HDFC Asset Management Company Ltd Management Discussions

Ato Long term (LT) average, ?-Price to Book value.

The sharp equity rally in the current financial year led to small cap and mid cap indices significantly outperforming. They now trade at a noteworthy premium to their historical valuation as well as that of large caps.

Outlook for equities remain positive over the medium to long term considering the structurally robust domestic growth outlook, healthy corporate profitability and supportive government policies. However, it is essential to acknowledge that any sharp slowdown in global growth, escalation of geopolitical tensions and re-acceleration in inflation globally or locally remain the key near-term risks.

FY 23-24 was a year of significant volatility for global fixed income markets, particularly in Advanced Economies (AEs). Amidst synchronised tightening by major central banks worldwide, AEs witnessed significant swings in yields as both growth and inflation exceeded expectations. The year began on sober note with US and European Banking crisis resulting in sharp fall in the yields. However, the swift response by AEs central banks nipped the crisis in the bud. The resilient economic activity, elevated inflation and limited fallout of the banking crisis, led to the US Fed and other major AEs central banks persisting with rate hikes. In H2FY24, with easing inflation in the United States, coupled with dismal growth in Europe and the US Federal Reserves pivot in December, yields declined substantially. However, this was short lived and reversed in Q4FY24 as inflation, economic activity and labour markets surprised significantly on the upside and rate cuts expectations were pushed back to later in the year. By the end of the year, 10-year government bond yields in US and UK ended 73 bps and 44 bps higher than last year. However, Germanys 10-Year bond yields were largely flat as the concerns of economic growth weighed on yields.

Conversely, Indian Government Securities (Gsec) yields trended lower during FY 23-24 and 10-year Gsec yields ended the year at 7.06%, 25 basis points lower. The curve flattened as long-end yields rallied, while short-end yields closed the year higher than the previous year. The announcement of in-line market borrowing in the budget, coupled with a pause by the RBI in April 2023, led to yields falling in the first half. However, elevated inflation, primarily driven by food prices, along with the draining of interbank liquidity by the RBI and the possibility of Open Market Operations (OMO) sales to manage liquidity, resulted in rising yields in the second half at the short end, although yields at the long end remained rangebound. Indias

inclusion in global bond indices led to significant increase in FPIs flows post September 2023, which capped any significant rise in yields at the long end. The Corporate bond spreads were largely stable compared to the previous year. The table below gives a summary view of movement of key rates and liquidity:

absorbed/infused by RBI*

(INR billion) during the year

NM - not meaningful. ^A-bi-annual yield; #-annualised yield; & - Bloomberg AAA corporate bond index is used. @ - Spreads calculated by subtracting non-annualised Gsec yields from annualised corporate bond yields.

‘Average net daily liquidity infused/absorbed through Liquidity Adjustment Facility, exports refinance, marginal standing facility, standing deposit facility and term repos/reverse repos. Source: Bloomberg, RBI

During the year, the average interbank liquidity experienced a significant decline, primarily driven by an increase in government cash balances rise in currency in circulation, and Open Market Operations (OMO) sales conducted by the RBI. This reduction in liquidity was partially mitigated by forex purchases carried out by the RBI.

Foreign Portfolio Investors (FPIs), including those under the Voluntary Retention Route, made debt investments totalling $14.2 Billion in FY 23-24, exhibiting a noteworthy shift from FY 22-23 when there was a net sale of $0.4 Billion. The announcement of inclusion of Indian Gsec in JP Morgans global bond indices played a pivotal role in this turnround with approximately 80% of these flows occurring in H2FY24, following the announcement.

Credit markets remained largely stable throughout the year. While credit spreads reached their low point in 2022, they registered a modest increase in 2023 due to the expansion in corporate bond supply. However, these spreads still remained below historical averages, as demand continued to be robust.

In FY 23-24, the Indian fixed income markets demonstrated relative stability, in contrast to the high volatility witnessed in the debt markets of the US and other advanced economies. This resilience can be attributed to several factors, including fiscal discipline, consistent demand from long-term buyers such as insurance and provident funds, easing core inflation, a correction in commodity prices, and a comfortable external sector characterised by ample forex reserves and an improving current account.

The outlook for fixed income for FY 24-25 remains favourable in view of the following key drivers:

• Inclusion of Indias sovereign securities in JP Morgan bond index bodes well for demand outlook for G-Sec in next year and can potentially act as a cap on any significant rise in yields.

• Core CPI momentum remains subdued on the back of lower input price pressure and rangebound global commodity prices.

• Government reiterated its commitment to bring down fiscal deficit to less than 4.5% of GDP by FY 25-26. This should keep market borrowings within manageable levels.

• External sector likely to be supported by steady services exports and adequate foreign exchange reserves.

• Rate hike cycle in AEs has ended and expectations of rate cuts during the year are high. The RBI is also likely to follow the suit and cut rates in second half of FY 24-25, although, we expect a shallow rate cut cycle.

However, there are counter balancing factors which can put upward pressure on yields

• Regular food price shocks can keep headline CPI elevated while sustained growth momentum can result in reacceleration in core inflation.

• SLR holdings of the banking system is high and credit growth is robust. Thus, incremental demand for G-Secs is likely to remain muted.

• Recent rise in commodity prices, especially crude oil, sustaining due to escalation of geopolitical tensions leading to disruption in supply chain.

Overall, yields are likely to trade with a downward bias and the long end of the yield curve is likely to outperform over the medium term.

Source for various data points: Bloomberg, NSDL, CMIE, RBI, Kotak Institutional Research, Union Budget 2024-25, ICICI Securities, AMFI, World Bank, Daily valuation provided by ICRA/CRISIL.

The Indian mutual fund industry concluded FY 23-24 with Assets Under Management (AUM) aggregating Rs. 53.4 Lakh Crore, reflecting YoY growth of 35%.

The industry witnessed substantial net flows amounting to Rs. 3.5 Lakh Crore during the year. The primary driver of net flows were actively managed equity-oriented funds, which attracted Rs. 2.4 Lakh Crore in FY 23-24, an increase from Rs. 1.6 Lakh Crore in FY 22-23. New Fund Offers from actively managed equity-oriented funds contributed meaningfully to this figure, with Rs. 54,589 Crore in net flows.

In addition to actively managed equity-oriented funds, equity index funds witnessed net new flows of Rs. 24,705 Crore in FY 23-24.

