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You Are Here : Markets  |  Equity   |   Company Profile  |   Directors Report
Housing Development Finance Corporation Ltd(Industry :   Finance - Housing)
 
BSE Code:500010NSE Symbol: HDFCP/E  (TTM): 26
ISIN Demat:INE001A01036Div Yield %:1.46EPS   (TTM) :44.9
Book Value (Rs):215.6536266Market Cap (RsCr):184462.86Face Value (Rs) :2
  Change Company 

TO THE MEMBERS

Your directors are pleased to present the Thirty-eighth annual report of your Corporation with the audited accounts for the year ended March 31, 2015.

FINANCIAL RESULTS
For the year ended March 31, 2015 For the year ended March 31, 2014
(Rs. in crore) (Rs. in crore)
Profit before Tax 8,624.14 7,440.24
Tax Expense (net of Deferred Tax Liability (DTL) on Special Reserve) 2,269.23 2,000.00
Profit after Tax but before DTL on Special Reserve 6,354.91 5,440.24
DTL on Special Reserve 364.77 -
Profit after Tax 5,990.14 5,440.24
Appropriations have been made as under:
Special Reserve No. II 1,054.00 890.00
General Reserve 2,003.33 1,037.98
Statutory Reserve (under Section 29C of the National Housing Bank Act, 1987) 150.00 900.00
Shelter Assistance Reserve - 60.00
Interim and Proposed Dividend (Rs. 15 per equity share of Rs. 2 each) 2,362.05 2,184.75
Additional Tax on Interim and Proposed 420.76 367.51
Dividend net of previous year adjustments 5,990.14 5,440.24

Dividend

In March 2015, your directors declared and paid an interim dividend of Rs. 2 per equity share of Rs. 2 each.

Your directors recommend payment of final dividend for the financial year ended March 31, 2015 of Rs. 13 per equity share of Rs. 2 each.

The total dividend for the year is Rs. 15 per equity share as against Rs. 14 per equity share for the previous year. The dividend payout ratio for year ended March 31, 2015 will be 47%, which was the same as in the previous year.

Lending Operations

The demand for individual home loans remained healthy during the year, with growth predominantly coming from Tier 1, Tier 2 and Tier 3 cities. Improved affordability due to rising incomes and continued fiscal benefits available on home loans have encouraged more people to avail of home loans.

The Corporation remains committed towards offering a bouquet of home loan products so as to ensure that it addresses a wide spectrum of customers.

The Corporation has made a concerted effort to grow its rural housing portfolio. It has developed requisite skills to assess agricultural income and has built robust legal and technical appraisal mechanisms to cater to the rural housing finance market.

Addressing housing needs of those from the unorganised sector is another segment that the Corporation has ventured into with the launch of ‘HDFC Reach’. Different credit assessment and appraisal techniques are needed to cater to the self-employed and employed customers from the unorganised sector.

Individual loan disbursements grew by 16% during the year. The average size of individual loans stood at Rs. 23.3 lac as against Rs. 22.1 lac in the previous year.

As at March 31, 2015, the loan book stood at Rs. 2,28,181 crore as against Rs. 1,97,100 crore in the previous year. Loans sold during the preceding twelve months amounted to Rs. 8,249 crore. The growth in the individual loan book, after adding back loans sold was 23% (17% net of loans sold). The non-individual loan book grew at 14%. The growth in the total loan book after adding back loans sold was 20% (16% net of loans sold).

Of the total loan book, individual loans comprise 71%. Further, 78% of the incremental growth in the loan book during the year came from individual loans.

Sale of Loans

During the year, the Corporation, under the loan assignment route sold individual loans amounting to Rs. 8,249 crore to HDFC Bank pursuant to the buyback option embedded in the home loan arrangement between the Corporation and HDFC Bank.

As at March 31, 2015, total loans outstanding in respect of loans sold/ assigned stood at Rs. 25,152 crore. HDFC continues to service loans and is entitled to the residual interest on the loans sold. The residual interest on the outstanding individual loans sold/assigned is 1.25% per annum. The residual income on the loans sold/assigned is being recognised over the life of the underlying loans and not on an upfront basis.

Loan pools which were rated by external rating agencies carry a rating indicating the highest degree of safety.

Repayments

During the year under review, Rs. 66,422 crore was received by way of scheduled repayment of principal through monthly instalments as well as redemptions ahead of schedule, as compared to Rs. 58,410 crore received last year.

Resource Mobilisation

Subordinated Debt

During the year, the Corporation raised Rs. 3,000 crore through the issue of long-term unsecured redeemable non-convertible subordinated debentures. The subordinated debt was assigned the highest rating of ‘CRISIL AAA/Stable’ and ‘ICRA AAA/Stable’ by CRISIL and ICRA respectively.

As at March 31, 2015, the Corporation’s outstanding subordinated debt stood at Rs. 6,475 crore. The debt is subordinated to present and future senior indebtedness of the Corporation and has been assigned the highest rating by CRISIL and ICRA respectively. Based on the balance term to maturity, as at March 31, 2015, Rs. 5,495 crore of the book value of subordinated debt was considered as Tier II under the guidelines issued by the National Housing Bank (NHB) for the purpose of capital adequacy computation.

Non-Convertible Debentures (NCD)

During the year, the Corporation issued NCD amounting to Rs. 26,170 crore on a private placement basis. The Corporation’s NCD issues have been listed on the Wholesale Debt Market segment of the National Stock Exchange of India Limited and the BSE Limited. The NCD issues have been assigned the highest rating of ‘CRISIL AAA/Stable’ and ‘ICRA AAA/ Stable’. As at March 31, 2015, NCD outstanding stood at Rs. 84,183 crore.

The Corporation has been regular in making payments of principal and interest on the NCD. The Corporation is in compliance with the provisions of the Housing Finance Companies Issuance of Non-Convertible Debentures on Private Placement (NHB) Directions, 2014.

Term Loans from Banks, Institutions and Refinance from the National Housing Bank (NHB)

As at March 31, 2015, the total loans outstanding from banks, institutions and NHB amounted to Rs. 26,194 crore as compared to Rs. 32,952 crore as at March 31, 2014.

HDFC’s long-term and short-term bank loan facilities have been assigned the highest rating of ‘CARE AAA’ and ‘CARE A1+’ respectively by CARE Ratings, signifying highest safety for timely servicing of debt obligations. During the year, the Corporation has drawn NHB refinance amounting to Rs. 529 crore under the Golden Jubilee Rural Housing Refinance Scheme and Urban Housing Fund.

Deposits

Total deposits outstanding increased from Rs. 56,578 crore at the beginning of the financial year to Rs. 66,088 crore as at March 31, 2015. The number of deposit accounts grew from 17.5 lac to 18.1 lac.

CRISIL, a subsidiary of Standard & Poor’s Rating Services and ICRA, an associate of Moody’s Investors Service have for the twentieth consecutive year, reaffirmed a rating of ‘CRISIL FAAA/Stable’ and ‘ICRA MAAA/Stable’ respectively for HDFC’s deposits.

These ratings represent the highest degree of safety regarding timely servicing of financial obligations and carries the lowest credit risk.

The support of the agents and their commitment to the Corporation has been instrumental in HDFC’s deposit products continuing to be a preferred investment for households and trusts.

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 Chapter V of the Companies Act, 2013.

Unclaimed Deposits

As of March 31, 2015, public deposits amounting to Rs. 609 crore had not been claimed by 50,352 depositors. Since then, 12,868 depositors have claimed or renewed deposits of Rs. 219 crore. Depositors were intimated regarding the maturity of deposits with a request to either renew or claim their deposits. Where the deposit remains unclaimed, reminder letters 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. Accordingly, during the year, an amount of Rs. 1.43 crore has been transferred to the IEPF.

Non-Performing Loans

Gross non-performing loans as at March 31, 2015 amounted to Rs. 1,542 crore. This is equivalent to 0.67% of the loan portfolio (as against 0.69% in the previous year). The non-performing loans of the individual portfolio stood at 0.51% while that of the non-individual portfolio stood at 1.01%.

As per NHB norms, the Corporation is required to carry a total provision of Rs. 1,703 crore.

The balance in the provision for contingencies account as at March 31, 2015 stood at Rs. 2,034 crore of which Rs. 481 crore is on account of non-performing loans and the balance Rs. 1,553 crore is in respect of general provisioning and other provisions. This balance in the provision for contingencies is equivalent to 0.89% of the loan portfolio. The Corporation carries an additional provision of Rs. 331 crore over the regulatory requirements.

The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI) has proved to be a useful recovery tool and the Corporation has been able to successfully initiate recovery action under this Act.

Regulatory Guidelines /Amendments

The Corporation has complied with the Housing Finance Companies (NHB) Directions, 2010 prescribed by NHB regarding accounting standards, prudential norms for asset classification, income recognition, provisioning, capital adequacy, credit rating, concentration of investments and capital market exposure norms.

The Corporation creates Special Reserve through appropriation of profits in order to avail tax deduction under Section 36 (1)(viii) of the Income Tax Act, 1961. NHB vide its circular dated May 27, 2014, directed HFCs to create Deferred Tax Liability (DTL) on Special Reserve as a matter of prudence. Further, vide circular dated August 22, 2014, NHB permitted HFCs to create DTL in respect of Special Reserve outstanding as at March 31, 2014 by adjusting the same directly from the reserves over a period of three years, starting from the financial year under review, in a phased manner, in the ratio of 25:25:50. DTL for amounts transferred to Special Reserve from the year ended March 31, 2015 onwards is to be charged to the Statement of Profit and Loss of that year.

The Corporation’s capital adequacy ratio (CAR) after reducing the investment in HDFC Bank from Tier I capital stood at 16.1%. Of this, Tier I capital was 12.5% and Tier II capital was 3.6%.

The CAR without reducing the investment in HDFC Bank from Tier I capital, while treating it as a 100% risk weight stood at 18.5%, of which Tier I capital was 15% and Tier II capital was 3.5%. As per the regulatory norms, the minimum requirement for the capital adequacy ratio and Tier I capital is 12% and 6% respectively.

Codes and Standards

The Corporation has adopted various codes and standards set out by NHB including inter alia Know Your Customer (KYC) Guidelines, Anti Money Laundering Standards, Fair Practices Code, Model Code of Conduct for Direct Selling Agents, Guidelines for Recovery Agents engaged by HFCs and Most Important Terms and Conditions of housing loans.

The Corporation has mechanisms in place to review and monitor adherence to these codes and standards and ensure reporting and compliances as required.

Marketing and Distribution

During the year, efforts were concentrated on further strengthening the distribution network. The Corporation’s distribution network now spans 378 outlets, which includes 103 offices of HDFC’s wholly owned distribution company, HDFC Sales Private Limited (HSPL).

To further augment the network, HDFC covers additional locations through its outreach programmes. HDFC has overseas offices in London, Singapore and Dubai. The Dubai office reaches out to its customers across Middle East through its service associates based in Kuwait, Qatar, Oman, Abu Dhabi and Saudi Arabia.

The Corporation’s distribution channels which include HSPL, HDFC Bank and third party direct selling associates (DSAs) play an important role in sourcing home loans. In value terms, HSPL, HDFC Bank and third party DSAs sourced 49%, 24% and 18% of home loans disbursed respectively during the year.

The Corporation has distribution tie-ups with banks such as IndusInd Bank, RBL Bank and Lakshmi Vilas Bank as well as with Sundaram Finance Limited, IIFL Limited and Cholamandalam Distribution Services Limited. All distribution channels only source loans, while the control over the credit, legal and technical appraisal continues to rest with HDFC, thereby ensuring that the quality of loans disbursed is not compromised in any way and is consistent across all distribution channels.

In order to reach out and connect more effectively with customers, the Corporation embarked on a number of digital initiatives including a revamped website, development of a mobile application, introduction of a ‘live chat’ with non-resident Indian customers as well as building a stronger presence on various social media platforms. The Corporation organised an online property fair to enable customers to identify and select homes.

Property fairs across major cities in India were organised. To cater to the Indian diaspora, ‘India Homes’ fairs were held in London, Singapore and Muscat where developers were invited by HDFC to show case their properties.

Value Added Services and Cross Selling

HDFC’s subsidiary companies have strong synergies with HDFC. This enables the Corporation to provide property related value added services and cross sell products and services under the ‘HDFC’ brand.

HDFC Realty Limited, a property advisory company, has a presence in 23 locations across India and helps individuals and corporate institutions to buy, sell or lease real estate. HDFCRED.com, an on-line real estate search engine assists potential home buyers in identifying properties and provides leads for potential home loan customers.

