TO THE MEMBERS
Your Directors have the pleasure in presenting the Sixteenth Annual Report together with the Audited Accounts of the Company for the year ended March 31, 2015.
State of Affairs of the Company

Financial Results	For the year ended March 31, 2015	For the year ended March 31, 2014
	(Rs. in Crore)	(Rs. in Crore)
Profit before Tax	622.60	522.45
Provision for Tax (Net Deferred Tax)	207.08	164.57
Short provision of Income Tax for earlier years (net)	0.02	0.11
Profit after Tax	415.50	357.77
Balance brought forward from previous year	760.04	590.04
Profit available for appropriation	1175.54	947.81
Transfer to General Reserve	41.55	35.78
Capital Redemption Reserve	-	0.14
Interim Equity Dividend Paid	164.07	126.20
Tax on Interim Equity Dividend Paid	32.80	21.45
Tax on Buyback of Equity Shares	-	4.20
Balance carried to Balance Sheet	937.12	760.04

For the year ended March 31, 2015, the Company posted a net profit of Rs. 415.50 crores as against Rs. 357.77 crores in the previous year. Appropriations from the net profit have been effected as per the table given above.

Dividend
Your Directors had declared and paid interim dividend of Rs. 65/- per equity share during the financial year ended March 31, 2015 in the month of March 2015 and the same is confirmed as final dividend for the financial year ended March 31, 2015.

Transfer to General Reserves
A sum of Rs. 41.55 crore has been transferred to the General Reserves of the Company.

Material Changes and Commitments, if any, affecting the financial position of the Company
There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

Review of Operations
Your Directors are pleased to report that:
The Average Assets under Management (AAuM) during the financial year 2014-15 were Rs. 1,45,860.97 crore as against an AAuM of Rs. 1,07,554 crore during the financial year 2013-2014, representing an increase of over 35%.

HDFC Mutual Fund (HDFCMF) has retained its position during the current year as the largest fund house.

During the year, the total number of accounts managed by HDFCMF is around 52.10 lacs as on March 31, 2015. The number of Investor Service Centres (ISCs) of the Company as on March 31, 2015 was 141. ISCs of Computer Age Management Services Pvt. Ltd. (CAMS), the Registrar and Transfer Agent of HDFCMF are Official Points of Acceptance for transactions of HDFCMF Schemes. These offices (218 as on March 31, 2015) supplement the investor-servicing network of your company. With these offices, your company services investors in almost 200 cities pan India.

During the financial year, the aggregate assets under investment management/advisory services under Portfolio Management Services were at Rs. 1,110 crore as on March 31, 2015. Discretionary and Non-Discretionary Portfolio Management is provided to High Networth Individuals and Corporate(s) on a segregated basis while Advisory services are provided to Institutional Investors and Corporate(s).

Your company under Portfolio Management Services had offered "HDFC AMC PMS - Real Estate Portfolio - 1" to resident individuals and corporate(s) during 2007-2008. The company had received net commitments of Rs. 3,831 crore from 10,168 clients. Your company has successfully exited investments to the tune of Rs. 2,811 crore till 31st March 2015 and extended the term of "HDFC AMC PMS - Real Estate Portfolio-1 "for two additional periods of one year each upon the expiry of sixth anniversary on February 4, 2014.

New Schemes launched under HDFC Mutual Fund
In order to offer more investment options to investors, your company has launched the following Schemes during FY 14-15:

HDFC Capital Protection Oriented Scheme: It is a close-ended income scheme. As the name suggests, the objective of the scheme is to protect capital of the investor over the tenure of the scheme. All plans in this scheme have been rated by ICRA. It is a debt hybrid scheme with marginal exposure of a bout 15-20% to equities. Your company has launched 2 plans having tenure of 3 years and 3 plans having tenure of 1100 days and above. Cumulatively these funds have mobilized Rs 602.55 crore. Upon maturity, each plan shall be automatically terminated and amount due shall be returned to its investors.

