About Housing Development Finance Corporation Ltd

Housing Development Finance Corporation Limited (HDFC) was incorporated on October 17, 1977 as the first specialized Mortgage Company in India. The principal business is to provide finance to individuals, corporate and developers for the purchase, construction, development and repair of houses, apartments and commercial property in India. The business is conducted through its branches in India and its overseas offices in London, Singapore and Dubai supported by a network of agents for sourcing loans as well as deposits and service associates in the Middle East region, to provide housing loans and property advisory services to non-resident Indians (NRIs) and persons of Indian origin (PIOs). HDFC is the Holding Company for investments in its associates and subsidiary companies. HDFC's product range includes loans for purchase and construction of a residential unit, purchase of land, home improvement loans, home extension loans, non-residential premises loans for professionals and loan against property, while its flexible repayment options include Step Up Repayment Facility (SURF) and Flexible Loan Installment Plan (FLIP). The Company's subsidiaries include HDFC Developers Ltd., HDFC Investments Ltd., HDFC Holdings Ltd., HDFC Trustee Company Ltd., HDFC Realty Ltd., HDFC Property Ventures Ltd., HDFC Sales Pvt. Ltd., HDFC Ventures Trustee Company Ltd., HDFC Venture Capital Ltd., HDFC Ergo General Insurance Company Ltd., HDFC Standard Life Insurance Company Ltd., GRUH Finance Ltd, HDFC Asset Management Company Ltd. and HDFC Bank Ltd. In the year 1979, the Corporation introduced HDFC Certificate of Deposit Scheme. In the year 1981, they introduced their first retail Deposit Product. They promoted a wholly owned subsidiary, HDFC Developers during the year. In the year 1982, the Corporation introduced the Line of Credit Product (LOC) for employee owned housing. In the year 1985, the Corporation introduced the Home Savings Plan based on the 'Bausparkassen' model, West Germany and the 'Step-up Repayment Facility'. In the year 1988, the Corporation in with India's leading financial institutions and commercial banks promoted Gujarat Rural Housing Finance Corporation Ltd (GRUH Finance), Housing Promotion and Finance Corporation Ltd (now SBI Home Finance), Can Fin Homes Ltd and Infrastructure Leasing and Financial Services (IL&FS), and the Credit Rating Information Services of India Ltd (CRISIL). They introduced Telescopic Loan Plan and Short Term Bridging Loan products. In the year 1989, the Corporation introduced two new products, namely Home Improvement loans & Home Extension loans. In the year 1990, the Corporation in association with the United Nations Centre for Human Settlements promoted the Coalition of Housing Finance Institutions in Asia. In the year 1991, they re-launched their retail fixed deposit products. In the year 1993, the company made a joint venture with General Electric Capital Corporation of US to promote Countrywide Consumer Financial Services Ltd for consumer finance. In the year 1994, the Corporation introduced Non-Residential Premises Loans for Individuals. In the year 1995, the Corporation made a Strategic alliance with NatWest Markets (UK) and promoted the HDFC Bank. They made a joint venture with IL&FS and Colliers Jardine Asia Pacific Ltd and promoted Colliers Jardine India Property Services Ltd. Also, they signed a MoU with Standard Life Assurance Co. of UK for life insurance. In the year 1997, the Corporation promoted the first private sector housing finance company, namely Delta Brac Housing Finance Corporation Ltd in Bangladesh. In the year 1998, the Corporation in partnership with a South-based NGO launched the Indian Association for Savings & Credit (IASC), a pioneering micro-finance institution operating in the states of Tamil Nadu and Kerala. Also, they introduced Home Equity Loans and Corporate Employees Group Finance Arrangement. In the year 1999, the Corporation invested in a new Housing Finance company in Sri Lanka. They launched the Corporation website www.hdfcindia.com (now hdfc.com). Also, they introduced the Adjustable Rate Home Loans and became the first housing finance institution to do so. In the year 2000, the Corporation inaugurated a new HDFC Standard Life office in Mumbai. They launched their first Property Fair and they issued their first Mortgage Backed Securities. The Corporation made a joint venture with Mahindra & Mahindra group and promoted propertymartindia.com, a website for providing a range of real estate services. During the year, the Corporation acquired the entire