HSBC Asset Management (India) Private Limited€¦ · Annual Report 2014 - 2015. DIRECTORS’...

HSBC Asset Management (India) Private Limited

Annual Report 2014 - 2015

DIRECTORS’ REPORT FOR THE YEAR ENDED MARCH 31, 2015

The Shareholders HSBC Asset Management (India) Private Limited The Directors of HSBC Asset Management (India) Private Limited (the Company/AMIN) have pleasure in submitting their report along with the audited financials for the Financial Year ended March 31, 2015.

1. FINANCIAL RESULTS

The performance of the Company during the financial year 2014-15 is summarized below: (Rupees in Million)

Particulars For the year ended 31.03.2015

For the year ended 31.03.2014

Total Income 868.894 720.696

Total Expenses 754.859 694.399

Profit / (Loss) before Tax 114.034 (75.419)

Provision for Tax (including Current, Deferred and Fringe Benefit Tax)

(8.907) -

Profit/(Loss) After Tax 105.128 (75.419)

During the year under review, the Company made a net profit of Rs. 105.128 million as against net loss of Rs. 75.419 million during the previous year.

2. APPROPRIATIONS The Company does not propose to transfer any amount to the General Reserves. An amount of Rs. 105.128 million is proposed to be retained in the Statement of Profit and Loss.

3. DIVIDEND Considering the quantum of distributable surplus, the management of the Company does not intend to provide for dividend during the year.

4. OPERATIONS a) Mutual Fund While the markets continued to remain challenging during the financial year ending March 31, 2015, we observed diverse trends in Assets under Management. During the year, the following schemes were launched /rolled over / matured by HSBC Mutual Fund

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Details of schemes launched during the period

Scheme Name Date of Launch

HSBC Managed Solution April 09, 2014

HSBC Fixed Term Series 102 April 28, 2014

HSBC Global Consumer Opportunities Fund

February 02, 2015

HSBC Capital Protection Oriented Fund – Series II – Plan I

March 17, 2015

Details of schemes rolled-over during the period

Scheme Name Date of roll-over

HSBC Fixed term Series 91 August 05, 2014


HSBC Fixed term Series 96 September 05, 2014

HSBC Fixed term Series 98 October 21, 2014

Details of schemes matured during the period

Scheme Name Date of maturity

HSBC Fixed term Series 89 April 4, 2014




HSBC Fixed term Series 99 November 14, 2014

HSBC Fixed term Series 100 December 4, 2014

HSBC Fixed term Series 101 January 22, 2015

The Company earned Investment Management fees to the tune of Rs. 39.52 crores (net of Service Tax) for managing the assets of HSBC Mutual Fund. The funds under management of the schemes of HSBC Mutual Fund as at March 31, 2015 was Rs. 8,224.75 crores. The Fund had 188,184 live investor accounts as at March 31, 2015 in its various schemes. b) Portfolio Management Services (PMS) The Company launched its Portfolio Management Services (PMS) offering on 27 March 2006. PMS offers segregated mandate and advisory solutions to a wide range of institutions including institutional investors (foreign and Indian), insurance companies, pension funds, large individual investors, welfare trusts, fund of funds among others. We undertake discretionary segregated mandates and advisory mandates for the above class of investors. As on March 31, 2015, the PMS business had Assets under Management of INR 99,800.90 crores under discretionary mandate and INR 2218.45 Crores under advisory mandate.

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5. Performance of the Schemes of HSBC Mutual Fund

Equity Schemes

(a) HSBC Equity Fund (HEF) – an open-ended diversified Equity Scheme HEF seeks to generate long-term capital growth from an actively managed portfolio of equity and equity related securities.

The net assets of HEF amounted to Rs. 660.85 crores as at March 31, 2015 as against Rs. 453.11 crores as at March 31, 2014. Around 98.81% of the net assets were invested in equities, 1.44% of the net assets were invested in reverse repos/CBLO and (- 0.25%) were in the net current assets as at March 31, 2015.

HEF remained invested in a diversified portfolio across large capitalization stocks. The relative underweight in Healthcare resulted in underperformance against scheme benchmark for the period 2014-15.

Date Of Inception : 10 Dec 02 Absolute (%) Compounded Annualized (%)

Scheme Name & Benchmarks April 14 - March 15

April 13 - March 14

April 12 - March 13

Since Inception

HSBC Equity Fund – Growth 27.89 16.82 4.20 24.66

S&P BSE 200 (Scheme Benchmark)

31.72 16.65 5.41 19.74

CNX Nifty (Standard Benchmark) 26.33 17.53 6.93 18.38

Rs. 10,000, if invested in HEF, would have become

12,789 11,682 10,420 151,791

Rs. 10,000, if invested in S&P BSE 200, would have become

13,172 11,665 10,541 92,353

Rs. 10,000, if invested in CNX Nifty, would have become

12,633 11,753 10,693 80,211

Past performance may or may not be sustained in future. Returns data as on March 31, 2015. Data for the period April to March has been considered in all cases, except for Since Inception. ‘Since Inception’ returns are calculated on Rs. 10 invested at inception. Standard benchmark is prescribed by SEBI for long term equity schemes and is used for comparision purposes. Returns on Rs. 10,000 are point-to-point returns for the specific time period, invested at the start of the period. The returns provided above have been rounded off and hence there may be a minor difference between point-to-point returns vis-à-vis returns indicated above. Calculations are based on Growth NAVs.

(b) HSBC India Opportunities Fund (HIOF) – an open-ended flexi-cap Equity Scheme HIOF seeks to generate long term capital growth through investments across all market capitalisations, including small, mid and large cap stocks. It aims to be predominantly invested in equity and equity related securities. However, it could move a significant portion of its assets towards fixed income securities if the fund manager becomes negative on equity markets.

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The net assets of HIOF amounted to Rs.456.15 crores as at March 31, 2015 as compared to Rs. 177.60 crores as at March 31, 2014. Around 95.81% of the net assets were invested in equities, 4.64 % of the net assets were invested in reverse repos/CBLO and (-0.45%) were in the net current assets as at March 31, 2015.

HIOF outperformed its benchmark on a 1-year, 2-year basis and since its inception. Stock selections in sectors like Industrials, Materials, Financials, Technology, Energy, and Consumer Discretionary contributed to the outperformance during this period.

Date Of Inception : 24 Feb 04 Absolute (%)

Compounded Annualized (%)


April 13 - March 14

April 12 - March 13

Since Inception

HSBC India Opportunities Fund – Growth

45.06 27.93 0.21 18.38


32.97 16.44 4.14 15.39


Rs. 10,000, if invested in HIOF, would have become

14,506 12,793 10,021 65,147


13,297 11,644 10,414 49,033


12,633 11,753 10,693 46,634


(c) HSBC Midcap Equity Fund (HMEF) – an open-ended diversified Equity Scheme*

HMEF seeks to generate long term capital growth from an actively managed portfolio of equity and equity related securities primarily being midcap stocks. However, it could move a portion of its assets towards fixed income securities if the fund manager becomes negative on the Indian equity markets.

The net assets of HMEF amounted to Rs. 359.12 crores as at March 31, 2015 as compared to Rs. 82.03 crores as at March 31, 2014. Around 99.55 % of the net assets were invested in equities, 1.25% of the net assets were invested in reverse repos/CBLO and (-0.80 %) were in the net current assets as at March 31, 2015.

HMEF has done well in terms of outperformance v/s benchmark due to stock selection across various sectors for the period 2014-15. The focus on reasonable growth oriented companies available at attractive valuations (PB/ROE) paid off. HMEF continues to be overweight in Auto Ancillary, Agro Chemicals, Capital Goods, Financials, Industrials and underweight in FMCG sector.

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.

Date Of Inception : 19 May 05 Absolute (%)



April 13 - March 14

April 12 - March 13

Since Inception

HSBC Midcap Equity Fund – Growth

66.69 28.40 -8.82 14.31

S&P BSE Midcap (Scheme Benchmark)

49.48 13.86 -4.30 12.72


Rs. 10,000, if invested in HMEF, would have become

16,669 12,840 9,118 37,456

Rs. 10,000, if invested in S&P BSE Midcap, would have become

14,948 11,386 9,570 32,618


12,633 11,753 10,693 42,674

Past performance may or may not be sustained in future. Returns data as on March 31, 2015. Data for the period April to March has been considered in all cases, except for Since Inception. ‘Since Inception’ returns are calculated on Rs. 10 invested at inception. Standard benchmark is prescribed by SEBI for long term equity schemes and is used for comparision purposes. Returns on Rs. 10,000 are point-to-point returns for the specific time period, invested at the start of the period. The returns provided above have been rounded off and hence there may be a minor difference between point-to-point returns vis-à-vis returns indicated above. Calculations are based on Growth NAVs. *HSBC Small Cap Fund merged with HMEF with effect from April 26, 2014 and consequently ceases to exist.

(d) HSBC Progressive Themes Fund (HPTF) – an open-ended flexi-theme Equity Scheme

HPTF seeks to generate long term capital growth from an actively managed portfolio of equity and equity related securities by investing primarily in sectors, areas and themes that play an important role in, and / or benefit from, India's progress, reform process and economic development.

The net assets of HPTF amounted to Rs. 145.82 crores as at March 31, 2015 as compared to Rs. 110.41 crores as at March 31, 2014. Around 99.17% of the net assets were invested in equities, 1.60% of the net assets were invested in reverse repos/CBLO and (-0.77%) were in the net current assets as at March 31, 2015.

HPTF is a theme based scheme. The focus being on Infrastructure considerably out-performed its benchmark during the year 2014-15.




April 13 - March 14

April 12 - March 13

Since Inception

HSBC Progressive Themes Fund – Growth

73.87 4.65 -10.58 7.26

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April 13 - March 14

April 12 - March 13

Since Inception


31.72 16.65 5.41 11.82


Rs. 10,000, if invested in HPTF, would have become

17,387 10,465 8,942 18,932


13,172 11,665 10,541 27,660


12,633 11,753 10,693 27,728


(e) HSBC Tax Saver Equity Fund (HTSF) - an open ended Equity linked Savings Scheme

HTSF seeks to provide long term capital appreciation by investing in a diversified portfolio of equity & equity related instruments of companies across various sectors and industries, with no capitalization bias. The Fund may also invest in fixed income securities.

The net assets of HTSF amounted to Rs. 189.70 crores as at March 31, 2015 compared to Rs 180.73 crores as at March 31, 2014. Around 99.27 % of the net assets were invested in equities, 1.16% of the net assets were invested in reverse repos/CBLO and (-0.43%) were in the net current assets as at March 31, 2015.

HTSF outperformed its benchmark during most of the time periods due to reasonable stock selection and the approach of creating a stable and quality portfolio. Going forward, the portfolio would be managed in a similar fashion of bottom up stock picking approach following our valuation - profitability framework of price to book/ROE balanced by adequate risk management.

Date Of Inception : 05 Jan 07 Absolute (%)



April 13 - March 14

April 12 - March 13

Since Inception

HSBC Tax Saver Equity Fund – Growth

39.09 22.52 11.90 12.70


31.72 16.65 5.41 9.59


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Date Of Inception : 05 Jan 07 Absolute (%)



April 13 - March 14

April 12 - March 13

Since Inception

Rs. 10,000, if invested in HTSF, would have become

13,909 12,252 11,190 26,786


13,172 11,665 10,541 21,269


12,633 11,753 10,693 21,317


(f) HSBC Dynamic Fund (HDF) - an open-ended Scheme

HDF seeks to provide long term capital appreciation by allocating funds in equity and equity related instruments. It also has the flexibility to move, entirely if required, into debt instruments in times that the view on equity markets seems negative.

The net assets of HDF amounted to Rs. 63.19 crores as at March 31, 2015 compared to Rs. 76.12 crores as at March 31, 2014. Around 69.33% of the net assets were invested in equities, 31.23% of the net assets were invested in reverse repos/CBLO and (-0.56%) were in net current assets as at March 31, 2015.

HDF has underperformed its benchmark over the period 2014-15 due to high cash balance. The scheme allocates capital across equity and debt securities dynamically. In a year when equity market was rising, thus becoming more expensive, and debt market being cheap, the dynamic allocation to cash kept on rising through the year. An average cash balance of approx. 31% through the year was the main reason of underperformance.

Date Of Inception : 24 Sep 07 Absolute (%)



April 13 - March 14

April 12 - March 13

Since Inception

HSBC Dynamic Fund – Growth 23.22 13.20 1.59 4.37


31.72 16.65 5.41 7.38


Rs. 10,000, if invested in HDF, would have become

12,322 11,320 10,159 13,796

Rs. 10,000, if invested in S&P 13,172 11,665 10,541 17,086

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Date Of Inception : 24 Sep 07 Absolute (%)



April 13 - March 14

April 12 - March 13

Since Inception

BSE 200, would have become


12,633 11,753 10,693 17,218


(g) HSBC Dividend Yield Equity Fund (HDYF) - an open ended Scheme*

HDYF aims to provide long-term growth from a diversified portfolio of equities and equity related instruments.

