Your Directors take pleasure in presenting their 25th Annual Report on the business andoperations of your Company together with the audited financial statements for the yearended March 31 2020.
Your Company endeavors to remain one of the leading players in the Asset Managementbusiness in India and keep enhancing its global footprint as well.
During the year Nippon Life Insurance Company ("NLI") acquired additionalequity shares of the Company and increased its shareholding to 75% of Company's issued& paid up equity share capital and thus became its holding Company. As a result ofthis your Company became the largest foreign owned Asset Management Company in India.
As a consequence of this development NLI became the sole sponsor of the Mutual Fundmanaged by the Company. The existing name of the mutual fund i.e. "Reliance MutualFund" was changed to "Nippon India Mutual Fund" and the name of yourCompany was also changed to "Nippon Life India Asset Management Limited".
NLI a fortune 500 company is one of the largest life insurers in the world managingassets of over USD 700 by. NLI has a large global network with presence across US EuropeAsia and Australia along with a 130-year track record in life insurance business as wellas global investments across asset management companies. This brings strong synergisticbenefits the company's domestic expertise in asset management business and its significantgrowth potential. The company expects substantial upside in terms of increased AUM &adoption of best governance & risk management practices based on NLI's globalpositioning & relationships.
FINANCIAL PERFORMANCE AND STATE OF COMPANY'S AFFAIRS
The standalone and consolidated financial statements of the Company for the financialyear ended March 31 2020 have been prepared in accordance with the Indian AccountingStandards (Ind AS) notified under Section 133 of the Companies Act 2013 (the Act)[Companies (Indian Accounting Standards) Rules 2015] and other relevant provisions of theAct. The financial highlights (on a consolidated and standalone basis) of the Company forthe year ended March 31 2020 are as follows:
| || || || ||(Rs Crores) |
|Description || |
| ||Year ended March 31 2020 ||Year ended March 31 2019 ||Year ended March 31 2020 ||Year ended March 31 2019 |
|Gross Income ||1193.21 ||1649.92 ||1134.29 ||1589.04 |
|Profit before exceptional item and tax ||559.81 ||700.24 ||561.39 ||686.72 |
|Exceptional Items ||- ||- ||- ||- |
|Profit Before tax ||559.81 ||700.24 ||561.39 ||686.72 |
|Current Tax ||142.36 ||217.38 ||142.73 ||215.42 |
|Deferred Tax ||1.69 ||(4.21) ||6.36 ||(3.87) |
|Profit for the year ||415.76 ||487.07 ||412.30 ||475.17 |
|Share of Profit from Associates ||(0.51) ||0.03 ||- ||- |
|Profit attributable to non-controlling interest ||- ||1.01 ||- ||- |
|Other Comprehensive Income ||(2.40) ||(2.17) ||(2.34) ||(2.17) |
|Balance carried to Balance Sheet ||412.85 ||484.93 ||409.96 ||473.00 |
|Basic EPS of Rs 10 each ||6.78 ||7.94 ||6.74 ||7.77 |
|Diluted EPS of Rs 10 each ||6.69 ||7.94 ||6.65 ||7.77 |
The Consolidated Financial Statements of the Company are forming part of this AnnualReport.
The annual accounts of all the subsidiary companies will be placed on the website ofthe Company.
DETAILS OF MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THECOMPANY
There are no material changes and commitments affecting the financial position of theCompany since the date of the financial statements i.e. March 31 2020.
During the year the Company had declared and paid an interim dividend of Rs 3 perequity share (30%) amounting to Rs 221.35 Crore (including dividend distribution tax andother applicable taxes/ surcharges). The Board has also recommended a final dividend of Rs2/- per Equity Share of Rs 10/- each for the financial year ended March 31 2020 for theapproval of the shareholders at the ensuing Annual General
Meeting. With this the total dividend for the financial year 2019-20 would be Rs 5/-including the interim dividend of Rs 3 per equity share distributed in February 2020. TheFinal dividend if declared will be paid after the Meeting.
The dividend payout is in accordance with the Company's Dividend Distribution Policywhich 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 ofthe Company.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report for the year under review as stipulated underSEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 (ListingRegulations) 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 Section186 of the Act are given in the notes to the Financial Statements.
