Nippon Life India Asset Management Ltd. - Quarterly/Annual Result Disclosures and Notes dated 31 Dec 2018

Auditor and Management Disclosures and Notes for the quarterly results dated 31 Dec 2018

1. The Company has adopted IND AS notified as per the Companies Act 2013 (‘the Act’) read with the Companies (Indian Accounting Standard) Rules, 2015 from April 1, 2018 and the effective date of such transition is April 1, 2017. Such transition has been carried out from the erstwhile Accounting Standards notified under the Act, read with relevant issued thereunder and guidelines issued by the Reserve Bank of India (‘RBI’) (collectively referred to as ‘Previous GAAP’). Accordingly, the impact of transition has been recorded in the opening reserve as at April 1, 2017, and corresponding figures presented in these results have been restated/reclassified.

There is a possibility that these financial results for the current and previous periods may require adjustments due to changes in financial reporting requirements arising from new standards, modifications to the existing standards, guidelines issued by the MCA or changes in the use of one or more optional exemptions from full retrospective application of certain Ind AS permitted under Ind AS – 101.

2. As required by paragraph 32 of Ind AS 101, net profit reconciliation between the figures reported under previous GAAP and Ind AS is as under:

(Rs. in crore)

Particulars Quarter ended Nine Months ended

31-Dec-17 31-Dec-17

Unaudited Unaudited

Net profit after tax as reported under previous GAAP 127.55 351.56

Adjustment increasing/(decreasing) net profit after tax as reported under previous GAAP :

Fair valuation of financial assets at fair value through profit and loss on investments 9.68 14.07

Consolidation of Reliance Capital Asset Management Employees Benefits Trust 0.11 (19.47)

Reversal of fair value gains on Equity investments - FVOCI (6.10) (6.10)

Dividend on Preference Shares classified as liability - (2.17)

Actuarial loss on employee defined benefit plan recognised in 'other comprehensive income' 0.36 0.98

Employee share based payments (0.54) (0.86)

Other adjustments 0.25 (0.20)

Deferred tax adjustments on above (3.57) (5.43)

Net profit after tax as per Ind AS 127.74 332.38

Other comprehensive income, net of tax (0.23) 1.23

Total Comprehensive Income as per Ind AS 127.51 333.61

3. The details of utilisation of IPO proceeds Rs. 588.85 crore (net of IPO related expenses) are as follows:

(Rs. in crore)

Particulars Net Proceeds as per IPO Utilised upto December 31, 2018 Unutilised amount as of December 31, 2018

Setting up new branches and relocating certain existing branches 38.31 3.40 34.91

Upgrading the IT system 40.65 11.46 29.19

Advertising, marketing and brand building activities 72.09 5.99 66.10

Lending to our Subsidiary (Reliance AIF Management Company Limited) for investment of continuing interest in the new AIF schemes managed by Reliance AIF Management Company Limited 125.00 8.68 116.32

Investing towards our continuing interest in new mutual fund schemes managed by us 100.00 98.00 2.00

Funding inorganic growth and strategic initiatives 165.00 - 165.00

General corporate purposes 47.80 47.80 -

Total 588.85 175.33 413.52

4. Pursuant to resolution dated April 25, 2018, shareholders approved Reliance Nippon Life Asset Management Limited – Employee Stock Option Plan 2017 ('ESOP 2017'), to provide for grant of option to eligible employees of the Company and its subsidiaries. Under the scheme, 45,98,135 equity shares have been granted to the eligible employees and each option (after it is vested) is exercisable for one equity share having face value of Rs 10 each for an exercise price of Rs 256.10. Vesting of the options shall take place over a maximum period of 4 years with a minimum vesting period of 1 year from the date of grant i.e. April 25, 2018. The exercise period would be maximum of 7 years from the date of grant of options.

5. The Board of Directors at its meeting held on January 22, 2019 has approved an interim dividend of Rs 3/- per equity share.

6. The Company is in the business of providing asset management services to the schemes of Reliance Mutual Fund and portfolio management service to clients. The primary segment is identified as asset management services. Portfolio management services does not qualify as reportable segment as per the criteria mentioned under Ind AS 108 and hence not disclosed separately.

7. The Standalone Financial Results for the quarter /nine months ended December 31, 2018 of the Company is subject to limited review by the statutory auditors of the Company. The comparative figures for quarter and nine months ended December 31, 2017 are also Ind AS compliant.

8. The above results were reviewed by the Audit committee and approved by the Board of Directors at its meeting held on January 22, 2019.

9. Expenses other than employee benefits expense, depreciation, amortization and finance cost have been grouped under "other expenses".

10. The amounts reflected as "0.00" in the Financial Results are values with less than rupees 0.005 crore.