The net assets of HDYF amounted to Rs. 48.27 crores as at March 31, 2015 compared to Rs. 46.12 crores as at March 31, 2014. Around 97.95 % of the net assets were invested in equities, 2.44% of the net assets were invested in reverse repos/CBLO and (-0.39%) were in net current assets as at March 31, 2015.

During the period 2014-2015, HDYF was overweight on Consumer Discretionary and Materials (domestic cyclicals) which helped the fund to outperform its benchmark.

Date Of Inception : 21 Mar 07 Absolute (%)



April 13 - March 14

April 12 - March 13

Since Inception

HSBC Dividend Yield Equity Fund – Growth

33.35 17.03 4.82 6.63


31.72 16.65 5.41 10.91


Rs. 10,000, if invested in HUOF, would have become

13,335 11,703 10,482 16,751


13,172 11,665 10,541 22,981


12,633 11,753 10,693 22,568

Past performance may or may not be sustained in future. Returns data as on March 31, 2015. Data for the period April to March has been considered in all cases, except for Since Inception. ‘Since

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Inception’ returns are calculated on Rs. 10 invested at inception. Standard benchmark is prescribed by SEBI for long term equity schemes and is used for comparision purposes. Returns on Rs. 10,000 are point-to-point returns for the specific time period, invested at the start of the period. The returns provided above have been rounded off and hence there may be a minor difference between point-to-point returns vis-à-vis returns indicated above. Calculations are based on Growth NAVs.

*HSBC Unique Opportunities Fund had undergone a change in its investment objective, investment strategy etc. and re-named as HDYF. The changes being in the nature of fundamental attribute changes, the investors have been notified of the same giving then an option to redeem from the Fund. The change was effective from July 18, 2014.

Debt Schemes

(h) HSBC Income Fund (HIF) – an open-ended Income Scheme HIF seeks to generate reasonable income through a diversified portfolio of fixed income securities. The AMC’s view of interest rate trends and the nature of the plans will be reflected in the type and maturities of securities in which the Short Term and Investment Plans are invested.

The Scheme has two plans – the Investment Plan and the Short Term Plan. The net assets of HSBC Income Fund – Investment Plan (HIF – IP) amounted to Rs. 104.89 crores as at March 31, 2015 as compared to Rs. 61.65 crores as at March 31, 2014. Around 95.44% of the net assets was invested in debt and money market instruments, 3.20% of the net assets was invested in reverse repos/CBLO and 1.36 % was in net current assets as at March 31, 2015. The net assets of HSBC Income Fund – Short Term Plan (HIF – STP) amounted to Rs. 1309.00 crores as at March 31, 2015 as compared to Rs. 727.27 crores as at March 31, 2014. Around 97.15% of the net assets were invested in debt and money market instruments, 0.79% of the net assets were invested in reverse repos/CBLO and 2.06% were in net current assets as at March 31, 2015. HIF-IP outperformed its benchmark due to higher duration calls taken during the year. The stable government and low volatility in forex market created environment for foreign investors to invest in fixed income segment which benefitted the rates and spread scenario.

HIF-STP underperformed its scheme benchmark due to lower duration calls taken during the year. RBI restricted short end investment (upto 3 year) by Foreign Portfolio investors which affected short end levels.

HIF – IP

Date Of Inception : 10 Dec 02 Simple Annualized (%)



April 13 - March 14

April 12 - March 13

Since Inception

HSBC Income Fund - Investment Plan – Growth

14.88 1.85 11.19 7.30

Crisil Composite Bond Fund Index (Scheme Benchmark)

14.60 4.34 9.27 6.42

Crisil 10 Year Gilt Index (Standard Benchmark)

14.58 -0.79 11.31 5.78

Rs. 10,000, if invested in HIF - IP, 11,488 10,185 11,119 23,801

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April 13 - March 14

April 12 - March 13

Since Inception

would have become

Rs. 10,000, if invested in Crisil Composite Bond Fund Index, would have become

11,460 10,434 10,927 21,505

Rs. 10,000, if invested in Crisil 10 Year Gilt Index, would have become

11,458 9,921 11,131 19,971

HIF – STP




April 13 - March 14

April 12 - March 13

Since Inception

HSBC Income Fund - S T P – Growth

9.95 7.23 9.26 7.05

Crisil Short Term Bond Fund Index (Scheme Benchmark)

10.33 8.79 9.09 6.93

Crisil 1 Year T-Bill Index (Standard Benchmark)

8.74 5.78 8.37 5.70

Rs. 10,000, if invested in HIF -ST, would have become

10,995 10,723 10,926 23,138

Rs. 10,000, if invested in Crisil Short Term Bond Fund Index, would have become

11,033 10,879 10,909 22,828

Rs. 10,000, if invested in Crisil 1 Year T-Bill Index, would have become

10,874 10,578 10,837 19,797


(i) HSBC Gilt Fund (HGF) – an open-ended Gilt Scheme

HGF seeks to generate reasonable returns through investments in Government Securities of various maturities. The AMC’s view of interest rate trends will be reflected in the maturities of securities in which the scheme is invested.

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The net assets of HGF amounted to Rs. 3.32 crores as at March 31, 2015 as compared to Rs. 2.64 crores as at March 31, 2014. Around 89.28% of the net assets was invested government securities, 8.55% was invested in reverse repos/CBLO and 2.17 % was in net current assets as at March 31, 2015. HGF outperformed its benchmark due to higher duration calls taken during the year. The stable government and low volatility in forex market created environment for foreign investors to invest in fixed income segment which benefitted the rates and spread scenario.

Date Of Inception : 05 Dec 03 Simple Annualized (%) Compounded Annualized (%)


April 13 - March 14

April 12 - March 13

Since Inception

HSBC Gilt Fund – Growth 16.35 1.99 12.37 5.31

I-Sec Composite Bond Fund Index (Scheme Benchmark)

15.68 3.95 11.71 7.27


14.58 -0.79 11.31 5.08

Rs. 10,000, if invested in HGF, would have become

11,635 10,199 11,237 17,970

Rs. 10,000, if invested in I-Sec Composite Bond Fund Index, would have become

11,568 10,395 11,171 22,146


11,458 9,921 11,131 17,524


(j) HSBC Floating Rate Fund – Long Term Plan (HFRF – LTP) – an open-ended Income Scheme

HFRF seeks to generate reasonable return with commensurate risk from a portfolio comprised of floating rate debt instruments and fixed rate debt instruments swapped for floating rate returns. The scheme may also invest in fixed rate money market and debt instruments.

The net assets of the HFRF - LTP amounted to Rs. 55.23 crores as at March 31, 2015 as compared to Rs. 112.48 crores as at March 31, 2014. Around 95.99% of the net assets was invested in money market instruments, 7.96% was invested in reverse repos/CBLO and (-3.95%) was in net current assets as at March 31, 2015.

HFRF-LTP underperformed the benchmark due to lower duration calls taken by fund and larger movement in duration segment. RBI restricted short end investment (upto 3 year) by Foreign Portfolio investors which affected short end levels.

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Date Of Inception : 16 Nov 04 Simple Annualized (%) Compounded Annualized (%)


April 13 - March 14

April 12 - March 13

Since Inception

HSBC FRF - LTP – Growth 8.73 9.21 9.17 7.78

Crisil Liquid Fund Index (Scheme Benchmark)

8.97 9.46 8.22 7.15


8.74 5.78 8.37 5.96

Rs. 10,000, if invested HFRF - LTP, would have become

10,873 10,921 10,917 21,761

Rs. 10,000, if invested in Crisil Liquid Fund Index, would have become

10,897 10,946 10,822 20,485


10,874 10,578 10,837 18,243


(k) HSBC Cash Fund (HCF) – an open-ended Liquid Scheme* HCF aims to provide reasonable returns, commensurate with low risk while providing a high level of liquidity, through a portfolio of money market and debt securities.

The net assets of HCF amounted to Rs. 1386.08 crores as at March 31, 2015 as compared to Rs. 1394.74 crores as at March 31, 2014. The entire net asset remains invested in debt and money market instruments including reverse repos/CBLO as at March 31, 2015.

HCF performed in line with its benchmark for a year due to conservative investments in line with the internal group guidelines and the focus being on accruals and credits.

Date Of Inception : 04 Dec 02

Simple Annualized (%) Compounded Annualized (%)

Scheme Name & Benchmarks

Last 7 Days as on 31 March 2015



April 14 - March 15

April 13 - March 14

Since Inception

HSBC Cash Fund – Growth

10.53 9.39 8.84 8.95 9.42 8.98

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Date Of Inception : 04 Dec 02

Simple Annualized (%) Compounded Annualized (%)

Scheme Name & Benchmarks




April 14 - March 15

April 13 - March 14

Since Inception

Crisil Liquid Fund Index (Scheme Benchmark)

13.63 10.39 9.58 8.97 9.46 8.82

Crisil 91 Day T-Bill Index (Standard Benchmark)

12.87 10.21 9.12 8.84 8.55 8.40

Rs. 10,000, if invested in HCF, would have become

10,020 10,039 10,073 10,895 10,942 13,948

Rs. 10,000, if invested in Crisil Liquid Fund Index, would have become

10,026 10,043 10,079 10,897 10,946 13,869

Rs. 10,000, if invested in Crisil 91 Day T-Bill Index, would have become

10,025 10,042 10,075 10,884 10,855 13,664


* Pursuant to SEBI circular dated Sept 13, 2012, certain plans/options within the schemes have been discontinued to comply with a single plan structure. Since there was no continuous NAV history available for the surviving plan prior to 19 May 2011, returns since the said date have been considered for calculating performance. The inception date of HSBC Cash Fund however is December 04, 2002.

(l) HSBC Ultra Short Term Bond Fund (HUSBF) – an open ended Debt Scheme

HUSBF seeks to provide liquidity and reasonable returns by investing primarily in a mix of short term debt and money market instruments.

The net assets of HUSBF amounted to Rs. 197.70 crores as at March 31, 2015 as compared to Rs. 153.71 crores as at March 31, 2014. Around 97.58% of the net assets was invested in debt and money market instruments, 5.30% was invested in reverse repos/CBLO and (-2.88%) was in net current assets as at March 31, 2015.

HUSTBF underperformed its scheme benchmark due to lower duration view that the fund takes and larger movement in duration segment. RBI restricted short end investment (upto 3 year) by Foreign Portfolio investors which affected short end levels.

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Date Of Inception : 17 Oct 06 Simple Annualized (%)



April 13 - March 14

Since Inception

HSBC Ultra Short Term Bond Fund - Growth $

9.04 9.04 8.96

Customised Benchmark Index Fund (Scheme Benchmark)*

9.11 8.60 9.01


8.74 5.78 7.45

Rs. 10,000, if invested in HUSTBF, would have become

10,904 10,904 21,584

Rs. 10,000, if invested in Customised Benchmark Index, would have become

10,911 10,860 21,676


10,874 10,578 19,042


$Pursuant to SEBI circular dated Sept 13, 2012, certain plans/options within the schemes have been discontinued to comply with a single plan structure. Since there was no continuous NAV history available for the surviving plan prior to 1 October 2012, returns since the said date have been considered for calculating performance ‘Since Inception’. The inception date of HSBC Ultra Short Term Bond Fund however is October 17, 2006. *Composite index of Crisil Liquid Fund Index (90%) and Crisil Short Term Bond Fund Index (10%).

(m) HSBC Flexi Debt Fund (HFDF) – an open ended Debt Scheme

HFDF seeks to deliver returns in the form of interest income and capital gains, along with high liquidity, commensurate with the current view on the markets and the interest rate cycle, through active investment in debt and money market instruments.

The net assets of HFDF amounted to Rs. 559.77 crores as at March 31, 2015 as compared to Rs.540.42 crores as at March 31, 2014. Around 98.13% of the net assets was invested in debt and money market instruments, 0.48% was invested in reverse repos/CBLO and 1.39% was in the net current assets as at March 31, 2015.

HFDF performed in line with the its benchmark due to higher duration calls in rates during the year as progressive reduction in inflation and commodity prices, stability in government created conducive environment for rate cuts. The stable government and low volatility in forex market created environment for foreign investors to invest in fixed income segment which benefitted the rates and spread scenario.

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Date Of Inception : 05 Oct 07 Simple Annualized (%)



April 13 - March 14

April 12 - March 13

Since Inception

HSBC Flexi Debt Fund –Growth 14.56 3.69 11.26 9.18

Crisil Composite Bond Fund Index (Scheme Benchmark)

14.60 4.34 9.27 7.58


14.58 -0.79 11.31 6.66

Rs. 10,000, if invested in HFDF, would have become

11,456 10,369 11,126 19,314

Rs. 10,000, if invested in Crisil Composite Bond Fund Index, would have become

11,460 10,434 10,927 17,294


11,458 9,921 11,131 16,210


(n) HSBC MIP (HMIP) – an open-ended Fund (Monthly income is not assured and is subject to availability of distributable surplus.)

HMIP is an open-ended fund which seeks to generate reasonable returns through investments in Debt and Money Market Instruments. The secondary objective of the scheme is to invest in equity and equity related instruments to seek capital appreciation.