HDFC and HSPL are Composite Corporate Agents for HDFC Standard Life Insurance Company Limited (HDFC Life) and HDFC ERGO General Insurance Company Limited (HDFC ERGO).

International Housing Finance Initiatives

HDFC’s expertise in housing finance is well regarded and therefore a number of existing and new housing finance companies are keen to tap the Corporation for training and technical assistance in housing finance.

The Frankfurt School of Finance & Management and HDFC jointly organised the seventh ‘Housing Finance Summer Academy’ in Germany, which is a course that aims solutionsto provide housing finance for emerging markets through a combination of academic knowledge and practical experience.

The Corporation remains committed to sharing its expertise in countries which have nascent mortgage markets. The Corporation continues to lend its support to housing finance players in Bangladesh, Sri Lanka, Maldives and Indonesia. Currently, the Corporation is in the process of setting up a greenfield housing finance company in Tanzania, along with International Finance Corporation (IFC) and three local based investors.

With a perspective of developing the capital markets to facilitate access to long-term funding for housing finance, the Corporation participated in the first international conference on capital markets in East Africa. The conference was held in Rwanda and was co-hosted by the Rwanda government and IFC.

Corporate Social Responsibility

In accordance with the provisions of Section 135 of the Companies Act, 2013 and rules framed there under, the Corporation has a Corporate Social Responsibility (CSR) Committee of Directors comprising Mr. Deepak S. Parekh (Chairman), Mr. D. N. Ghosh (independent director) and the whole-time directors.

The role of the committee is to review the CSR policy, indicate activities to be undertaken by the Corporation towards CSR and formulate a transparent monitoring mechanism to ensure implementation of projects and activities undertaken by the Corporation towards CSR.

The Corporation contributed directly and through H T Parekh Foundation to identified social sectors such as education, health and sanitation, community development, child welfare and livelihood and supporting differently abled persons.

During the year, the Corporation supported educational initiatives such as primary and secondary school education (rural and urban), girl child education, scholarships, alternate educational programmes, special education and teacher training and vocational skills training for underprivileged children. In the healthcare sector, the Corporation has been a strong supporter of institutions that work towards the prevention, treatment, rehabilitation and palliation for cancer patients and also for community based hospitals serving the rural population. Recognising health related risks attached to poor sanitation, the Corporation associated with organisations focusing on urban slum sanitation.

The Corporation supports initiatives towards the health, safety, nutrition and development of orphaned and underprivileged children.

Additionally, assistance was provided to institutions educating children with physical and mental disabilities to improve their livelihood. The Corporation also supported organisations promoting environmental preservation and Indian athletes competing at an international level.

Further details on the prescribed CSR spend under Section 135 of the Companies Act, 2013 and the amount committed and disbursed during the year under review are provided in the Annual Report on CSR activities annexed to this report.

Human Resource Development

The Corporation recognises that training and continuous upgradation of skill sets are essential to ensure a high calibre workforce. During the year, new recruits participated in an induction programme at the Centre for Housing Finance, which is the Corporation’s training centre in Lonavla. Other in-house training programmes were conducted on subjects like Know Your Customer, Credit Fraud Risk and Mitigation, Disbursement Processes, Rural Housing and Appraisal Techniques for Customers from the Unorganised Sector. Training was also imparted in specialised fields of legal and credit risk management. Staff members were nominated for a variety of external training programmes in India and overseas.

Awards and Recognitions

During the year, some of the awards received by the Corporation included:

• The Dun & Bradstreet- Corporate Awards, 2014 in the FIs / NBFCs / Financial Services sector;

• Best Home Loan by CNBC Awaaz Real Estate Awards, 2014;

• Best Loan Finance Bank and Best Overall Bank for Real Estate in India at the Euromoney Real Estate Awards, 2014.

The Board of Directors of the Corporation was selected as one of the ‘Five Best Boards’ for the second consecutive year in a study conducted by The Economic Times and Hay Group on India’s Best Boards 2014.

Subsidiary/Associate Companies

In accordance with the provisions of Section 136 of the Companies Act, 2013, the annual report of the Corporation, the annual financial statements and the related documents of the Corporation’s subsidiary companies are placed on the website of the Corporation, www. hdfc.com.

Shareholders may download the annual financial statements and detailed information on subsidiary companies from the Corporation’s website or may write to the Corporation for the same. Further, the documents shall be available for inspection by the shareholders at the registered office of the Corporation.

During the year under review, Magnum Foundations Private Limited was acquired as an associate by a subsidiary of the Corporation. There were no new subsidiary or joint venture companies incorporated during the year. H T Parekh Foundation ceased to be a subsidiary of the Corporation during the year.

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.

Review of Key Subsidiary and Associate Companies

HDFC Bank Limited (HDFC Bank)

HDFC and HDFC Bank continue to maintain an arm’s length relationship in accordance with the regulatory framework. Both organisations, however, capitalise on the strong synergies through a system of referrals, special arrangements and cross selling in order to effectively provide a wide range of products and services under the ‘HDFC’ brand name.

As at March 31, 2015, advances of HDFC Bank stood at Rs. 365,495 crore an increase of 21% over the previous year. Total deposits stood at Rs. 450,796 crore – an increase of 23%. As at March 31, 2015, HDFC Bank’s distribution network includes 4,014 branches and 11,766 ATMs in 2,464 locations.

For the year ended March 31, 2015, HDFC Bank reported a profit tax of Rs. 10,216 crore as against Rs. 8,478 crore in the previous year, representing an increase of 21%.

HDFC Bank has recommended a dividend of Rs. 8 per share of Rs. 2 each as against Rs. 6.85 per share for the previous year. HDFC together with its wholly owned subsidiaries, HDFC Investments Limited and HDFC Holdings Limited holds 21.7% of the equity share capital of HDFC Bank.

HDFC Standard Life Insurance Company Limited (HDFC Life)

Gross premium income of HDFC Life for the year ended March 31, 2015 stood at Rs. 14,830 crore as compared to Rs. 12,063 crore in the previous year. The sum assured in force at the end of FY 2015 was Rs. 3,66,755 crore as compared to Rs. 2,72,697 crore in the previous year, representing a growth of 34%.

The Company has a portfolio of 24 retail products and 7 group products covering saving, investment, protection and retirement needs of its customers, along with 9 optional rider benefits.

HDFC Life’s distribution network includes 414 branches, covering 1,000 locations and a liaison office in Dubai. In addition, the company has 86,000 financial consultants, 4 bancassurance partners and 9 pan-India brokers and corporate agency tie-ups. In FY 2015, HDFC Life ranked third among private sector life insurers in terms of market share based on the weighted received premium of individual business.

During the year, the Corporation sold 0.95% of the total issued and paid-up share capital of HDFC Life to Azim Premji Trust.

HDFC Life has reported a profit after tax of Rs. 786 crore for the year ended March 31, 2015 as against Rs. 725 crore in the previous year. The back book is generating sufficient profits to offset the new business strain incurred in writing of new policies.

The new business margin for individual business stood at 22.5% (based on loaded acquisition expenses). The post overrun margins (after considering the impact of the acquisition overrun) was 17.5% (PY 16.1%). At the company level, the post overrun margin was 18.5% for the year ended March 31, 2015.

As at March 31, 2015, the Market Consistent Embedded Value stood at Rs. 8,805 crore (previous year Rs. 6,992 crore).

During the year, HDFC Life paid an interim dividend of Rs. 0.70 per equity share of Rs. 10 each. The solvency ratio of the company was 196% as at March 31, 2015 as against the minimum regulatory requirement of 150%.

HDFC holds 70.7% of the equity share capital in HDFC Life.

HDFC Asset Management Company Limited (HDFC-AMC)

As at March 31, 2015, HDFC-AMC managed 55 debt, equity, gold exchange traded fund and fund of fund schemes of HDFC Mutual Fund. The average assets under management for the month of March 2015 stood at Rs. 1,67,161 crore (which is inclusive of average assets under discretionary portfolio management/ advisory services). HDFC Mutual Fund has been ranked first in the industry on the basis of quarterly average assets under management for the year ended March 31, 2015.

The number of investor accounts was in excess of 52 lac as at March 31, 2015. HDFC-AMC has 141 investor service centres across the country.

For the year ended March 31, 2015, HDFC-AMC reported a profit of Rs. 416 crore as against Rs. 358 crore in the previous year. HDFC holds 59.8% of the equity share capital of HDFC-AMC.

HDFC ERGO General Insurance Company Limited (HDFC ERGO)

HDFC ERGO continued to retain its market ranking as the fourth largest private sector player in the general insurance industry. Further, the company continued to be the largest player in the personal accident line of business.

The Company offers a complete range of insurance products like motor, health, travel, home and personal accident in the retail segment and customised products like property, marine, aviation and liability insurance in the corporate segment. The Company continues to leverage on the HDFC group’s distribution capability to drive its growth and on the technical capability of ERGO in the field Company has a balanced portfolio mix with the retail segment accounting for 59% of the business.

The gross written premium (excluding motor and declined risk pool) of the Company increased by 9% to Rs. 3,256 crore as against Rs. 2,978 crore in the previous year.

The profit before tax of the Company for the year stood at Rs. 141 crore as against Rs. 224 crore in the previous year. Lower profits during the year under review was mainly on account of the impact of natural catastrophes such as the Jammu & Kashmir floods, Cyclone Hudhud and Cyclone Phailin and due to a change in the depreciation policy, aligning it with the Companies Act, 2013. For the year ended March 31, 2015, the profit after tax stood at Rs. 104 crore. aftertax

During the year, HDFC ERGO paid an interim dividend of Rs. 0.75 per equity share of Rs. 10 each as against Rs. 0.50 per equity share in the previous year. The combined ratio as at March 31, 2015 stood at 108.6% (after motor and declined risk pool losses). The solvency ratio of the company was 165% as at March 31, 2015 as against the minimum regulatory requirement of 150%.

HDFC holds 73.6% of the equity share capital of HDFC ERGO.

HDFC Property Funds

HDFC Venture Capital Limited (HVCL) is the investment manager to HDFC Property Fund, a registered venture capital fund with the Securities and Exchange Board of India (SEBI).

HDFC Property Fund has two schemes -- the first scheme is HDFC India Real Estate Fund (HI-REF), which had an initial corpus of Rs. 1,000 crore. HI-REF has, as on date distributed of general insurance. The the entire investment corpus and also profits to its investors. HI-REF is in the midst of concluding final the balance portfolio. The second scheme was HDFC IT Corridor Fund, a Rs. 464 crore rent yielding portfolio. This scheme has been fully exited.

HDFC Property Ventures Limited (HPVL) provides investment advisory services to Indian and overseas asset management companies (AMCs). Such AMCs in turn manage and advise Indian and offshore private equity funds.

HDFC holds 80.5% of the equity share capital of HVCL and 100% of the equity share capital of HPVL.

The Corporation has sponsored two off shore funds -- HIREF International LLC and HIREF International Fund II Pte Ltd. HIREF International LLC was launched in 2007 and has a corpus of USD 800 million. Exits have commenced and the fund is in the process of exiting the balance investments. HIREF International Fund II Pte Ltd. had its second and final closing in April 2015 with a total corpus of USD 321 million.

GRUH Finance Limited (GRUH)

GRUH is a housing finance company with a retail network of 154 offices spread across 8 states. During the year, GRUH disbursed loans amounting to Rs. 3,121 crore as compared to Rs. 2,577 crore in the previous year an increase of 21%. As at March 31, 2015, the loan portfolio stood at Rs. 8,915 crore, recording a growth of 27% over the previous year. The gross non-performing loans stood at 0.28% of the total loans outstanding and the net non performing loans are nil. The average size of loans disbursed during the year was Rs. 8.4 lac.

As at March 31, 2015, the capital adequacy ratio stood at 15.4%, of which Tier I capital was 13.9% and Tier II capital was 1.5%.

For the year ended March 31, 2015, GRUH reported a profit after tax before DTL on Special Reserve of Rs. 223 crore as compared to Rs. 177 crore – representing a growth of 26%. The profit after tax after the factoring DTL on Special Reserve for the year ended March 31, 2015 stood at Rs. 204 crore.

The board recommended payment of a dividend for the year ended March 31, 2015 of Rs. 2 per equity share of Rs. 2 each as against Rs. 3 per equity share in the previous year. Considering the company declared a 1:1 bonus during the year, the effective dividend for the year is Rs. 4 per equity share (pre bonus) as compared to Rs. 3 per share in the previous year (pre bonus).

HDFC’s holding in GRUH currently stands at 58.6%.

HDFC Sales Private Limited (HSPL)

HDFC Sales Private Limited (HSPL) continues to strengthen the Corporation’s marketing and sales efforts by providing a dedicated sales force to sell home loans and other financial products.

