nippon life india asset management ltd share price Directors report

Dear Shareholders,

Your Directors take pleasure in presenting their 28th Annual Report on the business and operations of your Company, together with the audited financial statements, for the year ended March 31, 2023.

Your Company endeavors to remain one of the leading players in the Asset Management business in India and keeps exploring opportunities for enhancing its global footprint as well.

Your Company is a subsidiary Company of Nippon Life Insurance Company ("NLI"). NLI is a, fortune 500 Company and one of the largest life insurers in the world managing assets of over USD 700 billion. It has a large global network with presence across US, Europe, Asia, and Australia along with a 130-year track record in Life Insurance business as well as global investments across Asset Management companies. This pedigree brings strong synergistic benefits that very well complements your Companys domestic expertise in the Asse Management business and provides a thrust to its significant growth potential. Your Company expects substantial upside in terms of increased AUM & adoption of best governance & risk management practices based on NLIs global positioning & relationships.

FINANCIAL PERFORMANCE AND STATE OF COMPANYS AFFAIRS

The standalone and consolidated financial statements of the Company for the financial year ended March 31, 2023, have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act. The financial highlights (on a consolidated and standalone basis) of the Company for the year ended March 31, 2023, are as follows:

				(Rs. Crores)
	Consolidated		Standalone
Particulars	Year ended March 31, 2023	Year ended March 31, 2022	Year ended March 31, 2023	Year ended March 31, 2022
Gross Income	1516.61	1535.63	1431.18	1428.42
Profit before exceptional item and tax	927.74	988.67	917.77	945.43
Exceptional Items	-	-	-	-
Profit Before tax	927.74	988.67	917.77	945.43
Current Tax	212.14	206.66	212.53	200.38
Deferred Tax	(7.33)	38.64	(9.70)	33.84
Profit for the year	722.93	743.37	714.94	711.21
Share of Profit from Associates	0.40	0.79	-	-
Profit attributable to non-controlling interest	-	-	-	-
Other Comprehensive Income	(186)	(0.30)	(185)	(0.27)
Balance carried to Balance Sheet	721.47	743.86	713.09	710.94
Basic EPS of Rs. 10 each	11.61	12.00	11.48	11.47
Diluted EPS of Rs. 10 each	11.53	11.80	11.40	11.28

The Consolidated Financial Statements of the Company form part of this Annual Report.

The annual accounts of all the subsidiary companies will be placed on the website of the Company.

OPERATION HIGHLIGHTS

As you are aware that your Company acts as the asset manager to Nippon India Mutual Fund ("NIMF"), which is one of the largest Mutual Fund in India, in terms of the Quarterly Average Assets under Management (QAAUM) as on March 31, 2023.

The QAAUM of NIMF as on March 31, 2023, was Rs.2,93,159 Crores comprising of Rs.1,30,087 Crores of Equity, Rs.54,068 Crores of Debt, Rs.38,979 Crores of Liquid Funds and Rs.70,024 Crores of ETF assets. It may be noted that the QAAUM of NIMF as on March 31, 2022 was Rs.2,83,261 Crores comprising of Rs.1,19,062 Crores of Equity, Rs.73,173 Crores of Debt, Rs.35,230 Crores of Liquid Funds and Rs.55,796 Crores of ETF assets.

Overall QAAUM of NIMF has increased by 3.39% during the financial year 2022-23, while the Indian Mutual Fund Industry witnessed an overall growth of 5.55% in terms of QAAUM (Source: AMFI).

New Schemes Launched:

During the year under review, Nippon India Mutual Fund launched the following new schemes:

Scheme Name	Type	Structure
Nippon India Nifty Alpha Low Volatility 30 Index Fund	OPEN	An open-ended scheme replicating/tracking Nifty Alpha Low Volatility 30 Index
Nippon India Fixed Horizon Fund - XLIV - Series 1	CLOSE	A Close Ended Scheme. Relatively High interest rate risk and moderate Credit Risk
Nippon India Nifty AAA PSU Bond Plus SDL - Sep 2026 Maturity 50:50 Index Fund	OPEN	An open-ended Target Maturity Index Fund investing in constituents of Nifty AAA PSU Bond Plus SDL Sep 2026 50:50 Index. A Relatively High interest rate risk and Relatively Low Credit Risk.
Nippon India Nifty SDL Plus G-Sec - Jun 2028 Maturity 70:30 Index Fund	OPEN	An open-ended Target Maturity Index Fund investing in constituents of Nifty SDL Plus G-Sec Jun 2028 70:30 Index. A Relatively High interest rate risk and Relatively Low Credit Risk.
Nippon India Fixed Horizon Fund XLIV - Series 4	CLOSE	A Close Ended Scheme. Relatively High interest rate risk and moderate Credit Risk
Nippon India Fixed Horizon Fund - XLIV - Series 2	CLOSE	A Close Ended Scheme. Relatively Low interest rate risk and moderate Credit Risk
Nippon India Nifty G-Sec Sep 2027 Maturity Index Fund	OPEN	An open-ended Target Maturity Index Fund investing in constituents of Nifty G-Sec Sep 2027 Index. A Relatively High Interest rate risk and Relatively Low Credit Risk.
Nippon India Nifty G-Sec Jun 2036 Maturity Index Fund	OPEN	An open-ended Target Maturity Index Fund investing in constituents of Nifty G-Sec Jun 2036 Index. A Relatively High Interest rate risk and Relatively Low Credit Risk.
Nippon India Nifty SDL Plus G-Sec - Jun 2029 Maturity 70:30 Index Fund	OPEN	An open-ended Target Maturity Index Fund investing in constituents of Nifty SDL Plus G-Sec Jun 2029 70:30 Index. A Relatively High interest rate risk and Relatively Low Credit Risk
Nippon India Nifty G-Sec Oct 2028 Maturity Index Fund	OPEN	An open-ended Target Maturity Index Fund investing in constituents of Nifty G-Sec Oct 2028 Index. A Relatively High interest rate risk and Relatively Low Credit Risk
Nippon India Fixed Horizon Fund XLV - Series 4	CLOSE	A Close Ended Scheme. Relatively High interest rate risk and Relatively Low Credit Risk
Nippon India Fixed Horizon Fund XLV - Series 5	CLOSE	A Close Ended Scheme. Relatively High interest rate risk and Relatively High Credit Risk

As on March 31, 2023, NIMF has a well-rounded portfolio of 98 schemes under various categories such as Equity, Debt, Hybrid, Exchange Traded Funds, Index Funds, Fixed Maturity Plans, and Interval Funds.

DETAILS OF MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There are no material changes and commitments affecting the financial position of the Company since the date of the financial statements i.e, March 31, 2023.

DIVIDEND

During the year, the Company had declared and paid an interim dividend of Rs.4.00 per equity share (40%) amounting to Rs.249.23 Crores. The Board has also recommended a final dividend of Rs.7.50 per Equity Share (75%) of Rs.10/- each for the financial year ended March 31, 2023, for the approval of the Shareholders at the ensuing Annual General meeting. With this the total dividend for the financial year 2022-23 would be approximately Rs.716 Crores, including the interim dividend of Rs.4.00 per equity share distributed in November 2022. The Final dividend, if declared, will be paid after the Annual General Meeting.

The dividend pay-out is in accordance with the Companys Dividend Distribution Policy which forms part of this Annual Report.

AMOUNT TO BE CARRIED TO RESERVES

Your Directors do not propose any amount to be transferred to the General Reserves of the Company.

MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis Report for the year under review as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) is presented in a separate section forming part of this Annual Report.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENT

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act are given in the notes to the Financial Statements.

There is no difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions.

DEPOSITS

The Company has neither accepted nor renewed any fixed deposits during the year. There are no outstanding or unclaimed deposits, unclaimed / unpaid interest, refunds due to the deposit holders or to be deposited to the Investor Education and Protection Fund as on March 31, 2023.

EMPLOYEES STOCK OPTION SCHEME

With the perspective of promoting the culture of employee ownership and to attract, retain, motivate and incentivise senior as well as critical talent, the Company has formulated Nippon Life India Asset Management Limited - Employee Stock Option Plan 2017 ("NAM INDIA ESOP 2017") [formerly known as "Reliance Nippon Life Asset Management Limited - Employee Stock Option Plan 2017"] ("ESOP 2017" / "Plan") as its stock option scheme, which was launched in August 2017 and Nippon Life India Asset Management Limited - Employee Stock Option Plan 2019 ("NAM INDIA ESOP 2019") [formerly known as "Reliance Nippon Life Asset Management Limited - Employee Stock Option Plan 2019"] ("ESOP 2019" / "Plan") as its stock option scheme, which was launched in July 2019. The Nomination and Remuneration Committee of the Board monitors and administers these Plans and from time - to - time grants stock options to the employees.

Both ESOP 2017 as well as ESOP 2019 are in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (SEBI Regulations).