The Company has neither accepted nor renewed any fixed deposits during the year. Thereare no outstanding or unclaimed deposits unclaimed / unpaid interest refunds due to thedeposit holders or to be deposited to the Investor Education and Protection Fund as onMarch 31 2020.
EMPLOYEES STOCK OPTION SCHEME
With the perspective of promoting the culture of employee ownership and to attractretain motivate and incentive senior as well as critical talent the Company hasformulated Reliance Nippon Life Asset Management Limited - Employee Stock OptionPlan 2017' ("ESOP 2017" / "Plan") as its stock option scheme whichwas launched in August 2017 and Reliance Nippon Life Asset Management Limited -Employee Stock Option Plan 2019' ("ESOP 2019" / "Plan") as its stockoption scheme which was launched in July 2019. The Nomination and Remuneration Committeeof the Board monitors these Plans and grants ESOPs to the employees.
ESOP 2017 and ESOP 2019 are in compliance with the Securities and Exchange Board ofIndia (Share Based Employee Benefits) Regulations 2014 (SEBI Regulations). Howeverhaving regard to the provisions of first proviso to Section 136(1) of the Act the AnnualReport excluding the aforesaid information is being sent to all the members of the Companyand others entitled thereto. The certificate from the Statutory Auditors of the Companyconfirming the compliance of the Securities and Exchange Board of India (Share BasedEmployee Benefits) Regulations 2014 with respect to the Company's Employees Stock OptionScheme Plans will be available for inspection through electronic mode. Any memberinterested in obtaining the same may write to the Company Secretary and the same will befurnished on request. The details as required to be disclosed under SEBI Regulations areput on the Company's website athttps://www.nipponindiamf.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 varioussegments within the organization. Your Company thrives towards a culture of TotalCompliance' and it has a Zero Tolerance' policy for non-compliances.
Your Company has a comprehensive Risk Management Policy that envisages a structured andconsistent enterprise-wide risk management framework based on The Three Line of Defensemodel to ensure that risk management processes are consistently applied across theorganization and provide reasonable assurance regarding achievement of organization'sobjectives. The risk management policy clearly sets out the objectives & elements ofrisk management within the organization including the constitution of Risk Managementdepartment headed by Chief Risk Officer (reporting directly to the CEO and to the Board ofDirectors) Risk Management Committee (RMC) and the underlying mechanisms & processesto be used for identification analysis evaluation control monitoring and reporting ofvarious categories of risks including business credit market liquidity and operationalrisks. Your Company promotes risk awareness culture throughout the organization and riskmanagement is an integral part of decision making and day-to-day operations of allactivities at all levels across the organization. There are well documented & Boardapproved policies & processes which are in place. In addition proper & adequateInsurance Policies and business continuity planning have also been adequately put intoplace.
You will note that the basic revenue model of an asset management company is chargingof management fees on assets under management provided by the investors. In case of aneventuality where the Company repeatedly fails to comply with regulatory norms with regardto investment restrictions and/ or code of conduct or if there are repeated & glaringinstances of fraud/ front-running then the same may be a catastrophic risk for theenterprise. However your Directors would like to assure you that such risks are beingmitigated by putting into place robust & time-tested policies & processesqualified & professional manpower to run these processes under the aegis &guidance of your Board of Directors Board Committees and various other internalcommittees comprising of senior employees of your Company.
INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY
The Company has an Internal Control System which is commensurate with the size scaleand complexity of its business operations.
To maintain its objectivity and independence the Internal Auditor reports to the AuditCommittee. The Internal Auditor monitors and evaluates the efficacy and adequacy of theinternal control system in the Company its compliance with operating systems accountingprocedures and policies. Based on the report of the Internal Auditor process ownersundertake corrective action in their respective areas and thereby strengthen the controls.The Risk Management department follows up on pending audit issues and ensures thatcorrective actions have been taken. Significant audit observations if any and correctiveactions thereon are presented to the Audit Committee of the Board.
Your Directors wish to reiterate your Company's commitment to the highest standards ofcorporate governance in order to enhance the trust of all its stakeholders. Strong androbust corporate governance practices have facilitated your Company in standing up to thecontinued scrutiny of domestic & international investors and that of variousRegulatory authorities.