HSPL has a presence in 103 locations. During the year under review, HSPL sourced loans accounting for 49% of individual loans disbursed by HDFC. HSPL is a wholly owned subsidiary of HDFC.

Credila Financial Services Private Limited (Credila)

Credila is India’s first dedicated education loan company, providing loans to students pursuing higher education in India and abroad. As on March 31, 2015, Credila had cumulatively disbursed Rs. 2,221 crore to 21,031 customers. The outstanding loan book stood at Rs. 1,690 crore, registering a growth of 43% over the previous year. The average loan amount disbursed was Rs. 10.5 lac. For the year ended March 31, 2015, Credila reported a profit after tax ofRs. 28 crore as against Rs. 19 crore in the previous year – representing a growth of 45%.

In addition to having its own offices and sourcing applications through the web, Credila capitalises on HDFC’s distribution network to source and market education loans. Credila’s borrowers are entitled to income tax exemption under Section 80E of the Income Tax Act, 1961. HDFC holds 89.5% of the share holding in Credila on a fully diluted basis.

HDFC Education and Development Services Private Limited (HDFC Edu)

HDFC Edu is the Corporation’s wholly owned subsidiary which focuses on the education sector.

The objective of the Corporation entering the education space is to imbibe best practices in education and facilitate innovation, thereby creating a visible impact on the schooling system in the country.

In March 2015, the Corporation’s first school called ‘The HDFC School’ was inaugurated in Gurgaon. The motto of the school is ‘Educate, Excel and Empower.’ The school has started the primary wing and is in the process of setting up a 5-acre school campus for its secondary wing. The HDFC School is intended to be a full-school, which will follow the National Curriculum Framework, 2005 and will be a Central Board of Secondary Education (CBSE) affiliated school.

Particulars of Employees

HDFC had 2,081 employees as of March 31, 2015. During the year, 16 employees employed throughout the year were in receipt of remuneration of Rs. 60 lac or more per annum.

In accordance with the provisions of Rule 5.2 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of such employees are set out in the annex to the Directors’ Report. In terms of the provisions 136(1) of the Companies Act, 2013 read with the said rule, the Directors’ Report is being sent to all the shareholders of the Corporation excluding the annex. Any shareholder interested in obtaining a copy of the said annex may write to the Corporation.

Further disclosures on managerial remuneration are provided in Annex 1 appended to the Directors’ Report.

Particulars of Loans, Guarantees or Investments

Since the Corporation is a housing finance company, the disclosures regarding particulars of the loans given, guarantee given and security 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 under Notes 13 and 17 forming part of the standalone financial statements the Corporation for the year ended March 31, 2015.

Par ticular s of Contracts or Arrangements with Related Parties

The particulars of contracts or arrangements with related parties referred to Section 188(1), as prescribed in Form AOC 2 under Rule 8(2) of the Companies (Accounts) Rules, 2014, is annexed to this report.

Particulars Regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars regarding foreign exchange earnings and expenditure appear as Item Nos. 25.1 and 26.3 in the Notes to the Accounts. Since HDFC does not own any manufacturing facility, the other particulars relating to conservation of energy and technology absorption as stipulated in the Companies (Accounts) Rules, 2014, are not applicable.

Employees Stock Option Scheme (ESOS)

Presently, stock options granted to the employees operate under the following schemes: ESOS-07, ESOS-08, ESOS-11 and ESOS-14. There has been no variation in the terms of the options granted under any of these schemes. One stock option is equivalent to 5 equity shares of the Corporation.

ESOS-07, ESOS-08 and ESOS-11 (Schemes)

No fresh options were either granted or vested under ESOS-07 and ESOS-08. No fresh options were granted under ESOS-11, however, 1,80,438 options vested during the year, under ESOS-11. During the year, an aggregate of 28,33,013 options were exercised. Pursuant to the exercise, the Corporation received Rs. 684.28 crore as exercise consideration (excluding tax), of which Rs. 2.83 crore was towards share capital and Rs. 681.45 crore towards securities premium. During the year, pursuant to exercise of options, 1,41,65,065 equity shares of Rs. 2 each were allotted to the concerned option grantees.

During the year, 63,287 options lapsed, while options in force (including unvested) as on March 31, 2015 stood at 99,80,684.

ESOS-14

At the 37th Annual General Meeting (AGM) held on July 21, 2014, you had approved the issue of 62,42,130 stock options representing 3,12,10,650 equity shares of Rs. 2 each to the eligible employees and directors of the Corporation. The Nomination & Remuneration Committee of Directors of the Corporation at its meeting held on October 8, 2014, reserved 10,876 options for grant in future, out of total available 62,83,940 options (including 41,810 options lapsed under previous schemes). Accordingly, 62,73,064 stock options were granted representing 3,13,65,320 equity shares of Rs. 2 each at an exercise price of Rs. 5,073.25 per option i.e., Rs. 1,014.65 per equity share of Rs. 2 each under ESOS-14.

The price was determined in accordance with the pricing formula approved by you i.e. at the latest available closing price of the equity share at the NSE, prior to the meeting of the Nomination & Remuneration Committee at which the options are granted. The options granted will vest over a period of 1 to 3 years from the date of grant. The options are exercisable over a period of five years from the date of respective vesting. None of the options granted have vested during the year (and consequently, no options have been exercised). As at March 31, 2015, 49,045 options have lapsed and 62,24,019 options are in force. Under ESOS-14, 19,79,633 options have been granted to 86 employees, in the grades of Deputy General Manager and above up to and including the Vice Chairman & Chief Executive Officer. The minimum number of options granted to any of these employees was 6,000. No employee was granted options equal to or in excess of 1% of the total issued and paid-up share capital of the Corporation as on the date of grant.

Fair value

Since options were granted at the market price, the intrinsic value of the option is nil. Consequently, the compensation cost was nil. However, if the fair value of the options using the Black-Scholes model was used, considering the assumptions as of the date of grant, the compensation cost (net) would have been Rs. 198.64 crore and the profit after tax would have been lesser by Rs. 198.64 crore and the basic and diluted Earnings Per Share (EPS) would have been Rs. 36.86 and Rs. 36.52 respectively.

The key assumptions used in Black-Scholes model for calculating the fair value under ESOS-14, as on the date of grant, are (a) risk-free interest rate: 8.28% (b) expected life: up to 3 years (c) expected volatility of share price: 15% and (d) expected growth in dividend: 20%. The market price of the equity share on the date of grant ranged from Rs. 1,006.85 to Rs. 1,025.65.

All the options were granted at an exercise price of Rs. 1,014.65 per share and hence the weighted average exercise price is Rs. 1,014.65 per share. The weighted average fair value of the option granted under ESOS-14 (using the Black-Scholes model) works out to Rs. 1,035.91 per option i.e. Rs. 207.18 per share of the face value of Rs. 2 each.

The diluted EPS is Rs. 37.78 as against a basic EPS of Rs. 38.13.

Unclaimed Dividend

As at March 31, 2015, dividend amounting to Rs. 16.94 crore had not been claimed by shareholders of the Corporation. The Corporation has been periodically intimating the concerned shareholders, requesting them to encash their dividend before it becomes due for transfer to the IEPF. The Corporation continues to take various initiatives to reduce the quantum of unclaimed dividend. Unclaimed dividend amounting to Rs. 0.75 crore for FY 2006-07 was transferred to the IEPF on August 22, 2014. Further, the unclaimed dividend in respect of FY 2007-08 must be claimed by shareholders by August 22, 2015, failing which it will be transferred to the IEPF within a period of 30 days from the said date.

In terms of the IEPF (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Corporation has made the relevant disclosures to the Ministry of Corporate Affairs (MCA) regarding unclaimed dividends and unclaimed matured deposits along with interest accrued thereon. The Corporation has uploaded the prescribed information on www.iepf.gov.in and www.hdfc.com.

Unclaimed Shares

Details on unclaimed shares are provided in the section on ‘Shareholders’ Information’ provided elsewhere in the annual report.

Directors and Key Managerial Personnel

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Corporation, Mr. Deepak S. Parekh is liable to retire by rotation at the ensuing AGM. He is eligible for re-appointment.

The necessary resolution for the reappointment of Mr. Deepak S. Parekh has been included in the notice convening the ensuing AGM.

All the directors of the Corporation have confirmed that they are not disqualified from being appointed as directors in terms of Section 164(2) of the Companies Act, 2013.

Dr. S. A. Dave is the Corporation’s nominee director on the board of HDFC Life. This is in accordance with Clause 49 of the listing agreements, which requires the Corporation to nominate at least one of its independent directors on the board of HDFC Life, which is a material unlisted Indian subsidiary company of the Corporation.

The details on number of board/ committee meetings held are provided in the Report of the Directors on Corporate Governance, which forms part of this report.

During the year under review, Mr. Girish V. Koliyote resigned as the company secretary - a key managerial person of the Corporation, with effect from the close of business hours on March 19, 2015.

The Board of Directors, at its meeting held on March 19, 2015 appointed Mr. Ajay Agarwal as the company secretary -- a key managerial person in accordance with the provisions of Section 203 of the Companies Act, 2013, with effect from March 20, 2015.

Auditors

At the 37th AGM held on July 21, 2014, the members had appointed Messrs Deloitte Haskins & Sells LLP, Chartered Accountants, having registration number 117366W/W- 100018 as the statutory auditors of the Corporation and branch auditors to audit the accounts at the Corporation’s branches in India and offices a period of 3 years, to hold office as such until the conclusion of the 40th AGM, subject to them ratifying the said appointment at every AGM.

The Corporation has received a confirmation from Messrs Deloitte Haskins & Sells LLP to the effect that their appointment, if ratified at the ensuing AGM would be in terms of Sections 139 and 141 of the Companies Act, 2013 and rules made thereunder. The board proposes to the members to ratify the said appointment of Messrs Deloitte Haskins & Sells LLP.

Messrs PKF, Chartered Accountants, having registration number 10 issued by the Ministry of Economy, United Arab Emirates (UAE) was also appointed for a period of 3 years to hold office as such until the conclusion of the 40th AGM, subject to the members ratifying the said appointment at every AGM. The board proposes to ratify the appointment of Messrs PKF.

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, the Corporation appointed Messrs N. L. Bhatia & Associates, practising company secretaries to undertake the secretarial audit of the Corporation. The Secretarial Audit Report is annexed to this report.

Litigations

During the year under review, no significant or material passed by any regulatory/statutory authorities or courts/tribunals against the Corporation impacting its going concern status and operations in future.

Directors’ Responsibility Statement

In accordance with the provisions of Section 134 (3) (c) 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 the end of March 31, 2015 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 were prepared on a going concern basis;

e) Internal controls have been laid down to be followed by the Corporation and such internal controls are adequate and were operating effectively; and

f) Systems to ensure compliance with the provisions of all applicable laws are in place and were adequate and operating effectively.

Management Discussion and Analysis Report, Report of the Directors on Corporate Governance and Business Responsibility Report

In accordance with Clause 49 of the listing agreements, the Management Discussion and Analysis Report and the Report of the Directors on Corporate Governance form part of this report.

In accordance with the provisions of Clause 55 of the listing agreements, the Business Responsibility Report (BRR) has been prepared and placed on the Corporation’s website. Members who wish to receive a physical copy of the BRR are requested to write to the Corporation.

Extract of Annual Return – Form MGT 9

The details forming part of the extract of the Annual Return in Form MGT 9 is annexed to this report.

Acknowledgements

The Corporation would like to acknowledge the role of all its stakeholders - shareholders, borrowers, channel partners, depositors, key partners and lenders for their continued support to the Corporation. The directors appreciate the guidance received from various regulatory authorities including NHB, RBI, SEBI, MCA, Registrar of Companies, Financial Intelligence Unit (India), Foreign Investment Promotion Board, the stock exchanges and the depositories.

Your directors place on record their appreciation of the hard work and dedication of all the employees of the Corporation.

