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HDFC Asset Management Company Ltd.

BSE: 541729 Sector: Financials
NSE: HDFCAMC ISIN Code: INE127D01025
BSE 00:00 | 16 Apr 2927.90 -19.35
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NSE 00:00 | 16 Apr 2929.80 -19.70
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OPEN 2949.70
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VOLUME 4201
52-Week high 3358.30
52-Week low 2071.00
P/E 49.51
Mkt Cap.(Rs cr) 62,353
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 2949.70
CLOSE 2947.25
VOLUME 4201
52-Week high 3358.30
52-Week low 2071.00
P/E 49.51
Mkt Cap.(Rs cr) 62,353
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

HDFC Asset Management Company Ltd. (HDFCAMC) - Director Report

Company director report

To the Members

Your Directors have pleasure in presenting the Twenty-First AnnualReport together with the Audited Accounts of your Company for the financial year endedMarch 31 2020.

Financial Results

The financial performance of your Company for the financial year endedMarch 31 2020 is summarised as below:

' (in Crore)

FINANCIAL RESULTS For the yea r ended March 312020 For the year ended March 31 2019
Profit before Tax 1653.05 1374.70
Less: Provision for Tax (Net of Deferred Tax) 390.64 444.10
Profit after Tax 1262.41 930.60
Add / (Less): Other Comprehensive Income (Net of Tax) (3.08) (0.40)
Total Comprehensive Income (A) 1259.33 930.20
Balance of Retained earnings carried forward from previous year 2190.37 1567.67
Less: Interim Equity Dividend Paid - 255.09
Less: Tax on Interim Equity Dividend Paid - 52.43
Less: Final Equity Dividend Paid for earlier year 255.11 -
Less: Tax on Final Equity Dividend Paid for earlier year 52.44 -
Add / (Less): Other Adjustments (8.63) 0.02
Total(B) 1874.19 1260.17
Balance of Retained Earnings Carried to Balance Sheet (A+B) 3133.52 2190.37

For the year ended March 31 2020 your Company posted a net profit of' 1262.41 Crore as against ' 930.60 Crore in the previous year. Appropriations from thenet profit have been effected as per the summary given above.

For a detailed analysis of the financial performance of your Companyfor the year under review refer to report on Management Discussion and Analysis.

Your Company does not have any subsidiary or an associate company or ajoint venture company during the year under review.

Dividend

Your Directors recommend payment of dividend for the financial yearended March 31 2020 of ' 28/- per equity share (560%) offace value of ' 5/- each asagainst ' 24/- (480%) per equity share of face value of ' 5/- each for the previous year.

The dividend pay-out ratio for the proposed final dividend for the yearended March 31 2020 is 47.20%.

The dividend recommended is in accordance with the principles andcriteria as set out in the Dividend Distribution Policy which has been approved by theBoard of Directors.

The Dividend Distribution Policy of the Company is placed on theCompany's website at https://www.hdfcfund. com/about-us/governance/codes-policies.and the same is annexed as Annexure I in terms of Regulation 43A of Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 ("SEBI Listing Regulations”).

Management Discussion and Analysis Report

Report of the Directors on Corporate Governance and BusinessResponsibility Report

In accordance with the SEBI Listing Regulations the ManagementDiscussion and Analysis Report the Report of the Directors on Corporate Governance andBusiness Responsibility Report form part of this report.

Transfer to General Reserves

There was no amount transferred to the General Reserves of your Companyfor the FY 19-20.

Capital Structure

During the year your Company issued and allotted 230115 equityshares of ' 5/- each of the Company to eligible

employees on exercise of stock options granted under Employee StockOption Schemes of the Company.

Consequently the issued subscribed and paid-up equity share capitalincreased from ' 1062866050/- represented by 212573210 equity shares of '5/- each as on April 1 2019 to ' 1064016625/- represented by 212803325equity shares of ' 5/- each as on March 31 2020.