The scheme offers two plans: Regular Plan and Savings Plan. The Regular Plan can have up to 15% of the corpus invested in equities while the Savings Plan can have up to 25 % invested in equities. The net assets of HMIP – Regular Plan (HMIP – R) amounted to Rs. 93.47 crores as at March 31, 2015 as compared to Rs. 111.44 crores as at March 31, 2014. Around 82.79% of the net assets were invested in debt and money market instruments, 13.58% of the net assets was invested in equities and 3.63% was in net current assets as at March 31, 2015. The net assets of HMIP – Savings Plan (HMIP – S) amounted to Rs. 190.68 crores as at March 31, 2015 as compared to Rs. 186.36 crores as at March 31, 2014. Around 72.94% of the net assets were invested in debt and money market instruments, 23.56% of the net assets were invested in equities and 3.63% were in net current assets as at March 31, 2015.

MIP-R underperformed its benchmark due to lower duration view that the fund takes and larger movement in duration segment. Further, the underperformance of MIP-R was also due to lower exposure in equity.

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MIP-S outperformed its benchmark due to higher duration calls in rates during the year as progressive reduction in inflation and commodity prices, stability in government created conducive environment for rate cuts. Higher exposure in Equity also helped outperformance. HMIP – Regular Plan

Date Of Inception : 24 Feb 04 Simple Annualized (%)



April 13 - March 14

April 12 - March 13

Since Inception

HSBC MIP - Regular Plan - Growth

15.60 6.60 10.07 8.36

Crisil MIP Blended Index (Scheme Benchmark)

16.42 6.42 9.09 7.93


8.74 5.78 8.37 5.74


14.58 -0.79 11.31 5.10

Rs. 10,000, if invested in HMIP - R, would have become

11,560 10,660 11,007 24,387

Rs. 10,000, if invested in Crisil MIP Blended Index, would have become

11,642 10,642 10,909 23,346


10,874 10,578 10,837 18,585


11,458 9,921 11,131 17,381

Past performance may or may not be sustained in future. Returns data as on March 31, 2015. Data for the period April to March has been considered in all cases, except for Since Inception. ‘Since Inception’ returns are calculated on Rs. 10 invested at inception. Standard benchmark is prescribed by SEBI for long term equity schemes and is used for comparision purposes. Returns on Rs. 10,000 are point-to-point returns for the specific time period, invested at the start of the period. The returns provided above have been rounded off and hence there may be a minor difference between point-to-point returns vis-à-vis returns indicated above. Calculations are based on Growth NAVs. HMIP – Savings Plan




April 13 - March 14

April 12 - March 13

Since Inception

HSBC MIP - Savings Plan - Growth

18.57 8.99 10.74 10.10

Crisil MIP Blended Index (Scheme Benchmark)

16.42 6.42 9.09 7.93

Crisil 1 Year T-Bill Index 8.74 5.78 8.37 5.74

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April 13 - March 14

April 12 - March 13

Since Inception

(Standard Benchmark)


14.58 -0.79 11.31 5.10

Rs. 10,000, if invested in HMIP - S, would have become

11,857 10,899 11,074 29,112

Rs. 10,000, if invested in Crisil MIP Blended Index, would have become

11,642 10,642 10,909 23,346


10,874 10,578 10,837 18,585


11,458 9,921 11,131 17,381


(o) HSBC Fixed Term Series – a close ended Income Scheme

The scheme seeks to generate returns by investing in a portfolio of fixed income instruments which mature on or before the maturity date of the plans under the scheme.

Details of scheme launched during the period

Scheme Name Date of Launch


Details of schemes rolled-over during the period

Scheme Name Date of roll-over



HSBC Fixed term Series 96 September 05, 2014


Being close ended fixed maturity plans, the performance of these schemes are not provided.

18

(p) HSBC Capital Protection Oriented Fund – a close ended Capital Protection Oriented Scheme

The scheme seeks protection of capital by investing a portion of the portfolio in high quality debt securities and money market instruments and also to provide capital appreciation by investing in equities through NIFTY (Index) Call Options.

During the year, the scheme launched two plans namely, HSBC Capital Protection Oriented Fund – Series II – Plan I and HSBC Capital Protection Oriented Fund – Series II – Plan II having tenure of 1195 days and 1173 days respectively. HSBC Capital Oriented Protection Fund – Series II – Plan I was launched on March 17, 2015 and HSBC Capital Protection Oriented Fund – Series II – Plan II was launched on April 6, 2015. The performances of the schemes are benchmarked against CRISIL MIP Blended Index. Being close ended schemes, the performance of the scheme is not provided.

Fund of Funds Schemes

(q) HSBC Emerging Markets Fund (HEMF) - an open-ended Scheme

HEMF seeks to provide long term capital appreciation by investing in India and in the emerging markets, in equity and equity related instruments, share classes and units/securities issued by overseas mutual funds or unit trusts. The fund may also invest a limited proportion in debt and money market instruments.

The net assets of HEMF amounted to Rs. 10.79 crores as at March 31, 2015 compared to Rs. 14.47 crores as at March 31, 2014. Around 97.93% of the net assets were invested in HSBC GEM Equity Fund (overseas mutual fund), 2.93% of the net assets were invested in reverse repos/CBLO and (-0.86%) was in the net current assets as at March 31, 2015. Despite of INR deprecation, the underlying fund under-performed its benchmark due to combination of allocation and stock selection.

Date Of Inception : 17 Mar 08 Absolute (%)



April 13 - March 14

April 12 - March 13

Since Inception

HSBC Emerging Markets Fund - Growth

4.55 3.94 4.55 1.91

MSCI Emerging Market Index (Scheme Benchmark)

7.64 0.81 1.77 2.18


Rs. 10,000, if invested in HMEF, would have become

10,455 10,394 10,455 11,426

Rs. 10,000, if invested in MSCI Emerging Market Index, would have become

10,764 10,081 10,177 11,641


12,633 11,753 10,693 18,866

19


(r) HSBC Brazil Fund (HBF) - an open ended Fund of Funds Scheme HBF seeks to provide long term capital appreciation by investing predominantly in units/shares of HSBC Global Investments Funds (HGIF) Brazil Equity Fund. The Scheme may, at the discretion of the Investment Manager, also invest in the units of other similar overseas mutual fund schemes, which may constitute a significant part of its corpus. The scheme may also invest a certain proportion of its corpus in money market instruments and /or units of liquid mutual fund schemes, in order to meet liquidity requirements from time to time.

The net assets of HBF amounted to Rs.36.23 crores as at March 31, 2015 compared to Rs. 94.05 crores as at March 31, 2014. Around 99.11 % of the net assets were invested in HSBC Brazil Equity Fund (overseas mutual fund), 3.63% of the net assets were invested in reverse repos/CBLO and (-2.74%) were in the net current assets as at March 31, 2015.

HBF outperformed its scheme benchmark during the period 2014-15 mainly on account of depreciation of the INR vis-à-vis the USD.

Date Of Inception : 06 May 11 Absolute (%)



April 13 - March 14

April 12 - March 13

Since Inception

HSBC Brazil Fund – Growth -28.85 -11.37 -2.50 -11.87

MSCI Brazil 10/40 Index (Scheme Benchmark)

-29.37 -14.46 -14.53 -17.89


Rs. 10,000, if invested in HBF, would have become

7,115 8,863 9,750 6,104

Rs. 10,000, if invested in MSCI Brazil 10/40 Index, would have become

7,063 8,554 8,547 4,630


12,633 11,753 10,693 15,300


20

(s) HSBC Asia Pacific (Ex Japan) Dividend Yield Fund (HAPDF) – an open ended Fund of Funds Scheme

HAPDF seeks to provide long term capital appreciation by investing predominantly in units of HSBC Global Investment Funds (HGIF) Asia Pacific Ex Japan Equity High Dividend Fund (HEHDF). The Scheme may, also invest a certain proportion of its corpus in money market instruments and / or units of liquid mutual fund schemes, in order to meet liquidity requirements from time to time. However, there is no assurance that the investment objective of the Scheme will be achieved.

The net assets of HADPF amounted to Rs. 30.18 crores as on March 31, 2015 as compared to 56.26 crores as at March 31, 2014. Around 98.39 % of the net assets were invested in HSBC Global Investment Funds (HGIF) Asia Pacific Ex Japan Equity High Dividend Fund (overseas mutual fund), 2.38% of the net assets were invested in reverse repos/CBLO and (-0.77%) were in the net current assets as at March 31, 2015.

HAPDF outperformed its scheme benchmark during the period 2014-15 mainly on account of depreciation of the INR vis-à-vis the USD and stock selection.

Date Of Inception : 24 Feb 14 Absolute (%) Compounded Annualized (%)

Scheme Name & Benchmarks April 14 - March 15 Since Inception

HSBC Asia Pacific (Ex Japan) Dividend Yield Fund – Growth

6.87 5.08

MSCI AC Asia Pacific ex Japan (Scheme Benchmark)

2.65 5.43

CNX Nifty (Standard Benchmark) 26.33 33.51

Rs. 10,000, if invested in HAPDF, would have become

10,687 10,559

Rs. 10,000, if invested in MSCI AC Asia Pacific ex Japan, would have become

10,265 10,598


12,633 13,737


(t) HSBC Managed Solution (HMS) – an open ended Fund of Funds Scheme

HMS seeks to provide long term total return primarily by seeking capital appreciation through an active asset allocation with diversification commensurate with the risk profile of investments by investing predominantly in units of equity mutual funds as well as in a basket of debt mutual funds gold exchange traded funds (ETFs) and other ETFs, offshore mutual funds and money market instruments. The scheme has three plans namely, HMS – Growth Plan, HMS – Moderate Plan and HMS – Conservative Plan.

21

The scheme was launched on April 09, 2014. The performance of HMS – Growth Plan is benchmarked against Composite Index constituting 80% of BSE 200 Index and 20% of CRISIL Composite Bond Index while the performance of HMS – Moderate Plan is benchmarked against CRICIL Balanced Fund Index. The performance of HMS – Conservative Plan is benchmarked against Composite Index constituting of 90% into CRISIL Composite Bond Index and 10% of BSE 200 Index. The performance data has not been provided since the scheme had not completed 1 year period as on March 31, 2015.

(u) HSBC Global Consumer Opportunities Fund (HGCOF) - an open ended Fund of Funds

Scheme HGCOF seeks to provide long term capital appreciation by investing predominantly in units of HSBC Global Investment Funds (HGIF) China Consumer Opportunities Fund (Underlying scheme). The Scheme may also invest a certain proportion of its corpus in money market instruments and/or units of liquid mutual fund schemes, in order to meet liquidity requirements from time to time. The scheme was launched on February 02, 2015. The performance of the scheme is benchmarked against MSCI AC World Index. The performance data has not been provided since the scheme had not completed 1 year period as on March 31, 2015.

6. INVESTOR SERVICES The number of official points of acceptance of transactions is 197 locations. In addition to the offices of the Registrar & Transfer agents, the AMC has Investor Service Centres in 5 locations at its own offices - namely Mumbai, New Delhi, Kolkata, Bangalore and Chennai. With a view to enhance customer convenience, the AMC has extended the facility of priority based servicing to key distributors through the enhancement of the Interactive Voice Reponses. Call Center number has now been converted to a single Toll Free number which can be dialed from anywhere in India. The call center service is being managed by the Registrar and Transfer Agents. The AMC continues to retain the outsourced back office services with HSBC Electronic Data Processing India Private Limited. On the distribution front, the number of empanelled distributors was 463 as on March 31, 2015. During the year, the AMC initiated tie-ups for online distribution of the Mutual Fund’s schemes with several channel partners taking the total number of such tie-ups to 42.

7. EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in form MGT 9 is annexed below as Annexure A.

8. BOARD MEETINGS During the financial year 2014-15, five meetings of the Board of Directors of the Company were held on the following dates:

Date of Board Meeting Directors present

June 06, 2014 Ms. Naina Lal Kidwai Mr. Dinesh Mittal Ms. Kishori Udeshi

22

Date of Board Meeting Directors present

Mr. S. P. Mustafa

June 16, 2014 Ms. Naina Lal Kidwai Mr. Dinesh Mittal Ms. Kishori Udeshi Mr. S. P. Mustafa Mr. Puneet Chaddha

August 11, 2014 Ms. Naina Lal Kidwai Ms. Kishori Udeshi Mr. S. P. Mustafa Mr. Puneet Chaddha

November 26, 2014 Ms. Naina Lal Kidwai Mr. Dinesh Mittal Ms. Kishori Udeshi Mr. S. P. Mustafa Mr. Puneet Chaddha

February 11, 2015 Ms. Naina Lal Kidwai Ms. Kishori Udeshi Mr. S. P. Mustafa Mr. Puneet Chaddha

9. DIRECTORS' RESPONSIBILITY STATEMENT

The Directors of your Company confirm: i. that the applicable accounting standards have been followed in the preparation of the annual

accounts and that there are no material departures; ii. that such accounting policies have been selected and applied consistently and judgments and

estimates made are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at March 31, 2015 and of the profit of the Company for the year ended on that date;

iii. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 to safeguard the assets of the Company and to prevent and detect fraud and other irregularities;

iv. that the annual accounts have been prepared on a ‘going concern’ basis; and v. that proper systems have been devised to ensure compliance with the provisions of all

applicable laws and that such systems are adequate and operating effectively

10. LOANS OR GUARANTEES The Company has not provided any loans or guarantees under the provisions of section 186 of the Companies Act, 2013

23

11. CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the year under review, the Company has entered into contracts or arrangements with related parties pursuant to section 188 of the Companies Act, 2013. Details of contracts in form of AOC-2 are annexed below as Annexure B.

