About
Housing Development Finance CorporationLtd(Merged)
Housing Development Finance Corporation Limited (HDFC) was incorporated on October 17, 1977 as the first specialized Mortgage Company in India. The principal business is to provide finance to individuals, corporate and developers for the purchase, construction, development and repair of houses, apartments and commercial property in India. The business is conducted through its branches in India and its overseas offices in London, Singapore and Dubai supported by a network of agents for sourcing loans as well as deposits and service associates in the Middle East region, to provide housing loans and property advisory services to non-resident Indians (NRIs) and persons of Indian origin (PIOs). HDFC is the Holding Company for investments in its associates and subsidiary companies.
HDFC's product range includes loans for purchase and construction of a residential unit, purchase of land, home improvement loans, home extension loans, non-residential premises loans for professionals and loan against property, while its flexible repayment options include Step Up Repayment Facility (SURF) and Flexible Loan Installment Plan (FLIP).
The Company's subsidiaries include HDFC Developers Ltd., HDFC Investments Ltd., HDFC Holdings Ltd., HDFC Trustee Company Ltd., HDFC Realty Ltd., HDFC Property Ventures Ltd., HDFC Sales Pvt. Ltd., HDFC Ventures Trustee Company Ltd., HDFC Venture Capital Ltd., HDFC Ergo General Insurance Company Ltd., HDFC Standard Life Insurance Company Ltd., GRUH Finance Ltd, HDFC Asset Management Company Ltd. and HDFC Bank Ltd.
In the year 1979, the Corporation introduced HDFC Certificate of Deposit Scheme. In the year 1981, they introduced their first retail Deposit Product. They promoted a wholly owned subsidiary, HDFC Developers during the year. In the year 1982, the Corporation introduced the Line of Credit Product (LOC) for employee owned housing. In the year 1985, the Corporation introduced the Home Savings Plan based on the 'Bausparkassen' model, West Germany and the 'Step-up Repayment Facility'.
In the year 1988, the Corporation in with India's leading financial institutions and commercial banks promoted Gujarat Rural Housing Finance Corporation Ltd (GRUH Finance), Housing Promotion and Finance Corporation Ltd (now SBI Home Finance), Can Fin Homes Ltd and Infrastructure Leasing and Financial Services (IL&FS), and the Credit Rating Information Services of India Ltd (CRISIL). They introduced Telescopic Loan Plan and Short Term Bridging Loan products.
In the year 1989, the Corporation introduced two new products, namely Home Improvement loans & Home Extension loans. In the year 1990, the Corporation in association with the United Nations Centre for Human Settlements promoted the Coalition of Housing Finance Institutions in Asia. In the year 1991, they re-launched their retail fixed deposit products.
In the year 1993, the company made a joint venture with General Electric Capital Corporation of US to promote Countrywide Consumer Financial Services Ltd for consumer finance. In the year 1994, the Corporation introduced Non-Residential Premises Loans for Individuals.
In the year 1995, the Corporation made a Strategic alliance with NatWest Markets (UK) and promoted the HDFC Bank. They made a joint venture with IL&FS and Colliers Jardine Asia Pacific Ltd and promoted Colliers Jardine India Property Services Ltd. Also, they signed a MoU with Standard Life Assurance Co. of UK for life insurance.
In the year 1997, the Corporation promoted the first private sector housing finance company, namely Delta Brac Housing Finance Corporation Ltd in Bangladesh. In the year 1998, the Corporation in partnership with a South-based NGO launched the Indian Association for Savings & Credit (IASC), a pioneering micro-finance institution operating in the states of Tamil Nadu and Kerala. Also, they introduced Home Equity Loans and Corporate Employees Group Finance Arrangement.
In the year 1999, the Corporation invested in a new Housing Finance company in Sri Lanka. They launched the Corporation website www.hdfcindia.com (now hdfc.com). Also, they introduced the Adjustable Rate Home Loans and became the first housing finance institution to do so.
In the year 2000, the Corporation inaugurated a new HDFC Standard Life office in Mumbai. They launched their first Property Fair and they issued their first Mortgage Backed Securities. The Corporation made a joint venture with Mahindra & Mahindra group and promoted propertymartindia.com, a website for providing a range of real estate services.
During the year, the Corporation acquired the entire shareholding of Hometrust Housing Finance Company Ltd. Also, GRUH became a subsidiary of the Corporation. They made a joint venture with TCS and promoted Intelenet Global Services Limited for IT enabled services. Also, they entered into joint venture with Standard Life Investments for promoting the HDFC Mutual Fund.
In the year 2001, the Corporation in association with State Bank of India, Dun & Bradstreet and Trans Union International Inc. (TU) promoted Credit Information Bureau (India) Ltd. They opened their 100th office at Amristar.
In the year 2002, the company made a joint venture with Chubb Corporation, USA and promoted HDFC-Chubb General Insurance Company Ltd for non-life insurance. In June 2003, they singed a USD 200 million-loan agreement with International Finance Corporation (IFC), Washington.
In May 2003, the Corporation signed a Technical Service Contract with Egyptian American Bank for providing technical assistance for setting up Egypt's first private sector led mortgage finance company Egyptian Housing Finance Company.
In February 2005, the Corporation entered into an implementation agreement with NHB and Asian Development Bank for technical assistance for a study on the development of an agency/secondary mortgage institution to facilitate issuance of residential mortgage backed securities along similar lines as Fannie Mae in USA.
During the year 2006-07, the Corporation approved 8 schemes in the area of low-income housing and micro-enterprise financing by way of financial intermediation to partner non-government organisations and micro-finance institutions. They divested their equity holding in HDFC-SL in favour of Standard Life Assurance Company, UK for a consideration of Rs. 5.66 crore.
During the year 2007-08, the Corporation approved 16 new schemes under the KfW Entsicklungsbank lines in the area of low-income housing and micro-finance by way of financial intermediation to partner non-government organisations across India. They launched two major advertising campaigns, namely 'Asset Plus' and 'Empowerment'. 'Asset Plus' was launched primarily to create awareness about home equity loans. 'Empowerment' highlighted the fact that the Corporation's employees are empowered to deploy all resources available to them to provide professional services to customers.
During the year, the Corporation acquired the entire 26% of the equity of HDFC Chubb General Insurance Company Ltd from Chubb Global Financial Service Corporation, USA, consequent to which the company became a wholly owned subsidiary of the Corporation. In June 2007, consequent to a preferential offer by HDFC Bank Ltd, the Corporation acquired 13,582,000 shares of HDFC Bank for a consideration of Rs. 1,390.11 crore.
In October 2007, the Corporation and Standard Life Investments realigned their shareholding in HDFC Asset Management Company Ltd. Accordingly; the Corporation increased their stake to 60% in HDFC-AMC by acquiring 9.9% from Standard Life Investments. Also, the Corporation and ERGO International AG (ERGO), the primary insurance entity of Munich Re Group (Germany) entered into a joint venture, where by HDFC sold 26% equity stake of the company to ERGO. As a result of this new joint venture, the company was named HDFC ERGO General.
During the year, the Corporation divested 7.15% of its equity holding in HDFC-SL in favour of Standard Life Assurance Company, UK for a profit of Rs. 120.94 crore. Also, they divested their entire shareholding in Intelenet Global Service Pvt Ltd for a profit of Rs. 313.25 crore. As a result, Intelenet Global Service Pvt Ltd ceased to be an associate of the Corporation.
During the year 2008-09, the Corporation approved 12 new schemes under the KfW Entsicklungsbank lines in the area of low-income housing and micro-finance by way of bulk loans to partner Non-Government Organisations and micro-finance institutions.
During the year 2009-10, the Corporation introduced 'HDFC Systematic Savings Plan', which is a monthly savings plan offering a variable rate of interest. They launched a key brand campaign - 'HDFC - because every family needs a home'. The objective of the campaign was to connect with HDFC' s existing customers as well as prospective customers, making the HDFC brand synonymous with a home.
In April 2010, the company launched a special home loan product at a fixed rate of 8.25% per annum up to March 31, 2011, 9% for the period between April 4, 2011 and March 31, 2012 and the applicable floating rate for the balance term. This is a flexible product with dual rates. They also re-launched their product loan against property to assist customers.
During the year 2010-11, HDFC Real Estate Destination (HDFC RED), an on-line real estate portal was launched with the key objective of providing a single destination to potential home buyers to search and short-list desired properties that suit their requirements.
In 2011 HDFC signed MOU with Indian Army for total Salary Solutions. HDFC 5000th ATM was launched at Swami Narayan Chowk, Rajkot
In 2012, the company incorporated a new wholly owned subsidiary, namely HDFC Education and Development Services Pvt Ltd. HDFC launched Solitaire' range of women's Credit Cards. HDFC Bank and Vodafone India launch m-paisa - a product for financial inclusion. The company also launches Tax payment facility through ATM and also a Bouquet of premium Travel Credit Cards. The company also launches INFINIA Credit Card
In 2013 HDFC Mutual Fund Acquires the Schemes of Morgan Stanley Mutual Fund.
In 2015 HDFC Life gets nod to up foreign partner stake -FDI boost for HDFC as FIPB clears Standard Life's proposal. HDFC launches its first school 'The HDFC School' in Gurgaon.
HDFC announced a reduction in its Retail Prime Lending Rate (RPLR) by 20 basis points, with effect from 13 April 2015.
On 8 June 2015, a Committee of the Board of Directors of the Company approved a proposal for simultaneous offering of Secured Redeemable Non-Convertible Debentures of upto Rs. 5000 crore along with warrants convertible into equity shares.
On 14 August 2015, HDFC announced that it had agreed to sell 17.95 crore shares of HDFC Standard Life Insurance Company Limited (HDFC Life) in favour of its joint venture partner Standard Life (Mauritius Holdings) 2006 Limited at a price of Rs 95 per share aggregating to 9% of the issued and paid-up share capital of HDFC Life. Post the stake sale; HDFC' s holding in HDFC Life will drop to 61.65%.
HDFC announced a reduction in its Retail Prime Lending Rate (RPLR) by 25 basis points, with effect from 6 October 2015.
