uti asset management company ltd Directors report

Dear Members,

We are pleased to present the Directors’ Report of UTI Asset Management Company Limited (the Company / UTI AMC) along with the Company’s audited financial statements for the financial year (FY) ended 31st March, 2023.

FINANCIAL PERFORMANCE

The financial statements of the Company were prepared in accordance with Section 133 and other applicable provisions of the Companies Act, 2013 (the Act) and the Indian Accounting Standards (Ind AS) as notified by Ministry of Corporate Affairs. The below table summarizes the Company’s financial performance for the financial year ended 31st March, 2023 as compared to the previous financial year: ( Rs. in crore)

	Standalone		Consolidated
Particulars	As on 31st	As on 31st	As on 31st	As on 31st
	March, 2023	March, 2022	March, 2023	March, 2022
Revenue from operation	1,091.57	1,059.63	1,266.86	1,319.08
Other Income	9.39	0.64	23.23	8.19
Total Income	1,100.96	1,060.27	1,290.09	1,327.27
Employee Benefit Expenses	357.28	362.47	414.53	406.71
Other Expenses	189.85	171.54	289.94	260.38
Total Expenses	547.13	534.01	704.47	667.09
Profit before tax expense	553.83	526.26	585.62	660.18
Less: Tax expense (current & deferred)	129.4	108.48	145.94	125.59
Profit after tax	424.43	417.78	439.68	534.59
Add / less: Other comprehensive income (Net of tax)	7.44	3.78	7.53	3.80
Total comprehensive income	431.87	421.56	447.21	538.39
Balance of retained earnings carried to balance sheet	3,013.94	2,855.69	3,380.09	3,208.78
Paid-up capital	126.98	126.95	126.98	126.95
Net worth	3,348.27	3,160.45	3,867.84	3,620.17

SHARE CAPITAL

The authorized share capital of the Company is 2,00,00,00,000 (20,00,00,000 equity shares of face value of 10 each) and there was no change therein during the FY 2022-23.

As on 31st March, 2023, the issued, subscribed and paid-up equity share capital of the Company stood at 1,26,98,36,950 (comprising of 12,69,83,695 equity shares of the face value of 10 each) as against 1,26,94,90,410 (comprising of 12,69,49,041 equity shares of the face value of 10 each) at the end of the previous FY 2021-22. The increase in the paid up equity share capital is on account of allotment of 34,654 equity shares to the eligible employees who had exercised the stock options under the ‘UTI AMC Employee Stock Option Scheme-2007’ (the ESOP Scheme 2007).

The listed equity share capital of the Company as on 31st March, 2023 is 1,26,98,25,260 (comprising of 12,69,82,526 equity shares of the face value of 10 each). The difference between the paid up equity share capital and the listed equity share capital of 11,690 was due to the pending listing of 1,169 equity shares allotted under the ESOP Scheme 2007 on 16th March, 2023. National Stock Exchange of India Limited and BSE Limited have, vide their letters dated 3rd April, 2023, listed and admitted the aforesaid equity shares of the Company for trading with effect from 5th April, 2023.

DIVIDEND

The Board of Directors of the Company (the Board) has recommended a final dividend of 22 per equity share (220%) of face value of 10 each for the FY 2022-23.

The Board has recommended the final dividend equivalent to 65.82% of the profit after tax of the Company.

The Dividend Distribution Policy of the Company is annexed as

Annexure-I to this Directors’ Report and the same is available on the Company’s website at https://www.utimf.com/uti-amc- shareholders/corporate-governance/code-and-policies/.

The final dividend shall be paid, subject to the approval of members at the 20th Annual General Meeting (AGM) of the Company to be held on Tuesday, the 25th July, 2023, to those members: a. whose name appears in the statement of beneficial owners to be furnished by the Depositories in respect of the shares held in electronic form as at the end of business hours on Tuesday, the 18th July, 2023; and b. whose name appears as member in the Company’s register of members maintained by the Registrar and Share Transfer agent of the Company on Tuesday, the 18th July, 2023. Pursuant to Section 91 of the Act and Regulation 42 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the SEBI Listing Regulations), the register of members and share transfer books of the Company shall remain closed from Wednesday, the 19th July, 2023 to Tuesday, the 25th July, 2023, (both days inclusive) for determining the entitlement of members for dividend, if declared for the FY 2022-23.

The Company has not declared any interim dividend to the members of the Company during the FY 2022-23.

BUSINESS OPERATIONS / PERFORMANCE OF SUBSIDIARIES

As on 31st March, 2023, the Company had 4 (four) direct subsidiaries and 4 (four) step-down subsidiaries. The business operations and performance of subsidiaries are as under:

UTI International Limited:

UTI International Limited (UTI International) was incorporated as the Limited Liability Company under the laws of Guernsey on 30th January, 1996, pursuant to an Act of the Royal Court of the Guernsey Island. UTI International is engaged in the investment management of equity and debt funds as authorized by its Memorandum of Incorporation.

UTI International looks after the administration and marketing of offshore funds. UTI International is responsible for developing new products and new business opportunities for UTI group offshore activities. UTI International’s investor base includes insurance companies, pension funds, family offices and other financial institutions across Europe, Asia and the Middle East. UTI International has 4 (four) subsidiaries - UTI Investment Management Company (Mauritius) Limited, UTI International (Singapore) Private Limited, UTI International (France) SAS and UTI Investments America Limited.

The consolidated total income of UTI International for FY 2022-23 was GBP 94,63,720 as compared to GBP 1,83,21,165 for the previous FY 2021-22 and consolidated net loss for FY 2022-23 was GBP 32,91,807 as compared to consolidated net profit of GBP 75,15,534 in the previous FY 2021-22.

As of 31st March, 2023, UTI International had total 25 funds with an Asset under Management (AUM) of USD 2.64 billion.

UTI Retirement Solutions Limited:

UTI Retirement Solutions Limited (UTI RSL) was incorporated on 14th December, 2007 under the Companies Act, 1956. UTI RSL manages the pension funds under National Pension System (NPS). UTI RSL is engaged in carrying out the operations as pension fund manager under the regulatory framework of Pension Fund Regulatory and Development Authority (PFRDA) and the Board of Trustees of the NPS Trust.

UTI RSL has registered a strong growth in terms of AUM, revenue and net profit after tax during the FY 2022-23.

The total income of UTI RSL for the FY 2022-23 was 106.87 crore as compared to 93.82 crore for the previous FY 2021-22. The revenue on account of Investment Management Fee (IMF) has grown by 11.10% during FY 2022-23 from 91.39 crore to 101.53 crore.

UTI RSL’s net profit after tax has grown to 46.47 crore for the FY 2022-23 against the net profit after tax of 42.34 crore for the FY 2021-22, registering a growth of 9.75%.