On behalf of the Board of Directors
MUMBAI DEEPAK S. PAREKH
April 29, 2015 Chairman

Annex to Directors’ Report - 1

DISCLOSURES ON MANAGERIAL REMUNERATION

Details of remuneration as required under Rule 5.1 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided below:

Ratio of remuneration of each director to the median employees’ remuneration for FY 2015

Name Designation Ratio of remuneration to the median employees’ remuneration
Mr. Deepak S. Parekh Chairman 19:1
Mr. D. M. Sukthankar Non-executive Director 2:1
Mr. B. S. Mehta Independent Director 2:1
Mr. D. N. Ghosh Independent Director 2:1
Dr. S. A. Dave Independent Director 2:1
Dr. Ram S. Tarneja Independent Director 2:1
Mr. Nasser Munjee Independent Director 2:1
Dr. Bimal Jalan Independent Director 2:1
Dr. J. J. Irani Independent Director 2:1
Mr. V. Srinivasa Rangan Executive Director 49:1
Ms. Renu Sud Karnad Managing Director 77:1
Mr. Keki M. Mistry Vice Chairman & CEO 83:1

Percentage increase in the remuneration of each director and key managerial personnel in FY 2015

Name Designation Increase in Remuneration (%)
Mr. Keki M. Mistry Vice Chairman & CEO 15%
Ms. Renu Sud Karnad Managing Director 15%
Mr. V. Srinivasa Rangan Executive Director 16%
Mr. Girish V. Koliyote^ Company Secretary 13%
Mr. Ajay Agarwal # Company Secretary 16%

^ Resigned w.e.f. March 19, 2015 # Appointed w.e.f. March 20, 2015

The commission paid to each non-executive director (other than the Chairman of the Corporation) was raised from Rs. 10 lac to Rs. 15 lac in FY 2015, representing an increase of 50%. Commission paid to the Chairman in FY 2015 was Rs. 1.80 crore, which was the same as in the previous year.

Further details are provided in Form MGT 9.

Explanation on the relationship between the average increase in remuneration and the Corporation’s performance

The percentage increase in the median remuneration of employees in FY 2015 stood at 16%. Given below are some key financial Despite a challenging environment, the Corporation delivered a good financial performance in FY 2014.

Parameter March 31, 2014 March 31, 2013 %
(Rs. crore) (Rs. crore)
Total Income 24,198 21,148 14
Profit Before Tax 7,440 6,573 13
Profit After Tax 5,440 4,848 12
Total Borrowings 1,83,973 1,58,828 16
Total Outstanding Loan Book (including o/s loans sold) 2,17,763 1,87,010 16
Non-performing loans (%) 0.69 0.70
Book Value per share (Rs.) 179 162
Adjusted Book Value per share (adjusted for unrealised gains on listed investments) (Rs.) 424 360

Other efficiency parameters included:

The cost to income ratio stood at 7.9% for the year ended March 31, 2014. This is amongst the lowest in the financial sector, even compared to global peers.

The return on equity for FY 2014 was 20.6%.

The average assets per employee in FY 2014 was Rs. 109 crore (PY Rs. 100 crore), while the profit per employee in FY 2014 stood at Rs. 2.78 crore (PY Rs. 2.65 crore).

Average percentile increase already made in salaries of employees other than managerial personnel in last financial year and its comparison with the percentile increase in managerial remuneration.

The average increase in the remuneration of all employees was 15% in FY 2015. The average increase in remuneration of managerial personnel (i.e. the executive directors) as well non-managerial personnel was the same at 15%.

The average increase in the remuneration of both, the managerial and non-managerial personnel was determined based on the overall performance of the Corporation. Further, the criteria for remuneration of non-managerial personnel is based on an internal evaluation of key result areas (KRAs), while the remuneration of the managerial personnel is based on the remuneration policy as recommended by the Nomination & Remuneration Committee and approved by the Board of Directors.

The Corporation reiterates that there were no exceptional circumstances which warranted an increase in managerial remuneration which was not justified by the overall performance of the Corporation.

The increase in remuneration of Key Managerial Personnel is based on the overall performance of the Corporation. As elucidated above, the Corporation performed well on various financial peer comparison of other housing finance companies reaffirmed performance in FY 2014.

Key parameters for any variable component of remuneration availed by the directors

The variable component of the remuneration package to directors comprises payment of commission. The variable component of the remuneration is determined based on the overall performance of the Corporation, whilst also factoring in key principles of prudence and conservatism. Keeping the long-term interests of the Corporation in mind, key risk factors that the Corporation could potentially face are also considered while determining the overall variable component of the remuneration payable to directors.

The non-executive directors collectively endeavour to ensure that the Corporation performs well and hence the Corporation pays an annual commission to them, subject to the approval of the Nomination & Remuneration which reflectedtheCorporation’sperformance. Committee/ Board of Directors. The executive directors are paid commission as approved by the Nomination & Remuneration Committee.

There were no employees who are not directors who received remuneration in excess of the highest paid director of the Corporation during the year.

Variations in the market capitalisation of the company, price earnings ratio as at the closing date of the current financial year and previous financial year.

The market capitalisation of the Corporation increased by 50%, from Rs. 1,37,935 crore as at March 31, 2014 to Rs. 2,07,183 crore as at March 31, 2015. The price to earnings ratio was 34.6 times as at March 31, 2015 (PY 25.4 times).

The Corporation’s last public offer was made in the year 1992 at a price of Rs. 8 per equity share of Rs. 2 each (for ease of comparison, the face value of Rs. 100 per share has been converted to Rs. 2 per equity share).

The shares of the Corporation closed at Rs. 1,315.70 on National Stock Exchange of India Limited and at Rs. 1,311.25 on BSE Limited on March 31, 2015, representing an increase of 16446% since the date of last public issue.

Annex to Directors’ Report - 2

FORM NO. AOC - 2

(Pursuant to Clause (h) of sub-section (3) of Section 134 of the Companies Act, 2013 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 arrangements or transactions at arm’s length basis:

Sr. No. Name(s) of the related party and nature of relationship Nature of contracts/ arrangements/ transactions Duration of the contracts / arrangements/ transactions Salient terms of the contracts or arrangements or transactions including the value, if any Date(s) of approval by the Board, if any Amount paid as advances, if any
(a) (b) (c) (d) (e) (f) (g)
1 HDFC Bank Ltd., Associate company Assignment Fees / Sale of Loans April 2014 - March 2015 HDFC Bank has an option to buy 70% of the loans disbursed out of the loans sourced by it for the Corporation. In the event of the purchase being loans which qualify as priority sector for HDFC Bank, the option to buy is restricted to 55% instead of 70%. - -
The loans continue to be serviced by the Corporation, for which it is paid a servicing fee.
2 HDFC Bank Ltd., Associate company DSA Commission expense (home loan sourcing) April 2014 - March 2015 The Corporation pays Direct Sourcing Arrangement (DSA) commission to HDFC Bank for loans sourced at the prevailing market rate and based on the volume of loans sourced. - -
3 HDFC Sales Pvt. Ltd., Subsidiary company DSA Commission expense (home loan sourcing) April 2014 - March 2015 HDFC Sales Pvt. Ltd. generates leads for the Corporation for which the Corporation pays commission on the conversion of such leads to loans. The Corporation pays a commission at the prevailing market rate after taking into account the leads and the infrastructure provided by it. - -

 

On behalf of the Board of Directors
MUMBAI DEEPAK S. PAREKH
April 29, 2015 Chairman

Annex to Directors’ Report - 3

Annual Report on Corporate Social Responsibility (CSR) Activities

1. Brief outline of the company’s CSR policy, including overview of projects or programmes proposed to be undertaken and a reference of the web-link of the CSR policy and projects or programmes.

Overview of HDFC’s CSR activities:

While India has been growing rapidly over the years, the economic growth has not percolated to vast sections of society. For India to be on a sustainable growth path, a holistic approach is required for social development. Housing Development Finance Corporation Limited (HDFC) recognises that India’s social problems are complex and the issues require multifaceted approaches to address them. Hence, HDFC strives to work across a range of social interventions and development initiatives to facilitate deep and long term impact for a developed and inclusive society. HDFC has been making consistent efforts over the years towards economic and social upliftment of the marginalised sections of society.

In 1988, HDFC established a fund called the Shelter Assistance Reserve (SAR) with the main objective of participating and supporting worthwhile social projects. HDFC has been annually transferring a part of its net profits to SAR for CSR activities.

To commemorate the enormous contribution of late Shri H. T. Parekh, Founder Chairman of HDFC, to the development of housing finance and other financial sectors in India, HDFC incorporated the H T Parekh Foundation (Foundation) as a not-for-profit company in October 2012. The Foundation has been incorporated with the aim to undertake, pursue and be concerned with the welfare, betterment and advancement of society. HDFC has committed to support the activities carried on by the Foundation.

HDFC has identified social sectors which include education, health and sanitation, community development, child welfare and livelihood and supporting differently abled persons as important pillars of social and economic development.

During the financial year ended March 31, 2015, HDFC supported a number of educational initiatives such as primary and secondary school education (rural and urban), girl child education, scholarships, alternate educational programmes, special education, teacher training and vocational skills training for underprivileged children and youth who have not been able to complete their formal education. In healthcare, HDFC has been a strong supporter of institutions that work towards the prevention, treatment, rehabilitation and palliation to community based hospitals serving the rural ofcancerpatients.HDFCalsoprovided financial population. Recognising the health related risks attached to poor sanitation and hygiene awareness, HDFC associated with organisations focusing on urban slum sanitation.

HDFC supports initiatives towards the health, safety, nutrition and development of children across India. Support was extended to organisations working with children of construction labourers, day care and early childhood centres, homes for abandoned and orphaned children, institutions educating children with physical and mental disabilities for livelihood, so that these children grow up to become responsible and financially adults.

HDFC also supported organisations promoting environment preservation, conservation of art and culture and Indian athletes competing at an international level.

CSR Policy:

The CSR Policy, on the recommendation of the CSR Committee, has been approved by the Board of Directors of HDFC and is available on HDFC’s website: http://hdfc.com/policies/CSRPolicy.pdf

2. The Composition of the CSR Committee

Mr. Deepak S. Parekh (Chairman)

Mr. D. N. Ghosh

Mr. Keki M. Mistry

Ms. Renu Sud Karnad

Mr. V. Srinivasa Rangan

3. A verage net profit of the companyforthelastthreefinancial years

Rs. 6,130.73 crore

(For the financial years 2011-12, 2012-13 and 2013-14)

4. Prescribed CSR Expenditure (2% of the amount in Point 3 above)

Rs. 122.61 crore

5. Details of CSR spent during the financial 2014-15: (a) Total amount spent during the financial

Rs. 49.18 crore *

* This includes the total amount committed and disbursed during the year, the details of which are explained below:

i. During the year, HDFC disbursed Rs. 18.07 crore across a broad spectrum of social sectors not confined by geographic area or demographic factors. A large part of this was contributed to the Foundation to undertake projects and activities across various identified sectors (Refer to 5(c) for details).

ii. Rs. 8.84 crore was spent by the Foundation during the year, which was contributed by HDFC prior to April 1, 2014 (Refer to Section 5(d) for details). Accordingly, the total amount disbursed towards CSR activities during the year under review stood at Rs. 26.91 crore.

iii. Additionally, there are certain projects that required a 2-3 year implementation timeframe for a sustainable and meaningful impact. An amount of Rs. 22.27 crore has been committed towards such projects, for which the first disbursement was made during the year under review.

Taken together, the total amount committed and disbursed during the year was Rs. 49.18 crore.

(b) Amount unspent, if any

Rs. 73.43 crore (after considering the committed and disbursed amount).