The net flows into debt-oriented funds and debt exchange- traded funds (ETFs) amounted to Rs. 8,273 Crore and Rs. 10,914 Crore respectively. However, debt index funds experienced net outflows of Rs. 9,015 Crore, resulting in combined net flows of Rs. 10,171 Crore in debt, encompassing both active and passive instruments.

The industrys unique investor base expanded to 4.46 Crore, marking the addition of 69 Lakh new investors. This expansion underscores the growing appeal of mutual fund investments among investors.

The MF industry recorded a 22% increase in the number of folios to 17.79 Crore as on March 31, 2024 from 14.57 Crore as on March 31, 2023. Of the total, 17.68 Crore were folios from individuals, up 22% YoY. Unique investors identified on PAN & PEKRN increased by 18% to 4.46 Crore as on March 31, 2024.

Individual investors continue to play a pivotal role in propelling MF industry to new heights. Their robust participation amounted to an impressive Rs. 33.3 Lakh Crore, constituting a 61% share of the total Monthly Average AUM (MAAUM) for March 2024. This surge reflects a burgeoning confidence among individual investors in mutual funds as an instrument for wealth creation. Meanwhile, institutional investors contributions amounted to Rs. 21.7 Lakh Crore, comprising the remaining 39%.

For March 2024, MAAUM was distributed in an 82:18 ratio between the top 30 cities (T30) and beyond the top 30 cities (B30). Despite comprising only 18% of the total MAAUM, B30 cities contributed 27% to Equity-oriented MAAUM.

Over the past five years, the mutual fund industry in India has experienced a remarkable journey, with a CAGR of 18%. This increase is a testament to the industrys ability to adapt and thrive amidst evolving investor preferences and dynamic market landscapes.

Net inflows into mutual funds over the past five fiscal years have clocked Rs. 9.79 Lakh Crore, with a significant portion - Rs. 6.17 Lakh Crore - flowing into active equity-oriented schemes. This influx of capital reflects growing confidence of

The industry continued its upward trajectory in terms of monthly Systematic Investment Plan (SIP) flows with 4.28 crore new SIP registrations during the year. Total contributions through SIPs for FY 23-24 reached Rs. 2.0 Lakh Crore, compared to Rs. 1.6 Lakh Crore in FY 22-23. The industry continues to set records in terms of monthly SIP with flows for March 2024

^^ =Rs. 1 n on

investors in the equity markets and their willingness to accept mutual funds as a vehicle for wealth creation.

One notable trend stands out: The meteoric rise of SIPs. Monthly SIP flows have more than doubled from Rs. 8,055 Crore in March 2019 to Rs. 19,271 Crore in March 2024, signalling a paradigm shift in investor behaviour. The number of SIP accounts has surged to 8.40 Crore as on March 31, 2024, up from a modest 2.62 Crore, a growth of over 3 times in just five years.

(Rs. in Lakh Crore)

Source: AMFI. Data as of March 31 each year.

From FY 2022, Equity-oriented AUM data includes equity-oriented index funds and Debt AUM includes debt-oriented index funds.

HDFC AMC offers a comprehensive suite of mutual fund and alternative investments across asset classes, including equity, fixed income, hybrid, and multi-asset solutions, both on active as well as passive platforms, catering to the needs of a large and diverse customer base.

HDFC AMC is Investment Manager to HDFC Mutual Fund, one of the largest mutual funds in the country with closing AUM of Rs. 6.07 Lakh Crore and Annual Average AUM (AAAUM) of Rs. 5.44 Lakh crore and market share of 11.4% on a closing basis as on March 31, 2024. Over the course of the year, we took significant strides in consolidating our brand as the one-stop shop for investment solutions. This was achieved through the launch of a variety of new fund offerings (NFOs) spanning both active and passive categories.

The Company offers portfolio management and segregated account services and alternative investment funds to a diverse clientele, including high-net-worth individuals (HNIs), family offices, domestic corporates, trusts, provident funds, and domestic and global institutions. As on March 31, 2024, aggregate assets under our portfolio management services amounted to Rs. 2,425 Crore. Under our HDFC Alternatives brand, we are in the fund-raising mode for our HDFC AMC Select AIF FOF-I, with commitments totalling to around Rs. 800 Crore as on March 31, 2024.

Our closing AUM, as on March 31, 2024, rose 39% to Rs. 6.07 Lakh Crore from Rs. 4.37 Lakh Crore as on March 31, 2023. Equity-oriented AUM rose 62% to Rs. 3.97 Lakh Crore from Rs. 2.46 Lakh Crore as on March 31, 2023. Equity-oriented assets formed 65% of our total AUM on a closing basis. Our market share in total closing AUM and actively managed equity-oriented funds stood at 11.4% and 12.8%, respectively.

AAAUM for FY 23-24 was at Rs. 5.44 Lakh Crore versus Rs. 4.36 Lakh Crore for FY 22-23. AAAUM for actively managed equity-oriented schemes increased by 40% to Rs. 3.04 Lakh Crore from Rs. 2.17 Lakh Crore.

We served a customer base of 96 Lakh unique investors, with a total of 166 Lakh live accounts. Our distinction as the top choice for individual investors is underscored by our MAAUM market share for March 2024, standing strong at 13.3%.

HDFC AMC processed 7.37 Crore systematic transactions between April 2023 and March 2024, amounting to Rs. 28,264 Crore. About 87% of all systematic transactions at the time of signing up are for a period of over 5 years and about 80% for over 10 years.

• Our Companys Total Income has increased by 27.38% to Rs. 3,162.43 Crore in FY 23-24

• Profit After Tax (PAT) stood at Rs. 1,945.88 Crore and grew by 36.66% over FY 22-23

• Operating Profit (Profit Before Tax less Other income) increased by 22.21% to Rs. 1,900.13 Crore in FY 23-24

• PAT as a percentage of Annual Average AUM increased from 0.33% in FY 22-23 to 0.36% in FY 23-24

• Average Networth increased by 13.31% to Rs. 6,593.74 Crore in FY 23-24

The financial statements have been prepared and presented on going concern basis and in accordance with the Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of the Companies Act, 2013, (the Act) and other relevant provisions of the Act, as amended from time to time.

The Company had adopted Ind AS with effect from April 01, 2018.

Material accounting policies used for the preparation of the financial statements are disclosed in note 3 to the financial statements.

The following table sets forth selected financial information from our Statement of Profit and Loss for FY 23-24 and FY 22-23.

(in Crore)

Revenue from operations comprises of investment management fees from Mutual Fund and portfolio management services (PMS), Alternative Investment Fund (AIF) and other advisory services fee.

