hsbc asset management (india) private limited...5. performance of the schemes of hsbc mutual fund...

HSBC Asset Management (India) Private Limited

Annual Report 2015 - 2016

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DIRECTORS’ REPORT FOR THE YEAR ENDED MARCH 31, 2016

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, 2016.

1. FINANCIAL RESULTS

The performance of the Company during the financial year 2015-16 is summarized below: (Rupees in Million)

Particulars For the year ended 31.03.2016

For the year ended 31.03.2015

Total Income 935.024 868.894

Total Expenses 690.601 754.859

Profit / (Loss) before Tax and exceptional Item

244.423 114.035

Exceptional Items 45.000 -

Profit / (Loss) before Tax 289.423 114.035

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

(28.468) (8.907)

Profit/(Loss) After Tax 260.955 105.128

During the year under review, the Company made a net profit of Rs. 260.955 million as against net profit of Rs. 105.128 million during the previous year. 2. APPROPRIATIONS The Company does not propose to transfer any amount to the General Reserves. An amount of Rs. 261.454 million is proposed to be retained in the Statement of Profit and Loss. 3. DIVIDEND Considering the quantum of distributable surplus and contingent liabilities, the management of the Company does not intend to provide for dividend during the year. 4. OPERATIONS a) Mutual Fund During the year, the following schemes were launched /rolled over / matured by HSBC Mutual Fund

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Details of schemes launched

Scheme Name Date of Launch

HSBC Capital Protection Oriented Fund – Series II – Plan II

April 6, 2015

HSBC Fixed Term Series 125 March 14, 2016

HSBC Fixed Term Series 126 May 16, 2016

Details of schemes rolled-over

Scheme Name Date of roll-over

HSBC Fixed Term Series 105 April 8, 2015



HSBC Fixed Term Series 95 August 28, 2015

Details of schemes matured

Scheme Name Date of maturity

HSBC Fixed term Series 106 April 6, 2015

HSBC Fixed term Series 102 May 13, 2015

The Company earned Investment Management fees to the tune of Rs. 50.05 crores (net of Service Tax) for managing the assets of HSBC Mutual Fund. Also, Company earned advisory fees to the tune of Rs. 33.50 crores (net of Service Tax) from its advisory mandates under Mutual Fund licence. As on March 31, 2016, the Mutual Fund had asset under management of INR 7,436.82 crores under schemes of HSBC Mutual Fund and INR 15,128 crores under advisory mandate. 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, 2016, the PMS business had Assets under Management of INR 103,825.38 crores under discretionary mandate and INR 2,485.95 Crores under advisory mandate.

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5. Performance of the Schemes of HSBC Mutual Fund Equity Schemes

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. 567.22 crores as at March 31, 2016 as against Rs. 660.85 crores as at March 31, 2015. Around 97.98% of the net assets were invested in equities, 2.06% of the net assets were invested in reverse repos/CBLO and (-0.04%) in net current assets as at March 31, 2016.

HEF remained invested in a diversified portfolio across large capitalization stocks. It has outperformed its benchmark over the FY 2015-16 due to superior stock selection. Selections in sectors like Financials, Healthcare and Industrials contributed to the outperformance during this period. Given that HEF is a true large cap fund, we believe that Nifty 50 is a more aligned and representative index for the scheme. Hence, we are considering to change the scheme benchmark to Nifty 50 which in turn will provide more appropriate performance comparison to investors.

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

Scheme Name & Benchmarks April 15 - March 16

April 14 - March 15

April 13 - March 14

Since Inception

HEF – Growth -6.34 27.89 16.82 22.00

S&P BSE 200 (Scheme Benchmark) -7.86 31.72 16.65 17.40

Nifty 50 (Standard Benchmark) -8.86 26.33 17.53 16.07

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

9,366 12,789 11,682 142,040

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

9,214 13,172 11,665 85,036

Rs. 10,000, if invested in Nifty 50, would have become

9,114 12,633 11,753 73,047

Past performance may or may not be sustained in future. Returns data as on March 31, 2016. 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 and is used for comparison 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 India Opportunities Fund (HIOF) – an open-ended flexi-cap Equity Scheme HIOF seeks to generate long term capital growth through investments across all market capitalizations, including small, mid and large cap stocks. It aims to be predominantly invested in

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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. The net assets of HIOF amounted to Rs. 464.85 crores as at March 31, 2016 as compared to Rs. 456.15 crores as at March 31, 2015. Around 97.85% of the net assets were invested in equities, 2.41% of the net assets were invested in reverse repos/CBLO and (-0.26%) in net current assets as at March 31, 2016.

HIOF outperformed its benchmark over the FY 2015-16 due to superior stock selection. Selections in sectors like Healthcare, Financials, and Industrials also contributed to the outperformance during this period. HIOF is a true multi cap fund with large cap bias. Hence, we are considering changing the scheme benchmark to S&P BSE 200 as we believe it’s a more appropriate representative index and will provide investors with more apt performance comparisons.

Date Of Inception : 24 Feb 04 Absolute Returns (%) Compounded Annualized Returns (%)


April 14 - March 15

April 13 - March 14

Since Inception

HIOF – Growth -6.24 45.06 27.93 16.12



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

9,376 14,506 12,793 61,073


9,218 13,297 11,644 45,189


9,114 12,633 11,753 42,501

Past performance may or may not be sustained in future. Returns data as on March 31, 2016. 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 and is used for comparison 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 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. 360.31 crores as at March 31, 2016 as compared to Rs. 359.12crores as at March 31, 2015. Around 99.45 % of the net assets were invested in equities, 0.93% of the net assets were invested in reverse repos/CBLO and (-0.38%) in net current assets as at March 31, 2016.

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HMEF has done well in terms of outperformance v/s its benchmark due to stock selection across various sectors for long term periods. However, in FY 2015-16, BSE changed the components of its midcap index to a large mid cap bias companies that led to performance deviation (underperformance) in the scheme. Hence, we are considering a change in benchmark to a more representative index (Nifty Midcap) as the benchmark for this scheme. The focus on reasonable growth oriented companies available at attractive valuations (price to book ratio / return on equity) paid off over longer periods of outperformance v/s benchmark. HMEF continues to be overweight in Auto Ancillary, Agro Chemicals, Capital Goods, Financials, Industrials and underweight in FMCG sector.

Date Of Inception : 19 May 05 Absolute Returns (%) Compounded Annualized Returns (%)


April 14 - March 15

April 13 - March

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Since Inception

HMEF - Growth -2.67 66.69 28.40 9.37

S&P BSE Midcap (Scheme Benchmark) 0.25 49.48 13.86 8.93


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

9,733 16,669 12,840 26,481

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

10,025 14,948 11,386 25,342


9,114 12,633 11,753 31,394

Past performance may or may not be sustained in future. Returns data as on March 31, 2016. 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 and is used for comparison 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. On account of change in the index composition of the benchmark of HMEF (S&P BSE Midcap), vide BSE Notification dated 10 April, 2015, the returns for this benchmark are different when compared to the historically published returns. Further, as the index data for S&P BSE Midcap is available only from Sept 16, 2005, the 'Since inception' returns for both this index and the scheme have been calculated from this date onwards. HSBC Infrastructure Equity Fund (HIEF) – an open-ended equity Scheme* HIEF seeks to generate long term capital appreciation from an actively managed portfolio of equity and equity related securities by investing predominantly in equity and equity related securities of companies engaged in or expected to benefit from growth and development of Infrastructure in India.

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The net assets of HIEF amounted to Rs. 105.88 crores as at March 31, 2016 as compared to Rs. 145.82 crores as at March 31, 2015. Around 99.55% of the net assets were invested in equities, 1.25% of the net assets were invested in reverse repos/CBLO and (-0.70%) in net current assets as at March 31, 2016.

HIEF is a theme based scheme. The current benchmark of the scheme is S&P BSE 200 which is a diversified benchmark. The infrastructure theme underperformed the diversified benchmark as sectors like consumer, private retail banks and financials and auto sector did well v/s infrastructure sector in 2015-16 period. In order to better represent the scheme’s performance with this theme, we are considering a benchmark change for the scheme from S&P BSE 200 to BSE Infrastructure index.



April 14 - March 15

April 13 - March 14

Since Inception

HIEF – Growth -17.69 73.87 4.65 4.49



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

8,231 17,387 10,465 15,583


9,214 13,172 11,665 25,481


9,114 12,633 11,753 25,278

Past performance may or may not be sustained in future. Returns data as on March 31, 2016. 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 and is used for comparison 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 Progressive Themes Fund has been repositioned as HSBC Infrastructure Equity Fund with effect from October 14, 2015.

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. 161.21 crores as at March 31, 2016 compared to Rs 189.70 crores as at March 31, 2015. Around 98.81% of the net assets were invested in equities,

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1.00% of the net assets were invested in reverse repos/CBLO and 0.19% in net current assets as at March 31, 2016.

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/return on equity balanced by adequate risk management.

Date Of Inception : 05 Jan 07 Absolute Returns (%) Compounded Annualized Returns (%)


April 14 - March 15

April 13 - March 14

Since Inception

HTSF – Growth -5.14 39.09 22.52 10.61



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

9,486 13,909 12,252 25,409


9,214 13,172 11,665 19,598


9,114 12,633 11,753 19,430


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. 53.41 crores as at March 31, 2016 compared to Rs. 63.19 crores as at March 31, 2015. Around 80.78% of the net assets were invested in equities, 20.23% of the net assets were invested in reverse repos/CBLO and (-1.01%) in net current assets as at March 31, 2016.