shareholding of Hometrust Housing Finance Company Ltd. Also, GRUH became a subsidiary of the Corporation. They made a joint venture with TCS and promoted Intelenet Global Services Limited for IT enabled services. Also, they entered into joint venture with Standard Life Investments for promoting the HDFC Mutual Fund. In the year 2001, the Corporation in association with State Bank of India, Dun & Bradstreet and Trans Union International Inc. (TU) promoted Credit Information Bureau (India) Ltd. They opened their 100th office at Amristar. In the year 2002, the company made a joint venture with Chubb Corporation, USA and promoted HDFC-Chubb General Insurance Company Ltd for non-life insurance. In June 2003, they singed a USD 200 million-loan agreement with International Finance Corporation (IFC), Washington. In May 2003, the Corporation signed a Technical Service Contract with Egyptian American Bank for providing technical assistance for setting up Egypt's first private sector led mortgage finance company Egyptian Housing Finance Company. In February 2005, the Corporation entered into an implementation agreement with NHB and Asian Development Bank for technical assistance for a study on the development of an agency/secondary mortgage institution to facilitate issuance of residential mortgage backed securities along similar lines as Fannie Mae in USA. During the year 2006-07, the Corporation approved 8 schemes in the area of low-income housing and micro-enterprise financing by way of financial intermediation to partner non-government organisations and micro-finance institutions. They divested their equity holding in HDFC-SL in favour of Standard Life Assurance Company, UK for a consideration of Rs. 5.66 crore. During the year 2007-08, the Corporation approved 16 new schemes under the KfW Entsicklungsbank lines in the area of low-income housing and micro-finance by way of financial intermediation to partner non-government organisations across India. They launched two major advertising campaigns, namely 'Asset Plus' and 'Empowerment'. 'Asset Plus' was launched primarily to create awareness about home equity loans. 'Empowerment' highlighted the fact that the Corporation's employees are empowered to deploy all resources available to them to provide professional services to customers. During the year, the Corporation acquired the entire 26% of the equity of HDFC Chubb General Insurance Company Ltd from Chubb Global Financial Service Corporation, USA, consequent to which the company became a wholly owned subsidiary of the Corporation. In June 2007, consequent to a preferential offer by HDFC Bank Ltd, the Corporation acquired 13,582,000 shares of HDFC Bank for a consideration of Rs. 1,390.11 crore. In October 2007, the Corporation and Standard Life Investments realigned their shareholding in HDFC Asset Management Company Ltd. Accordingly; the Corporation increased their stake to 60% in HDFC-AMC by acquiring 9.9% from Standard Life Investments. Also, the Corporation and ERGO International AG (ERGO), the primary insurance entity of Munich Re Group (Germany) entered into a joint venture, where by HDFC sold 26% equity stake of the company to ERGO. As a result of this new joint venture, the company was named HDFC ERGO General. During the year, the Corporation divested 7.15% of its equity holding in HDFC-SL in favour of Standard Life Assurance Company, UK for a profit of Rs. 120.94 crore. Also, they divested their entire shareholding in Intelenet Global Service Pvt Ltd for a profit of Rs. 313.25 crore. As a result, Intelenet Global Service Pvt Ltd ceased to be an associate of the Corporation. During the year 2008-09, the Corporation approved 12 new schemes under the KfW Entsicklungsbank lines in the area of low-income housing and micro-finance by way of bulk loans to partner Non-Government Organisations and micro-finance institutions. During the year 2009-10, the Corporation introduced 'HDFC Systematic Savings Plan', which is a monthly savings plan offering a variable rate of interest. They launched a key brand campaign - 'HDFC - because every family needs a home'. The objective of the campaign was to connect with HDFC' s existing customers as well as prospective customers, making the HDFC brand synonymous with a home. In April 2010, the company launched a special home loan product at a fixed rate of 8.25% per annum up to March 31, 2011, 9% for the period between April 4, 2011 and March 31, 2012 and the applicable floating rate for the balance term. This is a flexible product with dual rates. They also re-launched their product loan against property to assist customers. During the year 2010-11, HDFC