Investment management fees from Mutual Fund consists of fees from various schemes which invest in different categories of securities like Equity, Debt etc. In general, fees per unit of AUM from schemes investing in equity securities are substantially higher than schemes investing in debt securities. Within each of these categories of funds, there are variations in the fees per unit of AUM based on factors like fund composition, fund size etc. Hence the quantum of fees is dependent on the size and composition of the AUM and if there are any changes therein, it leads to higher or lower fees on an overall basis.

The increase in Revenue from Operations from Rs. 2,166.81 Crore in FY 22-23 to Rs. 2,584.37 Crore in FY 23-24, was largely due to increase in investment management fee from Mutual Fund by 19.43% from Rs. 2,160.79 Crore in FY 22-23 to Rs. 2,580.60 Crore in FY 23-24. The said increase was a result of higher component of Equity oriented schemes in the overall Annual Average AUM as well as higher total Annual Average AUM in FY 23-24 as compared to FY 22-23.

Our other income largely comprises of income from investments which are generated from retained surpluses. Other income shows a significant increase by 83.05% from Rs. 315.80 Crore in FY 22-23 to Rs. 578.06 Crore in FY 23-24 largely due to higher returns on investments.

Finance costs are on account of accounting treatment prescribed under Ind AS 116 - Leases, where the future lease payments are discounted to its present value and are un-wound subsequently, resulting in finance cost.

Fees and commission comprise primarily of commissions paid to distributors for PMS, AIF and advisory business. Our fees and commission expenses decreased from Rs. 3.68 Crore in FY 22-23 to Rs. 2.48 Crore in FY 23-24.

Our employee benefits expenses increased due to the following reasons:

• An increase in salaries and allowances of employees which was led by increase in certain emoluments for employees in FY 23-24.

• Under Employees Stock Option Scheme - 2020 (ESOS - 2020), apart from stock options granted in the past year(s), the Nomination and Remuneration Committee (NRC) of the Board of Directors of the Company at its meeting held:

(i) On April 25, 2023 had approved a further grant of 10,50,000 stock options representing 10,50,000 equity shares of Rs. 5 each, at a grant price of Rs. 1,780.90 per equity share (being the market price as defined in the applicable SEBI Regulations), to its eligible employees.

(ii) On January 10, 2024 had approved a further grant of38,800 stock options representing 38,800 equity shares of Rs. 5 each, at a grant price of Rs. 3,415.25 per equity share (being the market price as defined in the applicable SEBI Regulations), to its eligible employees.

I n terms of ESOS - 2020, the options shall vest in three tranches. Each of these tranches consisting of 1/3 of the options granted shall vest on the completion of the

1^st, 2^nd and 3^rd year from the date of the grant respectively. The total charge towards the outstanding stock options has increased from Rs. 40.11 Crore in FY 22-23 to Rs. 47.05 Crore in the FY 23-24 and the same is appearing as Share Based Payments to Employees.

Accounting for equity settled share based payment transaction (employee stock options) at fair value increases the non cash component of Employee Benefits Expenses and is also reflected in Share Options Outstanding Account under Other Equity. This balance of Share Options Outstanding Account is transferred to Securities Premium as and when the stock options are exercised by the employees and subsequent allotment of shares to them. Hence, this charge is neutral to Equity of the Company.

• Accordingly, the employee benefit expenses increased by 13.05% from Rs. 312.67 Crore in FY 22-23 to Rs. 353.46 Crore in FY 23-24. However, excluding the above mentioned non-cash charge towards employee stock options, the employee benefit expenses has increased by Rs. 33.85 Crore i.e. 12.42%.

Our Depreciation, Amortisation and Impairment decreased from Rs. 53.34 Crore in FY 22-23 to Rs. 52.26 Crore in FY 23-24, primarily due to lower depreciation/amortisation charge on computer equipment & computer software which is partially offset by a higher depreciation charge on Right of Use Asset.

Our other expenses increased by 14.76% from Rs. 232.62 Crore in FY 22-23 to Rs. 266.95 Crore in FY 23-24 primarily due to increase in Software Expenses and Allied Services, Trademark license fees and KYC expenses related to Mutual Fund Investors. This rise in expenditure was due to various business & digital initiatives taken by the Company.

• Our Software Expenses and Allied Services cost increased from Rs. 30.50 Crore in FY 22-23 to Rs. 42.42 Crore in FY 23-24 due to continuing enhancements on the technology front and digitisation initiatives during the current year.

• Our Trademark license fees to parent company for the FY 23-24 was Rs. 7.56 Crore.

• Our KYC expenses related to Mutual Fund Investors increased from Rs. 5.15 Crore in FY 22-23 to Rs. 11.94 Crore in FY 23-24 due to higher number of investors onboarded in FY 23-24 as compared to FY 22-23.

The amount of other expenses incurred in FY 19-20 (pre covid level) was Rs. 195.43 Crore. The increase since pre covid level of FY 19-20, is at the rate of 8.11% (4 Years Compounded Annual Growth Rate). We shall continue to invest further into technology and digital infrastructure to be future ready. However, these expenses would be incurred in a calibrated manner.

As a result of the factors outlined above, our Profit Before Tax increased by 32.48% to Rs. 2,478.19 Crore in FY 23-24 from Rs. 1,870.61 Crore in FY 22-23.

Our total tax expenses increased by 19.17% to Rs. 532.31 Crore in FY 23-24 from Rs. 446.69 Crore in FY 22-23. Our current tax charge increased to Rs. 517.52 Crore in FY 23-24 from Rs. 421.26 Crore in FY 22-23. Our deferred tax charge decreased to Rs. 14.79 Crore in FY 23-24 from Rs. 25.43 Crore in FY 22-23. The deferred tax charge is mainly on account of movement in fair value gains / losses on investments. Our effective tax rate, including deferred tax was at 21.48% and 23.88% for FY 23-24 and FY 22-23, respectively. The effective tax rate for FY 23-24 is lower as compared to FY 22-23 primarily due to decrease in deferred tax charge for the year, mainly attributed to transition of holding period of certain investments from short term to long term. Our Company had elected to exercise the option of a lower tax rate provided under Section 115BAA of the Income-tax Act, 1961.

As a result of the factors outlined above, our Profit After Tax increased by 36.66% to Rs. 1,945.88 Crore in FY 23-24 from Rs. 1,423.92 Crore in FY 22-23.

