, etc.
Policy on appointment and remuneration for Directors, Key Managerial Personnel and Senior Management Employees
The Nomination and Remuneration Committee of the Board has devised a policy for selection and appointment of Directors, Key Managerial Personnel and Senior Management Employees and their Remuneration. The Committee has formulated the criteria for determining qualifications, positive attributes and independence of a Director, which has been put up on the Companyâs website www.reliancecapital.co.in. The policy on the above is attached as Annexure - A.
Directorsâ Responsibility Statement
Pursuant to the requirements under Section 1 34(5) of the Act with respect to Directorsâ Responsibility Statement, it is hereby confirmed that:
i. In the preparation of the annual financial statement for the financial year ended March 31, 2018, the applicable Accounting Standards had been followed along with proper explanation relating to material departures, if any;
ii. The Directors had selected such accounting policies and applied them consistently and 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, 201 8 and of the profit of the Company for the year ended on that date;
iii. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv. The Directors had prepared the annual financial statement for the financial year ended March 31, 201 8 on a âgoing concernâ basis;
v. The Directors had laid down proper internal financial controls to be followed by the Company and such financial controls are adequate and are operating effectively; and
vi. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
Contracts and Arrangements with Related Parties All contracts / arrangements / transactions entered into / by the Company during the financial year under review with related parties were on an armâs length basis and in the ordinary course of business.
There were no materially significant related party transactions which could have potential conflict with interest of the Company at large.
During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.
All Related Party Transactions were placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee was obtained for the transactions which were of a repetitive nature. The transactions entered into pursuant to the omnibus approval so granted were reviewed and statements giving details of all related party transactions were placed before the Audit Committee and the Board of Directors on quarterly basis. The policy on Related Party Transactions as approved by the Board is uploaded on the Companyâs website at the link http://www.reliancecapital.co.in/pdf/Policy_for_ Related_Party_Transaction.pdf. Your Directors draw attention of the members to Note No. 34 to the Financial Statement which sets out related party disclosures.
Material Changes and Commitments if any, affecting the financial position of the Company
There were no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year and the date of this Report.
Meetings of the Board
A calendar of Meetings is prepared and circulated in advance to the Directors. During the year, seven Board Meetings were held, details of meetings held and attended by each Director are given in the Corporate Governance Report.
Audit Committee
The Audit Committee of the Board consists of Independent Directors namely Mr. Rajendra P. Chitale, Chairman, Dr. Bidhubhusan Samal, Mr. V. N. Kaul, Ms. Chhaya Virani, Non-Independent Director, Mr. Amitabh Jhunjhunwala and Executive Director, Mr. Jai Anmol Ambani as members. During the year, all the recommendations made by the Audit Committee were accepted by the Board.
Auditors and Auditorsâ Report
M/s. Pathak H.D. & Associates, Chartered Accountants and M/s. Price Waterhouse & Co Chartered Accountants LLP, Chartered Accountants were appointed as Auditors of the Company for a term of 5 (five) consecutive years, at the Annual General Meeting of the Company held on September 27, 2016 and September 26, 2017, respectively. The Company has received letters from M/s. Pathak H.D. & Associates, Chartered Accountants, and M/s. Price Waterhouse & Co Chartered Accountants LLP that they are not disqualified from continuing as Auditors of the Company.
The Notes on Financial Statement referred to in the Auditorsâ Report are self-explanatory and do not call for any further comments. The observations and comments given by the Auditors in their Report read together with notes on Financial Statements are self-explanatory and hence do not call for any further comments under Section 134 of the Act.
Maintenance of Cost Records
The Central Government has not specified maintenance of cost records, for any of the products of the Company, under Section 148(1) of the Act.
Secretarial Standards
During the year under review, the Company has complied with the applicable Secretarial Standards issued by The Institute of Company Secretaries of India.
Secretarial Audit
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors had appointed M/s. Aashish K. Bhatt & Associates, Practicing Company Secretaries, to undertake the Secretarial Audit of the Company. There is no qualification, reservation or adverse remark made in their Secretarial Audit Report. The Audit Report of the Secretarial Auditor is attached as Annexure - B.
Extract of Annual Return
Extract of the Annual Return of the Company in form MGT-9 is attached as Annexure - C.
Particulars of Employees and related disclosures
(a) Employees Stock Option Scheme(s)
Employees Stock Option Scheme(s) (ESOS 201 5 and ESOS 2017) were approved and implemented by the Company and Options were granted to the employees in accordance with guidelines applicable to ESOS. The Nomination and Remuneration Committee of the Board monitors the Scheme. The existing ESOS Scheme and Plans are in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (SEBI Regulations).
The Company has received a certificate from the Auditors of the Company that the ESOS 2015 and ESOS 2017 have been implemented in accordance with the SEBI Regulations and as per the resolution passed by the members of the Company authorising issuance of the said Options. The details as required to be disclosed under SEBI Regulations are put on the Companyâs website at http://www.reliancecapital.co.in/ESOS-Disclosure.aspx.
(b) Other Particulars
In terms of the provisions of Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules are provided in the Annual Report, which forms part of this Report.
Disclosures relating to the remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 201 4, as amended, are also provided in the Annual Report, which forms part of this Report.
However, having regard to the provisions of first proviso to Section 1 36(1) of the Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. The said information is available for inspection at the registered office of the Company on all working days, except Saturdays between 11:00 A.M. and 1:00 P.M. up to the date of the Meeting. Any member interested in obtaining the same may write to the Company Secretary and the same will be furnished on request.
Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
The Company is a Non-Banking Financial Company and does not involve in any manufacturing activity, most of the information as required under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 are not applicable. However, the information as applicable has been given in Annexure - D forming part of this Report.
Corporate Governance
The Company has adopted âReliance Group-Corporate Governance Policies and Code of Conductâ which sets out the systems, processes and policies conforming to the international standards. The report on Corporate Governance as stipulated under Regulation 34(3) read with Para C of Schedule V of the Listing Regulations is presented in separate section forming part of this Annual Report.
A Certificate from the Auditors of the Company M/s. Pathak H.D. & Associates, Chartered Accountants and M/s. Price Waterhouse & Co Chartered Accountants LLP confirming compliance to the conditions of Corporate Governance as stipulated under Para E of Schedule V of the Listing Regulations, is enclosed to this Report. Ombudspersons & Whistle Blower (Vigil Mechanism)
The Company has formulated an Ombudspersons & Whistle Blower (Vigil Mechanism) policy to address the genuine concerns, if any, of the Directors and employees. The details of the same have been stated in the Report on Corporate Governance and the policy can be accessed on the Companyâs website.
Risk Management
The Company has laid down a robust Risk Management Policy, defining Risk profiles involving Strategic, Technological, Operational, Financial, Organisational, Legal and Regulatory risks within a well defined framework. The Risk Management Policy acts as an enabler of growth for the Company by helping its businesses to identify the inherent risks, assess, evaluate and monitor these risks continuously and undertake effective steps to manage these risks. A Risk Management Committee consisting of Mr. V. N. Kaul, Chairman and Ms. Chhaya Virani as member, periodically reviews the robustness of the Risk Management Policy. The periodical update on the risk management practices and mitigation plan of the Company and subsidiaries are presented to the Audit Committee and Board of Directors. The Audit Committee and Board periodically review such updates and findings and suggest areas where internal controls and risk management practices can be improved. More details on Risk Management indicating development and implementation of Risk Management Policy including identification of elements of risk and their mitigation are covered in Management Discussion and Analysis section, which forms part of this Report.
Compliance with provisions of Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company is committed to uphold and maintain the dignity of woman employees and it has in place a policy which provides for protection against sexual harassment of women at work place and for prevention and redressal of such complaints. During the year, no such complaints were received. The Company has also constituted an Internal Compliance Committee under the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013.
Corporate Social Responsibility
The Company has constituted Corporate Social Responsibility (CSR) Committee in compliance with the provisions of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014. The Corporate Social Responsibility Committee has formulated a Corporate Social Responsibility Policy (CSR policy) indicating the activities to be undertaken by the Company. The CSR policy may be accessed on the Companyâs website at the link; http://www.reliancecapital. co.in/pdf/Group_CS R_Policy_Document.pdf.
The CSR Committee consists of Dr. Bidhubhusan Samal as Chairman, Mr. Amitabh Jhunjhunwala, Mr. V. N. Kaul and Mr. Jai Anmol Ambani, as members. The disclosures with respect to CSR activities is given in Annexure - E.
Order, if any, passed by Regulators or Courts or Tribunals
No orders have been passed by the regulators or courts or tribunals impacting the going concern status and the Companyâs operations.
Internal Financial Controls and their adequacy
The Company has in place adequate internal financial controls across the organization. The same is subject to review periodically by the internal audit cell for its effectiveness. During the year, such controls were tested and no reportable material weakness in the design or operation were observed.
Business Responsibility Report
Business Responsibility Report for the year under review as stipulated under the Listing Regulations is presented in the separate section forming part of this Annual Report.
Acknowledgement
Your Directors would like to express their sincere appreciation for the co-operation and assistance received from shareholders, debenture holders, debenture trustee, bankers, financial institutions, regulatory bodies and other business constituents during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, officers and staff, resulting in the successful performance of the Company during the year.
For and on behalf of the Board of Directors
Anil Dhirubhai Ambani
Chairman
Mumbai
August 10, 2018
Mar 31, 2017
To the Members,
Reliance Nippon Life Asset Management Limited
(Formerly known as Reliance Capital Asset Management Limited)
The Directors lake pleasure in presenting their Twenty Second Annual Report on the business and operations of your Company, together with the audited financial statements, for the year ended March 31,2017,
Al the outset, your Directors wish to reiterate your Companyâs commitment to the highest standards of corporate governance in order to enhance the trust of all its stakeholders Strong and robust corporate governance practices have facilitated your Company in standing up to the continued scrutiny of domestic & international investors and that of the Regulatory authorities
Your Company endeavors to remain one of the leading players in the Asset Management business in India and enhance its global footprint as well.
FINANCIALS
The standalone and consolidated financial statements of the Company for the year ended March 31, 2017, have been prepared under the historical cost convention, in accordance with the generally accepted accounting principles in India and in line with the provisions of the Companies Act, 2013 (Act) The financial highlights (on a consolidated and standalone basis) of the Company for the year ended March 31, 2017 are as follows
(In Rs.)
Description |
Consolidated |
Standalone |
||
Year ended March 31, 2017 |
Year ended March 31. 2016 |
Year ended March 31, 2017 |
Year ended March 31, 2018 |
|
Gross income |
14,353.148,829 |
13.138 198,886 |
14,004,372,147 |
12,710.696.654 |
Profit before exceptional item and tax |
5,313,129,596 |
5,023,995.209 |
5,821.090,313 |
4.962.743,794 |
Exceptional Items |
- |
- |
- |
4.028,535 |
Profit Before Tax |
5,813,129.696 |
5,023,956,209 |
5,821.090,313 |
4,958,715.259 |
Provision for taxation |
1,74-1,999,424 |
1,275,6139.007 |
! 727 093.206 |
1.257.800,000 |
Provision for Deterred Tax Asset/ |
48 489 352 |
16,273,942 |
4(3,246,393 |
(833,962) |
(Liability) |
||||
Profit After Tax before share of minority shareholders |
4.019,640.921 |
3.764,401,144 |
4.047,750.714 |
3.701.754.221 |
Share of Minority Shareholders |
- |
66.056 |
- |
- |
Not Profit |
4,019,640.921 |
3,764,335.088 |
4.047,750,714 |
3,701.754,221 |
Balance carried to Balance Sheet |
11.116,795.338 |
10.039.836.996 |
11.266.005,325 |
10,220,937.190 |
Basic EPS of Rs.10 each |
343.93 |
326.77 |
351.37 |
321 33 |
Diluted EPS ot Rs.10 each |
348. 93 |
326 77 |
351.37 |
321 33 |
The Consolidated Financial Statements of the Company, along with that of its subsidiaries, for the year ended March 31, 2017 (duly audited by their respective statutory auditors) are forming part of this Annual Report.
The annual accounts of all the subsidiary companies and the related detailed information will be made available to the Shareholders of the Company seeking such information at any point of time. The annual accounts of all the subsidiary companies will also be kept at the Corporate Office of the Company, for inspection by the Shareholders. The Company shall furnish a hard copy Of details of accounts of subsidiaries to any Shareholder on demand.
DETAILS OF MATERIAL CHANGES AND COMMIMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments affecting the financial position of the Company since the date of the financial statements i.e March 31,2017,
DIVIDEND
EQUITY SHARES:
Your Directors are pleased to recommend the payment of dividend of Rs. 215/- (Rupees Two Hundred Fifteen Only) per equity share of Rs 10/- each, thereby entailing the total payout of Rs. 2,981,016.202/- (including dividend distribution tax and other applicable taxes/ surcharges).
PREFERENCE SHARES:
Your Directors are pleased to recommend the declaration and payment of dividend of Rs 6/-(Rupees Six only) on each 6% Non-Cumulative. Non Convertible Redeemable Preference Shares of the Company, for the year under review, thereby entailing the total payout of Rs. 21.664,377/- (including dividend distribution tax and other applicable taxes/surcharges)
AMOUNT TO BE CARRIED TO RESERVES
In view of the declaration and payment of dividend to the Shareholders of the Company and in accordance with the provisions of Section 123 of the Act, your Directors do not propose any amount to be transferred to the General Reserves of the Company.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENT
Details of Leans, Guarantees and Investments covered wider the provisions of Section 1B6 of the Act are provided as part of the notes to the Financial Statements.
MATERIAL DEVELOPMENTS
CHANGE OF NAME OF THE COMPANY
Pursuant to an Agreement entered into amongst the major Shareholders of your Company i e Reliance Capital Limited and Nippon Life Insurance Company, during the year the name of the Company was changed from Reliance Capital Asset Management Limitedâ to Reliance Nippon Life Asset Management Limitedâ.
ACQUISTION OF SCHEMES OF GOLDMAN SACHS MUTUAL FUND
During the year, your company consummated the transaction to take over the asset management rights of the schemes of Goldman Sachs Mutual Fund in India (âGSMFâ), from the asset management company and the trustee Company of GSMF Overall 12 (twelve) schemes were transferred to your Company The said transfer of schemes was also accompanied with taking over a team of 20 people/ employees of GSMF. With the acquisition of the said schemes, along with human capital of a cumulative work experience of 290 years, your Company has augmented its strength in exchange traded fund space and your Company hopes to grow from strength to Strength in I his niche space.
COMPLIANCE CULTURE AND RISK MANAGEMENT
Your Company is essentially Compliance centric and has a huge focus in this direction The Compliance function is manned by a dedicated and experienced team of professionals. The Compliance team regularly conducts venous educative training programs for various segments within the organization. Your Company thrives towards a culture of Total Complianceâ and it has a âZero Toleranceâ policy for non-compliances.
Your Company has a comprehensive Risk Management Policy that envisages an enterprise risk management framework and clearly sets out the objectives & elements of risk management within the organization, including the constitution of a Risk Management department (reporting directly to the CEO and to the Board of Directors), a Risk Management Committee (RMC) and the underlying mechanisms & processes to be used for identification, monitoring and reporting of various categories of risks including credit, market, liquidity and operational risks. There are well documented & Board approved policies & processes which are in place, in addition, proper & adequate Insurance Policies and business continuity planning have also been adequately put into place.
You will note that the basic revenue model of an asset management company is charging Of management fees on assets under management provided by the investors In case of an eventuality where the Company repeatedly fails to comply with regulatory norms with regard to investment restrictions and/ or code Of conduct, or if there are repeated & glaring instances of fraud / front-running then the same may be a catastrophic risk for the enterprise However, your Directors would like to assure you that such risks are being mitigated by putting into place robust & time tested policies & processes, qualified & professional manpower to run these processes under the aegis & guidance of your Board of Directors Board Committees and various other internal committees, consisting of its senior employees.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an internal Control System, commensurate With the size scale and complexity of its operations. To maintain its objectivity and independence, the Internal Auditor reports to the Audit Committee.
The Internal Auditor monitors and evaluates the efficacy and adequacy of the internal control system in the Company, its compliance with operating systems, accounting procedures and policies Based on the report of the Internal Auditor, process owners undertake corrective action in their respective areas and thereby strengthen the controls.
The Risk Management department follows up on pending audit issues and ensures that corrective actions are timely taken. Audit observations, if any. and corrective actions thereon, are also presented to the Audit Committee of the Board.
OPERATIONAL HIGHLIGHTS
ASSET MANAGEMENT:
In terms of the authorization from SEBI, your Company acts as the asset manager to Reliance Mutual Fund (âRMF), which is the third largest Mutual Fund in India, in terms of the Quarterly Average Assets under Management {QAAUM) as on March 31, 2017
The QAAUM of RMF as on March 31, 2017 was approx. Rs 210,891 Crores comprising of Rs 57,011 Crores of Equity, Rs 103.137 Crores of Debt. Rs. 37,995 Crores of Liquid Funds and Rs 12.746 Crores of ETF assets It may tie noted that the QAAUM of RMF as cm March 31. 2016 was approx Rs 158.408 Crores comprising of Rs 47,660 Crores of Equity, Rs. 75,422 Crores of Debt. Rs. 33.543 Crores of Liquid Funds: and Rs 1,775 Crores Of ETF assets.
Overall QAAUM of RMF has shown positive growth of around 33.1% during the financial year 2016-17, while the Indian Mutual Fund industry witnessed an overall positive growth of approx 35.2% in terms of QAAUM (Source: AMFl).
NEW SCHEMES LAUNCHED:
During the year under review, RMF launched the following new schemes;
Scheme Name |
Typo |
Structure |
Reliance Fixed Horizon Fund - XXXI |
Debt |
Close - ended |
Reliance Fixed Horizon Fund - XXXII |
Debt |
Close - ended |
Reliance Fixed Horizon Fund -XXXXlll |
Debt |
Close - ended |
Reliance Dual Advantage Fixed Tenure Fund X |
Debt |
Close - ended |
Reliance ETF Long Term Gilt |
ETF |
Open - ended |
As on March 31, 2017, RMF has a well rounded portfolio of 90 schemes under various categories such as Equity. Debt. Exchange Traded Fund. Fixed Maturity Plans and Interval Funds
PORTFOLIO MANAGEMENT:
Your Company has been rendering Portfolio Management Services (âPMSâ) since August 2004 It currently offers discretionary and advisory portfolio management services to various categories of clients. The PMS business continued its positive performance through the year. As at the year end, the total AUM of the PMS business (including discretionary and advisory services and also including EPFO and CMPFO portfolio) stood at Rs 1.42.510 Crores as against Rs 1.23,631 Crores for the Iasi financial year.
Going forward, the PMS division of your Company will endeavor to identity suitable opportunities for launching equity portfolios and rendering investment advisory services Our focus on providing customized offerings to high net-worth individuals & corporates will continue via PMS in Financial Year 2017-18.
Your Company is one of the four fund houses who are managing the prestigious Employees Provident Fund Organization (EPFO) mandate Since last few years As on March 31. 2017. the EPFO portfolio stood at Rs 1.21,748 Crones and CMPFO stood at Rs 20 762 Crores
ALTERNATIVE INVESTMENT BUSINESS:
Alternative Assets remains an area of great interest in investment management space The term Alternative Assets, is generally used to describe all assets other than the conventional listed equity and investment grade debt. Hence, this includes non-conventional/ non-benchmarked strategies in equities, non-investment grade debt/ high yield debt, assets like real estate, commodities, distress debt. etc. Reliance AIF Management Company Limited (âRAIFâ), which is a subsidiary of your Company, is engaged in this business of managing alternative investment funds During the year. RAIF has undertaken final closure of Reliance Yield Maximiser AIF Scheme III. its third scheme in the Secured Real Estate space To date, a total commitment of - Rs. 1.300 Crores has been raised across all offerings. During the year. RAIF has aimed to diversify across asset classes and have launched two additional schemes in the Sector Agnostic Debt and Commercial Rea Estate Space respectively Going forward. RAIF will continue to focus on profitable growth and include more asset classes.
RELIANCE INFRASTRUCTURE INVIT FUND:
We are pleased to inform you that during the year, the Company has been appointed as the investment Manager for Reliance Infrastructure InvIT Fund, an infrastructure investment trust registered with the Securities & Exchange Board of India. Reliance Infrastructure InvIT Fund is proposing to raise funds by way of public offer and shall make investments in the infrastructure assets In this regard, your Company has secured the requisite approval of SEBI regarding the Investment management activity in respect of Infrastructure Investment Trust
NATIONAL PENSION SYSTEM:
Reliance Capital Pension Fund Limited (âRCPFLâ), a subsidiary of your Company is acting as one of the Pension Fund Managers for managing the pension assets under the National Pension System (âNPSâ)
NPS industry witnessed a rapid growth during the current year, both in terms of subscriber base as well as in respect or the assets under management The subscribers under NPS schemes as of March 31, 2017 were in excess of 1.54 crores as compared to 97 50 Lakhs during the previous year. Further, the subscribers under private sector of NPS schemes as of March 31, 2017 were 10.22 Lakhs as compared to 6 96 Lakhs as or previous year i e March 31,2016
The overall assets managed by the NPS industry, as of March 31, 2017 were Rs 1.74,558.15 Crores as compared to around Rs 1,16,303 76 Crores as at the end of the last year, Further, the assets under management related to Private sector grew from Rs, 3,554 Crores last year to Rs 7,069 Crores as of March 31, 2017. The assets under management of RCPFL during the current fiscal year has gone up to Rs, 163.97 Crores as compared to Rs 111.22 Crores in the last year
INTERNATIONAL BUSINESS:
Global Economic Environment
Year 2016-17 has been an eventful year from the Global social and economic perspective From concerns around hard landing of the Chinese economy to Brexit event to a rise in the negative yield-bearing assets globally to the stupendous demonetization drive in India to the US presidential election victory of Donald Trump, the year has been action packed to say the least.
Despite the volatility, Indian economy appears well primed to continue its journey towards a sustainable recovery with the Nifty starts recovering in the last quarter of the year 2016-17
After a lackluster out-turn in the year 2016-17, economic activity is projected to pick up pace in 2017-1B. especially in emerging markets and developing economies The economic recovery in India is strongly supported by favorable factors like fiscal stability, lower inflation, policy reforms like demonetization, passage of the GST bill, modification in FDI policy and continued Government spending.
Offshore Opportunities
Foreign Portfolio investor (âFPDâ) flows in Indian equities Stood at a 5 years low of INR 187Bn in 2016-17 Further, FPls remained net sellers to the extent of I NR 443Bn in fixed income markets during the calendar year 2016, Interestingly, Domestic Institutional Investors ploughed in INR 372bn into Indian equities during the year surpassing the net flows from FPls. However, with clarity in the Union Budget on capital gain taxation and indirect transfers, FPls turned net buyers.
Other Opportunities
The international subsidiaries of your Company manage a wide range of India investment funds through which overseas investors can participate in the India growth story. Your Company extends its services through offices in Singapore, Mauritius and Dubai.
Non-Binding Advisory Services
Under its non-binding advisory mandate, your Company provides advisory services to various offshore entities and the assets under the advisory business as on March 31, 2017 is Rs 5,576 crores
Singapore
Your Singapore subsidiary. Reliance Asset Management (Singapore) Pte Ltd CRAMSâ), which established its business in Singapore in the year 2006 has closed the financial year 2016-17 with 238,925,146 USD assets under management.
After having successful launch of UCITS equity fund in Luxembourg which is being advised by your Company, RAMS continued its efforts through the launch of new products with over 127.432.306 USD raised from offshore investors this year.
Mauritian
The Mauritian subsidiary of your Company. Reliance Asset Management (Mauritius) Limited (âRAMMâ) continued its focus on rendering of investment management services to India focused collective investment schemes i.e. Emergent India Investments Limited
CORPORATE SOCIAL RESPONSIBILITY
As part of its initiatives under âCorporate Social Responsibility (âCSRâ). the Company has undertaken projects in the areas of promoting preventive heafth care in accordance with Schedule VII of the Act
The Annual Report on CSR activities is annexed herewith as Annexure - A.
AWARDS AND RECOGNITION
During the year, your Company and the Reliance Mutual Fund have been bestowed with the following awards and recognitions
- Stevie Award in the following categories
- innovation in Customer Service - Financial Services Industries (Status: Silver Stevie Winner)
- National Sales Team of the Year (Status: Bronze Stevie Winner):
- Reliance Mutual Fund featured in Best BFSI Brands 2016 by Economic Times:
- Finnoviti Award 2017 for âSimply Save & Instant Redemptionâ mobile solutions;
- National Awards for Excellence in Digital Marketing & Social Media - Best Progressive Digital Marketing Company;
- National Awards to Reliance Mutual Fund for Excellence in Digital Marketing £ Social Media - Simply Save - Digital Application of the year:
- BBC Knowledge - National Digital Marketing Awards - Best Financial Website to Reliance Mutual Fund;
- BBC Knowledge - National Digital Marketing Awards - Best Consumer Mobile App to Reliance Mutual Fund; â
- Asset Benchmark Research Awards - Top Investment Houses in Asian Local Currency Bonds, India, Rank 3;
- The Company featured in Economic Times Coffee Table Book as Mumbaiâs Trending Workplaces for Organization Creating an Enabling Culture of the employees.
FUTURE OUTLOOK
During the year under review, the Indian Mutual Fund Industry witnessed an overall positive growth of approx 35% in terms of QAAUM. from an amount of approx. Rs 13,53,444 Crores as at March 31, 2016 to an amount of approx Rs 18,29.583 Crores as at March 31, 2017 (Source: AMFI) with following
- 34.37 Lakh Net New SIPs registered during the Financial Year (as on February 2017)
- Around 48 Lakh Equity folios have been added this year so far (as on February 2017)
Government led various measures (e.g. Demonetization, GST) have already started showing positive impact in the economy. The Mutual Fund Industry has reflected stronger growth this year.
It has been a good year for your Company, as well. Your Company continues to be amongst the largest AMCs managing assets of around Rs 3.55,800 Cr [USD 55 Billion) across Mutual Funds, PMS. Pension Funds and Offshore strategies Your Company continues to aggressively pursue growth opportunities in the fund management and investment advisory space, both at domestic as well as at the international level
There is significant growth potential for mutual fund Industry. There are only 5 4 Cr investor folios reflecting deep under penetration in adoption of mutual fund products in india We continue to focus on geographical and retail penetration. Our Industry first initiative âMutual Fund Dayâ is directed effort to increase retail participation across the country. As per latest data available on AMFI, over 85% of the Industry AUM originates from the Top 15 cities. This provides opportunities far expansion in smaller locations. Your Company has been focusing on bringing new investors to unlock untapped potential. In line with the SEBl regulations we intend to improve penetration levels in Tier III, Tier IV locations and increase use Of technology to improve the investor expenence.
The smart phone user base in India is growing rapidly and provides us an opportunity to connect with large investor base through our digital interfaces. The digital space has the potential to significantly improve the service quality and also help ease in first-time investors to the Industry Your Company has one of the most integrated Digital platforms in the Industry, and we intend to continue building on it to further Improve the investorsâ experience. Being one of the largest players in the industry, your Company will continue investing in growing the market size, achieving product innovation, educating the investors, increasing the distribution reach and enhancing customer service infrastructure with aggressive expansion strategies.
SUBSIDIARIES
As of March 31, 2017, your Company had four (4) subsidiaries. Two of such subsidiaries are overseas being one each in Singapore and Mauritius and two subsidiaries being in India All the subsidiaries of the Company are engaged in financial services and related activities.
During the year under review, the subsidiary of your Company at United Kingdom i.e Reliance Capita! Asset Management (UK) Limited (formerly known as Reliance Capital Asset Management (UK) Pic.) had been stricken off from the Register maintained by the Companies House. United Kingdom.