Real Estate Destination (HDFC RED), an on-line real estate portal was launched with the key objective of providing a single destination to potential home buyers to search and short-list desired properties that suit their requirements. In 2011 HDFC signed MOU with Indian Army for total Salary Solutions. HDFC 5000th ATM was launched at Swami Narayan Chowk, Rajkot In 2012, the company incorporated a new wholly owned subsidiary, namely HDFC Education and Development Services Pvt Ltd. HDFC launched Solitaire' range of women's Credit Cards. HDFC Bank and Vodafone India launch m-paisa - a product for financial inclusion. The company also launches Tax payment facility through ATM and also a Bouquet of premium Travel Credit Cards. The company also launches INFINIA Credit Card In 2013 HDFC Mutual Fund Acquires the Schemes of Morgan Stanley Mutual Fund. In 2015 HDFC Life gets nod to up foreign partner stake -FDI boost for HDFC as FIPB clears Standard Life's proposal. HDFC launches its first school 'The HDFC School' in Gurgaon. HDFC announced a reduction in its Retail Prime Lending Rate (RPLR) by 20 basis points, with effect from 13 April 2015. On 8 June 2015, a Committee of the Board of Directors of the Company approved a proposal for simultaneous offering of Secured Redeemable Non-Convertible Debentures of upto Rs. 5000 crore along with warrants convertible into equity shares. On 14 August 2015, HDFC announced that it had agreed to sell 17.95 crore shares of HDFC Standard Life Insurance Company Limited (HDFC Life) in favour of its joint venture partner Standard Life (Mauritius Holdings) 2006 Limited at a price of Rs 95 per share aggregating to 9% of the issued and paid-up share capital of HDFC Life. Post the stake sale; HDFC' s holding in HDFC Life will drop to 61.65%. HDFC announced a reduction in its Retail Prime Lending Rate (RPLR) by 25 basis points, with effect from 6 October 2015. HDFC's Board of Directors at its meeting held on 26 October 2015 granted in-principle approval for establishment of a Sponsored Level 1 ADR programme in respect of up to 10% of the issued and paid-up share capital of the company. The Sponsored ADR programme envisages conversion of existing equity shares of the company into ADRs and does not entail any issue of additional shares. On 7 January 2016, HDFC announced that HDFC Capital Affordable Real Estate Fund-1 (HCARE-1), an Alternative Investment Fund (AIF) sponsored by the company, has received an aggregate commitment for an amount of Rs. 2700 crore from various investors. The targeted fund size is approximately Rs. 5000 crore and the first close will be Rs. 2700 crore. The tenure of the fund will be 12 years and it will invest in the long-term equity of mid income housing. HDFC Capital Advisors Limited, a wholly owned subsidiary of HDFC, has been appointed as an investment manager for HCARE-1. On 3 June 2016, HDFC announced that it had completed the transfer of 12.33 crore shares of its subsidiary HDFC ERGO General Insurance Company Limited (HDFC ERGO), representing 22.902% stake in HDFC ERGO, in favour of its joint venture partner ERGO International AG. HDFC further said that it made pre tax profit of Rs. 922 crore and post tax profit of Rs. 725 crore from this transaction. On 17 December 2015, HDFC had agreed to sell 22.902% stake in HDFC ERGO to ERGO International at a price of Rs. 90.973 per share for aggregate consideration of Rs. 1122 crore. On 14 July 2016, HDFC announced that it had successfully priced Rs 3000-crore overseas issue of unrated rupee denominated bonds. HDFC thus became the first Indian corporate issuer of rupee denominated bonds overseas. Rupee-denominated bonds are instruments through which Indian entities can raise funds in overseas capital markets, while the bond investors hold the currency risk. HDFC's Board of Directors at its meeting held on 27 July 2016 granted in-principle approval for the amalgamation of five wholly-owned subsidiaries viz. Grandeur Properties Private Limited, Haddock Properties Private Limited, Winchester Properties Private Limited, Pentagram Properties Private Limited and Windermere Properties Private Limited into HDFC. The area of business of these five subsidiaries is receiving of rental income on commercial properties. On 18 November 2016, HDFC announced that it has assigned its outstanding loans to the Unitech group to JM Financial Asset Reconstruction Company (JMFARC). Against total outstanding loans of Rs. 869 crore to the Unitech group, JMFARC paid HDFC Rs. 155 crore upfront and issued Security Receipts (SRs) to HDFC amounting to Rs. 705 crore to be redeemable over the period of construction