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To the Members
The Directors have pleasure in presenting the Twentieth Annual Report together with the Audited Accounts of the Company for the financial year ended March 31, 2019.
The financial performance of the Company for the financial year ended March 31, 2019 is summarised as below:
For the year ended March 31, 2019
For the year ended March 31, 2018
Profit before Tax
Less: Provision for Tax (Net of Deferred Tax)
Profit after Tax
Add/(Less): Other Comprehensive Income (Net of Tax)
Total Comprehensive Income
Balance of Retained earnings carried forward from previous year
Less: Interim Equity Dividend Paid
Less: Tax on Interim Equity Dividend Paid
Less: Transfer to General Reserve
Add: Other Adjustments
Balance of Retained Earnings carried to Balance Sheet
The Company has prepared its financial statements for the year ended March 31, 2019 for the first time under Indian Accounting Standards (Ind AS). The financial statements for the year ended March 31, 2018 have been restated in accordance with Ind AS for the purpose of comparative information.
For the year ended March 31, 2019, your Company posted a net profit of Rs. 930.60 Crore as against Rs. 711.29 Crore in the previous year. Appropriations from the net profit have been effected as per the summary given above.
For a detailed analysis of the financial performance of the Company for the year under review, refer to report on Management Discussion and Analysis.
Your Company does not have any subsidiary or an associate company or a joint venture company during the year under review.
Your Directors had declared and paid an interim dividend during the financial year ended March 31, 2019 of Rs. 12/per equity share (240%) of face value of Rs. 5/- each in the month of March 2019 involving a total outflow of Rs. 307.52 Crore (including dividend distribution tax of Rs. 52.43 Crore). An interim dividend of Rs. 16/- (320%) per equity share of face value of Rs. 5/- each was confirmed and paid to its shareholders for previous financial year 2017-18.
Your Directors recommend payment of final dividend for the financial year ended March 31, 2019 of Rs. 12/- per equity share (240%) of face value of Rs. 5/- each.
The total dividend for the year is Rs. 24/- (480%) per equity share as against Rs. 16/- (320%) per equity share of face value of Rs. 5/- each for the previous year.
The dividend declared/recommended is in accordance with the principles and criteria as set out in the Dividend Distribution Policy which has been approved by the Board of Directors. The Dividend Distribution Policy of the Company is placed on the Company''s website athttps://www.hdfcfund. com/about-us/governance/codes-policies and the same is annexed as Annexure I in terms of Regulation 43A of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations).
Management Discussion and Analysis Report and Report of the Directors on Corporate Governance
In accordance with the SEBI Listing Regulations, the Management Discussion and Analysis Report and the Report of the Directors on Corporate Governance form part of this report.
Transfer to General Reserves
There was no amount transferred to the General Reserves of your Company for the financial year 2018-19.
Initial Public Offering (IPO)
The Board of Directors of your Company is pleased to inform that during the year under review, your Company has completed its highly successful Initial Public Offer (IPO) and received an overwhelming response for the same with an oversubscription of about 83 times.
IPO of your Company was by way of an offer for sale of 12.01% of the post-offer paid-up equity share capital of your Company. The equity shares of your Company are listed on the National Stock Exchange of India Limited and BSE Limited w.e.f. August 06, 2018.
Issue of Equity Shares on a Private Placement Basis
Pursuant to the receipt of approval of the members at the Extra Ordinary General Meeting of the Company held on April 18, 2018, your Company issued and allotted 14,33,600 equity shares of the Company of Rs. 5/- each at an issue price of Rs. 1050/- per equity share aggregating to Rs. 1,50,52,80,000/by way of a private placement in accordance with Sections 62(1)(c), 42 and other applicable provisions, if any, of the Companies Act, 2013 including the Rules framed thereunder.
Proceeds from the Private placement issue:
The funds raised from the issuance of private placement were utilised for general corporate purposes including enhancement of the systems infrastructure.