(c) Manner in which the amount spent during the financial year is detailed below:

Sr. No. CSR Project /Activity Sector Locations Amount Outlay (Budget) on Projects or Programmes Amount Spent (Direct) on Projects or Programmes Cumulative Expenditure upto Reporting Period Amount Spent: Through Implementing Agency*
District (State) Rs. Crore Rs. Crore Rs. Crore Rs. Crore
1 Nutrition Programmes, Day Care Centres & After School Programmes for Underprivileged Children Child Welfare (Overall Child Development) Pune (Maharashtra); New Delhi; Ahmedabad (Gujarat) 0.31 0.31 0.31 0.31
2 Shelter/Homes for Orphans, Abandoned and Underprivileged Children Child Welfare (Setting up Homes for Orphans) Pune (Maharashtra); Aurangabad (Maharashtra); Sangli (Maharashtra); Ratnagiri (Maharashtra) 0.20 0.20 0.20 0.20
3 Rehabilitation of Socially & Economically Marginalised Groups Community Development (Measures to Reduce Inequalities) Mumbai (Maharashtra) 0.85 0.85 0.85 0.85
4 Supporting Flood Affected Victims during Natural Calamities, Aid to Indian Armed Forces Community Development (Support to Government Initiatives) Jammu & Kashmir; Maharashtra 0.68 0.68 0.68 0.68
5 Raising Awareness on Maternal Health, Sanitation and Malnutrition, Prevention of Violence against Women, Livelihood Programmes for Young Girls Community Development (Empowering Women) Pune (Maharashtra); Thane (Maharashtra); Mumbai (Maharashtra) 0.60 0.47 0.47 0.47
6 Setting Up and Running Homes for the Physically and Mentally Challenged Differently Abled (Institutional Support) Raigad (Maharashtra); Pune (Maharashtra) 2.10 2.10 2.10 2.10
7 Specialised Health Aid for Children and Young Adults with Physical Handicaps Differently Abled (Promoting Healthcare) Bengaluru (Karnataka) 0.20 0.06 0.06 0.06
8 Vocational Training to School Dropouts and Unemployed Youth Education (Vocational Skills for Livelihood) Raipur (Chhattisgarh) 0.36 0.36 0.36 0.36
9 Educational Development Through Life skills, Gender Equality & Socio economic Skills for Children from Economically Weak Backgrounds, Scholarships Education (Promoting Education for Children) Palghar (Maharashtra); Mumbai (Maharashtra) 0.28 0.28 0.28 0.28
10 Strengthening Infrastructure in Tiger Reserves Environment (Ensuring Environmental Sustainability & Animal Welfare) Sawai Madhopur (Rajasthan) 0.08 0.08 0.08 0.08
11 Support Towards the Prevention, Detection, Treatment & Rehabilitation of Cancer Patients Health (Prevention & Treatment of Cancer) Kolkata (West Bengal); Mumbai (Maharashtra) 30.81 8.81 8.81 8.81
12 Health Awareness, Prevention, Treatment & Rehabilitation for Neurological Diseases, Supporting Research on Public Health Policy Health (Promoting Healthcare including Preventive Healthcare) Mumbai (Maharashtra); Hyderabad (Telangana); New Delhi 2.08 2.08 2.08 2.08
13 Community Healthcare for Rural and Tribal Areas Health (Promoting Rural Healthcare Facilities) East Singhbhum (Jharkhand); West Singhbhum (Jharkhand); Seraikala Kharsawan (Jharkhand); Chamarajanagar (Karnataka) 1.02 1.02 1.02 1.02
14 Capacity Building & Development of Urban Slum Sanitation, Sanitation Awareness Programmes, Building Toilets in Rural Schools Sanitation (Sanitation Hardware & Hygiene Awareness) Kanchipuram (Tamil Nadu); Pimpri- Chinchwad (Maharashtra); Kolhapur (Maharashtra) 0.59 0.59 0.59 0.59
15 Supporting Athletes for Olympics Sports Mumbai (Maharashtra) 0.18 0.18 0.18 0.18
Sub-Total (1) 18.07 18.07 18.07

(d) De tails of amount spent by the H. T. Parekh Foundation in financial year 2014-15 from HDFC’s contribution in previous year:

Sr. No. CSR Project/Activity Sector Locations Amount Outlay (Budget) on Projects or Programmes Amount Spent (Direct) on Projects or Programmes Cumulative Expenditure upto Reporting Period Amount Spent through Implementing Agency
District (State) Rs. Crore Rs. Crore Rs. Crore Rs. Crore
1 Nutrition Programmes, Day Care Centres, After School Programmes & Health facilities for Underprivileged Children Child Welfare (Overall Child Development) Ahmedabad (Gujarat); Pune (Maharashtra); Noida (Uttar Pradesh) 0.57 0.57 0.57 0.57
2 Shelter/homes for Orphans, Abandoned and Underprivileged Children Child Welfare (Setting up Homes for Children) Mumbai (Maharashtra); Pune (Maharashtra) 0.25 0.25 0.25 0.25
3 Rehabilitation & Livelihood to Socially & Economically Marginalised Groups, Housing for Displaced & Underprivileged Persons, Awareness for Civil Society Rights Community Development (Measures to Reduce Inequalities) Muzaffarnagar (Uttar Pradesh); New Delhi; Mumbai (Maharashtra); Raigad (Maharashtra) 0.92 0.92 0.92 0.92
4 Setting Up and Running Homes for the Physically and Mentally Challenged Differently Abled (Institutional Support) Pune (Maharashtra); New Delhi 0.22 0.22 0.22 0.22
5 Specialised Healthcare for Children and Young Adults with Physical Handicaps Differently Abled (Promoting Healthcare) Mumbai (Maharashtra) 0.30 0.30 0.30 0.30
6 Vocational Skills & Livelihood Training for Disabled Children & Adults Differently Abled (Promoting Special Education) Mumbai (Maharashtra); Bengaluru (Karnataka); Kollam (Kerala) 3.58 3.58 3.58 3.58
7 Scholarships for Underprivileged Children & Youth Education (Scholarships) Mumbai (Maharashtra); Dehradun (Uttarakhand) 0.24 0.24 0.24 0.24
8 Educational Development through Life skills, Gender Equality & Socio-economic Skills for Children from Economically Weak Backgrounds, Supporting Education for Girls Education (Promoting Education for Children) Mumbai (Maharashtra); Sirohi (Rajasthan); Alwar (Rajasthan); Hyderabad (Telangana); Visakhapatnam (Andhra Pradesh); Mahbubnagar (Telangana); Kanker (Chhattisgarh); Ratlam (Madhya Pradesh); Sheopur (Madhya Pradesh); Udaipur (Rajasthan) 1.54 1.54 1.54 1.54
9 Strengthening Infrastructure in Tiger Reserves Environment (Ensuring Environmental Sustainability & Animal Welfare) Satpura, Hoshangabad (Madhya Pradesh) 0.62 0.62 0.62 0.62
10 Palliative Care / Hospices for Cancer Patients Health (Treatment & Palliative Care) Mumbai (Maharashtra); Nasik (Maharashtra) 0.35 0.35 0.35 0.35
11 Health Awareness, Prevention, Treatment & Rehabilitation for Neurological Diseases, Supporting Community Hospitals in Rural Areas, Support towards Public Blood Banks Health (Promoting Healthcare Including Preventive Healthcare) Jodhpur (Rajasthan); New Delhi; Mumbai (Maharashtra); Palghar (Maharashtra) 0.25 0.25 0.25 0.25
Sub-Total (2) 8.84 8.84 8.84
GRAND TOTAL 49.18 26.91 26.91 26.91

* Details of Implementing Agencies: The H T Parekh Foundation (Across all sectors); Mobile Creches for Working Mother’s Children (Child Welfare); Mumbai City Sainik Welfare Office (Community Development); Prime Minister’s Relief Fund (Community Development); Society for Nutrition, Education & Health Action (Community Development); Tata Institute of Social Sciences (Community Development); Maaya Foundation (Differently Abled); Om Creations Trust (Differently Abled); Savali Association for Mentally Retarded & Cerebral Palsy Children (Differently Abled); Tiger Watch (Environment); Neurology Foundation (Healthcare); Indian Cancer Society (Healthcare).

6. In case the company has failed to spend 2% of the average net profit of the last 3 financial years or any part thereof, the company shall provide the reasons for not spending the amount

HDFC considers social responsibility as an important part of its business and has been involved with the social sector for over 25 years.

In 2012, HDFC envisioned the establishment of a separate foundation with a dedicated team to focus on activities in the social and developmental sectors of India. Accordingly, the H T Parekh Foundation was formed in October 2012 to achieve this purpose.

As HDFC’s foreign shareholding exceeds 50%, any amount contributed by it to the Foundation would need prior approval of the Ministry of Home Affairs (MHA) under the Foreign Contribution Regulation Act, 2010 (FCRA). Although the majority of HDFC’s shareholders are Foreign Institutional Investors, they do not have any representation on HDFC’s Board of Directors or a say in management decisions. Moreover, the Board of Directors are all Indian citizens and HDFC’s entire business caters to the Indian market.

The Foundation received the FCRA approval only in March 2014; hence it was unable to undertake any social initiatives prior to this period. Coincidentally, Section 135 of the Companies Act, 2013 which provides for CSR obligations on specified classes of companies also came into force during this time. HDFC therefore thought it appropriate to conduct a major part of its CSR activities through the Foundation, as the objectives of both were aligned.

After receipt of the FCRA approval by the Foundation, an implementation plan was put in place to meet the development objectives of HDFC as well as the Foundation, which included the hiring of full time employees for the Foundation. In October 2014, the employees of the Foundation came on board.

Initially time was taken to put in place processes, evaluate desired projects, their execution timelines, travel to project locations and evaluate social investment options. Keeping in mind the long term and sustainable development objectives of HDFC (as well as the Foundation), it is of paramount importance that any funds provided by HDFC be utilised prudently to ensure maximum social benefit and development.

Considering all the factors stated above, the amount committed and disbursed towards CSR was Rs. 49.18 crore in financialyear 2014-15. Now that the team is in place at the Foundation for sometime, HDFC intends to commit and deploy larger funds across social sectors in the coming financial year.

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

For Housing Development Finance Corporation Limited
MUMBAI Keki M. Mistry Deepak S. Parekh
April 29, 2015 Vice Chairman & CEO Chairman - CSR Committee

Annex to Directors’ Report - 4

FORM NO. MGT-9

EXTRACT OF ANNUAL RETURN

as on the financial year ended on March 31, 2015

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

I. REGISTRATION AND OTHER DETAILS

CIN : L70100MH1977PLC019916
Registration Date : October 17, 1977
Name of the Company : HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED
Category / Sub-Category of the Company : Company limited by shares / Indian Non-Government Company
Address of the Registered office and contact details : Ramon House, H. T. Parekh Marg, 169, Backbay Reclamation, Churchgate, Mumbai, 400 020.
Tel No.: +91-22 6176 6000
Fax No.: +91-22 2281 1205
Whether listed company Yes / No : Yes
Name, Address and Contact details of Registrar and Transfer Agent, if any : Registered as an in-house share transfer agent
Housing Development Finance Corporation Limited
Investor Services Department
5th Floor, Ramon House,
H. T. Parekh Marg,
169, Backbay Reclamation,
Churchgate, Mumbai 400 020.
Tel. No.: +91-22-6141 3900
Fax No.: +91-22-2414 7301
E-mail: investorcare@hdfc.com

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 % of total turnover of the Company
1 The Corporation’s main business is financing by way of loans for the purchase or construction of residential houses, commercial real estate and certain other purposes, in India. All other activities of the Corporation revolve around the main business. 65922 98.14