12. CONSERVATION OF ENERGY TECHNOLOGY ABORPTION, EXPORT & FOREIGN EARNING AND OUTGO

As the Company is the Asset Management Company to HSBC Mutual Fund and provides portfolio management services, no reporting in respect of conservation of energy and technology absorption is required. Information regarding foreign exchange earnings and outgo is provided in points 20.2 and 20.3 of the Notes to the financial statements.

13. RISK MANAGEMENT POLICY The integrated Risk Management framework of the Company is as follows:

Independent function

Global best practices

Sound process orientation

Audited approach

Robust Governance structure

Risk Measurement

Risk Monitoring Management

Risk Adjusted Performance Measurement

Risk Governance

Integrated Risk

Management

Risk Identification

24

Overview: The Company has adopted a risk management and internal control structure, referred to as the Three Lines of Defence, to ensure it achieves its commercial aims while meeting regulatory and legal requirements and its responsibilities to shareholders, customers and staff. Ist Line: Comprises predominantly management of Businesses who are accountable and responsible for their day to day activities and processes, their management of risks arising and the controls to mitigate those risks. IInd Line: Comprises predominantly the Specialized Functions (e.g., Operational Risk Teams, Compliance teams, Information security teams etc.) whose role is to ensure that the Group meets its risk management and internal control responsibilities in relation to the risks they are responsible for overseeing. IIIrd Line: is Global Internal Audit. Global Internal Audit provides independent assurance to management and the Board over the design and operation of HSBC's risk management, governance and internal control processes. Risk management is an integral part of the way we do business. We have detailed risk management procedures to comply with regulatory guidelines and internal group policies. The group has issued internal guidelines named as “Functional Instruction Manual” which are required to be complied comprehensively. These are global best practices guidelines for each functional area of business. These guidelines have been prepared based on years of experience and are in a number of cases stricter than the local regulatory requirements. Risk Management team monitors Investment and Counterparty Limits and any exceptions are deliberated in Risk Management Committee (RMC) meetings that are held every Quarter. RMC is represented by CEO, COO, CIO, Head of Compliance, Head of Risk Management and Regional Head of Risk Management and reviews all risks spread across Investment/Market, Credit and Liquidity and Operational risk. Risk team also actively participates on various other Governance Forums like Investment Management Committee, Valuation Committee, Broker Empanelment Committee, Local Product Committee etc.

14. DIRECTORS AND KEY MANAGERIAL PERSONNEL Ms. Naina Lal Kidwai, Chairperson resigned from the directorship of the Company with effect from March 17, 2015. Pursuant to resignation of Ms. Kidwai, Ms. Kishori Udeshi was appointed as the new Chairperson of the Board. Mr. Ravi Menon was appointed as a Director of the Company with effect from April 24, 2015. As required by the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, the Board of Directors of the Company comprises 50% directors who are not associate of or associated in any manner with, the Sponsor of HSBC Mutual Fund (HSBC Securities and Capital Markets (India) Private Limited) or any of its subsidiaries or the Trustees of HSBC Mutual Fund.

25

15. DEPOSITS

The Company has not accepted any deposits from the public or employees during the year under review.

16. SIGNIFICANT AND MATERIAL ORDERS A Compounding application under section 297 of the Companies Act 1956 was filed with Regional Director, Registrar of Companies, Mumbai. The details of the application and the Order received from Regional Director are provided in MGT 9 forming part of this report. The said Order does not impact the going concern status and company’s operations in future.

17. AUDITORS HSBC Group, for its worldwide operations, has implemented its rotation policy for auditors by virtue of which KPMG, the existing Statutory Auditors for Group, retired and PWC was appointed as new Statutory Auditors with effect from January 2015. As your Company is part of the HSBC Group and in order to align its audit processes to the HSBC Group, HSBC Securities and Capital Markets (India) Private Limited, the holding company has recommended appointment of Price Waterhouse Chartered Accountants LLP, PWC’s Indian member firm as Auditors of the Company for a period of five years subject to ratification by Members at every Annual General Meeting. Price Waterhouse Chartered Accountants LLP, Chartered Accountants have also confirmed their eligibility under the Companies Act, 2013 and the Rules framed thereunder, if appointed by the Members at the ensuing Annual General Meeting and the Company has obtained from them the necessary certificate and consent in terms of the Companies Act, 2013.

The Directors recommends appointment of Price Waterhouse Chartered Accountants LLP, Chartered Accountants as Auditors of the Company.

18. CORPORATE PHILOSOPHY AND COMPLIANCE The Company firmly believes that strong corporate governance and compliance practices are of paramount importance to maintain the trust and confidence of its stakeholders and the reputation of the Company. To ensure transparency, fairness and objectivity in the organisation’s functioning and unquestioned integrity of all personnel involved, the Company has proactively adopted best practices with regard to corporate governance and compliance.

19. ADEQUACY OF INTERNAL FINANCIAL CONTROLS The Board has adopted the policies and procedures 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 the reliable financial disclosures.

20. ACKNOWLEDGEMENTS The Company maintained cordial relationships with Regulatory Authorities, Financial Institutions, Banks and investors during the year under review.

26

The Directors are grateful for the support extended by them and look forward to receiving their continued support and encouragement.

By authority of the Board Sd/- Sd/- Kishori Udeshi Puneet Chaddha Chairperson Whole time Director & Chief Executive officer Place: Mumbai Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

27

Annexure A

EXTRACT OF ANNUAL RETURN as on the financial year ended 31.03.2015

[Pursuant to Section 92(3) of the Companies Act, 2013, and Rule 12(1) of the Companies (Management and Administration) Rules, 2014]

FORM NO. MGT – 9

I. REGISTRATION AND OTHER DETAILS

i. CIN U74140MH2001PTC134220

ii. Registration Date December 12, 2001

iii. Name of the Company HSBC Asset Management (India) Private Limited

iv. Category / Sub-Category of the Company

Company having Share Capital

v. Address of the Registered Office and contact details

3rd Floor, Merchantile Bank Chamber, 16, Veer Nariman Road, Fort, Mumbai- 400001 Tel: +912266145000

vi. Whether listed company

No

vii. Name, address and contact details of Registrar and Transfer Agent, if any

TSR Darashaw Limited Address: 6-10 Haji Moosa Patrawala Industrial Estate, 20 Dr. E Moses Road, Mahalaxmi. Mumbai -400011

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

All the Business Activities contributing 10% or more of the total turnover of the Company shall be stated:

Sr. No. Name and Description of main Products / Services

NIC Code of the Product / Service

% to total turnover of the Company

1 Investment Management Services

Group 663 45.48%

2 Advisory/Sub Advisory Group 663 49.43%

28

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES -

Sr. No.

Name and address of the Company

CIN / GLN Holding / Subsidiary / Associate

% of shares held

Applicable Section

1. HSBC Securities and Capital Markets (India) Private Limited - 52/60, Mahatma Gandhi Road, Fort, Mumbai, Maharashtra, 400001

U67120MH1994PTC081575

Holding 100.00 2(46)

IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total

Equity)

(i) Category-wise Share Holding

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 year

Demat Physical

Total % of Total Shares

Demat Physical

Total % of Total Shares

A. Promoters

1) Indian

a) Individual / HUF - - - - - - - - -

b) Central Govt. - - - - - - - - -

c) State Govt.(s) - - - - - - - - -

d) Bodies Corporate

5,41,99,998

2 5,42,00,000

100.00 6,15,909,06

2 6,15,909,08

100.00 13.63

e) Banks / FI - - - - - - - - -

f) Any Other…. - - - - - - - - -

Sub-Total (A)(1): 5,41,99,998

2 5,42,00,000

100.00 6,15,909,06

2 6,15,909,08

100.00 13.63

2) Foreign

a) NRIs – Individuals

- - - - - - - - -

29

b) Other – Individuals

- - - - - - - - -

c) Bodies Corporate

- - - - - - - - -

d) Banks / FI - - - - - - - - -

e) Any Other…. - - - - - - - - -

Sub-Total (A)(2): - - - - - - - - -

Total Shareholding of Promoters (A) = (A)(1)+(A)(2)

5,41,99,998

2 5,42,00,000

100.00 6,15,909,06

2 6,15,909,08

100.00 13.63

B. Public Shareholding

1) Institutions

a) Mutual Funds / UTI

- - - - - - - - -

b) Banks / FI - - - - - - - - -

c) Central Govt. - - - - - - - - -

d) State Govt.(s) - - - - - - - - -

e) Venture Capital Funds

- - - - - - - - -

f) Insurance Companies

- - - - - - - - -

g) FIIs - - - - - - - - -

h) Foreign Venture Capital Funds

- - - - - - - - -

i) Others (specify) - - - - - - - - -

Sub-Total (B)(1): - - - - - - - - -

2) Non-Institutions

a) Bodies Corporate

(i) Indian - - - - - - - - -

(ii) Overseas - - - - - - - - -

b) Individuals

(i) Individual Shareholders holding nominal share capital upto Rs. 1 lakh

- - - - - - - - -

(ii) Individual Shareholders holding nominal share capital in excess of Rs. 1 lakh

- - - - - - - - -

c) Others

30

(specify)

i. Shares held by Pakistani citizens vested with the Custodian of Enemy Property

- - - - - - - - -

ii. Other Foreign Nationals

- - - - - - - - -

iii. Foreign Bodies - - - - - - - - -

iv. NRI / OCBs - - - - - - - - -

v. Clearing Members / Clearing House

- - - - - - - - -

vi. Trusts - - - - - - - - -

vii. Limited Liability Partnership

- - - - - - - - -

viii. Foreign Portfolio Investor (Corporate)

- - - - - - - - -

ix. Qualified Foreign Investor

- - - - - - - - -

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)

5,41,99,998

2 5,42,00,000

100.00 6,15,909,06

2 6,15,909,08

100.00 13.63

31

(ii) Shareholding of Promoters

Shareholders Name

Shareholding at the beginning of the year

Shareholding at the end of the year

% Change during the year

No. of Shares

% of total shares of the Company

% of Shares Pledged / encumbered to total shares

No. of Shares


% of Shares Pledged / encumbered to total shares

HSBC Securities and Capital Markets (India) Private Limited

5,42,00,000 100.00 Nil 6,15,909,08

100.00 Nil 13.63

(iii) Change in Promoters’ Shareholding (Please specify, if there is no change)


Cumulative Shareholding during the year

No. of Shares


No. of Shares


At the beginning of the year 5,42,00,000 100.00 6,15,909,08 100.00

Date wise Increase/Decrease in Promoters Shareholding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/sweat equity etc)

Date of allotment- June 23, 2014 Increase in Promoter Shares- Promoters holding was increased by 73,90,908 shares due to further issue of equity shares.

At the end of the year 6,15,909,08 100.00 6,15,909,08 100.00

32

(iv) Shareholding Pattern of Top Ten Shareholders (Other than Directors, Promoters and

Holders of GDRs and ADRs)

For Each of the Top 10 Shareholders


Shareholding at the end of the year

No. of Shares


No. of Shares


NIL

(v) Shareholding of Directors and Key Managerial Personnel - Nil

V. INDEBTEDNESS

Indebtedness of the Company including interest outstanding/accrued but not due for payment

Secured Loans excluding deposits

Unsecured Loans

Deposits Total Indebtedness

Indebtedness at the beginning of the financial year

i. Principal Amount

6,777,630 - - 6,777,630

ii. Interest due but not paid

- - - -

iii. Interest accrued but not due

- - - -

Total (i+ii+iii) 6,777,630 - - 6,777,630

Change in Indebtedness during the financial year

Addition 6,428,105 - - 6,428,105

Reduction 4,853,718 - - 4,853,718

Net Change 1,574,387 - - 1,574,387

Indebtedness at the end of the financial year

i. Principal Amount

8,352,019 - - 8,352,019

ii. Interest due but not paid

- - - -

iii. Interest accrued but

- - - -

33

not due

Total (i+ii+iii) 8,352,019 - - 8,352,019

* Future interest payable over the lease period is not included in above presentation.

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Managing Director, Whole-time Directors and/or Manager: Refer

Annexure C

B. Remuneration to other Directors: Not Applicable

Details of sitting fees paid to Directors are provided below

Sr. No.

