Nippon Life India Asset Management Ltd.
|BSE: 540767||Sector: Financials|
|NSE: NAM-INDIA||ISIN Code: INE298J01013|
|BSE 00:00 | 06 Dec||363.15||
|NSE 00:00 | 06 Dec||363.20||
|Mkt Cap.(Rs cr)||22,576|
|Mkt Cap.(Rs cr)||22575.95|
Nippon Life India Asset Management Ltd. (NAM-INDIA) - Director Report
Company director report
Your Directors take pleasure in presenting their 26th Annual Report onthe business and operations of your Company together with the audited financialstatements for the year ended March 312021.
Your Company endeavors to remain one of the leading players in theAsset 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 lifeinsurers in the world managing assets of over USD 700 bn. NLI has a large global networkwith presence across US Europe Asia and Australia along with a 130-year track record inLife Insurance business as well as global investments across Asset Management companies.This pedigree brings strong synergistic benefits that very well complements your Company'sdomestic expertise in Asset Management business and provides a thrust to its significantgrowth potential. Your Company expects substantial upside in terms of increased AUM &adoption of best governance & risk management practices based on NLI's globalpositioning & relationships.
Your Company acts as the Asset Management Company of Nippon IndiaMutual Fund and it happens to be the largest foreign owned Asset Management Company inIndia.
FINANCIAL PERFORMANCE AND STATE OF COMPANY'S AFFAIRS
The standalone and consolidated financial statements of the Company forthe financial year ended March 31 2021 have been prepared in accordance with the IndianAccounting Standards (Ind AS) notified under Section 133 of the Companies Act 2013 (theAct) [Companies (Indian Accounting Standards) Rules 2015] and other relevant provisionsof the Act. The financial highlights (on a consolidated and standalone basis) of theCompany for the year ended March 31 2021 are as follows:
The Consolidated Financial Statements of the Company are forming partof this Annual Report. The annual accounts of all the subsidiary companies will be placedon the website of the Company.
DETAILS OF MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIALPOSITION OF THE COMPANY
There are no material changes and commitments affecting the financialposition of the Company since the date of the financial statements i.e. March 31 2021.
During the year the Company had declared and paid an interim dividendof Rs. 3 per equity share (30%) amounting to Rs. 183.90 Crore. The Board has alsorecommended a final dividend of Rs. 5/- per Equity Share (50%) of Rs. 10/- each for thefinancial year ended March 31 2021 for the approval of the Shareholders at the ensuingAnnual General meeting. With this the total dividend for the financial year 2020-21 wouldbe approximately Rs. 492.16 crores including the interim dividend of Rs. 3 per equityshare distributed in February 2021. The Final dividend if declared will be paid afterthe Annual General Meeting.
The dividend payout is in accordance with the Company's DividendDistribution 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 theGeneral Reserves of the Company.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report for the year under review asstipulated under SEBI (Listing Obligations & Disclosure Requirements) Regulations2015 (Listing Regulations) is presented in a separate section forming part of this AnnualReport.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENT
Details of Loans Guarantees and Investments covered under theprovisions of Section 186 of the Act are given in the notes to the Financial Statements.
The Company has neither accepted nor renewed any fixed deposits duringthe year. There are no outstanding or unclaimed deposits unclaimed / unpaid interestrefunds due to the deposit holders or to be deposited to the Investor Education andProtection Fund as on March 31 2021.
EMPLOYEES STOCK OPTION SCHEME
With the perspective of promoting the culture of employee ownership andto attract retain motivate and incentivize senior as well as critical talent theCompany has formulated 'Reliance Nippon Life Asset Management Limited - Employee StockOption Plan 2017' ("ESOP 2017" / "Plan") as its stock option schemewhich was launched in August 2017 and 'Reliance Nippon Life Asset Management Limited -Employee
Stock Option Plan 2019' ("ESOP 2019" / "Plan") asits stock option scheme which was launched in July 2019. The Nomination and RemunerationCommittee of the Board monitors and administers these Plans and from time to time grantsstock options to the employees.