UTI RSL was awarded the ‘Best Pension Fund Manager of the Year’ by Asia Asset Management - Best of the Best Awards for the Year 2023. This is the sixth consecutive year that UTI RSL has received this award.

UTI RSL has also received the award for the ‘Best Transformation of the year’ for IT Infrastructure setup, at the CIO Summit 2023 hosted by Empiric Business Media.

UTI Capital Private Limited:

UTI Capital Private Limited (UTI CPL) was incorporated on 13th May, 2011, under the Companies Act, 1956. It is engaged in the business of managing alternate investment funds.

The total income of UTI CPL was 11.91 crore for the FY 2022-23 as compared to 7.68 crore for the previous FY 2021-22. The net loss was recorded at 3.29 crore for the FY 2022-23 as against net loss of 2.21 crore for the previous FY 2021-22.

UTI CPL has following funds: a. UTI Structured Debt Opportunities Fund I (UTI SDOF I), a

695.9 crore private credit fund. As on 31st March, 2023, UTI SDOF I had completed 9 exits out of 11 investments and the fund had returned ~108% of the total funds raised from investors in the form of capital, interest and capital gains. b. UTI Structured Debt Opportunities Fund II (UTI SDOF II), a

506.6 crore private credit fund, which had a final close on 31st May, 2022. As on 31st March, 2023, amount drawn down from investors was 223.6 crores and outstanding investments aggregating 196 crores in six portfolio companies. c. UTI Structured Debt Opportunities Fund III (UTI SDOF III), a 300.7 crore private credit fund, which had a first close on 30th September, 2022. As on 31st March, 2023, amount drawn down from investors was 78.4 crores and outstanding investments aggregating 33 crores in two portfolio companies.

d. UTI Multi Opportunities Fund I (UTI MOF I), a 763 crore fund, which had a first close on 31st March, 2022. As on 31st March, 2023, amount drawn down from investors was 168.5 crores and outstanding investments aggregating 143 crores in six portfolio companies.

UTI Venture Funds Management Company Private Limited:

UTI Venture Funds Management Company Private Limited (UTI VF) was incorporated on 27th March, 2001 under the Companies Act, 1956. The principal business of UTI VF is to manage venture capital funds and private equity funds.

The gross income of UTI VF was 1.25 crore for the FY 2022-23 as against 2.23 crore in the previous FY 2021-22. It clocked a net profit of 0.85 crore for the FY 2022-23 as against 0.89 crore for the previous FY 2021-22.

The audited financial statements of subsidiaries, together with the directors’ report and auditor’s report, for the period ended 31st March, 2023 are part of this Annual Report.

As a good corporate governance practice and in order to ensure effective monitoring of operations & performance of subsidiaries, atleast one independent director of UTI AMC has been appointed as director on the Board of UTI International, UTI RSL and UTI CPL.

All subsidiaries continued to be the subsidiary of the Company during the FY 2022-23. UTI Investments America Limited was incorporated on 7th November, 2022 as the subsidiary of UTI International.

The audited financial statements including the consolidated financial statements of the Company forms part of this Annual Report and are available on the Company’s website at https:// www.utimf.com/uti-amc-shareholders/financials-filings/results/. The financial statements of subsidiaries are also available on the Company’s website at https://www.utimf.com/uti-amc-shareholders/financials-filings/subsidiaries-financials/.

The Company has a ‘Policy for determining material subsidiary’ and is available on the Company’s website at https://www.utimf. com/uti-amc-shareholders/corporate-governance/code-and-policies/.

As on 31st March, 2023, the Company has only 1 (one) material subsidiary which is UTI International. The Company has no unlisted Indian material subsidiary.

OVERVIEW OF OPERATIONS OF THE GROUP

The Company believes that its track record of product innovation, consistency and stable investment performance contributed to the growth of its AUM. The overview of operations of the group is as under: ( Rs. in crore)

Particulars 31st March, 2023	As on As on 31st March, 2022		% of change
UTI Mutual Fund (UTI MF)
Quarterly Average Assets Under Management (QAAUM) of UTI MF(1)	2,38,791	2,23,842	6.68
QAAUM for equity schemes	70,494	69,287	1.74
QAAUM for ETFs and index funds	82,871	62,447	32.71
QAAUM for hybrid funds	24,101	26,444	(8.9)
QAAUM for the liquid funds (UTI Liquid Cash Plan and UTI Overnight Fund)	38,182	36,936	3.37
QAAUM of debt funds(2)	23,144	28,727	(19.4)
Portfolio Management Services (PMS) division of UTI AMC
AUM(3)	10,53,085	8,93,082	17.92
Subsidiaries
AUM of UTI International	21,703	28,974	(25.10)
AUM of UTI RSL	2,40,709	2,01,919	19.21
AUM of UTI CPL	1,707	1,088	56.89

Notes:

(1) The market share of UTI MF also grew from 5.83% to 5.89% on QAAUM basis;

(2) R eduction in QAAUM of debt funds was due to maturity of 28 closed-ended funds; and

(3) P ositive growth was mainly due to inflows mandates from EPFO, PLI, ESIC & CMPFO accounts and advisory business.

SCHEMES LAUNCHED DURING THE YEAR

UTI MF has launched 12 funds during the FY 2022-23 under different equity, debt and ETF category and successfully mobilised a total AUM of 1,142 crore.

CHANGES IN FUNDAMENTAL ATTRIBUTES OF SCHEMES

The changes made to the fundamental attributes of schemes during the FY 2022-23 are as under: a. Merger of schemes: There were merger of 17 debt schemes under fixed term maturity plans into 4 schemes; b. Change in asset allocation pattern: There was a change in asset allocation pattern of UTI-Fixed Income Interval Fund-Annual Interval Plan I and UTI-Fixed Income Interval Fund-Annual Interval Plan III; and c. Enabling provision for creation of segregated portfolio in the surviving schemes post-merger.

TRANSFER TO RESERVES

During the FY 2022-23, no amount was transferred to the general reserves of the Company.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The details of loans given, investments made, guarantees given and securities provided, if any, covered under Section 186 of the Act are disclosed under Note No. 6, 7 and 8 to the standalone financial statements for the FY 2022-23.

CONTRACTS OR ARRANGEMENTS WITH RELATED PARTY

In accordance with the provisions of Section 177 and Section 188 of the Act read with rules made thereunder and Regulation 23 of the SEBI Listing Regulations read with circulars and notification issued thereon, the Company has a ‘Policy on materiality of related party transactions and dealing with related party transactions’. The Policy is available on the Company’s website at https://www.utimf.com/uti-amc-shareholders/corporate-governance/code-and-policies/. During the FY 2022-23, the Company has entered into transactions with related parties, as defined under Section 2(76) of the Act read with Companies (Specification of Definitions Details) Rules, 2014 and applicable Accounting Standards, which were in ordinary course of business and on arm’s length basis.