HDFC's Board of Directors at its meeting held on 26 October 2015 granted in-principle approval for establishment of a Sponsored Level 1 ADR programme in respect of up to 10% of the issued and paid-up share capital of the company. The Sponsored ADR programme envisages conversion of existing equity shares of the company into ADRs and does not entail any issue of additional shares.
On 7 January 2016, HDFC announced that HDFC Capital Affordable Real Estate Fund-1 (HCARE-1), an Alternative Investment Fund (AIF) sponsored by the company, has received an aggregate commitment for an amount of Rs. 2700 crore from various investors. The targeted fund size is approximately Rs. 5000 crore and the first close will be Rs. 2700 crore. The tenure of the fund will be 12 years and it will invest in the long-term equity of mid income housing. HDFC Capital Advisors Limited, a wholly owned subsidiary of HDFC, has been appointed as an investment manager for HCARE-1. On 3 June 2016, HDFC announced that it had completed the transfer of 12.33 crore shares of its subsidiary HDFC ERGO General Insurance Company Limited (HDFC ERGO), representing 22.902% stake in HDFC ERGO, in favour of its joint venture partner ERGO International AG. HDFC further said that it made pre tax profit of Rs. 922 crore and post tax profit of Rs. 725 crore from this transaction. On 17 December 2015, HDFC had agreed to sell 22.902% stake in HDFC ERGO to ERGO International at a price of Rs. 90.973 per share for aggregate consideration of Rs. 1122 crore.
On 14 July 2016, HDFC announced that it had successfully priced Rs 3000-crore overseas issue of unrated rupee denominated bonds. HDFC thus became the first Indian corporate issuer of rupee denominated bonds overseas. Rupee-denominated bonds are instruments through which Indian entities can raise funds in overseas capital markets, while the bond investors hold the currency risk.
HDFC's Board of Directors at its meeting held on 27 July 2016 granted in-principle approval for the amalgamation of five wholly-owned subsidiaries viz. Grandeur Properties Private Limited, Haddock Properties Private Limited, Winchester Properties Private Limited, Pentagram Properties Private Limited and Windermere Properties Private Limited into HDFC. The area of business of these five subsidiaries is receiving of rental income on commercial properties.
On 18 November 2016, HDFC announced that it has assigned its outstanding loans to the Unitech group to JM Financial Asset Reconstruction Company (JMFARC). Against total outstanding loans of Rs. 869 crore to the Unitech group, JMFARC paid HDFC Rs. 155 crore upfront and issued Security Receipts (SRs) to HDFC amounting to Rs. 705 crore to be redeemable over the period of construction of Unitech's projects.
On 30 March 2017, HDFC announced that it had raised Rs. 3300 crore through the first issue of rupee denominated bonds to overseas investors under the Medium Term Note programme.
On 1 June 2017, HDFC announced that its wholly-owned subsidiary HDFC Investments Limited has made an investment about $ 1.5 million by subscribing to 15% of the share capital of First Housing Finance (Tanzania), the first housing finance company to be set up in Tanzania.
On 22 June 2017, HDFC executed a subscription agreement with International Finance Corporation, Washington (IFC) whereby IFC decided to subscribed to the rupee denominated bonds to be issued overseas by HDFC up to an amount of Rs. 1300 crore.
On 26 July 2017, HDFC's Board of Directors granted approval for issue of Secured Redeemable Non-Convertible Debentures (NCD) aggregating to Rs 35000 crore on a private placement basis under a Shelf Disclosure Document.
On 28 July 2017, HDFC announced that it had approved offering of up to 19.12 crore equity shares of Rs 10 each of HDFC Standard Life Insurance Company (HDFC Life), representing 9.57% of the paid up and issued share capital of HDFC Life, for sale in the initial public offer of HDFC Life. HDFC Life will continue to be a subsidiary of HDFC after the IPO.
On 31 July 2017, HDFC Standard Life Insurance Company and Max Group entities announced that they had called off the proposed merger of their life insurance business since the parties were unable to obtain the requisite regulatory approvals to consummate the proposed merger and other transactions contemplated under the definitive agreements for the merger. On 8 August 2016, HDFC Life and Max Group Entities had announced a proposal for the merger of their life insurance business through a composite scheme of arrangement and had entered into certain definitive agreements to implement the merger. On 17 June 2016, the Board of Directors of HDFC Standard Life Insurance Company, Max Life Insurance Company and Max Financial Services approved entering into a confidentiality, exclusivity and standstill agreement to evaluate a potential combination through a merger of Max Life Insurance Company and Max Financial Services with HDFC Standard Life Insurance Company by way of a scheme of arrangement.
On 14 August 2017, the Insurance Regulatory & Development Authority of India granted its final approval for the merger of HDFC ERGO General Insurance Company Limited (HDFC ERGO), a subsidiary of the company with HDFC General Insurance Company Limited (formerly L&T General Insurance Company). On 9 September 2016, HDFC ERGO announced that it had completed the acquisition of 100% shares of L&T General Insurance Company Limited for Rs 551 crore. On 3 June 2016, the Board of Directors of HDFC ERGO had approved the acquisition of 100% stake in L&T General Insurance Company Limited for an aggregate amount of Rs. 551 crore subject to receipt of requisite approvals.
On 16 November 2017, HDFC announced that it had raised Rs. 1300 crore from the issue of rupee denominated bonds to International Finance Corporation, Washington under the Medium Term Note Programme.
On 30 November 2017, HDFC approved offering a part of its shareholding in its subsidiary HDFC Asset Management Company Limited (HDFC AMC) through offer for sale in the initial public offer (IPO) of HDFC AMC. As on 30 September 2017, HDFC held 57.36% stake in HDFC AMC.
HDFC's Board of Directors at its meeting held on 19 December 2017 approved subscription to the securities offered by HDFC Bank on preferential basis up to an amount not exceeding Rs 8500 crore. The board also approved raising funds through issue of equity shares and/or other permissible securities up to an aggregate amount not exceeding Rs. 13000 crore.
On 20 December 2017, HDFC approved the sale of 6.3% stake in Computer Age Management Services Private Limited (CAMS) to Great Terrain Investment Ltd, Mauritius, an affiliate of Warburg Pincus group, for a total consideration of Rs 209.50 crore. After completion of the sale, HDFC's holding in CAMS will drop to 4.8% of the equity capital of CAMS.
On 21 December 2017, HDFC approved the sale of 100% of its equity share capital in HDFC Developers Limited, which runs the HDFC Red platform, and HDFC Realty Limited, a real estate brokerage platform, to Quikr for total consideration of Rs. 101.99 crore and Rs. 254.98 crore respectively. Quikr is India's largest classifieds platform. Simultaneously, HDFC acquired an equity stake in Quikr India Private Limited.
Pursuant to receipt of approval of the members through Postal Ballot in February 2018, the Corporation issued 6,43,29,882 equity shares of Rs 2 each at an issue price of Rs 1,726.05 per equity share on preferential basis in accordance with the provisions of Chapter VII of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 (SEBI ICDR Regulations). The Corporation also issued 1,03,89,041 equity shares at an issue price of Rs 1,825 per equity share to QIBs on a qualified institutions placement basis in accordance with the provisions of Chapter VIII of the SEBI ICDR Regulations. The Corporation raised an aggregate amount of Rs 13,000 crore from both the issuances.
In October 2015, the Corporation had issued 3.65 crore warrants at an issue price of Rs 14 per warrant with a right exercisable by the warrant holder to exchange each warrant for one equity share of Rs 2 each of the Corporation at any time on or before October 05, 2018, at a warrant exercise price of Rs 1,475 per equity share to be paid by the warrant holder at any time of exchange of the warrants. As at March 31, 2018, 5,14,600 warrants have been exercised and exchanged into 5,14,600 equity shares of Rs 2 each of the Corporation. The equity shares so issued rank pari passu with the existing shares of the Corporation.
During the year 2017, HDFC ERGO General Insurance Company Limited (HDFC ERGO) acquired L&T General Insurance Company Limited (L&T General) whereby it became a 100% subsidiary of HDFC ERGO. L&T General has been renamed HDFC General Insurance Limited.
During the year 2018, the NCLT and the Insurance Regulatory and Development Authority of India (IRDAI) granted their approval for the merger of HDFC ERGO General Insurance Company Limited with HDFC General Insurance Limited (formerly L&T General Insurance Company Limited). Subsequent to the merger, HDFC General Insurance Limited was renamed HDFC ERGO General Insurance Company Limited.
In January 2018, the Corporation sold its entire stake in its wholly owned subsidiary companies, HDFC Developers Limited and HDFC Realty Limited, to Quikr India Private Ltd. Consequently, HDFC Realty Limited and HDFC Developers Limited ceased to be subsidiaries of the Corporation with effect from 24 January 2018.
The Scheme of Amalgamation of five of its wholly owned subsidiaries, Windermere Properties Private Limited, Haddock Properties Private Limited, Grandeur Properties Private Limited, Winchester Properties Private Limited and Pentagram Properties Private Limited was approved with the Company on April 27, 2018 and accordingly, Corporation considered operations of the said subsidiaries from April 1, 2016.
During the year 2018-19, the Corporation offered for sale 4.08% of the paid-up and issued equity share capital of HDFC Asset Management Company Limited (HDFC AMC), a subsidiary of the Corporation in the initial public offer (IPO) of HDFC AMC. HDFC AMC's equity shares were listed on BSE and NSE on August 6, 2018. As at March 31, 2019, the Corporation's shareholding in HDFC AMC stood at 52.8%.
In August 2018, the Corporation acquired 30,52,469 equity shares of Good Host Spaces Private Limited (Good Host), representing 25.01% of the paid-up share capital of the company and Good Host became an associate company of the Corporation in 2019.
GRUH Finance Limited (GRUH), a listed subsidiary of the Corporation was amalgamated with and into Bandhan Bank Limited in January, 2019 with the appointed date, January 1, 2019 and the share exchange ratio is 568 equity shares of face value Rs 10 each of Bandhan for every 1,000 fully paid-up equity shares of face value Rs 2 each of GRUH. i.e., 1000: 568.