The report on Corporate Governance as stipulated under Regulation 34(3) read with ParaC of Schedule V of the Listing Regulations is presented in separate section forming partof this Annual Report.
A Certificate from the auditors of the Company i.e. M/s. S. R. Batliboi & Co. LLPChartered Accountants conforming compliance to the conditions of Corporate Governance asstipulated under Para E of Schedule V of the Listing Regulations is enclosed to thisReport.
In accordance with Section 177 of the Act and the Listing Regulations the Company hasformulated a Vigil Mechanism to address the genuine concerns if any. The policy can beaccessed on the Company's website.
CORPORATE SOCIAL RESPONSIBILITY
As part of its initiatives under "Corporate Social Responsibility (CSR)" theCompany has undertaken projects in the areas of promoting healthcare education and ruraldevelopment 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 2020 your Company had three (3) subsidiaries. Two of such subsidiariesare 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 relatedactivities. In addition the Company also has an Associate company in India which duringthe year has already surrendered its business license/ regulatory approval to act as aPension Fund Manager. This particular company currently has no business operations and itis therefore proposed to wind it up in accordance with the applicable laws.
Statement w.r.t. the performance and the financial position of the subsidiaries of theCompany is forming a part of the Consolidated Financial Statements of the Company.
The performance of financial position of the subsidiary companies is presented in theManagement Discussions and Analysis Report forming part of this Annual Report. The policyfor determining material subsidiary companies may be accessed on the Company's website athttps:// www.nipponindiamf.com/InvestorServices/Pages/Investor-Policies.aspx
KEY MANAGERIAL PERSONNEL
During the year under review the following officials/ employees were the KeyManagerial 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. Jai Anmol Ambani [Nominee Director of Reliance Capital Limited(RCL')] resigned from the directorship w.e.f. May 23 2019. Also during the yearMr. Kanu H. Doshi and Mr. S. C. Tripathi Independent Directors ceased to be Directorsw.e.f. September 23 2019.
Mr. Mahadevan Veeramony was appointed as an Independent Director of the Company onSeptember 23 2019.
All the Independent Directors of your Company i.e. General Ved Prakash Malik (Retd.)Ms. Ameeta Chatterjee and Mr. Mahadevan Veeramony have already furnished the requireddeclarations 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 expertiseand experience and are persons of high integrity and repute. They fulfil the conditionsspecified in the Companies Act 2013 and the Rules made there under and are independent ofthe management.
PERFORMANCE EVALUATION OF DIRECTORS BOARD AND COMMITTEES
The Company has devised a policy for the performance evaluation of the individualdirectors Board and its Committees which also includes the criteria for carrying out thesaid 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 hascarried out an annual performance evaluation of (i) the Directors (Independent andNon-independent); (ii) itself (as a whole); (iii) its committees and (iv) fulfillment ofIndependence criteria. The Board performance was evaluated based on inputs received fromthe Board members after considering criteria such as Board composition and structureeffectiveness 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 Directorswas also held during the year.
BOARD AND COMMITTEE MEETINGS
During the year under review ten (10) Board meetings and One (1) meeting of theCommittee of Directors were held.
Your Directors wish to inform that the functioning of the Board is supplemented byvarious committees (Board subcommittees and management committees) which have beenconstituted from time to time such as Audit Committee Committee of Directors CSRCommittee Stakeholders Relationship Committee Nomination & Remuneration CommitteeRisk Management Committee of the Board Valuation Committee Investment Committee RiskManagement Committee Allotment Committee Broker Empanelment Committee OperatingCommittee Compliance Committee Proxy Voting Committee Information Security RiskManagement Committee etc. to name a few. Each of the aforesaid Committees has beenconstituted in order to ensure due compliance with the applicable laws and to ensure thathighest levels of corporate governance are followed and practiced. The minutes of themeetings of each of these Committees are duly placed before the Board for noting andconfirmation.
In terms of the requirements of Section 177 of the Act the Audit Committee of theCompany consists of majority of Independent Directors. As on date of this report itcomprises of Ms. Ameeta Chatterjee [Independent Director] General Ved Prakash Malik(Retd.) [Independent Director] Mr. Mahadevan Veeramony [Independent Director] and Mr.Akira Shibata [Non- Independent Director]. Ms. Ameeta Chatterjee is the Chairperson ofthis Committee.