Allotment of Equity Shares under Employee Stock Option Schemes
During the year, your Company issued and allotted 5,84,410 equity shares of Rs. 5/- each of the Company to eligible employees on exercise of stock options granted under Employee Stock Option Schemes of the Company.
Consequently, the issued, subscribed and paid-up equity share capital increased from Rs. 1,05,27,76,000/- divided into 21,05,55,200 equity shares of Rs. 5/- each as on April 01, 2018 to Rs. 1,06,28,66,050/- divided into 21,25,73,210 equity shares of Rs. 5/- each as on March 31, 2019.
Review of Operations
Your Directors are pleased to report that:
Assets under Management (AuM) of HDFC Mutual Fund (HDFC MF) at the close of financial year 2018-19 was Rs. 3,43,938 Crore as against an AuM of Rs. 2,91,985 Crore at the close of financial year 2017-18, an increase of 18%. HDFC MF is India’s largest mutual fund in terms of total AuM with a market share of 14.5%. It is also the largest mutual fund in terms of actively managed equity-oriented funds, with a market share of 16.2%. The actively managed equity-oriented AuM of HDFC MF at the close of financial year 2018-19 was Rs. 1,64,263 Crore as against Rs. 1,44,925 Crore at the close of financial year 2017-18, an increase of 13%.
Your Company managed 91 lakh live accounts as on March 31, 2019, predominantly those of individual (retail) unitholders. The Individual monthly average AUM as a percent of total monthly average AUM as of March 2019 was 63.0% as against 62.2% as of March 2018. Your Company has established a strong and wide network of Investor Service Centres (ISCs) rendering services to its unit holders located at various locations across the country. As on March 31, 2019, your Company has 210 branches. ISCs of Computer Age Management Services Pvt. Ltd. (CAMS), the Registrar and Transfer Agent of HDFC MF, are Official Points of Acceptance for transactions of Schemes of HDFC MF. These offices supplement the investor-servicing network of your Company. Your Company services unitholders and over 75,000 empanelled distributors in approximately 200 cities pan India.
Your Company is the most preferred choice for retail investors, with the highest market share in assets from individual investors at 15.4%. Of the 1.93 Crore unique investors in mutual funds in India (as identified by PAN), we enjoy trust of 53 Lakh investors, a market share of 28%. Your Company’s offering of systematic transactions further enhances its appeal to individual investors looking to invest periodically in a disciplined and risk-mitigating manner. Your Company processed Rs.1,182 Crore through systematic transactions in the month of March 2019. These monthly flows provide a strong and growing order book” provide predictable flows, with 78.4% of live systematic investment plans (SIPs) subscribed for a tenure of more than 5 years.
Your Company also provides portfolio management and segregated account services, including discretionary, non-discretionary and advisory services, to high net worth individuals (HNIs), family offices, domestic corporates, trusts, provident funds and domestic and global institutions. As on March 31, 2019, the aggregate assets under these services were at Rs. 9,755 Crore.
New Scheme Launched Under HDFC Mutual Fund
The following open ended scheme was launched under HDFC MF during financial year 2018-19:
HDFC Ultra Short Term Fund
HDFC Ultra Short Term Fund (the Scheme) was launched in the month of September 2018. The investment objective of the Scheme is to generate regular income through investments in Debt and Money Market Instruments while maintaining Macaulay duration of the portfolio between 3 months and 6 months. The Scheme aims to generate income through investments in a range of debt and money market instruments. The Scheme would endeavour to generate returns commensurate with low levels of interest rate risk. The Scheme shall endeavour to develop a well-diversified portfolio of debt (including Securitised debt) and money market instruments. The Scheme may also invest in the schemes of mutual funds. The NFO of the Scheme mobilised assets to the tune of Rs. 1161 Crore.
As of March 31, 2019, HDFC MF offered 147 schemes across asset classes to meet the varying investment needs of investors.
