HDFC Capital Advisors Limited · Mr. Sunil Shaligram (Chairman) 2 Mr. Mathew Joseph 1 Ms. Madhumita...

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HDFC Capital Advisors Limited


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Fourth Annual Report 2018-19

Board of Directors

Mr. Sunil Shaligram(DIN: 01583151)

Mr. Mathew Joseph(DIN: 01033802)

Ms. Madhumita Ganguli(DIN: 00676830)

Mr. S. N. Nagendra(DIN: 02533658)

Statutory AuditorsDeloitte Haskins & Sells LLPChartered Accountants

BankersHDFC Bank Limited

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

Directors’ Report

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 ResultsFor the year ended

March 31, 2019 (`)

For the year ended March 31, 2018

(`)

Profit before Tax 23,48,27,747 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

Convergence to Ind ASThe 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.

DividendDuring 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 OperationsYour 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 Af fordable Real Estate Fund – 1 (HCARE-1) and HDFC Capital Af fordable Real Estate

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.

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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 sharesThe Ministry of Corporate Affairs notified Companies (Prospectus and A l lotment of Secur i t ies ) (Third Amendment) Rules, 2018, wherein every unl isted 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 InvestmentsDuring 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.

Pa r t i c u l a r s o f C o n t r a c t s o r Arrangements with Related PartiesYour 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.

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

Subsidiary/Associate CompaniesYour Company does not have any subsidiary or associate company.

Particulars of EmployeesYour Company had 18 employees as at March 31, 2019.

Prevention of Sexual Harassment of Employees at WorkplaceYour 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 repor t ing and conducting inquiries pertaining to such complaints.Dur ing 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 OutgoThe 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.

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

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27, 2018, October 29, 2018 and January 18, 2019.The attendance of the directors at the above-mentioned board meetings is listed below:

Directors Number of Meetings attended

Mr. Sunil Shaligram 5

Mr. Mathew Joseph 5

Ms. Madhumita Ganguli

5

Mr. S. N. Nagendra 5

Corporate Social Responsibility Committee

In accordance with the provisions of Section 135 of the Companies Act , 2013 and ru les f ramed 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 Number of Meetings attended

Mr. Sunil Shaligram (Chairman)

2

Mr. Mathew Joseph 1Ms. Madhumita Ganguli

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 i ts r isks through wel l -def ined 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 TribunalDuring 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 StandardsThe Company has complied with the applicable provisions of Secretarial Standards – 1 and 2 issued by The Institute of Company Secretaries of India.

Directors’ Responsibility StatementIn accordance with the provisions o f Sec t ion 134(3 ) (c ) o f 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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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 www.hdfc.com/the-hdfc-group/subsidiaries-policies.

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 di rectors 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

Madhumita GanguliNew Delhi Mathew JosephMay 2, 2019 Directors

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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 www.hdfc.com/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. No.

CSR Project or Activity identified

Sector in which the Project is covered

Projects or Programs

(1) Local Area or other (2) Specify

the State and district where

projects or programs were

undertaken

Amount outlay

(budget) project or program

wise

(` in lac)

Amount spent on projects or programs

(` in lac)

Cumulative expenditure

up to the reporting

period

(` in lac)

Amount spent: Directly

or through Implementing

Agency

Direct expenditure

on projects or programs

Overheads

(1) (2) (3) (4) (5) (6) (7) (8)

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

Promoting Healthcare

PAN India 12.43 12.43 —- 12.43 H T Parekh Foundation

(Implementing Agency)

Annex to Directors’ Report - I

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6. In case the company has failed to spend 2% of the average net profit of the last three financial years or any part thereof, the company shall provide the reasons for not spending the amount in its Board report:

Not Applicable

7. The CSR Committee of the Company hereby confirms that the implementation and monitoring of CSR Policy, is in compliance with CSR objectives and Policy of the Company.

For HDFC Capital Advisors Limited

New Delhi Mathew Joseph Sunil ShaligramMay 2, 2019 Director Chairman – CSR Committee

Annex to Directors’ Report - I (Continued)

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FORM NO. MGT-9EXTRACT OF ANNUAL RETURN

As on the financial year ended on March 31, 2019[Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies

(Management and Administration) Rules, 2014]

I. REGISTRATION AND OTHER DETAILSCIN U74999MH2015PLC264030Registration Date May 5, 2015Name of the Company HDFC CAPITAL ADVISORS LIMITEDCategory/ Sub-Category of the Company Company limited by shares/ Non-Government CompanyAddress of the Registered Office and Contact Details

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

Whether listed company Yes/ No NoName, Address and Contact Details of Registrar and Transfer Agent, if any

Link Intime India Private Limited C 101, 247 Park, L B S Marg, Vikhroli West, Mumbai – 400 083 Tel. No.: +91 22 4918 6000 E-mail: [email protected]

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY All the business activities contributing 10% or more of the total turnover of the Company:

Sr. No.

Name and Description of main Products/Services NIC Code of the Product/ Service

% to Total Turnover of the Company

1 Investment Manager to Alternative Investment Funds 66309 100

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIESSr. No.

Name and Address of the Company CIN/GLN Holding/ Subsidiary/ Associate

% of Shares Held

Applicable Section

1 H O U S I N G D E V E L O P M E N T FINANCE CORPORATION LIMITED Ramon House, H. T. Parekh Marg, 169, Backbay Reclamation, Churchgate, Mumbai – 400 020

L70100MH1977PLC019916 Holding 100 2(46)

Annex to Directors’ Report - II

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IV. SHAREHOLDING PATTERN (Equity Share Capital Break-up as percentage of Total Equity)(i) Category-wise Shareholding:

Category of Shareholders No. of Shares held at the beginning of the year

No. of Shares held at the end of the year

% Change during

the yearDemat Physical Total % of

Total Shares

Demat Physical Total % of Total

Shares

A. Promoters(1) Indian(a) Individual/HUF — — — — 60* — 60* 0.00 0.00(b) Central Govt. — — — — — — — — —(c) State Govt.(s) — — — — — — — — —(d) Bodies Corp. — 19,97,660 19,97,660 100 19,97,600 — 19,97,600 100 0.00(e) Banks/FI — — — — — — — — —(f) Any Other — — — — — — — — —Sub-total (A)(1) — 19,97,660 19,97,660 100 19,97,660 — 19,97,660 100 —(2) Foreign — — — — — — — — —Sub-total (A)(2) — — — — — — — — —Total Shareholding of Promoters (A) = (A)(1)+(A)(2)

— 19,97,660 19,97,660 100 19,97,660 — 19,97,660 100 —

B. Public Shareholding(1) Institutions — — — — — — — — —Sub-total (B)(1) — — — — — — — — —(2) Non-Institutions — — — — — — — — —Sub-total (B)(2) — — — — — — — — —Total Public Shareholding (B)=(B)(1)+(B)(2)

— — — — — — — — —

C. Shares Held by Custodian for GDRs & ADRs

— — — — — — — — —

Grand Total (A+B+C) — 19,97,660 19,97,660 100 19,97,660 — 19,97,660 100* The beneficial owner of these shares is Housing Development Finance Corporation Limited.

Annex to Directors’ Report - II (Continued)

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Annex to Directors’ Report - II (Continued)

(ii) Shareholding of PromotersSr. No.

Shareholders’ Name Shareholding at the beginning of the year

Shareholding at the end of the year % Change in Shareholding

during the year

No. of Shares

% of Total Shares of the

Company

% of Shares Pledged/

Encumbered to Total Shares

No. of Shares

% of Total Shares of the

Company

% of Shares Pledged/

Encumbered to Total Shares

1 Housing Development Finance Corporation Limited

19,97,600 100 — 19,97,600 100 — —

2 Housing Development Finance Corporation Limited jointly with its Nominees

60* 0.00 — — — — 0.00

3 Mr. Conrad D’Souza — — — 10# 0.00 — 0.004 Mr. Dipta Bhanu Gupta — — — 10# 0.00 — 0.005 Mr. Sudhir Kumar Jha — — — 10# 0.00 — 0.006 Mr. Prosenjit Gupta — — — 10# 0.00 — 0.007 Mr. Suresh Menon — — — 10# 0.00 — 0.008 Mr. Ajay Agarwal — — — 10# 0.00 — 0.00

Total 19,97,660 100 — 19,97,660 100 — * Shares held by Housing Development Finance Corporation Limited jointly with nominees were transferred to individual shareholders. # Beneficial owner of these shares is Housing Development Finance Corporation Limited.