The Independent Directors of the Audit Committee have reviewed and approved all the related party transactions executed during the FY 2022-23.

The Company has not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the Policy, the Act and the SEBI Listing Regulations. Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) and Section 188 of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014, in form AOC-2 is not applicable. However, detailed disclosure on related party transactions as per Ind AS 24 inter-alia containing name of the related party and details of the transactions entered into with such related party are disclosed in Note No. 30 of the standalone financial statements for the FY 2022-23.

DEPOSITS

During the FY 2022-23, the Company has not accepted any deposit under Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014.

AUDITORS Statutory Auditor

The statutory auditor of the Company is M/s. B S R & Co. LLP, Chartered Accountants (Firm Reg. No. 101248W/W-100022). The Auditor’s Report on financial statements for the FY 2022-23 forms part of this Annual Report.

Secretarial Auditor

The secretarial auditor of the Company is Vishal N. Manseta, Practicing Company Secretary (Membership No.: ACS 25183 and CP No. 8981).

Pursuant to the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Secretarial Audit Report of the Company issued by Vishal N. Manseta for the FY 2022-23 is annexed as

Annexure-II to this Directors’ Report.

There was no qualification, reservation or adverse comment or disclaimer made by the aforesaid auditors in their respective audit reports.

There was no instance of any fraud which is required to be reported to the Audit Committee or the Board by the statutory auditor or secretarial auditor pursuant to Section 143(12) of the Act.

Internal Auditor

The internal auditor of the Company is M/s. Aneja Associates (Firm Reg. No. 100404W).

Auditor for the scheme of UTI MF

The statutory auditor for schemes of UTI MF is M/s. S.R. Batliboi

& Co. LLP, Chartered Accountants (Firm Reg. No. 301003E/ E300005) in accordance with the provisions of Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 read with circulars and notification issued thereon.

SECRETARIAL STANDARDS

The Company has complied with the applicable provisions of Secretarial Standards issued by the Institute of Company Secretaries of India, during the FY 2022-23.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference to the financial statements of the Company. The Company has adopted accounting policies which are in line with the accounting standards prescribed in the Companies (Accounting Standards) Rules, 2006, that continue to apply under Section 133 and other applicable provisions, if any, of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014 and other relevant provisions of the Act to the extent applicable. The aforsaid policies are in accordance with Generally Accepted

Accounting Principle in India (Indian GAAP). There is no change in the accounting policies during the FY 2022-23.

The statutory auditor of the Company has reviewed the internal financial controls of the Company and confirmed that "the Company has, in all material respects, adequate internal financial controls with reference to the financial statements and such internal financial controls were operating effectively as at 31st March, 2023, based on the internal financial controls with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (the "Guidance Note").

The accounting policies also ensures that uniform accounting treatment is followed by the Company and its subsidiaries. The accounts of subsidiaries are audited by their respective statutory auditor for consolidation.

The Company maintains its books of accounts in SAP (an Enterprise Resource Planning [ERP] system) and has many of its accounting records stored in electronic form, which is backed up periodically. This ERP system is configured to ensure that all transactions are integrated seamlessly with the underlying books of accounts. The Company has implemented rigid and automated processes to ensure accurate and timely updation of various master data, audit trail etc. in the ERP system.

Pursuant to the Environment, Social and Governance (ESG) initiative, the Company had implemented paperless approval system. All internal approvals are obtained digitally through the Document Management System. All the payments for invoices are processed through this system and each employee has a separate login access.

The Company, while preparing its financial statements, makes judgements and estimates based on sound accounting policies and uses external agencies to verify / validate them as and when appropriate. The basis of such judgements and estimates were also reviewed by the statutory auditor and the Audit Committee. The Audit Committee and Board reviews the financial performance of the Company on quarterly basis.

HUMAN RESOURCES

The Company believes that its employees play a vital role in building a successful organization. It believes that nurturing people’s capability is the core behind driving business excellence. The Company is committed to maintaining an environment that values the contributions of its people and provides opportunities for their personal and professional growth. The employees, while performing their duty, deal with various stakeholders viz. clients, other employees, distributors and investors, among others, in a respectful manner. The employees duly comply with / adhere to the Company’s Rules, Code of Conduct and any violation in the same is appropriately addressed. The Company demonstrates a commitment to a culture that promotes the highest ethical standards. The employer employee relation continued to be healthy, cordial and progressive.

Some key focus areas and initiatives taken up during the FY 2022-23 are as under: a. Leaderships roles were re-structured in many functions so as to re-align the roles and responsibilities of senior team members and provide opportunities for growth; b. The digital marketing team was further strengthened; c. Few of the senior management team were sent for management development programmes; d. Planned awareness building and on-going learning sessions for the entire organization on statutory compliances; and e. High standard of ethics and strict compliance was maintained in reporting of investment transactions by employees.

At UTI AMC, the talent pool is a prudent mix of all age groups, bringing experience and youthfulness together. This has been pivotal in keeping the Company agile, while being firmly rooted in its legacy of 60+ years. The Company strongly believes that its continuing business excellence is a direct product of how it nurtures the talent and keep them future ready to remain relevant in the changing business scenario. 216 new hirings were completed during the FY 2022-23 catering to human resource requirements of diverse functions within UTI AMC. The Company have a multi generation workforce as under:

Generation	Number of	% of
	Employees -	Employees-
	Overall	Overall
Baby Boomers	39	2.97
Gen X	761	57.91
Gen Y	345	26.26
Gen Z	169	12.86
Total	1,314	100.00

UTI AMC cultural ethos are as under: i. A safe working environment free from sexual harassment and discrimination; ii. Challenging work assignments and opportunities are provided based on meritocracy; and iii. Strict adherence to the Company’s rules, code of conduct and above all, ethical standards.

Learning & Development

With a strong focus on role specific learning plan and in order to ensure effective use of blended learning methods, UTI AMC’s learning & development team partners with business leaders and managers to focus on developing employees and carving leaders out of its own employees. Specific programs are planned so as to ensure one builds expertize in her / his own chosen career. The Company has been focusing on different ways of enhancing knowledge of employees within the Company by arranging training session, interactions, reading materials, research reports etc. UTI AMC also have in place an Educational Assistance Policy enabling employees to take up higher professional studies.

Conviction

The Company has a stronger focus on meritocracy, change management, increasing efficiencies and building an efficient organization. The Company will continue to attract, develop and retain talent to help shape a better, young and vibrant Company that fosters employee engagement, productivity and motivation. UTI AMC aims to develop a culture that gives opportunity to the employees to develop their leadership capabilities.