Review of Operations

Assets under Management (AuM)* of HDFC Mutual Fund ("HDFCMF") at the close of FY 19-20 was ' 3.19 Lakh Crore as against an AuM of '3.44 Lakh Crore at the close of FY 18-19 a decrease of 7%. The decline in AUM can beprimarily attributed to the Coronavirus outbreak and the consequent pandemic. The QAAUMhowever grew by 8% to ' 3.70 Lakh Crore. HDFC MF is one of India's largest mutualfund in terms of total AuM with a market share of 14.3%. It is also the largest mutualfund in terms of actively managed equity-oriented funds with a market share of 14.7%. Theactively managed equity-oriented AuM of HDFC MF at the close of FY 19-20 was ' 1.20Lakh Crore as against ' 1.64 Lakh Crore at the close of FY 18-19 a decrease of 27% whichcan primarily be attributed to a fall in the equity markets due to the Coronaviruspandemic. The actively managed equity-oriented QAAUM constituted 43% of the total QAAUMand grew by 2% to ' 1.57 Lakh Crore.

Your Company managed 94 lakh live accounts as on March 31 2020predominantly those of individual (retail) unitholders. The Individual monthly average AUMas a percent of total monthly average AUM as of March 2020 was 57.2% as against 63.0% asof March 2019. Your Company has established a strong and wide network of Investor ServiceCentres (ISCs) rendering services to its unit holders located at various locations acrossthe country. Your Company has 221 ISCs as on March 31 2020. ISCs of Computer AgeManagement Services Ltd. (CAMS) the Registrar and Transfer Agent of HDFC MF are OfficialPoints of Acceptance for transactions of Schemes of HDFC MF. These offices supplement theinvestor-servicing network of your Company. Your Company services unitholders and over70000 empanelled distributors in over 200 cities pan India.

Your Company is the most preferred choice for retail investors withthe highest market share in assets from individual investors at 15.0%. Of the 2.08 Croreunique investors in mutual funds in India (as identified by PAN) we enjoy trust of 56Lakh investors a market share of 27%. Your Company's offering of systematictransactions further enhances its appeal to individual investors looking to investperiodically in a disciplined and risk-mitigating manner. Your

Company processed ' 1130 Crore through systematic transactionsin the month of March 2020. These monthly flows provide a strong and stable "orderbook” provide predictable flows with 81% of live systematic investment plans (SIPs)subscribed for a tenure of more than 5 years.

Your Company also provides portfolio management and segregated accountservices including discretionary non-discretionary and advisory services to high networth individuals (HNIs) family offices domestic corporates trusts provident funds anddomestic and global institutions. As on March 31 2020 the aggregate assets under theseservices were at ' 8530 Crore.

In the wake of Covid-19 pandemic threat we had successfully initiatedour Business Continuity Plan. AMFI circular issued in this regard has directed all AMCs tokeep branches/offices closed and only allow online transaction to continue effective March23 2020. All our operations continue to work remotely using the existing infrastructurein place. We have been able to successfully initiate Work from Home for employees whocontinue to interact with our customers partners and service providers remotely. Sinceour infrastructure is cloud based we could enhance the capacity comfortably to manage thevolumes. The current situation has impacted our sales from walk-in customers but due toour strong digital presence customers are able to make electronic transactions seamlessly.

Schemes Launched

Other than HDFC FMP 1100D April 2019 (1) a closed-ended fund no newscheme was launched during the financial year.

Fundamental Attributes Changed

During the year merger of certain Plans / Options under HDFC FloatingRate Debt Fund HDFC Liquid Fund and HDFC Low Duration Fund was carried out details ofwhich were announced through an addendum dated April 4 2019.

Directors and Key Managerial Personnel Non-Executive Directors

In accordance with the provisions of Section 152 of the Companies Act2013 read with the Companies (Appointment and Qualification of Directors) Rules 2014 andthe Articles of Association of the Company Mr. Deepak Parekh (DIN: 00009078) and Mr.James Aird (DIN: 01057384) Directors are liable to retire by rotation at the ensuingAnnual General Meeting (AGM) and being eligible have offered themselves forre-appointment.

Necessary proposals for their re-appointment have been placed for yourapproval at the ensuing AGM. The brief

resume of these Directors and other related information have beendetailed in the Notice convening the AGM of your Company. Your Directors recommend theirre-appointment as Non-Executive Directors of your Company.

Executive Director

Pursuant to the provisions of Sections 196 197 203 of the CompaniesAct 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 it is proposed to re-appoint Mr. Milind Barve (DIN: 00087839) as the ManagingDirector of your Company not liable to retire by rotation for a further period effectivefrom November 1 2020 upto January 31 2021. Necessary proposal for his re-appointmentincluding payment of remuneration has been placed for your approval at the ensuing AGM.Your Directors recommend his reappointment as Managing Director of your Company.