(iii) Change in Promoters’ Shareholding: During the year, there has been no change in promoter’s shareholding. (iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs): Not Applicable (v) Shareholding of Directors and Key Managerial Personnel: NIL

V. INDEBTEDNESS Indebtedness of the Company including interest outstanding/accrued but not due for payment: NIL

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL A. Remuneration to Managing Director, Whole-time Directors and/or Manager: Not Applicable B. Remuneration to other Directors:

Name of Directors Particulars of RemunerationFees for attending

Board / Committee Meetings

(`)

Commission

(`)

Others, please specify

(`)

Total Amount

(`)

Mr. Sunil Shaligram 1,00,000 — — 1,00,000Mr. Mathew Joseph 1,00,000 — — 1,00,000Ms. Madhumita Ganguli 1,00,000 — — 1,00,000Mr. S. N. Nagendra 1,00,000 — — 1,00,000Total 4,00,000 — — 4,00,000Overall ceiling as per the Companies Act, 2013 * — — —

*The Company pays ` 20,000 as sitting fees to the directors for attending the meetings of the Board of Directors. The overall ceiling as per the Companies Act, 2013 for payment of sitting fees is ` 1 lac per meeting.

C. Remuneration to Key Managerial Personnel other than MD/ MANAGER/ WTD: Not ApplicableVII. PENALTIES/ PUNISHMENT/COMPOUNDING OF OFFENCES During the year, no penalties were levied against the Company, its directors or any of its officers under the

Companies Act, 2013, nor was there any punishment or compounding of offences against the Company, its directors or any of its officers.

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Independent Auditors’ Report

Report on the Audit of the Financial Statements

OpinionWe have audited the accompanying financial statements of HDFC Capital Advisors Limited (“the Company”), which comprise the Balance Sheet as at 31st March 2019, and the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Companies Act, 2013 (“the Act”) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (“Ind AS”) and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March 2019, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Basis for OpinionWe conducted our audit of the financial statements in accordance with the Standards on Auditing specified under section 143(10) of the Act (SAs). Our responsibilities under those Standards are further described in the Auditor’s Responsibility for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with

the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI’s Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Information Other than the Financial Statements and Auditor’s Report Thereon• The Company ’s Board o f Directors is responsible for the other information. The other information comprises the information included in the Directors report (the reports), but does not include the financial statements and our auditor’s report thereon. The reports is expected to be made available to us after the date of this auditor’s report.• Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.• In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.• If, based on the work we have performed, we conclude that there is a material misstatement of this other

information, we are required to report that fact.

Management’s Responsibility for the Financial StatementsThe Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. This responsibility also includes 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; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

TO THE MEMBERS OF HDFC CAPITAL ADVISORS LIMITED

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Those Board of Directors are also responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibility for the Audit of the Financial StatementsOur object ives are to obta in reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.• Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are appropriate in the

Independent Auditors’ Report (Continued)

circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s repor t to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.Materiality is the magnitude of misstatements in the financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality

and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.We communicate w i th those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.Report on Other Legal and Regulatory Requirements1. As required by Section 143(3) of the Act, based on our audit, we report that: a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit. b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books. c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account.

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Independent Auditors’ Report (Continued)

d) In our opinion, the aforesaid financial statements comply with the Ind AS specified under Section 133 of the Act. e) On the basis of the written representations received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2019 from being appointed as a director in terms of Section 164(2) of the Act. f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting.

g) With respect to the other matters to be included in the Auditor’s Report in accordance with the requirements of section 197(16) of the Act, as amended, in our opinion and to the best of our information and according to the explanations given to us, the Company does not have an employee covered section 197 of the Act. h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us:i. The Company does not have any pending litigations which would impact its financial position as at the year-end.

ii. The Company did not have any long-term contracts including derivative contracts as at the year-end for which there were any material foreseeable losses.iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.2. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government in terms of Section 143(11) of the Act, we give in “Annexure B” a statement on the matters specified in paragraphs 3 and 4 of the Order.

For Deloitte Haskins & Sells LLPChartered Accountants

(Firm’s Registration No.117366W/W-100018)

G. K. SubramaniamMumbai PartnerMay 2, 2019 (Membership No. 109839)

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Annexure “A” to the Independent Auditors’ Report

(Referred to in paragraph (f) under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date)Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)We have audited the internal financial controls over financial reporting of HDFC CAPITAL ADVISORS LIMITED (“the Company”) as of 31st March 2019 in conjunction with our audit of the Ind AS financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial ControlsThe Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (the “Guidance Note”). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditor’s ResponsibilityOur responsibility is to express an

opinion on the Company’s internal financial controls over financial reporting of the Company based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing prescribed under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.Our audit involves per forming procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial ReportingA company’s internal financial control

over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial repor ting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorisations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial ReportingBecause of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become

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Annexure “A” to the Independent Auditors’ Report (Continued)

inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

OpinionIn our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects,

an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March 2019, based on the criteria for internal financial control over financial reporting established by the Company considering the essential

components of internal control stated in the Guidance Note.

For Deloitte Haskins & Sells LLPChartered Accountants

(Firm’s Registration No.117366W/W-100018)


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Annexure “B” to the Independent Auditors’ Report

(Referred to in paragraph 2 under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date)(i) (a) According to the information and explanations given to us, the Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. (b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification. (c) The Company does not have any immovable properties of freehold or leasehold land and building and hence reporting under clause 3(i)(c) of the Order is not applicable.(ii) To the best of our knowledge and according to the information and explanations given to us, the Company does not have any inventory and hence reporting under clause 3(ii) of the Order is not applicable.(iii) To the best of our knowledge and according to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms, limited liability partnerships or other parties covered in the register maintained under Section 189 of the Act.(iv) To the best of our knowledge and according to the information and explanations given to us, the Company has not granted any loans, made investments or provided guarantees under the provisions of

Sections 185 and 186 of the Act and hence reporting under clause 3(iv) of the Order is not applicable.(v) To the best of our knowledge and according to the information and explanations given to us, the Company has not accepted any deposit during the year and no order in this respect has been passed by the Company Law Board or National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunals.(vi) To the best our knowledge and according to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under section 148(1) of the Act, in respect of the services rendered by the Company.(vii) To the best of our knowledge and according to the information and explanations given to us, in respect of statutory dues: (a) The Company has been generally regular in depositing undisputed statutory dues, including Income-tax, Goods and Service Tax, Provident Fund, Profession Tax and applicable Cess to the appropriate authorities. (b) There were no undisputed amounts payable in respect of Income-tax, Goods and Service Tax and cess in arrears as at 31st March, 2019 for a period of more than six months from the date they became payable. (c) There are no dues of Income-tax, Goods and Service Tax, Provident Fund, Profession Tax and applicable Cess as on 31st March, 2019 on account of disputes.(viii) To the best of our knowledge and according to the information and explanations given to us, the Company

has not taken any loans or borrowings from financial institutions, banks and government or has not issued any debentures. Hence reporting under clause 3(viii) of the Order is not applicable to the Company.(ix) To the best of our knowledge and according to the information and explanations given to us, the Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or term loans and hence reporting under clause 3(ix) of the Order is not applicable.(x) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company by its officers or employees has been noticed or reported during the year.(xi) The Company does not have any employee covered under section 197 of the Act and hence reporting under clause 3(xi) of the Order is not applicable.(xii) The Company is not a Nidhi Company and hence reporting under clause 3(xii) of the Order is not applicable.(xiii) To the best of our knowledge and according to the information and explanations given to us, in our opinion and according to the information and explanations given to us the Company is in compliance with Section 188 and 177 of the Act, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements as required by the applicable accounting standards.(xiv) During the year the Company has not made any preferential allotment or private placement of shares or fully

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or partly convertible debentures and hence reporting under clause 3(xiv) of the Order is not applicable to the Company.(xv) To the best of our knowledge and according to the information and explanations given to us, during the

year the Company has not entered into any non-cash transactions with its directors or persons connected with him and hence provisions of section 192 of the Act are not applicable.(xvi) The Company is not required to be registered under section 45-IA of

the Reserve Bank of India Act, 1934.For Deloitte Haskins & Sells LLP

Chartered Accountants(Firm’s Registration No.117366W/W-100018)


Annexure “B” to the Independent Auditors’ Report (Continued)

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Balance sheet as at 31 March 2019

(Amount in `)Particulars Note no. As at

31 March 2019As at

31 March 2018As at

01 April 2017ASSETSNon-current assets Property, plant and equipment 3 8,360,305 3,162,453 5,011,928 Other intangible assets 3 40,648 — — Financial assets – Other financial assets 4 3,665,539 2,765,015 2,588,454 Deferred tax assets (Net) 5 — 1,077,000 566,000 Other non-current assets 6 405,496 477,987 663,346