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 HDFC DEVELOPERS LTD. U45200MH1981PLC023708 Subsidiary 100 2(87)
Ramon House, H T Parekh Marg, 169, Backbay Reclamation, Churchgate, Mumbai 400 020
2 GRUH FINANCE LTD. L65923GJ1986PLC008809 Subsidiary 58.6 2(87)
"GRUH", Netaji Marg, Nr. Mithakali Six Roads, Ellisbridge, Ahmedabad 380 006
3 HDFC INVESTMENTS LTD. U65990MH1994PLC083933 Subsidiary 100 2(87)
Ramon House, H T Parekh Marg, 169, Backbay Reclamation, Churchgate, Mumbai 400 020
4 HDFC TRUSTEE CO. LTD. U65991MH1999PLC123026 Subsidiary 100 2(87)
HDFC House, 2nd Floor, H T Parekh Marg, 165-166, Backbay Reclamation, Churchgate, Mumbai 400 020
5 HDFC ASSET MANAGEMENT CO. LTD. U65991MH1999PLC123027 Subsidiary 59.8 2(87)
HDFC House, 2nd Floor, H T Parekh Marg, 165-166, Backbay Reclamation, Churchgate, Mumbai 400 020
6 HDFC HOLDINGS LTD. U65993MH2000PLC123680 Subsidiary 100 2(87)
Ramon House, H T Parekh Marg, 169, Backbay Reclamation, Churchgate, Mumbai 400 020
7 HDFC REALTY LTD. U74140MH2000PLC124897 Subsidiary 100 2(87)
Ramon House, H T Parekh Marg, 169, Backbay Reclamation, Churchgate, Mumbai 400 020
8 HDFC STANDARD LIFE INSURANCE CO. LTD. U99999MH2000PLC128245 Subsidiary 70.7 2(87)
13th Floor, Lodha Excelus, Apollo Mills Compound, N. M. Joshi Marg, Mahalaxmi, Mumbai 400 011
9 HDFC ERGO GENERAL INSURANCE CO. LTD. U66010MH2002PLC134869 Subsidiary 73.6 2(87)
HDFC House, 1st Floor, H T Parekh Marg, 165-166, Backbay Reclamation, Churchgate, Mumbai 400 020
10 HDFC SALES PVT. LTD. U65920MH2004PTC144182 Subsidiary 100 2(87)
HDFC House, H T Parekh Marg, 165-166, Backbay Reclamation, Churchgate, Mumbai 400 020
11 WINDERMERE PROPERTIES PVT. LTD. U45200MH2004PTC147081 Subsidiary 100 2(87)
HDFC House, CTS 154 & 155, Oshiwara District Centre, Garden Road, Goregaon (West), Mumbai 400 104
12 HADDOCK PROPERTIES PVT. LTD. U70102MH2004PTC148768 Subsidiary 100 2(87)
HDFC House, CTS 154 & 155, Oshiwara District Centre, Garden Road, Goregaon (West), Mumbai 400 104
13 HDFC VENTURES TRUSTEE CO. LTD. U65991MH2004PLC149329 Subsidiary 100 2(87)
HDFC House, H T Parekh Marg, 165-166, Backbay Reclamation, Churchgate, Mumbai 400 020
14 HDFC VENTURE CAPITAL LTD. U65991MH2004PLC149330 Subsidiary 80.5 2(87)
HDFC House, H T Parekh Marg, 165-166, Backbay Reclamation, Churchgate, Mumbai 400 020
15 GRANDEUR PROPERTIES PVT. LTD. U70100MH2005PTC154232 Subsidiary 100 2(87)
HDFC House, CTS 154 & 155, Oshiwara District Centre, Garden Road, Goregaon (West), Mumbai 400 104
16 PENTAGRAM PROPERTIES PVT. LTD. U70100MH2005PTC154357 Subsidiary 100 2(87)
HDFC House, CTS 154 & 155, Oshiwara District Centre, Garden Road, Goregaon (West), Mumbai 400 104
17 WINCHESTER PROPERTIES PVT. LTD. U70100MH2005PTC154416 Subsidiary 100 2(87)
HDFC House, CTS 154 & 155, Oshiwara District Centre, Garden Road, Goregaon (West), Mumbai 400 104
18 CREDILA FINANCIAL SERVICES PVT. LTD. U67190MH2006PTC159411 Subsidiary 78.7 2(87)
B - 301, Citi Point, Andheri-Kurla Road, Andheri (East), Mumbai 400 059
19 HDFC PROPERTY VENTURES LTD. U74140MH2006PLC165539 Subsidiary 100 2(87)
HDFC House, H T Parekh Marg, 165-166, Backbay Reclamation, Churchgate, Mumbai 400 020
20 HDFC PENSION MANAGEMENT CO. LTD. U66020MH2011PLC218824 Subsidiary 70.7 2(87)
(Through HDFC Standard Life Insurance Co. Ltd.) 13th Floor, Lodha Excelus, Apollo Mills Compound, N. M. Joshi Marg, Mahalaxmi, Mumbai 400 011
21 HDFC EDUCATION AND DEVELOPMENT SERVICES U80301MH2011PTC224035 Subsidiary 100 2(87)
PVT. LTD. Ramon House, H T Parekh Marg, 169, Backbay Reclamation, Churchgate, Mumbai 400 020
22 GRIHA PTE. LTD., Singapore - Subsidiary 100 2(87)
(Through HDFC Investments Ltd.) 9, Battery Road, 15-01 Straits Trading Building, Singapore 049 910
23 GRIHA INVESTMENTS, (Mauritius) - Subsidiary 100 2(87)
(Through HDFC Holdings Ltd.) IFS Court, Twenty Eight, Cybercity, Ebene, Mauritius
24 HDFC BANK LTD.* L65920MH1994PLC080618 Associate 21.7 2(6)
HDFC Bank House, Senapati Bapat Marg, Lower Parel (West), Mumbai 400 013
25 INDIA VALUE FUND ADVISORS PVT. LTD. U67190MH2000PTC123712 Associate 21.5 2(6)
Suite F9C, Grand Hyatt Plaza, Santacruz (East), Mumbai 400 055
26 MAGNUM FOUNDATIONS PVT. LTD. U45201TN1998PTC039924 Associate 50 2(6)
No. 3, Mangesh Street, T. Nagar, Chennai 600 017

* includes the holding of HDFC Investments Ltd. and HDFC Holdings Ltd.

IV. SHAREHOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)

i) Category-wise Shareholding

Category of shareholder 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
(2) Foreign -
Total Shareholding of Promoters (A)= (A)(1)+(A)(2) - - - - - - - - -
(B) Public Shareholding
(1) Institutions
(a) Mutual Funds 3,75,35,507 4,750 3,75,40,257 2.40 3,32,46,999 4,750 3,32,51,749 2.11 (0.29)
(b) Financial Institutions/ Banks 2,80,26,994 7,100 2,80,34,094 1.80 1,74,55,460 7,100 1,74,62,560 1.11 (0.69)
(c) Central Government/ State Government(s) 9,02,355 - 9,02,355 0.06 10,91,927 - 10,91,927 0.07 0.01
(d) Venture Capital Funds - - - - - - - - -
(e) Insurance Companies 11,66,22,066 500 11,66,22,566 7.47 8,27,62,014 500 8,27,62,514 5.26 (2.22)
(f) Foreign Institutional Investors 118,14,42,356 - 118,14,42,356 75.71 125,43,10,973 - 125,43,10,973 79.65 3.95
(g) Foreign Venture Capital Funds - - - - - - - - -
(h) Any Other - - - - - - - - -
FDI - Foreign Institutions 32,48,505 - 32,48,505 0.21 29,80,901 - 29,80,901 0.19 (0.02)
Sub-Total (B)(1) 136,77,77,783 12,350 136,77,90,133 87.65 139,18,48,274 12,350 139,18,60,624 88.39 0.74
(2) Non-institutions
(a) Bodies Corporate 3,49,28,183 4,88,735 3,54,16,918 2.27 2,52,09,567 3,50,335 2,55,59,902 1.62 (0.65)

 

(b) Individuals -
i. Individual shareholders holding nominal share capital up to Rs. 1 lakh. 9,69,46,942 1,61,20,384 11,30,67,326 7.24 9,75,98,382 1,48,91,209 11,24,89,591 7.14 (0.10)
ii. Individual shareholders holding nominal share capital in excess of Rs. 1 lakh. 2,53,97,630 2,08,550 2,56,06,180 1.64 2,66,67,246 2,08,550 2,68,75,796 1.71 0.07
(c) Any Other (specify)
Directors & their relatives 84,73,909 3,900 84,77,809 0.55 87,54,611 3,900 87,58,511 0.56 0.01
Hindu Undivided Families 11,57,000 - 11,57,000 0.07 12,77,801 - 12,77,801 0.08 0.01
Foreign National - - - - - - - - -
NRIs 28,11,689 13,000 28,24,689 0.18 31,19,609 13,000 31,32,609 0.20 0.02
OCBs - - - - - - - - -
Clearing Members 39,49,053 - 39,49,053 0.25 16,56,014 - 16,56,014 0.10 (0.15)
Trusts 22,43,497 - 22,43,497 0.15 30,86,822 - 30,86,822 0.20 0.05
Sub-Total (B)(2) 17,59,07,903 1,68,34,569 19,27,42,472 12.35 16,73,70,052 1,54,66,994 18,28,37,046 11.61 (0.74)
Total Public Shareholding (B) = (B)(1) + (B)(2) 154,36,85,686 1,68,46,919 156,05,32,605 100 155,92,18,326 1,54,79,344 157,46,97,670 100 -
TOTAL (A)+(B) 154,36,85,686 1,68,46,919 156,05,32,605 100 155,92,18,326 1,54,79,344 157,46,97,670 100 -
(C) Shares held by Custodians and against which Depository Receipts have been issued - - - - - - - - -
Public - - - - - - - - -
GRAND TOTAL (A) + (B) + (C) 154,36,85,686 1,68,46,919 156,05,32,605 100 155,92,18,326 1,54,79,344 157,46,97,670 100

(iii) Change in Promoters’ Shareholding (please specify, if there is no change) Not applicable

(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs):