HDFC Focused Equity Fund Plan A: It is a close-ended Equity Scheme investing in Eligible Securities as per Rajiv Gandhi Equity Savings Scheme, 2012. The scheme matures after 1100 days from the date of allotment of units and the units are compulsorily redeemed on the maturity date. The investment objective of the Scheme is to generate long term capital appreciation from a portfolio of Eligible Securities as specified in Rajiv Gandhi Equity Savings Scheme. The Scheme mobilized over Rs. 150 crore in the NFO.

HDFC Fixed Maturity Plans: These are close-ended income schemes. They automatically mature at the end of the tenure. We have launched 42 plans during the year with mobilization of Rs. 5,416.88 crore.

Acquisition of the schemes of Morgan Stanley Mutual Fund
The Company acquired the right to manage 8 schemes of Morgan Stanley Mutual Fund as on closing of business hours of June 27, 2014 and HDFC Trustee Company Limited became Trustee to the Schemes of Morgan Stanley Mutual Fund and assumed the role, responsibility, authority and functions of Trustee to the schemes of Morgan Stanley Mutual Fund under HDFC Mutual Fund Trust Deed.

Awards
Your Directors are pleased to inform that schemes of HDFC Mutual Fund received the following awards during the year under review: -

1) Morningstar India Fund Awards 2015 #
• HDFC Multiple Yield Fund - Plan 2005 won the "Best Conservative Allocation Fund".
• HDFC Floating Rate Income Fund - Long Term Plan won the "Best Ultrashort Bond Fund".

2) Business Standard
• Mr. Prashant Jain won the "Business Standard Fund Manager of the Year - Equities" Award for the calendar year ended December 31, 2014.

During the year under review, HDFC AMC PMS - Real Estate Portfolio - I of HDFC Asset Management Company Limited received the following award for the third year in a row:
1) CNBC Awaaz Real Estate Awards 2014 #
• HDFC AMC PMS - Real Estate Portfolio - I won the "Best Real Estate Fund" award for the year by CNBC Awaaz.
# Please refer to the websites of the respective organizations for further information on the Ranking Methodology/Disclaimers, etc. for the abovementioned Awards.

Disclosures Under the Companies Act, 2013

Extract of Annual Return as on the Financial Year Ended on March 31, 2015
The details forming part of the extract of the annual return as on the financial year ended March 31, 2015 is attached hereto as Annexure I.

Details of Directors and Key Managerial Personnel (KMP) appointed during the year

Directors
In accordance with the Companies Act, 2013 and the Articles of Association of the Company, Mrs. Renu Sud Karnad and Mr. James Aird, Directors, retire by rotation at the ensuing Annual General Meeting. They are eligible for re-appointment.

Necessary proposals for the re-appointment of the aforesaid Directors have been included in the notice convening the Annual General Meeting.

None of the Directors of the Company are disqualified for being appointed as Directors as specified in Section 164 of the Companies Act, 2013.

KMP
In accordance with the provisions of Section 203 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Mr. Milind Barve, Managing Director, Mr. Piyush Surana, Chief Financial Officer and Ms. Sylvia Furtado, Company Secretary of the Company, who are existing employees of the Company were termed as the Key Managerial Personnel (KMP) of the Company w.e.f. June 13, 2014. Upon his re-appointment as the Managing Director of the Company, Mr. Milind Barve was re-confirmed as KMP of the Company w.e.f. November 1, 2014.

Independent Directors
In accordance with the provision of Section 149 of the Companies Act, 2013 read with Companies (Appointment and Qualification of Directors) Rules, 2014, Mr. Hoshang Billimoria, Mr. Humayun Dhanrajgir, Mr. P.M. Thampi, Dr. Deepak Phatak, Mr. Rajeshwar Bajaaj and Mr. Vijay Merchant were appointed as Independent Directors, not liable to retire by rotation and to hold office up to 5 (five) consecutive years up to July 20, 2019.

All the aforesaid six Directors have confirmed compliance with the criteria of independence prescribed under Section 149(6) of the Act. Declarations in this regard have been received from all of them as required under Section 149(7) of the Companies Act, 2013.

None of the Independent Directors of the Company are disqualified for being appointed as Directors as specified in Section 164 of the Companies Act, 2013.