Change in fundamental attributes including other changes and merger of schemes of HDFC Mutual Fund
In accordance with SEBI circular no. SEBI/HO/IMD/DF3/ CIR/P/2017/114 dated October 6, 2017 read with circular no. SEBI/HO/IMD/DF3/CIR/P/2017/126 dated December 04, 2017 on Categorization and Rationalization of Mutual Fund Schemes”, HDFC Trustee Company Limited, Trustee to the schemes of HDFC MF, categorized and rationalized the existing open ended schemes of HDFC MF by inter alia approving certain changes to certain schemes of HDFC MF. These proposed changes were carried out by implementing changes in the fundamental attributes, other changes and merger of certain schemes of HDFC MF.
Directors and Key Managerial Personnel Non-Executive Directors
In accordance with the provisions of Section 152 of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014 and the Articles of Association of the Company, Mr. N. K. Skeoch (DIN: 00165850) and Ms. Renu Sud Karnad (DIN: 00008064), Directors, are liable to retire by rotation at the ensuing Annual General Meeting (AGM) and being eligible have offered themselves for re-appointment.
Necessary proposals for their re-appointment have been placed for your approval at the ensuing AGM. The brief resume of these Directors and other related information have been detailed in the Notice convening the AGM of your Company. Your Directors recommend their re-appointment as Non-Executive Directors of your Company.
Mr. Deepak Parekh (DIN : 00009078), Non - Executive Director, would attain the age of 75 years on October 18, 2019 and he would be able to continue his directorship in the Company post the said date subject to the approval of members by way of a special resolution in terms of Regulation 17(1A) of SEBI Listing Regulations. Necessary proposal for the same has been placed for your approval at the ensuing AGM.
Mr. Humayun Dhanrajgir (DIN:00004006), Mr. P. M. Thampi (DIN:00114522) and Mr. Rajeshwar Bajaaj (DIN: 00419623), Independent Directors of the Company resigned, with effect from the close of business hours of October 31, 2018. The Board placed on record a vote of thanks and appreciation for the valuable contribution made by them over the years.
The Board appointed Mr. Dhruv Kaji (DIN: 00192559), Mr. Jairaj Purandare (DIN: 00159886) and Mr. Sanjay Bhandarkar (DIN: 01260274) as Independent Directors (Additional Directors) of the Company for a term of 5 consecutive years effective October 31, 2018, subject to the approval of members at the ensuing Annual General Meeting (AGM).
The Board also appointed Mr. Parag Shah (DIN: 00374944) and Ms. Roshni Nadar Malhotra (DIN: 02346621) as Independent Directors (Additional Directors) of the Company for a term of 5 consecutive years effective January 22, 2019 and April 27, 2019, respectively, subject to the approval of members at the ensuing AGM.
Pursuant to provisions of Sections 149, 150 and 152 of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014, along with Schedule IV to the Companies Act, 2013, the following Independent Directors were appointed at the Extra Ordinary General Meeting of the members held on July 21, 2014, to hold office for a term of 5 consecutive years up to July 20, 2019, not liable to retire by rotation, on the Board of your Company:
1. Mr. Hoshang Billimoria
2. Mr. Vijay Merchant
3. Dr. Deepak Phatak
The Board re-appointed Mr. Hoshang Billimoria (DIN: 00005003) as an Independent Director of the Company for a second term commencing from July 21, 2019 till November 29, 2019 based on the performance evaluation, subject to the approval of members through special resolution at the ensuing AGM.
The necessary resolutions for the appointment/ re-appointment of the above mentioned directors including their brief profiles and other related information have been included in the notice convening the ensuing AGM. Your Directors recommend their appointment/ re-appointment as Independent Directors of your Company.
All the directors of the Company have confirmed that they are not disqualified for being appointed as directors as specified under Section 164 of the Companies Act, 2013.
Key Managerial Personnel
In accordance with the provisions of Sections 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Mr. Milind Barve, Managing Director, Mr. Piyush Surana, Chief Financial Officer and Ms. Sylvia Furtado, Company Secretary are the Key Managerial Personnel of the Company.
