To the Members
Your Directors have the pleasure in presenting the Twenty-Fourth Annual Report together
with the Audited Accounts of your Company for the financial year ended March 31, 2023.
Financial Results
The financial performance of your Company for the financial year ended March 31, 2023
is summarised as below:
|
|
(Rs in Crore) |
Financial Results |
For the year ended March 31, 2023 |
For the year ended March 31, 2022 |
Profit before Tax |
1,870.61 |
1,855.29 |
Less: Provision for Tax (Net of Deferred Tax) |
446.69 |
462.16 |
Profit after Tax |
1,423.92 |
1,393.13 |
Add/(Less): Other Comprehensive Income (Net of Tax) |
0.42 |
0.49 |
Total Comprehensive Income (A) |
1,424.34 |
1,393.62 |
Balance of Retained earnings carried forward from previous year |
4,531.82 |
3,862.63 |
Less: Equity Dividend Paid for earlier year |
895.86 |
724.43 |
Total (B) |
3,635.96 |
3,138.20 |
Balance of Retained Earnings Carried to Balance Sheet (A+B) |
5,060.30 |
4,531.82 |
For the year ended March 31, 2023, your Company posted a net profit of I 1,423.92 Crore
as against I 1,393.13 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 your Company for the year under
review, refer to report on Management Discussion and Analysis.
Dividend
Your Directors recommend payment of dividend of I 48/- per equity share (960%) of face
value of I 5/- each for the financial year ended March 31, 2023 as against I 42/- (840%)
per equity share of face value of I 5/- each for the previous year.
The dividend pay-out ratio for the proposed dividend for the year ended March 31, 2023
is 71.95%.
The dividend recommended is in accordance with the parameters and criteria as set out
in the Dividend Distribution Policy which has been approved by the Board of Directors of
the Company. The Dividend Distribution Policy of the Company is placed on the Company's
website at https://www.hdfcfund.com/about-us/ corporate-governance/code-policy 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, Report of the Directors on Corporate
Governance and Business Responsibility and Sustainability Report
Management Discussion and Analysis Report and the Report of the Directors on Corporate
Governance form part of this report.
Further, pursuant to Regulation 34(2)(f) of the SEBI Listing Regulations, the Company
has published the Business Responsibility and Sustainability Report for the financial year
ended March 31, 2023, which also forms a part of the report.
Transfer to Reserves
There is no amount proposed to be transferred to the reserves. For complete details on
movement in Reserves and Surplus during the financial year ended March 31, 2023, please
refer to the Statement of Changes in Equity included in the financial statements.
Capital Structure
During the year, your Company issued and allotted 1,46,164 equity shares of I 5/- each
of the Company to eligible employees on exercise of stock options granted under Employee
Stock Option Scheme of the Company.
Consequently, the issued, subscribed and paid-up equity share capital increased from I
1,06,63,92,760/- represented by 21,32,78,552 equity shares of I 5/- each as on April 1,
2022 to I 1,06,71,23,580/- represented by 21,34,24,716 equity shares of I 5/- each as on
March 31, 2023.
During the year under review, the Company has not issued any:
(a) shares with differential rights as to dividend, voting or otherwise.
(b) sweat equity shares.