Current assets Financial assets – Investments 7 141,992,663 183,234,069 115,250,291 – Trade and other receivables 8 12,423,392 4,384,927 4,674,578 – Cash and cash equivalents 9 4,633,851 4,930,402 5,499,295 – Loans 10 150,098,630 — — – Other financial assets 11 330,030 330,030 330,030 Current tax assets (Net) 12 7,793,999 9,847,705 2,073,238 Other current assets 13 3,486,198 3,259,778 655,099 TOTAL ASSETS 333,230,751 213,469,366 137,312,259

EQUITY AND LIABILITIESEQUITY Equity share capital 14 19,976,600 19,976,600 19,976,600 Other equity 15 250,373,163 131,951,810 66,761,942 TOTAL EQUITY 270,349,763 151,928,410 86,738,542

LIABILITIESNon-current liabilities Provisions 16 856,326 2,350,669 864,864 Deferred tax liabilities (Net) 5 957,000 — —Current liabilities Financial liabilities Trade and other payables 17 - Total outstanding dues of Micro enterprises and small

enterprises27,000 — —

- Total outstanding dues of creditors other than Micro enterprises and small enterprises

53,220,679 56,617,746 49,102,464

Other current liabilities 18 5,851,738 2,452,829 606,389 Provisions 19 1,968,245 119,712 — TOTAL LIABILITIES 62,880,988 61,540,956 50,573,717 TOTAL EQUITY AND LIABILITIES 333,230,751 213,469,366 137,312,259

See accompanying notes to the financial statements 1-36As per our report of even date attached.

For Deloitte Haskins & Sells LLP Chartered Accountants Madhumita Ganguli Mathew Joseph G. K. Subramaniam Director DirectorPartner DIN: 00676830 DIN: 01033802 Mumbai Delhi Delhi2 May 2019 2 May 2019 2 May 2019

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Statement of Profit and Loss for the year ended 31 March 2019

(Amount in `)Particulars Note no. For the year ended

31 March 2019For the year ended

31 March 2018

INCOMERevenue from operations 20 374,561,926 222,367,441Other income 21 27,205,643 7,950,716Total Income 401,767,569 230,318,157EXPENSESEmployee benefit expenses 22 108,166,031 101,444,420Finance cost 23 8,214,313 —Depreciation and amortisation expense 3 1,598,445 2,335,447Other expenses 24 48,961,033 38,359,362Total Expenses 166,939,822 142,139,229Profit before tax 234,827,747 88,178,928Tax expenseCurrent tax 66,800,000 23,500,000Deferred tax 2,034,000 (511,000)Total tax expense 25 68,834,000 22,989,000Profit for the year 165,993,747 65,189,928Other comprehensive incomeA - Items that will not be reclassified to profit or loss 28 (860,564) (60) - Income tax relating to items that will not be reclassified to

profit or loss250,000 —

B - Items that will be reclassified to profit or loss — — - Income tax relating to items that will be reclassified to profit or loss — —Other comprehensive income for the year (610,564) (60)Total comprehensive income for the year 165,383,183 65,189,868Earnings per equity share (Face Value of ` 10 each) 26Basic 83.09 32.63Diluted 83.09 32.63See accompanying notes to the financial statements 1-36

As per our report of even date attached.


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Cash Flow Statement for the year ended 31 March 2019

(Amount in `)Particulars Notes For the year ended


31 March 2018Cash flow from operating activitiesProfit before tax 234,827,747 88,178,928Adjustment for:Depreciation and amortisation 3 1,598,445 2,335,447Dividend from current investments 21 — (7,051,107)Profit on sale of current investments 21 (13,545,228) —Gain on fair value of current investments 21 (5,202,966) (723,048)Interest income on inter corporate deposit (98,630) —Loss on sale of current investments 24 — 190,378Provision for Employee benefit obligation 16 & 19 354,190 1,605,517Changes in assets and liabilities(Increase) in current and non-current assets (9,092,919) (2,306,231)(Increase)/ Decrease in current and non-current liabilities (831,721) 9,361,662Cash generated from Operations 208,008,918 91,591,546Income taxes paid (64,496,294) (31,274,467)Net cash flow from operating activities 143,512,624 60,317,079

Cash flow from investing activitiesDividend from current investments 21 — 7,051,107Profit on sale of current investments 21 13,545,228 —Purchase of current investments (546,600,000) (508,429,018)Sale of current investments 593,044,372 440,977,911Inter corporate deposit (150,000,000) —Sale of Property, plant and equipment 3 3,342 —Purchase of Property, plant and equipment 3 (6,840,287) (485,972)Net cash flow used in investing activities (96,847,345) (60,885,972)

Cash flow from financing activitiesInterim dividend 31 (38,954,370) —Dividend distribution tax 31 (8,007,460) —Net cash flow from financing activities (46,961,830) —Net increase/(decrease) in cash and cash equivalents (296,551) (568,893)

Cash and cash equivalents at the beginning of the yearCash on hand 13,852 2,745Balances with banks - current account 4,916,550 5,496,550

4,930,402 5,499,295Cash and cash equivalents at the end of the year 4,633,851 4,930,402

Cash on hand 962 13,852Balances with banks - current account 4,632,889 4,916,550Cash and cash equivalents at the end of the year 9 4,633,851 4,930,402



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Statement of changes in equity for the year ended 31 March 2019

Equity share capital (Amount in `)

Particulars Total

Balance as at 1 April 2017 19,976,600Changes in Equity share capital during the year —Balance as at 31 March 2018 19,976,600Changes in Equity share capital during the year —Balance as at 31 March 2019 19,976,600

Other Equity (Amount in `)

Particulars Reserves and SurplusRetained Earnings

Other Comprehensive Income

Total

Balance as at 1 April 2017 66,761,942 — 66,761,942Profit for the year 65,189,928 — 65,189,928Other comprehensive income — (60) (60)Total comprehensive income for the year 65,189,928 (60) 65,189,868Balance as at 31 March 2018 131,951,870 (60) 131,951,810Profit for the year 165,993,747 — 165,993,747Other comprehensive income — (610,564) (610,564)Total comprehensive income for the year 165,993,747 (610,564) 165,383,183AppropriationInterim dividend (38,954,370) — (38,954,370)Dividend distribution tax (8,007,460) — (8,007,460)Balance as at 31 March 2019 250,983,787 (610,624) 250,373,163

The above Statement of changes in equity should be read in conjuction with the accompanying notes.



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Notes forming part of the financial statements

1. GENERAL INFORMATION

HDFC Capital Advisors Limited (“the Company”) is a Public Limited Company incorporated and domiciled in India having its registered office at Ramon House, H. T. Parekh Marg, 169, Backbay Reclamation, Churchgate, Mumbai- 400 020.

The Company was incorporated as a Public Limited Company on 05 May 2015 under the provisions of Companies Act, 2013. The Company is acting as an Investment Manager for Category II Alternative Investment Funds registered with Securities and Exchange Board of India vide registration no. IN/AIF2/15-16/0160 and IN/AIF2/17-18/0499.

2. SIGNIFICANT ACCOUNTING POLICIES

2.1 STATEMENT OF COMPLIANCE

These financial statements are prepared and presented in accordance with the Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended by the Companies (Indian Accounting Standards) (Amendment) Rules, 2018 notified under section 133 of the Companies Act, 2013, the relevant provisions of the Companies Act, 2013 (“the Act”) as applicable.

These are Company’s first Ind AS financial statements. The date of transition to Ind AS is 01 April 2017. The Company has carried out adoption in accordance with Ind AS 101 First Time adoption of Indian Accounting Standards.

Upto the year ended 31 March 2018, the Company prepared its financial statements in accordance with Indian Accounting Principles generally accepted in India as prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (IGAAP), which was the previous GAAP. In these financial statements for the year ended 31 March 2019, the financial statements for previous year ended 31 March 2018 and Balance Sheet as at 1 April 2017, have been represented as per Ind AS for comparison.

2.2 BASIS OF PREPARATION

Accounting policies have been consistently applied except where a newly-issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

2.3 PRESENTATION OF FINANCIAL STATEMENTS

The Balance Sheet and the Statement of Profit and Loss are prepared and presented in the format prescribed in the Schedule III to the Act. The Statement of Cash Flows has been prepared and presented as per the requirements of Ind AS 7 “Statement of Cash Flows”.

2.4 FUNCTIONAL AND PRESENTATION CURRENCY

The financial statements are presented in Indian Rupees, which is the functional currency of the Company and the currency of the primary economic environment in which the Company operates. The values are rounded off to the nearest rupee except where stated otherwise.

2.5 CLASSIFICATION OF ASSETS AND LIABILITIES AS CURRENT AND NON-CURRENT

All assets and liabilities are classified as current or non-current as per the Company’s normal operating cycle. Based on the nature of the activities, 12 months period has been considered by the Company as its normal operating cycle.