However, having regard to the provisions of first provision to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to all the Members of the Company and others entitled thereto. The certificate from the Statutory Auditors of the Company confirming the compliance of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 with respect to the Companys Employees Stock Option Scheme Plans will be available for inspection through electronic mode. Any member interested in obtaining the same may write to the Company Secretary and the same will be furnished on request. The details as required to be disclosed under SEBI Regulations are available on the Companys website at https:// mf.nipponindiaim.com/investor-service/customer- service/nam-india-shareholders-investors

CAPITAL STRUCTURE

During the Financial year 2022-23, the Company issued and allotted 11,57,515 Equity Shares to eligible employees on exercise of options granted under the Employee Stock Option Plans of the Company. Hence, the issued, subscribed and paid-up capital of the Company was 62,31,75,443 Equity Shares of g 10 each at the end of the Financial Year.

The Equity History of the Company has been provided in the Corporate Governance Report.

COMPLIANCE CULTURE & RISK MANAGEMENT

Your Company maintains a strong focus on Compliance and Risk Management as these are essential elements for its long-term success. The compliance and risk functions are managed by a dedicated and experienced team of professionals. The management has a zero tolerance towards risk and compliance failures or breaches.

There exists a comprehensive Compliance Manual, which is reviewed by your Board of Directors from time to time and it facilitates the Companys Compliance team to monitor various compliance requirements effectively & comprehensively. The Compliance team conducts periodical educative & training programmes on various regulatory compliances matters for various sections of employees.

Your Company also has a comprehensive Risk Management Policy that envisages a structured and consistent enterprise-wide risk management framework, based on the three lines of defense model, to ensure that risk management processes are consistently applied across the organisation and provide reasonable assurance regarding achievement of organisations objectives.

The risk management policy clearly sets out the objectives & elements of risk management within the organisation, including the constitution of an independent Risk Management department headed by Chief Risk Officer (reporting directly to the CEO and to the Board of Directors), Risk Management Committee at executive and Board levels. The policy also define the roles and responsibility of all the CXOs towards risk management as part of first line of defense model.

Your Company promotes risk awareness culture throughout the organisation and risk management is an integral part of decision making and day-today operations of all activities at all levels across the organisation. There are well documented & Board approved policies & processes to address and mitigate various risks to which the Company is exposed. The Company also has a robust business continuity plan which is tested on a periodic basis to ensure uninterrupted operations. The risk department conducts various training programmes on various facets of risk management including cyber risk awareness, conduct risk, operational risk, Anti Money Laundering, etc.

The Company has a structured risk reporting mechanism to ensure risks are monitored and reviewed by CRO, Senior Management, RMCBs and Board on a periodic basis.

INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY

The Company has an Internal Control System which is commensurate with the size, scale and complexity of its business operations.

For effective risk management and control, the Company has established structures and responsibilities in line with the "Three Lines of Defense" model, where 1st line being business operations, 2nd line is the oversight functions like Risk Management and Compliance and 3rd line is Internal Audit. To maintain its objectivity and independence, the Internal Audit department reports to the Audit Committee. The Internal Audit department monitors and evaluates the efficacy and adequacy of the internal control system in the Company, its compliance with operating systems, accounting procedures and policies. Based on the report of the Internal Auditor, process owners undertake corrective action in their respective areas and thereby strengthen the controls. The Internal Audit department follows up on pending audit issues and ensures that corrective actions have been taken. Significant audit observations, if any, and corrective actions thereon, are presented to the Audit Committee of the Board.

CORPORATE GOVERNANCE

Your Directors wish to reiterate your Companys commitment to the highest standards of corporate governance to enhance trust of all its stakeholders. Strong & robust corporate governance practices have facilitated your Company in standing up to the continued scrutiny of domestic & international investors and that of various Regulatory authorities.

The report on Corporate Governance as stipulated under Regulation 34(3) read with Para C of Schedule V of the Listing Regulations is presented in a separate section forming part of this Annual Report.

A Certificate from the auditors of the Company i.e. M/s. S. R. Batliboi & Co. LLP, Chartered Accountants conforming compliance to the conditions of Corporate Governance as stipulated under Para E of Schedule V of the Listing Regulations, is enclosed to this Report.

VIGIL MECHANISM

In accordance with Section 177 of the Act and the Listing Regulations, the Company has formulated a Vigil Mechanism to address the genuine concerns, if any. The Whistle Blower policy can be accessed on the Companys website. It is affirmed that no person has been denied access to the Chairperson of the Audit Committee.

CORPORATE SOCIAL RESPONSIBILITY

As part of its initiatives under "Corporate Social Responsibility (CSR)", the Company has undertaken projects in the areas of promoting healthcare, education and rural development in accordance with Schedule VII of the Act.

The Annual Report on CSR activities is annexed herewith as Annexure A.