Sr. No. Top 10 Shareholders* Shareholding at the beginning of the year Cumulative Shareholding during the year
No. of Shares % of total shares of the Company No. of Shares % of total shares of the Company
1. OPPENHEIMER DEVELOPING MARKETS FUND
April 01, 2014 6,52,03,138 4.18
May 23, 2014 Sale (2,75,920) (0.02) 6,49,27,218 4.16
May 30, 2014 Sale (46,83,215) (0.30) 6,02,44,003 3.86
June 6, 2014 Sale (7,91,135) (0.05) 5,94,52,868 3.81
June 20, 2014 – Purchase 5,32,389 0.02 5,99,85,257 3.83
June 30, 2014 – Purchase 20,64,192 0.13 6,20,49,449 3.96
November 14, 2014 Purchase 22,73,314 0.14 6,43,22,763 4.10
November 21, 2014 Purchase 16,07,530 0.10 6,59,30,293 4.20
November 28, 2014 Purchase 16,49,605 0.10 6,75,79,898 4.30
March 26, 2015 Sale (7,07,174) (0.05) 6,68,72,724 4.25
March 31, 2015 Sale (8,17,293) (0.06) 6,60,55,431 4.19
March 31, 2015 6,60,55,431 4.19
2. EUROPACIFIC GROWTH FUND
April 01, 2014 5,86,45,570 3.76
June 30, 2014 – Purchase 32,97,871 0.21 6,19,43,441 3.95
July 4, 2014 – Purchase 3,32,129 0.02 6,22,75,570 3.97
March 31, 2015 6,22,75,570 3.95
3. LIFE INSURANCE CORPORATION OF INDIA
April 1, 2014 3,82,68,355 2.45
August 8, 2014 – Purchase 4,87,238 0.02 3,87,55,593 2.47
August 15, 2014 – Purchase 4,56,796 0.03 3,92,12,389 2.50
December 5, 2014 Sale (4,51,791) (0.04) 3,87,60,598 2.47
December 31, 2014 Sale (1,85,308) (0.01) 3,85,75,290 2.45
January 23, 2015 Sale (20,27,548) (0.13) 3,65,47,742 2.32
January 30, 2015 Sale (12,52,952) (0.08) 3,52,94,790 2.24
February 06, 2015 Sale (2,703) (0.00) 3,52,92,087 2.24
February 13, 2015 Sale (2,09,005) (0.01) 3,50,83,082 2.23
February 20, 2015 Sale (6,38,619) (0.04) 3,44,44,463 2.19
February 27, 2015 Sale (8,69,173) (0.06) 3,35,75,290 2.13
March 20, 2015 Sale (8,446) (0.00) 3,35,66,844 2.13
March 26, 2015 Sale (8,96,862) (0.06) 3,26,69,982 2.07
March 31, 2015 3,26,69,982 2.07
4. ABERDEEN GLOBAL INDIAN EQUITY (MAURITIUS) LIMITED
April 1, 2014 3,17,90,000 2.04
May 9, 2014 Sale (13,00,397) (0.08) 3,04,89,603 1.95
May 23, 2014 Sale (31,95,000) (0.20) 2,72,94,603 1.75
September 5, 2014 Sale (3,80,616) (0.02) 2,69,13,987 1.72
September 12, 2014 Sale (4,49,148) (0.03) 2,64,64,839 1.69
September 19, 2014 Sale (24,839) (0.00) 2,64,40,000 1.69
November 7, 2014 Sale (4,00,000) (0.03) 2,60,40,000 1.66
February 06, 2015 Sale (13,50,000) (0.09) 2,46,90,000 1.57
March 13, 2015 Sale (9,50,000) (0.06) 2,37,40,000 1.51
March 20, 2015 Sale (9,90,000) (0.07) 2,27,50,000 1.44
March 31, 2015 2,27,50,000 1.44
5. GOVERNMENT OF SINGAPORE
April 1, 2014 3,02,98,803 1.94
April 4, 2014 – Purchase 8,01,480 0.05 3,11,00,283 1.99
April 11, 2014 Sale (5,22,330) (0.03) 3,05,77,953 1.96
April 18, 2014 Sale (11,90,919) (0.08) 2,93,87,034 1.88
April 25, 2014 Sale (4,61,892) (0.03) 2,89,25,142 1.85
May 2, 2014 Sale (5,94,609) (0.03) 2,83,30,533 1.82
May 30, 2014 Sale (1,38,862) (0.01) 2,81,91,671 1.81
June 6, 2014 Sale (4,10,962) (0.03) 2,77,80,709 1.78
June 13, 2014 Sale (2,90,890) (0.02) 2,74,89,819 1.76
June 20, 2014 Sale (73,497) (0.01) 2,74,16,322 1.75
June 30, 2014 Sale (1,51,440) (0.01) 2,72,64,882 1.74
July 4, 2014 Sale (53,210) (0.00) 2,72,11,672 1.74
July 11, 2014 – Purchase 45,928 0.00 2,72,57,600 1.74
July 18, 2014 – Purchase 1,77,851 0.01 2,74,35,451 1.75
August 1, 2014 Sale (7,10,589) (0.05) 2,67,24,862 1.71
August 22, 2014 – Purchase 11,07,917 0.07 2,78,32,779 1.78
August 29, 2014 Sale (1,84,178) (0.02) 2,76,48,601 1.76
September 5, 2014 Sale (1,94,354) (0.01) 2,74,54,247 1.75
September 12, 2014 Purchase 14,819 0.00 2,74,69,066 1.75
September 30, 2014 Sale (28,398) (0.00) 2,74,40,668 1.75
October 3, 2014 Purchase 1,04,906 0.01 2,75,45,574 1.76
October 10, 2014 Purchase 1,88,650 0.01 2,77,34,224 1.77
October 17, 2014 Sale (97,084) (0.01) 2,76,37,140 1.76
October 24, 2014 Sale (11,48,036) (0.07) 2,64,89,104 1.69
October 31, 2014 Sale (8,73,328) (0.06) 2,56,15,776 1.63
November 7, 2014 Purchase 4,59,379 0.03 2,60,75,155 1.66
November 21, 2014 Sale (19,630) (0.00) 2,60,55,525 1.66
November 28, 2014 Sale (21,678) (0.00) 2,60,33,847 1.66
December 5, 2014 Sale (3,54,855) (0.03) 2,56,78,992 1.63
December 12, 2014 Purchase 48,791 0.01 2,57,27,783 1.64
December 19, 2014 Sale (4,13,109) (0.03) 2,53,14,674 1.61
December 31, 2014 Sale (1,33,355) (0.01) 2,51,81,319 1.60
January 16, 2015 – Purchase 94,760 0.01 2,52,76,079 1.61
February 13, 2015 Purchase 4,20,813 0.02 2,56,96,892 1.63
February 20, 2015 Sale (19,791) (0.00) 2,56,77,101 1.63
March 6, 2015 – Purchase 34,937 0.00 2,57,12,038 1.63
March 13, 2015 Sale (3,33,376) (0.02) 2,53,78,662 1.61
March 26, 2015 – Purchase 1,32,801 0.01 2,55,11,463 1.62
March 31, 2015 – Purchase 2,82,864 0.02 2,57,94,327 1.64
March 31, 2015 2,57,94,327 1.64
6. VANGUARD EMERGING MARKETS STOCK INDEX FUND, ASERIES OF VANGUARD INTERNATIONAL EQUITY INDE X FUND
April 1, 2014 2,73,45,994 1.75
April 4, 2014 – Purchase 1,48,760 0.01 2,74,94,754 1.76
April 11, 2014 – Purchase 1,82,231 0.01 2,76,76,985 1.77
April 18, 2014 – Purchase 26,033 0.00 2,77,03,018 1.78
May 23, 2014 – Purchase 66,942 0.00 2,77,69,960 1.78
May 30, 2014 – Purchase 3,22,417 0.02 2,80,92,377 1.80
June 6, 2014 – Purchase 2,65,573 0.02 2,83,57,950 1.82
July 11, 2014 – Purchase 1,30,165 0.00 2,84,88,115 1.82
July 25, 2014 – Purchase 1,48,760 0.01 2,86,36,875 1.83
August 1, 2014 – Purchase 2,38,016 0.02 2,88,74,891 1.84
August 22, 2014 - Purchase 2,08,295 0.01 2,90,83,186 1.85
September 12, 2014 Purchase 1,04,132 0.01 2,91,87,318 1.86
September 30, 2014 Sale (5,74,700) (0.04) 2,86,12,618 1.82
November 28, 2014 Purchase 1,70,689 0.01 2,87,83,307 1.83
December 5, 2014 Purchase 2,32,658 0.01 2,90,15,965 1.85
January 9, 2015 Sale (1,52,479) (0.01) 2,88,63,486 1.84
January 16, 2015 Sale (66,942) (0.00) 2,87,96,544 1.83
January 23, 2015 - Sale (63,223) (0.00) 2,87,33,321 1.83
February 6, 2015 Sale (18,595) (0.00) 2,87,14,726 1.83
February 13, 2015 Sale (74,380) (0.00) 2,86,40,346 1.82
March 26, 2015 Sale (2,20,000) (0.02) 2,84,20,346 1.80
March 31, 2015 Sale (53,805) (0.00) 2,83,66,541 1.80
March 31, 2015 2,83,66,541 1.80
7. ABERDEEN EMERGING MARKETS FUND
April 1, 2014 2,27,99,000 1.46
May 23, 2014 Sale (16,55,000) (0.11) 2,11,44,000 1.35
June 20, 2014 Sale (12,46,000) (0.08) 1,98,98,000 1.27
June 30, 2014 Sale (15,00,000) (0.10) 1,83,98,000 1.17
August 22, 2014 Sale (4,21,102) (0.03) 1,79,76,898 1.15
August 29, 2014 Sale (4,12,514) (0.03) 1,75,64,384 1.12
September 5, 2014 Sale (5,21,787) (0.03) 1,70,42,597 1.09
September 12, 2014 Sale (3,59,705) (0.02) 1,66,82,892 1.06
September 19, 2014 Sale (19,892) (0.00) 1,66,63,000 1.06
December 31, 2014 - Sale (6,63,000) (0.04) 1,60,00,000 1.02
March 31, 2015 1,60,00,000 1.02
8. VIRTUS EMERGING MARKETS OPPORTUNITIES FUND
April 1, 2014 2,20,87,975 1.42
May 23, 2014 – Purchase 10,289 0.00 2,20,98,264 1.42
May 30, 2014 – Purchase 80,755 0.00 2,21,79,019 1.42
June 6, 2014 -Purchase 2,06,400 0.01 2,23,85,419 1.43
July 25, 2014 – Purchase 3,42,958 0.02 2,27,28,377 1.45
September 12, 2014 Purchase 7,56,700 0.05 2,34,85,077 1.50
September 19, 2014 - Sale (2,36,000) (0.02) 2,32,49,077 1.48
March 31, 2015 2,32,49,077 1.48
9. ABU DHABI INVESTMENT AUTHORITY – GULAB
April 1, 2014 2,18,13,693 1.40
June 6, 2014 – Purchase 4,13,369 0.02 2,22,27,062 1.42
June 30, 2014 – Purchase 18,734 0.00 2,22,45,796 1.42
July 4, 2014 – Purchase 62,765 0.00 2,23,08,561 1.42
July 11, 2014 – Purchase 3,22,104 0.02 2,26,30,665 1.44
July 18, 2014 – Purchase 1,03,545 0.01 2,27,34,210 1.45
September 5, 2014 Purchase 1,41,853 0.01 2,28,76,063 1.46
September 19, 2014 Purchase 70,635 0.00 2,29,46,698 1.46
November 28, 2014 Purchase 4,58,456 0.03 2,34,05,154 1.49
December 12, 2014 Purchase 1,27,502 0.01 2,35,32,656 1.50
February 27, 2015 Sale (54,226) (0.01) 2,34,78,430 1.49
March 6, 2015 Sale (3,32,596) (0.02) 2,31,45,834 1.47
March 31, 2015 2,31,45,834 1.47
10. ICICI PRUDENTIAL LIFE INSURANCE COMPANY LTD.
April 1, 2014 2,11,03,937 1.35
April 4, 2014 – Purchase 79,303 0.01 2,11,83,240 1.36
April 11, 2014 Sale (5,26,062) (0.04) 2,06,57,178 1.32
April 18, 2014 Sale (4,876) (0.00) 2,06,52,302 1.32
April 25, 2014 Sale (51,619) (0.00) 2,06,00,683 1.32
May 2, 2014 Sale (71,715) (0.00) 2,05,28,968 1.32
May 9, 2014 Sale (4,29,709) (0.03) 2,00,99,259 1.29
May 16, 2014 Sale (1,54,942) (0.01) 1,99,44,317 1.28
May 23, 2014 Sale (2,45,134) (0.02) 1,96,99,183 1.26
May 30, 2014 Sale (36,351) (0.00) 1,96,62,832 1.26
June 6, 2014 Sale (2,51,207) (0.02) 1,94,11,625 1.24
June 13, 2014 Sale (2,40,329) (0.02) 1,91,71,296 1.23
June 20, 2014 Sale (74,922) (0.00) 1,90,96,374 1.22
June 30, 2014 – Purchase 5,220 0.00 1,91,01,594 1.22
July 4, 2014 – Purchase 86,796 0.00 1,91,88,390 1.22
July 7, 2014 – Purchase 56,338 0.00 1,92,44,728 1.23
July 11, 2014 Sale (26,113) (0.00) 1,92,18,615 1.23
July 18, 2014 Sale (2,13,821) (0.01) 1,90,04,794 1.21
July 25, 2014 – Purchase 12,809 0.00 1,90,17,603 1.21
August 1, 2014 Sale (2,08,096) (0.01) 1,88,09,507 1.20
August 8, 2014 Sale (3,11,256) (0.02) 1,84,98,251 1.18
August 15, 2014 Sale (2,64,254) (0.02) 1,82,33,997 1.16
August 22, 2014 Sale (3,70,374) (0.02) 1,78,63,623 1.14
August 29, 2014 Sale (385) (0.00) 1,78,63,238 1.14
September 5, 2014 Sale (16,675) (0.00) 1,78,46,563 1.14
September 12, 2014 Sale (41,213) (0.00) 1,78,05,350 1.14
September 19, 2014 Sale (1,40,753) (0.01) 1,76,64,597 1.13
September 30, 2014 Sale (1,23,144) (0.01) 1,75,41,453 1.12
October 3, 2014 Sale (7,528) (0.00) 1,75,33,925 1.12
October 10, 2014 Purchase 31,974 0.00 1,75,65,899 1.12
October 17, 2014 Sale (72,856) (0.01) 1,74,93,043 1.11
October 24, 2014 Sale (26,758) (0.00) 1,74,66,285 1.11
October 31, 2014 Sale (1,12,455) (0.00) 1,73,53,830 1.11
November 7, 2014 Sale (83,277) (0.01) 1,72,70,553 1.10
November 14, 2014 Sale (83,239) (0.01) 1,71,87,314 1.09
November 21, 2014 Sale (15,531) (0.00) 1,71,71,783 1.09
November 28, 2014 Sale (3,28,845) (0.02) 1,68,42,938 1.07
December 5, 2014 Sale (67,831) (0.00) 1,67,75,107 1.07
December 12, 2014 Sale (4,41,292) (0.03) 1,63,33,815 1.04
December 19, 2014 Sale (2,73,645) (0.02) 1,60,60,170 1.02
December 31, 2014 Purchase 8,465 0.00 1,60,68,635 1.02
January 02, 2015 – Purchase 22,387 0.00 1,60,91,022 1.02
January 09, 2015 Sale (38,833) (0.00) 1,60,52,189 1.02
January 16, 2015 – Purchase 2,24,841 0.01 1,62,77,030 1.04
January 23, 2015 Sale (4,60,517) (0.03) 1,58,16,513 1.01
January 30, 2015 Sale (3,32,860) (0.03) 1,54,83,653 0.98
February 06, 2015 Purchase 53,451 0.01 1,55,37,104 0.99
February 13, 2015 Purchase 10,807 0.00 1,55,47,911 0.99
February 20, 2015 Sale (48,920) (0.00) 1,54,98,991 0.99
February 27, 2015 Sale (2,91,518) (0.02) 1,52,07,473 0.97
March 06, 2015 Sale (13,52,141) (0.09) 1,38,55,332 0.88
March 13, 2015 Sale (4,28,645) (0.03) 1,34,26,687 0.85
March 20, 2015 Sale (2,29,610) (0.01) 1,31,97,077 0.84
March 26, 2015 – Purchase 3,72,872 0.02 1,35,69,949 0.86
March 31, 2015 – Purchase 63,219 0.00 1,36,33,168 0.87
March 31, 2015 1,36,33,168 0.87

* the dates mentioned above are the dates of receipt of statement of beneficial positions from the Depositories.