Declaration of Independence
In accordance with the provisions of Section 134(3)(d) of the Companies Act, 2013, Mr. Hoshang Billimoria, Dr. Deepak Phatak, Mr. Vijay Merchant, Mr. Dhruv Kaji, Mr. Jairaj Purandare, Mr. Sanjay Bhandarkar, Mr. Parag Shah and Ms. Roshni Nadar Malhotra, Independent Directors, have submitted declarations stating that they meet the criteria of independence as per the provisions of the Companies Act, 2013 and SEBI Listing Regulations.
Mr. Humayun Dhanrajgir, Mr. P. M. Thampi and Mr. Rajeshwar Bajaaj, who resigned as Independent Directors of the Company w.e.f. October 31, 2018, had submitted declarations at the beginning of the year stating that they meet the criteria of independence.
Number of Meetings of the Board
During the financial year 2018-19, 7 (seven) meetings of the Board of Directors of your Company were held and the details of Board and Committee meetings held are provided in the Report of the Directors on Corporate Governance, which forms part of this report.
Formal Annual Evaluation
Details on the formal annual evaluation of the performance of the Board, its committees and of individual directors are provided in the Report of the Directors on Corporate Governance, which forms part of this report.
Nomination & Remuneration Policy
In terms of the requirements under Companies Act, 2013 and SEBI Listing Regulations, your Company has put in place a Nomination & Remuneration Policy, inter-alia, detailing the director’s appointment, remuneration, criteria for determining qualifications, attributes, independence of a director and other matters. The remuneration paid to the Directors, Key Managerial Personnel and Senior Management is as per the Nomination & Remuneration Policy of your Company. The Nomination & Remuneration Policy is placed on the Company''s website athttps://www.hdfcfund.com/about-us/governance/ codes-policies.
Issue of Employee Stock Options
In line with the practice of incentivising the employees through issue of stock options, your Company has in the past granted stock options to the employees under the various employee stock option schemes formulated from time to time.
Your Company has formulated Employee Stock Option Scheme(s) 2015- Series I & III and 2017- Series I & II (Schemes) for the purpose of administering the issue of stock options to the eligible Employees of your Company. There has been no material variation in the terms of the options granted under any of these schemes and all the schemes are in compliance with the SEBI (Share Based Employee Benefits) Regulations, 2014 (ESOP Regulations”). However, the above Schemes, formulated prior to IPO by your Company, were aligned with the ESOP Regulations. The disclosures as required under the ESOP Regulations have been placed on the website of the Company at www.hdfcfund.com.
There were no stock options granted during the financial year 2018-19 and your Company will not make any fresh grant of stock options under these aforesaid Schemes. No employee was issued stock option, during the year equal to or exceeding 1% of the issued capital of the Company at the time of grant.
Further, the certificate required under Regulation 13 of the ESOP Regulations from the Statutory Auditors of the Company that the above Schemes have been implemented in accordance with the ESOP Regulations will be available at the ensuing AGM for inspection.
Transition to Ind AS
The financial statements for the year ended March 31, 2019, are the first financial statements which the Company has prepared in accordance with Indian Accounting Standards (Ind AS). For periods up to and including the year ended March 31, 2018, your Company has prepared its financial statements in accordance with previous GAAP.
Accordingly, your Company has prepared financial statements which comply with Ind AS applicable for the year ended on March 31, 2019, together with the comparative period data as at and for the year ended March 31, 2018, as described in the significant accounting policies. In preparing these financial statements, your Company’s opening balance sheet was prepared as at April 01, 2017 (your Company’s date of transition to Ind AS). Note no. 39 under the notes to the financial statements, explains the principal adjustments made by the Company in restating its Previous GAAP financial statements, including the Balance Sheet as at April 01, 2017 and the financial statements as at and for the year ended March 31, 2018.