Particulars of Employees

The total number of employees of the Company as on 31st March, 2023 stood at 1,314 employees. The employee benefit expenses on standalone basis for the FY 2022-23 stood at 357.28 crore as compared to 362.47 crore for the FY 2021-22.

Information required under Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this Directors’ Report.

In terms of provisions of Section 136 of the Act, the Annual Report is being sent to members excluding aforementioned information. Such information will be available on the Company’s website at www.utimf.com.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

In accordance with Section 177 of the Act read with Rule 7 of the Companies (Meeting of Board and its Power) Rules, 2014 and Regulation 22 of the SEBI Listing Regulations, the Company has a ‘Whistle Blower Policy’ to supplement the Codes of Ethics, Staff Rules, Anti-Bribery Policy and Anti-Fraud Policy of the Company. The details related to vigil mechanism / whistle blower policy are provided in the Corporate Governance Report forming part of this Annual Report.

PREVENTIONOFSEXUALHARASSMENTATWORKPLACE

The Company has a ‘Policy on prevention of sexual harassment of women at workplace’ which is in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Policy aims to create an environment at every workplace which is free from sexual harassment and to provide safeguards against false or malicious charges. The Policy has been rigidly implemented within the Company.

The Company has constituted an Internal Complaints Committee (ICC) to enquire into the cases of sexual harassment at offices / UTI Financial Centres across India. The Company also conducts the awareness programmes on prevention of sexual harassment on regular basis.

The Company has not received any harrasment complaint during the FY 2022-23 and no complaint was pending at the end of the year.

DIRECTORS AND KEY MANAGERIAL PERSONNEL Directors

Composition of Board

The Board comprises of 10 (ten) directors, consisting of 6 (six) Independent Directors [including 2 (two) Independent Women

Directors], 3 (three) Non-Executive Nominee Directors and 1 (one) Managing Director. The Chairman of the Company is a Non-Executive Independent Director.

Mr. Flemming Madsen (DIN: 02904543) (nominee of T. Rowe Price International Ltd) retired by rotation at the 19th AGM of the Company and the members had appointed him as a Nominee Director (Non-Executive Category) of the Company with effect from 26th July, 2022, liable to retire by rotation.

Mr. Imtaiyazur Rahman (DIN: 01818725) was appointed as the Chief Executive Officer (CEO) of the Company with effect from 13th June, 2020. The members had, at the 19th AGM of the Company approved the appointment of Mr. Rahman as Managing Director from 26th July, 2022 to 12th June, 2024, not liable to retire by rotation and he had discontinued as Whole-Time Director with effect from 25th July, 2022. Accordingly, Mr. Rahman was re-designated as the Managing Director & CEO of the Company.

Mr. Sanjay Varshneya (DIN: 08161701) (nominee of Punjab National Bank) resigned from the Board of the Company with effect from 26th July, 2022. The Board commended the valuable contributions made by Mr. Varshneya during his tenure on the Board of the Company.

The Board had appointed Mr. Kiran Kumar Tarania (DIN: 09637366) (nominee of Punjab National Bank) as an Additional Director (Nominee Non-Executive Category) with effect from 26th July, 2022. Subsequently, the members had, through postal ballot passed on 12th October, 2022, approved the appointment of Mr. Tarania as Non-Executive Nominee Director, liable to retire by rotation.

Pursuant to Section 152 of the Act, Mr. Kiran Kumar Tarania (DIN: 09637366) is liable to retire by rotation at the ensuing AGM of the Company and being eligible, offers himself for reappointment as Non-Executive Nominee Director.

The Board had, based on the recommendation of Nomination and Remuneration Committee, approved the appointment of Mr. Srivatsa Desikamani (DIN: 10193489) (nominee of T. Rowe Price International Ltd) as an Additional Director (Non-Executive Nominee Category) with effect from 9th June, 2023 and he shall hold office up to the date of the 20th AGM.

The necessary resolutions for appointment of Mr. Tarania and re-appointment of Mr. Desikamani including their brief profile and other related information have been included in the Notice of the 20th AGM.

All the directors of the Company have confirmed that they are not disqualified from being appointed as director pursuant to Section 164 of the Act. A certificate that none of the directors on the Board of the Company has been debarred or disqualified from being appointed or continuing as director of Companies by the Securities and Exchange Board of India, Ministry of Corporate Affairs or any such statutory authority is annexed to the Corporate Governance Report forming part of this Annual Report.

Key Managerial Personnel

As on 31st March, 2023, the Company has 3 (three) Key Managerial Personnel (KMP) in terms of Section 2(51) and Section 203 of the Act as mentioned below:

- Mr . Imtaiyazur Rahman, Managing Director & Executive Officer;

- Mr . Surojit Saha, Chief Financial Officer; and

- Mr . Arvind Patkar, Company Secretary & Compliance

DECLARATION OF INDEPENDENCE

The Board hereby confirms that pursuant to the provisions of Section 149(6) of the Act, all independent directors have submitted a declaration of independence to the Company, wherein they have confirmed that they meet the criteria of independence as laid down under Section 149 of the Act and Regulation 16(1)(b) of the SEBI Listing Regulations.

Based on the declarations received from the independent directors, the Board is of the opinion that the independent directors fulfil the criteria of independence as specified in the Act and the SEBI Listing Regulations and are independent of the management.

All independent directors of the Company are registered in the databank of independent directors’ in compliance with the provisions of Section 150 of the Act and Rule 6 of Companies (Appointment and Qualifications of Directors) Rules, 2014. The independent directors have also complied with the provisions of Rule 6(4) of Companies (Appointment and Qualifications of Directors) Rules, 2014 relating to online proficiency self-assessment test.

The terms and conditions formulated by the Company for appointment of independent directors is available on the Company’s website at https://www.utimf.com/uti-amc- shareholders/corporate-governance/code-and-policies/.

NUMBER OF BOARD MEETINGS

11 meetings of Board were conducted during the FY 2022-23 on the following dates:

 

26th April, 2022, 26th May, 2022, 20th June, 2022, 21st June, 2022, 26th July, 2022, 20th October, 2022, 18th November, 2022, 14th December, 2022, 20th January, 2023, 1st February, 2023 and 21st March, 2023.

In addition to the above, a joint meeting of Board of UTI AMC and UTI Trustee Company Private Limited (Trustees of UTI MF) was held on 20th October, 2022.

In compliance with the provisions of the Act read with the rules and circulars issued thereunder, the SEBI Listing Regulations and Secretarial Standard on Meetings of Board of Directors issued by Institute of Company Secretaries of India (SS-1), the maximum interval between any two meetings of the Board did not exceed 120 days.