Particulars

Name of Director Total Amount Dinesh

Kumar Mittal S. P. Mustafa Kishori

Udeshi

1 Fee for attending Board/Committee Meetings

90,000 150,000 150,000 390,000

2 Commission - - -

3 Others, please Specify

- - -

Total 90,000 150,000 150,000 390,000

C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD: Not Applicable

VII. PENALTIES / PUNISHMENT / COMPOUNDING OF OFFENCES:

Type Section of the Companies Act

Brief Description

Details of Penalty / Punishment / Compounding fees Imposed

Authority [RD / NCLT / COURT]

Appeal made, if any (give details)

A. COMPANY 297 Provided below*

Penalty - - - -

Punishment - - - -

Compounding - 75,000 Company Law Board

-

B.DIRECTORS 297

Penalty - - - -

Punishment - - - -


-

C. OTHER OFFICERS IN DEFAULT

297

34

Penalty - - - -

Punishment - - - -


-

*The Compounding application pertains to certain IT services received by Company from HSBC Software Development India Private Limited (HSDI) without seeking prior approval of Central Government (CG). As per the Companies Act 1956, CG approval is required for transactions between Companies with common directors. The Company and HSDI have had a common Director since June 2007. For the transactions between Company and HSDI, Company had not obtained the CG approval as the Companies Act gives exemption from this requirement, for transactions which are already in existence prior to the common Directorship and/or where the transactions are in the nature of cost reimbursement. However, HSDI had obtained the CG approval, which the Company became aware of only in 2012. Given that one Party to the transaction i.e.HSDI had obtained CG approval, the ROC advised the Company to compound the offence. Accordingly, the Company and its current and past Officers in De-fault (CEO’s and Company Secretary’s) filed the compounding application. Sd/- Sd/- Kishori Udeshi Puneet Chaddha Chairperson Whole time Director & Chief Executive officer Place: Mumbai

35

Annexure B

Form No. AOC-2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014)

Form for disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arm’s length transactions under third proviso thereto 1. Details of contracts or arrangements or transactions not at arm’s length basis: Nil 2. Details of material contracts or arrangement or transactions at arm’s length basis: I. HSBC Asset Management (India) Private Limited & HSBC Electronic Data Processing India Private Limited

(a) Name of the related party and nature of relationship: HSBC Electronic Data Processing India Private Limited (HDPI). Nature of relationship: HSBC Group Entity

(b) Nature of contracts /arrangements /transactions: Inter Group Services Agreement

between AMIN and HDPI wherein HDPI would be processing the payroll and related Statutory Returns, Leave Management, Exit Management for all AMIN staff in India.

(c) Duration of the contracts / arrangements/transactions: 3 years

(d) Salient terms of the contracts or arrangements or transactions including the value, if

any: HDPI is the Group Entity processing salaries for various HSBC Entities. Estimated one-time cost INR 5 Lakh and recurring cost of INR 10 Lakhs per annum. Travel, Accommodation, Taxes and system customization cost extra.

(e) Date of approval by the Board, if any: November 26, 2014

(f) Amount paid as advances, if any: None.

II. HSBC Asset Management (India) Private Limited & HSBC Electronic Data Processing India Private Limited

(a) Name of the related party and nature of relationship: HSBC Electronic Data Processing India Private Limited (HDPI). Nature of relationship: HSBC Group Entity


between AMIN & HDPI wherein HDPI would be providing IT enabled services.

(c) Duration of the contracts / arrangements/transactions: 5 years

36

(d) Salient terms of the contracts or arrangements or transactions including the value, if any: HDPI is a Group Entity providing IT services to HSBC Entities. Estimated spent INR 95 Lakh per annum.



III. HSBC Asset Management (India) Private Limited & HSBC Software Development (India) Private Limited

(a) Name(s) of the related party and nature of relationship: HSBC Software Development (India) Private Limited (HSDI). Nature of relationship: HSBC Group Entity


between AMIN & HSDI wherein HSDI would be providing IT enabled services.

(c) Duration of the contracts / arrangements/transactions: 5 Years

(d) Salient terms of the contracts or arrangements or transactions including the value, if any: HSDI will chargeback @ USD 18 (INR 1094) per hour. The total cost of engagement per annum would be approx INR 12,500,000.



IV. HSBC Asset Management (India) Private Limited & HSBC Electronics Data Processing (India) Private Limited

(a) Name of the related party and nature of relationship: HSBC Electronics Data Processing (India) Private Limited. Nature of relationship: HSBC Group Entity.

(b) Nature of contracts /arrangements /transactions: Performance Level Agreement (PLA).

An Inter Group Services Agreement (IGSA) dated November 14, 2013 is already executed between AMIN & HDPI for certain IT related services. This IGSA will be supported by a PLA wherein HDPI would be providing E- Surveillance related activities to AMIN using group authorized applications.

(c) Duration of the contracts / arrangements/transactions: The contract will be on a

perpetual basis, the PLA will be renewed every year.

(d) Salient terms of the contracts or arrangements or transactions including the value, if any: HDPI is a Group Entity providing Compliance related services to HSBC entities. The charge for providing service would be approximately 14,40,000 INR per FTE annually. The charge to AMIN would be around 0.25 to 0.5 FTE based on the service provided.

(e) Date of approval by the Board, if any: February 11, 2015

37


V. HSBC Asset Management (India) Private Limited & HSBC Securities and Capital Markets (India) Private Limited

(a) Name of the related party and nature of relationship: HSBC Securities and Capital

Markets (India) Private Limited (HSCI). Nature of relationship – HSBC Group Entity


between AMIN & HSCI wherein HSCI provided IT enabled services.

(c) Duration of the contracts / arrangements/transactions: 1 year


any: HSCI passed through the charge (salary payment) to AMIN for the HSCI resources

working with AMIN. The total cost of engagement was INR 1 crore per annum.

(e) Date of approval by the Board, if any: April 24, 2015


VI. HSBC Asset Management (India) Private Limited & HSBC Electronic Data Processing (India) Private Limited

(a) Name of the related party and nature of relationship: HSBC Electronic Data Processing

(India) Private Limited (HDPI). Nature of relationship: HSBC Group Entity


between HDPI and AMIN wherein HDPI would provide IT monitoring services to AMIN.

(c) Duration of the contracts / arrangements/transactions: 3 Years


any:

Services being outsourced a. Log reviews, monitoring, audit trails checking, reporting/alerting, and allied activities

b. Support for various audits – internal, external and regulatory, security reviews, etc.

Estimated cost will be approx. 12 lacs per annum.

38

(e) Date of approval by the Board, if any: April 24, 2015


Sd/- Sd/- Kishori Udeshi Puneet Chaddha

Chairperson Whole time Director & Chief Executive officer Place: Mumbai


Balance sheet as at 31 March 2015

(Currency: Indian Rupees in thousands)

Note 31 March 2015 31 March 2014

EQUITY AND LIABILITIES

Shareholders' funds

Share capital 3 615,909 542,000

Reserves and surplus 4 109,985 (10,885)

725,894 531,115

Non-current liabilities

Long-term borrowings 5 5,484 3,824

Long-term provisions 7 19,079 14,175

24,563 17,999

Current liabilities

Trade payables 8 110,837 149,329

Other current liabilities 9 93,214 79,743

Short-term provisions 7 10,260 8,009

214,311 237,081

TOTAL 964,768 786,195

ASSETS

Non-current assets

Fixed assets

Tangible assets 10.1 22,375 25,274

Intangible assets 10.2 1,309 -

Non-current investments 12.1 2,437 -

Long-term loans and advances 11 388,528 393,775

414,649 419,049

Current assets

Current investments 12.2 304,130 149,780

Trade receivables 13 140,864 170,869

Cash and bank balances 14 55,694 1,111

Short-term loans and advances 11 49,431 45,386

550,119 367,146

TOTAL 964,768 786,195

Significant accounting policies 2 (0.62) (0.35)

The notes referred to above form an integral part of the financial statements.

As per our report of even date attached.

For B S R & Associates LLP For and on behalf of the Board of Directors of

Chartered Accountants HSBC Asset Management (India) Private Limited

Firm's Registration No: 116231W/W-100024

Sd/- Sd/- Sd/-

N Sampath Ganesh Kishori J Udeshi Puneet Chaddha

Partner Chairperson Director &

Membership No: 042554 DIN No: 01344073 Chief Executive Officer

DIN No: 03462959

Sd/- Sd/-

Denny Thomas Amit Deshmukh

Company Secretary Chief Financial Officer

CS No: 17104

Mumbai Mumbai

24 August, 2015 24 August, 20158


Statement of profit and lossfor the year ended 31 March 2015


Note 31 March 2015 31 March 2014

REVENUE

Revenue from operations 15 841,272 683,965

Other income 16 27,622 36,731

Total revenue 868,894 720,696

EXPENSES

Employee benefits expenses 17 408,920 375,147

Finance costs 18 2,022 2,036

Depreciation and amortization 10 19,240 13,758

Other expenses 19 324,677 303,458

Total expenses 754,859 694,399

Profit before exceptional items and tax 114,035 26,297

Exceptional items 19.3 - 101,715

Profit/ (Loss) before tax 114,035 (75,419)

Tax expense:

Current Tax 2.11 8,907 -

Deferred tax 6 - -

Profit/ (Loss) for the year 105,128 (75,419)

Earnings per equity share [face value of share Rs 10]

Basic and diluted 20.5 1.76 (1.39)

Significant accounting policies 2






Sd/- Sd/- Sd/-




DIN No: 03462959

Sd/- Sd/-



CS No: 17104

Mumbai Mumbai

24 August, 2015 24 August, 2015

9


Cash flow statement

for the year ended 31 March 2015


31 March 2015 31 March 2014

A Cash flow from operating activities

Profit/(Loss) before tax 114,035 (75,419)

Adjustments for

Depreciation 19,240 13,758

Interest expenses 1,022 1,036

Loss/(Profit) on sale of fixed assets (226) 652

Unrealised foreign exchange gain/ loss (1,275) 3,429

Profit on sale of investments (22,146) (30,446)

Interest on income tax refund (3,184) -

(6,569) (11,571)

Operating (loss) before working capital changes 107,467 (86,989)

Decrease / (Increase) in trade receivables 30,821 (117,554)

Decrease / (Increase) in loans and advances and other current assets (5,830) (5,711)

Decrease / (Increase) in current liabilities and provisions (17,424) 46,428

Cash generated from / (used in) operations 115,033 (163,826)

Income taxes paid (40,260) (43,912)

Income tax refund received 41,667 46,631

Net cash (used) / provided by operating activities ( A ) 116,440 (161,107)

B Cash flow from investing activities

Purchase of fixed assets (19,300) (10,056)

Proceeds from sale / (cost incurred for sale) of fixed assets 1,876 42

Purchase of Mutual fund units (846,737) (589,546)

Proceeds from sale of Mutual fund units 712,100 747,654

Net cash provided/ (used) by investing activities ( B ) (152,061) 148,094

C Cash flow from financing activities

Principal payment under finance leases (4,854) (3,045)

Proceeds from finance leases 6,428 3,150

Finance cost paid (1,022) (1,036)

Proceeds from issue of equity shares 89,652 -

Net cash provided/ (used) by financing activities ( C ) 90,204 (931)

Net Increase / (Decrease) in cash and cash equivalents (A) + (B) + (C) 54,583 (13,944)

Cash and cash equivalents at the beginning of the year 1,111 15,055

Cash and cash equivalents at the end of the year 55,694 1,111

Net Increase / (Decrease) in cash and cash equivalents 54,583 (13,944)

10

HSBC Asset Management (India) Private Limited (0.42) (0.40)

Cash flow statement (Continued)



Note:

Cash and cash equivalents comprise of cash on hand, balances with banks in current accounts.

(Refer Note 14 of the financial statements)






Sd/- Sd/- Sd/-




DIN No: 03462959

Sd/- Sd/-



CS No: 17104

Mumbai Mumbai

24 August, 2015 24 August, 2015

11


Notes to the financial statements



1. Background

2. Significant Accounting Policies

2.1 Basis of preparation of financial statements

2.2 Use of estimates

2.3 Current-non-current classification

All assets and liabilities are classified into current and non-current.

Assets

An asset is classified as current when it satisfies any of the following criteria:

(a) it is expected to be realised in, or is intended for sale of consumption in, the company's normal operating cycle;

(b) it is held primarily for the purpose of being traded;

(c) it is expected to be realised within 12 months after the reporting date; or

Current assets include the current portion of non-current financial assets.

All other assets are classified as non-current.

Liabilities

A liability is classified as current when it satisfies any of the following criteria:

(a) it is expected to be settled in the company’s normal operating cycle;

(b) it is held primarily f or the purpose of being traded

(c) it is due to be settled within 12 months after the reporting date; or

Current liabilities include current portion of non-current financial liabilities. All other liabilities are classified as non-current.

Operating cycle

Operating cycle is the time between the acquisition of assets for processing and their realisation in cash or cash equivalents.