HDF has outperformed its benchmark over the FY 2015-16 due to high cash balance and superior stock selection. The scheme allocates capital across equity and debt securities dynamically. In a year when equity market was down, approximately 22% allocation to cash (full year average) had a positive impact on attribution. In addition, selections in sectors like Financials, Energy, Materials, Healthcare, and Technology contributed to the outperformance during FY 2015-16.

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Date Of Inception : 24 Sep 07 Absolute Returns (%) Compounded Annualized Returns (%)


April 14 - March 15

April 13 - March 14

Since Inception

HDF – Growth -3.32 23.22 13.20 3.44



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

9,668 12,322 11,320 13,339


9,214 13,172 11,665 15,742


9,114 12,633 11,753 15,692


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

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

The net assets of HDYEF amounted to Rs. 38.52 crores as at March 31, 2016 compared to Rs. 48.27 crores as at March 31, 2015. Around 98.98 % of the net assets were invested in equities, 1.06% of the net assets were invested in reverse repos/CBLO and (-0.58%) in net current assets as at March 31, 2016.

The scheme under-performed its benchmark due to overweight position in energy and underweight position in pharma and financial sector. Going forward, the scheme will continue to be invested in companies offering attractive dividend yields along with profitability and valuation framework.

Date Of Inception : 21 Mar 07 Absolute Returns (%) Compounded Annualized Returns (%)


April 14 - March 15

April 13 - March 14

Since Inception

HDYEF – Growth -8.06 33.35 17.03 4.89



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Date Of Inception : 21 Mar 07 Absolute Returns (%) Compounded Annualized Returns (%)


April 14 - March 15

April 13 - March 14

Since Inception

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

9,194 13,335 11,703 15,402


9,214 13,172 11,665 21,177


9,114 12,633 11,753 20,560

Past performance may or may not be sustained in future. Returns data as on March 31, 2016. 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 and is used for comparison 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. Debt Schemes

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. 77.65 crores as at March 31, 2016 as compared to Rs. 104.89 crores as at March 31, 2015. Around 95.33% of the net assets was invested in debt and money market instruments, 1.13% of the net assets was invested in reverse repos/CBLO and 3.54 % in net current assets as at March 31, 2016. The net assets of HSBC Income Fund – Short Term Plan (HIF – STP) amounted to Rs. 1453.82 crores as at March 31, 2016 as compared to Rs. 1,309 crores as at March 31, 2015. Around 98.07% of the net assets were invested in debt and money market instruments, 1.06% of the net assets were invested in reverse repos/CBLO and 0.87% in net current assets as at March 31, 2016. HIF-IP underperformed its scheme’s benchmark due to higher duration calls taken during the year. The volatility in G-Sec markets, supply of UDAY bond and anticipation of US rate hikes also led to underperformance of the scheme.

HIF-STP underperformed its scheme’s benchmark due to lower duration calls taken during the year. The increased market volatility on supply of UDAY Bonds and Fed hike also led to underperformance of the scheme.

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HIF – IP



April 14 - March 15

April 13 - March

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Since Inception

HIF IP - Regular Plan – Growth 4.90 14.88 1.85 7.11

Crisil Composite Bond Fund Index (Scheme Benchmark)

8.22 14.60 4.34 6.55

Crisil 10 Year Gilt Index (Standard Benchmark)

7.95 14.58 -0.79 5.94

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

10,490 11,488 10,185 24,970

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

10,822 11,460 10,434 23,277

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

10,795 11,458 9,921 21,564

HIF – STP



April 14 - March 15

April 13 - March 14

Since Inception

HIF - STP – Regular Plan – Growth 7.42 9.95 7.23 7.08

Crisil Short Term Bond Fund Index (Scheme Benchmark) 8.44 10.33 8.79 7.04

Crisil 1 Year T-Bill Index (Standard Benchmark) 7.67 8.74 5.78 5.85

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

10,742 10,995 10,723 24,860

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

10,844 11,033 10,879 24,760

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

10,767 10,874 10,578 21,320


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

HFRF - LTP 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. 25.48 crores as at March 31, 2016 as compared to Rs. 55.23 crores as at March 31, 2015. Around 57.20% of the net assets was invested in money market instruments, 43.21% was invested in reverse repos/CBLO and (-0.41%) in net current assets as at March 31, 2016.

HFRF-LTP underperformed the scheme’s benchmark due to lower duration calls taken during the year by the scheme. The increased market volatility on supply of UDAY Bonds and Fed hike also led to underperformance of the scheme.

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


April 14 - March 15

April 13 - March

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Since Inception

HFRF- LTP - Regular Plan – Growth 7.66 8.73 9.21 7.77

Crisil Liquid Fund Index (Scheme Benchmark) 8.03 8.97 9.46 7.23


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

10,766 10,873 10,921 23,432

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

10,803 10,897 10,946 22,136


10,767 10,874 10,578 19,647

Past performance may or may not be sustained in future. Returns data as on March 31, 2016. 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 and is used for comparison 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 Floating Rate Fund - Long Term Plan has been merged with HSBC Ultra Short Term Bond Fund effective from May 25, 2016.

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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. 1,359.41 crores as at March 31, 2016 as compared to Rs. 1,386.08 crores as at March 31, 2015. The entire net asset remains invested in debt and money market instruments including reverse repos/CBLO as at March 31, 2016. HCF performed in line with its benchmark for FY 2015-2016 due to conservative investments in line with the internal group guidelines and the focus being on accruals and credit.

Past performance may or may not be sustained in future. Returns data as on March 31, 2016. 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 and is used for comparison 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. Pursuant to SEBI circular dated Sept 13, 2012, certain plans/options within the schemes have been discontinued to

Date Of Inception : 04 Dec 02

Simple Annualized Returns (%) Absolute Returns (%) Compounded Annualized (%)

Scheme Name & Benchmarks

Last 7 Days as on 31 March 2016



April 15 - March 16

April 14 - March 15

Since Inception

HCF – Growth 11.00 9.59 8.72 8.14 8.95

8.80

Crisil Liquid Fund Index (Scheme Benchmark)

14.43 10.94 9.82 8.03 8.97

8.66

Crisil 91 Day T-Bill Index (Standard Benchmark)

7.29 7.40 7.15 7.81 8.84

8.28

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

10,021 10,039 10,072 10,814 10,895

15,087

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

10,028 10,045 10,081 10,803 10,897

14,987

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

10,014 10,030 10,059 10,781 10,884

14,734

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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 HCF however is December 04, 2002.

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. 432.41 crores as at March 31, 2016 as compared to Rs. 197.7 crores as at March 31, 2015. Around 100.21% of the net assets was invested in debt and money market instruments, 5.20% was invested in reverse repos/CBLO and (-5.41%) in net current assets as at March 31, 2016.

HUSBF underperformed its scheme’s benchmark due to lower duration view that the scheme has taken during the year. The increased market volatility on supply of UDAY Bonds and Fed hike also led to underperformance of the scheme.

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

Compounded Annualized Returns (%)


April 14 - March 15

April 13 - March

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Since Inception

HUSBF – Regular Plan – Growth 7.88 9.04 9.04 8.65

Customised Benchmark Index Fund (Scheme Benchmark)*

8.08 9.11 8.60 8.74

Crisil 1 Year T-Bill Index (Standard Benchmark)

7.67 8.74 5.78 7.51

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

10,788 10,904 10,904 21,167

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

10,808 10,911 10,860 21,333


10,767 10,874 10,578 19,247

Past performance may or may not be sustained in future. Returns data as on March 31, 2016. 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 and is used for comparison 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. 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

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calculating performance ‘Since Inception’. The inception date of HUSBF however is October 17, 2006. *Composite index of Crisil Liquid Fund Index (90%) and Crisil Short Term Bond Fund Index (10%).

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. 456.19 crores as at March 31, 2016 as compared to Rs.559.77 crores as at March 31, 2015. Around 97.18% of the net assets was invested in debt and money market instruments, 0.12% was invested in reverse repos/CBLO and 2.70% in the net current assets as at March 31, 2016.

HFDF underperformed its scheme’s benchmark due to higher duration calls taken during the year. The volatility in G-Sec markets, supply of UDAY bond and anticipation of US rate hikes also led to underperformance of the scheme.

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


April 14 - March 15

April 13 - March 14

Since Inception

HFDF- Regular Plan – Growth Optioj 5.03 14.56 3.69 8.68

Crisil Composite Bond Fund Index (Scheme Benchmark) 8.22 14.60 4.34 7.66

Crisil 10 Year Gilt Index (Standard Benchmark) 7.95 14.58 -0.79 6.81

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

10,503 11,456 10,369 20,288

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

10,822 11,460 10,434 18,719


10,795 11,458 9,921 17,503

Past performance may or may not be sustained in future. Returns data as on March 31, 2016. 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 and is used for comparison 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 Gilt Fund (HGF) – an open ended Gilt Scheme: During the year, HGF did not meet the minimum Average AUM of Rs. 20 Crores mandated under SEBI Circular no. Cir/ IMD/ DF/ 15 /2014

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dated June 20, 2014 on requirement of minimum assets under management of debt oriented schemes. Hence, as required under the circular, AMC took steps to wound up the scheme on December 1, 2015. As the scheme is no longer in existence, the performance has not been provided.

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. 84.82 crores as at March 31, 2016 as compared to Rs. 93.47 crores as at March 31, 2015. Around 82.24% of the net assets were invested in debt and money market instruments, 14.68% of the net assets was invested in equities and 3.08% in net current assets as at March 31, 2016. The net assets of HMIP – Savings Plan (HMIP – S) amounted to Rs. 213.78% crores as at March 31, 2016 as compared to Rs. 190.68 crores as at March 31, 2015. Around 72.64% of the net assets were invested in debt and money market instruments, 25.02% of the net assets were invested in equities and 2.34% were in net current assets as at March 31, 2016.