The details of composition of the Board and its Committees and details of the meetings held during the FY 2022-23 along with the attendance of the directors therein are disclosed in the Corporate Governance Report forming part of this Annual Report.

Chief

NOMINATION & REMUNERATION POLICY

Pursuant to Section 178 of the Act and Regulation 19(4) of the SEBI Listing Regulations, the Company has a ‘Nomination.

& Remuneration Policy’ which aims to lay down a framework in relation to nomination and remuneration of directors, KMPs, senior management personnel and other employees.

The details of remuneration paid to executive director and sitting fees paid to non-executive directors have been included in the Corporate Governance report forming part of this Annual Report.

The criteria of making payments to non-executive directors has been included in the Nomination & Remuneration Policy and the said policy is available on the Company’s website at https:// www.utimf.com/uti-amc-shareholders/corporate-governance/ code-and-policies/.

AUDIT & SYSTEMS

The Company believes that internal audit control is a necessary concomitant of the principle of governance that freedom of management should be exercised within a framework of appropriate checks and balances. The Company is committed to ensure an effective internal control environment that provides assurance on the efficiency of operations and security of assets. The Company has a well established and robust internal audit process, both at business and corporate levels, which continuously monitors the adequacy and effectiveness of the internal control environment across the Company and the status of compliance with operating systems, internal policies and regulatory requirements.

DATA PROTECTION AND CYBER SECURITY

The Company recognizes the importance of collection, use and security of user’s information collected through various sources. The Company has a ‘Policy on Privacy and Security of Information’ which defines the rights of the Company / user to use, secure or restrict personal and confidential information of the investors. The Company is committed to secure investor’s personal identifiable information and has implemented processes and technologies to secure the same.

The Company had adopted ISO 27001 standard and implemented the best practices for information security in the organization. The information security framework, policy and processes of the Company are aligned to ISO 27001. The information security objectives are aligned with business objectives with highly resilient business continuity infrastructure and processes. The Company conducts periodic drills to test the infrastructure capabilities to continue the business during any disaster.

Periodic audits were conducted internally as well as through external firms to ensure data security and to conduct the review of Cyber Security & Cyber Resilience Framework and System Audit in compliance with SEBI guidelines.

CORPORATE SOCIAL RESPONSIBILITY

The Company believes in a philosophy of compassion, care and generosity characterized by a willingness to build a society that works for everyone. The Company gives utmost importance to its Corporate Social Responsibility (CSR) initiatives in order to operate in an economically, socially and environmentally sustainable manner, while recognizing the interests of its stakeholders. The Company strives to integrate its values and business operations in an ethical and transparent manner to demonstrate its commitment to sustainable development and to meet the interests of its stakeholders.

The Company has a ‘Corporate Social Responsibility Policy’ in compliance with the requirements of the Act and the Companies (Corporate Social Responsibility Policy) Rules, 2014 (CSR Rules) read with circulars and notification issued thereon, which inter-alia lays down the CSR Operational Framework, roles and responsibilities of the Board relating to CSR, manner of implementation and monitoring of CSR activities.

The Company has a Board-level CSR Committee and the details of its composition, terms of reference, number of meetings and attendance have been disclosed in the Corporate Governance Report forming part of this Annual Report. The Company also has a management-level CSR Committee to deal with all operational aspects related to CSR in accordance with the framework prescribed in the Policy and the guidance of the CSR Committee of the Board.

Pursuant to the CSR Rules, the Chief Financial Officer of the Company has certified that the funds disbursed as per the annual action plan for the FY 2022-23 have been utilised for the purpose and in the manner as approved / modified by the CSR Committee and Board.

The Policy is available on the Company’s website at https:// www.utimf.com/uti-amc-shareholders/ corporate-governance/ code-and-policies/.

The Annual Report on the Company’s CSR activities for FY 2022-23 is annexed as

Annexure-III to this Directors’ Report.

RISK MANAGEMENT

The Company has established processes and systems to ensure robust enterprise-wide risk management framework. The Risk Management Committee and Board periodically reviews the Company’s risk management policies, procedures and processes which include the delegation of investment and financial responsibilities, the establishment of prudential nvestmenti norms, the approval & dissemination of guidelines and restrictions, as well as the establishment of counter-party limits. The Board also reviews the performance of funds against the relevant benchmark and competing funds.

The Company’s risk management framework includes:

1. Risk Management Committee: A Board-level Risk Management Committee of the Company and of UTI Trustee Company Private Limited have been constituted to inter-alia review the overall risk management policies, guidelines and implementation thereof. The meetings of said committees are held on quarterly basis.

2. Equity and Debt Steering Committee: Meetings of equity steering committee and debt steering committee are held on a regular basis to review fund performance and strategy reports as well as to discuss products strategies and market developments.

3. Department of Risk Management: The Department of Risk Management reviews the implementation and governance of risk management framework at the scheme level and at the Company level. The department regularly reviews the portfolio risks, conducts performance attribution of funds vis-?-vis their respective benchmarks and competing funds, tracks the adherence of portfolio characteristics to the respective scheme mandates and computes various portfolio analytics to judge the risk and return indicators over a period of time.

4. Investment Committee: Investment Committee meets on a monthly basis to review, among other things, the performance of the funds, top securities transactions and exceptions, if any, to regulatory / internal investment norms or limits.

5. Executive Risk Management Committee: Executive Risk Management Committee, consisting of functional heads, meets on quarterly basis to review the risk management policy, Risk Control Self-Assessment (RCSA) framework, risk appetite framework, crisis management, risk incidents and various other operational risk indicators.

6. Department of Internal Audit: The Department of Internal Audit, together with the Investment Committee and the Department of Risk Management, ensures that the policies, procedures and processes laid down by the Board and the Risk Management Committee are effectively implemented.

Effective risk management is critical to the operation of the Company’s business. The Company has adopted various policies and procedures to manage the risks applicable to its business operations, inter-alia, including:

1. Investment risk: The Company’s funds are exposed to underperformance risk with respect to both the relevant benchmarks and competing funds due to investment related risks, which include market risks and credit risks. The measures taken to address and mitigate such risks including prudential investment limits, well-documented investment policies and procedures (regarding the delegation of powers, research methodologies, risk evaluation framework and brokers empanelment policy), sophisticated market information tools, a dedicated securities research team, experienced fund managers and a regular performance reporting and review mechanism.