Both ESOP 2017 as well as ESOP 2019 are in compliance with theSecurities and Exchange Board of India (Share Based Employee Benefits) Regulations 2014(SEBI Regulations).
However having regard to the provisions of first proviso to Section136(1) of the Act the Annual Report excluding the aforesaid information is being sent toall the members of the Company and others entitled thereto. The certificate from theStatutory Auditors of the Company confirming the compliance of the Securities and ExchangeBoard of India (Share Based Employee Benefits) Regulations 2014 with respect to theCompany's Employees Stock Option Scheme Plans will be available for inspection throughelectronic mode. Any member interested in obtaining the same may write to the CompanySecretary and the same will be furnished on request. The details as required to bedisclosed under SEBI Regulations are put on the Company's website athttps://mf.nipponindiaim.com/investor-service/customer-service/nam-india-shareholders-investors
COMPLIANCE CULTURE & RISK MANAGEMENT
Your Company is essentially Compliance centric and has a huge focus inthis direction. The Compliance function is manned by a dedicated and experienced team ofprofessionals. The Compliance team regularly conducts various educative training programsfor 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 existsa comprehensive Compliance Manual which is reviewed by your Board of Directors from timeto time and it facilitates Company's Compliance team to monitor various compliancerequirements effectively & comprehensively. Your Board of Directors have alsoconstituted a Compliance Committee which is chaired by the CEO & Executive Directorof the Company and which has the Compliance Officer and other senior & relevantfunctionaries as its members. This committee meets at least once in a quarter to discussand deliberate issues pertaining to compliance and other regulatory developments.
Your Company also has a comprehensive Risk Management Policy thatenvisages a structured and consistent enterprise-wide risk management framework based onThe Three Line of Defense model to ensure that risk management processes are consistentlyapplied across the organization and provide reasonable assurance regarding achievement oforganization's objectives. The risk management policy clearly sets out the objectives& elements of risk management within the organization including the constitution ofRisk Management department headed by Chief Risk Officer (reporting directly to the CEO andto the Board of Directors) Risk Management Committee (RMC) and the underlying mechanisms& processes to be used for identification
analysis evaluation control monitoring and reporting of variouscategories of risks including business credit market liquidity and operational risks.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 managementcompany is charging of management fees on assets under management provided by theinvestors. In case of an eventuality where the Company repeatedly fails to comply withregulatory norms with regard to investment restrictions and/ or code of conduct or ifthere are repeated & glaring instances of fraud/ front-running then the same may be acatastrophic risk for the enterprise. However your Directors would like to assure youthat such risks are being mitigated by putting into place robust & time-testedpolicies & processes qualified & professional manpower to run these processesunder the aegis & guidance of your Board of Directors Board Committees and variousother internal committees comprising of senior employees of your Company.
INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY
The Company has an Internal Control System which is commensurate withthe size scale and complexity of its business operations.
To maintain its objectivity and independence the Internal Auditorreports to the Audit Committee. The Internal Auditor monitors and evaluates the efficacyand adequacy of the internal control system in the Company its compliance with operatingsystems accounting procedures and policies. Based on the report of the Internal Auditorprocess owners undertake corrective action in their respective areas and therebystrengthen the controls. The Risk Management department follows up on pending audit issuesand ensures that corrective actions have been taken. Significant audit observations ifany and corrective actions thereon are presented to the Audit Committee of the Board
Your Directors wish to reiterate your Company's commitment to thehighest standards of corporate governance in order to enhance trust of all itsstakeholders. Strong & robust corporate governance practices have facilitated yourCompany in standing up to the continued scrutiny of domestic & international investorsand 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 sectionforming 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 complianceto the conditions of Corporate Governance as stipulated under Para E of Schedule V of theListing Regulations is enclosed to this Report.
