Annual Report: 2021
SBI Funds Management Private Limited (SBIFM) presented its 29th Annual Report for 2020-2021, prepared according to Indian Accounting Standards (Ind As). The financial performance, both standalone and consolidated, is summarized. Standalone total income for 2020-21 was ₹1,61,747 lakh, compared to ₹1,31,686 lakh in 2019-20. Profit before tax stood at ₹1,13,883 lakh, up from ₹79,390 lakh. After tax, the profit for the period was ₹86,276 lakh versus ₹60,555 lakh the previous year. The company transferred ₹500 lakh to the General Reserve during the period. 924,692 shares (face value ₹1 each) were allotted to employees through ESOPs, increasing the total paid-up equity to ₹5009.25 Lakh. The company's net worth increased to ₹2,57,460 lakh from ₹1,98,518 lakh. The Board declared a final dividend of ₹3 per equity share for FY 2020 and an interim dividend of ₹3 per equity share for FY 2021.
SBIFM has one wholly-owned subsidiary: SBI Funds Management (International) Private Limited, managing offshore funds SBI Resurgent India Opportunities Fund and SBI India Opportunities Fund. SBI Pension Funds Private Limited, with SBIFM holding 20% equity, manages pension funds as a Pension Fund Manager appointed by PFRDA. The company had no joint ventures. SBI Funds Management (International) Private Limited declared a dividend of ₹185.67 Lakh for 2020-21. Real GDP is estimated at -7.3% year-on-year, though the rural economy showed strength and equity markets recovered. The combined fiscal deficit ballooned to 13.9% of GDP in FY21. GST revenues for March 2021 were the highest ever at ₹1.23trn. Foreign portfolio investors (FPIs) were net buyers in equities with inflows of USD 37.3bn. S&P BSE Sensex rallied by 68% during the year.
The Indian Mutual Fund (MF) Industry grew by 18.8% in Quarterly AAUM. SBIMF's average AUM grew by 35%, the highest among the top six fund houses, solidifying its top rank with a 1.89% market share gain. SBIFM received over 30.4% of industry net-funds flow during the year, and managed total assets of ₹12,72,284 Crores as on March 31, 2021. The fund house remains the largest ETF asset manager in India.
During the year, SBI Mutual Fund (SBI MF) launched fourteen new fund offers including five new debt funds, two ETFs (SBI ETF-IT and SBI ETF-Private Bank), SBI Magnum Children Benefit Fund - Investment Plan, SBI Floating Rate Debt Fund, SBI Retirement Benefit Fund with four Plans and SBI International Access - US Equity Fund of Funds. As of March 31, 2021, 76% of equity assets and 90% of debt funds were in the top two quartiles.
Key SEBI regulations and guidelines impacting the Mutual Fund Industry in FY21 included clarifications on KYC rules, stamp duty on mutual fund transactions, standardization of digital platform transactions, mandates for trustees to appoint dedicated officers, and diversification requirements for multi-cap funds.
SBIFM was appointed by the Supreme Court of India to liquidate and distribute assets of six schemes of Franklin Templeton Mutual Fund. SBIFM was certified as a Great Place to Work. The fund house increased digital penetration significantly. 2/3 of the overall business came through digital channels and the share of digital sales increased. 85% of all SIP transactions were registered digitally.
Looking ahead, SBIFM plans to add 101 new places of presence in FY22 and will launch revamped digital assets with more intuitive user journeys, increase focus on investor education, add innovative funds to its product basket. SBIFM is increasing its reach across the country, with a presence in 222 locations including Dubai.
SBIFM's objective is to work towards social welfare and strengthen the community bond, focusing on assisting economically and socially weaker sections. Three CSR committee meetings were held during the year. SBIFM is working towards achieving a sustainable business for all stakeholders. It's taking steps to help investors throughout their investment journey by gathering customer feedback, improved processes, system enhancements, strengthened governance, and upskilling of teams. SBIMF provides enhanced digital solutions for both investors and distributors.
Regarding conservation of energy and technology absorption, the company is in the financial services industry and strives for appropriate energy conservation measures and technology absorption. Foreign exchange earnings totaled ₹3,791 Lakh, with an outgo of ₹597.74 Lakh, not including the non-resident shareholder AMUNDI's earnings. The Company has a risk management policy in place, covering Investment, Operational, Strategic, Fraud, and Financial Risks. Four risk management committee meetings were held during the year.
The company has adequate internal financial controls systems with reference to financial reporting. Employee relations remained cordial. M/s. CNK & Associates LLP were appointed as Statutory Auditors. SBIFM complied with applicable Secretarial Standards.
There were no loans or guarantees given or deposits accepted by the company in contravention of The Companies Act. All related party transactions were ordinary and compliant with the Companies Act. SBIFM has a policy in place that provides a safe and conducive work environment for women employees. An Internal Committee addresses sexual harassment complaints. The extract of the annual return in Form MGT-9 is included in the Director's Report and is available on the website. . The Director's Report includes information on key personnel, Board meetings, details of Directors and auditors, the audit committee of Directors, as well as the Risk Management Committee.
There were no frauds identified by the company or reported by the auditors. The company maintains cost records. A list of directors' attendance and their Director Identification Numbers (DIN) are provided. SBIFM has in place adequate internal financial controls systems with reference to financial reporting. The company is committed to adapt its security strategies with emerging threats.
There was no material order by any regulator, court, tribunals which have any significant impact on the going concern status and the company's operation in future.
The document also includes financial statements and auditor's reports for both standalone and consolidated financials, with detailed notes on various accounting policies and items.
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