SUBSIDIARIES & ASSOCIATE COMPANY

As of March 31, 2023, your Company had two (2) subsidiaries. One of such subsidiaries is overseas i.e., one subsidiary in Singapore and one subsidiary in India. Both the subsidiaries of the Company are engaged in financial services and related activities. In addition, the Company also has an Associate company in India, which has already surrendered its business license/ regulatory approval to act as a Pension Fund Manager. This particular company currently has no business operations, and it is therefore proposed to be wound up, in accordance with the applicable laws.

During the year our subsidiary company, Nippon Life India Asset Management (Mauritius) Limited, has been voluntarily wound up.

A statement w.r.t. the performance and the financial position of the subsidiaries of the Company forms a part of the Consolidated Financial Statements of the Company.

The performance of the financial position of the subsidiary companies is presented in the Management Discussions and Analysis Report forming part of this Annual Report. The policy for determining material subsidiary companies may be accessed on the Companys website at https://mf.nipponindiaim.com/ InvestorServices/Pages/lnvestor-Policies.aspx

Further, The International Financial Services Centres Authority (IFSCA) has granted NAM India (IFSC Branch) the certificate of registration to carry out the activities as a Fund Management Entity (Non-Retail) under the IFSCA (Fund Management) Regulations, 2022 on March 1, 2023.

KEY MANAGERIAL PERSONNEL

During the year under review, the following employees were the Key Managerial Personnel of the Company:

a) Mr. Sundeep Sikka - Executive Director & Chief Executive Officer;

b) Mr. Ajay Patel - Manager;

c) Mr. Prateek Jain - Chief Financial Officer; and

d) Ms. Nilufer Shekhawat - Company Secretary

DIRECTORS

During the year, Mr. Kazuyuki Saigo who was a Director as on March 31, 2022, resigned from the directorship of the Company w.e.f. April 21, 2022. Mr. Tomohiro Yao and Mr. Minoru Kimura were first appointed as Additional Directors of the Company w.e.f. April 21, 2022. Mr. Tomohiro Yao and Mr. Minoru Kimura were then appointed as Non-Executive Nominee Director w.e.f. July 12, 2022.

As on the date of this Boards Report, Mr. Hiroki Yamauchi was appointed as an additional Director (Non-Executive Nominee Director) in place of Mr. Akira Shibata. Mr. Upendra Kumar Sinha was appointed as an additional Director (Non-Executive Independent Director) and Chairman of the Board to be effective May 1, 2023. Both these appointments are subject to approval of the Shareholders at the ensuing Annual General Meeting.

All the Independent Directors of your Company i.e., General Ved Prakash Malik (Retd.), Ms. Ameeta Chatterjee, Mr. Ashvin Parekh and Mr. B. Sriram have already furnished the required declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act.

In the opinion of the Board, the Independent Directors possess the requisite expertise and experience and are people of high integrity and repute. They fulfil the conditions specified in the Act and the Rules made thereunder and are independent of the management.

In terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by The Indian Institute of Corporate Affairs, Manesar (IICA). The Independent Directors are also required to undertake online proficiency self-assessment test conducted by the IICA within a period of two years from the date of inclusion of their names in the data bank, unless they meet the criteria specified for exemption. All the Independent Directors of the Company are exempt from the requirement to undertake online proficiency self assessment test.

PERFORMANCE EVALUATION OF DIRECTORS, BOARD AND COMMITTEES

The Company has devised a policy for the performance evaluation of the individual directors, Board and its Committees, which also includes the criteria for carrying out the said performance evaluation. Pursuant to the provisions of the Act and Regulation 17(10) of Listing Regulations and as prescribed in the stated policy of the Board, the Board has carried out an annual performance evaluation of (i) the Directors (Independent and non-independent); (ii) itself (as a whole); (iii) its committees and (iv) fulfillment of Independence criteria. The Board performance was evaluated based on input received from the Board Members after considering criteria such as Board composition and structure, effectiveness of Board / Committee processes, and information provided to the Board, etc. In terms of the requirements of the Act, a separate meeting of the Independent Directors was also held during the year.

BOARD AND COMMITTEE MEETINGS

During the year under review, eight (8) Board meetings were held.

Your Directors wish to inform that the functioning of the Board is supplemented by various committees (Board sub-committees and management committees), which have been constituted from time to time, such as Audit Committee, Committee of Directors, CSR Committee, Stakeholders Relationship Committee, Nomination & Remuneration Committee, Risk Management Committee of the Board, Valuation Committee, Investment Committee, Risk Management Committee, Allotment Committee, Broker Empanelment Committee, Operating Committee, Compliance Committee, Stewardship Committee, Proxy Voting Committee, Information Security Risk Management Committee, etc. to name a few. Each of the aforesaid Committees has been constituted in order to ensure due compliance with the applicable laws and to ensure that the highest levels of corporate governance are followed and practiced. The minutes of the meetings of each of these Committees are duly placed before the Board for noting and confirmation.