In accordance with Section 177 of the Act and the Listing Regulationsthe Company has formulated a Vigil Mechanism to address the genuine concerns if any. Thepolicy 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 healthcareeducation 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 312021 your Company had three (3) subsidiaries. Two ofsuch subsidiaries are overseas being one each in Singapore and Mauritius and onesubsidiary is in India. All the subsidiaries of the Company are engaged in financialservices and related activities. In addition the Company also has an Associate company inIndia which 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.
A statement w.r.t. the performance and the financial position of thesubsidiaries of the Company is forming a part of the Consolidated Financial Statements ofthe Company.
The performance of financial position of the subsidiary companies ispresented in the Management Discussions and Analysis Report forming part of this AnnualReport. The policy for determining material subsidiary companies may be accessed on theCompany's website at https://mf.nipponindiaim. com/InvestorServices/Pages/Investor-Policies. aspx
KEY MANAGERIAL PERSONNEL
During the year under review the following employees were the 'KeyManagerial Personnel' of the Company:
a) Mr. Sundeep Sikka - Executive Director & Chief ExecutiveOfficer;
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 re-appointed as theExecutive Director & CEO of the Company for a term of 5 years commencing from April22 2021.
During the year Mr. Minoru Kimura [Nominee Director of NLI] resignedfrom the directorship w.e.f. June 8 2020 and Mr. Mahadevan Veeramony IndependentDirector resigned w.e.f. August 12020.
During the year Mr. Ashvin Parekh and Mr. B. Sriram were appointed asIndependent Directors of the Company on August 1 2020 and March 15 2021 respectively.Also during the year Mr. Kazuyuki Saigo and Mr. Yutaka Ideguchi Nominees of NLI wereappointed as Directors of the Company on June 8 2020 and March 15 2021 respectively.
General Ved Prakash Malik (Retd.) has been re-appointed as theNon-executive Independent Director of the Company for a second term of upto 5 yearscommencing from April 22 2021 till April 21 2026.
Mr. Sundeep Sikka has been re-appointed as the Executive Director &CEO of the Company for a further term of 5 years effective from April 22 2021.
All the Independent Directors of your Company i.e. General Ved PrakashMalik (Retd.) Ms. Ameeta Chatterjee Mr. Ashvin Parekh and Mr. B. Sriram have alreadyfurnished the required declarations that they meet the criteria of independence as laiddown under Section 149(6) of the Act.
In the opinion of the Board the Independent Directors possess therequisite expertise and experience and are persons of high integrity and repute. Theyfulfil the conditions specified in the Act and the Rules made thereunder and areindependent 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 theCompany have confirmed that they have registered themselves with the databank maintainedby The Indian Institute of Corporate Affairs Manesar ('IICA'). The Independent Directorsare also required to undertake online proficiency self-assessment test conducted by theIICA within a period of Two years from the date of inclusion of their names in the databank unless they meet the criteria specified for exemption. All the Independent Directorsof the Company are exempt from the requirement to undertake online proficiency selfassessment test.
PERFORMANCE EVALUATION OF DIRECTORS BOARD AND COMMITTEES
The Company has devised a policy for the performance evaluation of theindividual directors Board and its Committees which also includes the criteria forcarrying out the said performance evaluation. Pursuant to the provisions of the Act andRegulation 17(10) of Listing Regulations and as prescribed in the stated policy of theBoard 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 afterconsidering criteria such as Board composition and structure effectiveness of Board /Committee processes and information provided to the Board etc. In terms of therequirements of the Act a separate meeting of the Independent Directors was also heldduring 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 issupplemented by various committees (Board sub-committees and management committees) whichhave been constituted from time to time such as Audit Committee Committee of DirectorsCSR Committee Stakeholders Relationship Committee Nomination & RemunerationCommittee Risk Management Committee of the Board Valuation Committee InvestmentCommittee Risk Management Committee Allotment Committee Broker Empanelment CommitteeOperating Committee Compliance Committee Stewardship Committee Proxy Voting CommitteeInformation Security Risk Management Committee etc. to name a few. Each of the aforesaidCommittees has been constituted in order to ensure due compliance with the applicable lawsand to ensure that highest levels of corporate governance are followed and practiced. Theminutes of the meetings of each of these Committees are duly placed before the Board fornoting and confirmation.