Auditors and Auditors'' Report Statutory Auditors
In terms of Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, M/s. B S R & Co. LLP, Chartered Accountants (ICAI FRN: 101248W / W-100022) were appointed as the Statutory Auditors of your Company for a period of 5 continuous years i.e. from the conclusion of 18th AGM till the conclusion of 23rd AGM, subject to ratification by the members at every AGM of the Company.
In accordance with the Companies Amendment Act, 2017 notified on May 07, 2018 by Ministry of Corporate Affairs, the appointment of statutory auditors is not required to be ratified at every AGM. Accordingly, no proposal for ratification of appointment of M/s. B S R & Co. LLP as Statutory Auditors of the Company will be placed at the ensuing AGM.
Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company has appointed M/s. Bhandari & Associates, Company Secretaries to conduct the Secretarial Audit of your Company for the financial year 2018-19. The Secretarial Audit Report is annexed herewith as Annexure II to this report.
There were no qualifications, reservation or adverse comments or disclaimer made by the Statutory Auditors of the Company, M/s. B S R & Co. LLP and Secretarial Auditor of the Company, M/s. Bhandari & Associates, in their audit reports.
The aforesaid Auditors of the Company have not reported any fraud as specified under Section 143(12) of the Companies Act, 2013.
M/s. Deloitte Touche Tohmatsu India LLP, were appointed as Internal Auditors of your Company for the financial year 2018-19.
Risk Management Policy
The Risk Management Policy of your Company, reviewed by the Audit Committee and approved by the Board, provides for the Enterprise Risk Management (ERM) framework to identify, assess, monitor and mitigate various business risks and this framework incorporates the systematic application of policies, procedures and checks to identify potential risks in the operational areas of the business and minimise their impact on your Company. The framework is designed to identify risks, assess their likely impact, ensure the review of mitigation measures and requires reporting on a regular basis. The Audit Committee of the Board of Directors at its meetings periodically reviews the progress and functioning of the ERM.
The primary business of your Company is to manage the schemes of HDFC Mutual Fund which requires specialised expertise in investment management. Since this is a very crucial aspect which has an extremely significant bearing on the performance of your Company, a risk management committee is in place to oversee the risks associated with this function. This Committee reviews the progress of risk management practices pertaining to HDFC Mutual Fund.
Adequacy of Internal Controls
Your Company has internal control systems which commensurate with the size and complexity of its operations. The internal control systems comprise of standardised policies and procedures covering all functional areas aimed at ensuring sound management of operations, reliable financial reporting, safeguarding of assets and prevention and detection of frauds and errors. The Audit Committee of the Board of Directors, at regular intervals and in co-ordination with Internal and Statutory Auditors, reviews the adequacy of Internal Controls within your Company.
Further, the internal financial controls related to financial statements are found to be adequate and operating effectively and that no material weakness was noticed during the year under review.
Corporate Social Responsibility
In terms of Section 135 of the Companies Act, 2013, your Company has formed a Corporate Social Responsibility (CSR) Committee of Directors to approve activities to be undertaken, expenditure to be incurred and to monitor the performance of the CSR activities undertaken by the Company.
The CSR Committee comprises Mr. Deepak Parekh (Chairman), Mr. Vijay Merchant and Mr. Milind Barve. The Company Secretary acts as the secretary to the Committee.
Your Company undertakes its CSR activities through a variety of effective programs. Some of the thrust areas which your Company has identified to undertake CSR activities are in the areas of promoting preventive health care, promoting sports and promoting education. These activities are broadly in accordance with the Schedule VII to the Companies Act, 2013.
The Board of Directors and the CSR Committee review and monitor from time to time all the CSR activities being undertaken by the Company.
The annual report on CSR activities in accordance with the Companies (Corporate Social Responsibility Policy) Rules, 2014, is set out at Annexure III to this report.