As at April 1, 2019, i.e., the beginning of the financial year HDFC held 56.1% of the share capital of GRUH and thus, the company became a subsidiary of the Corporation. During the year 2019-20, the Corporation acquired 20,75,15,521 equity shares of HDFC ERGO Health Insurance Limited (HDFC ERGO Health), formerly Apollo Munich Health Insurance Company Limited, representing 51.16% of its equity share capital. Consequently, HDFC ERGO Health became a subsidiary of the Corporation.
During the year 2020-21, the Corporation's subsidiary, HDFC ERGO Health Insurance Limited (formerly Apollo Munich Health Insurance Company Limited) was merged with and into HDFC ERGO General Insurance Company Limited on September 29, 2020, with the Appointed Date, i.e., March 1, 2020 and resultant to this, the Scheme was made effective from November 13, 2020. As per the Scheme, the approved share exchange ratio is 100 equity shares of face value of Rs 10 each of HDFC ERGO for every 385 equity shares of face value of Rs 10 each of HDFC ERGO Health. i.e., 385:100. Based on the shareholding of the Corporation in HDFC ERGO and taking into consideration the share exchange ratio (for the merger of HDFC ERGO with HDFC ERGO Health), the Corporation is entitled to 50.6% stake in the merged entity (i.e. HDFC ERGO).
On April 22, 2021, the Corporation sold Equity Shares of Good Host Spaces Private Limited aggregating a total consideration of Rs 216 Crore and post the said Sale, Good Host ceased to be an associate of the Corporation.
On January 1, 2022, HDFC Life Insurance Company Limited acquired 100% shareholding of Exide Life Insurance Company Limited from Exide Industries Limited and Consequently, Exide Life became a wholly-owned subsidiary of HDFC Life.
During the year 2022, subsequent to the rights issue of True North Ventures Private Limited, the shareholding of the Corporation in True North reduced to 19.79%. Accordingly, True North ceased to be an associate of the Corporation. The Corporation on May 11, 2021 sold 44,12,000 equity shares of HDFC ERGO to ERGO International AG, aggregating a total consideration of Rs 236 Crore and accordingly, HDFC ERGO ceased to be a subsidiary of the Corporation.
On April 4, 2022, HDFC Investments Limited and HDFC Holdings Limited, wholly-owned subsidiaries of Housing Development Finance Corporation Limited (HDFC Limited) were merged with and into HDFC Limited and HDFC Limited with and into HDFC Bank by Scheme of Amalgamation, which became effective from July 01, 2023 with following ratios; 42 Equity Shares of HDFC BANK LIMITED having a Face Value of Re.1/- each to be issued as Fully Paid-Up, for every 25 Fully Paid-Up Equity Shares of Rs.2/- each held by the shareholder of HDFC LTD in the ratio, i.e. 42:25.
Housing Development Finance CorporationLtd(Merged)
Chairman Speech
TO OUR SHAREHOLDERS
When I wrote to you last year, we had just commenced our journey of working towards the
merger of HDFC and HDFC Bank. Financial year 2023 marked a year of many happenings. We
have been working relentlessly on the merger, whilst continuing to focus on ‘business
as usual' in a global macro-economic environment that has been exceptionally volatile.
The optimism on India continues with renewed vigour. The country has demonstrated
resilience with its broad-based recovery. India's position has been further strengthened
with cyclical and structural tailwinds. The country's GDP growth rate is likely to be more
than double that of global growth. We are extremely confident that the runway for housing
finance in India will remain immense for several years to come.
During the year, we have made substantial progress on the merger. Personally, if I were
to summarise the year in one word, it would be ‘gratitude'.
When we announced the merger, we knew we had hard deadlines to meet and a maze of
complex transactions to navigate through. Being one of the world's largest merger
announcements in recent times, each milestone has been closely followed by all
stakeholders. We have been unwavering in our commitment of being transparent throughout
this process and have engaged deeply with our stakeholders to keep them abreast of the
progress of the merger.
Working on a merger of this scale has been challenging and rewarding. Encountering
hurdles is par for the course in such transactions. Yet, what amazed us the most has been
the immense goodwill and strong relationships that HDFC as a group has. Whenever and
wherever we reached out for guidance, doors opened and help was at hand instantly. We have
worked with possibly the country's best legal teams, chartered accountants, valuers,
bankers, advisors and other specialised professionals. The collective knowledge and
experience of all these parties is unparalleled.
The approvals by the Competition Commission of India, the National Company Law
Tribunal, the shareholders and the regulators were important merger milestones. In all our
dealings pertaining to the merger, the HDFC group has been treated in a fair and just
manner. We stand committed to adhering to the prerequisites as stipulated by the
regulators, respecting the fact that these decisions are made keeping in mind the best
interests of the Indian financial ecosystem.
As we approach the tail end of the merger process, the effectiveness of the preparatory
work undertaken will be tested. For over ten months, the Integration Committee has been
labouring on ensuring a seamless transition. This is a painstaking exercise given the many
moving parts of this complex merger. Cross functional teams are hard at work to ensure
that the execution plan and strategic objectives are upheld in the merged entity.
Working towards the common goal of executing the merger has helped both sides get to
know each other better. It has been a phase of working jointly to tackle issues on hand,
but more importantly, it has enabled HDFC Bank to have a deeper understanding of the
underlying dynamics of the home loan business.
Over the course of the year, both HDFC and HDFC Bank have gone to great lengths to
explain the rationale of the merger, which has been well received by our stakeholders. An
oft-repeated question is what happens to the culture of HDFC? My answer to this is that
mergers are inherently about change. The work culture will be an amalgamation of the best
of both organisations. Culture at the workplace is always a shared responsibility. It
needs daily reinforcement through the demonstration effect with the tone set at the top.
What remains steadfast is the underlying ethics and value systems of both entities.
The confidence I derive is the agreed tenet of this integration -- preserving the
fabric of the ‘HDFC way of working'. This has also been publicly articulated
by the leadership at HDFC Bank.
No institution in India has the richness of 46 years of understanding the needs of a
home loan customer. Home loans are always different from other financial products. It is
the single largest investment a person makes in his or her lifetime. Home loans as a
financial product evokes a strong emotional quotient.
No doubt, the housing finance industry is a competitive one today. Yet, HDFC will
always have the distinction of being the institution that introduced retail housing
finance to the country.
Over the years, we have, in no small measure, helped chart the course for housing
finance to be recognised as an integral part of development of the country.
‘HDFC home loans' is an invaluable intangible. Since inception, HDFC has been
committed to building a customer centric organisation. We pride ourselves on our deep
expertise in understanding real estate markets at the micro level, the relationships we
have nurtured with developers and our ability to provide value added services such as
legal and technical appraisals in-house.
Our experience has taught us that every home loan customer has their own story and it
is the empathy factor that is the key differentiator between housing finance providers.
Dealing with home loan customers requires immense patience. It is about understanding the
needs and feelings of a home loan customer, assuaging their anxiety during this complex
transaction, customising solutions, explaining financial implications of a mortgage
product and lending responsibly to ensure a customer is not over stretched.
Home loans will now be complemented with HDFC Bank's core strengths - its sales engine,
execution capabilities at scale and deep insights on consumer behaviour. For HDFC Bank, a
home loan customer marks the beginning of a journey of having a customer in perpetuity.
HDFC Bank is excited at the prospect of cross selling an array of asset and liability
products to home loan customers. This will be done seamlessly on their digitalisation
platforms - all through a one click experience.
HDFC Bank's vast distribution network will be better harnessed for both home loans and
the group companies. As a natural progression, the synergies between HDFC Bank and the
group companies will deepen with HDFC Bank taking on the mantle of ownership.
What the future holds, only time will tell. The biggest risk organisations face today
is staying with the status quo, believing what worked well yesterday will continue in the
future. Change takes courage as it displaces one from the cocoon of comfort and
familiarity. Yet, with change comes the power of adaptability, growth and new aspirations.
The orchestration of this merger is to ensure that the future is not constrained for any
of our stakeholders.
As HDFC hands the baton, my wish is that our core founding values of kindness,
fairness, efficiency and effectiveness gets woven deeper into the fabric of the HDFC
group.
To all our employees transitioning to HDFC Bank, know that you will always carry the
indelible mark of ‘HDFC' with you. This is your era of new possibilities. Embrace
change, continue to work as close-knit teams, be kind and have each other's back. The
future is yours to grasp.
Our senior management and leadership team over the years have been the torchbearers and
crusaders, ensuring that our core values percolate down to every level within the
organisation. More importantly, to all our employees, past and present, I personally
salute each and all of you who built the foundation, the walls and then the floors brick
by brick with solid mortar. Some have been true HDFC lifers, others have dispersed, but
none will be forgotten. They are the fulcrum upon which this institution has stood on.
Governance has been the cornerstone of HDFC and for that, I am grateful to all our
directors who have supported and guided us through the decades.
To all our shareholders, thank you for your trust and belief in us. HDFC's new home is
about strategising and building for the long-term.
I deeply acknowledge the pivotal role and contribution of the Chairman of HDFC Bank,
Mr. Atanu Chakraborty along with the other board members during this merger process.
With the proven execution capabilities of HDFC Bank, we are confident that Sashi,
together with the leadership team will forge an era of new opportunities for the combined
entity.
It is my time to hang my boots with both anticipation and hope for the future. While
this will be my last communication to shareholders of HDFC, rest assured we now stride
tall into a very exciting future of growth and prosperity.
The HDFC experience is invaluable. Our history cannot be erased and our legacy will be
taken forward.
DEEPAK S. PAREKH
Chairman
Housing Development Finance CorporationLtd(Merged)
Company History
Housing Development Finance Corporation Limited (HDFC) was incorporated on October 17, 1977 as the first specialized Mortgage Company in India. The principal business is to provide finance to individuals, corporate and developers for the purchase, construction, development and repair of houses, apartments and commercial property in India. The business is conducted through its branches in India and its overseas offices in London, Singapore and Dubai supported by a network of agents for sourcing loans as well as deposits and service associates in the Middle East region, to provide housing loans and property advisory services to non-resident Indians (NRIs) and persons of Indian origin (PIOs). HDFC is the Holding Company for investments in its associates and subsidiary companies.