In terms of the requirements of Section 177 of the Act the AuditCommittee of the Company consists of majority of Independent Directors. As on date of thisreport it comprises Mr. Ashvin Parekh [Independent Director] Ms. Ameeta Chatterjee[Independent Director] General Ved Prakash Malik (Retd.) [Independent Director] Mr. B.Sriram [Independent Director] and Mr. Akira Shibata and Mr. Yutaka Ideguchi[Non-Independent Directors]. Mr. Ashvin Parekh acts as the Chairperson of this Committee.
During the year five (5) meetings of the Audit Committee were held.Other relevant details in this regard have been provided in the Corporate GovernanceReport.
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 Ms. Ameeta Chatterjee [Independent Director]General Ved Prakash Malik (Retd.) [Independent Director] Mr. Ashvin Parekh [IndependentDirector] Mr. B. Sriram [Independent Director] Mr. Yutaka Ideguchi [Non-IndependentDirector] and Mr. Kazuyuki Saigo [Non-Independent Director]. General Ved Prakash Malik(Retd.) acts as the Chairman of this Committee.
During the year three (3) meetings of the Nomination &Remuneration Committee were held. Other relevant details in this regard have been providedin the Corporate Governance Report.
The Nomination & Remuneration Policy has been provided as AnnexureB to the Board's Report.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
In terms of the requirements of Section 135 of the Act the CorporateSocial Responsibility ("CSR") Committee of the Company consists of eightmembers. As on date of this report it comprises Mr. Kazuyuki Saigo [Non-IndependentDirector] 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. Yutaka Ideguchi [Non-Independent Director]. Mr.Kazuyuki Saigo acts as the Chairman of this Committee.
During the year 2020-21 two (2) meetings of the CSR Committee wereheld. Other relevant details in this regard have been provided in the Corporate GovernanceReport.
STAKEHOLDERS' RELATIONSHIP COMMITTEE
In terms of the requirements of Section 178 of the Act theStakeholders' Relationship Committee of the Company consists of five members. As on dateof this report it comprises Ms. Ameeta Chatterjee [Independent Director] Mr. AshvinParekh [Independent Director] Mr. B. Sriram [Independent Director] Mr. Kazuyuki Saigo[Non-Independent Director] and Mr. Sundeep Sikka [CEO & Executive Director]. Ms.Ameeta Chatterjee acts as the Chairperson of this Committee.
RISK MANAGEMENT COMMITTEE
In terms of the relevant requirements under the Listing Regulationsthe Company has constituted a Risk Management Committee of the Board. The Committeepresently comprises of Mr. Kazuyuki Saigo [Non-Independent Director] as the ChairpersonMr. Akira Shibata [Non-Independent Director] Mr. Sundeep Sikka [CEO & ExecutiveDirector] Mr. Ashvin Parekh [Independent Director] Mr. B. Sriram [Independent Director]and Mr. Milind Nesarikar [Chief Risk Officer] as its members. During the year Mr.Mahadevan Veeramony and Mr. Minoru Kimura who were also members of this Committee ceasedto remain as such after they ceased to be Directors of the Company effective August 12020 and June 8 2020 respectively.
During the year one (1) meeting of the Risk Management Committee ofthe Board was held. Other relevant details in this regard have been provided in theCorporate Governance Report.
AUDITORS' OF THE COMPANY - STATUTORY AND INTERNAL
M/s. S. R. Batliboi & Co. LLP Chartered Accountants shall holdoffice as Statutory Auditors of the Company until the conclusion of the 28th AnnualGeneral Meeting.