of Unitech's projects. On 30 March 2017, HDFC announced that it had raised Rs. 3300 crore through the first issue of rupee denominated bonds to overseas investors under the Medium Term Note programme. On 1 June 2017, HDFC announced that its wholly-owned subsidiary HDFC Investments Limited has made an investment about $ 1.5 million by subscribing to 15% of the share capital of First Housing Finance (Tanzania), the first housing finance company to be set up in Tanzania. On 22 June 2017, HDFC executed a subscription agreement with International Finance Corporation, Washington (IFC) whereby IFC decided to subscribed to the rupee denominated bonds to be issued overseas by HDFC up to an amount of Rs. 1300 crore. On 26 July 2017, HDFC's Board of Directors granted approval for issue of Secured Redeemable Non-Convertible Debentures (NCD) aggregating to Rs 35000 crore on a private placement basis under a Shelf Disclosure Document. On 28 July 2017, HDFC announced that it had approved offering of up to 19.12 crore equity shares of Rs 10 each of HDFC Standard Life Insurance Company (HDFC Life), representing 9.57% of the paid up and issued share capital of HDFC Life, for sale in the initial public offer of HDFC Life. HDFC Life will continue to be a subsidiary of HDFC after the IPO. On 31 July 2017, HDFC Standard Life Insurance Company and Max Group entities announced that they had called off the proposed merger of their life insurance business since the parties were unable to obtain the requisite regulatory approvals to consummate the proposed merger and other transactions contemplated under the definitive agreements for the merger. On 8 August 2016, HDFC Life and Max Group Entities had announced a proposal for the merger of their life insurance business through a composite scheme of arrangement and had entered into certain definitive agreements to implement the merger. On 17 June 2016, the Board of Directors of HDFC Standard Life Insurance Company, Max Life Insurance Company and Max Financial Services approved entering into a confidentiality, exclusivity and standstill agreement to evaluate a potential combination through a merger of Max Life Insurance Company and Max Financial Services with HDFC Standard Life Insurance Company by way of a scheme of arrangement. On 14 August 2017, the Insurance Regulatory & Development Authority of India granted its final approval for the merger of HDFC ERGO General Insurance Company Limited (HDFC ERGO), a subsidiary of the company with HDFC General Insurance Company Limited (formerly L&T General Insurance Company). On 9 September 2016, HDFC ERGO announced that it had completed the acquisition of 100% shares of L&T General Insurance Company Limited for Rs 551 crore. On 3 June 2016, the Board of Directors of HDFC ERGO had approved the acquisition of 100% stake in L&T General Insurance Company Limited for an aggregate amount of Rs. 551 crore subject to receipt of requisite approvals. On 16 November 2017, HDFC announced that it had raised Rs. 1300 crore from the issue of rupee denominated bonds to International Finance Corporation, Washington under the Medium Term Note Programme. On 30 November 2017, HDFC approved offering a part of its shareholding in its subsidiary HDFC Asset Management Company Limited (HDFC AMC) through offer for sale in the initial public offer (IPO) of HDFC AMC. As on 30 September 2017, HDFC held 57.36% stake in HDFC AMC. HDFC's Board of Directors at its meeting held on 19 December 2017 approved subscription to the securities offered by HDFC Bank on preferential basis up to an amount not exceeding Rs 8500 crore. The board also approved raising funds through issue of equity shares and/or other permissible securities up to an aggregate amount not exceeding Rs. 13000 crore. On 20 December 2017, HDFC approved the sale of 6.3% stake in Computer Age Management Services Private Limited (CAMS) to Great Terrain Investment Ltd, Mauritius, an affiliate of Warburg Pincus group, for a total consideration of Rs 209.50 crore. After completion of the sale, HDFC's holding in CAMS will drop to 4.8% of the equity capital of CAMS. On 21 December 2017, HDFC approved the sale of 100% of its equity share capital in HDFC Developers Limited, which runs the HDFC Red platform, and HDFC Realty Limited, a real estate brokerage platform, to Quikr for total consideration of Rs. 101.99 crore and Rs. 254.98 crore respectively. Quikr is India's largest classifieds platform. Simultaneously, HDFC acquired an equity stake in Quikr India Private Limited. Pursuant to receipt of approval of the members through Postal Ballot in February 2018, the Corporation issued 