AUDIT COMMITTEE

In terms of the requirements of Section 177 of the Act, the Audit Committee of the Company consists of the majority of Independent Directors. As on date of this report, it comprises Mr. Ashvin Parekh [Independent Director], Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. B. Sriram [Independent Director], Mr. Hiroki Yamauchi [Non- Independent Director] and Mr. Minoru Kimura [Non- Independent Director]. Mr. Ashvin Parekh acts as the Chairperson of this Committee.

During the year, eight (8) meetings of the Audit Committee were held, which includes 1 joint Audit Committee between the Audit Committee of the Asset Management Company (AMC) with the Audit Committee of the Trustees and one (1) meeting to interact with the Statutory and Internal Auditors of the Mutual Fund without the engagement of management of the AMC as stipulated in SEBI Circular No. SEBI/HO/IMD/IMD-IDOF2/P/CIR/2022/17 dated February 09, 2022.

Other relevant details in this regard have been provided in the Corporate Governance Report.

NOMINATION & REMUNERATION COMMITTEE

In terms of the requirements of Section 178 of the Act, the Nomination & Remuneration Committee of the Company consists of the majority of Independent Directors. As on date of this report, it comprises, Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Tomohiro Yao [Non-Independent Director] and Mr. Minoru Kimura [Non-Independent Director]. General Ved Prakash Malik (Retd.) acts as the Chairperson of this Committee.

During the year, three (3) meetings of the Nomination & Remuneration Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.

The Nomination & Remuneration Policy has been provided as Annexure B to the Boards Report.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

In terms of the requirements of Section 135 of the Act, the Corporate Social Responsibility ("CSR") Committee of the Company consists of eight (8) Members. As on date of this report, it comprises Mr. Tomohiro Yao [Non-Independent Director], Ms. Ameeta Chatterjee [Independent Director], General Ved Prakash Malik (Retd.) [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Sundeep Sikka [CEO & Executive Director], Mr. Hiroki Yamauchi [Non-Independent Director] and Mr. Minoru Kimura [Non-Independent Director]. Mr. Tomohiro Yao acts as the Chairperson of this Committee.

During the year 2022-23, two (2) meetings of the CSR Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.

STAKEHOLDERS RELATIONSHIP COMMITTEE

In terms of the requirements of Section 178 of the Act, the Stakeholders Relationship Committee of the Company consists of five Members. As on date of this report, it comprises Ms. Ameeta Chatterjee [Independent Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director], Mr. Tomohiro Yao [Non-Independent Director] and Mr. Sundeep Sikka [CEO & Executive Director]. Ms. Ameeta Chatterjee acts as the Chairperson of this Committee.

During the year, two (2) meetings of the Stakeholders Relationship Committee were held. Other relevant details in this regard have been provided in the Corporate Governance Report.

RISK MANAGEMENT COMMITTEE

In terms of the relevant requirements under the Listing Regulations, the Company has constituted a Risk Management Committee of the Board. The Committee presently comprises of Mr. Tomohiro Yao [Non-Independent Director], Mr. Hiroki Yamauchi [Non-Independent Director], Mr. Sundeep Sikka [CEO & Executive Director], Mr. Ashvin Parekh [Independent Director], Mr. B. Sriram [Independent Director] and Mr. Rishi Garg [Chief Risk Officer] as its Members. Mr. Tomohiro Yao acts as the Chairperson of this Committee.

During the year, five (5) meetings of the Risk Management Committee of the Board were held. Other relevant details in this regard have been provided in the Corporate Governance Report.

AUDITORS OF THE COMPANY - STATUTORY AND INTERNAL

Statutory Auditors:

M/s. S. R. Batliboi & Co. LLP, Chartered Accountants shall hold office as Statutory Auditors of the Company until the conclusion of this 28th Annual General Meeting.

The Company has already received a consent letter from M/s. S. R. Batliboi & Co. LLP, Chartered Accountants communicating their willingness to be re-appointed as the Statutory Auditors of the Company and that their re-appointment, if made, would be within

the limits as prescribed under Section 139 of the Companies Act, 2013.

Your Directors hereby recommends the reappointment of M/s. S. R. Batliboi & Co. LLP, Chartered Accountants as the Statutory Auditors of the Company for a second term of 5 (five) consecutive years, to hold office from the conclusion of this Annual General Meeting until the conclusion of the 33rd Annual General Meeting of the Company.