JHS & Associates LLP Chartered Accountants were appointed as theInternal Auditors' of your Company for the financial year 2020-21. Your Directors havealso approved their reappointment as such for the financial Year 2021-22
AUDITORS OF THE SCHEMES OF NIPPON INDIA MUTUAL FUND (FORMERLY KNOWN ASRELIANCE MUTUAL FUND)- STATUTORY AND INTERNAL
In accordance with the applicable provisions of law the Company hasappointed Statutory and Internal Auditors for various Schemes of Nippon India Mutual Fundwho periodically 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 wereappointed as Statutory Auditors of the Schemes of Nippon India Mutual Fund for thefinancial year 2020-21.
During the year M/s. Deloitte Haskins & Sells LLP CharteredAccountants were appointed as Internal Auditors of the Scheme of Nippon India Mutual Fundand the portfolio management services division of the Company for the financial year2020-21. Your Directors have also approved their re-appointment as such for the financialYear 2021-22.
The observations and comments given by the Statutory Auditors in theirreport read together with notes on financial statements are self-explanatory and hencedoes not require any further comments in terms of Section 134 of the Act.
During the year under review the Company has complied with theapplicable 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 hadappointed M/s. M. Siroya and Company Mumbai a firm of Company Secretaries in-practice toundertake the Secretarial Audit of the Company for the financial year 2020-21. In thisregard the Report submitted by the Secretarial Auditor is annexed as Annexure C.
Your Directors are pleased to inform that the report from theSecretarial Auditors does not contain any qualifications or negative remarks.
Pursuant to Section 134(3)(a) and Section 92(3) of the Act read withRule 12(1) of the Companies (Management andAdministration)Rules2014theAnnualReturnoftheCompanyhas been placed on the website of theCompany and can be accessed athttps://mf.nipponindiaim.com/AboutUs/FinancialReports/Pages/ Annual-Return.aspx
PARTICULARS REGARDING CONSERVATION OF ENERGY TECHNOLOGY ABSORPTIONFOREIGN 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 useslatest technology and energy efficient equipment's. Your Company only uses LED lights and5 start air-conditioning for majority of offices. As energy cost forms a very small partof the total costs the impact on cost is not material.
TECHNOLOGY ABSORPTION ADAPTATION AND INNOVATION:
> Game changing initiatives:
New Digital Channel - WhatsApp: Pursuing the philosophy ofbuilding our Digital presence in line with the preference of our investors we extendedour Digital footprint to WhatsApp the largest social chat application. We have developedan innovative solution on WhatsApp for Business where our retail investors are providedwith the ease of initiating and completing Liquid Fund purchase transactions on WhatsAppitself without any re-directions. They can also check their KYC status and can exploreother digital platforms.
This move has helped us unlock broader opportunities for future and ourendeavor going forward is to provide wide-ranging transaction and servicing capabilitieswith best-in-class transaction experience to create an independent full-scale DigitalChannel for masses.
Corporate Solutions Suite: We have commissioned a full spectrumDigital asset for the Institutional Business segment. The new asset gives us thecapability to run Digital campaigns generate leads drive conversions as well asonboarding for online services transactions and servicing. The asset is built on aMobile-first approach with cross device compatibility and automated self-serve processesfor facilitating transition to digital transactions and online services.
Investor Segment expansion: We extended online purchase for anew investor segment - Hindu Undivided Family & Sole Proprietorship - to bring innewer business opportunities digitally and addressing the investment needs of a strongsegment which could have been left under-served due to restrictions of in-person investorengagement amidst COVID-19.
New Fund Offer : Digital Launches: The Nippon India Multi AssetFund was the first ever Digital NFO for the organisation and was enabled for investors& partners across all Digital assets. The NIFTY Small Cap 250 Index Fund and ETF NiftyCPSE Bond Plus SDL 2020 were the other NFOs to be launched during the COVID-19 pandemic.
System driven do it yourself (DIY) intelligent measures: Wehave created smart interventions on our platforms across various customer journeys withthe objective of creating business impact. Here is a quick overview:
Retention nudge - Switch to Liquid option at the time of Redemptionwhich guides investors to switch their investments into Liquid Fund instead of redeemingfrom Non-Liquid schemes.