2. Liquidity risk: Liquidity risk mainly arises in respect of open-ended funds, which typically allow investors to redeem their units at any time. If a significant number of investors opt for redemption from a particular fund at the same time, the fund may face liquidity risk. The risk is particularly high in respect of income funds, considering the low level of debt securities actively traded in Indian markets and the high concentration of investors in selected funds. The measures taken to address and mitigate liquidity risk include reviewing its portfolio positions in light of average trading volumes and historical redemption of funds, maintenance of liquid assets, regularly reviewing illiquid equity positions, observing concentration limits for single positions, issuers and sectors, and prudential issuer and sector norms, with a high proportion of the fixed income investments of the relevant funds in highly rated fixed income securities and with a line of credit available to address the liquidity shortfalls.

3. Operational risk: This is the risk of loss from inadequate or failed internal processes and systems or from external events including errors done by employees, improper documentation of transactions, failure of operational and information security procedures, computer systems, software or other equipment and business interruptions. The measures taken to address and mitigate operational risk include concurrent audit system for dealing and Net Asset Value (NAV) computation and an outsourced internal audit function, a straight-through investment processing system, isolating and monitoring the dealing room, service level agreements with third party vendors, conducting disaster recovery drills at least twice a year, Information Security Policies along with its review by an independent auditor, separating front-office and back-office functions, an effective investor grievance redressal mechanism, periodic training of the sales team and insurance coverage etc. In addition to the above, the Company has implemented RCSA framework to identify and control the relevant operational risks as per the SEBI (Mutual Funds) Regulations, 1996 and circulars issued thereunder.

4. Market risk: This risk is the possibility of loss arising from changes in the value of a financial instrument as a result of changes in market variables such as equity prices, interest rates, exchange rates or other asset prices, higher volatility of funds or returns as compared to benchmark or competing funds. The measures taken to address and mitigate market risk include implementing investment guidelines and position limits in terms of individual stocks, sectors and industries, having experienced fund managers closely monitoring investments and positions as well as measuring risk-adjusted performance.

5. Credit risk: This is the risk of loss in market value of debt securities due to downgrading by credit rating agencies or default in payment by issuers. The measures taken to address and mitigate credit risk include internal position limits, establishing counterparty exposure limits, early warning system, in-house research team, product positioning and placing restrictions on investments in unrated or low-rated debt securities.

6. Regulatory risk: The Company is highly regulated and it may be impacted by new laws, rules and regulations or changes in existing ones, affecting its ability to operate. The measures taken to address and mitigate regulatory risk include following regulatory guidelines, systematic controls in respect of regulatory limits, dedicated Secretarial and Compliance Department, monthly compliance audits and review by the Board of the Company and UTI Trustee Company Private Limited.

BOARD EVALUATION

The Company has a ‘Policy for Evaluation of Performance of the Board of Directors’ in accordance with the provisions of the Act and the SEBI Listing Regulations. The Policy aims to formulate the procedures and prescribes the criteria to evaluate the performance of the entire Board, its Committees and individual directors as well as to assess and enhance the effectiveness of the Board as a whole.

The Company had engaged an external consultant to conduct Board evaluation for the FY 2022-23. The performance evaluation was conducted in line with the provisions of the Policy for evaluation of performance of the Board of Directors, the Act, the SEBI Listing Regulations and Guidance Note on Board Evaluation dated 5th January, 2017 issued by SEBI.

The details on evaluation of performance of Board, its Committees and individual directors are disclosed in the Corporate Governance Report forming part of this Annual Report.

EMPLOYEE STOCK OPTION SCHEME

The Company has an employee stock option scheme called ‘UTI AMC Employee Stock Option Scheme-2007’ (ESOP Scheme 2007). The details of ESOP Scheme 2007 are as follows:

Particulars	Total
Options granted	89,03,828
Options vested (excluding options that have been exercised)	45,75,572
Options exercised	15,19,009
Total number of equity shares that would arise as a result of full exercise of options granted (net of cancelled / forfeited / lapsed options)	51,65,152
Options forfeited / lapsed / cancelled	37,38,676
Money realised by exercise of options (in )	40,97,43,368
Total number of options in force	36,46,143
Variation in terms of options	-

The details of stock options granted during the last three financial years to the employees of the Company and few employees of the subsidiaries are as under:

Sr. No. Date of grant	No. of options granted	Face Value (in )	Exercise Price (in )
During the FY 2020-21
1.	Nil
During the FY 2021-22
2. 28th July, 2021	8,61,350	10/-	923.20/-
3. 17th January, 2022	15,291	10/-	1079.45/-
During the FY 2022-23
4. 13th September, 2022	10,17,243	10/-	816.05/-

The details of stock options granted to KMP under the ESOP Scheme 2007 in the FY 2021-22 and FY 2022-23 are as under:

Sr. No.	Name of KMP	Designation	Total options granted
			2021-22	2022-23
1.	Mr. Imtaiyazur Rahman	Managing Director & Chief Executive Officer	2,30,000	2,60,393
2.	Mr. Surojit Saha	Chief Financial Officer	14,603	16,931
3.	Mr. Arvind Patkar	Company Secretary & Compliance Officer	2,460	2,356

The details of employees who received a grant of options amounting to five percent or more of options granted during the FY 2022-23:

Sr. No.	Name	Designation	Total options granted during the FY 2022-23
1.	Mr. Imtaiyazur Rahman	Managing Director & Chief Executive Officer	2,60,393
2.	Mr. Vetri Subramaniam	Chief Investment Officer	1,23,040
3.	Mr. Amandeep Singh Chopra	Head-Fixed Income	64,983

During the FY 2022-23, the Company has not granted stock options to employees under the ESOP Scheme 2007 which equal to or exceeds one percent of the issued share capital of the Company.

The grant was made based on parameters inter-alia including tenure, performance, role and total cost to the Company. The other terms of the aforementioned grants was in line with the options granted under the ESOP Scheme 2007.

The Company had obtained the in-principle approval from stock exchanges for listing of 21,10,259 equity shares for grants made in 2019 under the ESOP Scheme 2007 and the following equity shares are issued and listed during the previous three financial years:

Financial Year	Number of equity shares
2020-21	Nil
2021-22	1,61,787
2022-23	34,654*
Total	1,96,441

 

* 1,169 equity shares of the face value of 10 each allotted under ESOP Scheme 2007 on 16th March, 2023 were listed and admitted for trading on Stock Exchanges with effect from 5th April, 2023.

The scheme is in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (the SEBI SBEB & SE Regulations). The disclosures as required under the aforesaid regulations can be accessed on the Company’s website at https://utimf.com/. The certificate, as required under Regulation 13 of the SEBI SBEB

& SE Regulations, from the Secretarial Auditor of the Company certifying that ‘UTI AMC Employee Stock Option Scheme-2007’ has been implemented in accordance with the aforesaid regulations will be available for inspection at the 20th AGM of the Company.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

As the Company is engaged in the business of fund management services, its operations are neither energy intensive nor does it require adoption of specific technology. However, the Company is observant on the need for conservation of energy and adequate measures or efforts, wherever viable, were taken to ensure energy conservation.