Internal Auditors:

JHS & Associates LLP, Chartered Accountants (JHS) were appointed as the Internal Auditors of your Company for the financial year 2022-23. Having regard to their longevity in office and as a matter of good governance, your Directors have approved the rotation of JHS and appointed PricewaterhouseCoopers Services LLP (PWC) as the Internal Auditors of your Company for the financial year 2023-24.

Your Directors wish to place on record the contributions made by JHS during their tenure as Internal Auditors of your Company.

AUDITORS OF THE SCHEMES OF NIPPON INDIA MUTUAL FUND-STATUTORY AND INTERNAL

In accordance with the applicable provisions of law, the Company has appointed Statutory and Internal Auditors for various Schemes of Nippon India Mutual Fund, who periodically submit their reports, which are placed before the Audit Committee for discussion, review and implementation of their recommendations.

Statutory Auditors:

M/s. Walker Chandiok & Co. LLP, Chartered Accountants were appointed as Statutory Auditors of the Schemes of Nippon India Mutual Fund for the financial year 2022-23.

Internal Auditors:

M/s. Deloitte Haskins & Sells LLP, Chartered Accountants (Deloitte) were appointed as Internal Auditors of the Schemes of Nippon India Mutual Fund and the Portfolio Management Services division of the Company, for the financial year 2022-23. Having regard to their longevity in office and as a matter of good governance, your Directors have approved the rotation of Deloitte and appointed PricewaterhouseCoopers Services LLP (PWC) as the Internal Auditors of the Schemes of Nippon India Mutual Fund and the Portfolio Management Services division of the Company for the financial year 2023-24.

Your Directors wish to place on record the contributions made by Deloitte during their tenure as Internal Auditors of the Schemes of Nippon India Mutual Fund and the Portfolio Management Services division of the Company.

AUDITORS REPORT

The observations and comments given by the Statutory Auditors in their report read together with notes on financial statements are self-explanatory and hence does not require any further comments in terms of Section 134 of the Act.

SECRETARIAL STANDARDS

During the year under review, the Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Directors had appointed M/s. M. Siroya and Company, Mumbai, a firm of Company Secretaries in-practice to undertake the Secretarial Audit of the Company for the financial year 2022-23. In this regard, the Report submitted by the Secretarial Auditor is annexed as Annexure C.

Your Directors are pleased to inform you that the report from the Secretarial Auditors does not contain any qualifications or negative remarks.

ANNUAL RETURN

Pursuant to Section 134(3)(a) and Section 92(3) of the Act read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company has been placed on the website of the Company and can be accessed at https://mf.nipponindiaim.com/AboutUs/ FinancialReports/Pages/Annual-Return.aspx .

PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

CONSERVATION OF ENERGY:

The operations of the Company do not consume high levels of energy. Adequate measures have been taken to conserve energy wherever feasible. Your Company uses the latest technology and energy - efficient equipments. Your Company only uses LED lights and 5-star air-conditioning for majority of offices. As energy cost forms a very small part of the total costs, the impact on cost is not material.

TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION:

Business Easy Revamp - Business Easy 2.0 app, our Digital asset for our distributors, is an all-encompassing solution that acts as a complete Customer Relationship Management tool. The app works as a Digital branch through which distributors can manage their Mutual Fund business virtually. With the objective of evolving the app from a business facilitator to a growth enabler, this year saw the addition of new enhancements and features to the app. A number of features such as Intern Distributor addition, quick investment module were added along with meaningful reports for distributors to maximise the usage of the App.

Investor App and Website Enhancement - Our flagship assets, namely the InvestEasy App and the InvestEasy website are constantly upgraded to include enhancements and innovations. These include workflow enhancements such as Cart Buying where users can purchase more than one product at a time. A number of regulatory compliance requirements have been added in the year as well.

Process Automation across Organisation - As part of the automation initiative a number of processes have been automated across operations, finance, risk and technology. This has freed up resources to be redeployed elsewhere.

Implementation of cloud initiatives - Continuing on NAM Indias cloud journey a number of initiatives on cloud where the infrastructure for initiatives such as Data Lake, Analytics, new core applications have been implemented on the AWS cloud.

RESEARCH AND DEVELOPMENT DIGITAL ADOPTION AND INNOVATION:

Nippon India Mutual Fund, continue to envision and execute key Digital transformation endeavors year on year that are aimed to strengthen our already robust Digital ecosystem.

• Focus always remains on empowering our investors during moments of truth and on a here & now manner to take quicker, smarter, and well- informed decisions on how and where they should invest their money when they transact on our Digital assets. Such empowerment is fueled by our capabilities to crunch & run real-time analysis on the enormous amount of on-asset & offline data points we have regarding our consumers, their past purchases, and future propensities.