During the year Six (6) meetings of the Audit Committee were held. Other relevantdetails 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 ondate of this report it comprises Ms. Ameeta Chatterjee [Independent Director] GeneralVed Prakash Malik (Retd.) [Independent Director] Mr. Mahadevan Veeramony [IndependentDirector] and Mr. Minoru Kimura [Director]. General Ved Prakash Malik (Retd.) is theChairman of this Committee.
During the year Four (4) meetings of the Nomination & Remuneration Committee wereheld. Other relevant details in this regard have been provided in the Corporate GovernanceReport.
The Nomination & Remuneration Policy has been provided as Annexure B to the Board'sReport.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
In terms of the requirements of Section 135 of the Act the Corporate SocialResponsibility ("CSR") Committee of the Company consists of six members. As ondate of this report it comprises of Mr. Minoru Kimura [Non-Independent Director] Ms.Ameeta Chatterjee [Independent Director] General Ved Prakash Malik (Retd.) [IndependentDirector] Mr. Mahadevan Veeramony [Independent Director] Mr. Sundeep Sikka [CEO &Executive Director] and Mr. Akira Shibata [Non-Independent Director]. Mr. Minoru Kimuraacts as the Chairman of this Committee.
During the year 2019-20 two (2) meetings of the CSR Committee were held. Otherrelevant 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' RelationshipCommittee of the Company consists of four members. As on date of this report it comprisesof Ms. Ameeta Chatterjee [Independent Director] Mr. Mahadevan Veeramony [IndependentDirector] Mr. Minoru Kimura [Director] and Mr. Sundeep Sikka [CEO & ExecutiveDirector]. Ms. Ameeta Chatterjee acts as the Chairperson of this Committee.
During the year two (2) meetings of the Stakeholders' Relationship Committee wereheld. Other relevant details in this regard have been provided in the Corporate GovernanceReport.
RISK MANAGEMENT COMMITTEE
In terms of the relevant requirements under the Listing Regulations the Company hasconstituted a Risk Management Committee of the Board. The Committee presently comprises ofMr. Minoru Kimura as the Chairperson Mr. Akira Shibata Mr. Sundeep Sikka Mr. MahadevanVeeramony and Mr. Milind Nesarikar as its members. During the year Mr. Kanu H. Doshi whowas also a member of this Committee ceased to remain as such after he ceased to beDirector of the Company effective September 23 2019.
During the year One (1) meeting of the Risk Management Committee of the Board washeld. Other relevant details in this regard have been provided in the Corporate GovernanceReport.
AUDITORS' OF THE COMPANY - STATUTORY AND INTERNAL
M/s. S. R. Batliboi & Co. LLP Chartered Accountants shall hold office as StatutoryAuditors of the Company until the conclusion of the 28th Annual General Meeting.
JHS & Associates LLP Chartered Accountants were appointed as the InternalAuditors' of your Company for the financial year 2019-20. Your Directors have alsoapproved their reappointment as such for the financial year 2020-21.
AUDITORS OF THE SCHEMES OF NIPPON INDIA MUTUAL FUND (FORMERLY KNOWN AS RELIANCE MUTUALFUND)- STATUTORY AND INTERNAL
In accordance with the applicable provisions of law the Company has appointedStatutory and Internal Auditors for various Schemes of Nippon India Mutual Fund whoperiodically submit their reports which are placed before the Audit Committee fordiscussion review and implementation of their recommendations.
M/s. Walker Chandiok & Co. LLP Chartered Accountants were appointed as StatutoryAuditors of the Schemes of Nippon India Mutual Fund for the financial year 2019-20.
During the year M/s. Deloitte Haskins & Sells LLP Chartered Accountants wereappointed as Internal Auditors of the Scheme of Nippon India Mutual Fund and the portfoliomanagement services division of the Company for the financial year 2019-20. YourDirectors have also approved their re-appointment as such for the financial year 2020-21.
The observations and comments given by the Statutory Auditors in their report readtogether with notes on financial statements are self-explanatory and hence does notrequire any further comments in terms of Section 134 of the Act.
During the year under review the Company has complied with the applicable SecretarialStandards 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 andRemuneration 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 theSecretarial Audit of the Company for the financial year 2019-20. In this regard theReport submitted by the Secretarial Auditor is annexed as Annexure C.