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Notes to the Financial Statements for the year ended 31 March 2019 (Continued)

2.6 PROPERTY, PLANT AND EQUIPMENT (PPE)

Property, plant and equipment are stated at acquisition or construction cost less accumulated depreciation and impairment loss. Cost comprises the purchase price and any attributable cost of bringing the asset to its location and working condition for its intended use. All other repairs and maintenance are charged to profit and loss during the reporting period in which they are incurred. Subsequent expenditures related to an item of Property Plant & Equipment are added to its carrying value only when it is probable that the future economic benefits from the asset will flow to the Company and cost can be reliably measured.

Gains or losses arising from the retirement of, and gains or losses arising from disposal of Property, Plant and Equipment are recognised in the Statement of Profit and Loss.

Depreciation

Depreciation is provided on a pro-rata basis on the Straight Line Method (‘SLM’) over the estimated useful lives of the assets specified in Schedule II of the Companies Act, 2013 which are as follows:

A. Major assets class where useful life considered as provided in Schedule II: Asset Class Useful life

Leasehold Improvements Period of lease Video Conferencing Equipments 10 years Air Conditioners 10 years Office Equipment 5 years Furniture and Fittings 10 years Vehicles 8 years

B. Assets where useful life differs from Schedule II: Deprecation on tangible fixed assets has been provided on the straight-line method as per the useful

life prescribed in Schedule II to the Companies Act, 2013 except in respect of the following categories of assets in whose case the life of the assets has been assessed based on technical advice taking into account the nature of asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes, manufacturers warranties and maintenance support, etc.

Asset Class Useful life

Computer Hardware 4 years

2.7 INTANGIBLE ASSETS

Intangible assets are stated at acquisition cost, net of accumulated amortisation and accumulated impairment losses, if any.

Gains or losses arising from the retirement or disposal of an intangible asset are determined as the difference between the disposal proceeds and the carrying amount of the asset and are recognised as income or expense in the Statement of Profit and Loss.

Intangible assets and their useful lives are as under: Asset Class Useful life

Computer Software 4 years

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2.8 FAIR VALUE MEASUREMENT

The Company measures financial instruments at fair values at each Balance Sheet date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible by the Company.

Fair value measurements under Ind AS are categorised into Level 1, 2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access at measurement date

Level 2 inputs are inputs, other than quoted prices included within level 1, that are observable for the asset or liability, either directly or indirectly; and

Level 3 inputs are unobservable inputs for the valuation of assets or liabilities

2.9 FINANCIAL INSTRUMENTS

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments.

Classification

On initial recognition, the Company classifies financial assets as measured at amortised cost or FVTPL. A financial asset is measured at amortised cost if it meets both of the following conditions and is not

designated as at FVTPL - it is held within a business model whose objective is to hold assets to collect contractual cash flows;

and - its contractual terms give rise on specified dates to cash flows that are Solely Payments of Principal

and Interest (SPPI). Business model assessment An assessment of business models for managing financial assets is fundamental to the classification of a

financial asset. The Company determines the business models at a level that reflects how financial assets are managed together to achieve a particular business objective.

Reclassifications Financial assets are not reclassified subsequent to their initial recognition unless the Company were to

change its business model for managing financial assets, in which case all affected financial assets would be reclassified on the first day of the first reporting period following the change in the business model.

Initial measurement

Financial assets at FVTPL are initially recognised on the trade date, which is the date on which the Company becomes a party to the contractual provisions of the instrument. Other financial assets and financial liabilities are recognised on the date on which they are originated.

Financial assets at FVTPL are initially recognised at transaction price (i.e. the fair value of consideration given) with transaction cost recognized in Statement of Profit and Loss.

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Subsequent to initial recognition, all financial assets at FVTPL are measured at fair value. Gains and losses arising from changes in the fair value of the financial assets at FVTPL category are presented in Statement of Profit and Loss.

Impairment of financial assets

A financial asset not classified at FVTPL is assessed at each reporting date to determine whether there is objective evidence of impairment. A financial asset or a group of financial assets is ‘impaired’ if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the assets and that loss events had an impact on the estimated future cash flows of that assets that can be estimated reliably.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the fair value. Losses are recognised in profit or loss. Interest on the impaired asset continues to be recognised. If an event occurring after the impairment was recognised causes the amount of impairment loss to decrease, then the decrease in impairment loss is reversed through Statement of Profit and Loss.

Derecognition of financial assets

The Company derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognise the financial asset and also recognises an associated liability.

On derecognition of a financial asset, the difference between the carrying amount of the asset (or the carrying amount allocated to the portion of the asset that is derecognised) and the consideration received (including any new asset obtained less any new liability assumed) is recognised in Statement of Profit and Loss.

Trade and other receivables

Trade receivables are measured at the transaction price.

Cash and cash equivalents

Cash and cash equivalents in the Balance Sheet comprise cash at bank and in hand. Financial liabilities and equity instruments

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of direct issue costs.

Financial liabilities

Financial liabilities at initial recognition are classified as either financial liabilities ‘at FVTPL’ or ‘other financial liabilities’.

All financial liabilities are recognised initially at fair value and in the case of payables, they are recognised net of directly attributable transaction costs.

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The Company’s financial liabilities include trade and other payables.

Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

Financial liabilities at FVTPL

Financial liabilities at FVTPL include financial liabilities held for trading and financial liabilities designated upon initial recognition as at FVTPL. Financial liabilities are classified as held for trading, if they are incurred for the purpose of repurchasing in the near term.

Gains or losses on liabilities held for trading are recognised in the Statement of Profit and Loss.

Derecognition of financial liabilities

The Company de-recognises financial liabilities when and only when, the Company’s obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability de-recognised and the consideration paid and payable is recognised in the Statement of Profit and Loss.

2.10 REVENUE RECOGNITION

Revenue is recognised to the extent that it is probable that the economic benefit will flow to the Company and the revenue can be reliably measured.

(a) Income from services is recognised (net of applicable taxes) as they are rendered, based on agreement/ arrangement.

(b) Dividend income is accounted for when the right to receive the income is established. Dividends from units of mutual funds, where received, are accounted on receipt of such amounts.

(c) Interest income is recorded using the effective interest rate (EIR), which is the rate that exactly discounts the estimated future cash payments or receipts through the expected life of the financial instrument to the gross carrying amount of the financial asset.

2.11 EMPLOYEE BENEFITS

Short-term obligations

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the year when the employees render the service. These benefits include performance incentive and compensated absences which are expected to occur within twelve months after the end of the period in which the employee renders the related service.

Other long-term employee benefit obligations

Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recognised as a liability at the present value of the defined benefit obligation as at the balance sheet date, based on actuarial valuation.

The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur.

Defined contribution plans

The Company’s contribution to provident fund is considered as defined contribution plan and are charged as an expense based on the amount of contribution made on a monthly basis.

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Defined benefit plans

The liability or asset recognised in the balance sheet in respect of defined benefit gratuity plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by actuaries using the projected unit credit method.

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the Statement of Profit and Loss.

Remeasurement gains and losses arising from experience adjustments, changes in actuarial assumptions and return on plan assets (excluding interest income) are recognised in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.

Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in Statement of Profit and Loss as past service cost.

2.12 FOREIGN CURRENCY TRANSACTIONS

In preparing the financial statements of the Company, transactions in foreign currencies, other than the Company’s functional currency are recognised at the rates of exchange prevailing at the dates of the transactions. Exchange differences on monetary items are recognised in the Statement of Profit and Loss in the period in which these arise.

2.13 LEASES

Operating leases

Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company as lessee are classified as operating leases.

Lease payments under an operating lease is recognised as an expense on a straight-line basis over the lease term unless either

(a) another systematic basis is more representative of the time pattern of the user’s benefit even if the payments to the lessors are not on that basis; or

(b) the payments to the lessor are structured to increase in line with expected general inflation to compensate for the lessor’s expected inflationary cost increases. If payments to the lessor vary because of factors other than general inflation, then this condition is not met.

2.14 GOODS AND SERVICE TAX (GST) INPUT CREDIT

GST input credit is accounted for in the books in the period in which the underlying service received is accounted and when there is no uncertainty in availing / utilizing the credits.

2.15 PROVISION FOR CURRENT AND DEFERRED TAX

Current tax is measured on the basis of estimated taxable income for the current accounting period in accordance with the applicable tax rates and the provisions of the Income-tax Act, 1961, and the rules framed thereunder.

Deferred tax is recognised using the Balance Sheet approach on the temporary differences between the carrying amounts of assets and liabilities in the financial statements and the amounts used for taxation

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purposes. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse based on the laws that have been enacted or substantively enacted by the reporting date.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable.