HMIP-R underperformed its scheme’s benchmark due to lower duration view that the scheme has taken during the year. The volatility in G-Sec markets, supply of UDAY bond and anticipation of US rate hikes led to underperformance of the scheme. Further, the underperformance of HMIP-R was also due to lower exposure in equity. HMIP-S underperformed its benchmark due to lower duration view that the scheme has taken during the year. The volatility in G-Sec markets, supply of UDAY bond and anticipation of US rate hikes also led to underperformance of the scheme. . HMIP – Regular Plan

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


April 14 - March 15

April 13 - March 14

Since Inception

HMIP - Regular Plan – Growth 2.73 15.60 6.60 7.88

Crisil MIP Blended Index (Scheme Benchmark) 5.47 16.42 6.42 7.74



16

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

10,273 11,560 10,660 25,055

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

10,547 11,642 10,642 24,670


10,767 10,874 10,578 20,015


10,795 11,458 9,921 18,767

Past performance may or may not be sustained in future. Returns data as on March 31, 2016. 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 and is used for comparison 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 14 - March 15

April 13 - March

14

Since Inception

HMIP - Savings Plan - Growth 2.31 18.57 8.99 9.43

Crisil MIP Blended Index (Scheme Benchmark) 5.47 16.42 6.42 7.74



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

10,231 11,857 10,899 29,785

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

10,547 11,642 10,642 24,670


10,767 10,874 10,578 20,015


10,795 11,458 9,921 18,767


17

HSBC Fixed Term Series – close ended income schemes 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

HSBC Fixed Term Series 125 March 14, 2016

HSBC Fixed Term Series 126 May 16, 2016

Details of schemes rolled-over during the period

Scheme Name Date of roll-over




HSBC Fixed Term Series 95 August 28, 2015

Being close ended fixed maturity plans, the performance of these schemes are not provided. 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 FY 2015-2016, the scheme launched one plan namely, HSBC Capital Protection Oriented Fund – Series II – Plan II having tenure of 1173 days. HSBC Capital Protection Oriented Fund – Series II – Plan II was launched on April 6, 2015. The performance of the scheme is benchmarked against CRISIL MIP Blended Index. Being close ended scheme, the performance of the scheme is not provided.

Fund of Funds Schemes 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. 8.76 crores as at March 31, 2016 compared to Rs. 10.79 crores as at March 31, 2015. Around 97.47% of the net assets were invested in HSBC GEM Equity Fund (overseas mutual fund), 3.39%% of the net assets were invested in reverse repos/CBLO and (-0.86%) in net current assets as at March 31, 2016. The underlying fund has largely performed in line with the scheme’s benchmark during FY 2015-16 due to combination of factors relating to allocation and stock selection.

18

Date Of Inception : 17 Mar 08 Absolute Returns (%) Compounded Annualized (%)


April 14 - March 15

April 13 - March

14

Since Inception

HEMF - Growth -9.96 4.55 3.94 0.35

MSCI Emerging Market Index (Scheme Benchmark) -9.92 7.64 0.81 0.59


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

9,004 10,455 10,394 10,286

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

9,008 10,764 10,081 10,482


9,114 12,633 11,753 17,188


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.26.20 crores as at March 31, 2016 compared to Rs. 36.23 crores as at March 31, 2015. Around 99.67 % of the net assets were invested in HSBC Brazil Equity Fund (overseas mutual fund), 16.38% of the net assets were invested in reverse repos/CBLO and (-16.05%) in the net current assets as at March 31, 2016.

The underlying fund has largely performed in line with the scheme’s benchmark during FY 2015-16 due to combination of factors relating to allocation and stock selection.

19

Date Of Inception : 06 May 11 Absolute Returns (%) Compounded Annualized (%)


April 14 - March 15

April 13 - March 14

Since Inception

HBZ – Growth -13.85 -28.85 -11.37 -12.27

MSCI Brazil 10/40 Index (Scheme Benchmark) -13.37 -29.37 -14.46 -16.98


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

8,615 7,115 8,863 5,258

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

8,663 7,063 8,554 4,011


9,114 12,633 11,753 13,942

Past performance may or may not be sustained in future. Returns data as on March 31, 2016. 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 and is used for comparison 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 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. 14.88 crores as on March 31, 2016 as compared to 30.18 crores as at March 31, 2015. Around 99.10 % of the net assets were invested in HSBC Global Investment Funds (HGIF) Asia Pacific Ex Japan Equity High Dividend Fund (overseas mutual fund), 2.32% of the net assets were invested in reverse repos/CBLO and (-1.42%) in net current assets as at March 31, 2016. HAPDF outperformed its scheme benchmark during the FY 2015-16 mainly on account of depreciation of the INR vis-à-vis the USD and stock selection.

20



April 14 - March 15

Since Inception

HAPDF – Growth -6.10 6.87 -0.41

MSCI AC Asia Pacific ex Japan (Scheme Benchmark)

-14.12 2.65 -4.39

Nifty 50 (Standard Benchmark) -8.86 26.33 11.26

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

9,390 10,687 9,913

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

8,588 10,265 9,100


9,114 12,633 12,513

Past performance may or may not be sustained in future. Returns data as on March 31, 2016. 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 and is used for comparison 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 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 – Conservative Plan, Growth Plan and the Moderate Plan. The plans under the Scheme will invest predominantly in the existing and / or prospective schemes of HSBC Mutual Fund, units of third party domestic mutual funds, units of offshore equity oriented funds managed by HSBC Global Asset Management, gold ETFs and other ETFs of third parties until such time that the Fund doesn’t have such scheme offerings. The net assets of HMS – Conservative Plan amounted to Rs. 311.75 crores as at March 31, 2016 as compared to Rs. 296.71crores as at March 31, 2015. Around 98.71% of the net assets was invested in mutual fund schemes, 2.11% of the net assets was invested in reverse repos/CBLO and (-0.82%) in net current assets as at March 31, 2016. The net assets of HMS – Growth Plan amounted to Rs. 125.16 crores as at March 31, 2016 as compared to Rs. 126.83 crores as at March 31, 2015. Around 98.78% of the net assets were invested in Mutual fund schemes, 1.14% of the net assets were invested in reverse repos/CBLO and 0.08% in net current assets as at March 31, 2016. The net assets of HMS – Moderate Plan amounted to Rs. 192.80 crores as at March 31, 2016 as compared to Rs. 238.82 crores as at March 31, 2015. Around 99.52% of the net assets were invested in mutual fund schemes, 1.56% of the net

21

assets were invested in reverse repos/CBLO and (-1.08%) in net current assets as at March 31, 2016. 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 CRISIL 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. HMS – Growth Plan and Moderate Plan outperformed the benchmark index due to allocation effect. HMS Conservative underperformed due to higher allocation to equity during the year as equity asset class underperformed. HMS - Growth

Date Of Inception : 24 Feb 14 Absolute Returns (%)


Scheme Name & Benchmarks April 15 - March 16 Since Inception

HMS - Growth Plan – Growth -1.60 12.63

Customised Benchmark Index Fund (Scheme Benchmark)

-4.64 10.70

Nifty 50 (Standard Benchmark) -8.86 7.82

Crisil 10 Year Gilt Index (Standard Benchmark) 7.97 11.39

Rs. 10,000, if invested in HMS- Growth, would have become

10,160 12,570


9,536 12,160


9,114 11,558


10,797 12,304

HMS - Moderate




HMS – Moderate Plan – Growth 0.66 11.70

Crisil Balanced Fund Index (Scheme Benchmark)

-2.90 9.31



Rs. 10,000, if invested in HMS – Moderate , would have become

10,066 12,372

22




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

9,710 11,866


9,114 11,558


10,797 12,304

HMS - Conservative




Since Inception

HMS - Conservative Plan - Growth 4.97 10.11

Customised Benchmark Index Fund (Scheme Benchmark)

6.63 11.21



Rs. 10,000, if invested in HMS – Conservative, would have become

10,497 12,035


10,663 12,268


9,114 11,558


10,797 12,304

Past performance may or may not be sustained in future. Returns data as on March 31, 2016. 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 and is used for comparison 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 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

23

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 HGCOF amounted to Rs.10.51 crores as at March 31, 2016 as compared to 22.27 crores as on March 31, 2015. Around 98.68 % of the net assets were invested in HSBC Global Consumer Opportunities Fund (overseas mutual fund), 2.64% of the net assets were invested in reverse repos/CBLO and (-1.32%) in net current assets as at March 31, 2016. The scheme outperformed its scheme benchmark during the period 2015-16 mainly on account of depreciation of the INR vis-à-vis the USD and stock selection.