A statement w.r.t. the performance and the financial position of the subsidiaries of the Company is forming a part of the Consolidated Financial Statements of the Company.
Key Managerial Personnel
in terms of the requirements of Section 203 of the Act. during the year under review, the Following officials/ employees acted as the âKey Managerial Personnelâ of the Company
a) Mr. Sundeep Sikka - Executive Director & Chief Executive Officer;
b) Mr. Ajay Patel - Manager,
c) Mr. Prateek Jain - Chief Financial Officer;
d) Mr Yogesh Sachdeva - Company Secretary (up to October 25. 2016). and
e) Mr Deepak Mukhija - Company Secretary (effective from December 20, 2016)
DIRECTORS
During the year. Mr. Shinichi Okamoto, Director on the Board of the Company has resigned w.e f April 22, 2015. Further. Mr, Soum&n Ghosh. Director on the Board of the Company has also resigned w.e.f. March 31. 2017
In order to further broad base the constitution of the Board, during the year. General Ved Prakash Mahk (Retd.), Mr. Kazuhide Toda and Mr Tomonao Gotoda were appointed as Directors and Mr. Sundeep Sikka was appointed as a Whole-time Director (designated as Executive Director & Chief Executive Officer) on the Board of your Company.
In accordance with the provisions of Section 152 of the Act. Mr Kazuhide Toda (Director) is liable to retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, has offered himself for re-appointment, as such, The Board recommends the reappointment of Mr Kazuhide Toda as a Director of the Company
Further, since the closure of the financial year 2016-17, following changes have taken place in respect of your Companyâs Board:
- Mr. Tomonao Gotoda. Director on the Board of the Company, resigned w.e.f. April 22,2017
- Mr. Takayuki Murai has been appointed as the Additional Director of the Company on April 22, 2017 Mr Takayuki Murai shall hold office as Directors, uplo the date of ensuing Annual General Meeting and are eligible to be appointed as Director thereat In terms of Section 160 of the Act, your Company has received a notice in writing from one of the members, along with the requisite deposit proposing the candidature of Mr. Takayuki Murai for hrs appointment as Director
All the Independent Directors of your Company i.e Mr. Kanu H. Doshi. General Ved Prakash Malik (Retd.), Mr. Sushil Chandra Tripathi and Ms. Ameeta Chatterjee, have duly furnished the required declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act.
During the Year, in terms of the requirements of the Act, the Independent Directors held their separate meeting, where)n the performance of the Board and that of the non- independent Directors were evaluated. In this very meeting itself, the Independent Directors of the Company also thoroughly discussed the quantity, quality & the timelines of the flow of information between the Companyâs management and the Board and arrived at a view that the same is adequate and sufficient to enable effective decision making by the Board The Nomination a Remuneration Committee of the Company also undertook the evaluation of the Directorsâ performance.
BOARD AND COMMITTEE MEETINGS
During the year under review. Nine (9) Board meetings and Three (3) meetings of the Committee of Directors were held.
Your Directors wish to inform that the functioning of the Board is supplemented by various committees (Board sub â committees and management committees), which have been constituted from time to time, such as Audit Committee. Committee of Directors, CSR Committee. Nomination & Remuneration Committee, Valuation Committee, Investment Committee, InvlT Committee, Risk Management Committee, Broker Empanelment Committee, Operating Committee, Compliance Committee. Proxy Voting Committee, Information Security Risk Management Committee, etc to name a few. Each of the aforesaid Committees has been constituted in order to ensure due compliance with the applicable laws and to ensure the highest levels of corporate governance. The minutes of the meetings of each of these Committees are duly placed before the Board for noting and confirmation
AUDIT COMMITTEE
In terms of the requirements of Section 177 of the Act, the Audit Committee of the Company consists of majority of Independent Directors. As on dale of this report, it comprises Mr Kanu H, Dos hi [Independent Director], Mr Sushi I Chandra Tripathi [Independent Director), Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd,) [Independent Director) and Mr Takayuki Murai (Associate Director)
During the year, Seven (7) meetings of the Audit Committee were held.
NOMINATION & REMUNERTION COMMITTEE
In terms of the requirements of Section 178 of the Act, the Nomination & Remuneration Committee of the Company consists of majority of Independent Directors, As on date of this report, it comprises Mr Kanu H Doshi [Independent Director). Mr Sushil Chandra Tripathi [Independent Director), Ms Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director) and Mr. Kgzuhide Toda [Associate Director).
During the year, 2 meetings of the Nomination & Remuneration Committee were held.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
In terms of the requirements of Section 135 of the Act, the Corporate Social Responsibility (âCSRâ) Committee of the Company consists Of seven members As on date of this report it comprises Mr Kami H. Dos hi [independent Director], Mr Susfiil Chandra Trrpalhi [Independent Director], Ms Ameeta Chatterjee [Independent Director]. General Ved Prakasft Malik (Retd ) [Independent Director), Mr. Sundeep Sikka (Associate Director], Mr. Kazuhide Toda I Associate Director] and Mr. Takayuki Murai [Associate Director].
During the year, 2 meetings of the CSR Committee were held
AUDITORâS OF THE COMPANY â STATUTORY AND INTERNAL
In accordance with the applicable provisions of law, the Company has appointed Statutory and Internal Auditors, who periodically submit their reports, which are placed before the Audit committee for discussion, review and implementation of their recommendations.
STATUORY AUDITORS:
In terms or Section 139 of the Act read with Companies (Audit and Auditors) Rules, 2014, at the Nineteenth Annual General Meeting of the Company. M/s B S R & Co. LLP, Chartered Accountants were appointed as the Statutory Auditors of tiia Company in the Annual General Meeting held on June 24, 2014, for a period of Four (4) years subject however to ratification by members at every Annual General Meeting of the Company.
The Board recommends ratification of their appointment, as such, at the ensuing Twenty Second Annual General Meeting of the Company,
INTERNAL AUDITORS :
M/s, NMAH & Associates LLP, Chartered Accountants were appointed as I he Internal Auditorsâ of your Company for the year 2016-17 Your Directors approved their reappointment as such for I he financial year 2017-18.
AUDITORS OF THE SCHEMES OF RELIANCE MUTUAL FUNDS â STATUTORY AND INTERNAL
In accordance with the applicable provisions of law, the Company has appointed Statutory and Internal Auditors tor the various Schemes of Reliance Mutual Fund, who periodically submit their reports, which are placed before the Audit Committee for discussion, review and implementation of their recommendations.
STATUTORY AUDITORS :
M/s. Haribhakti & Co LLP,, Chartered Accountants held office as Statutory Auditors of the Schemes of Reliance Mutual Fund for the financial year 2016-17. Your Directors recommend their re-appointment as such for the financial year 2017-16
INTERNAL AUDITORS :
During the year. M/s. Daloitte Haskins & Sells LLP. Chartered Accountants were appointed as Internal Auditors of the Scheme of Reliance Mutual Fund and the portfolio management services division of the Company, for the financial year 2015-17 Your Directors recommend their re-appointment as such for the financial year 2017-201B.
AUDITORSâ REPORT
The notes to the Annual Accounts of the Company, referred to In the Auditors Report are self-explanatory and do not require any clarification from the Board
SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration Of Managerial Personnel) Rules. 2014, your Directors had appointed M/S M. Siroya and Company, Mumbai, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the financial year 2016-17 in this regard, the Report submitted by the Secretarial Auditor Is annexed herewith as Annexure - B
Your Directors are pleased to inform that the report from the Secretarial Auditors does not contain any qualifications or negative remarks
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as Annexure - C.
PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
CONSERVATION OF ENERGY :
The operations of the Company do not consume high levels of energy. Adequate measures have been taken to conserve energy wherever feasible Your Company uses latest technology and energy efficient equipments. As energy cost forms a very small part Of the total costs, the impact on cost is not material
TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION :
(I) The efforts made towards technology absorption:
During the financial year 2016-17, Digital strategy of your Company was focused providing the simplified processes to the customer and keeping in view the interests of the distributors. Along with this, there was a strong agenda to acquire a new customer online without any paper work. In line with the above objective, your Company launched various initiatives in this direction and many of these initiatives were first time in the industry Some of those initiatives are as follows:
- Launch of Instant redemption on Simply Save app for customers
- Revamped website for the distributor to provide ease of transactions, campaigns and other such transactions & add-on Features
- E-mandate for Axis and HDFC Bank customers, which enables customers to register regular payments like SIP etc. seamlessly
- Paperless eKYC process to acquire customers who are new to Mutual Fund industry by connecting with Aadhar ecosystem
(ii) Benefits derived out of the above initiatives:
Financial year 2016-17 has seen phenomenal increase in business through our digital Assets, as follows
- >100% growth in purchase Volume, up from 12% to 25%
- Digital is > 1.3 times bigger than largest distributor in Purchases... 6 times bigger than 2nd
- Every 4th Purchase in Digital, Mobile App contributing > 40% to Digital
- Total Digital Purchases have crossed 40, 000 per month
- 135% growth in unique customers during the year.
RESEARCH AND DEVELOPMENT:
Itâs evident that digital has become a critical asset in many companiesâ quest for growth We as a Company are very much committed to this and are looking continuously to provide simplified process and product over the digital platform to the online customers This approach is being led by various research and innovative products designed for the online customers. The team and management keep on participating In various discussions, conclave summits, forum to stay connected and updated on the digital movement in the world & industry
FOREIGN EXHANGE EARNINGS AND OUTGO :
During the year, the Company effected exports worth Rs Nil
During the year under review, the Company earned foreign exchange equivalent to Rs. 262,344,770/- The Company spent foreign exchange equivalents Rs. 05,598,762/-
DIRECTORSâ RESPONSIBILITY STATEMENT
As per the requirements of Sub Section (5) of Section 134 of the Act. the Directors confirm that-
(i) in the preparation of the annual accounts for the financial year ended March 31. 2017, the applicable accounting standards have been followed and that there are no material departures:
(ii) The Directors have selected such accounting policies in consultation with the Statutory Auditors1 and have applied them consistently and made judgments andâ estimates that were 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 of the Company for the year under review,
(iii) The Directors have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance With the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities
(iv) The Directors have prepared the annual accounts of the Company on a âgoing concernâ basis.
[v) The Directors have devised proper systems to ensure compliance with the provisions of alt applicable laws and that such systems are adequate and operating effectively.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were on an armâs length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors. Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. Related Party Transactions are being placed before the Audit Committee and/ or the Board, for approval/ noting, as appropriate. Prior omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions which are foreseen or repetitive in nature. Your Directors have already approved a Related Party Transactions Policy for the purpose of identification and monitoring of such transactions
PARTUCLARS OF FRAUDS REPORTED BY THE AUDITORSâ
In terms of Section 143(12} of the Act. M/s B S R J Co LLP, Chartered Accountants the Statutory Auditors of the Company have not reported any instance cf fraud having taken place dung the year under review, in their Audit Report.
SIGNIFICANT AND MATERIAL ORDRES PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators/ Courts which would impact the going concern status of the Company and its future operations
OUR PEOPLE
Your Company as an organization is committed towards creation of knowledge for the benefit of all the stakeholders It is our firm belief that the growth of an organization is largely dependent on the growth of its individuals. Policies in your Company are employee oriented and devised with our âPeople Firstâ philosophy in mind.
Your Company had 915 numbers of employees as at March 31. 2017
Your Company Mad 915 numbers of employees as at March 31, 2017
As required by the provisions of Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of the employees are set out in Annexure-Oâ to this Directorsâ Report
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
Your Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention Prohibition & Redressal) A cl, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment All employees (permanent, contractual, temporary, trainees) are covered under this Policy Following is a summary of sexual harassment complaints received and disposed off during the year.
- No. of complaints received Nil
- No. of complaints disposed of: N.A.
ACKNOWLEDGEMENTS
Your Directors which to place on record their sincere appreciation for the co-opera bon received from various regulatory and governmental authorities including SEBI RBI. Registrar of Companies. Maharashtra at Mumbai. PFRDA. NPS Trust. EPFO CMPFO Custodians Bankers. Registrars. Shareholders. Investors and all other business constituents during the year under review We believe all of them have contributed to our continued growth
Your Directors also wish to place on record their deep appreciation for the total commitment displayed by all the executives, officers and staff, resulting in yet another eventful performance for the year
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
OF RELIANCE NIPPON LIFE ASSET MANAGEMENT LIMITED
(Formerly known as Reliance Capital Asset Management Limited)
Place; Mumbai Kanu Doshi Sundeep Slkka
Dated: April 22,2017 Director Executive Director & CE O
(DIN: 00577409) (DIN: 02553654)
Mar 31, 2017
To the Members,
Reliance Nippon Life Asset Management Limited
(Formerly known as Reliance Capital Asset Management Limited)
The Directors lake pleasure in presenting their Twenty Second Annual Report on the business and operations of your Company, together with the audited financial statements, for the year ended March 31,2017,
Al the outset, your Directors wish to reiterate your Companyâs commitment to the highest standards of corporate governance in order to enhance the trust of all its stakeholders Strong and robust corporate governance practices have facilitated your Company in standing up to the continued scrutiny of domestic & international investors and that of the Regulatory authorities
Your Company endeavors to remain one of the leading players in the Asset Management business in India and enhance its global footprint as well.
FINANCIALS
The standalone and consolidated financial statements of the Company for the year ended March 31, 2017, have been prepared under the historical cost convention, in accordance with the generally accepted accounting principles in India and in line with the provisions of the Companies Act, 2013 (Act) The financial highlights (on a consolidated and standalone basis) of the Company for the year ended March 31, 2017 are as follows
(In Rs.)
Description |
Consolidated |
Standalone |
||
Year ended March 31, 2017 |
Year ended March 31. 2016 |
Year ended March 31, 2017 |
Year ended March 31, 2018 |
|
Gross income |
14,353.148,829 |
13.138 198,886 |
14,004,372,147 |
12,710.696.654 |
Profit before exceptional item and tax |
5,313,129,596 |
5,023,995.209 |
5,821.090,313 |
4.962.743,794 |
Exceptional Items |
- |
- |
- |
4.028,535 |
Profit Before Tax |
5,813,129.696 |
5,023,956,209 |
5,821.090,313 |
4,958,715.259 |
Provision for taxation |
1,74-1,999,424 |
1,275,6139.007 |
! 727 093.206 |
1.257.800,000 |
Provision for Deterred Tax Asset/ |
48 489 352 |
16,273,942 |
4(3,246,393 |
(833,962) |
(Liability) |
||||
Profit After Tax before share of minority shareholders |
4.019,640.921 |
3.764,401,144 |
4.047,750.714 |
3.701.754.221 |
Share of Minority Shareholders |
- |
66.056 |
- |
- |
Not Profit |
4,019,640.921 |
3,764,335.088 |
4.047,750,714 |
3,701.754,221 |
Balance carried to Balance Sheet |
11.116,795.338 |
10.039.836.996 |
11.266.005,325 |
10,220,937.190 |
Basic EPS of Rs.10 each |
343.93 |
326.77 |
351.37 |
321 33 |
Diluted EPS ot Rs.10 each |
348. 93 |
326 77 |
351.37 |
321 33 |
The Consolidated Financial Statements of the Company, along with that of its subsidiaries, for the year ended March 31, 2017 (duly audited by their respective statutory auditors) are forming part of this Annual Report.
The annual accounts of all the subsidiary companies and the related detailed information will be made available to the Shareholders of the Company seeking such information at any point of time. The annual accounts of all the subsidiary companies will also be kept at the Corporate Office of the Company, for inspection by the Shareholders. The Company shall furnish a hard copy Of details of accounts of subsidiaries to any Shareholder on demand.
DETAILS OF MATERIAL CHANGES AND COMMIMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments affecting the financial position of the Company since the date of the financial statements i.e March 31,2017,
DIVIDEND
EQUITY SHARES:
Your Directors are pleased to recommend the payment of dividend of Rs. 215/- (Rupees Two Hundred Fifteen Only) per equity share of Rs 10/- each, thereby entailing the total payout of Rs. 2,981,016.202/- (including dividend distribution tax and other applicable taxes/ surcharges).
PREFERENCE SHARES:
Your Directors are pleased to recommend the declaration and payment of dividend of Rs 6/-(Rupees Six only) on each 6% Non-Cumulative. Non Convertible Redeemable Preference Shares of the Company, for the year under review, thereby entailing the total payout of Rs. 21.664,377/- (including dividend distribution tax and other applicable taxes/surcharges)
AMOUNT TO BE CARRIED TO RESERVES
In view of the declaration and payment of dividend to the Shareholders of the Company and in accordance with the provisions of Section 123 of the Act, your Directors do not propose any amount to be transferred to the General Reserves of the Company.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENT
Details of Leans, Guarantees and Investments covered wider the provisions of Section 1B6 of the Act are provided as part of the notes to the Financial Statements.
MATERIAL DEVELOPMENTS
CHANGE OF NAME OF THE COMPANY
Pursuant to an Agreement entered into amongst the major Shareholders of your Company i e Reliance Capital Limited and Nippon Life Insurance Company, during the year the name of the Company was changed from Reliance Capital Asset Management Limitedâ to Reliance Nippon Life Asset Management Limitedâ.
ACQUISTION OF SCHEMES OF GOLDMAN SACHS MUTUAL FUND
During the year, your company consummated the transaction to take over the asset management rights of the schemes of Goldman Sachs Mutual Fund in India (âGSMFâ), from the asset management company and the trustee Company of GSMF Overall 12 (twelve) schemes were transferred to your Company The said transfer of schemes was also accompanied with taking over a team of 20 people/ employees of GSMF. With the acquisition of the said schemes, along with human capital of a cumulative work experience of 290 years, your Company has augmented its strength in exchange traded fund space and your Company hopes to grow from strength to Strength in I his niche space.
COMPLIANCE CULTURE AND RISK MANAGEMENT
Your Company is essentially Compliance centric and has a huge focus in this direction The Compliance function is manned by a dedicated and experienced team of professionals. The Compliance team regularly conducts venous educative training programs for various segments within the organization. Your Company thrives towards a culture of Total Complianceâ and it has a âZero Toleranceâ policy for non-compliances.
Your Company has a comprehensive Risk Management Policy that envisages an enterprise risk management framework and clearly sets out the objectives & elements of risk management within the organization, including the constitution of a Risk Management department (reporting directly to the CEO and to the Board of Directors), a Risk Management Committee (RMC) and the underlying mechanisms & processes to be used for identification, monitoring and reporting of various categories of risks including credit, market, liquidity and operational risks. There are well documented & Board approved policies & processes which are in place, in addition, proper & adequate Insurance Policies and business continuity planning have also been adequately put into place.
You will note that the basic revenue model of an asset management company is charging Of management fees on assets under management provided by the investors In case of an eventuality where the Company repeatedly fails to comply with regulatory norms with regard to investment restrictions and/ or code Of conduct, or if there are repeated & glaring instances of fraud / front-running then the same may be a catastrophic risk for the enterprise However, your Directors would like to assure you that such risks are being mitigated by putting into place robust & time tested policies & processes, qualified & professional manpower to run these processes under the aegis & guidance of your Board of Directors Board Committees and various other internal committees, consisting of its senior employees.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an internal Control System, commensurate With the size scale and complexity of its operations. To maintain its objectivity and independence, the Internal Auditor reports to the Audit Committee.
The Internal Auditor monitors and evaluates the efficacy and adequacy of the internal control system in the Company, its compliance with operating systems, accounting procedures and policies Based on the report of the Internal Auditor, process owners undertake corrective action in their respective areas and thereby strengthen the controls.
The Risk Management department follows up on pending audit issues and ensures that corrective actions are timely taken. Audit observations, if any. and corrective actions thereon, are also presented to the Audit Committee of the Board.
OPERATIONAL HIGHLIGHTS
ASSET MANAGEMENT:
In terms of the authorization from SEBI, your Company acts as the asset manager to Reliance Mutual Fund (âRMF), which is the third largest Mutual Fund in India, in terms of the Quarterly Average Assets under Management {QAAUM) as on March 31, 2017
The QAAUM of RMF as on March 31, 2017 was approx. Rs 210,891 Crores comprising of Rs 57,011 Crores of Equity, Rs 103.137 Crores of Debt. Rs. 37,995 Crores of Liquid Funds and Rs 12.746 Crores of ETF assets It may tie noted that the QAAUM of RMF as cm March 31. 2016 was approx Rs 158.408 Crores comprising of Rs 47,660 Crores of Equity, Rs. 75,422 Crores of Debt. Rs. 33.543 Crores of Liquid Funds: and Rs 1,775 Crores Of ETF assets.
Overall QAAUM of RMF has shown positive growth of around 33.1% during the financial year 2016-17, while the Indian Mutual Fund industry witnessed an overall positive growth of approx 35.2% in terms of QAAUM (Source: AMFl).
NEW SCHEMES LAUNCHED:
During the year under review, RMF launched the following new schemes;
Scheme Name |
Typo |
Structure |
Reliance Fixed Horizon Fund - XXXI |
Debt |
Close - ended |
Reliance Fixed Horizon Fund - XXXII |
Debt |
Close - ended |
Reliance Fixed Horizon Fund -XXXXlll |
Debt |
Close - ended |
Reliance Dual Advantage Fixed Tenure Fund X |
Debt |
Close - ended |
Reliance ETF Long Term Gilt |
ETF |
Open - ended |
As on March 31, 2017, RMF has a well rounded portfolio of 90 schemes under various categories such as Equity. Debt. Exchange Traded Fund. Fixed Maturity Plans and Interval Funds
PORTFOLIO MANAGEMENT:
Your Company has been rendering Portfolio Management Services (âPMSâ) since August 2004 It currently offers discretionary and advisory portfolio management services to various categories of clients. The PMS business continued its positive performance through the year. As at the year end, the total AUM of the PMS business (including discretionary and advisory services and also including EPFO and CMPFO portfolio) stood at Rs 1.42.510 Crores as against Rs 1.23,631 Crores for the Iasi financial year.
Going forward, the PMS division of your Company will endeavor to identity suitable opportunities for launching equity portfolios and rendering investment advisory services Our focus on providing customized offerings to high net-worth individuals & corporates will continue via PMS in Financial Year 2017-18.
Your Company is one of the four fund houses who are managing the prestigious Employees Provident Fund Organization (EPFO) mandate Since last few years As on March 31. 2017. the EPFO portfolio stood at Rs 1.21,748 Crones and CMPFO stood at Rs 20 762 Crores
ALTERNATIVE INVESTMENT BUSINESS:
Alternative Assets remains an area of great interest in investment management space The term Alternative Assets, is generally used to describe all assets other than the conventional listed equity and investment grade debt. Hence, this includes non-conventional/ non-benchmarked strategies in equities, non-investment grade debt/ high yield debt, assets like real estate, commodities, distress debt. etc. Reliance AIF Management Company Limited (âRAIFâ), which is a subsidiary of your Company, is engaged in this business of managing alternative investment funds During the year. RAIF has undertaken final closure of Reliance Yield Maximiser AIF Scheme III. its third scheme in the Secured Real Estate space To date, a total commitment of - Rs. 1.300 Crores has been raised across all offerings. During the year. RAIF has aimed to diversify across asset classes and have launched two additional schemes in the Sector Agnostic Debt and Commercial Rea Estate Space respectively Going forward. RAIF will continue to focus on profitable growth and include more asset classes.
RELIANCE INFRASTRUCTURE INVIT FUND:
We are pleased to inform you that during the year, the Company has been appointed as the investment Manager for Reliance Infrastructure InvIT Fund, an infrastructure investment trust registered with the Securities & Exchange Board of India. Reliance Infrastructure InvIT Fund is proposing to raise funds by way of public offer and shall make investments in the infrastructure assets In this regard, your Company has secured the requisite approval of SEBI regarding the Investment management activity in respect of Infrastructure Investment Trust
NATIONAL PENSION SYSTEM:
Reliance Capital Pension Fund Limited (âRCPFLâ), a subsidiary of your Company is acting as one of the Pension Fund Managers for managing the pension assets under the National Pension System (âNPSâ)
NPS industry witnessed a rapid growth during the current year, both in terms of subscriber base as well as in respect or the assets under management The subscribers under NPS schemes as of March 31, 2017 were in excess of 1.54 crores as compared to 97 50 Lakhs during the previous year. Further, the subscribers under private sector of NPS schemes as of March 31, 2017 were 10.22 Lakhs as compared to 6 96 Lakhs as or previous year i e March 31,2016
The overall assets managed by the NPS industry, as of March 31, 2017 were Rs 1.74,558.15 Crores as compared to around Rs 1,16,303 76 Crores as at the end of the last year, Further, the assets under management related to Private sector grew from Rs, 3,554 Crores last year to Rs 7,069 Crores as of March 31, 2017. The assets under management of RCPFL during the current fiscal year has gone up to Rs, 163.97 Crores as compared to Rs 111.22 Crores in the last year
INTERNATIONAL BUSINESS:
Global Economic Environment
Year 2016-17 has been an eventful year from the Global social and economic perspective From concerns around hard landing of the Chinese economy to Brexit event to a rise in the negative yield-bearing assets globally to the stupendous demonetization drive in India to the US presidential election victory of Donald Trump, the year has been action packed to say the least.
Despite the volatility, Indian economy appears well primed to continue its journey towards a sustainable recovery with the Nifty starts recovering in the last quarter of the year 2016-17
After a lackluster out-turn in the year 2016-17, economic activity is projected to pick up pace in 2017-1B. especially in emerging markets and developing economies The economic recovery in India is strongly supported by favorable factors like fiscal stability, lower inflation, policy reforms like demonetization, passage of the GST bill, modification in FDI policy and continued Government spending.
Offshore Opportunities
Foreign Portfolio investor (âFPDâ) flows in Indian equities Stood at a 5 years low of INR 187Bn in 2016-17 Further, FPls remained net sellers to the extent of I NR 443Bn in fixed income markets during the calendar year 2016, Interestingly, Domestic Institutional Investors ploughed in INR 372bn into Indian equities during the year surpassing the net flows from FPls. However, with clarity in the Union Budget on capital gain taxation and indirect transfers, FPls turned net buyers.
Other Opportunities
The international subsidiaries of your Company manage a wide range of India investment funds through which overseas investors can participate in the India growth story. Your Company extends its services through offices in Singapore, Mauritius and Dubai.
Non-Binding Advisory Services
Under its non-binding advisory mandate, your Company provides advisory services to various offshore entities and the assets under the advisory business as on March 31, 2017 is Rs 5,576 crores
Singapore
Your Singapore subsidiary. Reliance Asset Management (Singapore) Pte Ltd CRAMSâ), which established its business in Singapore in the year 2006 has closed the financial year 2016-17 with 238,925,146 USD assets under management.
After having successful launch of UCITS equity fund in Luxembourg which is being advised by your Company, RAMS continued its efforts through the launch of new products with over 127.432.306 USD raised from offshore investors this year.
Mauritian
The Mauritian subsidiary of your Company. Reliance Asset Management (Mauritius) Limited (âRAMMâ) continued its focus on rendering of investment management services to India focused collective investment schemes i.e. Emergent India Investments Limited
CORPORATE SOCIAL RESPONSIBILITY
As part of its initiatives under âCorporate Social Responsibility (âCSRâ). the Company has undertaken projects in the areas of promoting preventive heafth care in accordance with Schedule VII of the Act
The Annual Report on CSR activities is annexed herewith as Annexure - A.