Independent Directors

Pursuant to the provisions of Sections 149 150 and 152 of theCompanies Act 2013 read with the Companies (Appointment and Qualification of Directors)Rules 2014 along with Schedule IV to the Companies Act 2013 Mr. Vijay Merchant (DIN:01773227) Mr. Hoshang Billimoria (DIN: 00005003) and Dr. Deepak Phatak (DIN: 00046205)Independent Directors were appointed at the Extra Ordinary General Meeting of the membersheld on July 21 2014 to hold office for a term of 5 consecutive years up to July 202019 not liable to retire by rotation on the Board of your Company. Accordingly theterm of Mr. Vijay Merchant and Dr. Deepak Phatak came to an end on July 20 2019.

The Board re-appointed Mr. Hoshang Billimoria as an IndependentDirector of the Company for a second term commencing from July 21 2019 till November 292019 based on the performance evaluation which was approved by the members of the Companythrough special resolution at the 20th AGM. Accordingly the term of Mr.Hoshang Billimoria came to end on November 29 2019.

The Board placed on record a vote of thanks and appreciation for thevaluable contribution made by them over the years.

During the year the members at their 20th AGM of theCompany had appointed Mr. Dhruv Kaji Mr. Jairaj Purandare Mr. Sanjay Bhandarkar Mr.Parag Shah and Ms. Roshni Nadar Malhotra as Independent Directors of the Company for aperiod of five consecutive years effective from their respective date of appointment.

The Board appointed Mr. Shashi Kant Sharma (DIN: 03281847) as anIndependent Director (Additional Director) of the Company for a term of 5 consecutiveyears effective October 26 2019 subject to the approval of members

at the ensuing AGM. Mr. Sharma possesses requisite skills experienceand knowledge and his qualification and experience was suitable for the Company and theBoard would derive immense value from his guidance and rich work experience.

Regarding proficiency in terms of the recently introduced regulatoryrequirements providing for establishment of an online database of Independent Directors byIndian Institute of Corporate Affairs all the Independent Directors of the Company haveenrolled their names in the said database. Also the online proficiency self-assessmenttest as mandated will be undertaken by those Independent Directors of the Company who arenot exempted within the prescribed timelines.

The necessary resolution for the appointment of Mr. Shashi Kant Sharmaincluding his brief profile and other related information have been included in the Noticeconvening the ensuing AGM. Your Directors recommend his appointment as an IndependentDirector of your Company.

All the directors of the Company have confirmed that they are notdisqualified for being appointed as directors pursuant to Section 164 of the CompaniesAct 2013.

Declaration of Independence

In accordance with the provisions of Section 134(3)(d) of the CompaniesAct 2013 Mr. Dhruv Kaji Mr. Jairaj Purandare Mr. Sanjay Bhandarkar Mr. Parag ShahMs. Roshni Nadar Malhotra and Mr. Shashi Kant Sharma Independent Directors havesubmitted declarations stating that they meet the criteria of independence as per theprovisions of the Companies Act 2013 and SEBI Listing Regulations.

Mr. Vijay Merchant Dr. Deepak Phatak and Mr. Hoshang Billimoria whoceased to be Independent Directors of the Company during the financial year had submitteddeclarations at the beginning of the year stating that they meet the criteria ofindependence.

In the opinion of the Board the Independent Directors fulfill theconditions specified under the Companies Act 2013 the Rules made thereunder and SEBIListing Regulations and are independent of the management.

Key Managerial Personnel

In accordance with the provisions of Sections 2(51) and 203 of theCompanies Act 2013 read with the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 Mr. Milind Barve Managing Director Mr. Piyush Surana ChiefFinancial Officer and Ms. Sylvia Furtado Company Secretary are the Key ManagerialPersonnel of the Company.

Number of Meetings of the Board

During the FY 19-20 8 (eight) meetings of the Board of Directors ofyour Company were held and the details of Board and Committee meetings held are providedin the Report of the Directors on Corporate Governance which forms part of this report.

Annual Evaluation

Details on the formal annual evaluation of the performance of theBoard its committees and of individual directors are provided in the Report of theDirectors on Corporate Governance which forms part of this report.