HDFC's product range includes loans for purchase and construction of a residential unit, purchase of land, home improvement loans, home extension loans, non-residential premises loans for professionals and loan against property, while its flexible repayment options include Step Up Repayment Facility (SURF) and Flexible Loan Installment Plan (FLIP).
The Company's subsidiaries include HDFC Developers Ltd., HDFC Investments Ltd., HDFC Holdings Ltd., HDFC Trustee Company Ltd., HDFC Realty Ltd., HDFC Property Ventures Ltd., HDFC Sales Pvt. Ltd., HDFC Ventures Trustee Company Ltd., HDFC Venture Capital Ltd., HDFC Ergo General Insurance Company Ltd., HDFC Standard Life Insurance Company Ltd., GRUH Finance Ltd, HDFC Asset Management Company Ltd. and HDFC Bank Ltd.
In the year 1979, the Corporation introduced HDFC Certificate of Deposit Scheme. In the year 1981, they introduced their first retail Deposit Product. They promoted a wholly owned subsidiary, HDFC Developers during the year. In the year 1982, the Corporation introduced the Line of Credit Product (LOC) for employee owned housing. In the year 1985, the Corporation introduced the Home Savings Plan based on the 'Bausparkassen' model, West Germany and the 'Step-up Repayment Facility'.
In the year 1988, the Corporation in with India's leading financial institutions and commercial banks promoted Gujarat Rural Housing Finance Corporation Ltd (GRUH Finance), Housing Promotion and Finance Corporation Ltd (now SBI Home Finance), Can Fin Homes Ltd and Infrastructure Leasing and Financial Services (IL&FS), and the Credit Rating Information Services of India Ltd (CRISIL). They introduced Telescopic Loan Plan and Short Term Bridging Loan products.
In the year 1989, the Corporation introduced two new products, namely Home Improvement loans & Home Extension loans. In the year 1990, the Corporation in association with the United Nations Centre for Human Settlements promoted the Coalition of Housing Finance Institutions in Asia. In the year 1991, they re-launched their retail fixed deposit products.
In the year 1993, the company made a joint venture with General Electric Capital Corporation of US to promote Countrywide Consumer Financial Services Ltd for consumer finance. In the year 1994, the Corporation introduced Non-Residential Premises Loans for Individuals.
In the year 1995, the Corporation made a Strategic alliance with NatWest Markets (UK) and promoted the HDFC Bank. They made a joint venture with IL&FS and Colliers Jardine Asia Pacific Ltd and promoted Colliers Jardine India Property Services Ltd. Also, they signed a MoU with Standard Life Assurance Co. of UK for life insurance.
In the year 1997, the Corporation promoted the first private sector housing finance company, namely Delta Brac Housing Finance Corporation Ltd in Bangladesh. In the year 1998, the Corporation in partnership with a South-based NGO launched the Indian Association for Savings & Credit (IASC), a pioneering micro-finance institution operating in the states of Tamil Nadu and Kerala. Also, they introduced Home Equity Loans and Corporate Employees Group Finance Arrangement.
In the year 1999, the Corporation invested in a new Housing Finance company in Sri Lanka. They launched the Corporation website www.hdfcindia.com (now hdfc.com). Also, they introduced the Adjustable Rate Home Loans and became the first housing finance institution to do so.
In the year 2000, the Corporation inaugurated a new HDFC Standard Life office in Mumbai. They launched their first Property Fair and they issued their first Mortgage Backed Securities. The Corporation made a joint venture with Mahindra & Mahindra group and promoted propertymartindia.com, a website for providing a range of real estate services.
During the year, the Corporation acquired the entire shareholding of Hometrust Housing Finance Company Ltd. Also, GRUH became a subsidiary of the Corporation. They made a joint venture with TCS and promoted Intelenet Global Services Limited for IT enabled services. Also, they entered into joint venture with Standard Life Investments for promoting the HDFC Mutual Fund.
In the year 2001, the Corporation in association with State Bank of India, Dun & Bradstreet and Trans Union International Inc. (TU) promoted Credit Information Bureau (India) Ltd. They opened their 100th office at Amristar.
In the year 2002, the company made a joint venture with Chubb Corporation, USA and promoted HDFC-Chubb General Insurance Company Ltd for non-life insurance. In June 2003, they singed a USD 200 million-loan agreement with International Finance Corporation (IFC), Washington.
In May 2003, the Corporation signed a Technical Service Contract with Egyptian American Bank for providing technical assistance for setting up Egypt's first private sector led mortgage finance company Egyptian Housing Finance Company.
In February 2005, the Corporation entered into an implementation agreement with NHB and Asian Development Bank for technical assistance for a study on the development of an agency/secondary mortgage institution to facilitate issuance of residential mortgage backed securities along similar lines as Fannie Mae in USA.
During the year 2006-07, the Corporation approved 8 schemes in the area of low-income housing and micro-enterprise financing by way of financial intermediation to partner non-government organisations and micro-finance institutions. They divested their equity holding in HDFC-SL in favour of Standard Life Assurance Company, UK for a consideration of Rs. 5.66 crore.
During the year 2007-08, the Corporation approved 16 new schemes under the KfW Entsicklungsbank lines in the area of low-income housing and micro-finance by way of financial intermediation to partner non-government organisations across India. They launched two major advertising campaigns, namely 'Asset Plus' and 'Empowerment'. 'Asset Plus' was launched primarily to create awareness about home equity loans. 'Empowerment' highlighted the fact that the Corporation's employees are empowered to deploy all resources available to them to provide professional services to customers.
During the year, the Corporation acquired the entire 26% of the equity of HDFC Chubb General Insurance Company Ltd from Chubb Global Financial Service Corporation, USA, consequent to which the company became a wholly owned subsidiary of the Corporation. In June 2007, consequent to a preferential offer by HDFC Bank Ltd, the Corporation acquired 13,582,000 shares of HDFC Bank for a consideration of Rs. 1,390.11 crore.
In October 2007, the Corporation and Standard Life Investments realigned their shareholding in HDFC Asset Management Company Ltd. Accordingly; the Corporation increased their stake to 60% in HDFC-AMC by acquiring 9.9% from Standard Life Investments. Also, the Corporation and ERGO International AG (ERGO), the primary insurance entity of Munich Re Group (Germany) entered into a joint venture, where by HDFC sold 26% equity stake of the company to ERGO. As a result of this new joint venture, the company was named HDFC ERGO General.
During the year, the Corporation divested 7.15% of its equity holding in HDFC-SL in favour of Standard Life Assurance Company, UK for a profit of Rs. 120.94 crore. Also, they divested their entire shareholding in Intelenet Global Service Pvt Ltd for a profit of Rs. 313.25 crore. As a result, Intelenet Global Service Pvt Ltd ceased to be an associate of the Corporation.
During the year 2008-09, the Corporation approved 12 new schemes under the KfW Entsicklungsbank lines in the area of low-income housing and micro-finance by way of bulk loans to partner Non-Government Organisations and micro-finance institutions.
During the year 2009-10, the Corporation introduced 'HDFC Systematic Savings Plan', which is a monthly savings plan offering a variable rate of interest. They launched a key brand campaign - 'HDFC - because every family needs a home'. The objective of the campaign was to connect with HDFC' s existing customers as well as prospective customers, making the HDFC brand synonymous with a home.
In April 2010, the company launched a special home loan product at a fixed rate of 8.25% per annum up to March 31, 2011, 9% for the period between April 4, 2011 and March 31, 2012 and the applicable floating rate for the balance term. This is a flexible product with dual rates. They also re-launched their product loan against property to assist customers.
During the year 2010-11, HDFC Real Estate Destination (HDFC RED), an on-line real estate portal was launched with the key objective of providing a single destination to potential home buyers to search and short-list desired properties that suit their requirements.
In 2011 HDFC signed MOU with Indian Army for total Salary Solutions. HDFC 5000th ATM was launched at Swami Narayan Chowk, Rajkot
In 2012, the company incorporated a new wholly owned subsidiary, namely HDFC Education and Development Services Pvt Ltd. HDFC launched Solitaire' range of women's Credit Cards. HDFC Bank and Vodafone India launch m-paisa - a product for financial inclusion. The company also launches Tax payment facility through ATM and also a Bouquet of premium Travel Credit Cards. The company also launches INFINIA Credit Card
In 2013 HDFC Mutual Fund Acquires the Schemes of Morgan Stanley Mutual Fund.
In 2015 HDFC Life gets nod to up foreign partner stake -FDI boost for HDFC as FIPB clears Standard Life's proposal. HDFC launches its first school 'The HDFC School' in Gurgaon.
HDFC announced a reduction in its Retail Prime Lending Rate (RPLR) by 20 basis points, with effect from 13 April 2015.
On 8 June 2015, a Committee of the Board of Directors of the Company approved a proposal for simultaneous offering of Secured Redeemable Non-Convertible Debentures of upto Rs. 5000 crore along with warrants convertible into equity shares.
On 14 August 2015, HDFC announced that it had agreed to sell 17.95 crore shares of HDFC Standard Life Insurance Company Limited (HDFC Life) in favour of its joint venture partner Standard Life (Mauritius Holdings) 2006 Limited at a price of Rs 95 per share aggregating to 9% of the issued and paid-up share capital of HDFC Life. Post the stake sale; HDFC' s holding in HDFC Life will drop to 61.65%.
HDFC announced a reduction in its Retail Prime Lending Rate (RPLR) by 25 basis points, with effect from 6 October 2015.
HDFC's Board of Directors at its meeting held on 26 October 2015 granted in-principle approval for establishment of a Sponsored Level 1 ADR programme in respect of up to 10% of the issued and paid-up share capital of the company. The Sponsored ADR programme envisages conversion of existing equity shares of the company into ADRs and does not entail any issue of additional shares.