Review of Operations
Assets under Management (AUM)* of HDFC Mutual Fund ("HDFC MF") at the close
of FY 2022-23 was Rs 4.37 Lakh Crore as against an AUM of Rs 4.08 Lakh Crore at the close
of FY 2021-22, an increase of 7%. Total AAAUM was at Rs 4.36 Lakh Crore versus Rs 4.34
Lakh Crore as of March 31, 2022. HDFC MF is one of India's largest mutual funds in terms
of total AUM with a market share of 11.1% based on closing AUM. It is also one of the
largest mutual funds in terms of actively managed equity-oriented funds, with a market
share of 11.9%. The actively managed equity-oriented AUM at the close of FY 22-23 was Rs
2.32 Lakh Crore as against Rs 2.00 Lakh Crore at the close of FY 21-22, an increase of
16%. The actively managed equity-oriented annual average AUM constituted 50% of the total
annual average AUM and increased by 15% to Rs 2.17 Lakh Crore. Your Company managed 114
Lakh live accounts as on March 31, 2023, predominantly those of individual (retail)
unitholders. The Individual monthly average AUM as a percent of total monthly average AUM
as of March 2023 was 67.2% as against 62.4% as of March 2022. 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. Your Company has 228
branches as on March 31, 2023. ISCs of Computer Age Management Services 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. Your Company is one of the most preferred choices for individual investors,
with a market share in assets from individual investors at 12.9%. Of the 3.77 Crore unique
investors in mutual funds in India (as identified by PAN//PEKRN), we enjoy trust of 66
Lakh investors, a market penetration of 18%. 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 17,383
Crore through systematic transactions from April 2022 to March 2023. These monthly flows
provide a strong and stable "order book", provide predictable flows, with 86% 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 &
global institutions. As on March 31, 2023, the aggregate assets under these services were
at Rs 1,825 Crore. We announced first close of our HDFC AMC Select AIF FOF on March 31,
2023 with commitments adding up to Rs 400 Crore.
Schemes Launched
Following new schemes were launched during the financial year
1. HDFC FMP 1158D July 2022 |
2. HDFC NIFTY 100 ETF |
3. HDFC NIFTY NEXT 50 ETF |
4. HDFC FMP 1406D August 2022 |
5. HDFC Silver ETF |
6. HDFC NIFTY Growth Sectors 15 ETF |
7. HDFC NIFTY100 Quality 30 ETF |
8. HDFC NIFTY50 Value 20 ETF |
9. HDFC NIFTY100 Low Volatility 30 ETF |
10. HDFC NIFTY200 Momentum 30 ETF |
11. HDFC FMP 1359D September 2022 |
12. HDFC Silver ETF Fund of Fund |
13. HDFC NIFTY G-Sec Dec 2026 Index Fund |
14. HDFC NIFTY G-Sec July 2031 Index Fund |
15. HDFC NIFTY IT ETF |
16. HDFC NIFTY Private Bank ETF |
17. HDFC Business Cycle Fund |
18. HDFC NIFTY G-Sec Jun 2027 Index Fund |
19. HDFC NIFTY G-Sec Sep 2032 Index Fund |
20. HDFC FMP 1204D December 2022 |
21. HDFC Long Duration Debt Fund |
22. HDFC S&P BSE 500 ETF |
23. HDFC NIFTY Midcap 150 ETF |
24. HDFC NIFTY Smallcap 250 ETF |
25. HDFC FMP 2638D February 2023 |
26. HDFC Nifty SDL Oct 2026 Index Fund |
27. HDFC MNC Fund |
28. HDFC Nifty G-Sec Apr 2029 Index Fund |
29. HDFC Nifty G-Sec Jun 2036 Index Fund |
30. HDFC FMP 1269D March 2023 |
31. HDFC NIFTY SDL Plus G-Sec Jun 2027 40:60 Index Fund |
Mergers of the following schemes were also announced: HDFC FMP 1381D September 2018 (1)
and HDFC FMP 1372D September 2018 (1) into HDFC Corporate Bond Fund and HDFC FMP 1344D
October 2018 (1) into HDFC Medium Term Debt Fund vide notice and addendum dated May 16,
2022.
* For details on Mutual Fund AUM, refer Page 6.
Review of Subsidiary Company
Your Company had incorporated a wholly owned subsidiary company - HDFC AMC
International (IFSC) Limited ("HDFC IFSC" or the "Fund Management
Entity" or the "FME") in Gujarat International Finance Tec-City (Gift
City), Gandhinagar, Gujarat on May 27, 2022 for providing investment management, advisory
and related services. During the year, the FME has received an in-principle approval from
International Financial Services Centres Authority (IFSCA') for registration under
Registered Fund Management Entity (Retail) category and is in process of fulfilling the
requirements for obtaining a certificate of registration from IFSCA and pursuant to which
the FME will commence its business operations with initial plans of managing funds which
would primarily be feeders into certain domestic mutual fund schemes and/or ETFs in India.