Nomination & Remuneration Policy

In terms of the requirements under the Companies Act 2013 and SEBIListing Regulations your Company has in place a Nomination & Remuneration Policyinter-alia detailing the director's appointment remuneration criteria for determiningqualifications attributes independence of a director and other matters. The remunerationpaid to the Directors Key Managerial Personnel and Senior Management is as per theNomination & Remuneration Policy of your Company. The Nomination & RemunerationPolicy is placed on the Company's website at https://www.hdfcfund.com/about-us/governance/codes-policies.

Issue of Employee Stock Options

In line with the practice of incentivising the employees through issueof stock options your Company has in the past granted stock options to the employeesunder the various employee stock option schemes formulated from time to time. Your Companyhas formulated Employee Stock Option Scheme(s) 2015 - Series I & III and 2017 - SeriesI & II ("Schemes") for the purpose of administering the issue of stockoptions to the eligible Employees of your Company. There has been no material variation inthe terms of the options granted under any of these schemes and all the schemes are incompliance with the SEBI (Share Based Employee Benefits) Regulations 2014 ("ESOPRegulations”). However the above Schemes formulated prior to IPO by your Companywere aligned with the ESOP Regulations. The disclosures as required under the ESOPRegulations have been placed on the website of the Company at www.hdfcfund.com.

There were no stock options granted during the FY 19-20 and yourCompany will not make any fresh grant of stock options under these aforesaid Schemes. Noemployee was issued stock option during the year equal to or exceeding 1% of the issuedcapital of the Company at the time of grant.

Further the certificate required under Regulation 13 of the ESOPRegulations from the Statutory Auditors of the Company that the above Schemes have beenimplemented in accordance with the ESOP Regulations will be available at the ensuing AGMfor inspection.

The Board of Directors on the recommendation of the Nomination &Remuneration Committee and pursuant to the provisions of the Companies Act 2013 and ESOPRegulations had at its meeting held on May 9 2020 proposed issuance of equity shares

under Employees Stock Option Scheme - 2020

("ESOS - 2020”/ "the Scheme”) for rewarding andmotivating employees for their long association and in recognition of their dedicatedservice to the Company and also to attract and retain the best talent.

Members' approval to the Scheme is sought by way of SpecialResolution at the ensuing AGM.

Auditors and Auditors' Report Statutory Auditors

In terms of Section 139 of the Companies Act 2013 read with theCompanies (Audit and Auditors) Rules 2014 M/s. B S R & Co. LLP CharteredAccountants (ICAI FRN: 101248W / W-100022) were appointed as the Statutory Auditors ofyour Company for a period of 5 continuous years i.e. from the conclusion of 18thAGM till the conclusion of 23rd AGM subject to ratification by the members atevery AGM of the Company.

In accordance with the Companies Amendment Act 2017 notified on May 72018 by the Ministry of Corporate Affairs the appointment of statutory auditors is notrequired to be ratified at every AGM. Accordingly no proposal for ratification ofappointment of M/s. B S R & Co. LLP as Statutory Auditors of the Company will beplaced at the ensuing AGM.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act 2013read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 your Company has appointed M/s. Bhandari & Associates Company Secretaries toconduct the Secretarial Audit of your Company for the FY 19-20. The Secretarial AuditReport is annexed herewith as Annexure II to this report.

There were no qualifications reservation or adverse comments ordisclaimer made by the aforesaid Auditors in their audit reports.

The said Auditors of the Company have not reported any fraud asspecified under Section 143(12) of the Companies Act 2013.

Internal Auditors

M/s. Deloitte Touche Tohmatsu India LLP were appointed as InternalAuditors of your Company for the FY 19-20.

Risk Management Policy

The Risk Management Policy of your Company reviewed by the AuditCommittee and approved by the Board provides for the Enterprise Risk Management (ERM)framework to identify assess monitor and mitigate various business risks and thisframework incorporates the systematic application of policies procedures and checks toidentify potential risks in the operational areas of the business and minimise theirimpact on your Company. The framework is designed to identify risks assess their likelyimpact ensure the review of mitigation measures and requires reporting on a regularbasis. The Audit Committee of the Board of Directors at its meetings periodically reviewsthe progress and functioning of the ERM.

The primary business of your Company is to manage the schemes of HDFCMutual Fund which requires specialised expertise in investment management. Since this is avery crucial aspect which has an extremely significant bearing on the performance of yourCompany a Risk Management Committee is in place to oversee the risks associated with thisfunction. This Committee reviews the progress of risk management practices pertaining toHDFC Mutual Fund.