On 7 January 2016, HDFC announced that HDFC Capital Affordable Real Estate Fund-1 (HCARE-1), an Alternative Investment Fund (AIF) sponsored by the company, has received an aggregate commitment for an amount of Rs. 2700 crore from various investors. The targeted fund size is approximately Rs. 5000 crore and the first close will be Rs. 2700 crore. The tenure of the fund will be 12 years and it will invest in the long-term equity of mid income housing. HDFC Capital Advisors Limited, a wholly owned subsidiary of HDFC, has been appointed as an investment manager for HCARE-1. On 3 June 2016, HDFC announced that it had completed the transfer of 12.33 crore shares of its subsidiary HDFC ERGO General Insurance Company Limited (HDFC ERGO), representing 22.902% stake in HDFC ERGO, in favour of its joint venture partner ERGO International AG. HDFC further said that it made pre tax profit of Rs. 922 crore and post tax profit of Rs. 725 crore from this transaction. On 17 December 2015, HDFC had agreed to sell 22.902% stake in HDFC ERGO to ERGO International at a price of Rs. 90.973 per share for aggregate consideration of Rs. 1122 crore.
On 14 July 2016, HDFC announced that it had successfully priced Rs 3000-crore overseas issue of unrated rupee denominated bonds. HDFC thus became the first Indian corporate issuer of rupee denominated bonds overseas. Rupee-denominated bonds are instruments through which Indian entities can raise funds in overseas capital markets, while the bond investors hold the currency risk.
HDFC's Board of Directors at its meeting held on 27 July 2016 granted in-principle approval for the amalgamation of five wholly-owned subsidiaries viz. Grandeur Properties Private Limited, Haddock Properties Private Limited, Winchester Properties Private Limited, Pentagram Properties Private Limited and Windermere Properties Private Limited into HDFC. The area of business of these five subsidiaries is receiving of rental income on commercial properties.
On 18 November 2016, HDFC announced that it has assigned its outstanding loans to the Unitech group to JM Financial Asset Reconstruction Company (JMFARC). Against total outstanding loans of Rs. 869 crore to the Unitech group, JMFARC paid HDFC Rs. 155 crore upfront and issued Security Receipts (SRs) to HDFC amounting to Rs. 705 crore to be redeemable over the period of construction of Unitech's projects.
On 30 March 2017, HDFC announced that it had raised Rs. 3300 crore through the first issue of rupee denominated bonds to overseas investors under the Medium Term Note programme.
On 1 June 2017, HDFC announced that its wholly-owned subsidiary HDFC Investments Limited has made an investment about $ 1.5 million by subscribing to 15% of the share capital of First Housing Finance (Tanzania), the first housing finance company to be set up in Tanzania.
On 22 June 2017, HDFC executed a subscription agreement with International Finance Corporation, Washington (IFC) whereby IFC decided to subscribed to the rupee denominated bonds to be issued overseas by HDFC up to an amount of Rs. 1300 crore.
On 26 July 2017, HDFC's Board of Directors granted approval for issue of Secured Redeemable Non-Convertible Debentures (NCD) aggregating to Rs 35000 crore on a private placement basis under a Shelf Disclosure Document.
On 28 July 2017, HDFC announced that it had approved offering of up to 19.12 crore equity shares of Rs 10 each of HDFC Standard Life Insurance Company (HDFC Life), representing 9.57% of the paid up and issued share capital of HDFC Life, for sale in the initial public offer of HDFC Life. HDFC Life will continue to be a subsidiary of HDFC after the IPO.
On 31 July 2017, HDFC Standard Life Insurance Company and Max Group entities announced that they had called off the proposed merger of their life insurance business since the parties were unable to obtain the requisite regulatory approvals to consummate the proposed merger and other transactions contemplated under the definitive agreements for the merger. On 8 August 2016, HDFC Life and Max Group Entities had announced a proposal for the merger of their life insurance business through a composite scheme of arrangement and had entered into certain definitive agreements to implement the merger. On 17 June 2016, the Board of Directors of HDFC Standard Life Insurance Company, Max Life Insurance Company and Max Financial Services approved entering into a confidentiality, exclusivity and standstill agreement to evaluate a potential combination through a merger of Max Life Insurance Company and Max Financial Services with HDFC Standard Life Insurance Company by way of a scheme of arrangement.
On 14 August 2017, the Insurance Regulatory & Development Authority of India granted its final approval for the merger of HDFC ERGO General Insurance Company Limited (HDFC ERGO), a subsidiary of the company with HDFC General Insurance Company Limited (formerly L&T General Insurance Company). On 9 September 2016, HDFC ERGO announced that it had completed the acquisition of 100% shares of L&T General Insurance Company Limited for Rs 551 crore. On 3 June 2016, the Board of Directors of HDFC ERGO had approved the acquisition of 100% stake in L&T General Insurance Company Limited for an aggregate amount of Rs. 551 crore subject to receipt of requisite approvals.
On 16 November 2017, HDFC announced that it had raised Rs. 1300 crore from the issue of rupee denominated bonds to International Finance Corporation, Washington under the Medium Term Note Programme.
On 30 November 2017, HDFC approved offering a part of its shareholding in its subsidiary HDFC Asset Management Company Limited (HDFC AMC) through offer for sale in the initial public offer (IPO) of HDFC AMC. As on 30 September 2017, HDFC held 57.36% stake in HDFC AMC.
HDFC's Board of Directors at its meeting held on 19 December 2017 approved subscription to the securities offered by HDFC Bank on preferential basis up to an amount not exceeding Rs 8500 crore. The board also approved raising funds through issue of equity shares and/or other permissible securities up to an aggregate amount not exceeding Rs. 13000 crore.
On 20 December 2017, HDFC approved the sale of 6.3% stake in Computer Age Management Services Private Limited (CAMS) to Great Terrain Investment Ltd, Mauritius, an affiliate of Warburg Pincus group, for a total consideration of Rs 209.50 crore. After completion of the sale, HDFC's holding in CAMS will drop to 4.8% of the equity capital of CAMS.
On 21 December 2017, HDFC approved the sale of 100% of its equity share capital in HDFC Developers Limited, which runs the HDFC Red platform, and HDFC Realty Limited, a real estate brokerage platform, to Quikr for total consideration of Rs. 101.99 crore and Rs. 254.98 crore respectively. Quikr is India's largest classifieds platform. Simultaneously, HDFC acquired an equity stake in Quikr India Private Limited.
Pursuant to receipt of approval of the members through Postal Ballot in February 2018, the Corporation issued 6,43,29,882 equity shares of Rs 2 each at an issue price of Rs 1,726.05 per equity share on preferential basis in accordance with the provisions of Chapter VII of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 (SEBI ICDR Regulations). The Corporation also issued 1,03,89,041 equity shares at an issue price of Rs 1,825 per equity share to QIBs on a qualified institutions placement basis in accordance with the provisions of Chapter VIII of the SEBI ICDR Regulations. The Corporation raised an aggregate amount of Rs 13,000 crore from both the issuances.
In October 2015, the Corporation had issued 3.65 crore warrants at an issue price of Rs 14 per warrant with a right exercisable by the warrant holder to exchange each warrant for one equity share of Rs 2 each of the Corporation at any time on or before October 05, 2018, at a warrant exercise price of Rs 1,475 per equity share to be paid by the warrant holder at any time of exchange of the warrants. As at March 31, 2018, 5,14,600 warrants have been exercised and exchanged into 5,14,600 equity shares of Rs 2 each of the Corporation. The equity shares so issued rank pari passu with the existing shares of the Corporation.
During the year 2017, HDFC ERGO General Insurance Company Limited (HDFC ERGO) acquired L&T General Insurance Company Limited (L&T General) whereby it became a 100% subsidiary of HDFC ERGO. L&T General has been renamed HDFC General Insurance Limited.
During the year 2018, the NCLT and the Insurance Regulatory and Development Authority of India (IRDAI) granted their approval for the merger of HDFC ERGO General Insurance Company Limited with HDFC General Insurance Limited (formerly L&T General Insurance Company Limited). Subsequent to the merger, HDFC General Insurance Limited was renamed HDFC ERGO General Insurance Company Limited.
In January 2018, the Corporation sold its entire stake in its wholly owned subsidiary companies, HDFC Developers Limited and HDFC Realty Limited, to Quikr India Private Ltd. Consequently, HDFC Realty Limited and HDFC Developers Limited ceased to be subsidiaries of the Corporation with effect from 24 January 2018.
The Scheme of Amalgamation of five of its wholly owned subsidiaries, Windermere Properties Private Limited, Haddock Properties Private Limited, Grandeur Properties Private Limited, Winchester Properties Private Limited and Pentagram Properties Private Limited was approved with the Company on April 27, 2018 and accordingly, Corporation considered operations of the said subsidiaries from April 1, 2016.
During the year 2018-19, the Corporation offered for sale 4.08% of the paid-up and issued equity share capital of HDFC Asset Management Company Limited (HDFC AMC), a subsidiary of the Corporation in the initial public offer (IPO) of HDFC AMC. HDFC AMC's equity shares were listed on BSE and NSE on August 6, 2018. As at March 31, 2019, the Corporation's shareholding in HDFC AMC stood at 52.8%.
In August 2018, the Corporation acquired 30,52,469 equity shares of Good Host Spaces Private Limited (Good Host), representing 25.01% of the paid-up share capital of the company and Good Host became an associate company of the Corporation in 2019.
GRUH Finance Limited (GRUH), a listed subsidiary of the Corporation was amalgamated with and into Bandhan Bank Limited in January, 2019 with the appointed date, January 1, 2019 and the share exchange ratio is 568 equity shares of face value Rs 10 each of Bandhan for every 1,000 fully paid-up equity shares of face value Rs 2 each of GRUH. i.e., 1000: 568.
As at April 1, 2019, i.e., the beginning of the financial year HDFC held 56.1% of the share capital of GRUH and thus, the company became a subsidiary of the Corporation. During the year 2019-20, the Corporation acquired 20,75,15,521 equity shares of HDFC ERGO Health Insurance Limited (HDFC ERGO Health), formerly Apollo Munich Health Insurance Company Limited, representing 51.16% of its equity share capital. Consequently, HDFC ERGO Health became a subsidiary of the Corporation.