Your Directors at their meeting held on June 7, 2024 have declared an interim dividend for the financial year ended March 31, 2024 of Rs. 70/- per equity share (1,400%) of face value of Rs. 5/- each of the Company instead of final dividend of Rs. 70/- per equity share for the financial year ended March 31, 2024 as recommended earlier at the Board meeting held on April 19, 2024. Accordingly, the Dividend payout ratio for FY 23-24 would stand at 76.80%, up from 71.95% for FY 22-23.

The following table sets forth selected financial information from our Balance Sheet as at March 31, 2024 and March 31, 2023.

(Rs. in Crore)

Investments of the Company grew from Rs. 6,079.16 Crore in

FY 22-23 to Rs. 7,190.03 Crore in FY 23-24.

• The increase in Investments carried at fair value through Profit or Loss from Rs. 5,658.22 Crore in FY 22-23 to Rs. 6,892.53 Crore in FY 23-24 is primarily due to net investment in mutual fund schemes and fair value changes.

• The investments carried at amortised cost have decreased from Rs. 417.94 Crore in FY 22-23 to Rs. 263.50 Crore in FY 23-24 primarily due to maturity of certain tax free bonds.

• A Wholly Owned Subsidiary (‘WOS) of the Company namely ‘HDFC AMC International (IFSC) Limited, with its principal place of business located in Gujarat International Finance Tec-City (GIFT City), Gandhinagar, India, had been incorporated effective May 27, 2022. An amount of Rs. 3.00 Crore had been invested in the WOS during the FY 22-23. A further capital infusion of 31.00 Crore was done during the FY 23-24.

There is no significant movement in the balance of Non

Financial Assets.

There is no significant movement in the balance of

Financial Liabilities.

Non Financial Liabilities have increased to Rs. 232.90 Crore in FY 23-24 from Rs. 187.68 Crore in FY 22-23. This increase is primarily due to movement in net Deferred Tax balances and Other Non Financial Liabilities.

Total Equity has increased mainly due to higher retained earnings. Retained earnings represents the surplus profits after payment of dividend.

Note: Inventory Turnover Ratio is not applicable to the Company. Further, Interest Coverage Ratio and Debt Equity Ratio have not been presented as the Company is debt free as at March 31, 2024 and as at March 31, 2023. The finance costs appearing in the Statement of Profit and Loss is a result of

accounting treatment under Ind AS 116 - Leases and accordingly, there is no obligation on the Company to service any interest cost.

(in Crore)

Return on Average Networth increased from 24.47% in FY 22-23 to 29.51% in FY 23-24. This is due to a higher % change in PAT as compared to % change in Average Networth. PAT has increased mainly due to higher revenue from operations as well as other income leading to higher profits.

A Wholly Owned Subsidiary (‘WOS) of the Company namely ‘HDFC AMC International (IFSC) Limited, located in Gujarat International Finance Tec-City (GIFT City), Gandhinagar, India, had been incorporated effective May 27, 2022 and was capitalised during the financial year 2022-23. Accordingly, consolidated financial statements of the Company have been prepared from FY 22-23. The WOS is in the business of providing Investment Manager Services, act as a sponsor/ settlor for the GIFT AIF Funds and providing discretionary/ non-discretionary portfolio management services to clients (PMS). As at the end of the reporting period, the WOS is in the process of setting up its business operations. The consolidated financial statements are also available in this annual report.

The mutual fund industry in India is poised for sustained growth, driven by a combination of factors including demographic trends, market dynamics, regulatory reforms, and technological advancements.

• Financial literacy: As individuals become more aware of the benefits of investing in mutual funds for achieving their financial goals, they are likely to allocate a greater portion of their savings to these instruments.

• Shift from traditional investments: As investors seek alternatives to traditional investment avenues like fixed deposits and gold, mutual funds emerge as a convenient and professionally managed option.

• Growing SIPs: The growing popularity of Systematic Investment Plans is expected to be a significant growth driver. Large-scale campaigns aimed at promoting SIPs have improved outreach and awareness among investors, encouraging them to adopt a disciplined approach to investing. SIPs offer investors the flexibility to invest small amounts regularly, thereby reducing the entry barrier and appealing to a wider investor base.

• Burgeoning middle-class segment: Indias burgeoning middle-class segment, characterised by rising disposable incomes and aspirations, presents a significant growth opportunity for the mutual fund industry. As individuals strive to achieve their financial goals and secure their future, mutual funds provide an avenue for wealth accumulation and preservation, aligning with the aspirations of this demographic.

• Fintech platforms: The emergence and growth of fintech platforms have democratised investing, bringing in a large pool of new investors. These platforms offer user-friendly interfaces, seamless transactions, and access to a wide range of investment options. As fintech adoption continues to rise, it is expected to fuel the influx of new investors into the mutual fund ecosystem.

• Digital distribution: A robust distribution platform, coupled with the ease of transactions through digitisation, will the be key driver in reaching out to wider and deeper investor base across India. With the increasing penetration of smartphones and internet connectivity, investors from remote areas and smaller towns can now access mutual funds conveniently through online platforms and mobile applications.

• Diversified investment solutions: Continuously assess market opportunities, identify product offering gaps, and develop innovative investment solutions to meet evolving investor needs.

• Performance excellence: Set industry benchmarks for long-term investment performance. Provide investors with transparent and insightful data to make informed decisions, thereby fostering trust and confidence in our offerings.

• Customer centricity: Continuously enhance service quality, responsiveness, and personalisation to exceed customer expectations and build lasting relationships.

• Investor education: Committed to investor education through diverse range of resources and initiatives, driven by our eagerness to both grow the industry and ensure the financial well-being of investors.

• Distribution: Enhance distribution footprint and leverage technology to boost accessibility and attract new investors.

• Corporate governance and risk management: Adopt best-in-class corporate governance practices and robust risk management frameworks to ensure compliance, transparency, and accountability.

• Talent management: Focus on attracting and retaining top talent fostering a culture of innovation and collaboration to encourage creative thinking and drive continuous improvement across all aspects.

• ESG integration: Demonstrate our commitment to including environmental, social and governance (ESG) factors in decision- making and ownership.

The Company has instituted adequate internal control systems commensurate with the nature of its business and the size of its operations. This provides a high degree of assurance regarding the effectiveness and efficiency of operations, the adequacy of safeguards for assets, the reliability of financial controls and compliance with applicable laws and regulations.

The Audit Committee and Risk Management Committee are responsible for overseeing the risk management framework, reviewing the key risks and mitigation strategies, and ensuring the effectiveness of risk management policies and procedures. The Management is also responsible for ensuring that the risk management framework is effectively implemented within all areas of their respective functions.