• Intelligent, data led digital assets, can learn, and predict user behavior powered by both the real time frameworks and archived analytical frameworks which are operating on an advanced algo network. This helps in e-serving highly personalised and customised experiences to give our millennial, zillennial and legacy investors or partners accurate recommendations, suggestions, on-the-fly nudges, predictive service and much more as they advance in their journeys.

Implementation of Data Models for cross sell and upsell have been implemented as part of the innovation adoption initiatives. As part of this movement third party model creators have been engaged with enhancing the data models of the organisation. Use cases are created with the support of business to identify patterns and opportunities in the models and campaigns are triggered on the analytics ecosystem to connect with customers and track the efficacy of the models.

We at NAM India also are working on further enhancing our digital assets by bringing in innovation in the payment gateway space especially towards frictionless payments. The current payment gateway ecosystem gives us as Digital innovators a lot of play with respect to designing workflows especially in the UPI space.

FOREIGN EXCHANGE EARNINGS AND OUTGO:

During the year under review, the Company earned foreign exchange equivalent to g 18.09 Crores (Previous Year: g 22.85 Crores). The Company spent foreign exchange equivalent to g 11.25 Crores (Previous Year: g 6.98 Crores).

DIRECTORS RESPONSIBILITY STATEMENT

As per the requirements of Sub Section (5) of Section 134 of the Act, the Directors confirm that -

(i) In the preparation of the annual accounts for the financial year ended March 31, 2023,the applicable accounting standards have been followed and that there are no material departures;

(ii) The Directors have selected such accounting policies in consultation with the Statutory Auditors and have applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2023 and of the profit of the Company for the year under review;

(iii) The Directors have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) The Directors have prepared the annual accounts of the Company on a going concern basis;

(v) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

(vi) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

CONTRACT AND ARRANGEMENTS WITH RELATED PARTIES

All contracts/ arrangements/ transactions entered into/ by the Company during the financial year under review with related parties were on an arms length basis and in the ordinary course of business. There were no materially significant related party transactions which could have potential conflict with the interest of the Company at large. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.

All Related Party Transactions were placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee was obtained for the transactions which were of a repetitive nature. The transactions entered into pursuant to the omnibus approval so granted were reviewed and statements giving details of all related party transactions were placed before the Audit Committee and the Board of Directors for their review on a quarterly basis. The policy on Related Party Transactions as approved by the Board is uploaded on the Companys website at the following link: https://mf.nipponindiaim.com/InvestorServices/Pages/Investor-Policies.aspx

Your Directors draw attention of the Members to Note No. 28 to the financial statement which sets out related party disclosures.

PARTICULARS OF FRAUDS REPORTED BY THE AUDITORS

In terms of Section 143(12) of the Act, M/s. S R Batliboi & Co. LLP, Chartered Accountants, the Statutory Auditors of the Company have not reported any instance of fraud having taken place during the year under review, in their Audit Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators/ Courts which would impact the going concern status of the Company and its future operations.

DETAILS OF APPLICATION MADE BY THE COMPANY OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONGWITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR

The Company on behalf of the schemes of Nippon India Mutual Fund invests in various debt market instruments (non-convertible debentures) issued by various issuers. In order to realise the debenture outstandings, the Company has filed certain applications under the Insolvency and Bankruptcy Code, 2016. The Mutual Fund Division of the Company has filed (a) an IBC proceeding against Avantha Holdings Limited in January 2020 before Honble NCLT New Delhi which is withdrawn as Avantha Holdings Limited has paid its dues. The Company is also a respondent party to an IBC proceeding filed in the matter of Reserve Bank of India v. Dewan Housing Finance Corporation Limited pending before the Honble NCLT, Mumbai.

The Portfolio Management Services Division of the Company has filed:

(a) IBC proceedings against Fortuna Buildcon India Private Limited was filed in November 2017 before the Honble NCLT, Bangalore, wherein currently the resolution plan has been submitted to the Honble NCLT for approval

(b) three IBC proceedings against three Biodiversity Conservation India Private Limited group companies (BCIL Zed Ria Properties Private Limited, BCIL Red Earth Developers India Pvt. Ltd. and Biodiversity Conservation India Private Limited) were filed in December 2017 before the Honble NCLT, Bangalore. The NCLT has approved resolution plans in BCIL Zed Ria Properties Private Limited and in BCIL Red Earth Developers India Pvt. Ltd., which are currently under implementation while Biodiversity Conservation India Private Limited is currently under liquidation. The Company is also a respondent to 2 (two) appeals in BCIL Red Earth Developers India Private Limited and in 3 (three) appeals in BCIL Zed Ria Properties Private Limited, before Honble NCLAT, Chennai, which have been filed challenging the approved resolution plans;

