HDFC Capital Advisors Limited

HDFC Capital Advisors Limited

HDFC Capital Advisors Limited

1205

Fourth Annual Report 2018-19

Board of Directors

Directors' Report

Mr. Sunil Shaligram (DIN: 01583151) Mr. Mathew Joseph (DIN: 01033802) Ms. Madhumita Ganguli (DIN: 00676830) Mr. S. N. Nagendra (DIN: 02533658)

Statutory Auditors Deloitte Haskins & Sells LLP Chartered Accountants

Bankers HDFC Bank Limited

Registered Office Ramon House, H. T. Parekh Marg, 169, Backbay Reclamation, Churchgate, Mumbai 400 020 Tel. No.: +91 22 6141 3951 CIN: U74999MH2015PLC264030

TO THE MEMBERS

Your directors are pleased to present the Fourth annual report of your Company with the audited accounts for the year ended March 31, 2019.

Financial Results Profit before Tax

For the year ended March 31, 2019 (`)

23,48,27,747

For the year ended March 31, 2018 (`)

8,81,78,928

Provision for Tax

(6,88,34,000) (2,29,89,000)

Profit after Tax

16,59,93,747 6,51,89,928

Other comprehensive income

(6,10,564)

(60)

Total comprehensive income for the year

16,53,83,183 6,51,89,868

Interim Dividend Paid and DDT thereon (4,69,61,830)

--

Profit after Appropriation

11,84,21,353

--

Profit brought forward from previous year

13,19,51,810 6,67,61,942

Profit carried forward to Balance Sheet 25,03,73,163 13,19,51,810

Note: The financial statements for the year ended March 31, 2019 have been prepared 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 comparative purposes.

Convergence to Ind AS

The Ministry of Corporate Affairs on January 18, 2016 notified the Companies (Indian Accounting Standards) Rules, 2015 (Ind AS Rules) effective from April 1, 2015 and suggested a phased convergence to Ind AS by various classes of companies.

As per the Ind AS Rules, Housing Development Finance Corporation Limited (HDFC), holding company being a Housing Finance Company was required to prepare financial statement as per Ind AS from the financial year 2018-19. Accordingly your Company, being a subsidiary of HDFC, was also required to converge to Ind AS from the said financial year, in terms of the Ind AS Rules.

Dividend

During the year, your directors approved the payment of a maiden interim dividend of ` 19.50 per equity share of ` 10 each. No final dividend has been recommended by your directors.

Review of Operations

Your Company is a wholly owned subsidiary of HDFC. The Company has reported a total comprehensive income of ` 16.54 crore during the year as against ` 6.52 crore in the previous year.

Your Company continues to act as Investment Manager for HDFC Capital Affordable Real Estate Fund ? 1 (HCARE-1) and HDFC Capital Affordable Real Estate

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HDFC Capital Advisors Limited

Fund ? 2 (HCARE-2). HCARE-1 and HCARE-2 are registered as Category II Alternative Investment Funds under the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012.

Your Company has its presence in Mumbai and New Delhi.

There was no change in the nature of business of your Company nor was there any material change or commitment that would affect its financial position during the year as also till the date of this Report.

Dematerialisation of shares

The Ministry of Corporate Affairs notified Companies (Prospectus and Allotment of Securities) (Third Amendment) Rules, 2018, wherein every unlisted public company was mandated to facilitate dematerialisation of all its existing securities. In compliance with the said notification, your Company in order to facilitate dematerialisation of all its securities, appointed Link Intime India Private Limited as Registrar and Share Transfer Agent and National Securities Depository Limited as the designated depository. All the issued shares of your Company are held in dematerialised form as on March 31, 2019.

Loans, Guarantees or Investments

During the year, your Company has not provided any guarantee.

The details of investments made and short term financial assistances extended by your Company are provided in the notes forming part of the financial statements of the Company for the year ended March 31, 2019.

Particulars of Contracts or Arrangements with Related Parties

Your Company has not entered into

any contracts or arrangements with related parties requiring disclosure in Form No. AOC?2, as prescribed under Rule 8(2) of the Companies (Accounts) Rules, 2014.

Details of related party transactions are provided in the notes to the financial statements.