The Company has appointed an independent professional firm to oversee and carry out an internal audit of its activities. It carries out internal control reviews and provides an independent report to the Audit Committee on the adequacy and effectiveness of the risk management and internal controls of the organisation. All significant audit observations and follow-up actions thereon are periodically reported to the Audit Committee and closely monitored for effective implementation.

B S R & Co. LLP, the statutory auditors of the Company has audited the standalone and consolidated financial statements included in this annual report and has issued as a part of Auditors Report, a report on our internal financial controls with reference to the financial statements (as defined in Section 143 of the Companies Act, 2013).

Based on its evaluation, the Audit Committee has concluded that, as of March 31, 2024, our internal financial controls were adequate and operating effectively.

Over the past year, weve made substantial strides in advancing our technology infrastructure, marking a cornerstone in our tech transformation journey. We have deployed a future-ready Enterprise Data Warehouse solution, integrating multiple source systems to establish a centralised repository for actionable performance insights. This single source of truth ensures consistency, accuracy, and reliability, empowering teams to make informed decisions independently, thereby reducing reliance on technology experts and streamlining processes.

Our focus on data-driven decision-making applications has yielded deeper insights into market trends, customer behaviour, and investment opportunities, enabling us to stay at the forefront in a rapidly evolving landscape. Additionally, the integration of data visualisation tools and interactive dashboards has facilitated real-time monitoring of performance metrics and progress against goals, empowering stakeholders to derive timely insights to make informed decisions.

To support our growing business needs, we have made strategic investments in infrastructure modernisation and strengthening of cybersecurity measures. Comprehensive cybersecurity platforms and solutions, including threat protection and enhanced network isolation, have been seamlessly integrated to safeguard our data and systems against evolving threats. The adoption of secure and elastic cloud platforms has enabled us to dynamically adjust computing resources based on demand, ensuring operational efficiency and cost-effectiveness. Moreover, our resilient infrastructure architecture ensures uninterrupted service and system stability even in the face of disruptions.

The transition of our IT infrastructure to the cloud has not only improved operational efficiency but also promoted a culture of innovation within the organisation. Our shift to modern infrastructure has enabled rapid experimentation and deployment of new solutions, allowing us to adapt to changing market dynamics with agility. The implementation of standardised interfaces has further enhanced seamless collaboration with strategic business partners, unlocking new avenues for growth and value creation.

In conclusion, the past year has seen significant progress in enhancing our IT capabilities to support our business objectives effectively. From strengthening our data infrastructure to embracing advanced analytics and modernising our cybersecurity measures, weve laid a solid foundation for future growth and innovation. Moving forward,

we remain committed to leveraging technology as a strategic enabler, driving value for our stakeholders, and staying at the forefront of the asset management industry.

Our Compliance function monitors compliance with regulatory requirements laid down by the Securities and Exchange Board of India (SEBI) with respect to mutual fund, portfolio management services and alternative investment funds activities and other business activities permitted under Regulation 24(b) of SEBI (Mutual Funds) Regulations. The Compliance function is a bridge between us and various regulators/industry bodies, such as SEBI, the RBI, the Association of Mutual Funds in India, the Association of Portfolio Managers in India, depositories and stock exchanges. The Chief Compliance Officer updates our Board and Audit Committee on various compliance matters.

We have implemented various internal policies and procedures to ensure compliance with the regulatory requirements in relation to above businesses. Our Compliance Manual also lists the regulatory requirements, timelines and the functions responsible for compliance. Employees Securities Dealing Codes regulate personal investment transactions of employees and that of their dependants. We have also set guidelines for personal dealings for AMC as well as Trustee Company. Policies such as Conflict of Interest Policy, Outsourcing Policy, Policies under Risk Management Framework, Code of Conduct for Prevention of Circulation of Unauthenticated News, Anti-Money Laundering (AML) and KYC policy, and a Social Media Policy also ensure compliance with regulations relevant to our businesses.

Each function ensures compliance with applicable regulations pertaining to its areas of operation. Accordingly, we have established procedures, policies, codes and manuals, such as the Investment and Risk Manual, Operations Manual, Client Services Manual, Valuation Policy, Voting Policy, Polling Policy, Stress Test Policy, Cyber Security Policy, Cyber Crisis Management & Resiliency Policy, Stewardship Code and Code ofConduct for Fund Managers and Dealers. These are reviewed and updated periodically. An established certification process is followed by each function to periodically confirm compliance with the regulatory requirements.

Our compliance team stays updated on all new regulatory requirements and communicates the requirements to the relevant functions with meaningful inputs for implementation. The team also reviews the implementation status by closely coordinating with the respective functions.

We are committed to transparency and have also appointed independent internal auditors to review the activities of each department and function, including the compliance function. They review relevant reports before submission to the Board and the regulators concerned. Periodical SEBI inspections and statutory audits are also conducted to review and assess the compliance status.

The compliance team also drafts and issues product offer documents, issues notices/addenda related to product documents, reviews marketing materials before dissemination, and ensures timely filing of various reports with the Board and regulators and agencies concerned. It is also responsible for the redressal of customer grievances. As part of its periodic training initiatives, the compliance team engages with the employee(s) to educate, sensitise and create awareness about their obligations under the Regulations and our Companys codes/policies.

Our Operations are bifurcated into Mutual Fund (MF) Operations and Portfolio Management Services/ Alternative Investment (PMS/AIF) Operations.

The MF team is responsible for servicing customers of the Mutual Fund and Segregated accounts under regulation 24(b) of the SEBI (MF) Regulations. The responsibilities, inter alia, include investment administration, cash management, treasury support and settlement, fund accounting, asset valuation and unit pricing, coordination with the RTA/ Custodians/Bankers/other Service Providers, audits and MIS.

The PMS/AIF Operations team is responsible for maintaining the accounts of the clients under the SEBI PMS & AIF regulations, as applicable. Its functions include post trade investment support, cash management, treasury and settlement functions, recording of transactions in the books of accounts of the respective clients, valuation of securities in clients portfolios, providing various reports to the management and liaising with bankers and custodians. In respect of AIF Operations, its function includes oversight of third-party vendor in charge of the Fund Administration, Custody, Banking etc.

The functions of the MF & PMS/AIF are segregated and they have their own discrete teams and systems.

All operational activities are subject to independent audits. Internal auditors perform transactional and risk-based audit, apart from undertaking process reviews on a regular basis. Independent auditors carry out the statutory audit as required under the applicable regulations for our schemes, portfolio management and segregated accounts. All applications used

in operations are regularly subjected to system reviews/ audits. The Audit Committee reviews all the Auditors Reports with respect to the entire operations.