The Company is cognizant of the importance of imbibing measures towards optimum energy utilisation and conservation which are highlighted in the Business Responsibility and Sustainability Report forming part of this Annual Report.

FOREIGN EXCHANGE EARNINGS AND OUTGO

The details of foreign exchange earnings and outgo are mentioned below: ( in crore)

Particulars	FY 2022-23	FY 2021-22
Foreign Exchange Earnings	13.86	14.04
Foreign Exchange Outgo	12.11	9.58

The Company spent foreign exchange for payment towards professional fees and foreign business tours.

ANNUAL RETURN

In accordance with the requirements under Section 134(3)(a) and Section 92(3) of the Act and circulars issued thereon, the Annual Return of the Company for the FY 2022-23 is available on Company’s website at https://www.utimf.com/uti-amc- shareholders/financials-filings/annual-reports/.

UNCLAIMED DIVIDEND ON SHARES

The details of the unclaimed dividend as on 31st March, 2023 are as under: (in )

Sr. No.	Financial Year	Amount
1.	2019-20	8,56,267.00
2.	2020-21	9,42,350.09
3.	2021-22	6,95,059.06
	Total	24,93,676.15

The unclaimed dividend is mainly on account of non-updation of KYC details in the folios or demat accounts of the concerned members.

The details about the unclaimed and unpaid dividend amounts are available on the Company’s website at https://www.utimf. com/uti-amc-shareholders/unclaimed-dividend/.

SIGNIFICANT AND MATERIAL ORDER

There was no significant and material order passed by the regulators or courts or tribunals impacting the going concern status and the Company’s operations in future.

MATERIAL CHANGE AND COMMITMENT AFFECTING FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND DATE OF THE REPORT

There was no material change and commitment affecting the financial position of the Company between the end of the FY 2022-23 and the date of this report.

MANAGEMENT’S DISCUSSION AND ANALYSIS SECTION

A separate section titled Management’s Discussion and Analysis Section for the FY 2022-23 has been included in this Annual Report.

CORPORATE GOVERNANCE

The Company is a professionally managed asset management company led by its proficient Board having expertise in diverse fields and a dedicated management team having requisite talent and experience. The Company firmly believes to operate its business in a robust and compliant environment.

In terms of the SEBI Listing Regulations, a separate section titled ‘Corporate Governance Report’ has been included in this Annual Report.

The Company has obtained a certificate from Vishal N. Manseta, Practicing Company Secretary, certifying that the Company has complied with the mandatory requirements as stipulated under the SEBI Listing Regulations and his certificate forms part of the Corporate Governance Report forming part of this Annual Report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

SEBI has, vide its official gazette notification dated 5th May, 2021 and circular dated 10th May, 2021, mandated the top 1000 listed entities to disclose their performance against the nine principles of the ‘National Guidelines on Responsible Business Conduct’ (NGRBC) in Business Responsibility & Sustainability Report from the FY 2022-23.

Pursuant to Regulation 34 of the SEBI Listing Regulations, the Business Responsibility and Sustainability Report for the FY 2022-23 has been annexed as Annexure-IV to this Directors’ Report.

The Company has issued its first sustainability report for the FY 2021-22 in line with the GRI Standards "Core Option" along with guidance from the Sustainability Accounting Standards Board reporting standards which outlines Company’s performance on key ESG parameters integrated in the operations. At UTI AMC, focus on ESG matters underpins the business and is imperative to fulfilling the mission of serving clients responsibly and creating long-term value.

The sustainability report is available on the Company’s website at https://www.utimf.com/uti-amc-shareholders/financials-filings/ annual-reports/.

POSTAL BALLOT

Pursuant to Section 110 and 108 of the Act read with rules made thereunder and circulars issued thereon and Regulation 44 of the SEBI Listing Regulations, the Company had conducted postal ballot activity for regularization of appointment of Mr. Kiran Kumar Tarania (DIN: 09637366) as Non-Executive Nominee Director. Other details of the postal ballot are included in the Corporate Governance Report forming part of this Annual Report.

WEBSITE DISCLOSURES

In compliance with the Regulation 46 of the SEBI Listing Regulations, the Company has disclosed necessary information / disclosures / intimations etc. on the Company’s website at https://www.utimf.com/uti-amc-shareholders/disclosures-under-regulation-46-of-the-lodr/.

OTHER DISCLOSURES

In terms of the applicable provisions of the Act and the SEBI Listing Regulations, the Company additionally discloses that during the FY 2022-23: 1. there was no change in the nature of business of the Company; 2. there was no revision in the financial statements or Directors’ Report of the Company; 3. disclosure pertaining to maintenance of cost records as specified by the central government under Section 148 (1) of the Act is not applicable to the Company; 4. the Company has not issued any shares with differential voting rights; 5. the Company has not issued any sweat equity shares; 6. the Company has not made any applications and no proceeding were pending under the Insolvency and Bankruptcy Code, 2016; and 7. the Company has not made any one-time settlement the Banks or Financial Institutions.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 134(3)(c) and Section 134(5) of the Act, with respect to Directors’ Responsibility Statement, it is hereby confirmed that: 1. in the preparation of the annual accounts for the FY 2022-23, the applicable accounting standards were followed along with proper explanation relating to material departures, if any;

2. the accounting policies were selected and applied consistently, judgments and estimates were made so that they are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the year i.e. 31st March, 2023, and of the Profit and Loss of the Company for that period; 3. proper and sufficient care was taken 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; 4. the annual accounts were prepared on a going concern basis; 5. proper internal financial controls were in place and that such financial controls were adequate and were operating effectively; and 6. syst ems to ensure compliance with the provisions of applicable laws were in place and were adequate and operating effectively.

ACKNOWLEDGEMENT

The Board also place on record their appreciation for the hard work and dedication of all the employees and support staff of the Company and towards all of its subsidiaries.

The Board places its gratitude and appreciation for the valuable support, co-operation and guidance received from the Securities and Exchange Board of India, Reserve Bank of India, Pension Fund Development and Regulatory Authority, Ministry of Corporate Affairs, Registrar of Companies, Association of Mutual Funds in India, UTI Trustee Company Private Limited, National Securities Depository Limited, Central Depository Services (India) Limited, National Stock Exchange of India Limited, BSE Limited, Sponsors and the members of the Company.