Deposits

Your Company has not accepted any deposit and as such, no amount of principal or interest was outstanding as at March 31, 2019.

Subsidiary/Associate Companies

Your Company does not have any subsidiary or associate company.

Particulars of Employees

Your Company had 18 employees as at March 31, 2019.

Prevention of Sexual Harassment of Employees at Workplace

Your Company has in place a policy on prevention, prohibition and redressal of sexual harassment of employees at workplace inter alia incorporating the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules made thereunder. Members of the Internal Complaints Committee constituted by the Company are responsible for reporting and conducting inquiries pertaining to such complaints.

During the year, the Internal Complaints Committee (ICC) had a meeting with the presence of the external member as required under the said Act. Also a session was conducted by the external member of ICC for sensitising employees on applicability of the said Act.

During the year, no complaints were received by ICC.

Particulars regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The operations of your Company are not energy intensive. However, adequate measures have been initiated for conservation of energy wherever possible.

During the year, your Company incurred an expenditure of ` 4,43,050 in foreign currency towards travelling expenses incurred for business development. During the year, your Company had no foreign exchange earnings.

Directors

In accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company, Mr. S. N. Nagendra is liable to retire by rotation at the ensuing Annual General Meeting (AGM). He is eligible for re-appointment.

The necessary resolution for the re-appointment of Mr. S. N. Nagendra and details as required under secretarial standard have been included in the notice convening the ensuing AGM.

All the directors of the Company have confirmed that they are not disqualified from being appointed as directors, in terms of Section 164(2) of the Companies Act, 2013.

None of the directors of your Company have been debarred from holding the office of director by virtue of any order from Securities and Exchange Board of India (SEBI) or any other such authority.

Board Meetings

During the year, the board met five times. The meetings were held on April 19, 2018, July 24, 2018, August

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Fourth Annual Report 2018-19

27, 2018, October 29, 2018 and January 18, 2019.

The attendance of the directors at the above-mentioned board meetings is listed below:

Directors Mr. Sunil Shaligram

Number of Meetings attended

5

Mr. Mathew Joseph

5

Ms. Madhumita

5

Ganguli

Mr. S. N. Nagendra

5

Corporate Social Responsibility Committee

In accordance with the provisions of Section 135 of the Companies Act, 2013 and rules framed thereunder, the Company during the year constituted a Corporate Social Responsibility (CSR) Committee of Directors comprising Mr. Sunil Shaligram (Chairman), Mr. Mathew Joseph and Ms. Madhumita Ganguli. The quorum for the CSR Committee Meeting is two members.

The terms of reference of the committee inter alia is to indicate activities/projects/programs to be undertaken by the Company towards CSR, approve the areas where CSR activities can be adopted and update the Board of Directors on the amount of expenditure incurred by the Company towards CSR.

The report on CSR activities, as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014, is annexed to this Report.

During the year, the committee met twice. The meetings were held on July 24, 2018 and March 18, 2019.

The attendance of the members of the

committee at the above mentioned meetings is listed below:

Members

Mr. Sunil Shaligram (Chairman) Mr. Mathew Joseph Ms. Madhumita Ganguli

Number of Meetings attended

2

1 2

Leave of absence was granted to the concerned member who could not attend the meeting.

Auditors

At the Second AGM of the Company held on July 25, 2017, the Members had appointed Messrs Deloitte Haskins & Sells LLP, Chartered Accountants having Firm Registration Number 117366W/W-100018 as the statutory auditors of the Company, for a period of five years, to hold office as such until the conclusion of the Seventh AGM.

The Company has received a confirmation from Messrs Deloitte Haskins & Sells LLP, to the effect that they continue to satisfy the eligibility criteria prescribed under Section 141 of the Companies Act, 2013 and rules made thereunder.

The Auditors' Report annexed to the financial statements for the year under review does not contain any qualification.

Risk Management

Your directors are of the opinion that the Company is managing its risks through well-defined internal financial controls and that there are no significant risks that may threaten the existence of the Company.

Significant and Material Orders passed by Regulators or Courts or Tribunal

During the year, no significant or material orders were passed by any regulator or courts or tribunals against the Company impacting the going concern status and the Company's operations in future.