Your Directors are pleased to inform that the report from the Secretarial Auditors doesnot 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 annexedherewith as Annexure D. The same is available onhttps://www.nipponindiamf.com/investor-service/ customer-service /nam-india -shareholders-investors
PARTICULARS REGARDING CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS AND OUTGO CONSERVATION OF ENERGY:
The operations of the Company do not consume high levels of energy. Adequate measureshave been taken to conserve energy wherever feasible. Your Company uses latest technologyand energy efficient equipment's. As energy cost forms a very small part of the totalcosts the impact on cost is not material.
TECHNOLOGY ABSORPTION ADAPTATION AND INNOVATION:
Game changing initiatives:
Conversational Commerce: A first of its kind initiative across financialservices in APAC which has been co-created with Google. This Machine Learning poweredinnovation that facilitates voice-based financial transactions has brought many awardsand accolades for the organisation. The Simply Save app which hosts the ConversationalCommerce interface has seen 1 Lac+ new downloads in the year and one conversation invokedevery 7 minutes!
Business Easy 2.0 app: Our Artificial Intelligence enabled virtualoffice' for IFAs helps in driving business enablement via Digital technology. It is thecornerstone of our Digital penetration strategy in Real Bharat and gives us strengtheneddistribution footprint without physical presence. The app empowers IFAs to remotelyonboard and service customers and help them transact electronically in a completelypaperless manner.
All New Invest-easy Online Purchase Web & Mobile site: Anotherindustry first asset which gives our investors best-in-class frictionless and self-serveexperience. The asset is built with mobile first philosophy which gives investors thepower of anytime anywhere investing. New age design & e-commerce like experience helpin quick discovery and faster decisions and optimized journeys for onboarding andtransaction with enhanced re-marketing facilitate auto win-backs. The asset has alreadyhelped drive 2x efficiencies in purchases.
New Payment Infrastructure Integration: A multi-payment gateway modulewith two payment gateways Razorpay & Billdesk along with multiple payment optionsincluding UPI and direct and indirect integrations for an efficient and robust paymentprocess. This has reduced our single vendor dependency & also brought in contemporarymethodology like Smart Routing and Payment Retry options to reduce payment failures.
Strategic Alliances to fortify our Digital Distribution: Exclusive newpartners like Mobikwik Avail Finance Tarrakki and more Digital Distribution brought into further bolster our executional leadership and expansive reach and presence especiallyin the B-30 segment. Taking our engagement and relationships with all our key DistributionPartners like Paytm ETMoney Groww Kuvera etc. to the next level and building greatersalience of the NIMF brand we have launched many exclusive solutions and undertakenco-branded awareness and education campaigns for driving investor preference andstickiness.
Key Results of 2018-2019:
Digital Business touched a record 1.4+ million purchase transactions for FY2019-20 which is essentially 3 purchases every minute! This increase is a ~30 % YOYgrowth.
Contribution of Digital Business to overall NIMF business stands at 42% whichis a 50% growth over last FY where Digital contribution was at 28%.
Digital Business share in lumpsum and SIP purchase transactions stands at 46%and 35% respectively vis-a-vis total purchase transactions. The same metric stood at 31%and 21% in FY 2018-19.
28% of investors transacting with us through digital channels were newcustomers.
Digital contributed to more than 45% of new investor acquisition month on month.
Conversational Commerce interface (hosted on theSimply Save App) has seen 1 Lac+new downloads in the year and one conversation invoked every 7 minutes.
Awards & Accolades:
Our path breaking innovations won the following awards this year: ET BFSIExcellence Awards 2019 - Best Customer Engagement of the Year for Conversational Commerce.
Featured as a global case study in the Google Cloud Summit as a prominentpartner on its Conversational Commerce.
BFSI Smart Tech Leadership Awards - Best Use of Emerging or InnovativeTechnology for Conversational Commerce.
BFSI Smart Tech Leadership Awards - Outstanding use of AI & Robotics inFinancial Services for Business Easy 2.0.
Indian Digital Media Awards 2019 - Best Customer Engagement of the Year forConversational Commerce.
Kamikaze B2B Media - Best Payment technology initiative of the Year forConversational Commerce.