Since Inception

HGCOF – Growth -4.09 -4.81

MSCI AC World Index (Scheme Benchmark)

-6.24 -7.04

Nifty 50 (Standard Benchmark) -8.86 -10.60

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

9,591 9,471

Rs. 10,000, if invested in MSCI AC World Index, would have become

9,376 9,225


9,114 8,836

Past performance may or may not be sustained in future. Returns data as on March 31, 2016. 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 and is used for comparison 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. 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 8 locations at its own offices - namely Mumbai, New Delhi, Kolkata, Bangalore, Pune, Ahmedabad, Hyderabad and Chennai. With a view to enhance customer convenience, the AMC has the facility of priority based servicing to key distributors through the enhancement of the Interactive Voice Reponses. AMC has a single Toll Free number which can be dialed from anywhere in India. The call center service is

24

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 442 as on March 31, 2016. 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 2015-16, five meetings of the Board of Directors of the Company were held on the following dates:

Date of Board Meeting Directors present

April 24, 2015 Ms. Kishori Udeshi Mr. S. P. Mustafa Mr. Ravi Menon

July 15, 2015 Ms. Kishori Udeshi Mr. Dinesh Mittal Mr. Puneet Chaddha Mr. S. P. Mustafa Mr. Ravi Menon

August 24, 2015 Ms. Kishori Udeshi Mr. Dinesh Mittal Mr. Puneet Chaddha Mr. S. P. Mustafa Mr. Ravi Menon

November 27, 2015 Ms. Kishori Udeshi Mr. Dinesh Mittal Mr. Puneet Chaddha Mr. S. P. Mustafa Mr. Ravi Menon

February 22, 2016 Ms. Kishori Udeshi Mr. Puneet Chaddha Mr. S. P. Mustafa Mr. Ravi Menon

25

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, 2016 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. 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 25 and 24 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

26

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. 1st 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. 2nd 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. 3rd Line: is Global Internal Audit. Global Internal Audit provides independent assurance to the Group 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 practice 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, Liquidity 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 team also actively participates on various other Governance Forums like Investment Management Committee, Valuation Committee, Local Product Committee etc.

Risk Measurement

Risk Monitoring Management

Risk Adjusted Performance Measurement

Risk Governance

Integrated Risk

Management

Risk Identification

27

14. DIRECTORS AND KEY MANAGERIAL PERSONNEL Mr. Ravi Menon was appointed as a Director of the Company with effect from April 24, 2015. Mr. Menon was appointed as the Chief Executive Officer (CEO) of the Company with effect from February 01, 2016 in place of Mr. Puneet Chaddha who resigned as the CEO of the Company with effect from October 31, 2015. Mr. Chaddha resigned from the directorship of the Company with effect from May 24, 2016. 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. 15. DEPOSITS The Company has not accepted any deposits from the public or employees during the year under review. 16. SIGNIFICANT AND MATERIAL ORDERS

During the period, there were no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company’s operations in future.

17. AUDITORS

M/s. Price Waterhouse LLP, Chartered Accountants (Firm Registration No. F012754N/N500016), Mumbai, had been appointed as Auditors of the Company at the Annual General Meeting (AGM) held on September 16, 2015, for a period of five years, subject to ratification by the Members at each AGM. The Auditors have confirmed that their appointment is in accordance with the Section 139 of the Companies Act, 2013 and the Rules made thereunder and that they are not disqualified in terms of section 141 of the Companies Act, 2013. The Board recommends ratification of the approval to appoint M/s. Price Waterhouse LLP, Chartered Accountants, as Auditors of the Company for financial year 2016 -17 to the Members at the ensuing AGM.

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

28

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. 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 Ravi Menon Chairperson Director & Chief Executive officer Place: Mumbai Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

29

Annexure A

EXTRACT OF ANNUAL RETURN as on the financial year ended 31.03.2016

[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 53.53%

2. Advisory/Sub Advisory Group 663 39.33%

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 U67120MH1994PTC081575 Holding 100.00 2(46)

30

Sr. No.

Name and address of the Company

CIN / GLN Holding / Subsidiary / Associate

% of shares held

Applicable Section

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

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

6,15,909,06

2 6,15,909,08

100.00 6,15,909,06

2 6,15,909,08

100.00 -

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

f) Any Other…. - - - - - - - - -

Sub-Total (A)(1): 6,15,909,06

2 6,15,909,08

100.00 6,15,909,06

2 6,15,909,08

100.00 -

2) Foreign

a) NRIs – Individuals

- - - - - - - - -

b) Other – - - - - - - - - -

31

Individuals

c) Bodies Corporate

- - - - - - - - -

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

e) Any Other…. - - - - - - - - -

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

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

6,15,909,06

2 6,15,909,08

100.00 6,15,909,06

2 6,15,909,08

100.00 -

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

- - - - - - - - -

32

c) Others (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)

6,15,909,06

2 6,15,909,08

100.00 6,15,909,06

2 6,15,909,08

100.00 -

(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 share

% of Shares Pledged /

No. of Shares

% of total share

% of Shares Pledged /

33

s of the Company

encumbered to total shares

s of the Company

encumbered to total shares

HSBC Securities and Capital Markets (India) Private Limited

6,15,909,08 100.00 Nil 6,15,909,08 100.00 Nil -

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


Cumulative Shareholding during the year

No. of Shares

% of total shares of the Company

No. of Shares


At the beginning of the year No change during the year

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

No change during the year

At the end of the year No change during the year

(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

34

Secured Loans excluding deposits

Unsecured Loans

Deposits Total Indebtedness

Indebtedness at the beginning of the financial year

i. Principal Amount

8,352,021 - - 8,352,021

ii. Interest due but not paid

- - - -

iii. Interest accrued but not due

- - - -

Total (i+ii+iii) 8,352,021 - - 8,352,021

Change in Indebtedness during the financial year

Addition 1,596,566 - - 1,596,566

Reduction 4,135,329 - - 4,135,329

Net Change 2,538,763 - - 2,538,763

Indebtedness at the end of the financial year

i. Principal Amount

5,813,258 - - 5,813,258

ii. Interest due but not paid

- - - -

iii. Interest accrued but not due

- - - -

Total (i+ii+iii) 5,813,258 5,813,258

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

35

Sr. No.

Particulars

Name of Director Total Amount Dinesh

Kumar Mittal S. P. Mustafa Kishori

Udeshi

1 Fee for attending Board/Committee Meetings

90,000 150,000 170,000 410,000

2 Commission - - -

3 Others, please Specify

- - -

Total 90,000 150,000 170,000 410,000

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

Penalty Nil

Punishment

Compounding

B. DIRECTORS

Penalty Nil

Punishment

Compounding

C. OTHER

OFFICERS IN

DEFAULT

Penalty Nil

Punishment

Compounding

Sd/- Sd/- Kishori Udeshi Ravi Menon Chairperson Director & Chief Executive officer Place: Mumbai

36

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 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

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

between AMIN & HSCI wherein HSCI provided IT enabled services.

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

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

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

(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

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

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

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

37

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

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.

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

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

*Ministry of Corporate Affairs (MCA) had vide its notification dated June 05, 2015 (effective from July 05, 2015) modified the definition of related party for Private Companies to exempt its Holding, Subsidiary or an Associate Company from the scope of related party. Pursuant to aforesaid MCA circular, HSBC Electronic Data Processing (India) Private Limited is not a related party of AMIN. The above details of the said contract / agreement is forming part of this report since the approval was obtained from Board in April 2015. Sd/- Sd/-

Kishori Udeshi Ravi Menon Chairperson Director & Chief Executive officer Place: Mumbai


Balance Sheet (All amounts in thousands of Indian Rupees unless otherwise stated)

Note March 31, 2016 March 31, 2015

EQUITY AND LIABILITIES

Shareholders' funds

Share capital 3 615,909 615,909

Reserves and surplus 4 370,940 109,985

Non-current liabilities

Long-term borrowings 5 3,564 5,484

Deferred tax liabilities (net) 6 - -

Long-term provisions 7 20,497 19,079

Current liabilities

Trade payables 8

(a) Total outstanding dues of micro enterprises and small enterprises and - -

- -

(ii) Others 64,286 110,837 Other current liabilities 9 91,640 93,214

Short-term provisions 10 10,686 10,260

TOTAL 1,177,522 964,768

ASSETS

Non-current assets

Fixed assets 11

Tangible assets 31,672 22,375

Intangible assets 4,344 1,309

Non-current investments 12 103,152 2,437

Long-term loans and advances 13 375,577 388,528

Current assets

Current investments 14 456,834 304,130

Trade receivables 15 135,880 140,864

Cash and bank balances 16 20,202 55,694

Short-term loans and advances 17 49,861 49,431

TOTAL 1,177,522 964,768

The accompanying notes are an integral part of the financial statements.

This is the Balance Sheet referred to in our report of even date.

For Price Waterhouse Chartered Accountants LLP For and on behalf of the Board of Directors of

Firm's Registration No: 012754N/N500016 HSBC Asset Management (India) Private Limited

Chartered Accountants

sd/- sd/- sd/-

Vivek Prasad Kishori J Udeshi Ravi Menon

Partner Chairperson Director &

Membership No: 104941 DIN No: 01344073 Chief Executive Officer

DIN No: 00016302

sd/- sd/-

Denny Thomas Amit Deshmukh

Company Secretary Chief Financial Officer

CS No: 17104

Place : Mumbai Place : Mumbai

Date : August 29, 2016 Date : August 29, 2016

As at

(b) Total outstanding dues of creditors other than micro enterprises and small

enterprises

(i) Acceptances


Statement of Profit and Loss(All amounts in thousands of Indian Rupees unless otherwise stated)

Note March 31, 2016 March 31, 2015

REVENUE

Revenue from operations 18 876,756 841,272

Other income 19 58,268 27,622

Total revenue 935,024 868,894

EXPENSES

Employee benefits expense 20 413,717 410,306

Finance costs 21 1,088 1,022

Depreciation and amortisation 11 16,839 19,240

Other expenses 22 258,957 324,291

Total expenses 690,601 754,859

Profit before exceptional items and tax 244,423 114,035

Exceptional items 23 45,000 -

Profit before tax 289,423 114,035

Tax expense:

Current tax (61,768) (8,907)

Less : MAT Credit Entitlement 52,731 -

Net Current tax (9,037) (8,907)

Short provision for earlier years (19,431) -

Profit for the year 260,955 105,128

Earnings per equity share [Nominal value per share Rs 10 (previous year Rs.10)]

Basic and diluted 27 4.24 1.76

The accompanying notes are an integral part of the financial statements.