SIP Pause Intervention: AUM retention initiative developed to counterAUM withdrawals in view of challenges due to COVID pandemic where Intelligent nudges guideinvestors to pause their SIP instead of cancelling it.
Smart Payment Retry: Automated Payment Retry option for investors whoencounter payment related errors or failures during online purchase. The feature isdesigned to prevent potential drop- offs during transactions thereby reducing businessleakage.
Conversational Commerce: This one of its kind initiatives in thefinancial services space in APAC has seen consistent growth and investor traction. Thevoice-based interface which has been cocreated with Google and which facilitatesfinancial transactions in our Liquid Fund has brought many awards and accolades for theorganisation. The Simply Save app which hosts the Conversational Commerce interface hasseen 1.5 Lac+ new downloads since launch and has one conversation invoked every 5 minutes!
Business Easy 2.0: Our industry first Business Easy 2.0 (B.E2.0) app is a full spectrum business enabling digital solutions suite that acts as acomplete Customer Relationship Management tool using which Mutual Fund Distributors (MFDs)can manage their business virtually. Devoid of in-person meetings due to country-widelockdown the B.E
2.0 app became the mainstay of business For MFDs. The app gave them acomplete dashboard view of their business with intelligent insights about their audienceand the relevant investment options. They used the app to run segmented campaigns (email& SMS) and reach out to investors with personalised transaction links withpre-embedded details that their customers had to merely authorise. They also handled theservice-related needs of investors with the fully integrated Services module. Moreoverthe Distributors could also onboard new investors using the completely paperless e-KYCmodule.
Strengthening our Digital Distribution through StrategicAlliances and Enhanced Support to Partners: We added another key partner in the form ofPhonePe to our network which already has key names like Paytm ETMoney Groww KuveraTarrakki etc. to bolster our executional leadership and expansive reach. With ourimmense expertise in the core business of Asset Management and prowess in DigitalBusiness we engaged with our Partners at an even deeper level and helped them navigatethrough the tough COVID-19 times. Our expertise and knowledge were shared with thePartners and their customers advocating investment best practices and providing guidanceon how to steer through volatile markets. Our Fund Managers and Investment Expertsconducted exclusive webinars for these Partner platforms with the intent of educating theinvestors and helping them take the right decisions. Also co-branded content on similarlines was created and disseminated to investors using these Partner platforms. We alsoextended ETFs to the bouquet of our offerings across Partner platforms. These measures notonly arrested attrition but also helped us to grow business volumes on such platformsthereby benefitting both us and the Partners.
> Key Results of 2020-2021:
Digital Business touched a record 1.7+ million purchasetransactions till FYTD February 2020-21 which is essentially 5 purchases every minute!This increase is a ~32 % YOY growth.
Contribution of Digital Business to overall NIMF business standsat 52% which is a growth of 22% over last FY where Digital contribution was at 43%.
Digital Business share in lumpsum and SIP purchase transactionsstands at 49% and 59% respectively vis-a-vis total purchase transactions. The same metricstood at 46% and 35% in FY 2019-20.
Long term assets focus resulted in 76% non-Liquid acquisitionscompared to 25% in FY2019-2020.
28% of investors transacting with us through digital channelswere new customers.
Conversational Commerce interface (hosted on the Simply SaveApp) has ~1.5 Lac new downloads since launch and has seen one conversation invoked every 5minutes.
> Awards & Accolades.:
Our pathbreaking innovations won the following awards this year:
Asia Asset Management Best of the Best Awards 2021 - FinTechInnovation.
IBS Intelligence Global FinTech Innovation Awards 2020 - MostImpactful Project in Digitization / Paperless Initiative for Online Purchase Web &M-site.
CII Center for Digital Transformation of Confederation of IndianIndustries DX Awards 2020 - Customer Experience for Conversational Commerce.