Mature, robust and scalable systems and processes form the backbone of our operations. There is a keen focus on accuracy, internal controls, minimising operational risks and increasing efficiency. All systems are regularly upgraded and all processes are re-engineered periodically to ensure a high standard of regulatory compliance and governance. We have a comprehensive BCP and Disaster Recovery Plan (DRP) for our operations, and it is reviewed and updated at regular frequency. We completed a smooth transition of all our systems to the cloud environment architecture. A review of the adherence of our service providers to acceptable standards of governance & compliance, as well as their IT/ BCP/ DRP preparedness is done regularly.

Our Company has developed a comprehensive Risk Management Framework (RMF) to effectively manage key risks. This framework aligns with our business needs and relevant legal and regulatory requirements. The RMF provides guidance with respect to management for all risks relevant for the AMC and the schemes of HDFC Mutual Fund. To ensure an effective and integrated Risk Management, the AMC has defined three lines of defence model, viz. First Line of Defence comprises the CXOs; Second Line of Defence comprises oversight functions viz. Risk Management and Compliance; and the Third Line of Defence is the Internal Auditor. The Board approved Risk Management Framework details out our approach to risk management and the roles and responsibilities of all stakeholders.

The Board level Audit Committee and Risk Management Committee are responsible for overseeing the risk management framework, reviewing the key risks and mitigation strategies, and ensuring the effectiveness of risk management policies and procedures. The Management also ensures the risk management framework is effectively implemented within all areas of respective functions.

Risk Management Process is a logical and systematic process of identifying, analysing, evaluating, treating, monitoring and communicating risks associated with activities, functions or process, in a way that enables an organisation to minimise losses and maximise opportunities. The objective of risk management is not to eliminate risk, but to understand it so that we can take measures to prevent its occurrence and minimise the downside and take advantage of the upside. Risk assessment and mitigation strategies are an integral part of the risk framework within each function. The key

risks covered are Investment Risk, Credit Risk, Liquidity Risk, Operational Risk, Compliance Risk, Climate Risk, Technology Risk, Information Security & Cyber Risk, Outsourcing Risk, Reputation and conduct Risk, Sales and Distribution Risk, Financial Reporting Risk, Tax Risk, Legal Risk and Talent Risk.

Risk Management is integrated with major business processes such as strategic planning, operational management, and investment decisions to ensure consistent consideration of risks in all decision-making. Our Company continuously adapts to international best practices that address regulatory changes, organisational structure, emerging technologies, dynamic market conditions, and business growth.

We utilise various Risk Management Tools such as Risk Register, risk and control self-assessment (RSCA), incident reporting whereby risk owners are involved in the ongoing assessment and improvement of risk management and controls. There is also an ESG Task Committee to oversee company-wide ESG risks. Additionally, internal audit carries out internal control reviews and provides an independent report to the Audit Committee on the adequacy and effectiveness of risk management framework and internal controls of the organisation. Our statutory auditor carries out a review of our internal controls over financial reporting to the extent of the scope laid out in their audit plans. All significant audit observations and follow-up actions thereon are periodically reported to the Audit Committee and closely monitored for effective implementation.

Given the rapid technological and digital advancement in the securities market, cyber risks are inevitable. Hence, a strong Information Security and Cyber Security framework is essential. Our Companys Information and Cyber Security framework is one wherein the cyber risk and its mitigation are monitored by the Information Technology Security Committee and Risk Management Committee. Key areas covered under the cyber risk management include strong adherence to the Board-approved Information and Cyber Security Policies, compliance with SEBI guidelines and ISO 27001 standards to ensure that we are in line with industry best practices. Our Company maintains a robust cybersecurity architecture and has in place a cyber resilience framework to protect the integrity of data and guard against breaches of privacy.

Overall, risk management is a collective responsibility, from the Board to individual employees. Risks is primarily managed by the business function transacting the business. All employees are actively engaged in risk management within their own areas of responsibility and are expected to manage those risks.

Our insurance policies cover the entire gamut of our operations and protects the company from unexpected exigencies in the future. We have specialised policy insuring the schemes of HDFC Mutual Fund, HDFC Asset Management Company Limited, including PMS, AIF and advisory/ management services to permitted categories of FPIs under Regulation 24(b) of SEBI (Mutual Funds) Regulations, which, in addition to our Company, also includes our employees, directors and the trustee company of HDFC Mutual Fund. Our insurance policy covers any liability arising out of operations of Registrar and Transfer Agent and Custodians associated with our Mutual Fund business. Furthermore, we have specialised cybersecurity insurance coverage as well.

Our Company uses, among others, the name, registered trademark and brand name of HDFC and associated logos in the ordinary course of business including HDFC Asset Management Company, HDFC Mutual Fund, and HDFC AMC AIF-II. The trademark HDFC is the registered property of HDFC Bank; and it has granted a non-exclusive license to use its trademark and brand name HDFC to our Company, subject to applicable terms and conditions.

We continue to enrich our comprehensive digital portfolio with targeted solutions, including assisted digital facilities to cater to their needs and preferences. Our digital offerings include a user-friendly portal, mobile app, WhatsApp based engagements, chatbot, Transact on Call service (a service to initiate transactions on call) and a host of non-login web- based services.

Our focus this year was to derive value from the investments we made on the Customer Data Platform, personalisation tools, an analytics engine, and AI (artificial intelligence) powered tools. The focused and improved targeting for cross/up sell, retention, renewals etc. led to more than five times conversion as compared to last year. Automation of multiple user journeys, on-the-go segmentation with cross channel implementation resulted in better user-experience and conversion.

We extended our core digital solutions - enabling more financial & non-financial transactions, simplifying user journeys, creating point solutions and building a more integrated user-experience. On both the investor and the partner app, non-logged in sections were enriched with a host of features and information to address multiple requirements within the single channel preferred by the user. Our solutions incorporate the latest features like UPI Auto Pay, payment via Debit card, etc.

Listening to our partners needs has always been important to us. We worked closely with our partners on multiple fronts, e.g. enabling services via our APIs, providing standard and custom point solutions for their investors. We enabled single click marketing campaigns on our Digital Marketing tool Connekt for our partners. This not only helps in list generation and execution but also provides almost real time conversion tracking for our partners.

We constantly upgrade our website, both in terms of design and content. A variety of new content, e.g. a reading room section, behavioral blogs, etc. have been added to add value across different dimensions to the website visitor. In addition to the front end, on back end, we are upgrading our SEO (Search Engine Optimisation) capabilities and Content Management System. The impact is already visible with a substantial increase in website traffic, lower bounce rates, and lead generation, etc.