AWARDS AND RECOGNITION
During the year, your Company and the Reliance Mutual Fund have been bestowed with the following awards and recognitions
- Stevie Award in the following categories
- innovation in Customer Service - Financial Services Industries (Status: Silver Stevie Winner)
- National Sales Team of the Year (Status: Bronze Stevie Winner):
- Reliance Mutual Fund featured in Best BFSI Brands 2016 by Economic Times:
- Finnoviti Award 2017 for âSimply Save & Instant Redemptionâ mobile solutions;
- National Awards for Excellence in Digital Marketing & Social Media - Best Progressive Digital Marketing Company;
- National Awards to Reliance Mutual Fund for Excellence in Digital Marketing £ Social Media - Simply Save - Digital Application of the year:
- BBC Knowledge - National Digital Marketing Awards - Best Financial Website to Reliance Mutual Fund;
- BBC Knowledge - National Digital Marketing Awards - Best Consumer Mobile App to Reliance Mutual Fund; â
- Asset Benchmark Research Awards - Top Investment Houses in Asian Local Currency Bonds, India, Rank 3;
- The Company featured in Economic Times Coffee Table Book as Mumbaiâs Trending Workplaces for Organization Creating an Enabling Culture of the employees.
FUTURE OUTLOOK
During the year under review, the Indian Mutual Fund Industry witnessed an overall positive growth of approx 35% in terms of QAAUM. from an amount of approx. Rs 13,53,444 Crores as at March 31, 2016 to an amount of approx Rs 18,29.583 Crores as at March 31, 2017 (Source: AMFI) with following
- 34.37 Lakh Net New SIPs registered during the Financial Year (as on February 2017)
- Around 48 Lakh Equity folios have been added this year so far (as on February 2017)
Government led various measures (e.g. Demonetization, GST) have already started showing positive impact in the economy. The Mutual Fund Industry has reflected stronger growth this year.
It has been a good year for your Company, as well. Your Company continues to be amongst the largest AMCs managing assets of around Rs 3.55,800 Cr [USD 55 Billion) across Mutual Funds, PMS. Pension Funds and Offshore strategies Your Company continues to aggressively pursue growth opportunities in the fund management and investment advisory space, both at domestic as well as at the international level
There is significant growth potential for mutual fund Industry. There are only 5 4 Cr investor folios reflecting deep under penetration in adoption of mutual fund products in india We continue to focus on geographical and retail penetration. Our Industry first initiative âMutual Fund Dayâ is directed effort to increase retail participation across the country. As per latest data available on AMFI, over 85% of the Industry AUM originates from the Top 15 cities. This provides opportunities far expansion in smaller locations. Your Company has been focusing on bringing new investors to unlock untapped potential. In line with the SEBl regulations we intend to improve penetration levels in Tier III, Tier IV locations and increase use Of technology to improve the investor expenence.
The smart phone user base in India is growing rapidly and provides us an opportunity to connect with large investor base through our digital interfaces. The digital space has the potential to significantly improve the service quality and also help ease in first-time investors to the Industry Your Company has one of the most integrated Digital platforms in the Industry, and we intend to continue building on it to further Improve the investorsâ experience. Being one of the largest players in the industry, your Company will continue investing in growing the market size, achieving product innovation, educating the investors, increasing the distribution reach and enhancing customer service infrastructure with aggressive expansion strategies.
SUBSIDIARIES
As of March 31, 2017, your Company had four (4) subsidiaries. Two of such subsidiaries are overseas being one each in Singapore and Mauritius and two subsidiaries being in India All the subsidiaries of the Company are engaged in financial services and related activities.
During the year under review, the subsidiary of your Company at United Kingdom i.e Reliance Capita! Asset Management (UK) Limited (formerly known as Reliance Capital Asset Management (UK) Pic.) had been stricken off from the Register maintained by the Companies House. United Kingdom.
A statement w.r.t. the performance and the financial position of the subsidiaries of the Company is forming a part of the Consolidated Financial Statements of the Company.
Key Managerial Personnel
in terms of the requirements of Section 203 of the Act. during the year under review, the Following officials/ employees acted as the âKey Managerial Personnelâ of the Company
a) Mr. Sundeep Sikka - Executive Director & Chief Executive Officer;
b) Mr. Ajay Patel - Manager,
c) Mr. Prateek Jain - Chief Financial Officer;
d) Mr Yogesh Sachdeva - Company Secretary (up to October 25. 2016). and
e) Mr Deepak Mukhija - Company Secretary (effective from December 20, 2016)
DIRECTORS
During the year. Mr. Shinichi Okamoto, Director on the Board of the Company has resigned w.e f April 22, 2015. Further. Mr, Soum&n Ghosh. Director on the Board of the Company has also resigned w.e.f. March 31. 2017
In order to further broad base the constitution of the Board, during the year. General Ved Prakash Mahk (Retd.), Mr. Kazuhide Toda and Mr Tomonao Gotoda were appointed as Directors and Mr. Sundeep Sikka was appointed as a Whole-time Director (designated as Executive Director & Chief Executive Officer) on the Board of your Company.
In accordance with the provisions of Section 152 of the Act. Mr Kazuhide Toda (Director) is liable to retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, has offered himself for re-appointment, as such, The Board recommends the reappointment of Mr Kazuhide Toda as a Director of the Company
Further, since the closure of the financial year 2016-17, following changes have taken place in respect of your Companyâs Board:
- Mr. Tomonao Gotoda. Director on the Board of the Company, resigned w.e.f. April 22,2017
- Mr. Takayuki Murai has been appointed as the Additional Director of the Company on April 22, 2017 Mr Takayuki Murai shall hold office as Directors, uplo the date of ensuing Annual General Meeting and are eligible to be appointed as Director thereat In terms of Section 160 of the Act, your Company has received a notice in writing from one of the members, along with the requisite deposit proposing the candidature of Mr. Takayuki Murai for hrs appointment as Director
All the Independent Directors of your Company i.e Mr. Kanu H. Doshi. General Ved Prakash Malik (Retd.), Mr. Sushil Chandra Tripathi and Ms. Ameeta Chatterjee, have duly furnished the required declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act.
During the Year, in terms of the requirements of the Act, the Independent Directors held their separate meeting, where)n the performance of the Board and that of the non- independent Directors were evaluated. In this very meeting itself, the Independent Directors of the Company also thoroughly discussed the quantity, quality & the timelines of the flow of information between the Companyâs management and the Board and arrived at a view that the same is adequate and sufficient to enable effective decision making by the Board The Nomination a Remuneration Committee of the Company also undertook the evaluation of the Directorsâ performance.
BOARD AND COMMITTEE MEETINGS
During the year under review. Nine (9) Board meetings and Three (3) meetings of the Committee of Directors were held.
Your Directors wish to inform that the functioning of the Board is supplemented by various committees (Board sub â committees and management committees), which have been constituted from time to time, such as Audit Committee. Committee of Directors, CSR Committee. Nomination & Remuneration Committee, Valuation Committee, Investment Committee, InvlT Committee, Risk Management Committee, Broker Empanelment Committee, Operating Committee, Compliance Committee. Proxy Voting Committee, Information Security Risk Management Committee, etc to name a few. Each of the aforesaid Committees has been constituted in order to ensure due compliance with the applicable laws and to ensure the highest levels of corporate governance. The minutes of the meetings of each of these Committees are duly placed before the Board for noting and confirmation
AUDIT COMMITTEE
In terms of the requirements of Section 177 of the Act, the Audit Committee of the Company consists of majority of Independent Directors. As on dale of this report, it comprises Mr Kanu H, Dos hi [Independent Director], Mr Sushi I Chandra Tripathi [Independent Director), Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd,) [Independent Director) and Mr Takayuki Murai (Associate Director)
During the year, Seven (7) meetings of the Audit Committee were held.
NOMINATION & REMUNERTION COMMITTEE
In terms of the requirements of Section 178 of the Act, the Nomination & Remuneration Committee of the Company consists of majority of Independent Directors, As on date of this report, it comprises Mr Kanu H Doshi [Independent Director). Mr Sushil Chandra Tripathi [Independent Director), Ms Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director) and Mr. Kgzuhide Toda [Associate Director).
During the year, 2 meetings of the Nomination & Remuneration Committee were held.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
In terms of the requirements of Section 135 of the Act, the Corporate Social Responsibility (âCSRâ) Committee of the Company consists Of seven members As on date of this report it comprises Mr Kami H. Dos hi [independent Director], Mr Susfiil Chandra Trrpalhi [Independent Director], Ms Ameeta Chatterjee [Independent Director]. General Ved Prakasft Malik (Retd ) [Independent Director), Mr. Sundeep Sikka (Associate Director], Mr. Kazuhide Toda I Associate Director] and Mr. Takayuki Murai [Associate Director].
During the year, 2 meetings of the CSR Committee were held
AUDITORâS OF THE COMPANY â STATUTORY AND INTERNAL
In accordance with the applicable provisions of law, the Company has appointed Statutory and Internal Auditors, who periodically submit their reports, which are placed before the Audit committee for discussion, review and implementation of their recommendations.
STATUORY AUDITORS:
In terms or Section 139 of the Act read with Companies (Audit and Auditors) Rules, 2014, at the Nineteenth Annual General Meeting of the Company. M/s B S R & Co. LLP, Chartered Accountants were appointed as the Statutory Auditors of tiia Company in the Annual General Meeting held on June 24, 2014, for a period of Four (4) years subject however to ratification by members at every Annual General Meeting of the Company.
The Board recommends ratification of their appointment, as such, at the ensuing Twenty Second Annual General Meeting of the Company,
INTERNAL AUDITORS :
M/s, NMAH & Associates LLP, Chartered Accountants were appointed as I he Internal Auditorsâ of your Company for the year 2016-17 Your Directors approved their reappointment as such for I he financial year 2017-18.
AUDITORS OF THE SCHEMES OF RELIANCE MUTUAL FUNDS â STATUTORY AND INTERNAL
In accordance with the applicable provisions of law, the Company has appointed Statutory and Internal Auditors tor the various Schemes of Reliance Mutual Fund, who periodically submit their reports, which are placed before the Audit Committee for discussion, review and implementation of their recommendations.
STATUTORY AUDITORS :
M/s. Haribhakti & Co LLP,, Chartered Accountants held office as Statutory Auditors of the Schemes of Reliance Mutual Fund for the financial year 2016-17. Your Directors recommend their re-appointment as such for the financial year 2017-16
INTERNAL AUDITORS :
During the year. M/s. Daloitte Haskins & Sells LLP. Chartered Accountants were appointed as Internal Auditors of the Scheme of Reliance Mutual Fund and the portfolio management services division of the Company, for the financial year 2015-17 Your Directors recommend their re-appointment as such for the financial year 2017-201B.
AUDITORSâ REPORT
The notes to the Annual Accounts of the Company, referred to In the Auditors Report are self-explanatory and do not require any clarification from the Board
SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration Of Managerial Personnel) Rules. 2014, your Directors had appointed M/S M. Siroya and Company, Mumbai, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the financial year 2016-17 in this regard, the Report submitted by the Secretarial Auditor Is annexed herewith as Annexure - B
Your Directors are pleased to inform that the report from the Secretarial Auditors does not contain any qualifications or negative remarks
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as Annexure - C.
PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
CONSERVATION OF ENERGY :
The operations of the Company do not consume high levels of energy. Adequate measures have been taken to conserve energy wherever feasible Your Company uses latest technology and energy efficient equipments. As energy cost forms a very small part Of the total costs, the impact on cost is not material
TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION :
(I) The efforts made towards technology absorption:
During the financial year 2016-17, Digital strategy of your Company was focused providing the simplified processes to the customer and keeping in view the interests of the distributors. Along with this, there was a strong agenda to acquire a new customer online without any paper work. In line with the above objective, your Company launched various initiatives in this direction and many of these initiatives were first time in the industry Some of those initiatives are as follows:
- Launch of Instant redemption on Simply Save app for customers
- Revamped website for the distributor to provide ease of transactions, campaigns and other such transactions & add-on Features
- E-mandate for Axis and HDFC Bank customers, which enables customers to register regular payments like SIP etc. seamlessly
- Paperless eKYC process to acquire customers who are new to Mutual Fund industry by connecting with Aadhar ecosystem
(ii) Benefits derived out of the above initiatives:
Financial year 2016-17 has seen phenomenal increase in business through our digital Assets, as follows
- >100% growth in purchase Volume, up from 12% to 25%
- Digital is > 1.3 times bigger than largest distributor in Purchases... 6 times bigger than 2nd
- Every 4th Purchase in Digital, Mobile App contributing > 40% to Digital
- Total Digital Purchases have crossed 40, 000 per month
- 135% growth in unique customers during the year.
RESEARCH AND DEVELOPMENT:
Itâs evident that digital has become a critical asset in many companiesâ quest for growth We as a Company are very much committed to this and are looking continuously to provide simplified process and product over the digital platform to the online customers This approach is being led by various research and innovative products designed for the online customers. The team and management keep on participating In various discussions, conclave summits, forum to stay connected and updated on the digital movement in the world & industry
FOREIGN EXHANGE EARNINGS AND OUTGO :
During the year, the Company effected exports worth Rs Nil
During the year under review, the Company earned foreign exchange equivalent to Rs. 262,344,770/- The Company spent foreign exchange equivalents Rs. 05,598,762/-
DIRECTORSâ RESPONSIBILITY STATEMENT
As per the requirements of Sub Section (5) of Section 134 of the Act. the Directors confirm that-
(i) in the preparation of the annual accounts for the financial year ended March 31. 2017, the applicable accounting standards have been followed and that there are no material departures:
(ii) The Directors have selected such accounting policies in consultation with the Statutory Auditors1 and have applied them consistently and made judgments andâ estimates that were 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 of the Company for the year under review,
(iii) The Directors have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance With the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities
(iv) The Directors have prepared the annual accounts of the Company on a âgoing concernâ basis.
[v) The Directors have devised proper systems to ensure compliance with the provisions of alt applicable laws and that such systems are adequate and operating effectively.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were on an armâs length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors. Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. Related Party Transactions are being placed before the Audit Committee and/ or the Board, for approval/ noting, as appropriate. Prior omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions which are foreseen or repetitive in nature. Your Directors have already approved a Related Party Transactions Policy for the purpose of identification and monitoring of such transactions
PARTUCLARS OF FRAUDS REPORTED BY THE AUDITORSâ
In terms of Section 143(12} of the Act. M/s B S R J Co LLP, Chartered Accountants the Statutory Auditors of the Company have not reported any instance cf fraud having taken place dung the year under review, in their Audit Report.
SIGNIFICANT AND MATERIAL ORDRES PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators/ Courts which would impact the going concern status of the Company and its future operations
OUR PEOPLE
Your Company as an organization is committed towards creation of knowledge for the benefit of all the stakeholders It is our firm belief that the growth of an organization is largely dependent on the growth of its individuals. Policies in your Company are employee oriented and devised with our âPeople Firstâ philosophy in mind.
Your Company had 915 numbers of employees as at March 31. 2017
Your Company Mad 915 numbers of employees as at March 31, 2017
As required by the provisions of Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of the employees are set out in Annexure-Oâ to this Directorsâ Report
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
Your Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention Prohibition & Redressal) A cl, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment All employees (permanent, contractual, temporary, trainees) are covered under this Policy Following is a summary of sexual harassment complaints received and disposed off during the year.
- No. of complaints received Nil
- No. of complaints disposed of: N.A.
ACKNOWLEDGEMENTS
Your Directors which to place on record their sincere appreciation for the co-opera bon received from various regulatory and governmental authorities including SEBI RBI. Registrar of Companies. Maharashtra at Mumbai. PFRDA. NPS Trust. EPFO CMPFO Custodians Bankers. Registrars. Shareholders. Investors and all other business constituents during the year under review We believe all of them have contributed to our continued growth
Your Directors also wish to place on record their deep appreciation for the total commitment displayed by all the executives, officers and staff, resulting in yet another eventful performance for the year
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
OF RELIANCE NIPPON LIFE ASSET MANAGEMENT LIMITED
(Formerly known as Reliance Capital Asset Management Limited)
Place; Mumbai Kanu Doshi Sundeep Slkka
Dated: April 22,2017 Director Executive Director & CE O
(DIN: 00577409) (DIN: 02553654)
Mar 31, 2017
To the Members,
Reliance Nippon Life Asset Management Limited
(Formerly known as Reliance Capital Asset Management Limited)
The Directors lake pleasure in presenting their Twenty Second Annual Report on the business and operations of your Company, together with the audited financial statements, for the year ended March 31,2017,
Al the outset, your Directors wish to reiterate your Companyâs commitment to the highest standards of corporate governance in order to enhance the trust of all its stakeholders Strong and robust corporate governance practices have facilitated your Company in standing up to the continued scrutiny of domestic & international investors and that of the Regulatory authorities
Your Company endeavors to remain one of the leading players in the Asset Management business in India and enhance its global footprint as well.
FINANCIALS
The standalone and consolidated financial statements of the Company for the year ended March 31, 2017, have been prepared under the historical cost convention, in accordance with the generally accepted accounting principles in India and in line with the provisions of the Companies Act, 2013 (Act) The financial highlights (on a consolidated and standalone basis) of the Company for the year ended March 31, 2017 are as follows
(In Rs.)
Description |
Consolidated |
Standalone |
||
Year ended March 31, 2017 |
Year ended March 31. 2016 |
Year ended March 31, 2017 |
Year ended March 31, 2018 |
|
Gross income |
14,353.148,829 |
13.138 198,886 |
14,004,372,147 |
12,710.696.654 |
Profit before exceptional item and tax |
5,313,129,596 |
5,023,995.209 |
5,821.090,313 |
4.962.743,794 |
Exceptional Items |
- |
- |
- |
4.028,535 |
Profit Before Tax |
5,813,129.696 |
5,023,956,209 |
5,821.090,313 |
4,958,715.259 |
Provision for taxation |
1,74-1,999,424 |
1,275,6139.007 |
! 727 093.206 |
1.257.800,000 |
Provision for Deterred Tax Asset/ |
48 489 352 |
16,273,942 |
4(3,246,393 |
(833,962) |
(Liability) |
||||
Profit After Tax before share of minority shareholders |
4.019,640.921 |
3.764,401,144 |
4.047,750.714 |
3.701.754.221 |
Share of Minority Shareholders |
- |
66.056 |
- |
- |
Not Profit |
4,019,640.921 |
3,764,335.088 |
4.047,750,714 |
3,701.754,221 |
Balance carried to Balance Sheet |
11.116,795.338 |
10.039.836.996 |
11.266.005,325 |
10,220,937.190 |
Basic EPS of Rs.10 each |
343.93 |
326.77 |
351.37 |
321 33 |
Diluted EPS ot Rs.10 each |
348. 93 |
326 77 |
351.37 |
321 33 |
The Consolidated Financial Statements of the Company, along with that of its subsidiaries, for the year ended March 31, 2017 (duly audited by their respective statutory auditors) are forming part of this Annual Report.
The annual accounts of all the subsidiary companies and the related detailed information will be made available to the Shareholders of the Company seeking such information at any point of time. The annual accounts of all the subsidiary companies will also be kept at the Corporate Office of the Company, for inspection by the Shareholders. The Company shall furnish a hard copy Of details of accounts of subsidiaries to any Shareholder on demand.
DETAILS OF MATERIAL CHANGES AND COMMIMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments affecting the financial position of the Company since the date of the financial statements i.e March 31,2017,
DIVIDEND
EQUITY SHARES:
Your Directors are pleased to recommend the payment of dividend of Rs. 215/- (Rupees Two Hundred Fifteen Only) per equity share of Rs 10/- each, thereby entailing the total payout of Rs. 2,981,016.202/- (including dividend distribution tax and other applicable taxes/ surcharges).
PREFERENCE SHARES:
Your Directors are pleased to recommend the declaration and payment of dividend of Rs 6/-(Rupees Six only) on each 6% Non-Cumulative. Non Convertible Redeemable Preference Shares of the Company, for the year under review, thereby entailing the total payout of Rs. 21.664,377/- (including dividend distribution tax and other applicable taxes/surcharges)
AMOUNT TO BE CARRIED TO RESERVES
In view of the declaration and payment of dividend to the Shareholders of the Company and in accordance with the provisions of Section 123 of the Act, your Directors do not propose any amount to be transferred to the General Reserves of the Company.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENT
Details of Leans, Guarantees and Investments covered wider the provisions of Section 1B6 of the Act are provided as part of the notes to the Financial Statements.
MATERIAL DEVELOPMENTS
CHANGE OF NAME OF THE COMPANY
Pursuant to an Agreement entered into amongst the major Shareholders of your Company i e Reliance Capital Limited and Nippon Life Insurance Company, during the year the name of the Company was changed from Reliance Capital Asset Management Limitedâ to Reliance Nippon Life Asset Management Limitedâ.
ACQUISTION OF SCHEMES OF GOLDMAN SACHS MUTUAL FUND
During the year, your company consummated the transaction to take over the asset management rights of the schemes of Goldman Sachs Mutual Fund in India (âGSMFâ), from the asset management company and the trustee Company of GSMF Overall 12 (twelve) schemes were transferred to your Company The said transfer of schemes was also accompanied with taking over a team of 20 people/ employees of GSMF. With the acquisition of the said schemes, along with human capital of a cumulative work experience of 290 years, your Company has augmented its strength in exchange traded fund space and your Company hopes to grow from strength to Strength in I his niche space.
COMPLIANCE CULTURE AND RISK MANAGEMENT
Your Company is essentially Compliance centric and has a huge focus in this direction The Compliance function is manned by a dedicated and experienced team of professionals. The Compliance team regularly conducts venous educative training programs for various segments within the organization. Your Company thrives towards a culture of Total Complianceâ and it has a âZero Toleranceâ policy for non-compliances.
Your Company has a comprehensive Risk Management Policy that envisages an enterprise risk management framework and clearly sets out the objectives & elements of risk management within the organization, including the constitution of a Risk Management department (reporting directly to the CEO and to the Board of Directors), a Risk Management Committee (RMC) and the underlying mechanisms & processes to be used for identification, monitoring and reporting of various categories of risks including credit, market, liquidity and operational risks. There are well documented & Board approved policies & processes which are in place, in addition, proper & adequate Insurance Policies and business continuity planning have also been adequately put into place.
You will note that the basic revenue model of an asset management company is charging Of management fees on assets under management provided by the investors In case of an eventuality where the Company repeatedly fails to comply with regulatory norms with regard to investment restrictions and/ or code Of conduct, or if there are repeated & glaring instances of fraud / front-running then the same may be a catastrophic risk for the enterprise However, your Directors would like to assure you that such risks are being mitigated by putting into place robust & time tested policies & processes, qualified & professional manpower to run these processes under the aegis & guidance of your Board of Directors Board Committees and various other internal committees, consisting of its senior employees.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an internal Control System, commensurate With the size scale and complexity of its operations. To maintain its objectivity and independence, the Internal Auditor reports to the Audit Committee.
The Internal Auditor monitors and evaluates the efficacy and adequacy of the internal control system in the Company, its compliance with operating systems, accounting procedures and policies Based on the report of the Internal Auditor, process owners undertake corrective action in their respective areas and thereby strengthen the controls.
The Risk Management department follows up on pending audit issues and ensures that corrective actions are timely taken. Audit observations, if any. and corrective actions thereon, are also presented to the Audit Committee of the Board.
OPERATIONAL HIGHLIGHTS
ASSET MANAGEMENT:
In terms of the authorization from SEBI, your Company acts as the asset manager to Reliance Mutual Fund (âRMF), which is the third largest Mutual Fund in India, in terms of the Quarterly Average Assets under Management {QAAUM) as on March 31, 2017
The QAAUM of RMF as on March 31, 2017 was approx. Rs 210,891 Crores comprising of Rs 57,011 Crores of Equity, Rs 103.137 Crores of Debt. Rs. 37,995 Crores of Liquid Funds and Rs 12.746 Crores of ETF assets It may tie noted that the QAAUM of RMF as cm March 31. 2016 was approx Rs 158.408 Crores comprising of Rs 47,660 Crores of Equity, Rs. 75,422 Crores of Debt. Rs. 33.543 Crores of Liquid Funds: and Rs 1,775 Crores Of ETF assets.
Overall QAAUM of RMF has shown positive growth of around 33.1% during the financial year 2016-17, while the Indian Mutual Fund industry witnessed an overall positive growth of approx 35.2% in terms of QAAUM (Source: AMFl).
NEW SCHEMES LAUNCHED:
During the year under review, RMF launched the following new schemes;
Scheme Name |
Typo |
Structure |
Reliance Fixed Horizon Fund - XXXI |
Debt |
Close - ended |
Reliance Fixed Horizon Fund - XXXII |
Debt |
Close - ended |
Reliance Fixed Horizon Fund -XXXXlll |
Debt |
Close - ended |
Reliance Dual Advantage Fixed Tenure Fund X |
Debt |
Close - ended |
Reliance ETF Long Term Gilt |
ETF |
Open - ended |
As on March 31, 2017, RMF has a well rounded portfolio of 90 schemes under various categories such as Equity. Debt. Exchange Traded Fund. Fixed Maturity Plans and Interval Funds
PORTFOLIO MANAGEMENT:
Your Company has been rendering Portfolio Management Services (âPMSâ) since August 2004 It currently offers discretionary and advisory portfolio management services to various categories of clients. The PMS business continued its positive performance through the year. As at the year end, the total AUM of the PMS business (including discretionary and advisory services and also including EPFO and CMPFO portfolio) stood at Rs 1.42.510 Crores as against Rs 1.23,631 Crores for the Iasi financial year.
Going forward, the PMS division of your Company will endeavor to identity suitable opportunities for launching equity portfolios and rendering investment advisory services Our focus on providing customized offerings to high net-worth individuals & corporates will continue via PMS in Financial Year 2017-18.
Your Company is one of the four fund houses who are managing the prestigious Employees Provident Fund Organization (EPFO) mandate Since last few years As on March 31. 2017. the EPFO portfolio stood at Rs 1.21,748 Crones and CMPFO stood at Rs 20 762 Crores
ALTERNATIVE INVESTMENT BUSINESS:
Alternative Assets remains an area of great interest in investment management space The term Alternative Assets, is generally used to describe all assets other than the conventional listed equity and investment grade debt. Hence, this includes non-conventional/ non-benchmarked strategies in equities, non-investment grade debt/ high yield debt, assets like real estate, commodities, distress debt. etc. Reliance AIF Management Company Limited (âRAIFâ), which is a subsidiary of your Company, is engaged in this business of managing alternative investment funds During the year. RAIF has undertaken final closure of Reliance Yield Maximiser AIF Scheme III. its third scheme in the Secured Real Estate space To date, a total commitment of - Rs. 1.300 Crores has been raised across all offerings. During the year. RAIF has aimed to diversify across asset classes and have launched two additional schemes in the Sector Agnostic Debt and Commercial Rea Estate Space respectively Going forward. RAIF will continue to focus on profitable growth and include more asset classes.