Internet and Mobile Association of India (IAMAI) India DigitalAwards 2020 (11th Edition); Technology Solutions - Best use of Bots (Chat & Voice)for Conversational Commerce.
Kamikaze B2B Media Payments & Cards Awards 2020 - BestContactless Innovation of the Year and Best Contactless Payments Project of the Year forConversational Commerce.
CII Center for Digital Transformation of Confederation of IndianIndustries DX Awards 2020 - Service Distribution Excellence for Business Easy 2.0.
Adobe Campaign India Champion Award 2021 - 2nd Runner Up.
BFSI Digital Stallions Awards 2021 - Best use of Facebook inMutual Funds.
RESEARCH AND DEVELOPMENT:
DIGITAL ADOPTION AND INNOVATION: We at Nippon India MutualFund have always taken pride in our Digital prowess and technological innovationsconstantly setting benchmarks for others to follow.
Our repute as a Digital leader is recognized within the Industryand beyond. This leadership has come on the back of years of relentless hard work we haveput in to not just lay a sturdy foundation but also create a robust business-centricstructure cemented by Digital Technology.
Having acknowledged long ago that we are not only a Mutual Funds& Asset Management company but also as a new age Digitech enterprise that helpsindividuals entities and intermediaries achieve their financial and business goals wewere always at the Forefront of adopting technology and embracing a perpetual state ofdigital transformation. And in times of COVD-19 it is this constant pursuit spanningmany years that has paid off and made us #FutureReady
FOREIGN EXCHANGE EARNINGS AND OUTGO:
During the year under review the Company earned foreign exchangeequivalent to Rs. 21.79 Cr (Previous Year: Rs. 28.97 Cr). The Company spent foreignexchange equivalent to Rs. 6.49 Cr (Previous Year: Rs. 7.24 Cr).
DIRECTORS' RESPONSIBILITY STATEMENT
As per the requirements of Sub Section (5) of Section 134 of the Actthe Directors confirm that -
(i) In the preparation of the annual accounts for the financial yearended March 31 2021 the applicable accounting standards have been followed and thatthere are no material departures;
(ii) The Directors have selected such accounting policies inconsultation with the Statutory Auditors' and have applied them consistently and madejudgments and estimates that were reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at March 31 2021 and of the profit of theCompany for the year under review;
(iii) The Directors have taken proper and sufficient care to the bestof their knowledge and ability for the maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting fraud and other irregularities;
(iv) The Directors have prepared the annual accounts of the Company ona 'going concern' basis;
(v) The Directors have laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively;
(vi) The Directors have devised proper systems to ensure compliancewith the provisions of all applicable laws and that such systems are adequate andoperating effectively.
CONTRACT AND ARRANGEMENTS WITH RELATED PARTIES
All contracts/ arrangements/ transactions entered into/ by the Companyduring the financial year under review with related parties were on arm's length basis andin the ordinary
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 Committeefor approval. Prior omnibus approval of the Audit Committee was obtained for thetransactions which were of a repetitive nature. The transactions entered into pursuant tothe omnibus approval so granted were reviewed and statements giving details of all relatedparty transactions were placed before the Audit Committee and the Board of Directors fortheir review on a quarterly basis. The policy on Related Party Transactions as approved bythe Board is uploaded on the Company's website at the following link:
https://mf.nipponindiaim. com/InvestorServices/Pages/Investor-Policies. aspx
Your Directors draw attention of the members to Note No. 29 to thefinancial 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 anyinstance 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 futureoperations.