(c) IBC proceedings have been filed against the promoters of Biodiversity Conservation India Private Limited in November 2020 before Honble NCLT, Bangalore which are currently at a pre-admission stage;

(d) IBC proceeding filed against Green Valley Shelters Private Limited in December 2019, before Honble NCLT, Chennai, was admitted in August 2021, however the proceedings are currently temporarily stayed under an order of the Supreme Court. The Company is a respondent in a civil appeal filed by the promoters of Green Valley Shelters Private Limited before the Honble Supreme Court, challenging the admission of IBC proceedings against Green Valley Shelters Private Limited, which is currently pending under directions of exploring a settlement;

(e) an IBC proceeding filed against the promoters of Green Valley Shelters Private Limited in October 2020 before the Honble NCLT, Chennai and is at a pre-admission stage;

(f) an IBC proceeding was filed against Arkie Atelier Design India Private Limited, being the corporate guarantor for the debentures issued by Green Valley Shelters Private Limited in November 2021 and is currently at a preadmission stage;

(g) an IBC proceeding filed against Bharucha & Motivala Infrastructure Private Limited, being corporate guarantor for the debentures issued by Lake District Realty Private Limited, in November 2019 before Honble NCLT, Mumbai was admitted in May 2021, but has been stayed pursuant to an order of the Honble NCLAT in July 2021. The Company is a respondent in the appeal filed by the promoters of Lake District Realty Private Limited before the Honble NCLAT, Delhi, challenging the admission of IBC proceedings against Bharucha & Motivala Infrastructure Private Limited, which is currently reserved for orders;

(h) IBC proceedings have been filed against the promoters of Lake District Realty Private Limited in November 2021, which is currently at a pre-admission stage;

(i) an IBC proceedings has been filed against Ashapura Options Private Limited, being the corporate guarantor for the debentures issued by Ashapura Housing Private Limited in February 2022 which is at a pre-admission stage.

(j) IBC proceedings have also been filed against four (4) promoter guarantors of Ashapura Housing Private Limited, which are at a pre-admission stage.

COST RECORDS

The Company is not required to maintain cost records as specified by the Central Government under subsection (1) of section 148 of the Companies Act, 2013.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

In terms of the provisions of Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules are provided in the Annexure to the Boards Report. Disclosures relating to the remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended also forms part of this Report. However, having regard to the provisions of Section 136 of the Act, the Annual Report excluding the aforesaid information is being sent to all the Members of the Company and others entitled thereto. Any member interested in obtaining the said information may write to the Company Secretary. Upon such request the information shall be furnished.

PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

Your Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. Following is a summary of sexual harassment complaints received and disposed off during the year:

• No. of complaints received: 0

• No. of complaints disposed off: 0

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

Pursuant to Regulation 34(2)(f) of Listing Regulations, top 1000 listed entities by market capitalisation have to publish a Business Responsibility and Sustainability Report from FY 2022-23. Business Responsibility and Sustainability Report for the year under review as stipulated under Listing Regulations is presented in the separate section forming part of this Annual Report.

AWARDS AND RECOGNITIONS

Some of the awards & recognitions, which came to NAM India include,

• Included in the elite "Kincentric Best Employers Club- 2023" an exclusive and prestigious group of organisations chosen across all industries who have been Best Employers consistently in the last 3-5 years

• Awarded Best Employer 2022 Award - 5th time in last 7 years

• Won the Outstanding Employee Engagement Award from Ekincare for our Health & Wellbeing initiative (Amongst only 9 Companies recognised in the country)

ACKNOWLEDGEMENTS

Your Directors wish to place on record their sincere appreciation for the co-operation received from various regulatory and governmental authorities including SEBI, RBI, Registrar of Companies, Maharashtra at Mumbai, PFRDA, NPS Trust, EPFO, CMPFO, Stock Exchanges, Depositories, Custodians, Bankers, Registrar, Shareholders, Investors and all other business constituents during the year under review. We believe all of them have contributed to our continued growth.

Your Directors also wish to place on record their deep appreciation for the total commitment displayed by all the executives, officers and staff, resulting in yet another eventful performance for the year.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS OF

NIPPON LIFE INDIA ASSET MANAGEMENT LIMITED

Ashvin Dhirajlal Parekh	Sundeep Sikka
Director	Executive Director & CEO
(DIN: 06559989)	(DIN: 02553654)
Place : Mumbai
Dated : April 25, 2023