Accordingly, the Board at its meeting held on April 25, 2023, inter alia, approved the
audited financial statements including the consolidated financial statements of the
Company for the financial year ended March 31, 2023 subject to approval of members of the
Company.
In accordance with the provisions of Section 136 of the Companies Act, 2013 ("the
Act"), the annual report of the Company, the annual financial statements and the
related documents of the HDFC IFSC are placed on the website of the Company. Shareholders
may download the annual financial statements referred above from the Company's website or
may write to the Company for the same. Further, the documents shall also be available for
inspection by the shareholders at the registered office of the Company.
Pursuant to Section 129(3) of the Act, a statement containing
salientfeaturesofthefinancialstatementsofthesubsidiaryinthe prescribed Form AOC-1 forms
part of the financial statements. Except for the above subsidiary, your Company does not
have any other subsidiary or an associate company or a joint venture company during the
year under review.
Information on Promoter Companies
Amalgamation of Housing Development Finance Corporation Limited, Holding Company
During the year, the composite scheme of amalgamation ("Scheme") for the
amalgamation of: (i) HDFC Investments Limited and HDFC Holdings Limited, wholly-owned
subsidiaries of Housing Development Finance Corporation Limited ("HDFC
Limited") with and into HDFC Limited; and (ii) HDFC Limited with and into HDFC
Bank Limited ("HDFC Bank") under Sections 230 to 232 of the Companies Act, 2013,
was filed with Hon'ble National Company Law Tribunal, Mumbai Bench, Mumbai
("NCLT"). On March 17, 2023, Final Order was passed by NCLT sanctioning the said
Scheme. Basis the above, the Company has made final application to SEBI for change in
control of the Company/ change in co-sponsor(s)/promoter under SEBI (Mutual Funds)
Regulations, 1996, SEBI (Portfolio Manager) Regulations, 2020 and SEBI (Alternative
Investment Funds) Regulations, 2012, as applicable.
Stake sale by abrdn Investment Management Limited
During the year, your Company was in receipt of letter from abrdn Investment Management
Limited ("abrdn"), one of the promoters holding 10.21% of the paid-up share
capital of the Company, intimating their intention to sell the entire stake in the Company
subject to applicable SEBI (Mutual Funds) Regulations, 1996 ("SEBI MF
Regulations"). In this connection, SEBI had granted its approval permitting abrdn to
reduce its shareholding in the Company to less than 10%, subject to the Company complying
with the requirements specified under SEBI MF Regulations. Your Company has complied with
the above requirements and abrdn can now reduce its stake in the Company thereby ceasing
to be the co-sponsor of HDFC Mutual Fund.
Directors and Key Managerial Personnel
Non-Executive Directors
In accordance with the provisions of Section 152 of the Act, Mr. Keki Mistry (DIN:
00008886), Non-Executive Director, will retire by rotation at the ensuing Annual General
Meeting (AGM) of the Company. Mr. Mistry, who is eligible for reappointment, has conveyed
that he does not intend to seek re-appointment and will retire on completion of his
current term at the ensuing AGM.
Mr. Mistry has always provided constructive and valuable advice from time to time for
business strategy, financial matters and governance perspective for over 15 years as board
member of the Company. The Board placed on record its acknowledgement and appreciation for
the valuable contributions made by Mr. Mistry.
Necessary proposal to not fill up the vacancy caused by retirement of Mr. Keki Mistry
has been placed for your approval at the ensuing AGM. During the year, Mr. Rushad Abadan
(DIN: 08035538), Non- Executive Director of the Company, director nominated by abrdn
Investment Management Limited (formerly Standard Life Investments Limited) (AIML), one of
the Promoters of the Company, has resigned as Director of the Company with effect from
close of business hours of April 18, 2023 pursuant to withdrawal of his nomination by
AIML.
The Board placed on record its appreciation for the contribution made by Mr. Abadan
during his association with the Company.