During the year 2020-21, the Corporation's subsidiary, HDFC ERGO Health Insurance Limited (formerly Apollo Munich Health Insurance Company Limited) was merged with and into HDFC ERGO General Insurance Company Limited on September 29, 2020, with the Appointed Date, i.e., March 1, 2020 and resultant to this, the Scheme was made effective from November 13, 2020. As per the Scheme, the approved share exchange ratio is 100 equity shares of face value of Rs 10 each of HDFC ERGO for every 385 equity shares of face value of Rs 10 each of HDFC ERGO Health. i.e., 385:100. Based on the shareholding of the Corporation in HDFC ERGO and taking into consideration the share exchange ratio (for the merger of HDFC ERGO with HDFC ERGO Health), the Corporation is entitled to 50.6% stake in the merged entity (i.e. HDFC ERGO).
On April 22, 2021, the Corporation sold Equity Shares of Good Host Spaces Private Limited aggregating a total consideration of Rs 216 Crore and post the said Sale, Good Host ceased to be an associate of the Corporation.
On January 1, 2022, HDFC Life Insurance Company Limited acquired 100% shareholding of Exide Life Insurance Company Limited from Exide Industries Limited and Consequently, Exide Life became a wholly-owned subsidiary of HDFC Life.
During the year 2022, subsequent to the rights issue of True North Ventures Private Limited, the shareholding of the Corporation in True North reduced to 19.79%. Accordingly, True North ceased to be an associate of the Corporation. The Corporation on May 11, 2021 sold 44,12,000 equity shares of HDFC ERGO to ERGO International AG, aggregating a total consideration of Rs 236 Crore and accordingly, HDFC ERGO ceased to be a subsidiary of the Corporation.
On April 4, 2022, HDFC Investments Limited and HDFC Holdings Limited, wholly-owned subsidiaries of Housing Development Finance Corporation Limited (HDFC Limited) were merged with and into HDFC Limited and HDFC Limited with and into HDFC Bank by Scheme of Amalgamation, which became effective from July 01, 2023 with following ratios; 42 Equity Shares of HDFC BANK LIMITED having a Face Value of Re.1/- each to be issued as Fully Paid-Up, for every 25 Fully Paid-Up Equity Shares of Rs.2/- each held by the shareholder of HDFC LTD in the ratio, i.e. 42:25.
Housing Development Finance CorporationLtd(Merged)
Directors Reports
TO THE MEMBERS
Your directors are pleased to present the forty-sixth annual report of your Corporation
with the audited accounts for the year ended March 31, 2023.
Financial Results |
For the year ended March 31, 2023 |
For the year ended March 31, 2022 |
|
Rs in crore |
Rs in crore |
Profit Before Sale of Investments, Dividend and Provision for
Expected Credit Loss |
18,889.98 |
17,404.30 |
Profit on Sale of Investments |
183.81 |
263.02 |
Dividend |
2,735.25 |
1,510.99 |
Impairment on Financial Instruments (Expected Credit Loss) |
(1,795.00) |
(1,932.00) |
Profit Before Tax |
20,014.04 |
17,246.31 |
Tax Expense |
(3,774.68) |
(3,504.13) |
Net Profit After Tax |
16,239.36 |
13,742.18 |
Other Comprehensive Income (OCI) |
(786.12) |
33.86 |
Total Comprehensive Income |
15,453.24 |
13,776.04 |
Retained Earnings
Opening Balance |
23,108.86 |
17,328.59 |
Profit for the year |
16,239.36 |
13,742.18 |
Re-measurement of Net Defined Benefit Plans through OCI |
(19.27) |
(5.25) |
Amount Available for Appropriations |
39,328.95 |
31,065.52 |
Appropriations:
Special Reserve No. II |
2,200.00 |
2,100.00 |
Statutory Reserve (Under Section 29C of the National Housing Bank Act,
1987) |
1,100.00 |
700.00 |
Transfer from retained earnings |
1,366.17 |
1,004.01 |
Final Dividend Paid |
5,442.70 |
4,152.65 |
Closing Balance Carried Forward |
29,220.08 |
23,108.86 |
Dividend
Based on the performance of the Corporation and in accordance with Section 123(3) of
the Companies Act, 2013, the Board of Directors at its meeting held on May 4, 2023,
declared an interim dividend of Rs 44 per equity share of Rs 2 each for the financial year
ended March 31, 2023. Accordingly, no final dividend has been recommended for the year
ended March 31, 2023.
In the previous year, the Corporation had declared a final dividend of Rs 30 per equity
share.
The dividend pay-out ratio for the year ended March 31, 2023 is 49.7% compared to 39.6%
in the previous year.
The dividend declared is in accordance with the principles and criteria as set out in
the Dividend Distribution Policy. The Dividend Distribution Policy is placed on the
Corporation's website.
Material Developments: Ongoing Scheme of Amalgamation
The Board of Directors of the Corporation at its meeting held on April 4, 2022, subject
to requisite approvals/ consents, approved a composite scheme of amalgamation (Scheme) for
the amalgamation of: (i) HDFC Investments Limited (HDFC Investments) and HDFC Holdings
Limited (HDFC Holdings), wholly-owned subsidiaries of the Corporation, with and into the
Corporation and (ii) the Corporation with and into HDFC Bank Limited (HDFC Bank) and
matters related thereto.
On April 3, 2022, subject to requisite approvals/consents, the Board of Directors of
HDFC Investments and HDFC Holdings had approved the amalgamation of their respective
companies with and into the Corporation.
Upon the Scheme becoming effective, the subsidiaries/ associates of the Corporation
will become subsidiaries/ associates of HDFC Bank. Shareholders of the Corporation as on
the record date will receive 42 shares of HDFC Bank (each of face value of Rs 1), for
every 25 shares held in the Corporation (each of face value of Rs 2), and the equity
shares held by the Corporation in HDFC Bank will be extinguished as per the Scheme.
Further, HDFC Bank will be 100% owned by public shareholders and existing shareholders of
the Corporation will own 41% of HDFC Bank upon the Scheme becoming effective.
During the year, the Corporation received various no- objection/approval letters
regarding the Scheme from the Reserve Bank of India (RBI), the Securities and Exchange
Board of India (SEBI), the Competition Commission of India, the Pension Fund Regulatory
and Development Authority, the National Housing Bank (NHB) and the stock exchanges.
Further, during the year, the resolution approving the Scheme was passed by the
shareholders of the Corporation. On March 17, 2023, the Hon'ble National Company Law
Tribunal, Mumbai Bench approved the Scheme.
As of date, certain approvals are awaited from regulators of a few subsidiary/associate
companies of the Corporation in respect of change in control/transfer of shares to HDFC
Bank. The Scheme shall become effective upon receiving all such requisite approvals,
fulfilment of conditions prescribed therein and upon filing of the certified copy of the
order with the Registrar of Companies, Mumbai (ROC) by all the companies involved in the
Scheme.
Upon the Scheme coming into effect, HDFC Investments, HDFC Holdings and the Corporation
would be dissolved without being wound up.
Conversion of Warrants
In August 2020, the Corporation had completed its Qualified Institutional Placement of
equity shares and secured, redeemable non-convertible debentures simultaneously with
warrants. The Corporation had raised Rs 307 crore through the issue and allotment of
1,70,57,400 warrants at an issue price of Rs 180 per warrant with a right exercisable by
the warrant holder to exchange each warrant for one equity share of face value of Rs 2
each of the Corporation at any time on or before August 10, 2023, at a warrant exercise
price of Rs 2,165 per equity share, to be paid by the warrant holder at the time of
exchange of the warrants. As of date, 3,600 warrants have been converted into equity
shares. The warrants are listed on BSE Limited (BSE) and National Stock Exchange of India
Limited (NSE).
As per the Scheme, the warrants outstanding on the Effective Date shall continue in the
amalgamated company i.e. HDFC Bank. The number of equity shares of HDFC Bank that the
warrant holders shall be entitled to upon exercise of such warrants shall be on the basis
of the Share Exchange Ratio. There will be no other changes to the terms of the warrants
in the amalgamated company.
Management Discussion and Analysis Report (MD&A), Report of the Directors on
Corporate Governance and Business Responsibility and Sustainability Report
In accordance with the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 (Listing Regulations) and directions issued by RBI, the MD&A and the
Report of the Directors on Corporate Governance form part of this report.
As recommended by SEBI, the Business Responsibility and Sustainability Report (BRSR)
has been placed on the Corporation's website.
Key Regulatory Changes
The RBI's 'Scale Based Regulation (SBR): A Revised Regulatory Framework for NBFCs' came
into effect from October 1, 2022. Scale based regulation entail further alignment of
regulations of NBFCs with those applicable to banks on internal capital adequacy
assessment process, concentration of credit/investment, large exposure framework, senior
management compensation and adoption of core financial services solution, amongst others.
On September 30, 2022, the RBI released a list of NBFCs that qualified under the NBFC
Upper Layer (NBFC-UL). RBI stated that the top 10 NBFCs based on asset size would qualify
as NBFC-UL. RBI, however, clarified that despite the Corporation qualifying in terms of
asset size to be included in NBFC-UL, it was not being considered in this category in
light of the impending amalgamation. The Corporation is in compliance with the necessary
requirements as applicable under Scale Based Regulation.
As mandated under Scale Based Regulation, the Corporation has adopted a board approved
policy for Internal Capital Adequacy Assessment Process (ICAAP). The objective of ICAAP is
to ensure availability of adequate capital to support all risks in business as also to
develop and use better internal risk management techniques for monitoring and managing
risks.
The Corporation is in compliance with the applicable provisions of the Master Direction
- Non-Banking Financial Company - Housing Finance Company (Reserve Bank) Directions, 2021
(RBI HFC Directions) and other directions/ guidelines issued by RBI/NHB, as applicable.
Further details on regulatory issues are elucidated in the MD&A.
Lending Operations
The Corporation is a Non-Banking Financial Company - Housing Finance Company (NBFC-HFC)
and is engaged in financing the purchase and construction of residential houses, real
estate and certain other purposes in India. All other activities of the Corporation
revolve around the main business.
Lending operations of the Corporation continued seamlessly during the year, with the
demand for individual housing continuing to remain strong.
During the year, individual loan approvals and disbursements grew by 13% and 16%
respectively.