Statement on Declaration of Independence by Independent Directors
In accordance with the provisions of Section 134(3)(d) of the Companies Act, 2013, Mr. Hoshang Billimoria, Mr. Humayun Dhanrajgir, Mr. P.M. Thampi, Dr. Deepak Phatak, Mr. Rajeshwar Bajaaj and Mr. Vijay Merchant, Independent Directors, have given their respective declarations stating that they meet the criteria of independence as provided in Section149(6) of the Companies Act, 2013 at the time of their appointment as Independent Directors of the Company.

Corporate Governance:

Board Meetings
The meetings of the Board of Directors are held at the Company s registered office in Mumbai.
Six Board meetings were held during the financial year under review - on April 16, 2014, June 13, 2014, July 21, 2014, October 22, 2014, November 21, 2014 and January 15, 2015.
The attendance of each Director at the meetings of the Board of Directors is as under:

Directors	Number of Board Meetings Attended
Mr. Deepak S. Parekh (Chairman)	6
Mr. Norman Keith Skeoch	3
Mr. James Aird	5
Mr. Humayun Dhanrajgir	5
Mr. Hoshang Billimoria	6
Mr. P. M. Thampi	5
Dr. Deepak B. Phatak	4
Ms. Renu Sud Karnad	6
Mr. Rajeshwar R. Bajaaj	6
Mr. Keki Mistry	5
Mr. Vijay Merchant	6
Mr. Milind Barve (Managing Director)	6

Audit Committee
The members of the Audit Committee are Mr. Hoshang Billimoria (Chairman), Mr. P. M. Thampi, Mr. Keki Mistry, Mr. Humayun Dhanrajgir and Mr. James Aird. The Audit Committee has been constituted and functions in accordance with the provisions of Section 177 of the Companies Act, 2013 ("Act") read with Companies (Meeting of Board and its Powers) Rules, 2014. The Company Secretary acts as the secretary to the Committee. The Committee met 6 times during the financial year under review. The Audit Committee met prior to the finalization of the accounts for the year ended March 31, 2015.

Nomination & Remuneration Policy
The Nomination & Remuneration Policy of the Company was adopted on January 15, 2015, which details the Director s appointment, remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under sub-section (3) of Section 178 and the Policy is provided in Annexure II which is appended hereto.

Issue of Employee Stock Options
During the year, the Company has not granted any fresh employee stock options.

Voting Rights not exercised directly by Employees - Not applicable

Formal Annual Evaluation
During the year, the Board adopted a formal mechanism for evaluating its performance and as well as that of its Committees and individual Directors, including the Chairman of the Board. The evaluation involved self assessment by Board members, performance of the Board and Chairman in the form of questionnaire, which assessed the performance on the basis of various aspects namely board composition, mission and strategic planning, accountability, strategic foresight, risk management, standards of conduct, interaction with senior management, compensation of non-executive directors, role of non-executive chairman, role of non-executive directors, committees of directors -evaluation, compliance, reflections and also self evaluation. The evaluation of the Independent Directors was carried out by the entire Board and that of the Chairman and the Non-independent Directors were carried out by the Independent Directors. The Directors were satisfied with the evaluation results, which reflected the overall engagement of the Board and its Committees with the Company.

Auditors
M/s. Haribhakti & Co., LLP, Chartered Accountants, Statutory Auditors of your Company holds office until the conclusion of the ensuing Annual General Meetingand is eligible for re-appointment. The Company has received a certificate from them to the effect that their re-appointment, if made, would be within the limits prescribed under Companies Act, 2013 and rules made thereunder.

Secretarial Audit Report
The provisions of Section 204 read with Section 134(3) of the Companies Act, 2013, mandates Secretarial Audit of the Company to be done from the financial year commencing from April 1, 2014 by a Company Secretary in Practice and the Secretarial Auditor s Report is required to be annexed to the Board s Report for the financial year 2014-15 onwards. The Board has therefore considered and appointed M/s. Bhandari & Associates, Company Secretaries, as the Secretarial Auditor of the Company for the financial year 2014-15. The Secretarial Audit Report issued by them is given in Annexure III forming part of this Report.