RESEARCH AND DEVELOPMENT:
DIGITAL ADOPTION AND INNOVATION:
From Digital Leadership to Digital Supremacy: Nippon India Mutual Fund embodies aDigital-first mindset and over the years we have clearly established ourselves as aDigital leader not just in Mutual Funds but in the entire financial services space.
From being a Digital leader we are now metamorphosing into a Digitechincubator. Our goal is to drive class-leading Digital innovation to create competitiveadvantage and disrupt the investments space with solutions that keep today's Digitalsavvy millennial consumers at heart. We relentlessly pursue new ideas today so that wecontinue to set benchmarks tomorrow.
Our mature Digital framework catering to various segments and business lineshas not only helped us achieve robust and steady growth but also helped us drive many newage industry-first and pioneering solutions for our investors and partners.
FOREIGN EXCHANGE EARNINGS AND OUTGO:
During the year under review the Company earned foreign exchange equivalent to Rs28.97 Cr (Previous Year: Rs 26.86 Cr). The Company spent foreign exchange equivalent to Rs7.24 Cr (Previous Year: Rs 7.28 Cr).
DIRECTORS' RESPONSIBILITY STATEMENT
As per the requirements of Sub Section (5) of Section 134 of the Act the Directorsconfirm that -
(i) In the preparation of the annual accounts for the financial year ended March 312020 the applicable accounting standards have been followed and that there are nomaterial departures;
(ii) The Directors have selected such accounting policies in consultation with theStatutory Auditors' and have applied them consistently and made judgments and estimatesthat were reasonable and prudent so as to give a true and fair view of the state ofaffairs of the Company as at March 31 2020 and of the profit of the Company for the yearunder review;
(iii) The Directors have taken proper and sufficient care to the best of theirknowledge and ability for the maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities.
(iv) The Directors have prepared the annual accounts of the Company on a goingconcern' basis.
(v) The Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operating
(vi) The Directors have devised proper systems to ensure compliance with the provisionsof 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 thefinancial year under review with related parties were on an arm's length basis and in theordinary course of business. There were no materially significant related partytransactions which could have potential conflict with interest of the Company at large.During the year the Company had not entered into any contract / arrangement / transactionwith related parties which could be considered material in accordance with the policy ofthe 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 wereof a repetitive nature. The transactions entered into pursuant to the omnibus approval sogranted were reviewed and statements giving details of all related party transactions wereplaced before the Audit Committee and the Board of Directors for their review on aquarterly basis. The policy on Related Party Transactions as approved by the Board isuploaded on the Company's website at the following link:
https://www.nipponindiamf.com/InvestorServices/Pages/ Investor-Policies. aspx
Your Directors draw attention of the members to Note No.  to the financialstatement 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 CharteredAccountants the Statutory Auditors of the Company have not reported any instance of fraudhaving 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 wouldimpact 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 astatement showing the names and other particulars of the employees drawing remuneration inexcess of the limits set out in the said Rules are provided in the Annexure to the Board'sReport. Disclosures relating to the remuneration and other details as required underSection 197(12) of the Act read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 as amended also forms part of thisReport. However having regard to the provisions of Section 136 of the Act the AnnualReport excluding the aforesaid information is being sent to all the members of the Companyand others entitled thereto. Any member interested in obtaining the said information maywrite 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 therequirements of The Sexual Harassment of Women at the Workplace (Prevention Prohibition& Redressal) Act 2013. An Internal Complaints Committee (ICC) has been set up toredress complaints received regarding sexual harassment. All employees (permanentcontractual temporary trainees) are covered under this Policy. Following is a summary ofsexual harassment complaints received and disposed off during the year:
No. of complaints received: 3
No. of complaints disposed of: 3
BUSINESS RESPONSIBILITY REPORT
Business Responsibility Report for the year under review as stipulated under ListingRegulations 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-operationreceived from various regulatory and governmental authorities including SEBI RBIRegistrar of Companies Maharashtra at Mumbai PFRDA NPS Trust EPFO CMPFO StockExchanges Depositories Custodians Bankers Shareholders Investors and all otherbusiness constituents during the year under review. We believe all of them havecontributed to our continued growth.
Your Directors also wish to place on record their deep appreciation for the totalcommitment displayed by all the executives officers and staff resulting in yet anothereventful performance for the year.