This is the Statement of Profit and Loss referred to in our report of even date.




sd/- sd/- sd/-




DIN No: 00016302

sd/- sd/-



CS No: 17104



For the year ended


Cash Flow Statement (All amounts in thousands of Indian Rupees unless otherwise stated)

March 31, 2016 March 31, 2015

A Cash flow from operating activities

Profit before tax 289,423 114,035

Adjustments for

Depreciation and amortisation 16,839 19,240

Finance costs 1,088 1,022

Profit on sale of fixed assets (237) (226)

Unrealised foreign exchange (gain)/ loss 1,330 (1,275)

Gain from redemption of Non-current Investments (7) -

Gain from redemption of Current Investments (26,105) (22,146)

(7,092) (3,385)

Operating profit before working capital changes 282,331 110,650

Adjustments for :

(Decrease) / Increase in Long term provisions 1,417 4,903

(Decrease) / Increase in Trade payable (46,254) (38,491)

(Decrease) / Increase in Other current liabilities (954) 13,556

(Decrease) / Increase in Short term provisions 426 2,149

Decrease / (Increase) in Long-term loans and advances 2,429 (1,785)

Decrease / (Increase) in Trade receivables 3,358 31,280

Decrease / (Increase) in Short-term loans and advances (430) (4,045)

Cash generated from / (used in) operations 242,323 118,217

Taxes paid (Net off refund) (17,945) (1,777)

Net cash generated by operating activities ( A ) 224,378 116,440

B Cash flow from investing activities

Purchase of fixed assets (30,104) (19,300)

Proceeds from sale / (cost incurred for sale) of fixed assets 1,169 1,876

Purchase of Non-current investments (100,947) (2,437)

Proceeds from redemption of Non-current Investments 239 -

Purchase of Current investments (877,000) (844,300)

Proceeds from redemption of Current investments 750,400 712,100

Net cash (used) in investing activities ( B ) (256,243) (152,061)

C Cash flow from financing activities

Principal payment under finance leases (4,136) (4,854)

Proceeds from finance leases 1,597 6,428

Finance cost paid (1,088) (1,022)

Proceeds from issue of equity shares - 89,652

Net cash (used) in / generated by financing activities ( C ) (3,627) 90,204

Net Increase / (Decrease) in cash and cash equivalents (A) + (B) + (C) (35,492) 54,583

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

Cash and cash equivalents at the end of the year 20,202 55,694

For the year ended


Cash Flow Statement (All amounts in thousands of Indian Rupees unless otherwise stated)

Notes to Cash Flow Statement :

1. Cash and cash equivalents includes the following:

Cash on hand 12 50

Balances with scheduled banks

In current accounts 20,190 55,644

20,202 55,694

2. The above Cash Flow Statement has been prepared under the indirect method set out in Accounting Standard 3 issued by The Institute

of Chartered Accountants of India.

3. Figures in bracket indicate cash outflow.

This is the Cash Flow Statement referred to in our report of even date.




sd/- sd/- sd/-




DIN No: 00016302

sd/- sd/-



CS No: 17104




Notes to the financial statements for the year ended March 31, 2016 (Continued)

(All amounts in thousands of Indian Rupees unless otherwise stated)

1. Background

2. Summary of significant accounting policies

2.1 Basis of preparation

2.2 Use of estimates

2.3 Fixed assets and depreciation

Tangible assets:

Intangible assets:

Depreciation and amortisation:

Gains or losses arising from the retirement or disposal of an intangible asset are determined as the difference between the net disposal proceeds and the

carrying amount of the asset and recognised as income or expense in the Statement of Profit and Loss.

Losses arising from the retirement of, and gains or losses arising from disposal of fixed assets which are carried at cost or revalued amount are recognised

in the Statement of Profit and Loss.

HSBC Asset Management (India) Private Limited ("the Company") was incorporated on December 12, 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 February 7, 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 September 15, 2017 and to be renewed thereafter. It

provides discretionary and advisory Portfolio Management Services (PMS) to its clients. The Company also provides sub-advisory non binding services to

its group entities.

These financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost

convention on accrual basis to comply in all material aspects with the accounting standards specified under section 133 of the Companies Act, 2013 read

with Rule 7 of the Companies (Accounts) Rules, 2014 and other provisions of the Companies Act, 2013.

All assets and liabilities have been classified as current or non-current as per the Company’s normal operating cycle and other criteria set out in the

Schedule III to the Companies Act, 2013. Based on the nature of services and the time between their realisation in cash and cash equivalents, the Company

has ascertained its operating cycle as 12 months for the purpose of current and non-current classification of assets and liabilities.

The Ministry of Corporate Affairs (MCA) has notified the Companies (Accounting Standards) Amendment Rules, 2016 vide its notification dated March

30, 2016. The said notification read with Rule 3(2) of the Companies (Accounting Standards) Rules, 2006 is applicable to accounting period commencing

on or after the date of notification i.e. April 01, 2016.

The preparation of financial statements in conformity with the Generally Accepted Accounting Principles requires management to make certain estimates

and assumptions that affect reported amount of assets, liabilities, revenue and expenses (including disclosure of contingent liabilities) as on the date of the

financial statements and the reported income and expenses during the reporting period. The estimates and assumptions used in the accompanying financial

statements are based on management’s evaluation of the relevant facts and circumstances as of the date of the financial statements. Actual results may

differ from those estimates. Any revisions to accounting estimates are recognised prospectively in current and future periods.

Tangible Assets are stated at acquisition cost, net of accumulated depreciation and accumulated impairment losses.

Subsequent expenditures related to an item of fixed asset are added to its book value only if they increase the future benefits from the existing asset beyond

its previously assessed standard of performance.

Items of fixed assets that have been retired from active use and are held for disposal are stated at the lower of their net book value and net realisable value

and are shown separately in the financial statements under the head ‘Other current assets’. Any expected loss is recognised immediately in the Statement of

Profit and Loss.

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

on a straight line basis over their estimated useful lives. A rebuttable presumption that the useful life of an intangible asset will not exceed ten years from

the date when the asset is available for use is considered by the management. The amortisation period and the amortisation method are reviewed at least at

each financial year end. If the expected useful life of the asset is significantly different from previous estimates, the amortisation period is changed

accordingly.

Depreciation has been provided on a straight line basis from the date when the asset is ready for use. The rates of depreciation prescribed in Schedule II to

the Companies Act, 2013 are considered as the minimum rates. If the management’s estimate of the asset or of the remaining useful life of fixed assets on

subsequent review is shorter than envisaged in the aforesaid schedule, depreciation is provided at a higher rate based on the management’s estimate of

useful life/ remaining useful life.

Assets, each costing Rs.5,000 or less are depreciated at 100% in the year of capitalisation.




Usefule life of the Fixed Assets is estimated as under :

2.4 Impairment of assets

2.5 Revenue Recognition

2.6

2.7 Investments

2.8 Foreign currency transactions

Initial Recognition

On initial recognition, all foreign currency transactions are recorded by applying to the foreign currency amount the exchange rate between the reporting

currency and the foreign currency at the date of the transaction.

Exchange differences on restatement of all other monetary items are recognised in the Statement of Profit and Loss.

* For these classes of assets, based on internal assessment and technical evaluation, the management believes that the useful lives as given above best

represents the period over which management expects to use these assets. Hence the useful lives for these assets are different from the useful lives as

prescribed under Part C of Schedule II of the Companies Act 2013.

Subsequent Recognition

As at the reporting date, non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the

exchange rate at the date of the transaction. All monetary assets and liabilities in foreign currency are restated at the end of accounting period. All non-

monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that

existed when the values were determined.

Investments that are readily realisable and are intended to be held for not more than one year from the date on which such investments are made, are

classified as current investments. All other investments are classified as long term investments. Current investments are carried at cost or fair value,

whichever is lower. Long-term investments are carried at cost. However, provision for diminution is made to recognise a decline, other than temporary, in

the value of long-term investments, such reduction being determined and made for each investment individually.

Category of assets Useful lives of fixed assets

Office equipment 60 Months

Computers 36 Months

Servers 36 Months*

Computer Softwares 36 Months

Furniture and Fixtures 60 Months*

Motor Cars Depreciated over lease tenure

Assessment is done at each balance sheet date as to whether there is any indication that an asset (tangible and intangible) may be impaired. If any such

indication exists, an estimate of the recoverable amount of the asset is made. Recoverable amount is higher of an asset’s net selling price and its value in

use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of

its useful life. For the purpose of assessing impairment, the recoverable amount is determined for an individual asset, unless the asset does not generate

cash inflows that are largely independent of those from other assets or groups of assets. An asset whose carrying value exceeds its recoverable amount is

considered impaired and is written down to its recoverable amount. Assessment is also done at each balance sheet date as to whether there is any indication

that an impairment loss recognised for an asset in prior accounting periods may no longer exist or may have decreased. An impairment loss is reversed to

the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined if no impairment loss had previously

been recognised.

i) Investment management fees (excluding service tax) are recognised monthly on an accrual basis as per proportionate completion method, in accordance

with the terms of contract between the Company and the Board of Trustees of HSBC Mutual Fund based on daily net asset value (excluding investments

made by the Company in the schemes) in accordance with SEBI (Mutual Fund) regulations, 1996 as amended.

ii) Advisory fees are recognised on an accrual basis as per proportionate completion method in accordance with the respective terms of the contract with

counter parties.

iii) Portfolio management fees (excluding service tax) are recognised on an accrual basis as per proportionate completion method, based on fee structures

on a monthly basis.