With rapid technological advancement in securities market your Companymaintains a robust cyber security architecture and has in place a cyber resilienceframework to protect the integrity of data and guard against breaches of privacy.

Adequacy of Internal Controls

Your Company has internal control systems which commensurate with thesize and complexity of its operations. The internal control systems comprise ofstandardised policies and procedures covering all functional areas aimed at ensuring soundmanagement of operations reliable financial reporting safeguarding of assets andprevention and detection of frauds and errors. The Audit Committee of the Board ofDirectors at regular intervals and in co-ordination with Internal and Statutory Auditorsreviews the adequacy of Internal Controls within your Company.

Further the internal financial controls related to financialstatements are found to be adequate and operating effectively and that no materialweakness was noticed during the year under review.

Corporate Social Responsibility

In terms of Section 135 of the Companies Act 2013 your Company hasformed a Corporate Social Responsibility (CSR) Committee of Directors to approveactivities to be undertaken expenditure to be incurred and to monitor the performance ofthe CSR activities undertaken by the Company.

The CSR Committee comprises of Mr. Deepak Parekh (Chairman) Mr. ParagShah and Mr. Milind Barve. The Company Secretary acts as the secretary to the Committee.

Your Company undertakes its CSR activities through a variety ofeffective programs. The major thrust of the CSR activities of the Company is in the areaof promoting preventive health care. The Company also undertakes CSR activities in theareas of promoting sports and promoting education. These activities are broadly inaccordance with the Schedule VII to the Companies Act 2013.

The Board of Directors and the CSR Committee review and monitor fromtime 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 tothis report.

The contents of the CSR Policy as well as the CSR activities undertakenby the Company are available on the Company's website athttps://www.hdfcfund.com/about- us/corporate/csr.

Particulars of Contracts or Arrangements with Related Parties

During the year your Company has entered into transactions withrelated parties as defined under Section 2(76) of the Companies Act 2013 read withCompanies (Specification of Definitions Details) Rules 2014 and applicable AccountingStandards which were in the ordinary course of business and on arms' length basisand in accordance with the policy on Related Party Transactions of the Company.

The Related Party Transactions Policy of the Company ensures properapproval and reporting of the concerned transactions between the Company and relatedparties. The policy on Related Party Transactions is placed on the Company's websiteat https://www.hdfcfund.com/about- us/governance/codes-policies.

During the year there was no material transaction with any relatedparties as per the Related Party Transactions Policy of the Company and or any otherrelated party transaction entered into by the Company that required disclosure in FormAOC-2 hence disclosure in Form AOC-2 is not applicable to the Company.

The disclosures pertaining to related party transactions as per theapplicable Accounting Standards form part of the notes to the financial statementsprovided in this Annual Report.

Particulars of Loans Guarantees or Investments

Details of loans guarantees and investments if any covered under theprovisions of Section 186 of the Companies Act 2013 are provided in the notes tofinancial statements.

Deposits

During the year your Company has not accepted any deposits within themeaning 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 2020 dividend amounting to ' 0.19 Crore had not beenclaimed by shareholders of the Company and is lying in the respective Unpaid DividendAccounts. Your Company has disclosed the statement containing the names last knownaddresses and the unpaid dividend to be paid to each shareholder on the Company's websiteat www.hdfcfund.com.

Extract of Annual Return

As per the provisions of Companies Act 2013 the details forming partof the extract of the Annual Return (in the prescribed Form MGT-9) as on the financialyear ended March 31 2020 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 areprovided in the Report of the Directors on Corporate Governance which forms part of thisreport.

Particulars Regarding Conservation of EnergyTechnology Absorption and Foreign Exchange Earnings and Outgo

The information pertaining to the conservation of energy and technologyabsorption 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 consumehigh levels of energy. However regular efforts are made to adopt appropriate energyconservation measures and technology absorption methods.

(b) Foreign Exchange earnings and expenditure during the year -

• Foreign exchange (earnings): ' 33.77 Crore (previous year: '13.23 Crore)

• Foreign exchange (expenditure): ' 18.55 Crore

(previous year: ' 17.21 Crore)

Particulars of Employees

As on March 31 2020 your Company has 1194 employees and for theprevious year your Company had 1150 employees.