RELIANCE INFRASTRUCTURE INVIT FUND:
We are pleased to inform you that during the year, the Company has been appointed as the investment Manager for Reliance Infrastructure InvIT Fund, an infrastructure investment trust registered with the Securities & Exchange Board of India. Reliance Infrastructure InvIT Fund is proposing to raise funds by way of public offer and shall make investments in the infrastructure assets In this regard, your Company has secured the requisite approval of SEBI regarding the Investment management activity in respect of Infrastructure Investment Trust
NATIONAL PENSION SYSTEM:
Reliance Capital Pension Fund Limited (âRCPFLâ), a subsidiary of your Company is acting as one of the Pension Fund Managers for managing the pension assets under the National Pension System (âNPSâ)
NPS industry witnessed a rapid growth during the current year, both in terms of subscriber base as well as in respect or the assets under management The subscribers under NPS schemes as of March 31, 2017 were in excess of 1.54 crores as compared to 97 50 Lakhs during the previous year. Further, the subscribers under private sector of NPS schemes as of March 31, 2017 were 10.22 Lakhs as compared to 6 96 Lakhs as or previous year i e March 31,2016
The overall assets managed by the NPS industry, as of March 31, 2017 were Rs 1.74,558.15 Crores as compared to around Rs 1,16,303 76 Crores as at the end of the last year, Further, the assets under management related to Private sector grew from Rs, 3,554 Crores last year to Rs 7,069 Crores as of March 31, 2017. The assets under management of RCPFL during the current fiscal year has gone up to Rs, 163.97 Crores as compared to Rs 111.22 Crores in the last year
INTERNATIONAL BUSINESS:
Global Economic Environment
Year 2016-17 has been an eventful year from the Global social and economic perspective From concerns around hard landing of the Chinese economy to Brexit event to a rise in the negative yield-bearing assets globally to the stupendous demonetization drive in India to the US presidential election victory of Donald Trump, the year has been action packed to say the least.
Despite the volatility, Indian economy appears well primed to continue its journey towards a sustainable recovery with the Nifty starts recovering in the last quarter of the year 2016-17
After a lackluster out-turn in the year 2016-17, economic activity is projected to pick up pace in 2017-1B. especially in emerging markets and developing economies The economic recovery in India is strongly supported by favorable factors like fiscal stability, lower inflation, policy reforms like demonetization, passage of the GST bill, modification in FDI policy and continued Government spending.
Offshore Opportunities
Foreign Portfolio investor (âFPDâ) flows in Indian equities Stood at a 5 years low of INR 187Bn in 2016-17 Further, FPls remained net sellers to the extent of I NR 443Bn in fixed income markets during the calendar year 2016, Interestingly, Domestic Institutional Investors ploughed in INR 372bn into Indian equities during the year surpassing the net flows from FPls. However, with clarity in the Union Budget on capital gain taxation and indirect transfers, FPls turned net buyers.
Other Opportunities
The international subsidiaries of your Company manage a wide range of India investment funds through which overseas investors can participate in the India growth story. Your Company extends its services through offices in Singapore, Mauritius and Dubai.
Non-Binding Advisory Services
Under its non-binding advisory mandate, your Company provides advisory services to various offshore entities and the assets under the advisory business as on March 31, 2017 is Rs 5,576 crores
Singapore
Your Singapore subsidiary. Reliance Asset Management (Singapore) Pte Ltd CRAMSâ), which established its business in Singapore in the year 2006 has closed the financial year 2016-17 with 238,925,146 USD assets under management.
After having successful launch of UCITS equity fund in Luxembourg which is being advised by your Company, RAMS continued its efforts through the launch of new products with over 127.432.306 USD raised from offshore investors this year.
Mauritian
The Mauritian subsidiary of your Company. Reliance Asset Management (Mauritius) Limited (âRAMMâ) continued its focus on rendering of investment management services to India focused collective investment schemes i.e. Emergent India Investments Limited
CORPORATE SOCIAL RESPONSIBILITY
As part of its initiatives under âCorporate Social Responsibility (âCSRâ). the Company has undertaken projects in the areas of promoting preventive heafth care in accordance with Schedule VII of the Act
The Annual Report on CSR activities is annexed herewith as Annexure - A.
AWARDS AND RECOGNITION
During the year, your Company and the Reliance Mutual Fund have been bestowed with the following awards and recognitions
- Stevie Award in the following categories
- innovation in Customer Service - Financial Services Industries (Status: Silver Stevie Winner)
- National Sales Team of the Year (Status: Bronze Stevie Winner):
- Reliance Mutual Fund featured in Best BFSI Brands 2016 by Economic Times:
- Finnoviti Award 2017 for âSimply Save & Instant Redemptionâ mobile solutions;
- National Awards for Excellence in Digital Marketing & Social Media - Best Progressive Digital Marketing Company;
- National Awards to Reliance Mutual Fund for Excellence in Digital Marketing £ Social Media - Simply Save - Digital Application of the year:
- BBC Knowledge - National Digital Marketing Awards - Best Financial Website to Reliance Mutual Fund;
- BBC Knowledge - National Digital Marketing Awards - Best Consumer Mobile App to Reliance Mutual Fund; â
- Asset Benchmark Research Awards - Top Investment Houses in Asian Local Currency Bonds, India, Rank 3;
- The Company featured in Economic Times Coffee Table Book as Mumbaiâs Trending Workplaces for Organization Creating an Enabling Culture of the employees.
FUTURE OUTLOOK
During the year under review, the Indian Mutual Fund Industry witnessed an overall positive growth of approx 35% in terms of QAAUM. from an amount of approx. Rs 13,53,444 Crores as at March 31, 2016 to an amount of approx Rs 18,29.583 Crores as at March 31, 2017 (Source: AMFI) with following
- 34.37 Lakh Net New SIPs registered during the Financial Year (as on February 2017)
- Around 48 Lakh Equity folios have been added this year so far (as on February 2017)
Government led various measures (e.g. Demonetization, GST) have already started showing positive impact in the economy. The Mutual Fund Industry has reflected stronger growth this year.
It has been a good year for your Company, as well. Your Company continues to be amongst the largest AMCs managing assets of around Rs 3.55,800 Cr [USD 55 Billion) across Mutual Funds, PMS. Pension Funds and Offshore strategies Your Company continues to aggressively pursue growth opportunities in the fund management and investment advisory space, both at domestic as well as at the international level
There is significant growth potential for mutual fund Industry. There are only 5 4 Cr investor folios reflecting deep under penetration in adoption of mutual fund products in india We continue to focus on geographical and retail penetration. Our Industry first initiative âMutual Fund Dayâ is directed effort to increase retail participation across the country. As per latest data available on AMFI, over 85% of the Industry AUM originates from the Top 15 cities. This provides opportunities far expansion in smaller locations. Your Company has been focusing on bringing new investors to unlock untapped potential. In line with the SEBl regulations we intend to improve penetration levels in Tier III, Tier IV locations and increase use Of technology to improve the investor expenence.
The smart phone user base in India is growing rapidly and provides us an opportunity to connect with large investor base through our digital interfaces. The digital space has the potential to significantly improve the service quality and also help ease in first-time investors to the Industry Your Company has one of the most integrated Digital platforms in the Industry, and we intend to continue building on it to further Improve the investorsâ experience. Being one of the largest players in the industry, your Company will continue investing in growing the market size, achieving product innovation, educating the investors, increasing the distribution reach and enhancing customer service infrastructure with aggressive expansion strategies.
SUBSIDIARIES
As of March 31, 2017, your Company had four (4) subsidiaries. Two of such subsidiaries are overseas being one each in Singapore and Mauritius and two subsidiaries being in India All the subsidiaries of the Company are engaged in financial services and related activities.
During the year under review, the subsidiary of your Company at United Kingdom i.e Reliance Capita! Asset Management (UK) Limited (formerly known as Reliance Capital Asset Management (UK) Pic.) had been stricken off from the Register maintained by the Companies House. United Kingdom.
A statement w.r.t. the performance and the financial position of the subsidiaries of the Company is forming a part of the Consolidated Financial Statements of the Company.
Key Managerial Personnel
in terms of the requirements of Section 203 of the Act. during the year under review, the Following officials/ employees acted as the âKey Managerial Personnelâ of the Company
a) Mr. Sundeep Sikka - Executive Director & Chief Executive Officer;
b) Mr. Ajay Patel - Manager,
c) Mr. Prateek Jain - Chief Financial Officer;
d) Mr Yogesh Sachdeva - Company Secretary (up to October 25. 2016). and
e) Mr Deepak Mukhija - Company Secretary (effective from December 20, 2016)
DIRECTORS
During the year. Mr. Shinichi Okamoto, Director on the Board of the Company has resigned w.e f April 22, 2015. Further. Mr, Soum&n Ghosh. Director on the Board of the Company has also resigned w.e.f. March 31. 2017
In order to further broad base the constitution of the Board, during the year. General Ved Prakash Mahk (Retd.), Mr. Kazuhide Toda and Mr Tomonao Gotoda were appointed as Directors and Mr. Sundeep Sikka was appointed as a Whole-time Director (designated as Executive Director & Chief Executive Officer) on the Board of your Company.
In accordance with the provisions of Section 152 of the Act. Mr Kazuhide Toda (Director) is liable to retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, has offered himself for re-appointment, as such, The Board recommends the reappointment of Mr Kazuhide Toda as a Director of the Company
Further, since the closure of the financial year 2016-17, following changes have taken place in respect of your Companyâs Board:
- Mr. Tomonao Gotoda. Director on the Board of the Company, resigned w.e.f. April 22,2017
- Mr. Takayuki Murai has been appointed as the Additional Director of the Company on April 22, 2017 Mr Takayuki Murai shall hold office as Directors, uplo the date of ensuing Annual General Meeting and are eligible to be appointed as Director thereat In terms of Section 160 of the Act, your Company has received a notice in writing from one of the members, along with the requisite deposit proposing the candidature of Mr. Takayuki Murai for hrs appointment as Director
All the Independent Directors of your Company i.e Mr. Kanu H. Doshi. General Ved Prakash Malik (Retd.), Mr. Sushil Chandra Tripathi and Ms. Ameeta Chatterjee, have duly furnished the required declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act.
During the Year, in terms of the requirements of the Act, the Independent Directors held their separate meeting, where)n the performance of the Board and that of the non- independent Directors were evaluated. In this very meeting itself, the Independent Directors of the Company also thoroughly discussed the quantity, quality & the timelines of the flow of information between the Companyâs management and the Board and arrived at a view that the same is adequate and sufficient to enable effective decision making by the Board The Nomination a Remuneration Committee of the Company also undertook the evaluation of the Directorsâ performance.
BOARD AND COMMITTEE MEETINGS
During the year under review. Nine (9) Board meetings and Three (3) meetings of the Committee of Directors were held.
Your Directors wish to inform that the functioning of the Board is supplemented by various committees (Board sub â committees and management committees), which have been constituted from time to time, such as Audit Committee. Committee of Directors, CSR Committee. Nomination & Remuneration Committee, Valuation Committee, Investment Committee, InvlT Committee, Risk Management Committee, Broker Empanelment Committee, Operating Committee, Compliance Committee. Proxy Voting Committee, Information Security Risk Management Committee, etc to name a few. Each of the aforesaid Committees has been constituted in order to ensure due compliance with the applicable laws and to ensure the highest levels of corporate governance. The minutes of the meetings of each of these Committees are duly placed before the Board for noting and confirmation
AUDIT COMMITTEE
In terms of the requirements of Section 177 of the Act, the Audit Committee of the Company consists of majority of Independent Directors. As on dale of this report, it comprises Mr Kanu H, Dos hi [Independent Director], Mr Sushi I Chandra Tripathi [Independent Director), Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd,) [Independent Director) and Mr Takayuki Murai (Associate Director)
During the year, Seven (7) meetings of the Audit Committee were held.
NOMINATION & REMUNERTION COMMITTEE
In terms of the requirements of Section 178 of the Act, the Nomination & Remuneration Committee of the Company consists of majority of Independent Directors, As on date of this report, it comprises Mr Kanu H Doshi [Independent Director). Mr Sushil Chandra Tripathi [Independent Director), Ms Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director) and Mr. Kgzuhide Toda [Associate Director).
During the year, 2 meetings of the Nomination & Remuneration Committee were held.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
In terms of the requirements of Section 135 of the Act, the Corporate Social Responsibility (âCSRâ) Committee of the Company consists Of seven members As on date of this report it comprises Mr Kami H. Dos hi [independent Director], Mr Susfiil Chandra Trrpalhi [Independent Director], Ms Ameeta Chatterjee [Independent Director]. General Ved Prakasft Malik (Retd ) [Independent Director), Mr. Sundeep Sikka (Associate Director], Mr. Kazuhide Toda I Associate Director] and Mr. Takayuki Murai [Associate Director].
During the year, 2 meetings of the CSR Committee were held
AUDITORâS OF THE COMPANY â STATUTORY AND INTERNAL
In accordance with the applicable provisions of law, the Company has appointed Statutory and Internal Auditors, who periodically submit their reports, which are placed before the Audit committee for discussion, review and implementation of their recommendations.
STATUORY AUDITORS:
In terms or Section 139 of the Act read with Companies (Audit and Auditors) Rules, 2014, at the Nineteenth Annual General Meeting of the Company. M/s B S R & Co. LLP, Chartered Accountants were appointed as the Statutory Auditors of tiia Company in the Annual General Meeting held on June 24, 2014, for a period of Four (4) years subject however to ratification by members at every Annual General Meeting of the Company.
The Board recommends ratification of their appointment, as such, at the ensuing Twenty Second Annual General Meeting of the Company,
INTERNAL AUDITORS :
M/s, NMAH & Associates LLP, Chartered Accountants were appointed as I he Internal Auditorsâ of your Company for the year 2016-17 Your Directors approved their reappointment as such for I he financial year 2017-18.
AUDITORS OF THE SCHEMES OF RELIANCE MUTUAL FUNDS â STATUTORY AND INTERNAL
In accordance with the applicable provisions of law, the Company has appointed Statutory and Internal Auditors tor the various Schemes of Reliance Mutual Fund, who periodically submit their reports, which are placed before the Audit Committee for discussion, review and implementation of their recommendations.
STATUTORY AUDITORS :
M/s. Haribhakti & Co LLP,, Chartered Accountants held office as Statutory Auditors of the Schemes of Reliance Mutual Fund for the financial year 2016-17. Your Directors recommend their re-appointment as such for the financial year 2017-16
INTERNAL AUDITORS :
During the year. M/s. Daloitte Haskins & Sells LLP. Chartered Accountants were appointed as Internal Auditors of the Scheme of Reliance Mutual Fund and the portfolio management services division of the Company, for the financial year 2015-17 Your Directors recommend their re-appointment as such for the financial year 2017-201B.
AUDITORSâ REPORT
The notes to the Annual Accounts of the Company, referred to In the Auditors Report are self-explanatory and do not require any clarification from the Board
SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration Of Managerial Personnel) Rules. 2014, your Directors had appointed M/S M. Siroya and Company, Mumbai, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the financial year 2016-17 in this regard, the Report submitted by the Secretarial Auditor Is annexed herewith as Annexure - B
Your Directors are pleased to inform that the report from the Secretarial Auditors does not contain any qualifications or negative remarks
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as Annexure - C.
PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
CONSERVATION OF ENERGY :
The operations of the Company do not consume high levels of energy. Adequate measures have been taken to conserve energy wherever feasible Your Company uses latest technology and energy efficient equipments. As energy cost forms a very small part Of the total costs, the impact on cost is not material
TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION :
(I) The efforts made towards technology absorption:
During the financial year 2016-17, Digital strategy of your Company was focused providing the simplified processes to the customer and keeping in view the interests of the distributors. Along with this, there was a strong agenda to acquire a new customer online without any paper work. In line with the above objective, your Company launched various initiatives in this direction and many of these initiatives were first time in the industry Some of those initiatives are as follows:
- Launch of Instant redemption on Simply Save app for customers
- Revamped website for the distributor to provide ease of transactions, campaigns and other such transactions & add-on Features
- E-mandate for Axis and HDFC Bank customers, which enables customers to register regular payments like SIP etc. seamlessly
- Paperless eKYC process to acquire customers who are new to Mutual Fund industry by connecting with Aadhar ecosystem
(ii) Benefits derived out of the above initiatives:
Financial year 2016-17 has seen phenomenal increase in business through our digital Assets, as follows
- >100% growth in purchase Volume, up from 12% to 25%
- Digital is > 1.3 times bigger than largest distributor in Purchases... 6 times bigger than 2nd
- Every 4th Purchase in Digital, Mobile App contributing > 40% to Digital
- Total Digital Purchases have crossed 40, 000 per month
- 135% growth in unique customers during the year.
RESEARCH AND DEVELOPMENT:
Itâs evident that digital has become a critical asset in many companiesâ quest for growth We as a Company are very much committed to this and are looking continuously to provide simplified process and product over the digital platform to the online customers This approach is being led by various research and innovative products designed for the online customers. The team and management keep on participating In various discussions, conclave summits, forum to stay connected and updated on the digital movement in the world & industry
FOREIGN EXHANGE EARNINGS AND OUTGO :
During the year, the Company effected exports worth Rs Nil
During the year under review, the Company earned foreign exchange equivalent to Rs. 262,344,770/- The Company spent foreign exchange equivalents Rs. 05,598,762/-
DIRECTORSâ RESPONSIBILITY STATEMENT
As per the requirements of Sub Section (5) of Section 134 of the Act. the Directors confirm that-
(i) in the preparation of the annual accounts for the financial year ended March 31. 2017, the applicable accounting standards have been followed and that there are no material departures:
(ii) The Directors have selected such accounting policies in consultation with the Statutory Auditors1 and have applied them consistently and made judgments andâ estimates that were 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 of the Company for the year under review,
(iii) The Directors have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance With the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities
(iv) The Directors have prepared the annual accounts of the Company on a âgoing concernâ basis.
[v) The Directors have devised proper systems to ensure compliance with the provisions of alt applicable laws and that such systems are adequate and operating effectively.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were on an armâs length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors. Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. Related Party Transactions are being placed before the Audit Committee and/ or the Board, for approval/ noting, as appropriate. Prior omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions which are foreseen or repetitive in nature. Your Directors have already approved a Related Party Transactions Policy for the purpose of identification and monitoring of such transactions
PARTUCLARS OF FRAUDS REPORTED BY THE AUDITORSâ
In terms of Section 143(12} of the Act. M/s B S R J Co LLP, Chartered Accountants the Statutory Auditors of the Company have not reported any instance cf fraud having taken place dung the year under review, in their Audit Report.
SIGNIFICANT AND MATERIAL ORDRES PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators/ Courts which would impact the going concern status of the Company and its future operations
OUR PEOPLE
Your Company as an organization is committed towards creation of knowledge for the benefit of all the stakeholders It is our firm belief that the growth of an organization is largely dependent on the growth of its individuals. Policies in your Company are employee oriented and devised with our âPeople Firstâ philosophy in mind.
Your Company had 915 numbers of employees as at March 31. 2017
Your Company Mad 915 numbers of employees as at March 31, 2017
As required by the provisions of Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of the employees are set out in Annexure-Oâ to this Directorsâ Report
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
Your Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention Prohibition & Redressal) A cl, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment All employees (permanent, contractual, temporary, trainees) are covered under this Policy Following is a summary of sexual harassment complaints received and disposed off during the year.
- No. of complaints received Nil
- No. of complaints disposed of: N.A.
ACKNOWLEDGEMENTS
Your Directors which to place on record their sincere appreciation for the co-opera bon received from various regulatory and governmental authorities including SEBI RBI. Registrar of Companies. Maharashtra at Mumbai. PFRDA. NPS Trust. EPFO CMPFO Custodians Bankers. Registrars. Shareholders. Investors and all other business constituents during the year under review We believe all of them have contributed to our continued growth
Your Directors also wish to place on record their deep appreciation for the total commitment displayed by all the executives, officers and staff, resulting in yet another eventful performance for the year
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
OF RELIANCE NIPPON LIFE ASSET MANAGEMENT LIMITED
(Formerly known as Reliance Capital Asset Management Limited)
Place; Mumbai Kanu Doshi Sundeep Slkka
Dated: April 22,2017 Director Executive Director & CE O
(DIN: 00577409) (DIN: 02553654)
Mar 31, 2017
Directors'' Report
Dear Shareowners,
The Directors have pleasure in presenting the 31st Annual Report and the audited financial statement for the financial year ended March 31, 2017.
Financial Performance and State of Company''s Affairs
The standalone performance of the Company for the financial year ended March 31, 2017 is summarized below:
Particulars |
Financial Year ended March 31, 2017 |
*Financial Year ended March 31, 2016 |
||||
(Rs, in crore) |
(US$ in million**) |
(Rs, in crore) |
(US$ in million**) |
|||
Total revenue |
2 071 |
319 |
4 145 |
625 |
||
Profit before tax |
517 |
80 |
1 176 |
177 |
||
Tax expense |
98 |
15 |
199 |
30 |
||
Profit after tax |
419 |
65 |
977 |
147 |
||
Add: Opening surplus in statement of w and loss |
2 101 |
324 |
1 598 |
241 |
||
Profit available for appropriation |
2 520 |
389 |
2 575 |
388 |
||
Transfer to statutory reserve fund |
84 |
13 |
195 |
29 |
* Previous year figures has been regrouped / reclassified wherever necessary. The figures for the previous year includes figures of Commercial Finance Business of the Company demerged with Reliance Commercial Finance Limited and therefore to that extent not strictly comparable to that of current year''s figures.
** Exchange Rate Rs, 64.910 = US$ 1 as on March 31, 2017 (Rs, 66.333 = US$1 as on March 31, 2016).
Dividend
Your Directors have recommended a dividend of Rs, 10.50 (105 per cent) per equity share each of Rs, 10 aggregating to Rs, 290 crore (inclusive of dividend tax) for the financial year ended March 31, 2017, which, if approved at the ensuing 31st Annual General Meeting (AGM), will be paid to (i) all those equity shareholders whose names appear in the Register of Members as on September 22, 2017, and (ii) to those whose names appear as beneficial owners, as on September 22, 2017 as furnished by the National Securities Depository Limited and Central Depository Services (India) Limited for the purpose.
The Dividend payout as proposed is in accordance with the Company''s policy of paying sustainable dividend linked to long term performance, keeping in view of the capital needs of the Company''s growth plans and desire to achieve optimal financing of such plans through internal accruals. The Company''s Dividend Distribution Policy forms part of this Annual Report.
Scheme of Arrangement
The Scheme of Arrangement under Sections 391 to 394 of the Companies Act, 1 956 (the ''Scheme'') for demerger of Commercial Finance Business of the Company to its wholly owned subsidiary viz. Reliance Commercial Finance Limited has been sanctioned by the Hon''ble High Court of Judicature at Bombay. The Scheme has become effective on March 24, 201 7 on filing with the Registrar of Companies, Maharashtra at Mumbai with effect from April 1, 2016 i.e. Appointed Date.
On the Scheme becoming effective on March 24, 2017, the Company has positioned itself as a Core Investment Company (CIC).
During the year under review, your Directors had approved the Scheme of Arrangement under Sections 391 to 394 of the Companies Act, 1956 (the ''Scheme'') for demerger of Real Estate Lending Business of the Company to its wholly owned subsidiary viz. Reliance Home Finance Limited. The Appointed Date for the Scheme is April 1, 2017. The Scheme is subject to requisite approvals, including sanction of the National Company Law Tribunal.
Management Discussion and Analysis
Management Discussion and Analysis Report for the year under review as stipulated under Listing Regulations is presented in a separate section forming part of this Annual Report.
Resources and Liquidity
The Company''s Net Worth as on March 31, 2017, stood at Rs, 13,822 crore. The Company has raised Rs, 19,557 crore during the financial year 2016-17 by issuance of Commercial Paper, Non-Convertible Debentures (NCDs) and other money market instruments. The funds were deployed in providing commercial finance and other business requirement. RCL''s debt equity ratio as on March 31, 2017 stood at 1.38:1.
Deposits
The Company has neither accepted nor renewed any fixed deposits during the year. There are no unclaimed deposits, unclaimed / unpaid interest, refunds due to the deposit holders or to be deposited to the Investor Education and Protection Fund as on March 31, 2017.
Particulars of Loans, Guarantees or Investments
Pursuant to Section 186(11) of the Companies Act, 2013 (the "Act") loans made, and acquisition of securities by a NonBanking Financial Company in the ordinary course of its business are exempted from disclosure in the Annual Report.
Subsidiary and Associate companies
During the year under review, Reliance Capital Asset Management (UK) Limited, Reliance Money Express Limited, and Quant Capital Finance and Investments Private Limited ceased to be subsidiaries of the Company. Quant Commodity Broking Private Limited ceased to be a subsidiary and became an associate of the Company.
The performance and financial position of the major subsidiary companies are presented in Management Discussion and Analysis Report forming part of this Annual Report. Also, a report on the performance and financial position of each of the subsidiary and associate companies as per the Act is provided in the consolidated financial statement. The Policy for determining material subsidiary companies may be accessed on the Company''s website at http://www.reliancecapital.co.in/ pdf/Policy_for_Determining_Material_Subsidiary.pdf.
Consolidated Financial Statement
The Audited Consolidated Financial Statement for the financial year ended March 31, 2017, based on the financial statement received from subsidiary and associate companies, as approved by their respective Board of Directors have been prepared in accordance with Accounting Standard (AS) - 21 on ''Consolidated Financial Statements'' read with AS-23 on ''Accounting for Investments in Associates'', notified under the Act, read with the Accounting Standards Rules as applicable.
Directors
The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of Independence as prescribed under the Act and Listing Regulations.
The details of programme for familiarization of Independent Directors with the Company, nature of the industry in which the Company operates and related matters are put up on the website of the Company at the link http://www.reliancecapital.co.in/cg_ policies.html.
In terms of the provisions of the Companies Act, 2013, Shri Amitabh Jhunjhunwala, Director of the Company, retires by rotation and being eligible, offers himself for re-appointment at the ensuing AGM.
A brief resume of Shri Amitabh Jhunjhunwala, along with requisite details, as stipulated under Regulation 36 (3) of Listing Regulations, is given in the section on Corporate Governance Report forming part of this Annual Report.
Shri Soumen Ghosh ceased to be Executive Director & Group CEO with effect from March 31, 2017. The Board place on record its deep sense of appreciation for the invaluable contribution made by Shri Soumen Ghosh during his tenure as Director of the Company.
Key Managerial Personnel
During the year, Shri Atul Tandon was appointed as Company Secretary & Compliance Officer with effect from February 10, 2017. Shri V. R. Mohan upon superannuation relinquished the office of President & Company Secretary of the Company with effect from March 31, 2017.
Evaluation of Directors, Board and Committees
The Company has devised a policy for performance evaluation of the individual directors, Board and its Committees, which includes criteria for performance evaluation.
Pursuant to the provisions of the Act and Regulation 17(10) of Listing Regulations, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of the Committees of the Board. The Board performance was evaluated based on inputs received from all the Directors after considering criteria such as Board composition and structure, effectiveness of Board / Committee processes, and information provided to the Board, etc. A separate meeting of the Independent Directors was also held during the year for the evaluation of the performance of non-independent Directors, performance of the Board as a whole and that of the Chairman.
The Nomination and Remuneration Committee has also reviewed the performance of the individual directors based on their knowledge, level of preparation and effective participation in meetings, understanding of their roles as directors, etc.
Policy on appointment and remuneration for Directors, Key Managerial Personnel and Senior Management Employees
The Nomination and Remuneration Committee of the Board has devised a policy for selection and appointment of Directors, Key Managerial Personnel and Senior Management Employees and their Remuneration. The Committee has formulated the criteria for determining qualifications, positive attributes and independence of a Director, which has been put up on the Company''s website. The policy on the above is attached as Annexure - A.
Directors'' Responsibility Statement
Pursuant to the requirements under Section 134(5) of the Act with respect to Directors'' Responsibility Statement, it is hereby confirmed that:
i. In the preparation of the annual financial statement for the financial year ended March 31, 2017, the applicable Accounting Standards had been followed along with proper explanation relating to material departures, if any;
ii. The Directors had selected such accounting policies and applied them consistently and 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 of the Company for the year ended on that date;
iii. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv. The Directors had prepared the annual financial statement for the financial year ended March 31, 2017 on a ''going concern'' basis;
v. The Directors had laid down proper internal financial controls to be followed by the Company and such financial controls are adequate and are operating effectively; and
vi. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
Contracts and Arrangements with Related Parties
All contracts/ arrangements/ transactions entered into/ by the Company during the financial year under review with related parties were on an arm''s length basis and in the ordinary course of business. There were no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons, which may have a potential conflict with the interest of the Company at large.