Other Income

i) Interest income from bank deposits is accounted for on time proportion basis.

ii) Profit or loss on sale of investments is arrived at as excess of redemption value over weighted average cost of Investments.

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




2.9 Provisions and Contingencies

2.10 Leases

a)

b) Finance Leases

i)

ii)

2.11 Taxation

2.12 Employee benefits

a) Provident Fund

b) Gratuity

c) Compensated absences

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made

under operating leases are charged to the Statement of Profit and Loss on a straight-line basis over the period of the lease.

Accumulated compensated absences, which are expected to be availed or encashed within 12 months from the end of the year end are treated as short term

employee benefits. The obligation towards the same is measured at the expected cost of accumulating compensated absences as the additional amount

expected to be paid as a result of the unused entitlement as at the year end.

Deferred tax is recognised for all the timing differences, subject to the consideration of prudence in respect of deferred tax assets. Deferred tax assets are

recognised and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which

such deferred tax assets can be realised. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or

substantively enacted by the Balance Sheet date. In situations, where the Company has unabsorbed depreciation or carry forward losses under tax laws, all

deferred tax assets are recognised only to the extent that there is virtual certainty supported by convincing evidence that they can be realised against future

taxable profits. At each Balance Sheet date, the Company re-assesses unrecognised deferred tax assets, if any.

Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the recognised amounts and there is an intention to

settle the asset and the liability on a net basis. Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set off

assets against liabilities representing current tax and where the deferred tax assets and the deferred tax liabilities relate to taxes on income levied by the

same governing taxation laws

The Company provides for gratuity, a defined benefit plan (the “Gratuity Plan”) covering eligible employees in accordance with the Payment of Gratuity

Act, 1972. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an

amount based on the respective employee’s salary and the tenure of employment. The Company’s liability is actuarially determined (using the Projected

Unit Credit method) at the end of each year. Actuarial losses/ gains are recognised in the Statement of Profit and Loss in the year in which they arise.

Minimum Alternate Tax credit is recognised as an asset only when and to the extent there is convincing evidence that the company will pay normal income

tax during the specified period. Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT credit asset is written down to the

extent there is no longer a convincing evidence to the effect that the Company will pay normal income tax during the specified period.

Contingent Liabilities:

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the

occurrence or non occurrence of one or more uncertain future events not wholly within the control of the company or a present obligation that arises from

past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.

Provisions:

Provisions are recognised when there is a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic

benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are measured at the best estimate

of the expenditure required to settle the present obligation at the Balance sheet date and are not discounted to its present value.

Operating leases

The Company leases certain tangible assets and such leases where the Company has substantially all the risks and rewards of ownership are classified as

finance leases. Finance leases are capitalised at the inception of the lease at the lower of the fair value of the leased asset and the present value of the

minimum lease payments.

Each lease payment is apportioned between the finance charge and the reduction of the outstanding liability. The outstanding liability is included in other

short/long-term borrowings. The finance charge is charged to the Statement of Profit and Loss over the lease period so as to produce a constant periodic

rate of interest on the remaining balance of the liability for each period.

Tax expense for the period, comprising current tax and deferred tax, are included in the determination of the net profit or loss for the period. Current tax is

measured at the amount expected to be paid to the tax authorities in accordance with the taxation laws prevailing in the respective jurisdictions.

Contribution towards provident fund is made to the regulatory authorities, where the Company has no further obligations. Such benefits are classified as

Defined Contribution Schemes as the Company does not carry any further obligations, apart from the contributions made on a monthly basis.




2.13 Restricted Share Plan

2.14 Scheme related expenses

2.15 Earnings per share

2.16

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 April 1,2005 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.

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of

equity shares outstanding during the period. Earnings considered in ascertaining the Company’s earnings per share is the net profit for the period after

deducting preference dividends and any attributable tax thereto for the period. The weighted average number of equity shares outstanding during the period

and for all periods presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares, that have changed the

number of equity shares outstanding, without a corresponding change in resources. For the purpose of calculating diluted earnings per share, the net profit

or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects

of all dilutive potential equity shares.

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

The total recurring expenses relating to the schemes of HSBC Mutual Fund are as per SEBI (Mutual Fund) regulations, 1996. 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 initial issue expenses with respect to all schemes launched have been borne by the Company in the year in which they are incurred.

Cash and cash equivalents

Cash and cash equivalents include cash in hand, demand deposits with banks, other short-term highly liquid investments with original maturities of three

months or less.




March 31, 2016 March 31, 2015

3 Share capital

Authorised

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

80,000 80,000

Total 700,000 700,000

Issued, subscribed and paid-up

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

Total 615,909 615,909

3.1 Reconciliation of number of shares

Equity shares

Number of shares Amount Number of shares Amount

Balance as at the beginning of the year 61,590,908 615,909 54,200,000 542,000

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

Balance as at the end of the year 61,590,908 615,909 61,590,908 615,909

3.2 Rights, Preferences and Restrictions attached to shares

3.3 Shares held by holding company

0 1Equity shares

No of shares Amount No of shares Amount

61,590,908 615,909 61,590,908 615,909

3.4

Name of shareholder

No of shares % Holding No of shares % Holding

Equity Shares :

61,590,908 100 61,590,908 100

March 31, 2016 March 31, 2015

4 Reserves and Surplus

Capital redemption reserve 90,000 90,000

Securities premium 15,743 15,743

Surplus/(Deficit) in statement of Profit and loss

Balance as at the beginning of the year 4,242 (100,886)

Add : Profit for the year transferred from Statement of Profit and Loss 260,955 105,128

Balance as at the end of the year 265,197 4,242

Total 370,940 109,985

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

As at

As at

March 31, 2016 March 31, 2015

March 31, 2016 March 31, 2015

As at

March 31, 2015

Equity Shares: The company has one class of equity shares having a par value of Rs.10 per share. Each shareholder is eligible for one vote per share held.

In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts,

in proportion to their shareholding.

Details of shares held by Shareholders holding more than 5% of the aggregate shares of the company

HSBC Securities and Capital Markets (India) Private Limited and its

nominees

As at

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

its nominees

March 31, 2016

As at




March 31, 2016 March 31, 2015

5 Long term borrowings

Secured

Long term maturities of Finance lease obligations (Refer note 9 and note 11) 3,564 5,484

Total 3,564 5,484

March 31, 2016 March 31, 2015

4,189 6,571

625 1,087

3,564 5,484

The maturity profile of finance lease obligations is as follows:

March 31, 2016 March 31, 2015 March 31, 2016 March 31, 2015

2,887 3,832 2,249 2,868

4,189 6,571 3,564 5,484

- - - -

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

March 31, 2016 March 31, 2015

6 Deferred tax Liabilities (net)

Deferred tax liability

Depreciation on fixed assets - (542)

Lease Rentals - (215)

Total Deferred tax liability - (757)

Deferred tax assets

Bonus 17,041 1,724

Carry forward of losses 153,446 235,070

Gratuity & compensated absence 1,761 2,397

Lease Rentals 297 -

Total Deferred tax asset 172,545 239,191

Net Deferred Tax Asset / Liability Nil Nil

March 31, 2016 March 31, 2015

7 Long Term Provisions

Provision for employee benefits

Provision for Gratuity (refer note 26(e)) 20,497 19,079

Total 20,497 19,079

Present value of future minimum lease payments

Particulars

Total future minimum lease payments

Future interest included above

Payable between 1 - 5 years

Deferred tax asset and deferred tax liability have been offset as they relate to the same governing taxation laws. Deferred tax asset is recognised to the

extent of deferred tax liability available for setoff. Deferred tax asset has not been recognised on account of prudence in view of carry forward of taxable

losses.

Present value

Payable later than 5 years

Period Minimum lease payment

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:

Payable within 1 year

As at

As at

As at

Particulars of timing difference

As at




March 31, 2016 March 31, 2015

8 Trade payables

(a) Total outstanding dues of micro enterprises and small enterprises and - -

(b) Total outstanding dues of creditors other than micro enterprises and small enterprises

(i) Acceptances - -

(ii) Others 64,286 110,837

Total 64,286 110,837

March 31, 2016 March 31, 2015

9 Other current liabilities

Current maturities of finance lease obligations (Refer note 5 & note 11) 2,249 2,868

Employee Benefits payable 23,838 28,392

Statutory dues including provident fund and tax deducted at source 48,273 48,883

Other liabilities 17,280 13,071

Total 91,640 93,214

March 31, 2016 March 31, 2015

10 Short Term Provisions

Provision for employee benefits

Provision for Gratuity (refer note 26(e)) 3,424 4,077

Compensated absences 5,088 4,009

Other provisions

2,174 2,174

Total 10,686 10,260

11 Fixed assets -

a) Tangible assets

Gross block

Balance as at April 1, 2015 12,851 64,404 3,832 2,058 83,145

Additions 1,597 23,371 231 583 25,782

Disposals (2,731) (1,070) - (215) (4,016)

Balance as at March 31, 2016 11,717 86,705 4,063 2,426 104,911

Depreciation


Depreciation for the year 3,429 11,747 326 50 15,552

Accumulated depreciation on disposals (1,799) (1,070) - (215) (3,084)


Net block

As at March 31, 2016 4,955 25,818 365 534 31,672

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

There are no amounts due for payment to the Investor Education and Protection Fund under section 205C of the Companies Act, 1956 as at year end.

'The above information regarding micro and small enterprises has been determined to the extent such parties have been identified on the basis of

information available with the Company.