Particulars of Contracts or Arrangements with Related Parties
During the year, your Company has entered into transactions with related parties as defined under Section 2(76) of the Companies Act, 2013 read with Companies (Specification of Definitions Details) Rules, 2014 and applicable Accounting Standards, which were in the ordinary course of business and on arms’ length basis and in accordance with the policy on Related Party Transactions of the Company.
The Related Party Transactions Policy of the Company ensures proper approval and reporting of the concerned transactions between the Company and related parties. The policy on Related Party Transactions is placed on the Company''s website athttps://www.hdfcfund.com/about-us/ governance/codes-policies.
During the year, there was no material transaction with any related parties as per the Related Party Transactions Policy of the Company and all the related party transactions entered into by the Company were in the ordinary course of business and on an arm’s length basis, hence, disclosure in Form AOC-2 is not applicable to the Company.
The disclosures pertaining to related party transactions as per the applicable Accounting Standards form part of the notes to the financial statements provided in this Annual Report.
Particulars of Loans, Guarantees or Investments
Details of loans, guarantees and investments, if any, covered under the provisions of Section 186 of the Companies Act, 2013 are provided in the notes to financial statements.
During the year, your Company has not accepted any deposits within the meaning of Sections 73 and 74 of the Companies Act, 2013 read together with the Companies (Acceptance of Deposits) Rules, 2014.
Unclaimed Dividend on Shares
As at March 31, 2019, dividend amounting to Rs. 312/- had not been claimed by shareholders of the Company. Your Company has transferred this amount of dividend to HDFC AMC Ltd.
- Unpaid Interim Dividend A/c 2018-19. Your Company will disclose a statement containing the names, last known addresses and the unpaid dividend to be paid to each shareholder on the Company''s website at www.hdfcfund.com.
Unclaimed Suspense Account (IPO Related)
In relation to IPO of equity shares of the Company, 205 number of equity shares were transferred to the Unclaimed Suspense Account.
During the year under review, 13 claims were received by Karvy Fintech Pvt. Ltd, your Company’s Registrar & Share Transfer Agent, to transfer 205 shares held in unclaimed suspense share account and after thorough verification, all the 205 shares have been transferred to the respective shareholders.
There were no shares lying in the Unclaimed Suspense Account (IPO) as on March 31, 2019. Disclosure required under Regulation 39 read with Part F of Schedule V of SEBI Listing Regulations, is provided in the Report of Directors on Corporate Governance, which forms part of this report .
Extract of Annual Return
As per the provisions of Companies Act, 2013, the details forming part of the extract of the Annual Return (in the prescribed Form MGT-9) as on the financial year ended March 31, 2019 is appended as Annexure IV.
A copy of the Annual Return is placed on the Company''s website at www.hdfcfund.com.
Vigil Mechanism/Whistle Blower Policy
Your Company has put in place a Whistle Blower Policy. More details are provided in the Report of the Directors on Corporate Governance, which forms part of this report.
Particulars Regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
The information pertaining to the conservation of energy and technology absorption in terms of Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 is stated as below:
(a) Conservation of energy and technology absorption-
Your Company is in financial services industry and does not consume high levels of energy. However, regular efforts are made to adopt appropriate energy conservation measures and technology absorption methods.
(b) Foreign Exchange, earnings and expenditure during the year -
- Foreign exchange (earnings): Rs. 13.23 Crore (previous year: Rs. 14.09 Crore)
- Foreign exchange (expenditure): Rs. 17.21 Crore (previous year: Rs. 16.79 Crore - excluding Equity Dividend and Rs. 145.61 Crore - including Equity Dividend)
Particulars of Employees
As on March 31, 2019, your Company has 1,150 employees and for the previous year, your Company had 995 employees.
In accordance with the provisions of Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and particulars of the top ten employees in terms of remuneration drawn and of the aforesaid employees are set out in the annexure to this report. In terms of the provisions of Section 136(1) of the Companies Act, 2013, the Directors’ Report is being sent to all shareholders of the Company excluding the annexure. Any shareholder interested in obtaining a copy of the annexure may write to the Company.