Independent Directors
Mr. Shashi Kant Sharma (DIN: 03281847), Independent Director, has resigned as Director
of the Company with effect from April 11, 2022 as he was not in a position to devote
adequate time to the affairs of the Company due to his pre-occupation.
The Board placed on record its appreciation for the contribution made by Mr. Sharma
during his association with the Company. Pursuant to the provisions of Sections 149 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 and SEBI Listing
Regulations, Mr. Dhruv Kaji (DIN: 00192559), Mr. Jairaj Purandare (DIN: 00159886), Mr.
Sanjay Bhandarkar (DIN: 01260274), Mr. Parag Shah (DIN: 00374944) and Ms. Roshni Nadar
Malhotra (DIN: 02346621), Independent Directors, were appointed at the AGM of the members
held on July 16, 2019, to hold office for a term of 5 consecutive years not liable to
retire by rotation, on the Board of your Company. Thus, the current term of Mr. Kaji, Mr.
Purandare and Mr. Bhandarkar as Independent Directors of the Company ends on October 30,
2023 and of Mr. Shah and Ms. Nadar as Independent Directors of the Company ends on January
21, 2024 and April 26, 2024, respectively.
Considering their skills, background, experience, integrity, knowledge, expertise and
contributions made over last four years as Independent Directors of the Company and on the
basis of their performance evaluation, the Board believes that their continued association
as Independent Directors would be of immense benefit to the Company. Accordingly, the
Board of Directors of the Company based on the recommendation of the Nomination &
Remuneration Committee, re-appointed all the aforementioned directors as Independent
Directors of the Company for a second term of five (5) consecutive years commencing from
the end of their first tenure respectively subject to the approval of members through
special resolutions at the ensuing AGM.
In compliance with the provisions of Regulation 17(1A) of the Listing Regulations, the
approval of the members by special resolution is also sought for re-appointing Mr. Kaji,
who would be attaining the age of 75 years during his second term of appointment as an
Independent Director.
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 Act and SEBI Listing
Regulations.
All the Independent Directors have also confirmed that in terms of Rule 6(3) of the
Companies (Appointment and Qualification of Directors) Rules, 2014, they have registered
themselves with the Independent Director's database as prescribed under the Act. Further,
in terms of Rule 6(4) of the Companies (Appointment and Qualification of Directors) Rules,
2014, one Independent Director has passed the Online Proficiency Self-Assessment test
conducted by Indian Institute of Corporate Affairs (IICA) and the other four Independent
Directors were not required to appear for the said test as required by IICA as they fulfil
the criteria stipulated under Rule 6(4) of the Companies (Appointment and Qualification of
Directors) Rules, 2014.
In the opinion of the Board, the Independent Directors fulfil the conditions specified
under the Act, the Rules made thereunder and SEBI Listing Regulations and are independent
of the management.
All the directors of the Company have confirmed that they are not disqualified for
being appointed as directors pursuant to 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, as amended, Mr. Navneet Munot, Managing Director & CEO, Mr. Naozad Sirwalla,
Chief Financial Officer and Ms. Sylvia Furtado, Company Secretary are the Key Managerial
Personnel of the Company.
Number of meetings of the Board
During the FY 2022-23, 5 (five) 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.
Annual Evaluation
Details on the formal annual evaluation conducted 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 the Act and SEBI Listing Regulations, your Company
has 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 said Nomination & Remuneration Policy is placed on the
Company's website at https://www.hdfcfund.com/about-us/ corporate-governance/code-policy.
Issue of Employee Stock Options
In line with the practice of incentivizing the employees through issue of stock
options, your Company, pursuant to approval granted by the Shareholders of the Company at
the AGM held on July 23, 2020, has formulated Employees Stock Option Scheme 2020
(ESOS 2020). During the year, the Nomination & Remuneration Committee (NRC) of
Board of Directors at its meeting held on July 21, 2022 has granted 50,000 stock options
representing 50,000 equity shares of H 5/- each to the eligible employees of your Company
as determined by the NRC, under ESOS 2020 at grant price of H 1,921.70 per option.