HSBC Asset Management (India) Private Limited ("the Company") was incorporated on 12 December 2001. The Company is a wholly owned

subsidiary of HSBC Securities and Capital Markets (India) Private Limited. Its principal activity is to act as an Investment Manager to HSBC

Mutual Fund ("the Fund"). The Company manages the Mutual Fund schemes launched by HSBC Mutual Fund and provides various

administrative services to the Fund as laid down in the Investment Management Agreement dated 7 February 2002. The Company is also a

SEBI registered Portfolio Manager. The Company has received a certificate from SEBI to act as Portfolio Manager. The said certificate is valid

up to 15 September 2017 and to be renewed thereafter. It provides discretionary and advisory Portfolio Management Services (PMS) to its

clients.

The accompanying financial statements are prepared and presented on the accrual basis of accounting and comply with the Accounting

Standards specified under Section 133 of the Companies Act, 2013 ('the Act') read with Rule 7 of the Companies (Accounts) Rules, 2014, the

relevant provisions of the Act and other accounting principles generally accepted in India, to the extent applicable. The financial statements are

presented in Indian rupees rounded off to nearest thousand.

The preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP) requires management to make

judgments, estimates and assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, income and

expenses and the disclosure of contingent liabilities on the date of the financial statements. Actual results could differ from those estimates.

Estimates and underlying assumptions are reviewed on an on going basis. Any revision to accounting estimates is recognised prospectively in

current and future periods.

The accounting policies set out below have been applied consistently to the periods presented in these financial statements except as explained

in the note 2.4 on change in accounting policies of depreciation of fixed assets.

(d) the Company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Terms of

a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

(d) it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting

date.

12


Notes to the financial statements (Continued)



2. Significant Accounting Policies (Continued)

2.4 Fixed assets and depreciation

Nature of fixed assets

Office equipment

Computers - other than servers & networks

Nature of fixed assets

Furniture & fixture

Computers - servers & networks

Assets costing less than Rs. 5,000 are fully depreciated in the year of purchase.

2.5 Impairment of assets

2.6 Investments

Long-term investments (including current portion thereof) are carried at cost less any other-than-temporary diminution in value, determined

separately for each individual investment.

Current investments are carried at the lower of cost and fair value. The comparison of cost and fair value is done separately in respect of each

category of investment.

Motor cars are depreciated on a straight line method as per the lease tenure or on the basis of technical evaluation of the useful life whichever is

less.

Effective from 01 April 2014, computer software have been amortised on a straight line basis over a period of 3 years.

Depreciation on additions is provided on a pro rata basis from the month the asset is put to use or ready to use whichever is earlier. In respect of

assets sold, depreciation is provided up to the month of disposal.

The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists,

the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash-

generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The

reduction is treated as an impairment loss and is recognized in the profit and loss account. If, at the balance sheet date, there is an indication that

a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount

subject to a maximum of depreciable historical cost.

Investments that are readily realisable and intended to be held for not more than a year from the date of acquisition are classified as current

investments. All other investments are classified as long-term investments.

Fixed assets are stated at historical cost less accumulated depreciation. Cost includes inward freight, duties, octroi, taxes and other incidental

expenses related to acquisition and corresponding installation expenses.

Pursuant to the applicability of Schedule II of the Companies Act, 2013 effective from 1 April 2014, the Company has decided to change its

accounting policy of providing depreciation from Written Down Value method (WDV) to Straight Line Method (SLM).

Accordingly the following assets have been depreciated on SLM based on the estimated useful life as prescribed in the Schedule II of

Companies Act, 2013.

Any reductions in the carrying amount and any reversals of such reductions are charged or credited to the statement of profit and loss.

Profit or loss on sale of investments is determined on the basis of weighted average carrying amount of investments disposed of.

Useful life as per the limits prescribed in schedule II of the

Companies Act, 2013 in Years

5

3

Useful life as per the limits prescribed in schedule II of the

Companies Act, 2013 in Years

Management estimate of useful life

in years

5

3

However, in respect of the following assets, the estimated useful life is different from useful life prescribed in Schedule II of the Companies

Act, 2013. Based on the nature of fixed assets used by the Company and past experience of its usage, the Company considers that the useful life

estimated by the management for respective assets to be appropriate.

Management estimate of useful life

in years

3

10

6

5

13






2.7 Revenue Recognition

Profit or loss on sale of investments is arrived at by applying weighted average cost on trade date

2.8 Transactions in foreign currency

2.9 Provisions and Contingencies

2.10 Leases

Finance Leases

a.

b.

Operating Leases

Investment management fees (excluding service tax) are recognised monthly on an accrual basis, in accordance with the terms of contract

between the Company and the Board of Trustees of HSBC Mutual Fund and are in line with the Securities and Exchange Board of India

("SEBI") (Mutual Funds) Regulations, 1996 (SEBI Regulations) as amended from time to time, based on daily net asset value (excluding

investments made by the Company in the schemes in accordance with SEBI Regulations).

Dividend income is recognised when the right to receive the same is established.

Lease transactions are accounted in accordance with Accounting Standard 19 'Leases' prescribed under Section 133 of the Act.

The group recharges are accounted monthly at the month end rate. Other foreign exchange transactions are recorded using the rates prevailing

on the date of the respective transactions. Exchange differences arising on foreign exchange transactions settled during the period are

recognised in the statement of profit and loss of the year.

Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date are translated at the closing exchange rates on that

date. The resultant exchange differences, if any, are recognised in the statement of profit and loss and related assets and liabilities are

accordingly restated in balance sheet.

A provision is recognised if, as a result of a past event, the Company has a present obligation that can be estimated reliably, and it is probable

that an outflow of economic benefits will be required to settle the obligation. Provisions are recognised at the best estimate of the expenditure

required to settle the present obligation at the balance sheet date. The provisions are measured on an undiscounted basis.

Lease payments for assets taken on operating leases are recognized as an expense in the statement of Profit and Loss account over the lease term

on a straight-line basis.

A contingent liability exists when there is a possible but not probable obligation, or a present obligation that may, but probably will not, require

an outflow of resources, or a present obligation whose amount cannot be estimated reliably. Contingent liabilities do not warrant provisions, but

are disclosed unless the possibility of outflow of resources is remote. Contingent assets are neither recognised nor disclosed in the financial

statements. However, contingent assets are assessed continually and if it is virtually certain that an inflow of economic benefits will arise, the

asset and related income are recognised in the period in which the change occurs.

Assets taken on finance lease are recognised as a fixed asset at the fair market value of the asset or present value of the minimum lease

payments as prescribed under Accounting Standard 19 'Leases'. An equivalent liability is created at the inception of the lease. Rentals paid are

apportioned between finance charge and principal based on the implicit rate of return in the contract. The finance charge is shown as interest

expense and the principal amount is reduced from the liability.

Depreciation on such assets is provided on the basis of lease period or on the basis of useful life prescribed in Schedule II of the Act / technical

evaluation of the useful life of the assets.

Interest income is accounted for on an accrual basis.

Portfolio management fees (excluding service tax) are recognised on an accrual basis, based on fee structures on a monthly basis.

Advisory fees are recognised on an accrual basis in accordance with the respective terms of the contract with counter parties.

14






2.11 Taxation

2.12 Retirement Benefits

Employee Benefits

Short term employee benefits

Post employment benefits

Defined benefit plans

Compensated absences

Income-tax expense comprises current tax (i.e. amount of tax for the period determined in accordance with the income-tax law) and deferred tax

charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the period). Income-tax

expense is recognised in profit or loss except that tax expense related to items recognised directly in reserves is also recognized in those

reserves.

The Company’s gratuity benefit scheme is defined benefit plan. The Company’s net obligation in respect of a defined benefit plan is calculated

by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is

discounted to determine its present value. Any unrecognised past service costs and the fair value of any plan assets are deducted. The

calculation of the Company’s obligation is performed annually by a qualified actuary using the projected unit credit method.

The Company recognises all actuarial gains and losses arising from defined benefit plans immediately in the statement of profit and loss. All

expenses related to defined benefit plans are recognised in employee benefits expense in the statement of profit and loss. When the benefits of a

plan are improved, the portion of the increased benefit related to past service by employees is recognised in profit or loss on a straight-line basis

over the average period until the benefits become vested. The Company recognises gains and losses on the curtailment or settlement of a

defined benefit plan when the curtailment or settlement occurs.

MAT Credit entitlement is recognised where there is convincing evidence that the same can be realised in future. The Company has balance of

unrecognised MAT credit of Rs. 17,230 (P.Y. Rs. 15,508) as at 31 March 2015.

Employee benefits payable wholly within twelve months of receiving employee services are classified as short-term employee benefits. These

benefits include salaries and wages, bonus and ex-gratia payments.

Current tax is measured at the amount expected to be paid to (recovered from) the taxation authorities, using the applicable tax rates and tax

laws. Deferred tax is recognised in respect of timing differences between taxable income and accounting income i.e. differences that originate

in one period and are capable of reversal in one or more subsequent periods. The deferred tax charge or credit and the corresponding deferred

tax liabilities or assets are recognised using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be realised in future; however, where there

is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is a virtual certainty

supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realised.

Deferred tax assets are reviewed as at each balance sheet date and written down or written be realised.

The Company follows the leave period on a calendar year basis. Unutilised leave at the end of calendar year expires. Compensated absences are

accounted as short term employee benefits on the basis of unutilised leave as at the end of the financial year.

15






2.13 Restricted Share Plan

2.14 Scheme related expenses

2.15 Earnings per share

The total recurring expenses relating to the schemes of HSBC Mutual Fund are as per SEBI Regulations. Expenses over and above the expense

limit for each scheme or Expenses which are not permissible to be borne by HSBC Mutual Fund are required to be borne by the Company and

are disclosed under the head Other expenses as 'Scheme related expenses'.

The employees to whom the shares are granted will be entitled to receive the shares after the end of the vesting period. At the end of the vesting

period the shares awarded will be transferred to the employee provided the employee continues to be in employment. The shares may be

retained or sold at the discretion of the employee.

If the employee leaves the service during the vesting period, the shares granted are forfeited.

The initial issue expenses with respect to all schemes launched have been borne by the Company in the year in which they are incurred.

Restricted share plan represents restricted stock award, by way of shares of HSBC Holdings Plc. (the ultimate holding company), granted to

eligible employees in lieu of bonus. The value of share awards granted after 1 April 2005 is carried at cost and is amortised over the vesting

period, in accordance with the Guidance Note on Accounting for Employee Share based payments issued by the Institute of Chartered

Accountants of India.

The Company reports basic and diluted earnings per share in accordance with Accounting Standard 20 - "Earnings Per Share" prescribed under

Section 133 of the Act. Basic earnings per share is computed by dividing the net profit after tax by the weighted average number of equity

shares outstanding for the year.

Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue equity shares were exercised or

converted during the year. Diluted earnings per share is computed using the weighted average number of equity shares and dilutive potential

equity shares outstanding at year end.

16



as at 31 March 2015


31 March 2015 31 March 2014

3 Share capital

Authorised share capital

62,000,000 Equity shares (previous year 62,000,000) of Rs 10 each 620,000 620,000

80,000 80,000

700,000 700,000

Issued, subscribed and fully paid-up share capital

61,590,908 (previous year : 54,200,000) Equity shares of Rs 10 each fully paid up 615,909 542,000

615,909 542,000

3.1 Reconciliation of shares outstanding at the beginning and at the end of reporting period

Equity shares

No of shares Amount No of shares Amount

At the beginning of the year 54,200,000 542,000 54,200,000 542,000

Issued during the year 7,390,908 73,909 - -

Outstanding at the end of the year 61,590,908 615,909 54,200,000 542,000

3.2 Rights, Preferences and Restrictions attached to each class of shares

3.3

0 17Equity shares

No of shares Amount No of shares Amount

61,590,908 615,909 54,200,000 542,000

3.4 Shareholders holding more than 5% shares at the end of the reporting period

Name of shareholder

No of shares Amount % Holding No of shares Amount % Holding

61,590,908 615,909 100 54,200,000 542,000 100

31 March 2015 31 March 2014

4 Reserves and Surplus

Capital redemption reserve 90,000 90,000

Securities premium 15,743 -

Profit and loss balance

At the commencement of the year (100,886) (25,467)

Add: Profit/(Loss) for the year 105,128 (75,419)

Closing balance 4,242 (100,886)

Total 109,985 (10,886)

31 March 201431 March 2015

31 March 2015

The Company has a single class of equity shares. Accordingly, all equity shares rank equally with regard to dividends and share in

the Company's residual assets. The equity shares are entitled to receive dividend as declared from time to time. On winding up of

the Company, the holders of equity shares will be entitled to receive the residual assets of the company.

31 March 2014

31 March 2015 31 March 2014

HSBC Securities and Capital Markets

(India) Private Limited and its nominees

Equity shares of Rs 10 each fully paid up held by Holding Company and its

nominees

8,000,000 Cumulative redeemable preference shares (previous year 8,000,000) of Rs 10 each

(The entire paid up share capital is held by HSBC Securities and Capital Markets (India) Private

Limited and its nominees)

Shares held by Holding Company

17



as at 31 March 2015


5 Long term borrowings

31 March 2015 31 March 2014 31 March 2015 31 March 2014

Finance lease obligations (secured) 5,484 3,824 2,868 2,953

5,484 3,824 2,868 2,953


6,571 4,369 3,832 3,715

1,087 545 964 761

5,484 3,824 2,868 2,953

The maturity profile of finance lease obligations is as follows:


3,832 3,715 2,868 2,953

6,571 4,369 5,484 3,824

- - - -

Finance lease obligations are secured against motor cars taken on lease.