Further, disclosures on managerial remuneration as required under Section 197 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are appended as Annexure V.
- There was no change in the nature of the business of the Company.
- There was no revision in the financial statements of the Company.
- Disclosure pertaining to maintenance of cost records as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, is not applicable to your Company.
- Your Company has not issued any sweat equity shares to the employees of your Company.
- Your Company has not issued equity shares with differential rights as to dividend, voting or otherwise.
- Details of the Audit Committee of the Board of Directors including its composition are provided in the Report of the Directors on Corporate Governance, which forms part of this report.
- There was no receipt of any remuneration or commission by the Managing Director of the Company from its holding company.
Directors'' Responsibility Statement
In accordance with the provisions of Section 134(5) of the Companies Act, 2013 and based on the information provided by the management, your Directors state that:
(i) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(ii) Accounting policies selected were applied consistently. Reasonable and prudent judgements and estimates were made so as to give a true and fair view of the state of affairs of the Company at the end of March 31, 2019 and of the profit of the Company for year ended on that date;
(iii) Proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities;
(iv) The annual accounts of the Company have been prepared on a going concern basis;
(v) Internal financial controls have been laid down to be followed by the Company and such internal financial controls are adequate and operating effectively; and
(vi) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Your Company is in compliance with the provisions of the applicable Secretarial Standards issued by the Institute of Company Secretaries of India in terms of the Companies Act, 2013.
Prevention of Sexual Harassment Policy and Its Reporting
Your Company has framed and implemented a Policy on Sexual Harassment of Women at Workplace aiming at prevention of harassment of employees which lays down the guidelines for identification, reporting and prevention of undesired behaviour. 6 (six) Internal Committees (IC) for different regions were constituted in accordance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 with women employees being a majority and an external member. The Policy, IC Members’ details and the penal consequences of violating the said Act/ Policy are displayed at all offices/ ISCs and on the intranet of the Company. Regular employee awareness sessions are conducted to generate awareness about the policy, reporting mechanism and prevention of sexual harassment at the workplace. During the year, the IC did not receive any complaints pertaining to sexual harassment.
Significant/Material Orders Passed by the Regulators
There are no significant and material orders by any regulator, court, tribunal impacting the going concern status of the Company and its operations in future.
On December04, 2018, vide a settlement order issued by SEBI, your Company, without admitting or denying the violations, settled proceedings in connection with quasi - judicial proceedings initiated in respect of certain alleged violations under SEBI (Mutual Funds) Regulations, 1996 and circulars and/or guidelines issued, for an amount of Rs. 3,78,56,498/-.
Vide the said settlement order, SEBI has stated that the quasi judicial proceedings have been disposed off.
Material Changes and Commitments, if any, Affecting the Financial Position of the Company from the Financial Year end till the Date of this Report
There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year 2018-19 and the date of this Report.
The Directors take this opportunity to thank its investors, shareholders, bankers, distributors, key partners, Investor Service Centres and other service providers for their continued support. The Directors would like to convey their gratitude to Housing Development Finance Corporation Limited and Standard Life Investments Limited, promoters of your Company and look forward to their continued support.
The Directors acknowledge the valuable assistance, support and guidance given by the Securities and Exchange Board of India, Association of Mutual Funds of India, Reserve Bank of India, Ministry of Corporate Affairs, Registrar of Companies, the stock exchanges and depositories.
The Directors wish to place on record their appreciation to employees at all levels for their dedication and commitment.
The Directors also acknowledge the faith reposed in HDFC Mutual Fund by its investors and look forward to their continued support.
On behalf of the Board of Directors
Deepak S. Parekh
April 26, 2019 (DIN: 00009078)
HDFC House, 2nd Floor, H. T. Parekh Marg,
165 - 166, Backbay Reclamation, Churchgate,
Mumbai - 400 020.
Tel.: 022 - 6631 6333, Fax: 022 - 66580203