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. Your Company has also granted stock
options to the employees in the past under various employee stock option schemes viz.
Employee Stock Option Scheme(s) 2015 - Series I & III and 2017
- Series I & II ("Schemes") formulated from time to time 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 and Sweat Equity) Regulations, 2021 ("ESOP Regulations"). However, the
above Schemes formulated prior to IPO by your Company, were aligned with the ESOP
Regulations. Your Company will not make any fresh grant of stock options under these
aforesaid Schemes.
Disclosures as required under the ESOP Regulations have been placed on the website of
the Company at www.hdfcfund.com. Further, the certificate required under Regulation 13 of
the ESOP Regulations from the Secretarial Auditor of the Company that all the employee
stock option schemes have been implemented in accordance with the ESOP Regulations will be
available at the ensuing AGM for inspection.
Auditors and Auditor's Report
Statutory Auditors
In terms of Section 139 of the Act read with the Companies (Audit and Auditors) Rules,
2014, M/s. B S R & Co. LLP, Chartered Accountants (ICAI FRN: 101248W/W-100022) were
re-appointed as the Statutory Auditors of your Company for a period of 5 continuous years
i.e. from the conclusion of 23rd AGM till the conclusion of 28th AGM of the Company.
The Auditor's Report on the financial statements of the Company for the financial year
ended March 31, 2023 forms part of the Annual Report.
Secretarial Auditor
Pursuant to the provisions of Section 204 of the Act 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 FY 2022-23. The Secretarial Audit Report is annexed herewith
as Annexure I to this report.
There were no qualifications, reservations or adverse comments or disclaimer made by
the aforesaid Auditors in their audit reports.
The said Auditors of the Company have not reported any fraud as specified under Section
143(12) of the Act.
Internal Auditors
M/s. Deloitte Touche Tohmatsu India LLP, were appointed as Internal Auditors of your
Company for the financial year 2022-23.
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. This framework incorporates
the checks, process and procedures to identify potential risks in the investment and
operational areas of the business and minimise their impact through necessary control on
your Company. The framework is designed to identify risks, assess their likelihood and
impact, ensure the review of mitigation measures and requires reporting on a regular
basis. The Risk Management Committee and Audit Committee of the Board of Directors at
their meetings periodically reviews the functioning of the ERM.
The Company has a strong Cyber Risk Management framework wherein cyber risk and
mitigation controls are monitored by Information Technology and Security Committee and
Risk
Management Committee of the Company. Key areas covered under the Cyber Risk Management
are strong adherence to the Board approved Information and Cyber Security Policies, SEBI
guidelines and ISO 27001:2013. The Company maintains robust cyber security posture to
protect the confidentiality and integrity of data.
SEBI vide its circular no. SEBI/HO/IMD/IMD-1DOF2/P/ CIR/2021/630 dated September 27,
2021, revised Risk Management Framework (RMF) for mutual funds. As per the said SEBI
circular, HDFC Mutual Fund have adopted a Risk Management Framework with effect from April
1, 2022. As part of the framework, Risk Management function has incorporated policies,
procedures, roles & responsibilities of the management, the Board of the Company and
the Board of HDFC Trustee Company Ltd. The Board of your Company has approved the Risk
Management framework, revised few policies in line with the said SEBI circular and has
implemented risk measures outlined in the said circular. The terms of reference of the
Risk Management Committee has been enhanced in line with requirements of the said SEBI
circular as its main function is to oversee the risks associated with the business of
mutual fund at the enterprise level, regulatory, compliance, operation and other functions
of Company.
Adequacy of Internal Controls
Your Company has internal control systems which are 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 has been 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 to approve activities to be undertaken, expenditure
to be incurred and to monitor the performance of the CSR activities undertaken by the
Company. During the year the CSR
CommitteewasrenamedasEnvironmental,Social&Governance and Corporate Social
Responsibility (ESG & CSR) Committee'. Pursuant to which the ESG & CSR Committee
will now in addition to reviewing and overseeing the CSR activities of the Company will
also oversee the development and implementation of the Company's Environmental, Social
& Governance framework. The ESG & CSR Committee comprises Mr. Deepak Parekh
(Chairman), Mr. Parag Shah and Mr. Navneet Munot. The Company Secretary acts as the
secretary to the Committee. The Company undertakes its CSR activities through a variety of
effective programs. The major thrust of the CSR activities of the Company is in the areas
of promoting education and health care. The Company also undertakes CSR activities in the
areas of promoting sports and environment sustainability. These activities are in
accordance with the Schedule VII to the Companies Act, 2013.