6 Deferred tax (net)

31 March 2015 31 March 2014

Deferred tax

liabilitiesDepreciation on fixed assets (542) (1,636)

Bonus - (678)

Lease Rentals (215) -

Total Deferred tax liability (757) (2,314)

Deferred tax assets

Bonus 1,724 -

Carry forward of losses 235,070 240,068

Gratuity & compensated absence 2,397 833

Lease Rentals - 101

Total Deferred tax asset 239,191 241,002

Net Deferred Tax Asset/ (Liability) 238,434 238,688

On account of huge carry forward of losses and in absence of virtual certainty of generating adequate profits in the foreseeable future, net

deferred tax asset has not been recognised.

Non - current portion Current portion

Current portion

The Company has entered into finance lease agreements for motor cars for use by some of its employees. The period of lease is between 3 to 5

years in all cases. These lease agreements are non-renewable and do not provide for escalation in rental values. The total future minimum lease

payments at the balance sheet date, element of interest included in such payments, and present value of these minimum lease payments are as

follows:

Particulars

Total future minimum lease payments

Minimum lease payment

Future interest included above

Present value

Payable later than 5 years

Period

Payable between 1 - 5 years

Particulars of timing difference

Payable within 1 year

Non - current portion

Present value of future minimum lease payments

18



as at 31 March 2015


7 Provisions

7.1 Provision for employee benefits


Gratuity 19,079 14,175 4,077 1,499

Compensated absences - - 4,009 4,438

19,079 14,175 8,086 5,937

7.2 Other provisions


- - 2,174 2,072

- - 2,174 2,072

Total 19,079 14,175 10,260 8,009

31 March 2015 31 March 2014

8 Trade payables

Sundry Creditors

Payable to vendors (including accrued expenses) 110,837 149,329

110,837 149,329

For dues to micro and small suppliers refer Note 20.10

9 Other current liabilities

Current maturities of finance lease obligation (secured)* 2,868 2,953

Provision for bonus 28,392 23,319

Statutory dues payable 48,883 49,811

Other liabilities 13,071 3,660

93,214 79,743

Short term

* Total current maturities of long term borrowings Rs 2,868 (Rs previous year 2,953). For details refer

note 5

Long term

Provision for current tax [net of advance tax Rs 8,362; (previous year Rs 10,625)]

19



as at 31 March 2015


Non-Current Assets

10 Fixed assets -

10.1 Tangible assets

Gross block

Balance as at 1 April 2014 11,764 56,440 3,835 2,058 74,097

Additions 6,419 11,353 42 - 17,814

Disposals (5,332) (3,388) (46) - (8,766)

Balance as at 31 March 2015 12,851 64,405 3,831 2,058 83,145

Depreciation


Depreciation for the year 4,132 14,132 605 194 19,063

Accumulated depreciation on disposals (3,688) (3,382) (46) - (7,116)


Net block

As at 31 March 2015 7,719 14,195 459 2 22,375

* All motor cars of the Company have been taken on finance lease.

Gross block


Additions 3,150 6,104 6 - 9,260

Disposals (3,579) (925) - - (4,504)


Depreciation


Depreciation for the year 2,659 9,891 346 66 12,962

Accumulated depreciation on disposals (3,008) (801) - - (3,809)


Net block

As at 31 March 2014 7,076 16,980 1,022 196 25,274

* All motor cars of the Company have been taken on finance lease.

10.2 Intangible assets

Gross block

Balance as at 1 April 2014 60,067

Additions 1,486

Disposals (1,664)

Balance as at 31 March 2015 59,889

Depreciation


Depreciation for the year 177

Accumulated depreciation on disposals (1,664)


Net block

As at 31 March 2015 1,309

Furniture and

fittings

Computer software

TotalMotor cars * Computers

Particulars

ComputersParticulars Motor cars *

Particulars

Total Office

equipment

Office

equipment

Furniture and

fittings

20



as at 31 March 2015


Non Current Assets (Continued)

10 Fixed assets (Continued) -

10.2 Intangible assets

Gross block


Additions 796

Disposals -


Depreciation


Depreciation for the year 796

Accumulated depreciation on disposals -


Net block

As at 31 March 2014 -

11 Loans and advances


11.1 To parties other than related parties

Deposit for services - - 254 253

- - 254 253

Other loans and advances

(Unsecured and considered good)

Loans to employees * 1,445 1,184 347 302

CENVAT credit receivable - - 20,694 13,294

381,524 388,556 - -

Prepaid expenses 3,374 4,035 14,111 9,365

Other receivables - - 878 115

Advance recoverable in cash or kind 2,185 - 879 9,789

388,528 393,775 36,909 32,865

11.2 To related parties

Deposit for premises - - 12,268 12,268

- - 12,268 12,268

Total 388,528 393,775 49,431 45,386

Non - current portion Current portion

Particulars Computer software

* These are interest free loans granted to employees and includes an

amount of Rs. Nil (previous year Rs. Nil) advanced to directors.

Advance taxes [net of provision for tax Rs 464,364;

(previous year Rs 464,364)]

21



as at 31 March 2015


12.1 Non-current investments

No. of units Amount No. of units Amount

Investments in Mutual Fund - unquoted

244,572.04 2,437 - -

Aggregate of unquoted investments in mutual fund units

At Book value 2,437 -

At Net asset value 2,417 -

Total 2,437 -

The above investments pertains to seed investments as per Regulation 28(3) of SEBI (Mutual Funds) Regulations, 1996.

12.2 Current investments

No. of units Amount No. of units Amount

Investments in Mutual Fund - unquoted

227,022.93 304,130 121,517.810 149,780

At Book value 304,130 149,780

At Net asset value 316,861 155,408

Total 304,130 149,780

31 March 2015 31 March 2014

13 Trade receivables

- -

Other receivables

140,864 170,869

140,864 170,869

- -

140,864 170,869

14 Cash and bank balances

Cash and cash equivalents

Cash on hand 50 50

Balance with banks

- on current accounts 55,644 1,061

55,694 1,111

Particulars 31 March 2015 31 March 2014

31 March 2014

HSBC Cash Fund - Institutional Plus - Growth Direct

HSBC Global Consumer Opportunities Fund - Growth Option

31 March 2015

(Unsecured and considered good)

Outstanding for more than six months

Particulars

Unsecured and considered good

Less: Provision for doubtful debts

22





31 March 2015 31 March 2014

15 Revenue from operations

Investment management fees 395,246 397,329

Advisory fees 429,530 253,329

Income from PMS business 16,496 33,307

841,272 683,965

16 Other Income

Gain on sale of current investments 22,146 30,446

Dividend income on current investments - -

Profit on sale of Assets (net) 226 -

Miscellaneous income 111 368

Interest on income tax refund 3,184 4,898

Net gain on account of foreign exchange fluctuations 1,955 1,019

27,622 36,731

17 Employee benefits / expenses

Salaries, wages and bonus 375,105 345,863

Contribution to provident fund and other funds 14,868 14,575

Restricted share plan 4,232 3,101

Staff welfare expenses 5,805 8,737

Gratuity 8,910 2,871

408,920 375,147

18 Finance costs

Interest expense

Finance charge on finance leases 1,022 1,036

Other borrowing cost

Guarantee charges 1,000 1,000

2,022 2,036

23





31 March 2015 31 March 2014

19 Other expenses

Brokerage and incentives 14,452 10,053

Legal and professional fees 10,272 5,950

Support service charges (refer note 19.1) 75,930 113,103

Rent and utilities 33,908 30,383

Payment to auditors

- for statutory audit fees 850 650

- for certification charges 198 151

- for reimbursement of expenses 19 20

Business development expenses 46,594 30,945

Repairs and maintenance 38,552 34,199

Telephone, communication and postage 30,834 25,642

Office administration expenses 6,831 5,301

Insurance 11,349 6,793

Scheme related expenses (refer note 2.14) 32,019 15,953

Compensation (refer note 19.2) 1,164 156

Membership and subscription 805 820

Loss on sale of assets (net) - 652

Directors sitting fees 390 270

Donation - 25

Training expenses 1,386 4,293

Rates and taxes 5,665 4,626

Travelling expenses 13,459 13,473

324,677 303,458

19.1 Support service charges

19.2 Compensation

31 March 2015 31 March 2014

19.3 Exceptional items

Compensation paid to the investors of HSBC Gilt fund - 101,715

The Company incurred Rs 1,164 (previous year Rs 156) towards compensation paid by the Company to investors / distributors on account of

routine processing errors / delays.

Pursuant to a complaint filed by certain investors, Securities and Exchange Board of India (SEBI) issued a Show Cause notice dated August 7,

2009 to the Board of Trustees of the Fund, the Fund, HSBC Asset Management (India) Private Limited and the then CEO of the HSBC Asset

Management (India) Private Limited, (together the “respondents”) pertaining to changes made in the Scheme Information Document of HSBC

Gilt Fund via Addendums dated January 05, 2009 and March 02, 2009. SEBI, vide its order dated April 23, 2010 disposed off the Show Cause

Notice dated August 7, 2009. Aggrieved by this, the investors filed an appeal with the Securities Appellate Tribunal (SAT). SAT vide its order

directed the respondent to provide exit option at the then prevailing Net Asset Value. The Company filed an appeal against these Orders before

the Supreme Court. The Supreme Court dismissed the appeal vide its order dated on January 15, 2014. Accordingly the Company has paid

compensation amounting to Rs 101,715 (including interest of Rs 44,234) in February, 2014.

Above charges represent the charges paid by the Company to other HSBC Group entities both for central as well as regional support. These

Group entities provide management, administrative as well as technical support on various functional aspects of day-to-day business as well as

the strategy for growth.

24





20 Notes to the financial statements

20.1 Capital Commitments

31 March 2015 31 March 2014

100,947 -

20.2 Expenditure in foreign currency

Support service charges 63,737 109,524

Telephone, communication and postage 3,132 3,124

Business development expenses 33 -

Travelling expenses 2,215 1,979

Training expenses 1,085 2,311

Membership and subscription 125 328

70,327 117,266

20.3 Earnings in foreign currency

Advisory fees 429,530 253,329

429,530 253,329

20 Notes to the financial statements (Continued)

As at 31 March 2015, the Company had seed investment commitment in pursuant to Regulation 28(3)

of SEBI (Mutual Funds) Regulations, 1996.

25






20.4 Employee Benefits

a) Defined benefit plans

The following table summarises the position of assets and obligations relating to the defined benefit plan.

31 March 2015 31 March 2014

- -

23,156 15,674

23,156 15,674

b)


Gratuity 19,079 14,175 4,077 1,499

19,079 14,175 4,077 1,499

c)

31 March 2015 31 March 2014

Government bonds - -

Qualifying insurance

policies

- -

- -

d)

31 March 2015 31 March 2014

15,674 14,537

3,417 3,589

1,687 1,411

- -

3,806 (2,129)

- -

(1,428) (1,734)

23,156 15,674

e)

31 March 2015 31 March 2014

- -

- -

- -

- -

- -

- - - -

Movement in fair values of plan assets

Gratuity

Fair value of plan assets at 1 April 2014

Contributions paid into the plan

Benefits paid by the plan

Expected return on plan assets

Defined benefit obligation at 31 March 2015

Defined benefit obligation at 1 April 2014

Current service cost

Interest cost

Fair value of plan assets at 31 March 2015

Benefits paid by the plan

Actuarial (gain)/loss

Gratuity

Curtailment loss

Movement in present values of defined benefit obligations

Net actuarial loss / (gain) recognised during the year

Effect of movement in exchange rates

Fair value of plan assets

Classification into current / non current

Current

The Company operates post employment defined benefit plans that provide gratuity benefit. The gratuity plan entitles employees, who have at

least five years of continuous service, to receive one-half month’s salary for each year of completed service at the time of retirement/exit.