All Related Party Transactions were placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee was obtained for the transactions which were of a repetitive nature. The transactions entered into pursuant to the omnibus approval so granted were reviewed and statements giving details of all related party transactions were placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis. The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website at the link http://www.reliancecapital.co.in/ pdf/Policy_for_Related_Party_Transaction.pdf. Your Directors draw attention of the members to Note No. 35 to the financial statement which sets out related party disclosures.
Material Changes and Commitments if any, affecting the financial position of the Company
There were no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year and the date of this report.
Meetings of the Board
A calendar of Meetings is prepared and circulated in advance to the Directors. During the year, seven Board Meetings were held, details of which are given in the Corporate Governance Report.
Audit Committee
The Audit Committee of the Board consists of Independent Directors namely Shri Rajendra P. Chitale, Chairman, Dr. Bidhubhusan Samal, Shri V. N. Kaul, Smt. Chhaya Virani and Non-Independent Director Shri Amitabh Jhunjhunwala as members. During the year, all the recommendations made by the Audit Committee were accepted by the Board.
Auditors and Auditors'' Report
At the 30th Annual General Meeting of the members of the Company held on September 27, 2016, the shareholders of the Company had appointed M/s. Pathak H.D. & Associates, Chartered Accountants as Auditors to hold office until the conclusion of the 35th Annual General Meeting of the Company to conduct statutory audit of the Company. Further, M/s. B S R & Co. LLP, Chartered Accountants were appointed to hold office of Auditors, till the conclusion of ensuing Annual General Meeting. Pursuant to the provisions of Section 139 of the Companies Act, 2013 (the "Act") read with Rule 6 of Companies (Audit and Auditors) Rules, 2014, M/s. B S R & Co. lLp, Chartered Accountants, Statutory Auditors'' having completed their term retires from the office of the Statutory Auditors. M/s. Price Waterhouse & Co Chartered Accountants LLP, are proposed to be appointed as Joint Statutory Auditors in place of M/s. B S R & Co. LLP, Chartered Accountants.
The Company has also received letters from M/s. Pathak H.D. & Associates, Chartered Accountants, to ratify their appointment and from M/s. Price Waterhouse & Co Chartered Accountants LLP to the effect that their appointment, if made, is within the prescribed limits under Section 141(3) of the Act and that they are not disqualified from appointment as Statutory Auditors of the Company.
Your Directors have therefore proposed to ratify the appointment of M/s. Pathak H.D. & Associates, Chartered Accountants and to appoint M/s. Price Waterhouse & Co Chartered Accountants LLP, as Joint Statutory Auditors of the Company, subject to the approval of the members at the ensuing AGM.
The observations and comments given by the Auditors in their report read together with notes on financial statements are self explanatory and hence do not call for any further comments under Section 134 of the Act.
Secretarial Audit
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors had appointed Aashish K. Bhatt & Associates, Practicing Company Secretaries, to undertake the Secretarial Audit of the Company. There is no qualification, reservation or adverse remark made in their Secretarial Audit Report. The Audit Report of the Secretarial Auditor is attached as Annexure - B.
Extract of Annual Return
Extract of the Annual Return of the Company in form MGT-9 is attached as Annexure - C.
Particulars of Employees and related disclosures
In terms of the provisions of Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules are provided in the Annexure to the Directors'' Report. However, having regard to the provisions of Section 136 of the Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. The said information is available for inspection at the registered office of the Company on all working days, except Saturdays between 11:00 A.M. and 1:00 P.M. up to the date of the Meeting and any member interested in obtaining the same may write to the Company Secretary. Upon such request the information shall be furnished.
Disclosures relating to the remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, are provided in Annexure - D.
Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
The Company is a Non-Banking Financial Company and does not involve in any manufacturing activity, most of the information as required under Section 1 34(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 are not applicable. However, the information as applicable has been given in Annexure - E forming part of this Report.
Corporate Governance
The Company has adopted "Reliance Group-Corporate Governance Policies and Code of Conduct" which sets out the systems, process and policies conforming to the international standards. The report on Corporate Governance as stipulated under Regulation 34(3) read with Para C of Schedule V of the Listing Regulations is presented in separate section forming part of this Annual Report.
A Certificate from the auditors of the Company M/s. Pathak
H.D. & Associates, Chartered Accountants and M/s. B S R & Co. LLP, Chartered Accountants conforming compliance to the conditions of Corporate Governance as stipulated under Para E of Schedule V of the Listing Regulations, is enclosed to this Report.
Vigil Mechanism
In accordance with Section 1 77 of the Act and the Listing Regulations, the Company has formulated a Vigil Mechanism to address the genuine concerns, if any, of the directors and employees. The details of the same have been stated in the Report on Corporate Governance and the policy can be accessed on the Company''s website.
Employees Stock Option Scheme
Employees Stock Option Scheme (ESOS 2015) was approved and implemented by the Company and Options were granted to the employees in accordance with guidelines applicable to ESOS.
The Nomination and Remuneration Committee of the Board monitors the Scheme. The existing ESOS Scheme and Plans are in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (SEBI Regulations).
Risk Management
Directors'' Report
The applicable disclosures for ESOS 2015 as stipulated under the Companies (Share Capital and Debentures) Rules, 2014 as on March 31, 2017 are given below:
Particulars |
ESOS 2015 |
|
a) |
Total Options granted |
6 46 080 Options |
b) |
Options vested |
5 26 780 Options |
c) |
Options exercised |
Nil |
d) |
Total number of equity shares arising as a result of exercise of Option |
Nil |
e) |
Options lapsed |
1 15 780 Options |
f) |
Exercise Price |
The options were granted at the market price i.e. '' 396 |
g) |
Variation of terms of Options |
Nil |
h) |
Money realized by exercise of Options |
Nil |
i) |
Total number of Options in force at the end of the year |
5 26 780 Options |
j) |
Employee wise details of Options granted to: i. key managerial personnel |
|
(a) Shri Amit Bapna - Chief Financial Officer |
40 900 Options |
|
(b) Shri Atul Tandon - Company Secretary & Compliance Officer |
7 200 Options |
|
ii. any other employee who receives a grant of options in any one year of option amounting to five per cent or more of options granted during that year |
Nil |
|
iii. identified employees who were granted option, during any one year, equal to or exceeding one per cent of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant |
Nil |
The Company has received a certificate from the auditors of the Company that the ESOS 2015 has been implemented in accordance with the SEBI Regulations and as per the resolution passed by the members of the Company authorizing issuance of the said Options. The other details as required under SEBI Regulations are disclosed on the Company''s website at www.reliancecapital.co.in/ESOS-Disclosure.aspx.
The Company has laid down a robust Risk Management Policy, defining Risk profiles involving Strategic, Technological, Operational, Financial, Organizational, Legal and Regulatory risks within a well defined framework. The Risk Management Policy acts as an enabler of growth for the Company by helping its businesses to identify the inherent risks, assess, evaluate and monitor these risks continuously and undertake effective steps to manage these risks.
A Risk Management Committee (RMC) consisting of Shri V. N. Kaul, Chairman and Smt. Chhaya Virani as member, periodically reviews the robustness of the Risk Management Policy. The periodical update on the risk management practices and mitigation plan of the Company and subsidiaries are presented to the Audit Committee and Board of Directors. The Audit Committee and Board periodically review such updates and findings and suggest areas where internal controls and risk management practices can be improved.
Asset Liability Committee (ALCO) consisting of senior management executives, monitors liquidity and interest rate risks of the Company. The functioning of ALCO is reviewed by the RMC which meets quarterly and reports to the Board of Directors. Compliance with provisions of Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013 The Company is committed to uphold and maintain the dignity of woman employees and it has in place a policy which provides for protection against sexual harassment of women at work place and for prevention and redressal of such complaints. During the year no such complaints were received.
Corporate Social Responsibility
The Company has constituted Corporate Social Responsibility Committee in compliance with the provisions of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014. The Corporate Social Responsibility Committee has formulated a Corporate Social Responsibility Policy (CSR policy) indicating the activities to be undertaken by the Company. The CSR policy may be accessed on the Company''s website at the link; http://www.reliancecapital.co.in/ pdf/Group_CSR_Policy_ Document.pdf.
The CSR Committee consists of Dr. Bidhubhusan Samal as Chairman, Shri Amitabh Jhunjhunwala and Shri V. N. Kaul, as members. The disclosures with respect to CSR activities is given in Annexure - F.
Order, if any, passed by Regulators or Courts or Tribunals
No orders have been passed by the regulators or courts or tribunals impacting the going concern status and the Company''s operations.
Internal Financial Controls and their adequacy
The Company has in place adequate internal financial controls across the organization. The same is subject to review periodically by the internal audit cell for its effectiveness. During the year, such controls were tested and no reportable material weakness in the design or operation were observed.
Business Responsibility Statement
Business Responsibility Report for the year under review as stipulated under Listing Regulations is presented in the separate section forming part of this Annual Report.
Acknowledgement
Your Directors would like to express their sincere appreciation for the co-operation and assistance received from shareholders, debenture holders, debenture trustee, bankers, financial institutions, regulatory bodies and other business constituents during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, officers and staff, resulting in the successful performance of the Company during the year.
For and on behalf of the Board of Directors
Anil Dhirubhai Ambani
Chairman
Mumbai April 27, 2017
Mar 31, 2015
Dear Shareowners,
The Directors have pleasure in presenting the 29th Annual Report and
the audited financial statement for the financial year ended March 31,
2015.
Financial Results
The standalone performance of the Company for the financial year ended
March 31, 2015 is summarised below:
Particulars Financial Year ended *Financial Year ended
March 31, 2015 March 31, 2014
(Rs. in
crore) (US$ in
million**) (Rs. in
crore) (US$ in
million**)
Total revenue 3988 637 3254 541
Profit before
exceptional items 844 135 464 77
Profit before tax 844 135 464 77
Tax expense 87 14 55 9
Profit after tax 757 121 409 68
Add: Opening surplus
in statement of
profit and loss 1309 209 1248 208
Profit available for
appropriation 2066 330 1657 276
Proposed dividend
including tax on
proposed dividend 257 41 225 37
Tax on proposed
dividend for
earlier years (16) (3) - -
Transfer to
statutory reserve
fund 151 24 82 14
Transfer to
general reserve 76 12 41 7
* Figures of previous year have been regrouped and reclassified,
wherever required.
** Exchange Rate Rs. 62.5908 = US$ 1 as on March 31, 2015 (Rs. 60.10 =
US$1 as on March 31, 2014).
Financial Performance
The Company''s gross income for the financial year ended March 31, 2015
increased to Rs. 3,988 crore, from Rs. 3,254 crore in the previous
year, increase of 23 per cent. The operating profit (PBDIT) of the
Company increased by 16 per cent to Rs. 3,232 crore during the year,
from Rs. 2,777 crore, in the previous year. Interest expenses for the
year increased by 3 per cent to Rs. 2,357 crore from Rs. 2,279 crore,
in the previous year. Depreciation was at Rs. 31 crore as against Rs.
34 crore in the previous year. The net profit for the year increased by
85 per cent to Rs. 757 crore from Rs. 409 crore, in the previous year.
An amount of Rs. 151 crore was transferred to the Statutory Reserve
Fund pursuant to Section 45-IC of the Reserve Bank of India Act, 1934,
and a net amount of Rs. 76 crore was transferred to the General Reserve
during the year under review.
Dividend
Your Directors have recommended a dividend of Rs. 9.00 (90 per cent)
per equity share each of Rs. 10 aggregating to Rs. 257 crore (inclusive
of dividend tax) for the financial year ended March 31, 2015, which, if
approved at the ensuing 29th Annual General Meeting (AGM), will be paid
to (i) all those equity shareholders whose names appear in the Register
of Members as on September 18, 2015, and (ii) to those whose names
appear as beneficial owners, as on September 18, 2015 as furnished by
the National Securities Depository Limited and Central Depository
Services (India) Limited for the purpose.
The Dividend payout as proposed is in accordance with the Company''s
policy of paying sustainable dividend linked to long term performance,
keeping in view of the capital needs of the Company''s growth plans and
desire to achieve optimal financing of such plans through internal
accruals.
Management Discussion and Analysis
Management Discussion and Analysis Report for the year under review as
stipulated under Clause 49 of the Listing Agreement with the Stock
Exchanges in India is presented in a separate section forming part of
this Annual Report.
Strategic Alliance and Preferential Allotment of Shares
Your Company and Sumitomo Mitsui Trust Bank (the "SMTB ") have been
evaluating a strategic alliance for the establishment of a Universal
Bank. SMTB is a company incorporated and registered in Tokyo, Japan,
with business operations in Japan, Singapore and the United States.
SMTB offers a broad range of banking and financial services and
consulting services. The central focus of SMTB''s business is on various
banking services outside India. Sumitomo Mitsui Trust Bank is core part
of Sumitomo Mitsui Trust Group of Japan which is the fourth largest
bank in Japan. The Company and SMTB have agreed to explore and engage
on collaborating in a variety of areas of potential synergies and
mutual benefits in respect of the current lines of business operations
and specifically for the establishment of the Universal Bank.
The Company has as a part of strategic alliance with SMTB and in
accordance with the provisions of the Securities and Exchange Board of
India (Issue of Capital and Disclosure Requirements) Regulations, 2009,
allotted on a Preferential basis 70,00,000 equity shares of face value
of Rs. 10 each at a premium of Rs. 520 per share aggregating to Rs. 371
crore to SMTB.
Resources and Liquidity
The Company''s Net Worth as on March 31, 2015, stood at Rs. 12,387
crore. The Company has raised Rs. 24,490 crore during the financial year
2014-15 by issuance of Commercial Paper, Non-Convertible Debentures
(NCDs) and other money market instruments. The Company has also raised
Rs. 250 crore by way of Unsecured Subordinated Non Convertible
Debentures (Tier II Bonds) to augment the Capital Adequacy Ratio. The
funds were deployed in providing commercial finance and other business
requirement. RCL''s debt equity ratio as on March 31, 2015 stood at
1.76:1.
-Capital Adequacy Ratio
Your Company''s Capital to Risk Assets Ratio (CRAR) calculated in line
with the Systemically Important Non-Banking Financial (Non-Deposit
Accepting or Holding) Companies Prudential Norms (Reserve Bank)
Directions, 2015 ("RBI Directions ") stood at 23.87 per cent, well
above the regulatory minimum of 15 per cent. Your Company''s asset size
is Rs. 35,702 crore. The Company has received a certificate from the
Auditors of the Company, M/s. Chaturvedi & Shah, Chartered Accountants
and M/s. B S R & Co. LLP, Chartered Accountants, pursuant to
Non-Banking Financial Companies Auditors'' Report (Reserve Bank)
Directions, 2008, confirming compliance of the conditions with respect
to Systemically Important Non-Deposit taking Non-Banking Financial
Companies.
Deposits
The Company has neither accepted nor renewed any fixed deposits during
the year. There are no unclaimed deposits, unclaimed / unpaid interest,
refunds due to the deposit holders or to be deposited to the Investor
Education and Protection Fund as on March 31, 2015.
Particulars of Loans, Guarantees or Investments
Pursuant to Section 186(11) of the Companies Act, 2013 loans made, and
acquisition of securities by a Non-Banking Financial Company in the
ordinary course of its business are exempted from disclosure in the
Annual Report.
Subsidiary and Associate companies
During the year under review, Reliance Alternative Investments Services
Private Limited, Reliance Asset Management (Malaysia) Sdn. Bhd.,
Reliance Composite Insurance Broking Limited, Reliance Consultants
(Mauritius) Limited, Reliance Equity Advisors (India) Limited, Quant
Capital Advisors Private Limited, Quant Commodities Private Limited and
Indian Agri Services Private Limited ceased to be subsidiaries of the
Company.
The performance and financial position of the major subsidiary companies
are presented in Management Discussion and Analysis Report forming part
of this Annual Report. Also, a report on the performance and financial
position of each of the subsidiary companies and associate companies as
per the Act is provided in the consolidated financial statement. The
Policy for determining material subsidiary companies may be accessed on
the Company''s website at
http://www.reliancecapital.co.in/pdf/Policy_for_
Determining_Material_Subsidiary.pdf.
Consolidated Financial Statement
The Audited Consolidated Financial Statement for the financial year
ended March 31, 2015, based on the financial statement received from
subsidiary companies and associate companies, as approved by their
respective Board of Directors have been prepared in accordance with
Accounting Standard (AS) - 21 on ''Consolidated Financial Statements''
read with AS-23 on ''Accounting for Investments in Associates'', notified
under the Act, read with the Accounting Standards Rules as applicable.
Directors
During the year under review, in terms of the provisions of Act, the
Company appointed Shri Rajendra P. Chitale, Shri V. N. Kaul and Dr.
Bidhubhusan Samal as Independent Directors of the Company for a period
of 5 years w.e.f. September 30, 2014.
The Company has received declarations from all the Independent
Directors of the Company confirming that they meet the criteria of
independence as prescribed under the Act and Clause 49 of the Listing
Agreement with the Stock Exchanges.
The details of programme for familiarization of Independent Directors
with the Company, nature of the industry in which the Company operates
and related matters are put up on the website of the Company at the
link http://www.reliancecapital.co.in/cg_ policies.html.
Smt. Chhaya Virani was appointed as a Women Director, liable to retire
by rotation w.e.f. September 30, 2014 and designated as an Independent
Director of the Company for a period of 5 years w.e.f. May 29, 2015.
In terms of the provisions of the Companies Act, 2013, Shri Amitabh
Jhunjhunwala, Director of the Company, retires by rotation and being
eligible, offers himself for re-appointment at the ensuing AGM.
Shri Soumen Ghosh, CEO was appointed as an Executive Director & Group
CEO for a period of 5 years commencing from May 29, 2015.
A brief resume of Shri Amitabh Jhunjhunwala, Smt. Chhaya Virani and
Shri Soumen Ghosh, Directors, nature of expertise in specifc functional
areas and names of the companies in which they holds directorship and /
or membership / chairmanships of Committees of the respective Boards,
shareholding and relationship between directors inter se as stipulated
under Clause 49 of the Listing Agreement with the Stock Exchanges in
India, is given in the section on Corporate Governance Report forming
part of this Annual Report.
Key Managerial Personnel
During the year, Shri Soumen Ghosh, Chief Executive Officer, Shri Amit
Bapna, Chief Financial Officer and Shri V. R. Mohan, President & Company
Secretary were designated as the Key Managerial Personnel of the
Company as per requirements of the Act.
Shri Soumen Ghosh, CEO to the Board of the Company has been appointed
as an Executive Director & Group CEO, with effect from May 29, 2015 and
upon his appointment Shri V. R. Mohan ceased to hold the office of
Manager.
Evaluation of Directors, Board and Committees
The Company has devised a policy for performance evaluation of the
individual directors, Board and its Committees, which includes criteria
for performance evaluation.
Pursuant to the provisions of the Act and Clause 49 of the Listing
Agreement, the Board has carried out an annual performance evaluation
of its own performance, the directors individually as well as the
evaluation of the working of the Committees of the Board. The Board
performance was evaluated based on inputs received from all the
Directors after considering criteria such as Board composition and
structure, effectiveness of Board / Committee processes, and
information provided to the Board, etc. A separate meeting of the
Independent Directors was also held during the year for the evaluation
of the performance of non-independent Directors, performance of the
Board as a whole and that of the Chairman.
The Nomination and Remuneration Committee has also reviewed the
performance of the individual directors based on their knowledge, level
of preparation and effective participation in Meetings, understanding
of their roles as directors, etc.
-Policy on appointment and remuneration for directors, key managerial
personnel and senior management employees
The Nomination and Remuneration Committee of the Board has devised a
policy for selection and appointment of Directors, Key Managerial
Personnel and Senior Management Employees and their Remuneration. The
Committee has formulated the criteria for determining qualifications,
positive attributes and independence of a Director, which has been put
up on the Company''s website. The policy on the above is attached as
Annexure - A.
Directors'' Responsibility Statement
Pursuant to the requirements under Section 134(5) of the Act with
respect to Directors'' Responsibility Statement, it is hereby confirmed
that:
i. In the preparation of the annual financial statements for the
financial year ended March 31, 2015, the applicable Accounting Standards
had been followed along with proper explanation relating to material
departures, if any;
ii. The Directors had selected such accounting policies and applied
them consistently and 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, 2015 and of the profit of the Company for
the year ended on that date;
iii. The Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 2013 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities;
iv. The Directors had prepared the annual financial statements for the
financial year ended March 31, 2015 on a ''going concern'' basis;
v. The Directors had laid down proper internal financial controls to be
followed by the Company and such financial controls are adequate and are
operating effectively; and
vi. The Directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems are
adequate and operating effectively.
Contracts and Arrangements with Related Parties
All contracts/ arrangements/ transactions entered into/ by the Company
during the financial year under review with related parties were on an
arm''s length basis and in the ordinary course of business. There were
no materially significant related party transactions made by the Company
with Promoters, Directors, Key Managerial Personnel or other designated
persons, which may have a potential conflict with the interest of the
Company at large.
All Related Party Transactions were placed before the Audit Committee
as also the Board for approval. Prior omnibus approval of the Audit
Committee was obtained for the transactions which were of a repetitive
nature. The transactions entered into pursuant to the omnibus approval
so granted were reviewed and statements giving details of all related
party transactions were placed before the Audit Committee and the Board
of Directors for their approval on a quarterly basis. The policy on
Related Party Transactions as approved by the Board is uploaded on the
Company''s website at the link
http://www.reliancecapital.co.in/pdf/Policy_for_Related_
Party_Transaction.pdf. None of the Directors has any pecuniary
relationships or transactions vis-Ã -vis the Company.
Material Changes and Commitments if any, affecting the financial
position of the Company
There was no material change and commitment which materially affect the
financial position of the Company occurred between the financial year
ended on March 31, 2015 and the date of this report.
Meetings of the Board
A calendar of Meetings is prepared and circulated in advance to the
Directors. During the year, eight Board Meetings were held, details of
which are given in the Corporate Governance Report.
Audit Committee
The Audit Committee of the Board consists of Independent Directors
namely Shri Rajendra P. Chitale, Chairman, Dr. Bidhubhusan Samal, Shri
V. N. Kaul and Non Independent Director Shri Amitabh Jhunjhunwala as
members. During the year, all the recommendations made by the Audit
Committee were accepted by the Board.
Auditors and Auditors'' Report
M/s. Chaturvedi & Shah, Chartered Accountants and M/s. B S R & Co. LLP,
Chartered Accountants, the Auditors of the Company hold office until the
conclusion of the ensuing AGM and are eligible for re-appointment.
The Company has received letters from M/s. Chaturvedi & Shah, Chartered
Accountants and M/s. B S R & Co. LLP, Chartered Accountants; to the
effect that their appointment, if made, would be within the prescribed
limits under Section 141(3) of the Act and that they are not
disqualified from appointment as statutory auditors of the Company.
The observations and comments given by the Auditors in their report
read together with notes on financial statements are self explanatory
and hence do not call for any fur their comments under Section 134 of
the Act.
Secretarial Audit
Pursuant to the provisions of Section 204 of the Act and the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the
Board of Directors had appointed M/s Aashish K. Bhatt & Associates,
Practicing Company Secretaries, to undertake the Secretarial Audit of
the Company. There is no qualification, reservation or adverse remark
made in their Secretarial Audit Report. The Audit Report of the
Secretarial Auditor is attached as Annexure  B.
Extract of Annual Return
Extract of the Annual Return of the Company in form MGT-9 is attached
as Annexure - C.
Employees Stock Option Scheme
During the year under review, the Company has not granted any Options
to the employees of the Company. Employees Stock Option Scheme (ESOS)
was approved and implemented by the Company and Options were granted to
the employees under ESOS Plan A and Plan B in accordance with earlier
guidelines applicable to ESOS.
The ESOS Compensation Committee of the Board monitors the Scheme. The
existing ESOS Scheme and Plans are in compliance with the Securities
and Exchange Board of India (Share based employee benefits) Regulations,
2014 (SEBI Regulations).
-The applicable disclosures as stipulated under the Companies (Share
Capital and Debentures) Rules, 2014 as on March 31, 2015 are given
below:
Particulars ESOS Plan A ESOS Plan B
a) Total Options
granted 399900 Options 397000 Options
b) Number of Options
surrendered 131160 Options 60040 Options
c) Options vested 125320 Options 217500 Options
d) Options exercised Nil Nil
e) Total number of
equity shares arising
as a result of
exercise of Nil Nil
Option
f) Options lapsed 143420 Options 119460 Options
g) Exercise Price The options
were granted at The options were granted
at
the market
price i.e.
Rs. 800 the market price i.e.
Rs. 800
h) Variation of terms
of Options Nil Nil
i) Money realized by
exercise of Options Nil Nil
j) Total number of
Options in force at
the end of the year 125320 Options 217500 Options
k) Employee wise
details of Options
granted to:
i. key managerial
personnel 12000 Nil
Shri Amit Bapna -
Chief Financial
Officer
ii. any other
employee who
receives a grant of
options in any Nil Nil
one year of option
amounting to five
per cent or more
of options granted
during the year
iii. identified
employees who were
granted option,
during any Nil Nil
one year, equal to
or exceeding one
per cent of the
issued capital
(excluding
outstanding warrants
and conversions)
of the Company at
the time of grant
The Company has received a certificate from the statutory auditors of
the Company that the ESOS Plan A and B have been implemented in
accordance with the SEBI Regulations and as per the resolution passed
through Postal Ballot on January 8, 2007.
Particulars of Employees and related disclosures
In terms of the provisions of Section 197 of the Act read with Rule 5
of the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014, a statement showing the names and other particulars of the
employees drawing remuneration in excess of the limits set out in the
said rules are provided in the Annexure to the Directors'' Report.
However, having regard to the provisions of Section 136 of the Act, the
Annual Report excluding the aforesaid information is being sent to all
the members of the Company and others entitled thereto. The said
information is available for inspection at the registered office of the
Company on all working days, except Saturdays between 11:00 A.M. and
1:00 P.M. up to the date of the meeting and any member interested in
obtaining the same may write to the Company Secretary. Upon such
request the information shall be furnished.
Disclosures relating to the remuneration and other details as required
under Section 197(12) of the Act read with Rule 5(1) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 are
provided in Annexure - D.
Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo
As the Company is a non-banking financial company and does not involve
in any manufacturing activity, most of the information as required
under Section 134(3)(m) of the Act read with Rule 8 of the Companies
(Accounts) Rules, 2014 are not applicable. However, the information as
applicable has been given in Annexure  E forming part of this Report.
Corporate Governance
The Company has adopted "Reliance Group-Corporate Governance Policies
and Code of Conduct " which sets out the systems, process and policies
conforming to the international standards. The report on Corporate
Governance as stipulated under Clause 49 of the Listing Agreement with
the Stock Exchanges, forms part of this Annual Report.
A Certificate from the auditors of the Company M/s. Chaturvedi & Shah,
Chartered Accountants and M/s. B S R & Co. LLP, Chartered Accountants
conforming compliance to the conditions of Corporate Governance as
stipulated under Clause 49 of the Listing Agreement, is enclosed to
this Report.
Vigil Mechanism
In accordance with Section 177 of the Act and the Listing Agreement,
the Company has formulated a Vigil Mechanism to address the genuine
concerns, if any of the directors and employees. The details of the
same have been stated in the Report on Corporate Governance and the
policy can also be accessed on the Company''s website.