We significantly grew our AI capabilities and RegTech capabilities with multiple projects, primarily in two domains. With RegTech - we automated the SID (Scheme Information Document) generation process. One other RegTech example is on using a bot for checking transaction limits. With pure- play AI, we deployed two important solutions: a smart queries assistant for helping our investment team and other stakeholders to mine information, and an AI bot for extracting and tracking credit rating changes.

Our Company has long been an employer of choice and it has officially been certified as a "Great Place to Work" by Great Place to Work Institute. This is a testament to our organisational strength and commitment to our purpose driven by the Vision and Mission.

Our employees are our brand ambassadors, committed to deeply engaging with our investors, partners and all other stakeholders. At HDFC AMC, we have been continuously investing in our employees to help them reinvent themselves so that we can serve our investors with fiduciary responsibilities and maintain the highest ethical standards. Our employee policies, recognition and reward policies and remuneration practices encourage our employees to demonstrate the right set of behaviours and inspire them to live our Vision "To be the most respected asset manager in the world" and our Mission "To be the wealth creator for every Indian". Our organisation

is committed to embodying the values of a contemporary society and creating a workplace that believes in a diversified workforce and being an equal opportunity employer.

We commit ourselves to continue to be a caring workplace that is fully compliant with all ethical standards, regulatory requirements and statutory obligations. We continue to be an employer that successfully attracts best-in-class talent to help us achieve our business objectives and continue to build trust with our investors.

An investor education and awareness initiative that aims to cultivate lasting financial literacy among the Indian masses. The campaign focuses on emotional engagement, shifting away from the functional aspects of SIP and linking it with our everyday quest for a better life. This comprehensive 360-degree media campaign includes ad films, extensive outdoor advertising, TV commercials and digital and social initiatives.

On the occasion of 76^th Independence Day, we conducted 76 Nukkad Nataks in regional languages under #BarniSeAzadi, across the length and breadth of India to financially empower Indian households and encourage healthy investing habits.

An investor education and awareness campaign to highlight the benefits of Equity Linked Savings Scheme (ELSS) for tax savings and wealth creation. The campaign emphasised two key aspects of ELSS funds: their growth potential through equity investments and tax-saving.

An insightful video series dedicated to investor education and awareness. It simplifies and demystifies the complex concepts related to SIPs, through engaging and easy-to- understand content.

Furthering our mission to be the wealth creator for every Indian, HDFC Mutual Fund proudly announced the launch of 24 new branches. To share this exciting news, we rolled out an extensive print and digital campaign.

We have a longstanding commitment to cancer care, and this year we launched HDFC Charity Fund for Cancer Care. This fund allows investors to contribute to cancer care and bolster our efforts to support individuals battling cancer. HDFC Mutual Fund matches the investment made by the investor and donates the doubled amount to the Indian Cancer Society.

On World Environment Day, we relaunched our #NurtureNature campaign, which began in 2021. This

socially responsible initiative aligns with our commitment

to sustainability and environmental stewardship. For each investor who registered for a SIP digitally, we recycled 250 grams of plastic. The campaign received an enthusiastic response, resulting in the recycling of 4,200 kilograms of plastic.

At the beginning of the calendar year, we released The Person of the Year 2023 an article by Mr. Navneet Munot, which was an interesting take at the year gone by.

Our annual Yearbook 2024 titled India in Amrit Kaal takes a look at the year gone by and captures interesting future trends and developments.

As a customer-centric organisation, we continue to raise the bar in service to deliver excellence so that we remain a brand of choice when it comes to matters of financial planning.

Todays customers are increasingly conscious of their choices and are much better informed than before. It is thus imperative that we ensure that our front-line service team remains sharp, agile, smart and responsive to the needs of customers. To this end, we invest heavily in educating and training our staff. Service teams at our branches across the country are supported by an experienced team at the corporate office. Regional Service Managers, who supervise service delivery in the regional offices, visit branches regularly to ensure the staff are aligned to our business purpose. While engaging with the

staff to understand their perspective, the Regional Service Manager also assists mutual fund distributor requirements and augments support at the branches. The Corporate Client Services team, on its part, considers the feedback from the branches and trains the service team routinely to create last- mile impact.

We have a well-structured framework to manage service delivery and ensure that we work in tandem to enhance customer experience. Crucial to this framework is the Registrar and Transfer Agent (RTA), Computer Age Management Services (CAMS), which forms the backbone of our service delivery. We work closely with CAMS to ensure the smooth execution of processes and provide support to our distribution partners. We also regularly review our business operations in detail so that we remain prepared to deal with the dynamic business environment.

We service our customers through a network of 254 branches, 270 CAMS service centres, call centres, our website and mobile app that provide digital solutions, and a centrally managed dedicated email address. We also provide various other avenues where our customers may choose to transact such as our distributor mobile app, stock exchanges, channel partners, MF Utility, MF Central, and websites/mobile apps of mutual fund distributors and advisors. Our efforts to enable, support and encourage digital transactions have resulted in a substantial increase in digital transactions, which now dominate our business transactions.

We measure our service delivery and quality based on multiple parameters such as turnaround time, repeat complaints / grievances, escalations, which are evaluated periodically & root cause analysis is done to provide and improve the seamless service we offer our customers and business partners.

We prioritise open communication with our customers. We actively seek customers for feedback and also communicate with them to comply with changing regulatory requirements. We conduct satisfaction survey separately for both financial and non-financial transactions, to capture customer feedback on various processes, their experience on transactions, interactions with various touch points & feedback for improvement. Based on the feedback received, a team works on the actionable /improvement areas and their implementation. This activity is reviewed by the management periodically.

We also connect with distributors to share information on regulatory and process changes through the service relationship managers. We gather their feedback on service delivery through satisfaction survey. Feedback, suggestions, improvement areas and processes are reviewed and worked upon.

Customer delight can only be delivered if we work in cohesion, and our collective endeavour is to place the customer at the heart of our business.

Our digital team has undertaken multiple initiatives to ensure our website and mobile apps provide best-in-class services to our stakeholders

One of the key measures of customer satisfaction is improving our processes based on issues faced by customers which have led to a progressive decline in complaints.

Learning is a continuous process, and we believe that we need to empower our stakeholders through knowledge sharing. HDFC LEAP is our proprietary learning and development enterprise that always prioritises the education and training for our investors and distributors. We undertook various training initiatives during the year to affirm this belief. Our prime focus is to promote investor education and awareness and helping our distributors in skill enhancement.