Present value of obligations

Liability recognised in Balance Sheet

Composition of plan assets

Gratuity

Non current

The liability in respect of the two plans comprises of the following non current and current portions:

26






20.4 Employee Benefits (continued)

f)

31 March 2015 31 March 2014

Current service cost 3,417 3,589

Interest cost 1,687 1,411

Expected return on

plan assets

- -

Charge for asset ceiling - -

Net actuarial (gain)/loss recognised during the year 3,806 (2,129)

8,910 2,871

g)

31 March 2015 31 March 2014

- -

Actuarial (gain)/loss - -

Actual return on plan assets - -

- -

h)

31 March 2015 31 March 2014

Discount rate * 7.95% 9.20%

6% 6%

13.50% 1% - 10%

** Salary escalation rate varies based on the salary terms and future period of employment.

31-Mar-15 31-Mar-14 31-Mar-13 31-Mar-12 31-Mar-11

23,156 15,674 14,536 10,591 9,894

- - - - -

Deficit/(Surplus) (23,156) (15,674) (14,536) (10,591) (9,894)

(1,159) (9,175) 2,139 (177) 1,501

- - - - -

20.5 Earnings per share

Basic / Diluted earnings per share

Future salary increases **

Attrition rate

Fair value of plan assets

Defined benefit obligation

Experience adjustment arising on plan liabilities

Experience adjustment arising on plan assets

i) Five years' information

The calculation of basic/diluted earnings per share for the year ended 31 March 2015 was based on the profit attributable to equity shareholders

of Rs 105,128 (previous year loss Rs 75,419), and weighted average number of equity shares outstanding of 59,869,738 (previous year

54,200,000)

Actual return on the plan assets

Gratuity

Principal accrual assumptions

Gratuity

The following are the principal accrual assumptions at the reporting date (expressed as weighted average)

Expected return on plan assets

Gratuity

Total included in employee benefits

Expense recognised in statement of profit and loss

* The discount rate is based on the prevailing market yields of Indian government securities as at the balance sheet date for the estimated term

of the obligations.

For the year ended

27






20.5 Earnings per share (Continued)

31 March 2015 31 March 2014

105,128 (75,419)

105,128 (75,419)

54,200,000 54,200,000

7,390,908 -

61,590,908 54,200,000

59,869,738 54,200,000

1.76 (1.39)

1.76 (1.39)

10 10

20.6 Segmental reporting

PMS Advisory Unallocable Total

Segment revenue 395,246 16,496 429,530 27,622 868,894

Segment result (264,823) (5,633) 356,869 27,622 114,035

Taxation - - - 8,907 8,907

Net (loss) / profit (264,823) (5,632) 356,869 18,715 105,129

Segment assets 98,117 4,307 87,981 774,363 964,768

Segment liabilities 25,475 285 4,331 208,783 238,873

16,158 449 449 2,244 19,300

16,107 448 447 2,237 19,240

PMS Advisory Unallocable Total

Segment revenue 397,329 33,307 253,330 36,730 720,696

Segment result (287,912) (4,686) 180,450 36,730 (75,418)

Taxation - - - - -

Net (loss) / profit (287,912) (4,686) 180,450 36,730 (75,418)

Segment assets 98,634 8,396 116,476 562,690 786,196

Segment liabilities 18,307 1,747 12,908 222,118 255,080

7,755 511 85 1,704 10,055

10,610 700 116 2,332 13,758 Depreciation of assets

Number of shares at the beginning of the year

Assets purchased during the year

Mutual Fund

For the year ended 31 March 2014

For the year ended 31 March 2015

The Company's operations predominantly relate to providing investment management services in India to the schemes of HSBC Mutual Fund.

The Company also provides portfolio management services (PMS) along with non-binding advisory services to HSBC Asset Management Hong

Kong (AMHK) for offshore funds. Unallocable revenue primarily includes dividend income, profit on sale of investments and others. Common

expenses are allocated on the basis of proportionate time spent and headcount. The disclosure with respect to this reportable segment is

available below:

Face value per share

In accordance with Accounting Standard 20 on Earnings Per Share prescribed under Section 133 of the Act, the following is the

calculation of the basic and diluted earnings per share:

Shares issued / (buy back) during the year

Net Profit for the year

Shareholders earnings

Calculation of weighted average number of equity shares

Calculation of shareholders earnings

Total number of equity shares outstanding at the year end

Mutual fund

Geographical segments : The Company does not have overseas operations and is considered to operate only in the domestic segment.

Particulars

Weighted average number of equity shares

outstanding Basic earnings (in Rupees) per share

In accordance with Accounting Standard 20 on Earnings Per Share prescribed under Section 133 of the Act, the following is the

calculation of the basic and diluted earnings per share:

Geographical segments : The Company does not have overseas operations and is considered to operate only in the domestic segment.

Particulars

Diluted earnings (in Rupees) per share

Assets purchased during the year

Depreciation of assets

28






20.7 Restricted Share Plan

Particulars For the year ended

31 March 2015

(units)

For the year ended

31 March 2014

(units)

Opening balance 15,629 11,741

9,590 9,944

Exercised / vested (6,319) (6,056)

Other movement * (472) -

Balance 18,428 15,629

Particulars Number of shares

Key managerial personnel 3,148

15,280

Balance 18,428

The terms and conditions related to the grant of the restricted share plan are as follows :

Share based payment expense

Particulars 31 March 2015 31 March 2014

Amount recognised in employee benefits 4,232 3,101

Total expense recognised in employee benefits 4,232 3,101

Restricted share plan represents restricted stock award granted to select high potential employees. Shares are awarded through Restricted Shares

of HSBC Holdings Plc. At the end of the vesting period the shares awarded will be transferred to the employee provided the employee continues

to be in employment. These restricted shares have been awarded to the employees during every financial year ended except March 2009.

Total number of restricted shares awarded

Contractual life : The maximum life is three years with one-third vesting at the end of every twelve months and in few cases the vesting is after

thirty six months from the date of the grant.

Senior employees

Vesting conditions : Employees need to be in employment with the entity at the time of vesting of the shares.

* Other movements refers to the net transfer-in and transfer-out of restricted share awards to the employees within group entities having no

additional liability to the Company.

29






20.8 Related party disclosures

(1) Names of related parties

Related party where control exists but with which no transactions have taken place during the year

HSBC Holdings PLC (ultimate Holding Company)

Related parties with whom transactions have taken place during the year

Holding Company HSBC Securities and Capital Markets (India) Private Limited

Others HSBC Mutual Fund *

* HSBC Asset Management (India) Private Limited is the Investment Manager to HSBC Mutual Fund.

(2) Fellow subsidiaries with whom transactions have taken place during the year

The Hong Kong and Shanghai Banking Corporation Limited - India Branches

HSBC Global Asset Management (Hong Kong) Limited (Formerly known as HSBC Investments (Hong Kong) Limited)

HSBC Software Development (India) Private Limited

HSBC Electronic Data Processing (India) Private Limited

HSBC Global Asset Management, London (Formerly known as HSBC Group Investment Business Limited, London)

The Hong Kong and Shanghai Banking Corporation Limited, Hong Kong

HSBC Invest Direct Securities (India) Limited.

HSBC Bank Plc.

HSBC Global Asset Management (Singapore) Limited

(3)

Ms. Naina Lal Kidwai (upto Mar 17, 2015) Mr. Dinesh K Mittal Mr. Puneet Chaddha

Mr. S P Mustafa Ms. Kishori J Udeshi

Mr. Ravi Menon (with effect from Apr 24, 2015) .

Key management personnel (as defined under AS-18 ‘Related Party disclosures’ notified under Section 133 of the Act and their

relatives with whom transactions have taken place during the year

30






20.8 Related party transactions

(4) Revenue transactions with related parties

Current year Previous year Current year Previous year Current year Previous year Current year Previous year

Income

Investment management fees - - - - 395,246 397,329 - -

PMS advisory fees - - 429,530 253,329 - - - -

Profit on sale of investments

(net) (non trade)

- - - - 22,146 30,446 - -

Expenses

Remuneration - - - - - - 25,114 21,994

Brokerage / incentives - - 3,940 7,714 11,930 2,773 - -

Bank and custody charges - - 1,119 1,250 - - - -

Sitting fees - - - - - - 390 270

Computer maintenance 5,084 6,973 425 2,204 - - - -

Compensation - - - - 649 135 - -

Scheme related expenses - - - - 32,019 15,953 - -

Training and Education - - 128 111 - - - -

Support service charges - - 71,296 117,998 - - - -

Rent and Utilities - - 30,505 29,649 - - - -

(5) Capital transactions with related parties

Current year Previous year Current year Previous year Current year Previous year Current year Previous year

Issue of equity shares 89,652 -

Deposit for premises - - - (964) - - - -

Purchase of investments - - - - 846,737 596,546 - -

Sale of investments - - - - 712,100 717,208 - -

(6) Balances with related parties

Particulars

Assets

Investment management fee

receivable

- - - - 50,908 49,224 - -

PMS advisory fees receivable - - 3,048 116,215 - - - -

Investment advisory fee

receivable

- - 84,271 -

Deposit for premises - - 12,268 12,268 - - - -

Investments - - - - 306,566 149,780

Balances with banks-current

accounts

- - 55,565 985 - - - -

Liabilities

Equity share capital held by

holding company

615,909 542,000 - - - -

Computer maintenance 4,576 300 - 382 - - - -

Support service charges - - 28,451 79,627 - - - -

Commission/Brokerage - - 401 7,449 - - - -

Scheme related expenses - - - - 23,442 158,512 - -

* HSBC Asset Management (India) Private Limited is the Investment Manager to HSBC Mutual Fund

Transactions carried out with providers of finance in the normal course of business have not been disclosed in the above table in

accordance with Accounting Standard 18 - Related Party Transactions prescribed under Section 133 of the Act.

31-Mar-15 31-Mar-1431-Mar-15 31-Mar-14 31-Mar-15 31-Mar-14 31-Mar-15 31-Mar-14

Particulars with Holding Companies with fellow Subsidiaries with others* with Key Management

with Holding Companies with fellow Subsidiaries with others* with Key Management

Particulars with Holding Company with fellow Subsidiaries with others* with Key Management

31






20.9 Dues to micro and small suppliers

20.10 Long term contracts

20.11 Effects of change in accounting policies related to depreciation

20.12 Effects of change in estimates related to depreciation

20.13 Contingent Liability

31-Mar-15 31-Mar-14

Dues towards Income Tax 94,873 31,363

Trade payables includes Rs. Nil (Previous year: Rs. Nil) payable to "Suppliers" registered under the Micro, Small and Medium Enterprises

Development Act, 2006. No interest has been paid / is payable by the Company during the year to "Suppliers" registered under this act. The

aforementioned is based on the responses received by the Company to its inquiries with suppliers with regard to applicability under the said act.

The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable

losses.

Pursuant to the pronouncement of useful life to compute depreciation on tangible assets under the provisions of schedule II to the

Companies Act, 2013, the Company has, during the year, changed its method of depreciation for all tangible assets from written

down value basis to straight line method basis and the rates of depreciation for all tangible assets have been changed from those

prescribed under the erstwhile schedule XIV to the Companies Act, 1956 to the rates ascertained based on the useful life or as

prescribed under the schedule II to the Companies Act, 2013. Accordingly, depreciation has been recalculated in accordance with

the new method from the date of the asset coming into use. The deficiency arising from retrospective re-computation of

depreciation in accordance with the new method has been adjusted in the statement of profit and loss for the current year. Had the

Company continued to follow the earlier method depreciation for all tangible assets the profit for the period and the carrying value

of all tangible assets would have been higher by Rs. 5,766 and the depreciation for the year would have been lower by Rs. 5,766.

During the year, in respect of computer software, the Company changed its estimates of useful life from immediate amortisation to

amortisation in 3 years. Such change in the estimated useful life of computer software have effects on the depreciation in the

current period and in each period during the remaining useful life of the asset. Accordingly, amortisation of computer software for

the year has been calculated based on the revised useful life. Had the Company continued to follow the earlier estimates of useful

life for its computer software, the profit for the period and the carrying value of computer software would have been lower by Rs.

1,309 and the amortisation for the year would have been higher by Rs. 1,309.

Income-tax in respect of certain disallowances/adjustments made by the Income Tax Authorities aggregating to Rs. 94,873 upon

assessment/re- assessment for the AY 2004-05, 2006-07, 2007-08, 2008-09 and 2010-11. These are mainly on account of the

following:

> AY 2004-05 - Disallowance of certain pre-operative expenses;

> AY 2006-07 - Disallowance of certain business expenses;

> AY 2007-08 - Transfer pricing and prior period adjustments; and

> AY 2008-09 - Transfer pricing adjustments

> AY 2010-11 - Transfer pricing and restricted shares adjustments

The decisions are pending at various stages of appeal before CIT(Appeals) and the ITAT. The Company is contesting the demands

and the management believes that its position is likely to be upheld in the appellate process. No tax expense has been accrued in

the financial statements for the tax demands raised on account of the aforesaid.

Claims against the Company not acknowledged as debt

32






20.14 Foreign currency exposures not hedged

Foreign

currency

Rupees Foreign

currency

Rupees

Sundry Creditors GBP 190 18,102 444 41,297

USD 97 6,128 617 37,712

SGD 78 3,666 - -

HKD - - 229 1,831

Sundry Debtors USD 1,393 87,319 1,882 116,240

The outstanding in foreign currency are not hedged by derivatives instruments or otherwise.

20.15 Prior year comparatives




Sd/- Sd/- Sd/-




DIN No: 03462959

Sd/- Sd/-



CS No: 17104

Mumbai Mumbai

24 August, 2015 24 August, 2015

Previous year's figures have been regrouped and reclassified wherever necessary to conform with the current year's

Particulars Currency 31 March 2015 31 March 2014

33

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