DETAILS OF APPLICATION MADE BY THE COMPANY OR ANY PROCEEDING PENDINGUNDER THE INSOLVENCY AND BANKRUPTCY CODE 2016 (31 OF 2016) DURING THE YEAR ALONGWITHTHEIR STATUS AS AT THE END OF THE FINANCIAL YEAR
The Company invests in various debt market instruments (non-convertibledebentures) issued by various issuers. In order to realize the debenture outstandings theCompany has filed certain applications under the Insolvency and Bankruptcy Code 2016. TheMutual Fund Division of the Company has filed
(a) an IBC proceeding against Avantha Holdings Limited in January 2020before Hon'ble NCLT New Delhi which is currently at pre-admission hearings stage; and
(b) a claim under the CIRP process against Dewan Housing FinanceCorporation Limited before the Hon'ble NCLT Mumbai in December 2019. The Company is alsoa 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) three IBC proceedings against three Fortuna Group companies(Fortuna Buildcon India Private Limited Fortuna Projects India Private Limited andFortuna Urbanscape Private Limited) in November 2017 before the Hon'ble NCLT Bangalore.Fortuna Buildcon India Private Limited and Fortuna Urbanscape Private Limited arecurrently under CIRP and Fortuna Projects India Private Limited is currently underliquidation;
(b) three IBC proceedings against three Biodiversity Conservation IndiaPrivate Limited group companies (BCIL Zed Ria Properties Private Limited BCIL Red EarthDevelopers India Pvt Ltd and Biodiversity Conservation India Private Limited) in December2017 before the Hon'ble NCLT Bangalore. BCIL Zed Ria Properties Private Limited BCIL RedEarth developers India Pvt Ltd are currently under CIRP and Biodiversity ConservationIndia Private Limited is currently under liquidation;
(c) an IBC proceeding has been filed against the promoters ofBiodiversity Conservation India Private Limited in November 2020 before the Hon'ble NCLTBangalore which is currently at pre-admission hearings stage;
(d) an IBC proceeding has been filed against Green Valley SheltersPrivate Limited in December 2019 before the Hon'ble NCLT Chennai which is currently atpreadmission hearings stage;
(e) an IBC proceeding has been filed against the promoters of GreenValley Shelters Private Limited in October 2020 before the Hon'ble NCLT Chennai which iscurrently at pre-admission hearings stage;
(f) an IBC proceeding has been filed against Bharucha & MotivalaInfrastructure Private Limited being corporate guarantor for the debentures issued byLake District Realty Private Limited in November 2019 before Hon'ble NCLT Mumbai whichis currently at pre-admission hearings stage;
(g) a claim under the CIRP process against Unishire Regency Park LLPbefore the Hon'ble NCLT Bangalore in July 2020.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
In terms of the provisions of Section 197 of the Act read with Rule 5of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 asamended a statement showing the names and other particulars of the employees drawingremuneration in excess of the limits set out in the said Rules are provided in theAnnexure to the Board's Report. Disclosures relating to the remuneration and other detailsas 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 formspart of this Report. However having regard to the provisions of Section 136 of the Actthe Annual Report excluding the aforesaid information is being sent to all the members ofthe Company and others entitled thereto. Any member interested in obtaining the saidinformation may write to the Company Secretary. Upon such request the information shall befurnished.
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
Your Company has in place a Prevention of Sexual Harassment Policy inline with the requirements of The Sexual Harassment of Women at the Workplace (PreventionProhibition & Redressal) Act 2013. An Internal Complaints Committee (ICC) has beenset up to redress complaints received regarding sexual harassment. All employees(permanent contractual temporary trainees) are covered under this Policy. Following isa summary of sexual harassment complaints received and disposed off during the year:
No. of complaints received: 0
No. of complaints disposed of: 0
BUSINESS RESPONSIBILITY REPORT
Business Responsibility Report for the year under review as stipulatedunder Listing Regulations is presented in the separate section forming part of this AnnualReport.
Your Directors wish to place on record their sincere appreciation forthe co-operation received from various regulatory and governmental authorities includingSEBI RBI Registrar of Companies Maharashtra at Mumbai PFRDA NPS Trust EPFO CMPFOStock Exchanges Depositories Custodians Bankers Registrar Shareholders Investors andall other business 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 forthe total commitment displayed by all the executives officers and staff resulting in yetanother eventful performance for the year.