As at

Provision for tax [net of advance tax and tax deducted at source Rs

10,523 (previous year Rs 10,523)]

As at

Particulars Motor cars * Computers Office equipment Furniture and

fittings

As at

Total




Gross block


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

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


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

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

b) Intangible assets

Gross block

Balance as at April 1, 2015 59,889

Additions 4,322

Disposals -

Balance as at March 31, 2016 64,211 -

Depreciation


Depreciation for the year 1,287

Accumulated depreciation on disposals -

Balance as at March 31, 2016 59,867

Net block

As at March 31, 2016 4,344

Intangible assets

Gross block


Additions 1,486

Deletions (1,664)


Depreciation


Depreciation for the year 177

Accumulated depreciation on deletions (1,664)


Net block

As at March 31, 2015 1,309

Particulars

Office equipment Furniture and

fittings

Particulars

Particulars

Motor cars *

Computer

Computer

TotalComputers




Face Value

per unit

No. of units Amount No. of units Amount

12 Non-current investments

Particulars

10 244,572.037 2,437 244,572.037 2,437

HSBC Cash Fund - Growth option Direct Plan 1,000 3,558.752 5,000 - -

10 225,543.221 5,000 - -

10 206,147.313 5,000 - -

10 210,860.141 5,000 - -

10 395,920.436 5,000 - -

HSBC Flexi Debt Fund-Growth option Direct Plan 10 254,406.317 5,000 - -

10 434,786.389 5,000 - -

10 377,569.065 4,804 - -

10 407,381.757 5,000 - -

HSBC MIP – Regular Plan - Growth option Direct Plan 10 202,448.821 5,000 - -

HSBC MIP – Savings Plan - Growth option Direct Plan 10 170,321.192 5,000 - -

HSBC Equity Fund- Growth option Direct Plan 10 33,261.112 5,000 - -

10 76,942.845 5,000 - -

HSBC Midcap Equity Fund - Growth option Direct Plan 10 129,937.630 5,000 - -

10 274,726.784 5,000 - -

10 187,801.892 5,000 - -

10 272,756.686 4,468 - -

HSBC Dynamic Fund- Growth option Direct Plan 10 360,147.516 5,000 - -

10 113,484.384 1,443 - -

HSBC Brazil Fund - Growth option Direct Plan 10 701,095.111 5,000 - -

10 434,480.361 5,000 - -

103,152 2,437

Agreegate amount of unquoted investments 103,152 2,437

The above investments pertains to seed investments as per Regulation 28(4) of SEBI (Mutual Funds) Regulations, 1996.

March 31, 2016 March 31, 2015

13 Long term loans and advances

Unsecured, considered good

Prepaid expenses 3,138 3,374

Loans to employees 1,436 1,445

318,272 381,524

MAT Credit Entitlement 52,731 -

Advance recoverable in cash or kind - 2,185

Total 375,577 388,528

Total

March 31, 2016

HSBC Global Consumer Opportinites Fund- Benefiting

from China's Growing Consumption Power - Direct plan

Growth option

As at

March 31, 2015

HSBC Asia Pacific Divdend Yield Fund Direct Plan

Growth option

As at

HSBC Ultra Short Term Bond Fund-Growth option

Direct Plan

HSBC Managed Solutions India Conservative Fund

Direct Plan Growth option

HSBC Managed Solutions India Moderate Fund Direct

Plan Growth option

HSBC Managed Solutions India Growth option Fund

Direct Plan Growth option

Advance taxes and tax deducted at source [net of provision for tax Rs 554,468 (previous year

Rs 473,271)]

HSBC India Opportunities Fund-Growth option Direct

Plan

HSBC Infrastructure Equity Fund - Growth option Direct

Plan

HSBC Tax Saver Equity Fund- Growth option Direct Plan

HSBC Dividend Yield Equity Fund-Growth option Direct

Plan

HSBC Emerging Markets Fund- Growth option Direct

Plan

HSBC Floating Rate Fund - Long Term Plan- Growth

option Direct plan

HSBC Income Fund – Investment Plan - Growth option

Direct Plan

HSBC Income Fund – Short Term Plan - Growth option

Direct Plan




Face Value No. of units Amount No. of units Amount

14 Current investments

Particulars

Investments in Mutual Fund - unquoted

1,000 314,646.829 456,834 227,022.935 304,130

Total 456,834 304,130

March 31, 2016 March 31, 2015

15 Trade receivables

2,040 -

133,840 140,864

Total 135,880 140,864

March 31, 2016 March 31, 2015

16 Cash and bank balances

Cash and cash equivalents

Cash on hand 12 50

Balance with banks

- in current accounts 20,190 55,644

Total 20,202 55,694

March 31, 2016 March 31, 2015

17 Short-term loans and advances


Security Deposits * 9,583 12,522

Loans to employees 457 347

CENVAT credit receivable 20,238 20,694

Prepaid expenses 16,080 14,111

Advance recoverable in cash or in kind 3,503 1,757

Total 49,861 49,431

* The above amounts includes Rs. 9,327 (previous year Rs.12,268) being deposits given for lease premises to the related party.


Outstanding for a period exceeding 6 months from the date

they are due for payment *

March 31, 2015

As at

As at

March 31, 2016

HSBC Cash Fund - Direct Plan - Growth option

As at

As at

Others *

* Out of the above the unbilled revenue as at March 31, 2016 is Rs. 66,764 (previous year Rs. 87,318) which has been raised subsequent to year end.




March 31, 2016 March 31, 2015

18 Revenue from operations

Investment management fees 500,536 395,246

Advisory fees 367,702 429,530

Income from PMS business / Mandates 8,518 16,496

Total 876,756 841,272

March 31, 2016 March 31, 2015

19 Other Income

Gain from redemption of Non-current Investments 7 -

Gain from redemption of Current Investments 26,105 22,146

Profit on sale of Assets (net) 237 226

Interest on income tax refund 2,853 3,184

Gain on account of foreign exchange fluctuations (net) 6,829 1,955

Provision no longer required written back 22,197 -

Miscellaneous 40 111

Total 58,268 27,622

March 31, 2016 March 31, 2015

20 Employee benefits expense

Salaries, wages and bonus 382,129 375,105

Contribution to provident fund and other funds (Refer note 26(a)) 15,706 14,868

Gratuity (Refer note 26(f)) 4,709 8,910

Restricted share plan (Refer note 28) 5,418 4,232

Staff welfare 5,755 7,191

Total 413,717 410,306

March 31, 2016 March 31, 2015

21 Finance costs

Finance charge on finance leases 1,088 1,022

Total 1,088 1,022

March 31, 2016 March 31, 2015

22 Other expenses

Brokerage and incentives 29 14,452

Legal and professional fees 8,624 11,507

Support service charges (refer note 22(a)) 73,805 75,930

Rent and utilities 36,041 33,908

Payment to auditors

- statutory audit fees 1,100 850

- other services 143 198

- reimbursement of expenses - 19

Business development 21,161 46,594

Repairs and maintenance 32,202 38,552

Telephone, communication and postage 38,950 30,834

Office administration 3,108 3,166

Insurance 10,468 11,349

Scheme related expenses 7,386 32,019

Compensation (refer note 22(b)) 343 1,164

Recruitment cost 3,232 2,430

Guarantee charges 1,918 1,000

Membership and subscription 1,395 805

Directors sitting fees 410 390

Rates and taxes 3,119 5,665

Travelling 15,523 13,459

Total 258,957 324,291

For the year ended

For the year ended

For the year ended

For the year ended

For the year ended




a) Support service charges

b) Compensation

March 31, 2016 March 31, 2015

23 Exceptional items

Insurance claim recovery pertaining to HSBC Gilt fund 45,000 -

March 31, 2016 March 31, 2015

24 Expenditures in foreign currency

Training 121 1,085

Support service charges 50,002 63,737

Business development 477 33

Telephone, communication and postage 3,464 3,132

Membership and subscription 312 125

Travelling 4,361 3,255

Total 58,737 71,367

March 31, 2016 March 31, 2015

25 Earnings in foreign currency

Advisory fees 367,702 429,530

Total 367,702 429,530

##### Notes to the financial statements (Continued)

March 31, 2016 March 31, 2015

26 Employee Benefits

a) Defined contribution plan

Defined contributions plans amount recognised

12,453 12,204

ii) Pension fund paid to the authorities 1,907 1,382

iii) Others 1,136 1,282

210 -

Total 15,706 14,868

March 31, 2016 March 31, 2015

b) Reconciliation of defined benefit obligations

23,156 15,674

1,684 1,687

4,146 3,417

(3,945) (1,428)

- -

- -

(1,121) 3,806

23,920 23,156

For the year ended

iv) National Pension Scheme

For the year ended

The Company incurred Rs 343 (previous year Rs 1,164) 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. The Company had logded a claim with the Insurance company and received Rs 45,000 during the year as full and final settlement against

the above payment.

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.