The Assets Under Management (AUM) as at March 31, 2023 amounted to Rs 7,23,988 crore as
compared to Rs 6,53,902 crore in the previous year - a growth of 11%.
On an AUM basis, the growth in the individual loan book was 17%.
The Corporation's outstanding loan book stood at Rs 6,20,507 crore as at March 31,
2023, compared to Rs 5,68,363 crore in the previous year.
During the year, the Corporation assigned individual loans amounting to Rs 36,910 crore
compared to Rs 28,455 crore in the previous year.
As at March 31, 2023, the outstanding amount in respect of individual loans sold was Rs
1,02,071 crore. The Corporation continues to service these loans.
Further details of lending operations are provided in the MD&A.
Market Borrowings
The Corporation is in compliance with the provisions of the guidelines on Private
Placement of Non-Convertible Debentures (NCDs) as per RBI HFC Directions, and other
regulations as may be applicable. The Corporation has been regular in payment of principal
and interest on the NCDs.
Details of market borrowings are provided in the MD&A and notes to accounts.
Deposits
Deposits outstanding as at March 31, 2023 amounted to Rs 1,52,111 crore as compared to
Rs 1,60,900 crore in the previous year.
CRISIL and ICRA have for the twenty-eighth consecutive year, reaffirmed their 'CRISIL
AAA/Stable' and 'ICRA AAA/ Stable' ratings respectively for HDFC's deposits. These ratings
represent the highest degree of safety regarding timely servicing of financial
obligations.
There has been no default in repayment of deposits or payment of interest during the
year. All the deposits accepted by the Corporation are in compliance with the requirements
of the regulations regarding deposit acceptance.
As at March 31, 2023, public deposits amounting to Rs 42 crore pertaining to 1,392
deposit accounts had matured and was not repaid by the Corporation. These cases were
claimed, but could not be repaid by the Corporation for pending legal matters or instances
where the depositor is deceased and the nominee/legal heir has not claimed the deposit or
the succession certificate is awaited. Other than these cases, there were no unclaimed
deposits as at March 31, 2023. Since then, 50 deposit accounts amounting to Rs 0.27 crore
have been settled. The Corporation continues to make concerted efforts to resolve these
issues.
Depositors were intimated regarding the maturity of deposits with a request to either
renew or claim their deposits. Where the deposit remains unclaimed, reminders are sent to
depositors periodically and follow up action is initiated through the concerned agent or
branch.
Deposits remaining unclaimed for a period of seven years from the date they became due
for payment have to be transferred to the Investor Education and Protection Fund (IEPF)
established by the central government. The concerned depositor can claim the deposit from
the IEPF. During the year, an amount of Rs 5.32 crore was transferred to the IEPF.
Capital Adequacy Ratio
As at March 31, 2023, the Corporation's capital adequacy ratio (CAR) stood at 24.3%, of
which Tier I capital was 23.8% and Tier II capital was 0.5%.
As per regulatory norms, the minimum required capital adequacy ratio is 15%, of which
the minimum Tier I Capital requirement is 10%.
Corporate Social Responsibility (CSR)
During the year, the Corporation's CSR activities were undertaken in accordance with
the board approved Annual Action Plan, which focused primarily on core sectors of
education and healthcare. Other sectors included environment, supporting persons with
disability and heritage restoration.
The Corporation prioritised key sub-thematic areas within each of the above sectors to
ensure that the CSR interventions were targeted optimally. The Corporation contributed
directly to implementing agencies and through the H T Parekh Foundation to the identified
social sectors.
Further details on the prescribed CSR spend under Section 135 of the Companies Act,
2013, the amount spent during the year under review and the executive summaries of impact
assessment reports of CSR projects completed are provided in the Annual Report on CSR
activities annexed to this report.
Subsidiary and Associate Companies
In accordance with the provisions of Section 136 of the Companies Act, 2013, the annual
report of the Corporation as well as the annual financial statements and related documents
of the Corporation's subsidiary companies are placed on the website of the Corporation.
Shareholders may download the annual financial statements and detailed information on
the subsidiary companies from the Corporation's website or may write to the Corporation
for the same. Further, the documents shall also be available for inspection by the
shareholders at the registered office of the Corporation.
HDFC Asset Management Company Limited (HDFC AMC)
On May 27, 2022, HDFC AMC International (IFSC) Limited (HDFC AMC International) was
incorporated as a wholly- owned subsidiary of HDFC AMC, a subsidiary of the Corporation,
in Gujarat International Finance Tec-City (Gift City).
On August 16, 2022, abrdn Investment Management Limited (abrdn), formerly Standard Life
Investments Limited, (one of the promoters of HDFC AMC), sold
1,28,00,000 equity shares of Rs 5 each representing 6% of its issued and paid-up
capital in HDFC AMC. Post the sale, the shareholding of abrdn of HDFC AMC has reduced from
16.21% to 10.21%.
In December 2022, abrdn intimated their intention to sell their entire stake in HDFC
AMC, subject to applicable regulatory approvals. In February 2023, SEBI permitted abrdn to
reduce its shareholding in HDFC AMC to less than 10%, subject to HDFC AMC complying with
the requirements specified under SEBI (Mutual Fund) Regulations, 1996. Post compliance of
the said requirements by HDFC AMC and reduction of stake by abrdn in HDFC AMC to less than
10%, abrdn will cease to be a co-sponsor of HDFC Mutual Fund.
HDFC Life Insurance Company Limited (HDFC Life)
On September 16, 2022, the NCLT approved the Scheme of Amalgamation for amalgamation of
Exide Life Insurance Company Limited (Exide Life) with and into HDFC Life, under Sections
230 to 232 of the Companies Act, 2013, subject to the final approval of the Insurance
Regulatory and Development Authority of India (IRDAI). On October 13, 2022, IRDAI provided
its final approval to the said Scheme. The Appointed Date of the Scheme was April 1, 2022
and the Scheme became effective from end of day on October 14, 2022. Accordingly, Exide
Life was dissolved without being wound up from the said effective date.
HDFC Capital Advisors Limited (HDFC Capital)
On May 25, 2022, the Corporation completed sale of 2,35,019 equity shares of Rs 10 each
of HDFC Capital, representing 10% of its fully diluted paid-up share capital, to a
wholly-owned subsidiary of Abu Dhabi Investment Authority at a price of Rs 7,843 per
equity share, aggregating to Rs 184 crore. Pursuant to the said sale, HDFC Capital ceased
to be a wholly-owned subsidiary of the Corporation, though it continues to remain a
subsidiary of the Corporation.
HDFC Venture Capital Limited (HDFC Venture)
On August 4, 2022, the Corporation acquired 97,500 equity shares of Rs 10 each of HDFC
Venture, a subsidiary of the Corporation, representing 19.50% of its paid-up equity share
capital from State Bank of India, at a consideration of Rs 9,75,000 and pursuant to the
said acquisition, HDFC Venture became a wholly-owned subsidiary of the Corporation.
Amalgamation of HDFC Property Ventures Limited (HDFC Property) and HDFC Venture Capital
Limited (HDFC Venture) with and into HDFC Capital Advisors Limited (HDFC Capital)
The boa rd of directors of HDFC Property and HDFC Venture, wholly-owned subsidiaries of
the Corporation and HDFC Capital, a subsidiary of the Corporation, at their respective
meetings held on August 25, 2022 approved a Scheme of Amalgamation (Scheme of subsidiary
companies) for the amalgamation of HDFC Property and HDFC Venture with and into HDFC
Capital, under Sections 230 to 232 and other applicable provisions of the Companies Act,
2013, subject to receipt of requisite approvals.
The NCLT vide its order dated March 3, 2023 approved the Scheme of subsidiary
companies. Since the companies are still under discussions on various aspects pertaining
to the amalgamation, an application has been filed with the NCLT seeking an extension of
60 days for filing of the certified true copy of order with the ROC.
HDFC Ventures Trustee Company Limited (HDFC Ventures Trustee)
During the year, HDFC Ventures Trustee, a wholly-owned subsidiary of the Corporation
stepped down as trustee to 3E Education Trust and Maharashtra 3E Education Trust, HDFC
Property Fund, HDFC Investment Trust and HDFC Investment Trust II and wound-up its
trusteeship business.
The Board of Directors of HDFC Ventures Trustee has approved the change of name of the
company to Savoir Trustee Limited, subject to approval of the shareholders.
The Corporation has not made any loans or advances in the nature of loans to any of its
subsidiary or associate company or companies in which its directors are deemed to be
interested, other than in the ordinary course of business.
The Corporation is in compliance with the provisions of Foreign Exchange Management
Act, 1999 with respect to downstream investments made by it/by its subsidiaries during the
year. Further, as required by the Foreign Exchange Management (Non-debt Instruments)
Rules, 2019, the Corporation has obtained a certificate from statutory auditors on the
same.
A review of key subsidiary and associate companies of the Corporation forms part of the
MD&A which forms part of this report. Further, a statement containing salient features
of financial statements of the subsidiaries and associates of the Corporation in the
prescribed Form No. AOC-1 is provided elsewhere in this annual report.
Particulars of Employees
HDFC had 4,017 employees as of March 31, 2023. During the year, 19 employees employed
throughout the year were in receipt of remuneration of Rs 1.02 crore or more per annum and
4 employees employed for part of the year were in receipt of remuneration of Rs 8.5 lac or
more per month.
In accordance with the provisions of Rule 5(2) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, the names and particulars of the top
ten employees in terms of remuneration drawn and of the aforesaid employees are set out in
the annex to the Directors' Report. In terms of the provisions of Section 136(1) of the
Companies Act, 2013 read with rules made thereunder. The Directors' Report is being sent
to all shareholders of the Corporation excluding the annex. Any shareholder interested in
obtaining a copy of the annex may write to the Corporation.
Further disclosures on managerial remuneration are annexed to this report.
Prevention, Prohibition and Redressal of Sexual Harassment of Women at the Workplace
The Corporation has a policy on prevention, prohibition and redressal of sexual
harassment of women at the workplace and has an Internal Complaints Committee (ICC) in
compliance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013. The Corporation's policy on the same is placed on the Corporation's
website. The ICC comprises majority of women members. Members of the Corporation's ICC are
responsible for conducting inquiries pertaining to such complaints.