We have taken a comprehensive approach by blending technical programs with experiential learning. We have also used a lot of game/activity-based simulations, as these methods are known to improve engagement and retention amongst learners.

During FY 23-24, we conducted 1,336 distributor training/ awareness sessions (326 soft-skills and 1,010 technical programs) with over 175 speakers covering a wide range of topics that attracted around 75,000 participants. We have widened our reach to various investor and distributor segments. We have introduced a few unique programs. These include:

Soft-Skills workshops/Experiential Workshops - We use

these workshops to develop interpersonal, communication and presentation skills. This fosters emotional intelligence that help survivorship of investors and distributors in volatile markets.

• Customer Centricity & Trust: In this module, participants learn how to develop a customer-centric approach and create a culture that prioritises customer satisfaction. This covers the importance of customer centricity, understanding customer needs, effective communication, and building long-term relationships with customers.

• Fire walk: This workshop is ideal for those who want to break through barriers and take their performance to the next level.

• You are a Hero: This workshop is designed to help people experience a source of high energy and encourage them to break their limiting beliefs.

• Jigsaw Discovery Tool: The Jigsaw Discovery Tool provides active engagement from beginning to end. Participants actively enjoy vibrant, interactive sessions and come away charged with energy and practical tools that they can put into a new-found motivation to develop relationships.

• Seal the Deal: This program helps in breaking out of our structured approach and try a new approach to close more deals, cross sell and in turn make satisfied and smiling customers. This program also aids in building and strengthening our relationships with our customers.

Technical Workshops: These workshops develop market knowledge and give overall market perspective to our investors and distributors.

• Mission to Mars: This is for spreading financial literacy among school students aged between 9-16 years. We successfully executed this module among school children, many of whom were the children of our distributors and clients.

• Fem-power: This is an investor education initiative that focuses on women investors and their specific financial needs and goals.

• Market Outlook: The focus of this program is on educating our investors and distributors on economy, market outlook & various asset classes.

Skill-enhancement workshops: Focused on providing

opportunity to our distributors to strengthen their skills and domain knowledge. Some of these were:

• NISM workshops: 509 workshops have been conducted in the financial year covering over 7,000 participants.

• HDFC AMC Certification: PGP Academy & Moodys 50+ hours course - Covering over 3,700 participants (employees and distributors)

Read more on page 31 of this report.

The schemes and other investment products are subject to various market related risk such as Investment Risk, Credit Risk, Liquidity Risk, ESG Risk, and Compliance Risk. In case the schemes and other investment products underperform, the existing customers may redeem or withdraw their investments and shift to some other products. The growth of the business is contingent not only on our performance but also on the overall economy, the growth rate of the country, household savings rates and consumer attitude towards financial savings. Any adverse market rate fluctuations and/ or adverse economic conditions could affect the business in many ways, including by reducing the value of our AUM, and subsequently leading to a decline in revenue.

To manage various market-related risks, our Company has a well-documented Investment manual covering Investment Philosophy, Investment and Research Process, Credit Limit and Credit Monitoring Procedure. The Risk Management closely monitors the portfolio for adequacy of portfolio liquidity, stress and credit events and to generate early warning signal. The Investment Committee reviews the performance of the schemes and also monitors all scheme-related risks. Instance of breaches or early warning signals generated are flagged to the Investment Committee and Risk Management Committee on a regular basis. However, regardless of how risks are managed, schemes and other investment products carry their own risks.

Our reputation is linked to the strength of the HDFC brand and reputation. While our brand is well-recognised, we may be vulnerable to adverse market and customer perception, particularly in an industry where integrity, trust and customer confidence are paramount. Again, the regulatory environment in which we operate is also prone to changes, and any violation/ breach in the regulation can adversely impact the reputation of our Company. This could have a negative effect on revenue and margins. In order to mitigate the compliance and reputation risks, we have a well-defined process of identifying the actionable/ impact of the change in the regulation, implementing necessary controls and the status around the same is also reported to the Board. In case of any material ambiguity in the interpretation of the law, the same is also discussed with regulator or obtains an opinion from external lawyers to confirm the understanding. Internal auditors have been appointed to review activities and report their findings to the Board. They also periodically audit/review statutory compliance reports as per the mandate. However, we ensure that we comply with all applicable laws, any failure in detecting errors in our statutory records or errors or omissions in our business operations could expose us to potential losses.

One of the key risks to business is disruptions in the technology infrastructure due to technology advancements or cyberattacks. As majority of the transactions today are processed digitally, any interruption is likely to adversely impact business. We continue to channel substantial investments into bolstering our technological infrastructure to enable it to handle interruptions. Our Company maintains a robust cyber security architecture and has in place a cyber resilience framework to protect the integrity of data and guard against privacy breaches.

In an era of rapid technological progress and digital evolution, the company acknowledges the prevalence ofincreasing cyber and information security risks. The Company has a strong Cyber Risk Management framework wherein cyber risk and its mitigation are monitored by the Information Technology & Security Committee and Risk Management Committee of the Company. Furthermore, the Company has a cyber-resilience framework in place to safeguard the integrity of data and guard against cyber breaches. Core to this strategy are Board- approved policies including Information Security, Cyber Security, Cyber Crisis Management, and Business Continuity policies. Key areas covered under the cyber risk management include strong adherence to the Board approved Information and Cyber Security policies, compliance with SEBI guidelines and ISO 27001 standards to ensure that the Company is in line with industry best practices.

We uphold the highest standards of confidentiality, integrity of the personal data entrusted to us. To fortify our defences against cyber threats and preserve data integrity, our Company employs a "Defence in Depth" strategy. Our measures include robust encryption protocols, stringent access controls, best-in-class firewalls, and 24x7 "State-of- art" security surveillance.

The company has intensified its initiatives to promote security awareness among employees, urging vigilance against cyberattacks and cultivating a robust cyber security culture within the organisation. Additionally, we educate customers and other stakeholders on the risks of cyber breaches and attacks. Furthermore, we prioritise the continuous training of our cyber security and Incident Response teams through regular cyber table-top drills.

The Company integrates cyber security controls and practices seamlessly into its business processes, adhering to the principle of Security by Design. Our commitment to enhanced cyber security practices, coupled with effective governance, has led to the development of mature cyber security frameworks. Our Technology and Digital systems undergo frequent reviews and audits conducted by independent agencies. Our systems are subjected to rigorous scrutiny and validation in system audits. Proactive measures are consistently implemented to fortify these systems against external threats.