Comments by the Board on every qualification, reservation or adverse remark or disclaimer made by the auditor in his report or Company Secretary in practice in the Secretarial Audit Report
There were no qualifications, reservation or adverse comments or disclaimer made by the Statutory Auditors of the Company, M/s. Haribhakti & Co., LLP and Secretarial Auditor of the Company, M/s. Bhandari & Associates, in their audit reports.

Risk Management Policy
The Company has evolved an Enterprise Risk Management (ERM) framework to identify, assess, monitor and mitigate various business risks. The Risk Management Policy of the Company reviewed by the Audit Committee and approved by the Board provides for the ERM framework which incorporates the systematic application of policies, procedures and checks to identify potential risks and lessen their impact on the Company involving -identifying potential risks, assessing their potential impact, taking action to minimize the potential impact and monitoring and reporting on the status of key risks on a regular basis. The Risk Management Committee of the Company at their meetings periodically reviews the processes that are already in place to check the adequacy of risk management systems.

Adequacy of Internal Controls
The internal audit system of the Company has been devised to promote reliable financial reporting, safeguarding of assets and prevention and detection of frauds and errors and which is adequate for internal financial controls with reference to financial statements and commensurate with the business and the operations of the Company. The Audit Committee of Board of Directors, at regular intervals and in co-ordination with Internal and Statutory Auditors, reviews the adequacy of Internal Control Systems within the company.

Corporate Social Responsibility
The CSR Committee has been constituted and functions in accordance with the provisions of Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014. The members of the Corporate Social Responsibility Committee ("CSR Committee") are Mr. Deepak Parekh (Chairman), Mr. Vijay Merchant and Mr. Milind Barve (Managing Director). The Company Secretary acts as the secretary to the Committee. The Committee met twice during the financial year under review. The Corporate Social Responsibility Policy of the Company and annual report on CSR activities is given in Annexure IV forming part of this Report.

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
All related party transactions entered during the financial year were in the ordinary course of business for the company and were on arm s length basis. Since all related party transactions entered into by the company were not material in nature and were in the ordinary course of business and on an arm s length basis, form AOC-2 is not applicable to the company.

Particulars of Loans, Guarantees or Investments under Section 186 of the Companies Act, 2013
The Company has made investments in body corporate(s) and in units of Schemes of Mutual Fund pursuant to Section 186 of the Companies Act, 2013. Details of the investments are provided hereunder category-wise viz. Body Corporate and others i.e. Mutual Funds:

Name of the Body Corporate	Amount/ Outstanding Amount (in Rs.)	Particulars of Loans, Guarantees and Investments	Purpose for which the Loan, Guarantee and investment are proposed to be utilised
HDFC Mutual Fund	513,37,94,188	Investments under different schemes of HDFC Mutual Fund	Investment of surplus funds
Fearing Capital India Evolving Fund	18,07,16,332	Venture Fund	Investment of surplus funds
National Highways Authority of India	6,18,09,000	Tax-free Secured Redeemable Non-Convertible Bonds - 8.20% 10-Year Plan	Investment of surplus funds
Indian Railway Finance Corporation Ltd.	16,31,31,000	Tax-free Secured Redeemable Non-Convertible Bonds - 8% 10-Year Plan	Investment of surplus funds
L&T Finance Holdings Ltd.	36,52,52,200	8.75% Cum Redeemable Preference Shares	Investment of surplus funds
Rural Electrification Corporation Ltd.	19,99,83,200	Tax-Free Secured Redeemable Non-Convertible Bonds 8.46% - 15 Years	Investment of surplus funds
Infrastructure Leasing & Financial Services Limited	40,00,00,000	16.06% Redeemable Preference Shares	Investment of surplus funds
MF Utilities India Pvt. Limited	5,00,000	Unlisted Equity Shares	Investment of surplus funds
Total	650,51,85,920

Note: Details of every investment made by the Company is mentioned in the financial statements.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
Your Company has a policy on Prevention of Sexual Harassment at Workplace aiming at prevention of harassment of employees and also lays down the guidelines for identification, reporting and prevention of undesired behaviour. 7 (seven) Internal Complaints Committees (ICC) comprising 6 (six) members each were constituted in accordance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 with women employees constituting majority. The ICC is responsible for redressal of complaints related to sexual harassment and follows the guidelines provided in the Policy. During the year, the ICCs did not receive any complaints pertaining to sexual harassment.