Risk Management
The Company has laid down a robust Risk Management Policy, defining Risk
profiles involving Strategic, Technological, Operational, Financial,
Organisational, Legal and Regulatory risks within a well defined
framework. The Risk management Policy acts as an enabler of growth for
the Company by helping its businesses to identify the inherent risks,
assess, evaluate and monitor these risks continuously and undertake
effective steps to manage these risks.
-A Risk Management Committee (RMC) consisting of Shri V. N. Kaul,
Chairman and Smt. Chhaya Virani and Shri Soumen Ghosh as members,
periodically reviews the robustness of the Risk Management Policy. The
periodical update on the risk management practices and mitigation plan
of the Company and subsidiaries are presented to the Audit Committee
and Board of Directors. The Audit Committee and Board periodically
review such updates and findings and suggest areas where internal
controls and risk management practices can be improved.
Asset Liability Committee (ALCO) consisting of senior management
executives, monitors liquidity and interest rate risks of the Company.
The functioning of ALCO is reviewed by the RMC which meets on quarterly
basis and reports to the Board of Directors.
Compliance with provisions of Sexual Harassment of Women at workplace
(Prevention, Prohibition and Redressal) Act, 2013
The Company is committed to uphold and maintain the dignity of woman
employees and it has in place a policy which provides for protection
against sexual harassment of women at work place and for prevention and
redressal of such complaints. During the year no such complaints were
received.
Corporate Social Responsibility
The Company has constituted Corporate Social Responsibility Committee
in compliance with the provisions of Section 135 of the Act read with
the Companies (Corporate Social Responsibility Policy) Rules 2014. The
Corporate Social Responsibility Committee has formulated a Corporate
Social Responsibility Policy (CSR policy) indicating the activities to
be undertaken by the Company. The CSR policy may be accessed on the
Company''s website at the link;
http://www.reliancecapital.co.in/pdf/Group_CSR_Policy_ Document.pdf.
The CSR Committee consists of Dr. Bidhubhusan Samal as Chairman, Shri
Amitabh Jhunjhunwala and Shri V. N. Kaul, Directors as members.
The disclosures with respect to CSR activities is given in Annexure -
F.
Order, if any, passed by regulator or courts or tribunals
No orders have been passed by the regulators or courts or tribunals
impacting the going concern status and the Company''s operations.
Internal Financial Controls and their adequacy
The Company has in place adequate internal financial controls across the
organization. The same is subject to review periodically by the
internal audit cell for its effectiveness. During the year, such
controls were tested and no reportable material weakness in the design
or operation were observed.
Business Responsibility Statement
SEBI vide its Circular CIR/CFD/DIL/8/2012 dated August 13, 2012, has
mandated the top 100 listed entities, based on market capitalisation on
BSE Limited and National Stock Exchange of India Limited at March 31,
2012, to include Business Responsibility Report ("BRR ") as part of the
Annual Report. In view of FAQ''s issued by SEBI, the BRR has been
uploaded on the website of the Company at www.reliancecapital.co.in.
Any shareholder interested in obtaining physical copy of BRR may write
to the Company Secretary at the Registered Office of the Company.
Acknowledgement
Your Directors would like to express their sincere appreciation for the
co-operation and assistance received from shareholders, debenture
holders, debenture trustee, bankers, financial institutions, regulatory
bodies and other business constituents during the year under review.
Your Directors also wish to place on record their deep sense of
appreciation for the commitment displayed by all executives, officers
and staff, resulting in the successful performance of the Company
during the year.
For and on behalf of the Board of Directors
Anil Dhirubhai Ambani
Chairman
Mumbai May 29, 2015
Mar 31, 2014
Dear Shareowners,
The Directors have pleasure in presenting the 28th Annual Report and
the audited accounts for the financial year ended March 31, 2014.
Financial Results
The standalone performance of the Company for the financial year ended
March 31, 2014 is summarised below:
Particulars Financial Year ended Financial Year ended
March 31, 2014 March 31, 2013#
(Rs.in
crore) (US$ in
million*) (Rs. in
crore) (US$ in
million**)
Total revenue 3254 541 3 868 707
Profit before
exceptional items 464 77 704 129
Exceptional Items:
- Investment written
off due to merger - - 680 125
- Transfer / (Withdrawal)
from General Reserve - - (680) (125)
Profit before tax 464 77 704 129
Tax expense 55 9 42 8
Profit after tax 409 68 662 122
Add: Opening surplus in
statement of profit and
loss 1 248 208 1 144 210
profit available for
appropriation 1 657 276 1 806 332
Proposed dividend
including tax on
proposed dividend 225 37 211 39
Interim dividend
(including tax) - - 144 26
Tax on proposed
dividend for earlier
years - - 5 1
Transfer to statutory
reserve fund 82 14 132 24
Transfer to general
reserve 41 7 66 12
* 1 US$ = Rs. 60.10 ** 1 US$ = Rs. 54.39
# Figures of Previous year have been regrouped and reclassifed,
wherever required.
Financial Performance
The Company''s gross income for the financial year ended March 31, 2014
decreased to Rs. 3,254 crore, from Rs. 3,868 crore in the previous year,
decrease of 15.87 per cent. The operating profit (PBDIT) of the Company
decreased by 4.64 per cent to Rs. 2,777 crore during the year, from Rs.
2,912 crore, in the previous year. Interest expenses for the year
increased by 4.59 per cent to Rs. 2,279 crore, from Rs. 2,179 crore, in the
previous year. Depreciation was at Rs. 34 crore as against Rs. 29 crore in
the previous year. The net profit for the year decreased by 38.21 per
cent to Rs. 409 crore from Rs. 662 crore, in the previous year. An amount
of Rs. 82 crore was transferred to the Statutory Reserve Fund pursuant to
Section 45-IC of the Reserve Bank of India Act, 1934, and a net amount
of Rs. 41 crore was transferred to the General Reserve during the year
under review.
Dividend
Your Directors have recommended a dividend of Rs. 8.50 (85 per cent) per
equity share each of Rs. 10 aggregating to Rs. 225 crore (inclusive of
dividend tax) for the financial year ended March 31, 2014, which, if
approved at the ensuing 28th Annual General Meeting, will be paid to
(i) all those equity shareholders whose names appear in the Register of
Members as on September 19, 2014, and (ii) to those whose names appear
as benefcial owners, as on September 19, 2014 as furnished by the
National Securities Depository Limited and Central Depository Services
(India) Limited for the purpose.
The Dividend payout as proposed is in accordance with the Company''s
policy of paying sustainable dividend linked to long term performance,
keeping in view of the capital needs of the Company''s growth plans and
desire to achieve optimal fnancing of such plans through internal
accruals.
Management Discussion and Analysis
Management Discussion and Analysis Report for the year under review as
stipulated under Clause 49 of the Listing Agreement with the Stock
Exchanges in India, is presented in a separate section forming part of
this Annual Report.
Resources and Liquidity
The Company''s Net Worth as on March 31, 2014, stood at Rs. 11,458 crore.
The Company has raised Rs. 18,879 crore during the financial year 2013-14
by issuance of Commercial Paper, Non Convertible Debentures (NCDs) and
other money market instruments. The Company has also raised Rs. 174 crore
by way of Unsecured Subordinated Non Convertible Debentures (Tier II
Bonds) to augment the Capital Adequacy Ratio. The funds were deployed
in providing commercial finance and other business requirement. RCL''s
debt equity ratio as on March 31, 2014 stood at 2:1.
Capital Adequacy Ratio
Your Company''s Capital to Risk Assets Ratio (CRAR) calculated in line
with the Non-Banking Financial (Non-Deposit Accepting or Holding)
Companies Prudential Norms (Reserve Bank) Directions, 2007 ("RBI
Directions") stood at 16.31 per cent, well above the regulatory minimum
of 15 per cent. Your Company''s asset size is Rs. 36,515 crore. The
Company has received a certificate from the Auditors of the Company,
M/s. Chaturvedi & Shah, Chartered Accountants and M/s. B S R & Co. LLP,
Chartered Accountants, pursuant to Non Banking Financial Companies
Auditors'' Report (Reserve Bank) Directions, 2008, confrming compliance
of the conditions with respect to Systemically Important Non-Deposit
taking Non-Banking Financial Companies.
Subsidiaries
During the year under review, Reliance Money Solutions Private Limited,
Reliance AIF Management Company Limited and Reliance Capital AIF
Trustee Company Private Limited became subsidiaries of the Company and
Reliance Venture Asset Management Private Limited, Reliance Capital
(Singapore) Pte. Limited, Reliance Financial Advisory Services Limited
(formerly Reliance Investment Banking Services Limited), QOPPA Trading
Private Limited, QCAP Trade Private Limited, Quant Alternative Asset
Management Private Limited and QCAP Securities Private Limited ceased
to be subsidiaries of the Company. Quant Capital Securities Private
Limited has become and ceased to be a subsidiary during the year.
In accordance with the general circular issued by the Ministry of
Corporate Affairs (MCA), Government of India (GoI), Balance Sheet,
Statement of profit and Loss and other documents of the subsidiary
companies are not attached with the Balance Sheet of the Company. The
Company shall make available the copies of annual accounts of the
subsidiary companies and related detailed information to the
shareholders of the Company seeking the same. The annual accounts of
the subsidiary companies will also be kept for inspection by any
shareholder at the Registered Office of the Company and that of
respective subsidiary companies. Further, pursuant to Accounting
Standard (AS-21) prescribed under the Companies (Accounting Standards)
Rules, 2006 (Accounting Standards Rules) and the Listing Agreement,
Consolidated Financial Statements presented herein by the Company
include financial results of subsidiary companies, which forms part of
this Annual Report.
Fixed Deposits
The Company has neither accepted nor renewed any fixed deposits during
the year. There are no unclaimed deposits, unclaimed / unpaid interest,
refunds due to the deposit holders or to be deposited to the Investor
Education and Protection Fund as on March 31, 2014.
Directors
In terms of the provisions of the Companies Act, 1956, Shri Amitabh
Jhunjhunwala, Director of the Company retires by rotation and being
eligible, offers himself for re-appointment at the ensuing Annual
General Meeting (AGM). Pursuant to the provisions of the Companies
Act, 2013 Shri Rajendra P. Chitale, Dr. Bidhubhusan Samal and Shri V.
N. Kaul, Independent Directors of the Company are proposed to be
appointed at the ensuing AGM to hold Office for a term of five
consecutive years from the date of their appointment at the ensuing
Annual General Meeting and that they shall not be liable to retire by
rotation.
The Company has received declarations from all the Independent
Directors of the Company confrming that they meet with the criteria of
independence as prescribed both under sub-section (6) of Section 149 of
the Companies Act, 2013 and under Clause 49 of the Listing Agreement
with the Stock Exchanges. A brief resume of the Directors being
appointed at the ensuing AGM, nature of expertise in Specific functional
areas and names of the companies in which they hold directorship and /
or membership / chairmanships of Committees of the respective Boards,
shareholding and relationship between directors inter se as stipulated
under Clause 49 of the Listing Agreement with the Stock Exchanges in
India, is given in the section on Corporate Governance Report forming
part of this Annual Report.
Directors'' Responsibility Statement
Pursuant to the requirements under Section 217(2AA) of the Companies
Act, 1956 with respect to Directors'' Responsibility Statement, it is
hereby confrmed that:
(i) in the preparation of the annual accounts for the financial year
ended March 31, 2014, the applicable Accounting Standards had been
followed alongwith proper explanation relating to material departures,
if any;
(ii) the Directors had selected such accounting policies and applied
them consistently and 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 on March 31, 2014, and of the profit of the Company
for the year ended on that date;
(iii) the Directors had taken proper and suffcient 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; and (iv) the Directors had prepared the annual accounts
for the financial year ended March 31, 2014 on a ''going concern'' basis.
Consolidated Financial Statement
The Audited Consolidated Financial Statement based on the Financial
Statement received from subsidiaries and associates, as approved by
their respective Board of Directors have been prepared in accordance
with AS-21 on ''Consolidated Financial Statements'' read with AS-23 on
''Accounting for Investments in Associates'' notifed under Section 211
(3C) of the Companies Act, 1956 read with the Accounting Standards
Rules as applicable.
Auditors and Auditors'' Report
M/s. Chaturvedi & Shah, Chartered Accountants and M/s. B S R & Co. LLP,
Chartered Accountants, the Auditors of the Company hold Office until the
conclusion of the ensuing Annual General Meeting and are eligible for
re-appointment. The Company has received letters from M/s. Chaturvedi
& Shah, Chartered Accountants and M/s. B S R & Co. LLP, Chartered
Accountants, to the effect that their appointment, if made, would be
within the prescribed limits under Section 141(3)(g) of the Companies
Act, 2013, and that they are not disqualifed for re-appointment.
The observations and comments given by Auditors in their report read
together with notes to Accounts are self explanatory and hence do not
call for any further comments under Section 217 of the Companies Act,
1956.
Particulars of Employees
In terms of the provisions of Section 217(2A) of the Companies Act,
1956 read with the Companies (Particulars of Employees) Rules, 1975 as
amended, the names and other particulars of employees are set out in
the Annexure to the Directors'' Report. However, having regard to the
provisions of Section 219(1)(b) (iv) of the Companies Act, 1956, the
Annual Report excluding the aforesaid information is being sent to all
the members of the Company and others entitled thereto. Any member
interested in obtaining such particulars may write to the Company
Secretary at the Registered Office of the Company.
Corporate Governance
The Company has adopted "Reliance Group  Corporate Governance Policies
and Code of Conduct" which has set out the systems, processes and
policies conforming to the International Standards and corporate
governance guidelines issued by Reserve Bank of India for Non Banking
Financial Companies. The report on Corporate Governance as stipulated
under Clause 49 of the Listing Agreement with the Stock Exchanges,
forms part of this Annual Report. A certificate from the Auditors of the
Company M/s. Chaturvedi & Shah, Chartered Accountants and M/s. B S R &
Co. LLP, Chartered Accountants, confrming compliance with conditions of
Corporate Governance as stipulated under Clause 49 of the Listing
Agreement, is enclosed to this Report.
Employees Stock Option Scheme
During the year under review, the Company has not granted any Options
to the employees of the Company. Employees Stock Option Scheme (ESOS)
was approved and implemented by the Company and Options were granted to
employees under ESOS Plan A and Plan B in accordance with the
Securities and Exchange Board of India (Employee Stock Option Scheme
and Employee Stock Purchase Scheme) Guidelines, 1999 (''the SEBI
Guidelines''). The ESOS Compensation Committee, constituted in
accordance with the SEBI Guidelines, administers and monitors the
Scheme.
The Company has received a certificate from the auditors of the Company
that the ESOS Plan A and B have been implemented in accordance with the
Guidelines and as per the resolution passed through Postal Ballot on
January 8, 2007.
Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo
The particulars as required to be disclosed pursuant to Section
217(1)(e) of the Companies Act, 1956, read with the Companies
(Disclosures of Particulars in the Report of Board of Directors) Rules,
1988, are as under:
(1) Part A and B pertaining to conservation of energy and technology
absorption are not applicable to the Company.
(2) Foreign exchange earnings and outgo Earnings  Rs. Nil Outgo - Rs. 2
crore
Business Responsibility Statement
SEBI vide its Circular CIR/CFD/DIL/8/2012 dated August 13, 2012, has
mandated the top 100 listed entities, based on market capitalisation on
BSE Limited and National Stock Exchange of India Limited at March 31,
2012, to include Business Responsibility Report ("BRR") as part of the
Annual Report. In view of FAQ''s dated May 10, 2013 issued by SEBI, the
BRR has been uploaded on the website of the Company
www.reliancecapital.co.in. Any shareholder interested in obtaining
physical copy of BRR may write to the Company Secretary at the
registered Office of the Company.
Acknowledgements
Your Directors would like to express their sincere appreciation of the
co-operation and assistance received from shareholders, debenture
holders, debenture trustee, bankers, regulatory bodies and other
business constituents during the year under review. Your Directors
also wish to place on record their deep sense of appreciation for the
commitment displayed by all executives, Officers and staff, resulting in
the successful performance of the Company during the year.
For and on behalf of the Board of Directors
Anil Dhirubhai Ambani
Chairman
Mumbai
August 21, 2014
Mar 31, 2013
Dear Shareowners,
The Directors have pleasure in presenting the 27th Annual Report and
the audited accounts for the financial year ended March 31, 2013.
Financial Results
The standalone performance of the Company for the financial year ended
March 31, 2013 is summarised below:
Particulars Financial Year ended Financial Year ended
March 31, 2013 March 31, 2012#
(Rs. in
crore) (US$ in
million*) (Rs. in
crore) (US$ in
million**)
Total revenue 3 868 707 3 317 648
Profit before
exceptional items 704 129 621 121
Exceptional Items:
- Investment written
off due to merger 680 125 - -
- Loss on sale on
investments - - 149 3
- Transfer/(Withdrawal)
from General Reserve (680) (125) (149) (3)
Profit before tax 704 129 621 121
Tax expense 42 8 102 20
Profit after tax 662 122 519 101
Add: Opening surplus
in statement of
profit and loss 1 144 210 1 972 385
Profit available for
appropriation 1 806 332 2 491 487
Proposed dividend
including tax on
proposed dividend 211 39 191 37
Interim Dividend
(including tax) 144 26 - -
Tax on proposed
dividend for
earlier years 5 1 - -
Transfer to statutory
reserve fund 132 24 104 20
Transfer to general
reserve 66 12 1 052 206
* 1 US$ = Rs. 54.39 ** 1 US$ = Rs. 51.16 (Source: Reserve Bank of India
website).
# Figures of Previous year have been regrouped and reclassified,
wherever required.
The assets and liabilities of Reliance Equities International Private
Limited (REIPL) and Emerging Money Mall Limited (EMML) and its
operating results have been incorporated in the Company''s books
pursuant to the merger of REIPL and EMML with the Company with effect
from March 31, 2013 i.e., the Appointed Date. Accordingly, financial
results for the financial year 2012-13 may not be comparable with that
of financial year 2011-12.
Financial Performance
The Company''s gross income for the financial year ended March 31, 2013
increased to Rs. 3,868 crore, from Rs. 3,317 crore in the previous
year, an increase of 16.62 per cent. The operating profit (PBDIT) of
the Company increased by 7.37 per cent to Rs. 2,912 crore during the
year, from Rs. 2,712 crore, in the previous year. Interest expenses for
the year increased by 5.52 per cent to Rs. 2,179 crore, from Rs. 2,065
crore, in the previous year. Depreciation was at Rs. 29 crore as
against Rs. 26 crore in the previous year. The net profit for the year
increased by 27.55 per cent to Rs. 662 crore from Rs. 519 crore, in the
previous year. An amount of Rs. 132 crore was transferred to the
Statutory Reserve Fund pursuant to Section 45-IC of the Reserve Bank of
India Act, 1934, and a net amount of Rs. 66 crore was transferred to
the General Reserve during the year under review.
Dividend
Your Directors have declared and paid a Special Interim Dividend of Rs.
5 (50 per cent) per Equity Share each of Rs. 10, aggregating to Rs. 144
crore (inclusive of dividend tax).
In addition to the above Special Interim Dividend your Directors have
also recommended a Final dividend of Rs. 8 (80 per cent) per equity
share each of Rs. 10 aggregating to Rs. 212 crore (inclusive of
dividend tax) for the financial year ended March 31, 2013, which, if
approved at the ensuing 27th Annual General Meeting, will be paid to
(i) all those equity shareholders whose names appear in the Register of
Members as on August 16, 2013, and (ii) to those whose names appear as
beneficial owners, as on August 16, 2013 as furnished by the National
Securities Depository Limited and Central Depository Services (India)
Limited for the purpose.
The Dividend payout as proposed is in accordance with the Company''s
policy of paying sustainable dividend linked to long term performance,
keeping in view of the capital needs of the Company''s growth plans and
desire to achieve optimal financing of such plans through internal
accruals.
Scheme of Amalgamation
Reliance Equities International Private Limited and Emerging Money Mall
Limited have been amalgamated with the Company with effect from March
31, 2013 in terms of the Scheme of Amalgamation sanctioned by the
Hon''ble High Court of Judicature at Bombay vide order dated March 22,
2013.
Management Discussion and Analysis
Management Discussion and Analysis Report for the year under review as
stipulated under Clause 49 of the Listing Agreement with the Stock
Exchanges in India, is presented in a separate section forming part of
this Annual Report.
Resources and Liquidity
The Company''s Net worth as on March 31, 2013, stood at Rs. 11,512
crore. The Company has raised Rs. 15,594 crore during the financial
year 2012-13 by issuance of Commercial Paper, Non Convertible
Debentures (NCDs) and other money market instruments. The Company has
also raised Rs. 491 crore by way of Unsecured Subordinated Non
Convertible Debentures (Tier II Bonds) to augment the Capital Adequacy
Ratio. The funds were deployed in providing commercial finance and
other business requirement. RCL''s debt equity ratio as on March 31,
2013 stood at 1.84:1.
Capital Adequacy Ratio
Your Company''s Capital to Risk Assets Ratio (CRAR) calculated in line
with the Non-Banking Financial (Non-Deposit Accepting or Holding)
Companies Prudential Norms (Reserve Bank) Directions, 2007 ("RBI
Directions") stood at 16.99 per cent, well above the regulatory minimum
of 15 per cent. Your Company''s asset size is Rs. 33,557 crore. The
Company has received a certificate from the Auditors of the Company,
M/s. Chaturvedi & Shah, Chartered Accountants and M/s. B S R & Co.,
Chartered Accountants, pursuant to Non Banking Financial Companies
Auditors'' Report (Reserve Bank) Directions, 2008, confirming compliance
of the conditions with respect to Systemically Important Non-Deposit
taking Non-Banking Financial Companies.
Subsidiaries
During the year under review, Indian Agri Services Private Limited,
Emerging Money Mall Limited and Quant Alternative Asset Management
Private Limited became subsidiaries of the Company. Reliance Equities
International Private Limited and Emerging Money Mall Limited ceased to
be subsidiaries on their amalgamation with the Company
In accordance with the general circular issued by the Ministry of
Corporate Affairs (MCA), Government of India (GoI), Balance Sheet,
Statement of Profit and Loss and other documents of the subsidiary
companies are not attached with the Balance Sheet of the Company. The
Company shall make available the copies of annual accounts of the
subsidiary companies and related detailed information to the
shareholders of the Company seeking the same. The annual accounts of
the subsidiary companies will also be kept for inspection by any
shareholder at the Registered Office of the Company and that of
respective subsidiary companies. Further, pursuant to Accounting
Standard (AS)-21 prescribed under the Companies (Accounting Standards)
Rules, 2006 (Accounting Standards Rules) and the Listing Agreement,
Consolidated Financial Statements presented herein by the Company
include financial results of subsidiary companies, which forms part of
this Annual Report.
Fixed Deposits
The Company has neither accepted nor renewed any fixed deposits during
the year. There are no unclaimed deposits, unclaimed / unpaid interest,
refunds due to the deposit holders or to be deposited to the Investor
Education and Protection Fund as on March 31, 2013.
Directors
In terms of the provisions of the Companies Act, 1956, Shri Rajendra P.
Chitale, Director of the Company retires by rotation and being
eligible, offers himself for re-appointment at the ensuing Annual
General Meeting (AGM).
A brief resume of the Director retiring by rotation at the ensuing AGM,
nature of expertise in specific functional areas and names of the
companies in which he holds directorship and/ or membership/
chairmanships of Committees of the respective Boards, shareholding and
relationship between directors inter se as stipulated under Clause 49
of the Listing Agreement with the Stock Exchanges in India, is given in
the section on Corporate Governance Report forming part of this Annual
Report.
Shri C. P. Jain ceased to be a Director with effect from September 10,
2012. The Board place on record its deep sense of appreciation for the
invaluable contribution made by Shri C. P. Jain during his tenure as
director of the Company
Directors'' Responsibility Statement
Pursuant to the requirements under Section 217(2AA) of the Companies
Act, 1956 with respect to Directors'' Responsibility Statement, it is
hereby confirmed that:
(i) in the preparation of the annual accounts for the financial year
ended March 31, 2013, the applicable Accounting Standards had been
followed alongwith proper explanation relating to material departures,
if any;
(ii) the Directors had selected such accounting policies and applied
them consistently and 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 on March 31, 2013, and of the profit of the Company
for the year ended on that date;
(iii) the Directors had 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; and
(iv) the Directors had prepared the annual accounts for the financial
year ended March 31, 2013 on a ''going concern'' basis.
Auditors and Auditors'' Report
M/s. Chaturvedi & Shah, Chartered Accountants and M/s. B S R & Co.,
Chartered Accountants, the Auditors of the Company hold office until
the conclusion of the ensuing Annual General Meeting and are eligible
for re-appointment.
The Company has received letters from M/s. Chaturvedi & Shah, Chartered
Accountants and M/s. B S R & Co., Chartered Accountants, to the effect
that their appointment, if made, would be within the prescribed limits
under Section 224(1 B) of the Companies Act, 1956, and that they are
not disqualified from such appointment within the meaning of Section
226 of the Companies Act, 1 956.
The observations and comments given by Auditors in their report read
together with notes to Accounts are self explanatory and hence do not
call for any further comments under Section 217 of the Companies Act,
1956.
Consolidated Financial Statements
The Audited Consolidated Financial Statements based on the Financial
Statements received from subsidiaries and associates, as approved by
their respective Board of Directors have been prepared in accordance
with AS-21 on ''Consolidated Financial Statements'' read with AS-23 on
''Accounting for Investments in Associates'' notified under Section 211
(3C) of the Companies Act, 1956 read with the Accounting Standards
Rules as applicable.
Particulars of Employees
In terms of the provisions of Section 217(2A) of the Companies Act,
1956 read with the Companies (Particulars of Employees) Rules, 1975 as
amended, the names and other particulars of employees are set out in
the Annexure to the Directors'' Report. However, having regard to the
provisions of Section 219(1)(b)(iv) of the Companies Act, 1 956, the
Annual Report excluding the aforesaid information is being sent to all
the members of the Company and others entitled thereto. Any member
interested in obtaining such particulars may write to the Company
Secretary at the Registered Office of the Company
Employees Stock Option Scheme
During the year under review, the Company has not granted any Options
to the employees of the Company. Employees Stock Option Scheme (ESOS)
was approved and implemented by the Company and Options were granted to
employees under ESOS Plan A and Plan B in accordance with the
Securities and Exchange Board of India (Employee Stock Option Scheme
and Employee Stock Purchase Scheme) Guidelines, 1 999 (''the SEBI
Guidelines''). The ESOS Compensation Committee, constituted in
accordance with the SEBI Guidelines, administers and monitors the
Scheme.
The Company has received a certificate from the auditors of the Company
that the ESOS Plan A and B have been implemented in accordance with the
Guidelines and as per the resolution passed through Postal Ballot on
January 8, 2007.
Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo
The particulars as required to be disclosed pursuant to Section
217(1)(e) of the Companies Act, 1 956, read with the Companies
(Disclosures of Particulars in the Report of Board of Directors) Rules,
1988, are as under:
(1) Part A and B pertaining to conservation of energy and technology
absorption are not applicable to the Company,
(2) Foreign exchange earnings and outgo Earnings - Rs. Nil Outgo - Rs.
3 crore
Corporate Governance
The Company has adopted "Reliance Group - Corporate Governance Policies
and Code of Conduct" which has set out the systems, processes and
policies conforming to the International Standards and corporate
governance guidelines issued by Reserve Bank of India for Non Banking
Financial Companies.