Current and deferred tax are recognised in the Statement of Profit and Loss, except when the same relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax relating to such items are also recognised in other comprehensive income or directly in equity respectively.

2.16 CASH FLOW STATEMENT

Cash Flows are reported using the indirect method, whereby profit/ (loss) before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

2.17 PROVISIONS AND CONTINGENT LIABILITIES

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provision (excluding employee benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities, if any are disclosed in the Notes. Contingent assets are neither recognised nor disclosed in the financial statements.

2.18 EARNINGS PER SHARE (EPS)

The basic EPS is computed by dividing the profit after tax for the year attributable to the equity shareholders by the weighted average number of equity shares outstanding during the year.

2.19 SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of financial statements in conformity with the Ind AS requires judgements, estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements, the reported amounts of revenues and expenses during the reporting period and the disclosures thereof as of the date of the financial statements. Although these estimates are based on the management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in outcomes different from the estimates. Difference between actual results and estimates are recognised in the period in which the results are known or materialise. Estimates and underlying assumptions are reviewed on an ongoing basis. Any revision to accounting estimates is recognised prospectively in the current and future periods.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation which are uncertain at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of asset and liabilities within the next financial year, are described below. The Company based its assumptions and

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estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

a) Useful lives of Property, plant and equipment The Company uses its technical expertise along with historical and industry trends for determining the

economic life of an asset/component of an asset. The useful lives are reviewed by the management periodically and revised, if appropriate. In case of a revision, the unamortised depreciable amount is charged over the remaining useful life of the assets.

b) Measurement of Defined benefit obligation The cost of the defined benefit plan and other Long term employee benefits (Compensated Absences)

and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

2.20 STANDARDS ISSUED BUT NOT EFFECTIVE

Ind AS 116 Leases was notified on 28 March 2019 and it replaces Ind AS 17 Leases, including appendices thereto. Ind AS 116 is effective for annual periods beginning on or after 01 April 2019. Ind AS 116 sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model similar to the accounting for finance leases under Ind AS 17. The standard includes two recognition exemptions for lessees – leases of ‘low-value’ assets (e.g., personal computers) and short-term leases (i.e. leases with a lease term of 12 months or less). At the commencement date of a lease, a lessee will recognise a liability to make lease payments (i.e. the lease liability) and an asset representing the right to use the underlying asset during the lease term (i.e. the right-of-use asset). Lessees will be required to separately recognise the interest expense on the lease liability and the depreciation expense on the right-of-use asset. As the Company does not have any material leases, the adoption of this standard is not likely to have a material impact in its Financial Statements.

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Notes forming part of financial statements

Note-3a (Amount in `)

Property, plant and equipment

Gross Block Depreciation Net Block

As at 01 April 2018

Additions Deductions As at 31 March

2019

As at 01 April 2018

For the year

Deductions As at 31 March

2019

As at 31 March

2019

As at 31 March

2018

Tangible assets

Computer hardware 1,798,414 1,793,973 — 3,592,387 695,752 763,991 — 1,459,743 2,132,644 1,102,662

Furniture and fittings 501,581 157,150 — 658,731 105,485 51,803 — 157,288 501,443 396,096

Leasehold improvements

3,519,982 1,713,252 — 5,233,234 3,204,902 332,676 — 3,537,578 1,695,655 315,080

Office equipments 1,772,320 382,181 8,590 2,145,911 423,705 260,238 5,248 678,695 1,467,216 1,348,615

Vehicles — 2,739,731 — 2,739,731 — 176,384 — 176,384 2,563,347 —

Total Tangible assets 7,592,297 6,786,287 8,590 14,369,994 4,429,844 1,585,093 5,248 6,009,689 8,360,305 3,162,453

Intangible assets

Computer Software — 54,000 — 54,000 — 13,352 — 13,352 40,648 —

Total Intangible assets — 54,000 — 54,000 — 13,352 — 13,352 40,648 —

Note-3b (Amount in `)

Property, plant and equipment

Gross Block Depreciation Net Block

As at 01 April 2017 (Deemed

cost)

Additions Deductions As at 31 March 2018

As at 01 April 2017

(Deemed cost)

For the year

Deductions As at 31 March 2018

As at 31 March 2018

As at 31 March 2017

Tangible assets

Computer hardware 1,389,115 409,299 — 1,798,414 305,412 390,340 — 695,752 1,102,662 1,083,703

Furniture and fittings 501,581 — — 501,581 55,328 50,157 — 105,485 396,096 446,253

Leasehold improvements 3,519,982 — — 3,519,982 1,528,192 1,676,710 — 3,204,902 315,080 1,991,790

Office equipments 1,695,647 76,673 — 1,772,320 205,465 218,240 — 423,705 1,348,615 1,490,182

Total Tangible assets 7,106,325 485,972 — 7,592,297 2,094,397 2,335,447 — 4,429,844 3,162,453 5,011,928

(Amount in `)

4. OTHER NON-CURRENT FINANCIAL ASSETS As at 31 March 2019

As at 31 March 2018

As at 01 April 2017

Security deposit 3,665,539 2,765,015 2,588,4543,665,539 2,765,015 2,588,454

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(Amount in `)

5. DEFERRED TAX (NET) As at 31 March 2019

As at 31 March 2018

As at 01 April 2017

Deferred tax liability Fair Value of Mutual Funds measured at FVTPL 1,726,000 199,000 — Others — — — Total 1,726,000 199,000 —

Deferred tax asset Provision for employee benefit expenses 295,000 706,000 286,000 Depreciation 422,000 482,000 131,000 Preliminary expenses 41,000 77,000 139,000 Others 11,000 11,000 10,000 Total 769,000 1,276,000 566,000

Deferred tax asset (Net) — 1,077,000 566,000 Deferred tax liabilities (Net) 957,000 — —

957,000 1,077,000 566,000

(Amount in `)

6. OTHER NON-CURRENT ASSET As at 31 March 2019

As at 31 March 2018

As at 01 April 2017

Deferred lease rentals 405,496 477,987 663,346405,496 477,987 663,346

(Amount in `)

7. INVESTMENTS As at 31 March 2019

As at 31 March 2018

As at 01 April 2017

Unquoted Mutual Funds 9,932.126 (2018 : 41,771.945, 2017 : Nil) units of ̀ 10 each

HDFC Liquid Fund-Direct Plan-Growth36,533,195 142,941,269 —

776,570.355 (2018: Nil; 2017 : Nil) units of ̀ 10 each HDFC Low Duration Fund-Direct Plan-Retail Plan-Growth option

31,732,140 — —

2,030,845.98 (2018 : Nil; 2017 : Nil) units of ̀ 10 each HDFC Short Term Debt Fund-Direct Plan-Growth option

42,304,128 — —

3,000,000.00 (2018 : Nil, 2017 : Nil) units of ̀ 10 each HDFC Ultra Short Term Fund-Direct Growth

31,423,200 — —

Nil (2018 : Nil; 2017 : 37,661.364) units of ` 10 each fully paid up of HDFC Liquid Fund-Direct -Dividend-Daily reinvest

— — 38,407,812

Nil (2018 : Nil; 2017 : 3,713,077.859) units of ̀ 10 each fully paid up of HDFC Banking and PSU Debt Fund-Direct Dividend

— — 38,351,268

Nil (2018 : Nil; 2017 : 3,739,406.910) units of ` 10 each fully paid up of HDFC Short Term Opportunities Fund-Direct Plan-Fortnightly Dividend

— — 38,491,211

Nil (2018: 4,000,000; 2017: Nil) units of ̀ 10 each fully paid up of HDFC FMP 92D February 2018(1)-Direct-Growth-Series 39 — 40,292,800 —

141,992,663 183,234,069 115,250,291

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(Amount in `)

8. TRADE AND OTHER RECEIVABLES As at 31 March 2019

As at 31 March 2018

As at 01 April 2017

Unsecured, considered goodOutstanding for a period exceeding six months from the date they are due for payment

— — —

Others 12,423,392 4,384,927 4,674,57812,423,392 4,384,927 4,674,578

(Amount in `)

9. CASH AND CASH EQUIVALENTS As at 31 March 2019

As at 31 March 2018

As at 01 April 2017

Balances with Banks- Current Account 4,632,889 4,916,550 5,496,550 Cash on hand 962 13,852 2,745

4,633,851 4,930,402 5,499,295

(Amount in `)

10. CURRENT FINANCIAL ASSETS -LOANS As at 31 March 2019

As at 31 March 2018

As at 01 April 2017

Inter corporate deposit 150,098,630 — —150,098,630 — —

(Amount in `)

11. CURRENT FINANCIAL ASSETS -OTHERS As at 31 March 2019

As at 31 March 2018

As at 01 April 2017

Security deposit 330,030 330,030 330,030330,030 330,030 330,030

(Amount in `)