Deposits
During the year under review, the Company has not accepted any deposits as covered under Chapter V of the Companies Act, 2013.

Subsidiary Companies
There are no subsidiary or associate or joint venture companies during the year.

Particulars regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Expenditure
(a) Since the Company does not carry out any manufacturing activities, particulars required to be disclosed with respect to the conservation of energy and technology absorption in terms of Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 are not applicable.

(b) Foreign Exchange, earnings and expenditure during the year -
• Foreign exchange (earnings): Rs. 0.89 crore (previous year: Rs. 0.90 crore)
• Foreign exchange (expenditure): Rs. 71.68 crore (previous year: Rs. 54.35 crore) (including Equity Dividend)

Particulars of Employees
As on March 31, 2015, the Company has 613 employees and for the previous year, the Company had 625 employees.

Directors Responsibility Statement
In accordance with the provisions of Section 134(5) of the Companies Act, 2013 and based on the information provided by the management, your Directors state that:

(i) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(ii) Accounting policies selected were applied consistently. Reasonable and prudent judgments and estimates were made so as to give a true and fair view of the state of affairs of the Company at the end of March 31, 2015 and of the profit of the Company for year ended on that date;

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

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

(v) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Acknowledgements
The Directors acknowledge the valuable assistance, support and guidance given by the Securities and Exchange Board of India, Association of Mutual Funds of India, Reserve Bank of India, bankers, distributors, key partners, Investor Service Centres and other service providers. The Directors would like to convey their gratitude to Housing Development Finance Corporation Limited and Standard Life Investments Limited and look forward to their continued support.

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

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

On behalf of the Board of Directors
DEEPAK S. PAREKH
Chairman
(DIN: 00009078)
MUMBAI
April 21, 2015

ANNEXURE I

EXTRACT OF ANNUAL RETURN AS ON THE FINANCIAL YEAR ENDED ON MARCH 31, 2015

ANNEXURE I to the Directors’ Report is disclosed Seprately in the "Disclosure of extract of annual return as provided under section 92(3) [Text Block]" in XBRL document.

ANNEXURE II

NOMINATION & REMUNERATION POLICY

ANNEXURE II to the Directors’ Report is disclosed Seprately in the "Disclosure for companies covered under section 178(1) on directors appointment and remuneration including other matters provided under section 178(3) [Text Block]" in XBRL document.

ANNEXURE III
SECRETARIAL AUDIT REPORT

ANNEXURE III to the Directors’ Report is disclosed Seprately in the "Disclosure in secretarial audit report explanatory [Text Block]" in XBRL document .

ANNEXURE IV

ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY ACTIVITIES
As prescribed under Section 135 of the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules, 2014

ANNEXURE IV to the Directors’ Report is disclosed Seprately in the "Disclosure of corporate social responsibility explanatory [Text Block]" in XBRL document .

Since the Company does not carry out any manufacturing activities, particulars required to be disclosed with respect to the conservation of energy and technology absorption in terms of Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 are not applicable.

Since the Company does not carry out any manufacturing activities, particulars required to be disclosed with respect to the conservation of energy and technology absorption in terms of Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 are not applicable.

• Foreign exchange (earnings): Rs. 0.89 crore (previous year: Rs. 0.90 crore)
• Foreign exchange (expenditure): Rs. 71.68 crore (previous year: Rs. 54.35 crore) (including Equity Dividend)

In accordance with the provisions of Section 134(5) of the Companies Act, 2013 and based on the information provided by the management, your Directors state that:
(i) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(ii) Accounting policies selected were applied consistently. Reasonable and prudent judgments and estimates were made so as to give a true and fair view of the state of affairs of the Company at the end of March 31, 2015 and of the profit of the Company for year ended on that date;
(iii) Proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities;
(iv) The annual accounts of the Company have been prepared on a going concern basis;
(v) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.