The report on Corporate Governance as stipulated under Clause 49 of the
Listing Agreement with the Stock Exchanges, forms part of this Annual
Report. A Certificate from the Auditors of the Company M/s. Chaturvedi
& Shah, Chartered Accountants and M/s. B S R & Co., Chartered
Accountants, confirming compliance with conditions of Corporate
Governance as stipulated under Clause 49 of the Listing Agreement, is
enclosed to this Report. Acknowledgements
Your Directors would like to express their sincere appreciation of the
co-operation and assistance received from shareholders, debenture
holders, debenture trustee, bankers, regulatory bodies and other
business constituents during the year under review, Your Directors also
wish to place on record their deep sense of appreciation for the
commitment displayed by all executives, officers and staff, resulting
in the successful performance of the Company during the year.
For and on behalf of the Board of Directors
Anil Dhirubhai Ambani
Chairman
Mumbai
May 16, 2013
Mar 31, 2012
Dear Shareowners,
The Directors have pleasure in presenting the 26th Annual Report and
the audited accounts for the financial year ended March 31, 2012.
Financial Results
The standalone performance of the Company for the financial year ended
March 31, 2012 is summarised below:
Particulars Financial Year ended Financial Year ended
March 31, 2012 March 31, 2011#
(Rs. in
crore) (US$ in
million*) (Rs. in
crore) (US$ in
million**)
Total revenue 3 317 648 1 971 441
profit before
exceptional items 621 121 201 45
Exceptional Items: - - - -
- Investment written
off due to merger 0 0 329 7
- Loss on sale on
investments 149 3 - -
- Transfer / (Withdrawal)
from General Reserve (149) (3) (329) (7)
profit before tax 621 121 201 45
Tax expense 102 20 (28) (6)
profit after tax 519 101 229 51
Add: Opening surplus in
statement of profit
and loss 1 972 385 1 972 442
profit available for
appropriation 2 491 487 2 201 493
Proposed dividend
including tax on
proposed dividend 191 37 161 36
Reversal of tax on
proposed dividend for
earlier years - - (1) (0)
Transfer to statutory
reserve fund 104 20 46 10
Transfer to
general reserve 1 052 206 23 5
*1 US$ = Rs. 51.16 ** 1 US$ = Rs. 44.65 (Source: Reserve Bank of India
website). #Figures of Previous Year have been regrouped and
reclassifed, wherever required.
The assets and liabilities of Viscount Management Services (Alpha)
Limited (VMSAL) and its operating results have been incorporated in the
Company's books pursuant to the merger of VMSAL with the Company with
effect from October 1, 2011 i.e., the Appointed Date. Accordingly,
financial results for the year 2011-12 may not be comparable with that
of financial year 2010-11.
Financial Performance
The Company's gross income for the financial year ended March 31, 2012
increased to Rs. 3,317 crore, from Rs. 1,971 crore in the previous
year, an increase of 68 per cent. The operating profit (PBDIT) of the
Company increased by 84 per cent to Rs. 2,712 crore during the year,
from Rs. 1,472 crore, in the previous year. Interest expenses for the
year increased by 64 per cent to Rs. 2,065 crore, from Rs. 1,257 crore,
in the previous year. Depreciation was at Rs. 26 crore as against Rs.
14 crore in the previous year. The net profit for the year increased by
127 per cent to Rs. 519 crore from Rs. 229 crore, in the previous year.
An amount of Rs. 104 crore was transferred to the Statutory Reserve
Fund pursuant to Section 45-IC of the Reserve Bank of India Act, 1934,
and a net amount of Rs. 1,052 crore was transferred to the General
Reserve during the year under review.
Dividend
Your Directors have recommended a dividend of Rs. 7.50 (75 per cent)
per equity share each of Rs. 10 aggregating to Rs. 191crore (inclusive
of dividend tax) for the financial year ended March 31, 2012, which, if
approved at the ensuing 26th Annual General Meeting, will be paid to
(i) all those equity shareholders whose names appear in the Register of
Members as on August 24, 2012, and (ii) to those whose names appear as
benefcial owners, as on August 24, 2012 as furnished by the National
Securities Depository Limited and Central Depository Services (India)
Limited for the purpose.
The Dividend payout as proposed is in accordance with the Company's
policy of paying sustainable dividend linked to long term performance,
keeping in view of the capital needs of the Company's growth plans and
desire to achieve optimal fnancing of such plans through internal
accruals.
Scheme of Arrangement
Amalgamation of Viscount Management Services (Alpha) Limited (VMSAL)
with the Company VMSAL, has been amalgamated with the Company with
effect from October 1, 2011.
Management Discussion and Analysis
Management Discussion and Analysis Report for the year under review as
stipulated under Clause 49 of the Listing Agreement with the Stock
Exchanges in India, is presented in a separate section forming part of
this Annual Report.
The Company has during the year, entered into various contracts in the
areas of financial services business. While benefits from such
contracts will accrue in the future years, their progress is
periodically reviewed.
Resources and Liquidity
The Company's Net worth as on March 31, 2012, stood at Rs. 10,910
crore. The Company has raised Rs. 11,510 crore during the financial
year 2011-12 by issuance of Commercial Paper, Non Convertible
Debentures (NCDs) and other money market instruments. The Company has
also raised Rs. 508 crore by way of Unsecured Subordinated Non
Convertible Debentures (Tier II Bonds) to augment the Capital Adequacy
Ratio. The funds were deployed in providing commercial finance and
other business requirement. RCL's debt equity ratio as on March 31,
2012 stood at 1.67:1.
Capital Adequacy Ratio
Your Company's Capital to Risk Assets Ratio (CRAR) calculated in line
with the Non-Banking Financial (Non-Deposit Accepting or Holding)
Companies Prudential Norms (Reserve Bank) Directions, 2007 ("RBI
Directions") stood at 20.21 per cent, well above the regulatory minimum
of 15 per cent. Your Company's asset size is Rs. 30,183 crore. The
Company has received a cer tifcate from the Auditors of the Company,
M/s. Chaturvedi & Shah, Chartered Accountants and M/s. B S R & Co.,
Chartered Accountants, pursuant to Non Banking Financial Companies
Auditors' Report (Reserve Bank) Directions, 2008, confrming compliance
of the conditions with respect to Systemically Important Non-Deposit
taking Non-Banking Financial Companies.
Subsidiaries
During the year under review, Reliance Composite Insurance Broking
Limited became subsidiary of the Company. Reliance Infrastructure
Finance Private Limited ceased to be subsidiary of the Company.
Viscount Management Services (Alpha) Limited became and ceased to be
subsidiary on its amalgamation with the Company.
In accordance with the general circular issued by the Ministry of
Corporate Affairs (MCA), Government of India (GoI), Balance Sheet,
Statement of profit and Loss and other documents of the subsidiary
companies are not attached with the Balance Sheet of the Company. The
Company shall make available the copies of annual accounts of the
subsidiary companies and related detailed information to the
shareholders of the Company seeking the same. The annual accounts of
the subsidiary companies will also be kept for inspection by any
shareholder at the Registered Offce of the Company and that of
respective subsidiary companies.
Further, pursuant to Accounting Standard (AS)-21 prescribed under the
Companies (Accounting Standards) Rules, 2006 (Accounting Standards
Rules) and the Listing Agreement, Consolidated Financial Statements
presented herein by the Company include financial information of
subsidiary companies, which forms part of this Annual Report.
Fixed Deposits
The Company has neither accepted nor renewed any fixed deposits during
the year. There are no unclaimed deposits, unclaimed / unpaid interest,
refunds due to the deposit holders or to be deposited to the Investor
Education and Protection Fund as on March 31, 2012.
Directors
In terms of the provisions of the Companies Act, 1956, Dr. Bidhubhusan
Samal and Shri V. N. Kaul, Directors of the Company retire by rotation
and being eligible, offer themselves for re-appointment at the ensuing
Annual General Meeting (AGM).
A brief resume of the Directors retiring by rotation at the ensuing
AGM, nature of expertise in specifc functional areas and names of the
companies in which they hold directorship and/ or membership/
chairmanships of Committees of the respective Boards, shareholding and
relationship between directors inter se as stipulated under Clause 49
of the Listing Agreement with the Stock Exchanges in India, is given in
the section on Corporate Governance Report forming part of this Annual
Report.
Directors' Responsibility Statement
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956 with respect to Directors' Responsibility Statement, it is
hereby confrmed that:
(i) in the preparation of the annual accounts for the financial year
ended March 31, 2012, the applicable Accounting Standards had been
followed alongwith proper explanation relating to material departures;
(ii) the Directors had selected such accounting policies and applied
them consistently and 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 on March 31, 2012, and of the profit of the Company
for the year ended on that date;
(iii) the Directors had taken proper and suffcient 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; and
(iv) the Directors had prepared the annual accounts for the financial
year ended March 31, 2012 on a 'going concern' basis.
Auditors and Auditors' Report
M/s. Chaturvedi & Shah, Chartered Accountants and M/s. B S R & Co.,
Chartered Accountants, the Auditors of the Company hold offce until the
conclusion of the ensuing Annual General Meeting and are eligible for
re-appointment.
The Company has received letters from M/s. Chaturvedi & Shah, Chartered
Accountants and M/s. B S R & Co., Chartered Accountants, to the effect
that their appointment, if made, would be within the prescribed limits
under Section 224(1B) of the Companies Act, 1956, and that they are not
disqualifed for such appointment within the meaning of Section 226 of
the Companies Act, 1956.
The observations and comments given by Auditors in their report read
together with notes to Accounts are self explanatory and hence do not
call for any further comments under Section 217 of the Companies Act,
1956.
Consolidated Financial Statements
The Audited Consolidated Financial Statements based on the Financial
Statements received from subsidiaries and associates, as approved by
their respective Board of Directors and Management Committee have been
prepared in accordance with AS-21 on 'Consolidated Financial
Statements' read with AS- 23 on 'Accounting for Investments in
Associates' notifed under Section 211 (3C) of the Companies Act, 1956
read with the Accounting Standards Rules as applicable.
Particulars of Employees
In terms of the provisions of Section 217(2A) of the Companies Act,
1956 read with the Companies (Particulars of Employees) Rules, 1975 and
the Companies (Particulars of Employees) Amendment Rules, 2011, the
names and other particulars of employees are set out in the Annexure to
the Directors' Report. However, having regard to the provisions of
Section 219(1)(b) (iv) of the Companies Act, 1956, the Annual Report
excluding the aforesaid information is being sent to all the members of
the Company and others entitled thereto. Any member interested in
obtaining such particulars may write to the Company Secretary at the
Registered Offce of the Company.
Employees Stock Option Scheme
During the year under review, the Company has not granted any Options
to the employees of the Company. Employees Stock Option Scheme (ESOS)
was approved and implemented by the Company and Options were granted to
employees under ESOS Plan A and Plan B in accordance with the
Securities and Exchange Board of India (Employee Stock Option Scheme
and Employee Stock Purchase Scheme) Guidelines, 1999 ('the SEBI
Guidelines'). The ESOS Compensation Committee, constituted in
accordance with the SEBI Guidelines, administers and monitors the
Scheme. The applicable disclosures as stipulated under the SEBI
Guidelines as on March 31, 2012 are given below:
Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo
The particulars as required to be disclosed pursuant to Section
217(1)(e) of the Companies Act, 1956, read with the Companies
(Disclosures of Particulars in the Report of Board of Directors) Rules,
1988, are as under:
(1) Part A and B pertaining to conservation of energy and technology
absorption are not applicable to the Company:
(2) Foreign exchange earnings and outgo
Earnings - Nil Outgo - Rs. 6 crore
Corporate Governance
The Company has adopted "Reliance Group à Corporate Governance Policies
and Code of Conduct" which has set out the systems, processes and
policies conforming to the International Standards and corporate
governance guidelines issued by Reserve Bank of India for Non Banking
Financial Companies.
The report on Corporate Governance as stipulated under Clause 49 of the
Listing Agreement with the Stock Exchanges, forms part of this Annual
Report. A Certifcate from the Auditors of the Company M/s. Chaturvedi &
Shah, Chartered Accountants and
M/s. B S R & Co., Chartered Accountants, confrming compliance with
conditions of Corporate Governance as stipulated under Clause 49 of the
Listing Agreement, is enclosed to this Report.
Acknowledgements
Your Directors would like to express their sincere appreciation of the
co-operation and assistance received from shareholders,
debentureholders, debenture trustee, bankers, regulatory bodies and
other business constituents during the year under review. Your
Directors also wish to place on record their deep sense of appreciation
for the commitment displayed by all executives, offcers and staff,
resulting in the successful performance of the Company during the year.
For and on behalf of the Board of Directors
Mumbai Anil Dhirubhai Ambani
June 2, 2012 Chairman
Mar 31, 2011
Dear Shareowners,
The Directors present the 25th Annual Report together with the audited
statement of accounts of the Company for financial year ended March 31,
2011.
Financial Results
The standalone performance of the Company for the financial year ended
March 31, 2011 is summarised below:
Particulars Financial Year ended Financial Year ended
March 31, 2011 March 31, 2010#
(Rs. in crore) (US$ in
million*)
Gross Income 1934.01 433.152 389.88 529.39
Gross profit 215.09 48.17 446.49 98.91
Less: Depreciation 14.33 3.21 18.16 4.02
profit before Tax 200.76 44.96 428.33 94.89
Provision for Taxation (28.51) (6.39) 88.91 19.70
Net profit 229.27 51.35 339.42 75.19
Add: profit brought
forward from the
Previous Year 1971.32 441.51 1,920.52 425.46
profit available for
Appropriation 2,200.59 492.85 2,259.94 500.65
Dividend including
Dividend Tax 160.65 35.98 186.80 41.38
Transfer to General
Reserve 22.93 5.14 33.94 7.52
Transfer to Statutory
Reserve Fund 45.85 10.27 67.88 15.04
Balance carried
forward 1,971.16 441.47 1,971.32 436.71
*1 US$ = Rs. 44.65 ** 1 US$ = Rs. 45.14 (Source: Reserve Bank of India
website). #Figures of Previous Year have been regrouped and
reclassified, wherever required.
The assets and liabilities of Reliance Commercial Finance Pvt. Ltd.
(RCFPL), a wholly owned subsidiary of the Company and its operating
results have been incorporated in the Company's books pursuant to the
merger of RCFPL with the Company with effect from April 1, 2010 i.e.,
the Appointed Date. Accordingly, financial results for the year 2010-11
may not be comparable with that of financial year 2009-10.
Financial Performance
The Company's gross income for the financial year ended March 31, 2011
decreased to Rs. 1,934.01 crore, from Rs. 2,389.88 crore in the previous
year, a decline of 24 per cent. The operating profit (PBDIT) of the
Company decreased by 17 per cent to Rs. 1,471.70 crore during the year,
from Rs. 1,723.69 crore, in the previous year. Interest expenses for the
year decreased by 2 per cent to Rs. 1,256.61 crore, from Rs. 1,277.40
crore, in the previous year. Depreciation was at Rs. 14.33 crore as
against Rs. 18.16 crore in the previous year. The net provision written
back for taxation during the year was Rs. 28.51 crore. The net profit for
the year decreased by 48 per cent to Rs. 229.27 crore from Rs. 339.42
crore, in the previous year. An amount of Rs. 45.85 crore was transferred
to the Statutory Reserve Fund pursuant to Section 45-IC of the Reserve
Bank of India Act, 1934, and an amount of Rs. 22.93 crore was transferred
to the General Reserve during the year under review.
Dividend
Your Directors have recommended a dividend of Rs. 6.50 (65 per cent) per
equity share aggregating to Rs. 160.65 crore (inclusive of dividend tax)
for the financial year ended March 31, 2011, which, if approved at the
ensuing Annual General Meeting, will be paid to (i) all those equity
shareholders whose names appear in the Register of Members as on
September 18, 2011, and (ii) to those whose names appear as beneficial
owners, as on September 18, 2011 as furnished by the National
Securities
Depository Ltd. and Central Depository Services (India) Ltd. for the
purpose.
The Dividend payout as proposed is in accordance with the Company's
policy of paying sustainable dividend linked to long term performance,
keeping in view of the capital needs of the Company's growth plans and
desire to achieve optimal financing of such plans through internal
accruals.
Schemes of Arrangement
(a) Amalgamation of Reliance Commercial Finance Pvt. Ltd. with the
Company
Reliance Commercial Finance Pvt. Ltd. ('RCFPL'), a wholly owned
subsidiary of the Company, has been amalgamated with the Company with
effect from April 1, 2010.
(b) Reorganisation of Subsidiaries
i) Infrastructure Division of Reliance Money Infrastructure Pvt. Ltd.
has been demerged into Reliance Capital Asset Management Company Ltd.
vide Order dated January 13, 2011 of the Hon'ble High Court of Gujarat.
The Appointed date was February 17, 2011.
ii) Brokerage and Financial Services Business of Reliance Equities
International Pvt. Ltd. has been demerged into Quant Broking Pvt. Ltd.
vide Order dated June 14, 2010 of the Hon'ble High Court of Gujarat.
The Appointed date was April 1, 2009.
Management Discussion and Analysis Report
The Management Discussion and Analysis Report for the year under review
as stipulated under Clause 49 of the listing agreement with the stock
exchanges in India, is presented in a separate section forming part of
the Annual Report. The Company has entered into various contracts in
the areas of financial services business. While benefits from such
contracts will accrue in the future years, their progress is
periodically reviewed.
Resources and Liquidity
The Company's Net worth as on March 31, 2011, stood at Rs. 6,958.27
crore. The Company has raised Rs. 6,692 crore (net) during the financial
year 2010-11 by issuance of Commercial Paper, Non Convertible
Debentures (NCDs) and other money market instruments. The Company's
NCDs amounting to Rs. 5,092 crore are listed on Bombay Stock Exchange
Ltd. as on March 31, 2011. The funds were mainly deployed in providing
consumer finance. RCL's debt equity ratio as on March 31, 2011 stood at
2.66:1.
Subsidiaries
During the year, Reliance Exchangenext Limited, Reliance Spot Exchange
Infrastructure Limited, Quant Capital Pvt. Ltd., Quant Broking Pvt.
Ltd., Quant Securities Pvt. Ltd., Quant Commodities Pvt. Ltd., Quant
Commodity Broking Pvt. Ltd., Quant Capital Advisors Pvt. Ltd., Quant
Capital Finance and Investments Pvt. Ltd., Reliance Wealth Management
Limited, Quant Investment Services Pvt. Ltd., Qoppa Trading Pvt. Ltd.
and Valankulam Investments & Trading Pvt. Ltd. became subsidiaries of
the Company. Medybiz Pvt. Ltd., Net Logistics Pvt. Ltd. and Reliance
Capital Services Pvt. Ltd. ceased to be subsidiaries of the Company.
As per approval granted by the Ministry of Corporate Affairs vide
Circular No. 02/2011 dated February 8, 2011, copies of the Balance
Sheet, profit and Loss Account, Report of the Board of Directors and
Auditors of the subsidiary companies are not being attached to the
Balance Sheet of the Company. The financial information of the
subsidiary companies as required by the above circular is disclosed
under 'Financial Information of Subsidiary Companies', which forms part
of the Annual Report.
The Company will make available hard copy of Annual Accounts of the
subsidiary companies and the related detailed information to the
shareholder of the Company seeking the same.
The annual accounts of the subsidiary companies will also be kept for
inspection by any shareholders at the Registered office the Company and
that of the respective subsidiary companies.
Further, pursuant to the provisions of Accounting Standard - 21 (AS-21)
prescribed under the Companies (Accounting Standards) Rules, 2006 and
Listing Agreement as prescribed by the Securities and Exchange Board of
India, Consolidated Financial Statements presented by the Company
includes financial information of subsidiary companies, which forms part
of the Annual Report.
Fixed Deposits
The Company has neither accepted nor renewed any fixed deposits during
the year. There are no unclaimed deposits, unclaimed / unpaid interest,
refunds due to the deposit holders or to be deposited to the Investor
Education and Protection Fund as on March 31, 2011.
Capital Adequacy Ratio
Your Company's Capital to Risk Assets Ratio (CRAR) calculated in line
with the Non-Banking Financial (Non-Deposit Accepting or Holding)
Companies Prudential Norms (Reserve Bank) Directions, 2007 ("RBI
Directions") stood at 17.82 per cent, well above the regulatory minimum
of 15 per cent. Your Company's asset size is Rs. 26,538.98 crore. The
Company has received a certificate from the Auditors of the Company,
M/s. Chaturvedi & Shah, Chartered Accountants and M/s. B S R & Co.,
Chartered Accountants, pursuant to Non Banking Financial Companies
Auditors' Report (Reserve Bank) Directions, 2008, confirming compliance
of the conditions with respect to Systemically Important Non-Deposit
taking Non-Banking Financial Companies.
Directors
In terms of the provision of the Companies Act, 1956 Shri Amitabh
Jhunjhunwala and Shri C. P. Jain, Directors of the Company, retire by
rotation and being eligible offer themselves for re-appointment at the
ensuing Annual General Meeting.
A brief resume of the Directors retiring by rotation at the ensuing
Annual General Meeting, nature of their expertise in specific functional
areas and names of companies in which they hold directorship and/or
membership/ chairmanship of committees of the board, as stipulated
under Clause 49 of the listing agreement with the Stock Exchanges, is
given in the section on Corporate Governance elsewhere in the Annual
Report.
Directors' Responsibility Statement
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956 with respect to Directors' Responsibility Statement, it is
hereby confrmed that:
(i) in the preparation of the annual accounts for the financial year
ended March 31, 2011, the applicable accounting standards have been
followed alongwith proper explanation relating to material departures;
(ii) the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that were reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as at March 31, 2011, and of the profit of the Company
for the year ended on that date;
(iii) the Directors 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; and
(iv) the Directors have prepared the annual accounts for the financial
year ended March 31, 2011 on a 'going concern' basis.
Group
Pursuant to intimation received from the Promoters, the names of the
Promoters and entities comprising 'Group' as defined under the
Monopolies and Restrictive Trade Practices (MRTP) Act, 1969 are
disclosed in the Annual Report for the purpose of the SEBI (Substantial
Acquisition of Shares and Takeovers) Regulations, 1997.
The Company had received a certificate from the Auditors of the Company
M/s. Chaturvedi & Shah, Chartered Accountants and M/s. B S R & Co.,
Chartered Accountants, that the Scheme and ESOS Plan A and B have been
implemented in accordance with the SEBI Guidelines and as per the
resolution passed through Postal Ballot on January 8, 2007.
Consolidated Financial Statements
The Audited Consolidated Financial Statements based on the Financial
Statements received from subsidiaries, joint ventures and associates,
as approved by their respective Board of Directors and management
committee have been prepared in accordance with the Accounting
Standard-21 (AS-21) on 'Consolidated Financial Statements' read with
Accounting Standard-23 (AS-23) on 'Accounting for Investments in
Associates' notified under Section 211 (3C) of the Companies Act, 1956
read with the Companies (Accounting Standards) Rules, 2006, as
applicable.
Auditors and Auditors' Report
M/s. Chaturvedi & Shah, Chartered Accountants and M/s. B S R & Co.,
Chartered Accountants, as Auditors of the Company, hold office until the
conclusion of the ensuing Annual General Meeting and are eligible for
re-appointment.
The Company has received letters from M/s. Chaturvedi & Shah, Chartered
Accountants and M/s. B S R & Co., Chartered Accountants, to the effect
that their appointment, if made, would be within the prescribed limits
under Section 224(1B) of the Companies Act, 1956, and that they are not
disQualified for such appointment within the meaning of Section 226 of
the Companies Act, 1956.
The observations and comments given by Auditors in their report read
together with notes to Accounts are self explanatory and hence do not
call for any further comments under Section 217 of the Companies Act,
1956.
Particulars of Employees
In terms of the provisions of Section 217(2A) of the Companies Act,
1956 read with the Companies (Particulars of Employees) Rules, 1975 and
the Companies (Particular of Employees) Amendment Rules, 2011, the
names and other particulars of employees are set out in the Annexure to
the Directors' Report. However, having regard to the provisions of
Section 219(1)(b) (iv) of the Companies Act, 1956, the Annual Report
excluding the aforesaid information is being sent to all the members of
the Company and others entitled thereto. Any member interested in
obtaining such particulars may write to the Company Secretary at the
Registered office of the Company.
Energy Conservation, Technology Absorption and Foreign Exchange
Earnings and Outgo
Particulars required to be furnished under the Companies (Disclosure of
Particulars in the Report of Board of Directors) Rules, 1988, are as
under:
(1) Part A and B pertaining to conservation of energy and technology
absorption are not applicable to the Company.
Transfer of unclaimed dividend to Investor Education and Protection
Fund (IEPF)
Pursuant to the provisions of Section 205(A) of the Companies Act,
1956, the declared dividend which remained unclaimed for a period of 7
years has been transferred by the Company to the Investor Education and
Protection Fund established by the Central Government pursuant to
Section 205C of the said Act.
Corporate Governance
The Company has adopted the "Reliance Group - Corporate Governance
Policies and Code of Conduct" which has set out the systems, processes
and policies conforming to International Standards and corporate
governance guidelines issued by Reserve Bank of India for Non Banking
Financial Companies. The corporate governance framework in the Company
is based on an effective independent Board, the separation of the
Board's supervisory role from the executive management and the
constitution of Board Committees, generally comprising a majority of
independent Directors and chaired by an independent Director, to
oversee critical areas. This Code is also available on the website of
the Company www.reliancecapital.co.in.
In terms of Clause 49 of the Listing Agreement, a confirmation from the
Company Secretary & Manager of the Company regarding compliance with
the Code by all the Directors and senior management forms part of this
Annual Report.
The report on Corporate Governance as stipulated under Clause 49 of the
listing agreement with the Stock Exchanges, forms part of the Annual
Report. A certificate from the Auditors of the Company M/s. Chaturvedi &
Shah, Chartered Accountants and M/s. B S R & Co., Chartered
Accountants, confirming compliance with conditions of Corporate
Governance as stipulated under the aforesaid Clause 49 is attached to
this Report.
Acknowledgements
Your Directors would like to express their sincere appreciation of the
co-operation and assistance received from shareholders,
debentureholders, bankers, regulatory bodies and other business
constituents during the year under review. Your Directors also wish to
place on record their deep sense of appreciation for the commitment
displayed by all executives, officers and staff, resulting in the
successful performance of the Company during the year.
For and on behalf of the Board of Directors
Anil Dhirubhai Ambani
Chairman
Mumbai
May 30, 2011
Mar 31, 2010
The Directors have pleasure in presenting the twenty fourth Annual
Report, together with the audited statement of accounts of the Company
for the year ended March 31, 2010.
Financial Results
The standalone performance of the Company for the financial year ended
March 31, 2010 is summarised below:
Financial Year ended Financial Year ended
Particulars March 31, 2010 March 31, 2009#
(Rs. in
crore) (US$ iiin
million*) (Rs. in
crore) (US$ in million**)
Gross Income 2389.88 529.44 3014.45 591.65
Gross Profit 446.49 98.91 1098.42 215.59
Less: Depreciation 18.16 4.02 21.22 4.16
Profit before Tax 428.33 94.89 1077.20 211.42
Provision for Taxation 88.91 19.70 109.18 21.43
Net Profit 339.42 75.19 968.02 189.99
Add: Profit brought
forward from the
previous year 1920.52 425.46 1429.72 280.61
Profit available for
Appropriation 2259.94 500.65 2397.74 470.61
Dividend including
Dividend Tax 186.80 41.38 186.80 36.66
Transfer to General
Reserve 33.94 7.52 96.81 19.00
Transfer to Statutory
Reserve Fund 67.88 15.04 193.61 38.00
Balance carried
forward 1971.32 436.71 1920.52 376.94
*1 US$ = Rs.45.14 ** 1 US$ = Rs.50.95
#Figures of previous year have been regrouped and reclassified,
wherever required
Financial Performance
The CompanyÃs gross income for the financial year ended March 31, 2010
decreased to Rs.2,389.88 crore, from Rs.3,014.45 crore in the previous
year, a decline of 26 per cent. The operating profit (PBDIT) of the
Company decreased by 36.87 per cent to Rs.1,706.09 crore during the
year, from Rs.2,335.17 crore, in the previous year. Interest expenses
for the year increased by 1.81 per cent to Rs.1,259.60 crore, from
Rs.1,236.75 crore, in the previous year. Depreciation was at Rs.18.16
crore as against Rs.21.22 crore in the previous year. The provision
for taxation during the year was Rs.88.91 crore. The net profit for
the year decreased by 185 per cent to Rs.339.42 crore from Rs.968.02
crore, in the previous year. An amount of Rs.67.88 crore was
transferred to the Statutory Reserve Fund pursuant to section 45-IC of
the Reserve Bank of India Act, 1934, and an amount of Rs.33.94 crore
was transferred to the General Reserve during the year under review.