12. CURRENT TAX ASSETS (NET) As at 31 March 2019

As at 31 March 2018

As at 01 April 2017

Advance tax paid (net of provisions) 7,793,999 9,847,705 2,073,2387,793,999 9,847,705 2,073,238

(Amount in `)

13. OTHER CURRENT ASSETS As at 31 March 2019

As at 31 March 2018

As at 01 April 2017

Advance for expenses 758,293 40,155 — GST credit receivable 1,970,155 2,672,557 — Cenvat credit receivable — — 373,923 Prepaid expenses 757,750 547,066 281,176

3,486,198 3,259,778 655,099

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(Amount in `)

14. EQUITY SHARE CAPITAL As at 31 March 2019

As at 31 March 2018

As at 01 April 2017

Authorised share capital 5,000,000 (5,000,000) Equity Shares of ` 10 each 50,000,000 50,000,000 50,000,000

50,000,000 50,000,000 50,000,000 Issued, subscribed & paid-up capital 1,997,660 (1,997,660) Equity Shares of ̀ 10 each fully paid-up 19,976,600 19,976,600 19,976,600

19,976,600 19,976,600 19,976,600

14.1 The Company has only one class of shares referred to as equity shares having Face value of ` 10 each. Each holder of equity shares is entitled to one vote per share. The final dividend, if any, proposed by the Board of Directors will be subject to the approval of the shareholders in the ensuing Annual General Meeting.

14.2 In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

14.3 Shares held by Holding CompanyName of the Shareholder As at 31 March 2019 As at 31 March 2018

No. of Shares Amount No. of Shares Amount

Housing Development Finance Corporation Limited, the Holding Company and its nominees

1,997,660 19,976,600 1,997,660 19,976,600

14.4 The details of shareholder holding more than 5% shares is set out below:Name of the Shareholder As at 31 March 2019 As at 31 March 2018

No. of Shares % held No. of Shares % held

Housing Development Finance Corporation Limited, the Holding Company and its nominees

1,997,660 100.00 1,997,660 100.00

14.5 Reconciliation of the number of shares is set out below:Particulars As at

31 March 2019As at

31 March 2018

Number of shares at the beginning of the year 1,997,660 1,997,660Number of shares allotted by fresh issue — —Number of shares at the end of the year 1,997,660 1,997,660

(Amount in `)

15. OTHER EQUITY As at 31 March 2019

As at 31 March 2018

As at 01 April 2017

Retained earnings 250,983,787 131,951,870 66,761,942 Other comprehensive income (610,624) (60) —

250,373,163 131,951,810 66,761,942

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(Amount in `)

16. NON-CURRENT PROVISIONS As at 31 March 2019

As at 31 March 2018

As at 01 April 2017

Employee benefit obligation (Refer Note 28) — Gratuity — 1,740,779 864,864 — Compensated absences 856,326 609,890 —

856,326 2,350,669 864,864

(Amount in `)

17. TRADE AND OTHER PAYABLES As at 31 March 2019

As at 31 March 2018

As at 01 April 2017

Total outstanding dues of Micro enterprises and small enterprises

27,000 — —

Total outstanding dues of creditors other than Micro enterprises and small enterprises 53,220,679 56,617,746 49,102,464

53,247,679 56,617,746 49,102,464 The information as required to be disclosed under the Micro, Small and Medium Enterprises Development

Act, 2006 has been determined to the extent such parties have been identified on the basis of Information available with the Company. The amount of principal and interest outstanding during the year is given below:

(Amount in `)

Particulars As at 31 March 2019

As at 31 March 2018

As at 01 April 2017

a) Amount outstanding but not due as at year end 27,000 — —b) Amount due but unpaid as at the year end — — —c) Amounts paid after appointed date during the year — — —d) Amount of interest accrued and unpaid as at year end — — —e) The amount of further interest due and payable even in

the succeeding year — — —27,000 — —

The information has been provided by the Company and relied upon by the Auditors. (Amount in `)

18. OTHER CURRENT LIABILITIES As at 31 March 2019

As at 31 March 2018

As at 01 April 2017

GST payable 2,893,921 1,472,161 — Statutory remittances 2,957,817 980,668 606,389

5,851,738 2,452,829 606,389

(Amount in `)

19. CURRENT PROVISIONS As at 31 March 2019

As at 31 March 2018

As at 01 April 2017

Employee benefit obligation (Refer Note 28) – Gratuity 1,810,034 6,777 — – Compensated absences 158,211 112,935 —

1,968,245 119,712 —


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(Amount in `)

20. REVENUE FROM OPERATIONS For the year ended 31 March 2019

For the year ended 31 March 2018

Management fees 374,561,926 222,367,441374,561,926 222,367,441

(Amount in `)

21. OTHER INCOME For the year ended 31 March 2019


Dividend from current investments — 7,051,107 Gain on fair value of current investments 5,202,966 723,048 Profit on sale of current investment 13,545,228 — Interest income on inter corporate deposit 8,243,151 — Interest income on security deposit 214,298 176,561

27,205,643 7,950,716

(Amount in `)

22. EMPLOYEE BENEFIT EXPENSES For the year ended 31 March 2019


Salaries and bonus 102,353,700 97,487,944 Contribution to provident and other funds 3,273,398 2,409,913 Staff welfare expenses (Refer Note 27) 2,538,933 1,546,563

108,166,031 101,444,420

(Amount in `)

23. FINANCE COST For the year ended 31 March 2019


Interest and penalty on taxes 69,792 — Interest expenses (Refer Note 27) 8,144,521 —

8,214,313 —

(Amount in `)

24. OTHER EXPENSES For the year ended 31 March 2019


Rent (Refer Note 29) 12,046,153 10,147,784 Electricity charges 382,898 360,221 Security charges 328,967 347,685 Maintenance expenses 599,497 606,569 Housekeeping expenses 1,888,352 1,925,150 Repairs to others 201,718 109,783 Insurance charges 27,186 592,690 Professional fees (Refer Note 27) 22,018,404 17,024,120 Recruitment expenses 200,000 516,801 Travelling expenses 3,438,707 2,847,913


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Office expense 208,143 153,410 Director’s sitting fees (Refer Note 27) 400,000 300,000 Corporate Social Responsilibility expenses (Refer Note 30) 1,243,000 — Telephone expenses 306,991 358,552 Loss on sale of current investments — 190,378 Auditors’ remuneration (Refer Note 24.1) 750,000 300,000 Printing and stationery 628,019 262,559 Software expenses 392,521 84,334 Business development expenses 1,097,174 724,953 Membership, subscription and seminar expenses 1,596,316 1,059,424 Miscellaneous expenses 1,206,988 447,036

48,961,033 38,359,362

24.1 AUDITORS’ REMUNERATION Audit fees 300,000 140,000 Tax audit fees 100,000 50,000 Limited reviews 350,000 110,000

750,000 300,000

25. INCOME TAXES RELATING TO CONTINUING OPERATIONS1. Income tax recognised in Statement of Profit and Loss (Amount in `)

Particulars For the year ended 31 March 2019


Current taxIn respect of the current year 66,800,000 23,500,000Deferred taxIn respect of the current year 2,034,000 (511,000)Total income tax expense recognised in the current year relating to continuing operations

68,834,000 22,989,000

2. Reconciliation of income tax expense of the year can be reconcilied to the accounting profit as follows: (Amount in `)



Standalone Profit before tax 234,827,747 88,178,928Income tax expense calculated at 29.12% (Previous Year 27.5525%) 68,381,840 24,295,499Effect of expenses that are not deductible in determining taxable profit 517,160 81,038Effect of incomes which are exempt from tax — (1,942,756)Effect on deferred tax balances due to the changes in income tax rate (58,000) 96,000Others (7,000) 459,220Income tax expense recognised in Statement of Profit and Loss 68,834,000 22,989,000


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26. EARNINGS PER SHAREParticulars For the year ended


31 March 2018

Total Profit for the year (Amount in `) 165,993,747 65,189,928Weighted average number of equity shares 1,997,660 1,997,660Par value per share (Amount in `) 10 10

Earnings per share-Basic & Diluted (Amount in `) 83.09 32.63

27. RELATED PARTY TRANSACTIONS Names of related parties, related party relationship-where control exists and disclosure of related party

transactions (Amount in `)