Secretarial Standards

The Company has complied with the applicable provisions of Secretarial Standards ? 1 and 2 issued by The Institute of Company Secretaries of India.

Directors' Responsibility Statement

In accordance with the provisions of Section 134(3)(c) of the Companies Act, 2013 and based on the information provided by the management, your directors state that:

a. In the preparation of the annual accounts, the applicable accounting standards have been followed;

b. Accounting policies selected have been applied consistently. Reasonable and prudent judgements and estimates have been made so as to give a true and fair view of the state of affairs of the Company as at March 31, 2019 and of the profit of the Company for the year ended on that date;

c. Proper and sufficient care has been taken for the 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;

d. The annual accounts of the Company have been prepared on a going concern basis; and

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HDFC Capital Advisors Limited

e. Systems to ensure compliance with the provisions of all applicable laws are in place and were adequate and operating effectively.

Annual Return and Extract thereof

The extract of Annual Return in Form No. MGT-9 as required under the provisions of the Companies Act, 2013 is annexed to this Report. The Annual Return for the financial year 2018-19 is uploaded at hdfc. com/the-hdfc-group/subsidiariespolicies.

Acknowledgements

Your directors would like to express their sincere appreciation to all the stakeholders of the Company for their support and continued patronage.

Your directors appreciate the guidance received from various statutory/ regulatory authorities including the SEBI, Ministry of Corporate Affairs ? Government of India, the Registrar of Companies, Mumbai and the depositories.

Your directors recognise and

appreciate the sincere hard work, loyalty and efforts of the employees of the Company in ensuring that the Company performs well.

On behalf of the Board of Directors

New Delhi May 2, 2019

Madhumita Ganguli

Mathew Joseph

Directors

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Fourth Annual Report 2018-19

Annex to Directors' Report - I

THE ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES [Pursuant to Section 135 of the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules, 2014]

1. Brief outline of the Company's CSR Policy, including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR policy:

The Company believes in conducting its business responsibly, fairly and in a most transparent manner. It continuously seeks ways to bring about an overall positive impact on the society and environment where it operates and as a part of its social objectives.

The main objective of the CSR Policy of the Company is to lay down guidelines to make CSR a key business process for sustainable development of the society and the environment in which it operates. The CSR policy is available at the-hdfc-group/subsidiaries-policies.

During the year, the Company as part of its CSR activities provided a grant to H T Parekh Foundation. The contribution by the Company to H T Parekh Foundation has been provided exclusively for promoting health and nutrition among children of migrant workers. H T Parekh Foundation undertakes various social and developmental activities. It partners with exemplary NGOs across the country for the implementation of social projects across core sectors such as education, healthcare and skilling & livelihood. The CSR committee is the governing body that articulates the scope of CSR activities and ensures compliance with the CSR policy including overview of the projects undertaken.

2. The Composition of the CSR Committee: Mr. Sunil Shaligram (Chairman), Mr. Mathew Joseph and Ms. Madhumita Ganguli.

3. Average net profit of the company for last three financial years

: ` 6.21 crore

4. Prescribed CSR expenditure (2% of the amount as in item 3 above) : ` 12.43 lac

5. Details of CSR spend during the financial year:

a) Total amount to be spent for the financial year

: ` 12.43 lac

b) Amount unspent, if any

: NIL

c) Manner in which the amount spent during the financial year is detailed below:

Sr. CSR Project or Activity Sector in

No.

identified

which the

Project is

covered

(1)

(2)

(3)

Projects or Programs (1) Local Area or other (2) Specify the State and district where projects or programs were undertaken

(4)

Amount outlay (budget) project or program wise

Amount spent on projects or programs

Cumulative expenditure

up to the reporting

period

Amount spent: Directly

or through Implementing

Agency

(` in lac)

(` in lac)

Direct expenditure on projects or programs

Overheads

(` in lac)

(5)

(6)

(7)

(8)

1 Contribution to H T Promoting Parekh Foundation for Healthcare activities in improving the healthcare and nutrition of children of migrant workers

PAN India

12.43

12.43

---

12.43

H T Parekh

Foundation

(Implementing

Agency)

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