In accordance with the provisions of Rule 5(2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the names andparticulars of the top ten employees in terms of remuneration drawn are set out in theannexure to this report. In terms of the provisions of Section 136(1) of the CompaniesAct 2013 the Directors' Report is being sent to all shareholders of the Companyexcluding the annexure. Any shareholder interested in obtaining a copy of the annexure maywrite to the Company.

Further disclosures on managerial remuneration as required underSection 197 read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are appended as Annexure V.

Other Disclosures

• There was no change in the nature of the business of theCompany.

• There was no revision in the financial statements of theCompany.

• Disclosure pertaining to maintenance of cost records asspecified by the Central Government under sub-section (1) of Section 148 of the CompaniesAct 2013 is not applicable to your Company.

• Your Company has not issued any sweat equity shares to theemployees of your Company.

• Your Company has not issued equity shares with differentialrights as to dividend voting or otherwise.

• Details of the Audit Committee of the Board of Directorsincluding its composition are provided in the Report of the Directors on CorporateGovernance which forms part of this report.

• There was no receipt of any remuneration or commission by theManaging 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 ofthe annual accounts the applicable accountingstandards had been followed along with proper explanation relating to material departures;

(ii) Accounting policies selected were applied consistently. Reasonableand prudent judgements and estimates were made so as to give a true and fair view of thestate of affairs of the Company at the end of March 31 2020 and of the profit of theCompany for year ended on that date;

(iii) Proper and sufficient care has been taken for maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting frauds andother irregularities;

(iv) The annual accounts of the Company have been prepared on a goingconcern basis;

(v) Internal financial controls have been laid down to be followed bythe Company and such internal financial controls are adequate and operating effectively;and

(vi) Proper systems have been devised to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

Secretarial Standards

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 CompaniesAct 2013.

Prevention of Sexual Harassment Policy and itsReporting

Your Company has framed and implemented a Policy on Sexual Harassmentof Women at Workplace aiming at prevention of harassment of employees which lays down theguidelines for identification reporting and prevention of undesired behaviour. 6 (six)Internal Committees (IC) for different regions were constituted in accordance with theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013with 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 alloffices/ ISCs and on the intranet of the Company. Regular employee awareness sessions areconducted to generate awareness about the policy reporting mechanism and prevention ofsexual harassment at the workplace. During the year the IC did not receive any complaintspertaining to sexual harassment.

Significant/Material Orders Passed by theRegulators

There are no significant and material orders by any regulator courttribunal impacting the going concern status of the Company and its operations in future.

SEBI issued show cause notices in May and June 2019 to your CompanyHDFC Trustee Company Limited (Trustee Company) and certain officials of your Company foralleged violations of SEBI (Mutual Funds) Regulations 1996 in the matter of four schemesof HDFC Mutual Fund

i.e. Fixed Maturity Plans (FMPs) holding debt instruments of EsselGroup Companies. Separate Settlement applications were filed with SEBI under SEBI(Settlement Proceedings) Regulations 2018 by your Company officials of your Company andthe Trustee Company against the enforcement actions/ proceedings initiated through theshow cause notices issued by SEBI without admission or denial of guilt. SEBI issuedSettlement Order no. SO/ EFD-2/SD/337/April/2020 dated April 16 2020 in this regardwhereby the enforcement action and enforcement proceedings had been disposed off againstyour Company officials of your Company and Trustee Company.

Material Changes and Commitments if any Affecting the FinancialPosition of the Company from the Financial Year End till the date of this Report

There have been no material changes and commitments affecting thefinancial position of the Company which have occurred between the end of the FY 19-20 andthe date of this Report.

Acknowledgements

The Directors take this opportunity to thank its investorsshareholders trustee company bankers distributors key partners Investor ServiceCentres and other service providers for their continued support. The Directors would liketo convey their gratitude to Housing Development Finance Corporation Limited and StandardLife Investments Limited promoters of your Company and look forward to their continuedsupport.

The Directors acknowledge the valuable assistance support and guidancegiven by the Securities and Exchange Board of

India Association of Mutual Funds of India Reserve Bank of IndiaMinistry of Corporate Affairs Registrar of Companies Stock Exchanges and Depositories.

The Directors wish to place on record their appreciation to employeesat all levels for their dedication and commitment.

The Directors also acknowledge the faith reposed in HDFC Mutual Fund byits investors and look forward to their continued support.

On behalf of the Board of Directors

Deepak S. Parekh
Mumbai Chairman
June 11 2020 (DIN: 00009078)

.