Particulars Relationship For the year ended 31 March 2019


EXPENSESInterest expenseHousing Development Finance Corporation Limited

Holding Company 8,144,521 —

ContributionHDFC Capital Advisors Limited-Gratuity Fund Post Employment benefit

plan1,747,556 —

Bank & other chargesHDFC Bank Limited Associate of Holding

Company9,363 2,849

RemunerationMr. Deepak Parekh Members of Key

Managerial Person of Holding Company

1,400,000 1,000,000

Mr. Keki M. Mistry Members of Key Managerial Person of Holding Company

1,400,000 1,000,000

Mr. V. Srinivasa Rangan Members of Key Managerial Person of Holding Company

1,400,000 1,000,000

Ms. Renu Sud Karnad Members of Key Managerial Person of Holding Company

1,400,000 1,000,000

Other expenses/paymentsHDFC ERGO General Insurance Company Limited

Fellow Subsidiary — 720,306

HDFC Standard Life Insurance Company Limited

Fellow Subsidiary 78,677 42,995

Sitting feesSunil Shaligram Key Managerial Person 100,000 75,000


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Particulars Relationship For the year ended 31 March 2019


Madhumita Ganguli Key Managerial Person 100,000 75,000Mathew Joseph Key Managerial Person 100,000 75,000S N Nagendra Key Managerial Person 100,000 75,000ASSETSOther advances/prepaidHDFC Standard Life Insurance Company Limited

Fellow Subsidiary 161,833 81,894

HDFC ERGO General Insurance Company Limited

Fellow Subsidiary — 281,677

LIABILITIESInter-corporate deposit takenHousing Development Finance Corporation Limited


Inter-corporate deposit repaidHousing Development Finance Corporation Limited


28. EMPLOYEE BENEFITS The Company has determined the liability for employee benefits in accordance with Ind AS 19 – Employee Benefits. Defined benefit plans - Gratuity The following table sets out the status as required by Ind AS 19 – Employee Benefits. (Amount in `)



Change in the Benefit Obligations:Liability at the beginning of the year 1,747,556 864,864Current service cost 883,394 821,054Interest cost 132,115 61,578Benefits paid — —Actuarial gains - Due to change in financials assumptions 28,673 (75,977)Actuarial losses - Due to experience 811,582 76,037Liability at the end of the year 3,603,320 1,747,556The Liability at the end of the year in respect of an un-funded plan. — 1,747,556Fair value of plan assets:Fair value of plan assets at the beginning of the year — —Expected return on plan assets 66,057 —Contributions 1,747,538 —Actuarial loss on plan assets (20,309) —Fair value of plan assets at the end of the year 1,793,286 —


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Total actuarial loss to be recognised 1,810,034 —Actual Return on plan assets:Expected return on plan assets 66,057 —Actuarial loss on plan assets (20,309) —Actual Return on plan assets 45,748 —Reconciliation of the liability recognised in the Balance Sheet:Opening net liability 1,747,556 864,864Expense recognised in Statement of Profit and Loss 949,452 882,632Expense recognised in Other comprehensive income 860,564 60Contribution by the Company (1,747,538) —Benefits paid — —Amount recognised in the Balance Sheet 1,810,034 1,747,556

(Amount in `)



Expense recognised in the Statement of Profit and Loss:Current service cost 883,394 821,054Interest cost 66,058 61,578Expense recognised in the Statement of Profit and Loss 949,452 882,632

(Amount in `)



Expense recognised in the Statement of Other comprehensive income:Actuarial (gains)/losses on obligation for the year 840,255 60Return on plan assets, excluding interest income 20,309 —Net (income)/expense for the period recognized in Other comprehensive income

860,564 60

Amount recognised in the Balance Sheet: (Amount in `)

Particulars 2018-19 2017-18 2016-17 2015-16

Liability at the end of the year 3,603,320 1,747,556 864,864 80,666Fair value of plan assets at the end of the year 1,793,286 — — —Amount recognised in the Balance Sheet under “Long term Provision for Employee Benefits” and “Short term Provision for Employee Benefits”

1,810,034 1,747,556 864,864 80,666

Experience Adjustment :On plan liabilities 811,582 76,037 108,766 —On plan assets — — — —Estimated contribution for next year 2,280,821 — — —


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Investment Pattern: (% Invested)


As at 31 March 2018

Insurance funds 100% —Total 100% —

Compensated absences (Amount in `)


As at 31 March 2018

The actuarial liability of compensated absences of privilege leave of the employees of the Company

1,014,537 722,825

Principal Assumptions:Particulars As at

31 March 2019As at

31 March 2018

Discount rate 7.47% 7.56%Return on plan assets 7.47% 0.00%Salary escalation 5.00% 5.00%

The estimate of future salary increase, considered in the actuarial valuation takes account of inflation, seniority, promotion and other relevant factors.

Sensitivity Analysis (Amount in `)


As at 31 March 2018

Projected benefit obligation on current assumptions 3,603,320 1,747,556Delta effect of +1% change in rate of discounting (300,532) (156,876)Delta effect of -1% change in rate of discounting 342,667 179,530Delta effect of +1% change in rate of salary increase 347,750 182,362Delta effect of -1% change in rate of salary increase (309,910) (161,887)Delta effect of +1% change in rate of employee turnover (37,173) (31,836)Delta effect of -1% change in rate of employee turnover 31,589 29,281

Projected benefits payable in future years from the date of reporting As at 31 March 2019

As at 31 March 2018

1st Following year 14,113 6,7772nd Following year 47,752 7,2513rd Following year 386,633 29,2444th Following year 316,861 222,9655th Following year 346,062 181,141Sum of years 6 to 10 1,618,427 847,655Sum of years 11 and above 5,169,025 2,773,932


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29. OPERATING LEASE In accordance with the Ind AS 17 on ‘Leases’ the following disclosure in respect of Operating Leases are made:

(Amount in `)


As at 31 March 2018

Not later than one year 13,005,384 6,014,984Later than one year but not later than five years 16,801,160 NilLater than five years Nil NilAmount charged to Statement of Profit and Loss 12,046,153 10,147,784

30. CORPORATE SOCIAL RESPONSIBILITY The detail of CSR expenditure spent during the year ended 31 March 2019 is as below : (a) Gross amount required to be spent by the Company during the year is ` 1,243,000/- (b) Amount spent during the year on :- (Amount in `)

Particulars In cash Yet to be paid in cash

Total

(i) Construction / acquisition of asset — — —(ii) On purpose other than (i) above 1,243,000 — 1,243,000

31. INTERIM DIVIDEND (Amount in `)


As at 31 March 2018

Dividend on equity shares declared and paidInterim dividend during the year ended 31 March 2019: ` 19.50 per share of face value of ` 10 each

38,954,370 —

Dividend distribution tax on interim dividend 8,007,460 —

32. CONTINGENT LIABILITY AND CAPITAL COMMITMENTS There is no contingent liability and capital commitments outstanding as at 31 March 2019 (Previous Year Nil)

33. SEGMENT REPORTING The Company is primarily engaged in the Investment Management business in India. As such, there are no

separate reportable segments, as per Ind AS 108 on “Operating Segments”.


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34. FINANCIAL INSTRUMENTS-ACCOUNTING CLASSIFICATIONS AND FAIR VALUE MEASUREMENTS (IND AS 107) A. Classification of financial assets and liabilities: (Amount in `)

Particulars 31 March 2019 31 March 2018 01 April 2017

FVTPL Amortised cost FVTPL Amortised cost FVTPL Amortised cost

Financial assetsInvestments- Mutual funds 141,992,663 — 183,234,069 — 115,250,291 —Trade receivables — 12,423,392 — 4,384,927 — 4,674,578Loans — 150,098,630 — — — —Cash and cash equivalents — 4,633,851 — 4,930,402 — 5,499,295Other financial assets (Current and Non-Current)

3,995,569 — 3,095,045 — 2,918,484 —

Total financial assets 145,988,232 167,155,874 186,329,114 9,315,329 118,168,775 10,173,873Financial liabilitiesTrade and other payables 53,247,679 — 56,617,746 — 49,102,464 —Total financial liabilities 53,247,679 — 56,617,746 — 49,102,464 —

B. Fair value measurements : The fair values of the Financial assets and liabilities are included at the amount, at which the instrument could

be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments

based on the input that is significant to the fair value measurement as a whole: Level 1: This hierarchy uses quoted (unadjusted) prices in active markets for identical assets or liabilities.

The fair value of all Equity Shares which are traded on the stock exchanges, is valued using the closing price at the reporting date.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on Company specific estimates. The mutual fund units are valued using the closing Net Asset Value.

If all significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.

Particulars 31 March 2019 31 March 2018 01 April 2017

Financial assets at Fair value through Profit and lossInvestment in Mutual Funds (Level 2) 141,992,663 183,234,069 115,250,291

The management assessed that cash and bank balances, trade receivables, loans, trade payables, borrowings and other financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

Key Inputs for Level 2 Fair valuation Technique Mutual Funds : Based on Net Asset Value of the Scheme (Level 2)

35. FIRST TIME ADOPTION OF IND AS (IND AS 101): The Company has prepared financial statements for the year ended 31 March 2019, in accordance with Ind AS

for the first time. For the periods upto and including the year ended 31 March 2018, the Company prepared its


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financial statements in accordance with the accounting standards notified under Section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Previous GAAP).