The Corporation on a regular basis sensitises its employees, including outsourced
employees on the prevention of sexual harassment at the workplace through workshops, group
meetings, online training modules and awareness programmes which are held on a regular
basis. The Corporation also conducted a special training programme for members of the ICC.
During the year, three complaints were received by the ICC which were reviewed and
disposed of and accordingly, there were no complaints pending as at March 31, 2023.
Particulars of Loans, Guarantees or Investments
Since the Corporation is an NBFC-HFC, the disclosures regarding particulars of
loans/guarantees given and securities provided is exempt under the provisions of Section
186 (11) of the Companies Act, 2013.
As regards investments made by the Corporation, the details of the same are provided in
the notes to the financial statements of the Corporation for the year ended March 31, 2023
(note 9).
Particulars of Contracts or Arrangements with Related Parties
The particulars of contracts or arrangements with related parties required to be
disclosed in Form No. AOC-2 is annexed to this report. Details of related party
transactions are given in the notes to the financial statements.
The policy on Related Party Transactions of the Corporation ensures proper approval and
reporting of the related party transactions. Pursuant to applicability of certain
amendments to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015,
effective April 1, 2023 with respect to related party transaction norms, the said policy
was amended to align it with all the applicable amendments.
The policy on Related Party Transactions is published elsewhere in the annual report
and is also placed on the Corporation's website.
Particulars regarding Conservation of Energy, Technology Absorption and Foreign
Exchange Earnings and Outgo
During the year ended March 31, 2023, earnings in foreign currency stood at Rs 0.63
crore and expenditure in foreign currency stood at Rs 970 crore (largely pertaining to
interest on foreign currency borrowings).
The Corporation is in the business of housing finance and hence its operations are not
energy intensive. The Corporation is cognisant of the importance of imbibing measures
towards optimum energy utilisation and conservation. Further details are available in the
BRSR.
Employees Stock Option Scheme (ESOS)
Presently, the stock options granted to the employees operate under ESOS-07, ESOS-08,
ESOS-14, ESOS-17 and ESOS-20 schemes. During the year, there has been no variation in the
terms of the options granted under any of the schemes and all the schemes are in
compliance with SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021
(SBEB Regulations). The Corporation has obtained a certificate from secretarial auditors
on the same.
During the year under review, the Corporation granted 60,38,952 options under ESOS-20.
Of this, 59,33,952 options were granted to all employees of the Corporation equally on May
2, 2022. The balance 1,05,000 options were granted to a few employees who subsequently
joined the Corporation during the year. The exercise prices for all such stock options
were the latest available closing prices of the equity shares of the Corporation on NSE,
prior to the date of the respective meetings of the Nomination and Remuneration Committee
at which the stock options were granted.
The vesting and exercise schedule is the same as earlier grants under ESOS-2020.
The disclosures as required under SBEB Regulations have been placed on the website of
the Corporation.
Unclaimed Dividend and Shares
As at March 31, 2023, dividend amounting to Rs 23 crore had not been claimed by
shareholders of the Corporation.
The Corporation undertakes various initiatives to reduce the quantum of unclaimed
dividend and has been periodically intimating the concerned shareholders, requesting them
to encash their dividend before it becomes due for transfer to the I EPF.
During the year, unclaimed dividend amounting to Rs 3 crore for FY15 was transferred to
the IEPF. Further, in compliance with the Investor Education and Protection Fund Authority
(Accounting, Audit, Transfer and Refund) Rules, 2016 as amended, the Corporation
transferred 78,279 equity shares of Rs 2 each (corresponding to dividend for FY15
remaining unclaimed for a continuous period of 7 years) in favour of the IEPF. However,
the concerned shareholders may claim the unclaimed dividend and unclaimed shares from
IEPF, the procedure of which is detailed on the Corporation's website.
The unclaimed dividend in respect of final dividend for FY16 must be claimed by
shareholders on or before August 25, 2023, failing which the unclaimed dividend and
corresponding shares would be required to be transferred to the IEPF within a period of 30
days from the said date.
Directors
Mr. U. K. Sinha and Mr. Jalaj Dani retired as the independent directors of the
Corporation with effect from April 29, 2023 on completion of their respective tenures. The
board placed on record its sincere appreciation for the wise counsel and contributions
made by Mr. Sinha and Mr. Dani to the Corporation during their respective tenures.
In accordance with the provisions of the Companies Act, 2013 and the Articles of
Association of the Corporation, Mr. Keki M. Mistry and Ms. Renu Sud Karnad are liable to
retire by rotation and are eligible for re-appointment. The brief profiles of Mr. Mistry
and Ms. Karnad are provided elsewhere in the annual report.
All the directors of the Corporation have confirmed that they satisfy the fit and
proper criteria as prescribed under the applicable regulations and that they are not
disqualified from being appointed as directors in terms of Section 164(2) of the Companies
Act, 2013.
The details on the number of board/committee meetings held are provided in the Report
of the Directors on Corporate Governance, which forms part of this report.
Auditors
The members of the Corporation vide resolution passed by way of postal ballot on
November 10, 2021, had appointed Messrs S.R. Batliboi & Co. LLP, Chartered Accountants
(Firm Registration No. 301003E/ E300005) and Messrs G. M. Kapadia & Co., Chartered
Accountants (Firm Registration No. 104767W), as joint statutory auditors of the
Corporation for a period of three consecutive years, subject to them continuing to fulfil
the applicable eligibility norms.
During the year, the total remuneration paid by the Corporation and some of its
subsidiaries as per the provisions of the Companies Act, 2013 to Messrs S.R. Batliboi
& Co. LLP and its network firm entities and Messrs G. M. Kapadia & Co. was Rs 4.03
crore and Rs 3.65 crore respectively. The remuneration pertains to fees for audit,
internal financial control reporting, limited reviews, tax audits and taxation services,
certifications and other matters during their respective tenures. Further details of
remuneration paid by the Corporation to the said audit firms are provided in note 36.3 of
the financial statements.
The Joint Statutory Auditors' Report annexed to the financial statement for the year
under review does not contain any qualifications.
The Joint Statutory Auditors have confirmed that they continue to satisfy the
eligibility norms and independence criteria as prescribed by RBI guidelines and the
Companies Act, 2013.
Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, Messrs BNP &
Associates, practicing company secretaries undertook the secretarial audit of the
Corporation for FY23. The Secretarial Audit Report is annexed to this report and does not
contain any qualifications.
The Secretarial Compliance Report as prescribed by SEBI is provided elsewhere in the
annual report.
Significant and Material Orders Passed by Regulators
During the year, RBI imposed a monetary penalty of Rs 5 lac on the Corporation for
non-compliance with certain provisions of 'The Housing Finance Companies (NHB) Directions,
2010' issued by the National Housing Bank (NHB) read with the press release dated August
13, 2019 issued by RBI on 'Transfer of Regulation of Housing Finance Companies (HFCs) to
Reserve Bank of India.'
The Corporation paid the penalty on March 29, 2023. The Corporation maintains that this
is not significant or material in nature.
There were no significant or material orders passed by the regulators or courts or
tribunals against the Corporation during the year under review.
Directors' Responsibility Statement
In accordance with the provisions of Section 134(3)(c) and Section 134 (5) of the
Companies Act, 2013 and based on the information provided by the management, your
directors state that:
(a) In the preparation of annual accounts, the applicable accounting standards have
been followed;
(b) Accounting policies selected have been applied consistently. Reasonable and prudent
judgements and estimates have been made so as to give a true and fair view of the state of
affairs of the Corporation as at March 31, 2023 and of the profit of the Corporation for
the year ended on that date;
(c) Proper and sufficient care has been taken for the maintenance of adequate
accounting records in accordance with the provisions of the Companies Act, 2013 for
safeguarding the assets of the Corporation and for preventing and detecting frauds and
other irregularities;
(d) The annual accounts of the Corporation have been prepared on a going concern basis;
(e) Internal financial controls have been laid down to be followed by the Corporation
and such internal financial controls are adequate and operating effectively; and
(f) Systems to ensure compliance with the provisions of all applicable laws are in
place and were adequate and operating effectively.
Internal Financial Controls
The Corporation has put in place adequate policies and procedures to ensure that the
system of internal financial controls is commensurate with the size and nature of the
Corporation's business. These systems provide a reasonable assurance in respect of
providing financial and operational information, complying with applicable statutes,
safeguarding of assets of the Corporation, prevention and detection of frauds, accuracy
and completeness of accounting records and ensuring compliance with corporate policies.
Annual Return
The Annual Return in Form No. MGT-7 for FY23 is uploaded on the Corporation's website.
Material changes and commitment, if any, affecting the financial position of the
Corporation from the financial year end till the date of this report
There are no material changes and commitments affecting the financial position of the
Corporation which have occurred after March 31, 2023 till the date of this report.
Acknowledgements
The directors place on record their gratitude for the support of various regulatory
authorities including RBI, NHB, NCLT, Competition Commission of India, SEBI, IRDAI,
Pension Fund Regulatory and Development Authority, Ministry of Finance, Ministry of
Housing and Urban Affairs, Ministry of Corporate Affairs, Registrar of Companies,
Financial Intelligence Unit (India), the stock exchanges, National Securities Depository
Limited and Central Depository Services (India) Limited.
The Corporation deeply acknowledges the invaluable contribution of the lawyers,
chartered accountants, financial advisors, registered valuers, tax advisors, amongst
others who have helped the Corporation and HDFC Bank navigate through the complexities of
the amalgamation process. The Corporation also appreciates the co-operation of all its
subsidiary and associate companies during the year.
The board of directors collectively place their gratitude to all key stakeholders of
the Corporation - its shareholders, borrowers, channel partners, depositors, deposit
agents, lenders and regulators for their unstinting support that has contributed to the
successful track record of the Corporation over the years.
Finally, the greatest appreciation goes to the efforts of each and every employee -
past and present who for forty-six long years truly demonstrated the power of ordinary
people building an extra-ordinary company.
|
On behalf of the Board of Directors |
MUMBAI |
DEEPAK S. PAREKH |
May 4, 2023 |
Chairman |