The CompanyÃs Net worth as on March 31, 2010, stood at Rs.6,885.69
crore.
Dividend
Your directors are pleased to recommend a dividend of Rs.6.50 (65 per
cent) per equity share on 24,56,32,800 equity shares of Rs.10 each
aggregating to Rs.186.80 crore (inclusive of dividend tax) for the
financial year ended March 31, 2010, which, if approved at the ensuing
Annual General Meeting, will be paid to (i) all those equity
shareholders whose names appear in the Register of Members as on
September 14, 2010 and (ii) to those whose names as beneficial owners,
are furnished by the National Securities Depository Ltd. and Central
Depository Services (India) Ltd. for the purpose. The dividend payout
as proposed is in accordance with the CompanyÃs policy of paying,
sustainable dividend linked to long term performance, keeping in view
the capital needs for the CompanyÃs growth plans and the desire to
achieve optimal financing of such plans through internal accruals.
Management Discussion and Analysis Report
The Management Discussion and Analysis Report for the year under
review, as stipulated under Clause 49 of the listing agreement with the
Stock Exchanges in India, is presented in a separate section which
forms, part of the Annual Report. The Company has entered into various
contracts in the areas of financial services business. While benefits
from such contracts will accrue in the future years, their progress is
periodically reviewed.
Resources and Liquidity
The Company has raised Rs.11,958.15 crore during the financial year
2009-10 by issuance of Commercial Paper, Non Convertible Debentures
(NCDs) and other money market instruments. The CompanyÃs NCDs amounting
to Rs.3,575 crore are listed on Bombay Stock Exchange Ltd. as on March
31, 2010. The funds were mainly deployed in providing consumer finance.
RCLÃs debt equity ratio as on March 31, 2010 stood at 1.57:1.
Subsidiaries
During the year, Reliance Asset Management (Malaysia) SDN BHD became
subsidiary of the Company.
In terms of the approval granted by the Central Government under
Section 212(8) of the Companies Act, 1956, copies of the Balance Sheet,
Profit and Loss Account and Report of the Board of Directors and
Auditors of the subsisting subsidiaries have not been attached with the
Balance Sheet of the Company. However, these documents will be made
available upon request to any member of the Company interested in
obtaining the same. As directed by the Central Government, the
financial data of the subsidiaries has been furnished under ÃFinancial
Information of Subsidiary CompaniesÃ, which forms part of the Annual
Report. The annual accounts of the Company including that of
subsidiaries will be kept for inspection by any member. Further,
pursuant to Accounting Standard-21 (AS-21) as notified by Companies
(Accounting Standards) Rules, 2006, the Consolidated Financial
Statements presented by the Company include the financial information
about its subsidiary Companies.
Fixed Deposits
The Company has neither accepted nor renewed any fixed deposits during
the year. There are no unclaimed deposits, unclaimed / unpaid interest
due to the deposit holders or to be deposited to the Investor Education
and Protection Fund as on March 31, 2010.
Capital Adequacy Ratio
Your CompanyÃs Capital to Risk Assets Ratio (CRAR) calculated in line
with the Non Banking Financial (Non Deposit Accepting or Holding)
Companies Prudential Norms (Reserve Bank) Directions, 2007 (ÃRBI
DirectionsÃ) stood at 28.03%, well above the regulatory minimum of 12%.
Your CompanyÃs asset size is Rs.20,028 crore. The Company has received
a certificate from the Auditors M/s. Chaturvedi & Shah, Chartered
Accountants and M/s. B S R & Co., Chartered Accountants, of the
Company, pursuant to Non Banking Financial Companies Auditorsà Report
(Reserve Bank) Directions, 2008, confirming compliance of the
conditions with respect to NBFCs-ND-SI.
Directors
In terms of Article 154 of the Articles of Association of the Company,
Shri Rajendra P. Chitale, Director of the Company, retires by rotation
and being eligible offers himself for re- appointment at the ensuing
Annual General Meeting.
Dr. Bidhubhusan Samal and Shri V. N. Kaul were appointed as additional
directors w.e.f. October 30, 2009 and April 30, 2010 respectively. They
would hold office till the ensuing Annual General Meeting. The Company
has received notice in writing from a member proposing their
candidature, for the office of Director.
A brief resume of the Director retiring by rotation at the ensuing
Annual General Meeting and of the additional directors whose
candidature has been proposed by a member, nature of their expertise in
specific functional areas and names of Companies in which they hold
directorship and/or membership/chairmanship of Committees of the Board,
as stipulated under Clause 49 of the listing agreement with the Stock
Exchanges, is given in the section on Corporate Governance elsewhere in
the Annual Report.
Directorsà Responsibility Statement
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956 with respect to Directorsà Responsibility Statement, it is
hereby confirmed that:
(i) in the preparation of the annual accounts for the financial year
ended March 31, 2010, the applicable accounting standards have been
followed alongwith proper explanation relating to material departures;
(ii) the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that were reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as at March 31, 2010 and of the profit of the Company
for the year ended on that date;
(iii) the Directors 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; and
(iv) the Directors have prepared the annual accounts for the financial
year ended March 31, 2010 on a Ãgoing concernà basis.
Group
Pursuant to an intimation from the Promoters, the names of the
Promoters and entities comprising Ãgroupà as defined under the
Monopolies and Restrictive Trade Practices (ÃMRTPÃ) Act, 1969 are
disclosed in the Annual Report for the purpose of the SEBI (Substantial
Acquisition of Shares and Takeovers) Regulations, 1997.
The Company has received a certificate from the Auditors of the Company
M/s. Chaturvedi & Shah, Chartered Accountants and M/s. B S R & Co.,
Chartered Accountants, that the Scheme and ESOS Plan A and B have been
implemented in accordance with the SEBI Guidelines and as per the
resolution passed through Postal Ballot on January 8, 2007.
Consolidated Financial Statements
The Audited Consolidated Financial Statements, based on the Financial
Statements received from subsidiaries, associates and partnership
firms, as approved by their respective Board of Directors and Managing
Committee, have been prepared in accordance with Accounting Standard-21
(AS-21) on Consolidated Financial Statements read with Accounting
Standard-23 (AS-23) on the Accounting for Investments in Associates.
Auditors and Auditorsà Report
M/s. Chaturvedi & Shah, Chartered Accountants and M/s. B S R & Co.,
Chartered Accountants, as Statutory Auditors of the Company, hold
office until the conclusion of the ensuing Annual General Meeting and
are eligible for re-appointment.
The Company has received letters from M/s. Chaturvedi & Shah, Chartered
Accountants and M/s. B S R & Co., Chartered Accountants, to the effect
that their appointment, if made, would be within the prescribed limits
under Section 224(1B) of the Companies Act, 1956, and that they are not
disqualified for such appointment within the meaning of Section 226 of
the Companies Act, 1956.
The observations and comments given by Auditors in this report read
together with notes to Accounts are self explanatory and hence do not
call for any further comments under Section 217 of the Companies Act,
1956.
Particulars of Employees
In terms of the provisions of Section 217(2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975,
the names and other particulars of the employees are set out in the
Annexure to the Directorsà Report. However, having regard to the
provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report
excluding the aforesaid information is being sent to all the Members of
the Company and others entitled thereto. Any member interested in
obtaining such particulars may write to the Company Secretary at the
Registered Office of the Company.
Energy Conservation, Technology Absorption and Foreign Exchange
Earnings and Outgo
Particulars required to be furnished under the Companies (Disclosure of
Particulars in the Report of Board of Directors) Rules, 1988, are as
under:
(1) Part A and B pertaining to conservation of energy and technology
absorption are not applicable to the Company.
(2) Foreign Exchange earnings and outgo:
Earnings - Rs.Nil
Outgo - Rs.14.52 crore
Transfer of unclaimed dividend to Investor Education and Protection
Fund (IEPF)
Pursuant to the provisions of Section 205(A) of the Companies Act,
1956, the declared dividend which remained unclaimed for a period of 7
years has been transferred by the Company to the Investor Education and
Protection Fund (IEPF) established by the Central Government pursuant
to Section 205C of the said Act.
Corporate Governance
The Company has adopted the ÃReliance Anil Dhirubhai Ambani Group -
Corporate Governance Policies and Code of Conductà which has set out
the systems, processes and policies conforming to International
Standards and corporate governance guidelines issued by Reserve Bank of
India for Non Banking Financial Companies. The corporate governance
framework in the Company is based on an effective independent Board,
the separation of the BoardÃs supervisory role from the executive
management and the constitution of Board Committees, generally
comprising a majority of independent Directors and chaired by an
independent Director, to oversee critical areas. This Code is also
available on the website of the Company www.reliancecapital.co.in.
In terms of Clause 49 of the Listing Agreement, a confirmation from the
Company Secretary & Manager of the Company regarding compliance with
the Code by all the Directors and senior management is annexed to this
Report.
The report on Corporate Governance as stipulated under Clause 49 of the
listing agreement with the Stock Exchanges, forms part of the Annual
Report. A Certificate from the Auditors of the Company M/s. Chaturvedi
& Shah, Chartered Accountants and M/s. B S R & Co., Chartered
Accountants, confirming compliance with conditions of Corporate
Governance as stipulated under the aforesaid Clause 49, is annexed to
this Report.
Acknowledgements
Your Directors would like to express their sincere appreciation of the
co-operation and assistance received from shareholders, bankers,
regulatory bodies and other business constituents during the year under
review. Your Directors also wish to place on record their deep sense of
appreciation for the commitment displayed by all executives, officers
and staff, resulting in the successful performance of the Company
during the year.
For and on behalf of the Board of Directors
Anil Dhirubhai Ambani
Chairman
Mumbai
April 30, 2010
Mar 31, 2000
The Directors present the Fifth Annual Report, together with the
audited statement of Accounts of the Company for the period ended 31st
March, 2000.
Financial Results :
(Rupees)
Year ended Year ended
31-3-2000 31-3-1999
Gross Income 3,75,72,669 2,22,78,629
Gross Profit 90,79,093 57,53,487
Depreciation 11,35,574 12,86,302
Profit before tax 79,43,519 44,67,185
Provision for taxation 22,00,000 11,00,000
Profit After tax 57,43,519 33,67,185
Proposed Dividend 25,00,070 25,00,070
Balance carried to Balance Sheet 1,19,43,905 88,09,114
Dividend
The Directors have recommended a dividend of 1 % (previous year 1 %) on
75,00,700 equity shares of Rs. 10/- each aggregating to Rs. 7,50,070
for the year ended 31st March, 2000.
The Directors have also recommended a dividend of 5 % on 3,50,000
Redeemable Cumulative Preference Shares of Rs. 100/-each aggregating
to Rs. 17,50,000.-.
Operations :
The Company is the Investment Manager to Reliance Capital Mutual Fund.
During the year under review, Reliance Growth Fund (RGF) was converted
into an open-end scheme. Further, RGF declared a dividend of 100% i.e
Rs. 10 per unit under its Dividend Plan. Reliance Vision Fund and
Reliance Growth Fund have performed well by beating relevant stock
market indices. Reliance Income Fund has introduced dividend plans,
namely Half yearly Dividend Plan, Quarterly Dividend Plan, Monthly
Dividend Plan in addition to Annual Dividend Plan.
The Company has earned income mainly from Asset Management activity
besides some investment income on its surplus funds.
Fixed Deposits :
The Company has not accepted any Fixed Deposit from the public. Hence
no information is required to be appended to this report.
Directors :
Shri Vinod M. Ambani Director of the Company retires by rotation and
being eligible, offers himself for re-appointment. Auditors &
Auditors' Report :
M/s. C. C. Chokshi & Co., Chartered Accountant, Auditors of the
Company, hold office until the conclusion of the ensuing Annual Genera)
Meeting end are recommended for re-appointment. The Company has
received a letter from M/s. C. C. Chokshi & Co., Chartered Accountants,
to the effect that their re-appointment if made, would be within the
prescribed limits under Section 224(1-B) of the Companies Act, 1956.
Personnel :
As required by the provisions of Section 217(2-A) of the Companies Act,
1956 read with Companies (Particulars of Employees) Rules, 1975 as
amended, the names and other particulars of the employees are set out
in the Annexure to the Directors Report.
Particulars required to be furnished by the Companies (Disclosure of
Particulars in the Report of Board of Directors) Rule 1988 :
(1) Part A and B pertaining to conservation and technology absorption
are not applicable to the Company.
(2) Foreign Exchange earnings and outgo : The Company has neither used
(previous year Rs. nil) nor earned any foreign exchange during the year
under review.
Mar 31, 2000
The Directors present the Fifth Annual Report, together with the
audited statement of Accounts of the Company for the period ended 31st
March, 2000.
Financial Results :
(Rupees)
Year ended Year ended
31-3-2000 31-3-1999
Gross Income 3,75,72,669 2,22,78,629
Gross Profit 90,79,093 57,53,487
Depreciation 11,35,574 12,86,302
Profit before tax 79,43,519 44,67,185
Provision for taxation 22,00,000 11,00,000
Profit After tax 57,43,519 33,67,185
Proposed Dividend 25,00,070 25,00,070
Balance carried to Balance Sheet 1,19,43,905 88,09,114
Dividend
The Directors have recommended a dividend of 1 % (previous year 1 %) on
75,00,700 equity shares of Rs. 10/- each aggregating to Rs. 7,50,070
for the year ended 31st March, 2000.
The Directors have also recommended a dividend of 5 % on 3,50,000
Redeemable Cumulative Preference Shares of Rs. 100/-each aggregating
to Rs. 17,50,000.-.
Operations :
The Company is the Investment Manager to Reliance Capital Mutual Fund.
During the year under review, Reliance Growth Fund (RGF) was converted
into an open-end scheme. Further, RGF declared a dividend of 100% i.e
Rs. 10 per unit under its Dividend Plan. Reliance Vision Fund and
Reliance Growth Fund have performed well by beating relevant stock
market indices. Reliance Income Fund has introduced dividend plans,
namely Half yearly Dividend Plan, Quarterly Dividend Plan, Monthly
Dividend Plan in addition to Annual Dividend Plan.
The Company has earned income mainly from Asset Management activity
besides some investment income on its surplus funds.
Fixed Deposits :
The Company has not accepted any Fixed Deposit from the public. Hence
no information is required to be appended to this report.
Directors :
Shri Vinod M. Ambani Director of the Company retires by rotation and
being eligible, offers himself for re-appointment. Auditors &
Auditors' Report :
M/s. C. C. Chokshi & Co., Chartered Accountant, Auditors of the
Company, hold office until the conclusion of the ensuing Annual Genera)
Meeting end are recommended for re-appointment. The Company has
received a letter from M/s. C. C. Chokshi & Co., Chartered Accountants,
to the effect that their re-appointment if made, would be within the
prescribed limits under Section 224(1-B) of the Companies Act, 1956.
Personnel :
As required by the provisions of Section 217(2-A) of the Companies Act,
1956 read with Companies (Particulars of Employees) Rules, 1975 as
amended, the names and other particulars of the employees are set out
in the Annexure to the Directors Report.
Particulars required to be furnished by the Companies (Disclosure of
Particulars in the Report of Board of Directors) Rule 1988 :
(1) Part A and B pertaining to conservation and technology absorption
are not applicable to the Company.
(2) Foreign Exchange earnings and outgo : The Company has neither used
(previous year Rs. nil) nor earned any foreign exchange during the year
under review.
Mar 31, 1999
The Directors present the Fourth Annual Report, together with the
audited statement of Accounts of the Company for the period ended 31st
March, 1999.
Financial Results : (Rupees)
for the financial year ended
31-3-1999 31-3-1998
Gross Income 2,22,78,629 453,96,487
Gross Profit 57,53,487 1,25,41,866
Depreciation 12,86,302 11,19,449
Profit before tax 44,67,185 1,14,22,417
Provision for taxation 11,00,000 17,00,000
Profit After tax 33,67,185 97,22,417
Proposed Dividend 25,00,070 20,94,661
Balance carried to Balance Sheet 88,09,113 82,17006
Dividend :
The Directors have recommended a dividend of 1% (previous year 2%) on
75,00,700 equity shares of Rs. 10/- each aggregating to Rs. 7,50,070
for the year ended 31st March, 1999.
The Directors have also recommended a dividend of 5% on 3,50,000
Redeemable cumulative Preference Shares of Rs.100 each aggregating to
Rs. 17,50,000/-
Operations :
The Company is the Investment Manager to Reliance Capital Mutual Fund.
A process has been initiated for conversion of Reliance Growth Fund, a
closed end equity oriented growth scheme into an open end scheme.
Reliance Vision Fund and Reliance Growth Fund have performed well by
beating relevant stock market indices. Reliance Income Fund and
Reliance Liquid Fund, the income schemes have also been performing
well.
Fixed Deposits :
The Company has not accepted any Fixed Deposit from the public. Hence
no information is required to be appended to this report.
Directors :
Shri V.H. Pandya is appointed as an additional Director of the Company
with effect from June 22, 1998 and he will hold office upto the ensuing
Annual General Meeting. Necessary notice has been received under
Section 257 of the Companies Act, 1956, proposing his candidature for
the office of Director.
Shri Vinod M. Ambani director of the Company retires by rotation and
being eligible, offers himself for re-appointment.
Auditors & Auditors' Report :
M/s C.C. Chokshi & Co., Chartered Accountant, Auditors of the Company,
hold office until the conclusion of the ensuing Annual General Meeting
and are recommended for re-appointment. The Company has received a
letter from M/s. C.C. Chokshi & Co., Chartered Accountants, to the
effect that their re-appointment if made, would be within the
prescribed limits under Section 224(1- B) of the Companies Act, 1956.
Personnel :
As required by 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 the employees are set out
in the Annexure to the Directors' Report. However as per the
provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the
report and the accounts are being sent to all shareholders of the
company excluding the aforesaid information. Any shareholder
interested in obtaining such particulars may write to the Company.
Particulars required to be furnished by the Companies (Disclosure of
Particulars in the Report of Board of Directors) Rule 1988 :
(1) Part A and B pertaining to conservation and technology absorption
are not applicable to the Company.
(2) foreign Exchange earnings and outgo : The Company has neither used
(previous year Rs. nil) nor earned any foreign exchange during the year
under review.
Mar 31, 1999
The Directors present the Fourth Annual Report, together with the
audited statement of Accounts of the Company for the period ended 31st
March, 1999.
Financial Results : (Rupees)
for the financial year ended
31-3-1999 31-3-1998
Gross Income 2,22,78,629 453,96,487
Gross Profit 57,53,487 1,25,41,866
Depreciation 12,86,302 11,19,449
Profit before tax 44,67,185 1,14,22,417
Provision for taxation 11,00,000 17,00,000
Profit After tax 33,67,185 97,22,417
Proposed Dividend 25,00,070 20,94,661
Balance carried to Balance Sheet 88,09,113 82,17006
Dividend :
The Directors have recommended a dividend of 1% (previous year 2%) on
75,00,700 equity shares of Rs. 10/- each aggregating to Rs. 7,50,070
for the year ended 31st March, 1999.
The Directors have also recommended a dividend of 5% on 3,50,000
Redeemable cumulative Preference Shares of Rs.100 each aggregating to
Rs. 17,50,000/-
Operations :
The Company is the Investment Manager to Reliance Capital Mutual Fund.
A process has been initiated for conversion of Reliance Growth Fund, a
closed end equity oriented growth scheme into an open end scheme.
Reliance Vision Fund and Reliance Growth Fund have performed well by
beating relevant stock market indices. Reliance Income Fund and
Reliance Liquid Fund, the income schemes have also been performing
well.
Fixed Deposits :
The Company has not accepted any Fixed Deposit from the public. Hence
no information is required to be appended to this report.
Directors :
Shri V.H. Pandya is appointed as an additional Director of the Company
with effect from June 22, 1998 and he will hold office upto the ensuing
Annual General Meeting. Necessary notice has been received under
Section 257 of the Companies Act, 1956, proposing his candidature for
the office of Director.
Shri Vinod M. Ambani director of the Company retires by rotation and
being eligible, offers himself for re-appointment.
Auditors & Auditors' Report :
M/s C.C. Chokshi & Co., Chartered Accountant, Auditors of the Company,
hold office until the conclusion of the ensuing Annual General Meeting
and are recommended for re-appointment. The Company has received a
letter from M/s. C.C. Chokshi & Co., Chartered Accountants, to the
effect that their re-appointment if made, would be within the
prescribed limits under Section 224(1- B) of the Companies Act, 1956.
Personnel :
As required by 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 the employees are set out
in the Annexure to the Directors' Report. However as per the
provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the
report and the accounts are being sent to all shareholders of the
company excluding the aforesaid information. Any shareholder
interested in obtaining such particulars may write to the Company.
Particulars required to be furnished by the Companies (Disclosure of
Particulars in the Report of Board of Directors) Rule 1988 :
(1) Part A and B pertaining to conservation and technology absorption
are not applicable to the Company.
(2) foreign Exchange earnings and outgo : The Company has neither used
(previous year Rs. nil) nor earned any foreign exchange during the year
under review.
Mar 31, 1996
Your Directors present the 1st Annual Report, together with
the Audited Statement of accounts of the Company for the
period ended 31st March, 1996.
Financial Results :
For the period ended
31st March, 1996
(Rs.)
Gross Income 10,674,384.45
Gross Profit 4,880,107.79
Depreciation 807,974.00
Profit before tax 596,814.35
Provision for taxation NIL
Balance carried to Balance Sheet 596,814.35
Dividend:
To conserve resources, the Board of Directors have not
recommended any dividend for the period under review.
Operations:
The Company has been appointed as the Asset Management
Company for Reliance Capital Mutual Fund. The initial
schemes of Reliance Capital Mutual Fund were launched in
September, 1995 with an unparalleled investor friendly
feature of "Zero Initial Cost" whereby all costs relating to
the initial issue was borne by the Company. The Directors
are pleased to inform that the said schemes, have
outperformed all comparable stock market indices.
Resource Mobilisation:
During the period your Company issued and allotted 60 lakhs
equity shares of Rs. 10/- each for cash at par to Reliance
Capital Limited, the holding company. During the current
year, your company has further issued and allotted 15 lakhs
equity shares of Rs.10/- each for cash at par to Reliance
Capital Limited, the holding company.
Fixed Deposits:
The Company has not accepted any Fixed Deposit from the
public. Hence no information is required to be appended to
this report.
Directors :
Shri Mathew Panikar, Shri P S Gopalakrishnan and Shri
Shailesh Vaidya were appointed as additional Directors of
the Company with effect from 20th March, 1995 and they hold
office upto the ensuing Annual General Meeting. Necessary
notices have been received under Section 257 of the
Companies Act, 1956, proposing their candidature for the
office of Directors.
Shri Dhirendra H. Shah, Shri Tushar B Sarda and Shri Anil
Aggarwal have resigned from the Board with effect from 3rd
June, 1995. The Board of Directors have placed on record
the valuable services rendered by them to the Company.
Shri Anand Jain Director of the Company retires by rotation
and being eligible, offers himself for re-appointment.
Auditors & Auditors' Report:
Messrs C C Chokshi & Co. Auditors of the Company, hold
office until the conclusion of the ensuing Annual General
Meeting and are recommended for appointment. The Company
has received a letter from Messrs C.C. Chokshi & Co.,
Chartered Accountants, to the effect that their
re-appointment if made, would be within the prescribed
limits under Section 224(1-B) of the Companies Act, 1956.
Personnel:
As required by 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 the employees are set out in the Annexure to
the Directors' Report.
Particulars required to be furnished by the companies
(disclosure of particulars in the report of board of
directors) rule 1988.
(1) Part A and B pertaining to conservation and technology
absorption are not applicable to the Company.
(2) Foreign Exchange earnings and outgo
Foreign Exchange earnings : NIL
Foreign Exchange outgo: Rs. 1,33,025/-
Acknowledgements :
Your Directors wish to place on record their appreciation of
the devoted services by Executives, Officers and staff of
the Company for its success.
Mar 31, 1996
Your Directors present the 1st Annual Report, together with
the Audited Statement of accounts of the Company for the
period ended 31st March, 1996.
Financial Results :
For the period ended
31st March, 1996
(Rs.)
Gross Income 10,674,384.45
Gross Profit 4,880,107.79
Depreciation 807,974.00
Profit before tax 596,814.35
Provision for taxation NIL
Balance carried to Balance Sheet 596,814.35
Dividend:
To conserve resources, the Board of Directors have not
recommended any dividend for the period under review.
Operations:
The Company has been appointed as the Asset Management
Company for Reliance Capital Mutual Fund. The initial
schemes of Reliance Capital Mutual Fund were launched in
September, 1995 with an unparalleled investor friendly
feature of "Zero Initial Cost" whereby all costs relating to
the initial issue was borne by the Company. The Directors
are pleased to inform that the said schemes, have
outperformed all comparable stock market indices.
Resource Mobilisation:
During the period your Company issued and allotted 60 lakhs
equity shares of Rs. 10/- each for cash at par to Reliance
Capital Limited, the holding company. During the current
year, your company has further issued and allotted 15 lakhs
equity shares of Rs.10/- each for cash at par to Reliance
Capital Limited, the holding company.
Fixed Deposits:
The Company has not accepted any Fixed Deposit from the
public. Hence no information is required to be appended to
this report.
Directors :
Shri Mathew Panikar, Shri P S Gopalakrishnan and Shri
Shailesh Vaidya were appointed as additional Directors of
the Company with effect from 20th March, 1995 and they hold
office upto the ensuing Annual General Meeting. Necessary
notices have been received under Section 257 of the
Companies Act, 1956, proposing their candidature for the
office of Directors.
Shri Dhirendra H. Shah, Shri Tushar B Sarda and Shri Anil
Aggarwal have resigned from the Board with effect from 3rd
June, 1995. The Board of Directors have placed on record
the valuable services rendered by them to the Company.
Shri Anand Jain Director of the Company retires by rotation
and being eligible, offers himself for re-appointment.
Auditors & Auditors' Report:
Messrs C C Chokshi & Co. Auditors of the Company, hold
office until the conclusion of the ensuing Annual General
Meeting and are recommended for appointment. The Company
has received a letter from Messrs C.C. Chokshi & Co.,
Chartered Accountants, to the effect that their
re-appointment if made, would be within the prescribed
limits under Section 224(1-B) of the Companies Act, 1956.
Personnel:
As required by 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 the employees are set out in the Annexure to
the Directors' Report.
Particulars required to be furnished by the companies
(disclosure of particulars in the report of board of
directors) rule 1988.
(1) Part A and B pertaining to conservation and technology
absorption are not applicable to the Company.
(2) Foreign Exchange earnings and outgo
Foreign Exchange earnings : NIL
Foreign Exchange outgo: Rs. 1,33,025/-
Acknowledgements :
Your Directors wish to place on record their appreciation of
the devoted services by Executives, Officers and staff of
the Company for its success.