Accordingly, the Company has prepared its financial statements to comply with Ind AS for the year ending 31 March 2019, together with comparative information as at and for the year ended 31 March 2018, as described in the summary of significant accounting policies. In preparing these financial statements, the Company’s opening Balance Sheet was prepared as at 1 April 2017 i.e. the transition date to Ind AS for the Company. This note explains the principal adjustment made by the Company in restating its previous GAAP financial statements, including the Balance Sheet as at 1 April 2017, and the financial statements as at and for the year ended 31 March 2018.

Exemptions availed: Deemed cost for Property, plant and equipment and intangible assets: The Company has elected to continue with the carrying value of all of its property, plant and equipment and

intangible assets recognised as of 01 April 2017 (the transition date), measured as per the Previous GAAP and use that carrying value as its deemed cost as of the transition date under Ind AS.

Classification and measurement of financial assets: The Company has classified the financial assets in accordance with Ind AS 109 on the basis of facts and

circumstances that exist at the date of transition to Ind AS. Fair value of financials assets and liabilities: As per Ind AS exemption, the Company has not fair valued the financial assets and liabilities retrospectively and

has measured the same prospectively.

36. Notes to the reconciliation of Equity as at 01 April 2017 and 31 March 2018 and Total comprehensive income for the year ended 31 March 2018

A. Fair valuation of investments (Mutual Funds): Under Previous GAAP, current investments were measured at lower of cost or fair value. Under Ind AS,

these financial assets have been classified as FVTPL on the date of transition. The fair value changes are recognised in the Statement of Profit and Loss. On transitioning to Ind AS, these financial assets have been measured at their fair values which is higher than cost as per previous GAAP. As a result there has been:

(Amount in `)


As at 01 April 2017

Increase in carrying amount of investments 723,048 64,759Deferred tax liability on fair valuation of investments 199,000 —Increase in total equity (recognised in Retained Earnings) 524,048 64,759

Note - 1 - During the year as at 01 April 2017, the increase in the carrrying value of investments was offset by provision for diminution recognised under Previous GAAP. Accordingly the deferred tax liability recognised is Nil.

B. Other comprehensive income (OCI) Under Previous GAAP, there was no concept of OCI. Under Ind AS, re-measurement of defined benefit plan

liability are recognised in OCI. C. Defined benefit obligation Both under Previous GAAP and Ind AS, the Company recognised costs related to its post-employment

defined benefit plan on an actuarial basis. Under Previous GAAP, the entire cost, including actuarial gain and losses, are charged to profit or loss. Under Ind AS, remeasurements (comprising of actuarial gains and losses, the effect of assets ceiling, excluding amounts included in net interest on the net defined benefit liability and return on plan assets excluding amount included in net interest on the net defined benefit liability) are recognised in the Balance Sheet through Other Comprehensive Income (OCI). Thus, employee benefit expense is reduced by ` 60 and is recognised in OCI during the year ended 31 March 2018.


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D. Deferred tax: IGAAP requires deferred tax accounting using the income statement approach, which focuses on differences

between taxable profits and accounting profits for the period. Ind AS12 requires entities to account for deferred taxes using the Balance Sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the Balance Sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under IGAAP.

E. Re-classification of assets and liabilities as per Schedule III of the Companies Act, 2013: As per Schedule III, Security deposits which are financial in nature are classified under other non-current/

current assets respectively. Current and non-current liabilities have been reclassified into financial and non-financial liabilities as per

the nature of liabilities.


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I. Effect of Ind AS adoption on the Balance Sheet as at 31 March 2018 and 01 April 2017 (Amount in `)

Particulars Reference Note 36

Opening Balance Sheet as at 01 April 2017 Balance Sheet as at 31 March 2018

IGAAP Adjustments Ind AS IGAAP Adjustments Ind AS

ASSETS

Non-current assets

Property, plant and equipment 5,011,928 — 5,011,928 3,162,453 — 3,162,453

Financial assets

- Other financial assets E 3,281,400 (692,946) 2,588,454 3,281,400 (516,385) 2,765,015

Deferred tax assets (Net) D 556,000 10,000 566,000 1,265,000 (188,000) 1,077,000

Other non-current assets E — 663,346 663,346 — 477,987 477,987

Current assets

Financial assets

- Investments A 115,185,532 64,759 115,250,291 182,511,021 723,048 183,234,069

- Trade and other receivables 4,674,578 — 4,674,578 4,384,927 — 4,384,927

- Cash and cash equivalents 5,499,295 — 5,499,295 4,930,402 — 4,930,402

- Other financial assets 330,030 — 330,030 330,030 — 330,030

Current tax assets (Net) 2,073,238 — 2,073,238 9,847,705 — 9,847,705

Other current assets 655,099 — 655,099 3,259,778 — 3,259,778

Total Assets 137,267,100 45,159 137,312,259 212,972,716 496,650 213,469,366

EQUITY AND LIABILITIES

EQUITY

Equity share capital 19,976,600 — 19,976,600 19,976,600 — 19,976,600

Other equity A, D, E 66,716,783 45,159 66,761,942 131,455,160 496,650 131,951,810

Total Equity 86,693,383 45,159 86,738,542 151,431,760 496,650 151,928,410

LIABILITIES

Non-current liabilities

Provisions 864,864 — 864,864 2,350,669 — 2,350,669

Current liabilities

Financial liabilities

Trade and other payables

Total outstanding dues of micro enterprises and small enterprises

— — — — — —

Total outstanding dues of creditors other than micro enterprises and small enterprises

49,102,464 — 49,102,464 56,617,746 — 56,617,746

Other current liabilities 606,389 — 606,389 2,452,829 — 2,452,829

Provisions — — — 119,712 — 119,712

Total Equity and Liabilities 137,267,100 45,159 137,312,259 212,972,716 496,650 213,469,366


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II. Effect of Ind AS adoption on the Statement of Profit and Loss for the year ended 31 March 2018 (Amount in `)


Year ended 31 March 2018

IGAAP* Adjustments Ind AS

IncomeRevenue from operations 222,367,441 — 222,367,441Other income A,E 7,051,107 899,609 7,950,716Total Income 229,418,548 899,609 230,318,157ExpensesEmployee benefit expenses C 101,444,480 (60) 101,444,420Depreciation and amortisation expense 2,335,447 — 2,335,447Other expenses E 38,109,244 250,118 38,359,362Total Expenses 141,889,171 250,058 142,139,229Profit before tax 87,529,377 649,551 88,178,928Tax expense Current tax 23,500,000 — 23,500,000 Deferred tax D (709,000) 198,000 (511,000) Total tax expense 22,791,000 198,000 22,989,000Profit for the year 64,738,377 451,551 65,189,928Other comprehensive incomeA - Items that will not be reclassified to profit or loss C — (60) (60) - Income tax relating to items that will not be

reclassified to profit or loss— — —

B - Items that will be reclassified to profit or loss — — — - Income tax relating to items that will be

reclassified to profit or loss— — —

Other comprehensive income for the year — (60) (60)Total comprehensive income for the year 64,738,377 451,491 65,189,868

* Previous year’s numbers have been regrouped wherever necessary.


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III. Reconciliation of total comprehensive income for the year ended 31 March 2018Particulars Reference

Note 36Amount Amount

Profit as reported under previous GAAP 64,738,377Ind AS adjustments on account of:i. Fair value change in investments A 723,048ii. Other adjustments C,E (73,497)iii. Deferred tax adjustment on above D (198,000)Total effect of transition to Ind AS 451,551Profit for the year as per Ind AS 65,189,928Other comprehensive income for the year (Net of tax) C (60)Total comprehensive income under Ind AS 65,189,868

IV. Networth Reconciliation as on 1 April 2017 and 31 March 2018 (Amount in `)


As at 01 April 2017

P&L Year Ended March 2018

As at 31 March 2018

Opening Networth as per previous IGAAP 86,693,383 64,738,377 151,431,760AdjustmentFair value change in investments A, D 64,759 524,048 588,807Other adjustments C, D, E (19,600) (72,497) (92,097)Total of adjustments 45,159 451,551 496,710Networth excluding other comprehensive income

86,738,542 65,189,928 151,928,470

Other comprehensive incomeRemeasurements of post-employment benefit obligations

C — (60) (60)

Total of other comprehensive income — (60) (60)Networth 86,738,542 65,189,868 151,928,410




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