The Board is also thankful to its UTI MF scheme investors, Auditors, Custodians, Registrar & Share Transfer Agents, Banks, Distributors and all other service providers for their valued support. with

For and on behalf of the Board of Directors of UTI Asset Management Company Limited

	Dinesh Kumar Mehrotra
Date: 9th June, 2023	Chairman
Place: Mumbai	DIN: ( 00142711)

DIVIDEND DISTRIBUTION POLICY

1. Introduction:

1.1 Pursuant to the provisions of Regulation 43A of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended (the "SEBI Listing Regulations"), it is mandatory to have a Dividend Distribution Policy ("Policy") in place by the top one thousand listed companies based on the market capitalisation calculated as on 31st March, every year.

1.2 The Board of Directors of UTI Asset Management Company Limited (the "Company") has adopted and formulated this Policy, in compliance with the SEBI Listing Regulations.

2. Objective:

The objective of this Policy is to establish the parameters to be considered by the Board before declaring or recommending dividend. The Policy aims to strike an optimum balance between rewarding shareholders through dividend and ensuring that sufficient funds are retained for the growth of the Company.

3. Definitions:

3.1. The words, terms and expressions referred to in this policy will have the same meaning as defined under the Companies Act, 2013 (the "Act"), the rules made there under and the SEBI Listing Regulations including any statutory modification or re-enactment thereto, as the case may be.

3.2. In this Policy, unless the contrary intention appears:

a) the clause headings are for ease of reference only and shall not be relevant to interpretation;

b) a reference to a clause number includes a reference to its sub-clauses;

c) words in singular number include the plural and vice-versa.

4. Scope:

4.1 The Policy covers the following:

a. Dividend to Equity Shareholders of the Company:

At present the Company has only one class of equity shares and accordingly, the Dividend will be distributed equally among all the equity shareholders, based on their shareholding on the record date. Parameters for dividend payments in respect of any other class of shares will be as per the respective terms of issue and in accordance with the applicable regulations and will be determined, if and when the Company decides to issue other classes of shares.

b. Interim Dividend:

Interim Dividend(s), if any, shall be declared by the Board.

In case no final dividend is declared for any particular financial year, interim dividend paid during that year, if any shall be regarded as final dividend for the year in the Annual General Meeting ("AGM").

Before declaring interim dividend, the Board shall consider the financial position of the Company that allows the payment of such dividend along with all the compliances to be taken care of as per the statutory requirements.

The payment of dividend shall be made within the statutorily prescribed period from the date of declaration to the shareholders entitled to receive the dividend on the record date, as per the applicable laws.

Interim dividends will be declared before the end of the financial year:

out of the surplus in the profit and loss account;

out of the profits of the financial year in which interim dividend is sought to be declared;

out of profits generated in the financial year till the quarter preceding the date of declaration of the interim dividend;

In case, the Company has incurred loss during the current financial year up to the end of the quarter immediately preceding the date of declaration of the dividend, such dividend shall not be declared at a rate higher than the average dividends declared during three preceding financial years. c. Final Dividend:

Recommendation, if any, shall be made by the Board, usually in the Board meeting that considers and approves the annual financial statements, subject to approval of the shareholders of the Company.

The dividend as recommended by the Board shall be approved / declared in the AGM of the Company.

The payment of dividends shall be made within the statutorily prescribed period from the date of declaration, to those shareholders who are entitled to receive the dividend on the record date / book closure period, as per the applicable laws.

Final dividend shall be declared after audited financials are available and after taking into account the interim dividends declared in that year.

Unrealized gains in other comprehensive income will not be considered for declaration of dividend.

5. Parameters to be considered:

5.1 Parameters to be considered before recommending dividend:

The Board of Directors may declare dividend equivalent to 50% or more of the Profit after Tax (PAT) of the Company after considering the following factors:

Statutory and Regulatory factors

The Company shall declare dividend only after ensuring compliance with provisions of the Act, rules made thereunder, the SEBI Listing Regulations, as amended, any other statutory laws as may be applicable from time to time and Articles of Association of the Company.

Financial Factors / Internal Factors

Profits earned during the financial year:

Accumulated reserves;

Profitability outlook for the coming years

Expected future capex requirements

Expansion or modernisation of existing businesses;

Free cash flows after considering capital expenditure requirement, resources required to fund acquisitions, diversification, repayment of borrowings, change in working capital, research and development, to meet contingencies etc.

Cost of borrowings for long term and short-term projects proposed to be undertaken by the Company.

Past dividend trends like rate of dividend, pay- out ratio, EPS, bonus, split of shares etc.

Other factors which the Board may consider.

External Factors

Shareholder expectations, including individual shareholders;

Significant changes in the Macro-economic &

Market conditions;

Taxation, Regulation & Govt. Policies.

5.2 Circumstances under which the shareholders of the Company may or may not expect dividend

The Company may not distribute a dividend or may distribute a reduced quantum of dividend when there is absence or inadequacy of profits. Also, if one or more of the criteria for recommendation of dividend is not fulfilled by the Company, such as: a) Any regulatory restriction placed on the Company on declaration of dividend; b) Significantly higher working capital requirements adversely impacting free cash flow; c) Due to losses incurred; d) Any corporate action resulting cash outflow, such as buyback of shares, investments, mergers, acquisitions etc.; e) Bonus issue; f) if the Board is of the view that it would be prudent to conserve capital for expansion of business growth or other exigencies, which shall be stated by the Board; g) Any external factors such as changes in tax law, significant change in Indian economy etc. The reasons stated above are illustrative and not exhaustive.

5.3 Utilisation of retained earnings

Retained earnings shall be utilised in accordance with prevailing regulatory requirements, creating reserves for specific objectives, fortifying the balance sheet against contingencies, generating higher returns for shareholders through reinvestment of profits for future growth and expansion and any other specific purpose as approved by the Board of Directors of the Company. The Company shall endeavor to utilise retained earnings in a manner that shall be beneficial to both, the interests of the Company and its stakeholders.

6. Non-applicability of Policy:

The Policy shall not apply to the dividend to be paid to the preference shareholders.

7. Review:

7.1 The Policy would be subject to revision/ amendment in accordance with the applicable laws.

7.2 The Board shall review the Policy of the Company at least once in every three years.

8. Conflict:

In the event of any conflict between this policy and the extant regulations, the regulations shall prevail.

9. Amendments:

Any subsequent amendment/modification in the Act, SEBI Listing Regulations and/or other applicable laws in this regard shall automatically apply to this Policy.

10. Disclosure of Policy:

The Policy shall be uploaded on the website of the Company and the weblink of the same shall be disclosed in the Annual Report of the Company.

11. Effective Date:

11.1. The Policy has come into effect from the date of approval of the Board i.e. 16th December, 2019. 11.2. The Policy has been amended, from time to time as mentioned below:

Number of times,	Board Meeting
policy amended	Date
1st Amendment	12th September, 2020
2nd Amendment	28th October, 2021