(v) Shareholding of Directors and Key Managerial Personnel*:

Name of the Director/ Key Managerial Person Shareholding at the beginning of the year Number of shares purchased (allotted pursuant to exercise of stock options) during FY 2014-15 Number of shares sold during FY 2014-15 Shareholding at the end of the year % of total shares of the Company
Mr. Deepak S. Parekh 22,00,000 2,00,000 8,00,000 16,00,000 0.10
Mr. D. M. Sukthankar 2,31,100 50,000 15,301 2,65,799 0.02
Mr. B. S. Mehta 4,35,000 - - 4,35,000 0.03
Mr. D. N. Ghosh 1,72,935 5,000 15,000 1,62,935 0.01
Dr. S. A. Dave 3,60,215 10,000 - 3,70,215 0.02
Dr. Ram S. Tarneja 4,57,500 - - 4,57,500 0.03
Mr. Nasser Munjee 19,600 - 14,000 5,600 0.00
Dr. Bimal Jalan 15,000 20,000 20,000 15,000 0.00
Dr. J. J. Irani 50,000 35,000 20,000 65,000 0.00
Mr. V. Srinivasa Rangan 2,72,620 3,80,000 2,70,620 3,82,000 0.02
Ms. Renu Sud Karnad 18,26,449 13,02,900 8,28,277 23,01,072 0.15
Mr. Keki M. Mistry 6,39,000 7,00,000 6,39,000 7,00,000 0.04
Mr. Girish V. Koliyote+ 11,825 80,000 56,200 35,625 0.00
Mr. Ajay Agarwal++ 41,190 - - 41,190 0.00

* Datewise increase / decrease in shareholding of the directors and the key managerial personnel is available on the website of the National Stock Exchange of India Limited and the BSE Limited.

+ Resigned with effect from March 19, 2015 and hence the closing balance is till March 19, 2015.

++ Appointed with effect from March 20, 2015 and hence the opening balance is of March 20, 2015.

V. INDEBTEDNESS

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

(Rs. in crore)
Secured Loans excluding deposits Unsecured Loans Deposits Total Indebtedness
Indebtedness at the beginning of the financial year
i) Principal Amount 1,10,192.49 17,202.47 57,020.79 1,84,415.75
ii) Interest due but not paid - - 55.18 55.18
iii) Interest accrued but not due 3,603.42 287.22 2,479.95 6,370.59
Total (i+ii+iii) 1,13,795.91 17,489.69 59,555.92 1,90,841.52
Change (Net) in Indebtedness during the financial year - - - -
i) Addition - - - -
ii) Reduction
Net Change (5,516.17) 20,926.39 9,781.02 25,191.24
Indebtedness at the end of the financial year
i) Principal Amount 1,04,806.16 37,704.84 66,705.96 2,09,216.96
ii) Interest due but not paid - - 78.70 78.70
iii) Interest accrued but not due 3,473.58 711.24 2,552.28 6,737.10
Total (i + ii + iii) 1,08,279.74 38,416.08 69,336.94 2,16,032.76

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

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

Sr. No. Particulars of Remuneration

Name of MD/WTD/Manager

Total Amount
Mr. Keki M. Mistry (Managing Director - Vice Chairman and CEO) Ms. Renu Sud Karnad (Managing Director) Mr. V. Srinivasa Rangan (Executive Director and CFO)
(Rs.) (Rs.) (Rs.) (Rs.)
1 Gross salary
(a) Salary as per provisions contained in Section 17(1) of the Income-tax Act, 1961 3,28,58,433 2,95,10,243 1,91,99,038 8,15,67,714
(b) Value of perquisites under Section 17(2) of the Income-tax Act, 1961(*) 37,94,661 37,80,445 33,87,957 1,09,63,063
(c) Profits in lieu of salary under section 17(3) of the Income-tax Act, 1961 - - - -
2 Stock Option (**) 2,40,000 2,40,000 1,35,000 6,15,000
3 Sweat Equity - - - -
4 Commission
- as % of profit - - - -
- Others 4,45,50,000 4,06,50,000 2,59,50,000 11,11,50,000
5 Others - - - -
Total 8,12,03,094 7,39,40,688 4,85,36,995 20,36,80,777
Ceiling as per the Companies Act, 2013 Maximum of Rs. 407,41,58,358 per Whole-time Director 814,83,16,715

* Excludes value of perquisite on exercise of stock options.

** Number of stock options granted during the financial year 2014-15 under ESOS -2014. Each option represents 5 equity shares of Rs. 2 each.

B. Remuneration to other Directors

Name of Directors Particulars of Remuneration
Fees for attending board/ committee meetings Commission paid for Others, please specify financial year* Total Amount
(Rs.) (Rs.) (Rs.)
Mr. Deepak S. Parekh ** 7,00,000 1,80,00,000 - 1,87,00,000
Mr. D. M. Sukthankar 3,00,000 20,00,000 - 23,00,000
Mr. B. S. Mehta 9,00,000 20,00,000 - 29,00,000
Mr. D. N. Ghosh 7,00,000 20,00,000 - 27,00,000
Dr. S. A. Dave 9,20,000 20,00,000 - 29,20,000
Dr. Ram S. Tarneja 4,20,000 20,00,000 - 24,20,000
Mr. Naseer Munjee 3,00,000 20,00,000 - 23,00,000
Dr. Bimal Jalan 2,50,000 20,00,000 - 22,50,000
Dr. J. J. Irani 5,00,000 20,00,000 - 25,00,000
Total 49,90,000 3,40,00,000 - 3,89,90,000
Overall Ceiling as per the Companies Act, 2013 1,00,000+ 81,48,31,672 - 81,48,31,672@

* As a practice, the commission will be paid to the directors after the financial statements are adopted by the shareholders at the ensuing AGM.

** Mr. Deepak S. Parekh was granted 1,40,000 stock options under ESOS-2014.

+ The Company pays Rs. 50,000 as sitting fees to directors (not being whole-time directors) for attending the meeting of board or committee thereof.

@ Excludes sitting fees.

C. Remuneration to Key Managerial Personnel other than MD / MANAGER / WTD

Sr. No. Particulars of Remuneration Key Managerial Personnel (Company Secretary)
Mr. Girish V. Koliyote (from April 1, 2014 to March 19, 2015)+ Mr. Ajay Agarwal (from March 20, 2015 to March 31, 2015)++ Total
(Rs.) (Rs.) (Rs.)
1 Gross salary
(a) Salary as per provisions contained in Section 17(1) of the Income-tax Act, 1961 31,68,363 15,00,451 46,68,814
(b) Value of perquisites under section 17(2) of the Income- tax Act, 1961@ 2,91,169 4,63,506 7,54,675
(c) Profits in lieu of salary under Section 17(3) of the Income-tax Act, 1961 - - -
2 Stock Option * ** -
3 Sweat Equity - - -
4 Commission
- as % of profit - - -
- Others, specify… - - -
5 Others, please Specify - - -
Total 34,59,532 19,63,957 54,23,489

+ Excludes benefit paid on resignation such as gratuity, leave encashment, leave travel allowance, etc.

++ Remuneration paid for the financial year 2014-15.

* Consequent to the resignation of Mr. Girish V. Koliyote, stock options granted to him under ESOS-2014 have lapsed.

** No options were granted after assuming the office of the Company Secretary.

@ Excludes value of perquisite on exercise of stock options.

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES

During the year, no penalties were levied against the Corporation, its directors or any of its officers under the Companies Act, 2013 nor was there any punishment or compounding of offences against the Corporation, its directors or any of its officers.

Annex to Directors’ Report - 5

Secretarial Audit Report

[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

FOR THE FINANCIAL YEAR ENDED MARCH 31, 2015

To,

The Members,

Housing Development Finance Corporation Limited

We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Housing Development Finance Corporation Limited (hereinafter called the "Corporation"). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.

Based on our verification of the Corporation’s books, papers, minute books, forms and returns filed other records maintained by the Corporation and also the information provided by the Corporation, its officers, agents and authorized representatives during the conduct of Secretarial Audit. We hereby report that in our opinion, the Corporation has, during the financial March 31, 2015 complied with the statutory provisions listed hereunder and also that the Corporation has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter.

We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Corporation for the financial year ended March 31, 2015, according to the provisions of:

i. The Companies Act, 2013 (the Act) and the rules made thereunder;

ii. The National Housing Bank Act, 1987, rules, regulations, circulars and guidelines issued by NHB;

iii. The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder;

iv. The Depositories Act, 1996 and the regulations and bye-laws framed thereunder;

v. Foreign Exchange Management Act, 1999 ("FEMA") and the rules and regulations made thereunder to the extent applicable;

vi. KYC & PML Policy on securities formulated in terms of the Prevention of Money Laundering Act, 2005, rules made thereunder and guidelines issued by SEBI;

vii. The Depositories Act, 1996 and the regulations and bye-laws framed there under; and viii. The following regulations and guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):

a. The Securities and Exchange Board of India (Substantial Acquisition of Shares & Takeovers) Regulations, 2011;

b. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992;

c. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009;

d. The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999;

e. The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008;

f. The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client;

g. The Securities and Exchange Board of India (Delisting of Equity Shares) and Regulations, 2009; and

h. The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998.

Other applicable laws to the Corporation:

• Tax Laws

• Service Tax Act

• Income Tax Act, 1961

• Employee Laws

• Payment of Gratuity Act, 1972 and Payment of Gratuity (Central) Rules, 1972

• Payment of Bonus Act, 1965 and Payment of Bonus Rules, 1975

• Payment of Wages and Minimum Wages Act, 1948 Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 & the scheme provided thereunder

• Employees’ State Insurance Act, 1948

• The Employment Exchanges Notific of Vacancies) (Compulsory Act, 1959

• Indian Stamp Act, 1899 and the states Stamp Acts

• Copyright Act, 1957

• Transfer of Property Act, 1982

• The states Shops and Establishment Act

• Registration Act, 1908

• Limitation Act, 1963

• The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

We have also examined compliance with the applicable clauses of the following:

i. Secretarial Standards issued by The Institute of Company Secretaries of India (ICSI); and

ii. Listing Agreements (equity) & Simplified Listing Agreement for debt securities.

During the period under review, the Corporation has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above. However, the Corporation has spent less than the prescribed threshold of 2% of its average net profits for the last three financial years (as calculated in accordance with the Companies Act, 2013) towards Corporate Social Responsibility.

We further report that:

The Board of Directors of the Corporation is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review, were carried out in compliance with the provisions of the Act.

Adequate notice is given to all directors to schedule the Board Meetings and Board Committee Meetings. Agenda was sent at least seven days in advance. Detailed notes on agenda were not sent seven days in advance, however the same were sent at least 2-3 days prior to the date of the Board meeting and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

Majority decision is carried through while the dissenting members’ views are captured and recorded as part of the minutes.

We further report that there are adequate systems and processes in the Corporation commensurate with the size and operations of the Corporation to monitor and ensure compliance with applicable Laws, Rules, Regulations and Guidelines.

We further report that during the audit period, the Members vide postal ballot on July 21, 2014 approved the special resolution:

1. To authorize the Board of Directors of the Corporation to mortgage, create charge or hypothecates the assets of the Corporation pursuant to Section 180 (1) (a) of the Companies Act, 2013.

We further report that during the Audit period, the Members at the Annual General Meeting held on July 21, 2014 approved:

1. The Borrowing Limit of Rs. 3,00,000 crore (Rupees Three Lac crore only) in pursuance to Section 180 of the Companies Act, 2013;

2. The issue of Redeemable Non-Convertible Debentures (NCDs) secured or unsecured and/or any other hybrid instruments which can be classified as being Tier II capital under the provisions of the Housing Finance Companies (NHB) Directions, 2010, for cash either at premium or discount to the face value, up to an aggregate amount not exceeding Rs. 75,000 crore (Rupees Seventy Five Thousand crore only) under one or more shelf disclosure document; and

3. To create, issue, offer and allot equity shares of the aggregate nominal face value not exceeding Rs. 6,24,21,300 (Rupees Six Crore Twenty Four Lac Twenty One Thousand Three Hundred only) represented by 3,12,10,650 equity shares of Rs. 2 each of the Corporation, fully paid (or such adjusted numbers for any bonus, stock splits or consolidation or other re-organisation of the capital structure of the Corporation as may be applicable, from time to time) to the present and future permanent employees and directors of the Corporation, whether in India or abroad (hereinafter referred to as ‘employees’), under the Employee Stock Option Scheme 2014 (ESOS - 2014).

For N. L. Bhatia & Associates
UIN: S1996MH016600
N. L. Bhatia
Managing Partner
MUMBAI FCS 1176
April 21, 2015 CP No.: 422

Annex to Secretarial Audit Report

To

The Members

Housing Development Finance Corporation Limited

Our report of even date is to be read along with this letter.

1. Maintenance of secretarial record is the responsibility of the management of the Corporation. Our responsibility is to express an opinion on these secretarial records based on our audit.

2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Corporation.

4. Wherever required we have obtained the management representation about the compliance of laws, rules and regulations and happening of events etc.

5. The compliance of the provisions of corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our examination was limited to the verification of procedures on test basis.

6. The Secretarial Audit report is neither an assurance as to the future viability of the Corporation nor the efficacy or effectiveness with which the management has conducted the affairs of the Corporation.

For N. L. Bhatia & Associates
UIN: S1996MH016600
N. L. Bhatia
Managing Partner
MUMBAI FCS 1176
April 21, 2015 CP No.: 422

   

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