The Board of Directors and the ESG & 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 as amended, is set out at Annexure II to this
report.
During the year, the Company has fully spent the required amount towards CSR
activities.
The composition of the ESG & CSR Committee, CSR Policy as well as the CSR
activities undertaken by the Company is available on the Company's website at
https://www.hdfcfund.com/ about-us/corporate-profile/csr.
Particulars of contracts or arrangements with Related Parties
During the year Company, your Company has entered into transactions with related
parties as defined under Section 2(76) of the Act read with Companies (Specification of
Definitions Details) Rules, 2014, SEBI Listing Regulations 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 Policy 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 at
https://www.hdfcfund.com/about-us/ corporate-governance/code-policy.
During the year, there was no material transaction with any related parties as per the
Related Party Transactions Policy of the Company and or any other related party
transaction entered into by the Company that requires disclosure in Form AOC-2, 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.
Deposits
During the year, your Company has not accepted any deposits within the meaning of
Sections 73 and 74 of the Act read together with the Companies (Acceptance of
Deposits) Rules, 2014.
Unclaimed Dividend on Shares
As at March 31, 2023, unclaimed dividend amounting to I 69,82,410/- which has not been
claimed by shareholders of the Company and is lying in the respective Unpaid Dividend
Accounts of the Company.
Your Company has disclosed the statement containing the names, last known addresses of
those shareholders whose dividend is unpaid on the Company's website at www.hdfcfund.com.
Annual Return
Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as
on the financial year ended March 31, 2023 is placed on the Company's website at
https://www.hdfcfund. com/about-us/financial/annual-reports.
Vigil Mechanism/Whistle Blower Policy
Whistle Blower Policy is in place and details of the same 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 Act, 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): I 3.31 Crore (previous year: I 9.59 Crore)
Foreign exchange (expenditure): I 10.06 Crore (previous year: I 14.88 Crore)
Particulars of Employees
As on March 31, 2023, your Company has 1281 employees and for the previous year, your
Company had 1,187 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 are set out in the
annexure to this report. In terms of the provisions of Section 136(1) of the Act, 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 of the Act
read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 are appended as Annexure III.
Other Disclosures
There was no change in the nature of the business of the Company.
There was no revision in the financial statements of the Company.
During the year, there was no receipt of any remuneration or commission by the
Managing Director & CEO of the Company from its Holding Company and Subsidiary
Company.
Disclosure pertaining to maintenance of cost records as specified by the Central
Government under sub-section (1) of Section 148 of the Act, is not applicable to your
Company.
There was no application made or any proceeding pending under the Insolvency and
Bankruptcy Code, 2016 during the year.
There was no one-time settlement entered into with any Bank or financial
institutions in respect of any loan taken by the Company.
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.
Directors' Responsibility Statement
In accordance with the provisions of Section 134(5) of the Act 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, 2023 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 Act 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.
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 Act.
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 zones 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 received no complaint 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.
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 2022-23 and the date
of this Report.
Acknowledgements
The Directors take this opportunity to thank its investors, shareholders, trustee
company, 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 abrdn Investment Management Limited
(Formerly StandardLifeInvestmentsLimited),promotersofyourCompany. 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, 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 |
Mumbai Chairman |
May 30, 2023 (DIN: 00009078) |
CIN: L65991MH1999PLC123027 |
Registered Office: |
"HDFC House", 2nd Floor, H. T. Parekh Marg |
165 - 166, Backbay Reclamation, Churchgate |
Mumbai 400 020. |
Tel.: 022 6631 6333, Fax: 022 66580203 |
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