For the year ended

As at

Present Value Obligation (PVO) at beginning of year

Interest cost

Settlement cost

Acquisition (credits)

Actuarial loss on obligation

PVO at end of the year

Current Service Cost

Benefits Paid

i) Provident fund paid to the authorities

For the year ended




March 31, 2016 March 31, 2015

c) Reconciliation of fair value of plan assets

- -

- -

- -

- -

- -

- -

- -

- -

March 31, 2016 March 31, 2015

d) Amounts to be recognised in the Balance Sheet and movement in net liability

23,920 23,156

- -

Net liability recognized in the Balance Sheet 23,920 23,156

March 31, 2016 March 31, 2015 March 31, 2016 March 31, 2015

e) Classification into current / non current

20,497 19,079 3,424 4,077

Total 20,497 19,079 3,424 4,077

March 31, 2016 March 31, 2015

f) Expense recognised in the Statement of Profit and Loss

4,146 3,417

1,684 1,687

- -

- -

(1,121) 3,806

- -

4,709 8,910

March 31, 2016 March 31, 2015

g) Description of Plan Assets

- -

Qualifying Insurance - -

March 31, 2016 March 31, 2015

h) Summary of Actuarial Assumptions

7.70% 7.95%

13.50% 13.50%

March 31, 2016 March 31, 2015 March 31, 2014 March 31, 2013 March 31, 2012

h)

23,921 23,156 15,674 14,536 10,591

- - - - -

Surplus / (deficit) (23,921) (23,156) (15,674) (14,536) (10,591)

(1,436) (1,159) (9,175) 2,139 (177)

- - - - -

Plan assets at the end of year

Expected Return on Plan Assets

Contributions

Benefit paid

Actuarial gain on plan assets

Closing Fair Value of Plan Assets

As at

As at

Present value of obligation

Opening Fair Value of Plan Assets

Adjustment to opening balance of plan assets

Transfer in

Less : Fair Value of Plan Assets at end of the year

As at

Current Service Cost

Interest cost

Expected Return on Plan Assets

As at

Non current Current

Gratuity

* 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.

As at

** The estimates of future salary increases considered in actuarial valuation takes into account, inflation, seniority, promotions and other relevant factors,

such as demand and supply in the employment market.

Experience Gain / (Loss) adjustments on plan assets

As at

Settlement cost

Actuarial Loss/(Gain) recognised for the year

Net Gratuity expense included in Employee costs

Total included in employee benefits

As at

Discount Rate*

Salary escalation rate**

Government bonds

Defined benefit obligation at the end of year

Experience adjustments

Experience Gain / (Loss) adjustments on plan liabilities




27 Earnings per share

March 31, 2016 March 31, 2015

260,955 105,128

61,590,908 54,200,000

Shares issued during the year - 7,390,908

Total number of equity shares outstanding at the year end 61,590,908 61,590,908

61,590,908 59,869,738

4.24 1.76

10 10

28 Restricted Share Plan

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

Particulars

March 31, 2016 March 31, 2015

Outstanding at the beginning of the year 18,428 15,629

10,152 9,590

Exercised / vested during the year (6,535) (6,319)

Other movements * 1,513 (472)

Outstanding at the end of the year 23,558 18,428

Restricted Share plan expense

Particulars

March 31, 2016 March 31, 2015

Amount recognised in employee benefits 5,418 4,232

Total expense recognised in employee benefits 5,418 4,232

29 Related party disclosures

Names of related parties and nature of relationship

1 Holding Company

HSBC Securities and Capital Markets (India) Private Limited

2 Ultimate Holding Company

HSBC Holdings PLC

3 Fellow subsidiaries

The Hong Kong and Shanghai Banking Corporation Limited - India Branches

HSBC Global Asset Management (Hong Kong) Limited

HSBC Software Development (India) Private Limited

HSBC Electronic Data Processing (India) Private Limited

HSBC Global Asset Management Limited

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

4 Others

HSBC Mutual Fund *

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

5

Mr. Ravi Menon ( appointed with effect from Apr 24, 2015) Mr. Puneet Chaddha (Resigned with effect from May 24, 2016)

Ms. Naina Lal Kidwai (Resigned with effect from March 17, 2015)

* 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.

In accordance with Accounting Standard 20 on 'Earnings Per Share', the following is the calculation of the basic and diluted earnings per share:In accordance with Accounting Standard 20 on 'Earnings Per Share', the following is the calculation of the basic and diluted earnings per share:

Weighted average number of equity

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.

For the year ended

Number of shares at the beginning of the year

Calculation of weighted average number of equity shares

Nominal value per share Rupees

Basic and diluted earnings (in Rupees) per share

Granted during the year

Key management personnel

As per Accounting Standard (AS 18) on ‘Related Party Disclosure’, the releated parties are as follows

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

Profit for the year

Particulars

For the year ended

For the year ended

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.




29 Related party transactions

i) Transactions during the year are as under:

March 31,2016 March 31,2015 March 31,2016 March 31,2015 March 31,2016 March 31,2015 March 31,2016 March 31,2015

Income

Investment management

fees

- - - - 500,536 395,246 - -

Advisory fees - - 367,702 429,530 - - - -

Dividend - - - - - - - - Profit / (Loss) on sale of - - - - - - - - Expenses

Managerial

Remuneration

- - - - - - 19,613 25,114

Training - - 121 239 - - - -

Brokerage and incentives - - - 3,940 1 11,930 - -

Support service charges - - 60,169 71,185 - - - -

Rent and Utilities - - 33,290 30,505 - - - -

Repairs and maintenance -

Computers

4,879 5,084 8,435 425 - - - -

Scheme related expenses - - - - 7,386 32,019 - -

Compensation - - - - - 649 - -

Bank and Guarantee

charges

- - 2,033 1,119 - - - -

Issue of equity shares - 89,652 - - - - -

Deposit for premises - - (2,940) - - - -

Purchase of investments - - - - 977,947 846,737 - -

Sale of investments - - - - 750,639 712,100 - -


Notes to related party disclosures (to the extent of material transactions)

March 31,2016 March 31,2015

Investment management fees

HSBC Mutual Fund 500,536 395,246

Advisory fees

HSBC Global Asset Management (Hongkong) Limited 367,702 429,530

Managerial Remuneration

Puneet Chaddha 16,685 25,114

Training

HSBC Global Asset Management (Hongkong) Limited 101 110

Brokerage and incentives

HSBC Mutual Fund 1 -

The Hong Kong and Shanghai Banking Corporation Limited - India - 3,799

Support service charges

HSBC Global Asset Management Limited 14,234 30,354


The Hongkong and Shanghai Banking Corporation Ltd - Hongkong 8,760 8,540

HSBC Electronic Data Processing (India) Pvt Ltd 9,586 9,514

The Hong Kong and Shanghai Banking Corporation Limited, India 581 -

Rent and Utilities

The Hong Kong and Shanghai Banking Corporation Limited - India 33,290 30,505

Repairs and maintenance - Computers

HSBC Securities and Capital market Pvt ltd 4,879 5,084

HSBC Software Development Pvt Ltd 8,435 425

Scheme related expenses


Compensation

HSBC Mutual Fund - 649

Bank and Guarantee charges


Issue of equity shares

HSBC Securities and Capital market Pvt ltd - 89,652

Deposit for premises

The Hong Kong and Shanghai Banking Corporation Limited - India (2,940) -

Purchase of investments


Sale of investments


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

For the year ended

The nature and volume of transactions during the year and balances outstanding as year end with related parties in the ordinary course of business above

are as follows:




ii) Balances outstanding are as under:

Particulars

March 31,2016 March 31,2015 March 31,2016 March 31,2015 March 31,2016 March 31,2015 March 31,2016 March 31,2015

Assets

Investment management

fee receivable

- - - - 63,780 50,908 - -

PMS advisory fees

receivable

- - 4,703 3,048 - - - -

Investment advisory fee

receivable

- - 62,061 84,271

Deposit for premises - - 9,328 12,268 - - - -

Investments - - - - 559,986 306,566

Balances with banks - - 19,130 55,565 - - - -

Liabilities

Equity share capital 615,909 615,909 - - - -

Legal and professional fees - - - - - - - - Computer maintenance - 4,576 - - - - - -

Support service charges - - 32,862 28,451 - - - -

Commission/Brokerage - - 401 401 - - - -

Scheme related expenses - - - - 7,321 23,442 - -


Notes to related party disclosures (to the extent of material transactions)

March 31,2016 March 31,2015

Investment management fees


PMS advisory fees receivable


Investment advisory fee receivable


Deposit for premises


Investments


Balances with banks


Equity share capital

HSBC Securities and Capital market Pvt ltd 615,909 615,909

Computer maintenance

HSBC Securities and Capital market Pvt ltd - 4,576

Support service charges

HSBC Global Asset Management Limited 11,778 18,102

HSBC Global Asset Management (Hong Kong) Limited 4,833 4,739

HSBC Bank Honkgong 7,112 -

HSBC Software Development India Pvt.Ltd 7,365 -

Commission/Brokerage

The Hong Kong and Shanghai Banking Corporation Limited - India Branches 190 190

HSBC Investdirect Securities (India) Limited 211 211

Scheme related expenses


with others* with Key Managementwith Holding Companies with fellow Subsidiaries

For the year ended




March 31,2016 March 31,2015

30 Contingent Liabilities

Dues towards Income Tax matters 93,209 94,873

Dues towards Service Tax matters 4,985 -

98,194 94,873

As at

March 31,2016 March 31,2015

31 Capital Commitments

- 100,947

32 Unhedge foreign currency exposures

Foreign

currency

Rupees Foreign

currency

Rupees

Trade payable GBP 121 11,532 190 18,102

USD 98 6,532 97 6,128

SGD - - 78 3,666

HKD 810 6,921 - -

Trade receivable USD 1,009 66,764 1,393 87,319

33 Prior year comparatives

Previous year figures are re-grouped/re-classified wherever necessary to confirm to current year's classification.




sd/- sd/- sd/-




DIN No: 00016302

sd/- sd/-



CS No: 17104



Claims against the Company not acknowledged as debt

Particulars Currency

As at

March 31,2016 March 31,2015

As at

Seed investment commitment pursuant to Regulation 28(3) of SEBI (Mutual Funds) Regulations,

1996.

As at

(a) It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolution of the respective

proceedings.

(b) The Company does not expect any reimbursements in respect of the above contingent liabilities.

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