6,43,29,882 equity shares of Rs 2 each at an issue price of Rs 1,726.05 per equity share on preferential basis in accordance with the provisions of Chapter VII of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 (SEBI ICDR Regulations). The Corporation also issued 1,03,89,041 equity shares at an issue price of Rs 1,825 per equity share to QIBs on a qualified institutions placement basis in accordance with the provisions of Chapter VIII of the SEBI ICDR Regulations. The Corporation raised an aggregate amount of Rs 13,000 crore from both the issuances. In October 2015, the Corporation had issued 3.65 crore warrants at an issue price of Rs 14 per warrant with a right exercisable by the warrant holder to exchange each warrant for one equity share of Rs 2 each of the Corporation at any time on or before October 05, 2018, at a warrant exercise price of Rs 1,475 per equity share to be paid by the warrant holder at any time of exchange of the warrants. As at March 31, 2018, 5,14,600 warrants have been exercised and exchanged into 5,14,600 equity shares of Rs 2 each of the Corporation. The equity shares so issued rank pari passu with the existing shares of the Corporation. In January 2018, the Corporation sold its entire stake in its wholly owned subsidiary companies, HDFC Developers Limited and HDFC Realty Limited, to Quikr India Private Ltd. Consequently, HDFC Realty Limited and HDFC Developers Limited ceased to be subsidiaries of the Corporation with effect from 24 January 2018. During the year 2018, the Corporation approved offering of upto 4.08% of the paid up and issued equity share capital of HDFC Asset Management Co., Ltd., (HDFC AMC), a subsidiary of the Corporation for sale in the IPO of HDFC AMC. The Board of Directors at its earlier meeting held on 27 July 2016 had approved the scheme of amalgamation of five of its wholly- owned subsidiaries, Windermere Properties Private Limited, Haddock Properties Private Limited, Grandeur Properties Private Limited, Winchester Properties Private Limited and Pentagram Properties Private Limited with itself. The applications for the proposed merger were filed with the NCLT, Mumbai bench and in March 2018, the scheme of amalgamation was approved by the NCLT. The order was filed with the Registrar of Companies, Mumbai on April 27, 2018. Accordingly, the Corporation has considered the operations of the said subsidiaries from April 1, 2016, as its own operations and accounted for the same in its books of accounts after making necessary adjustments. During the year 2018, the Corporation sold individual loans amounting to Rs. 6,453 crore, of which Rs. 1,850 crore qualified as priority sector advances for banks. The corporation's Assets Under Management (AUM) as at 31 March 2019 amounted to Rs 4,61,913 crore as compared to Rs 4,02,880 crore in the previous year. On an AUM basis, the growth in the individual loan book was 17% and the non-individual loan book was 8%. The growth in the total loan book on an AUM basis was 15%. During the FY2019, the Corporation's loan book increased from Rs 3,62,811 crore to Rs 4,06,607 crore as at 31 March 31 2019. In addition, total loans securitised and/or assigned by the Corporation and outstanding as at 31 March 2019 amounted to Rs 55,306 crore. During the fiscal 2019, the Corporation, sold individual loans amounting to Rs 25,150 crore (Previous Year: Rs 6,453 crore). Of this, Rs 23,982 crore was assigned to HDFC Bank, pursuant to the buyback option embedded in the home loan arrangement between the Corporation and HDFC Bank and Rs 1,168 crore was assigned/ securitised to another bank. Of the total loans sold during the year, Rs 5,316 crore qualifed as priority sector advances for banks. As at 31 March 2019, the investment portfolio stood at Rs 46,240 crore compared to Rs 30,717 crore in the previous year. As at 05 October 2018, 3,64,99,471 warrants had been lodged for exchange with equity shares of the Corporation, representing 99.99% of the warrants issued. Accordingly, the Corporation issued and allotted 3,64,99,471 equity shares of Rs 2 each and realised an amount of Rs 5,384 crore (of which Rs 5,308 crore was received during the year). During the year 2019, the Corporation raised an amount of Rs 48,177 crore through secured redeemable non-convertible debentures (NCDs), issued in various tranches on a private placement basis. . The NCD issues have been assigned the highest rating of CRISIL AAA/Stable' and ICRA AAA/Stable'. In July 2018, the Corporation raised an ECB of USD 750 million in the form of a syndicated loan facility. The Corporation also raised an ECB of JPY 53.2 billion (USD 486 billion equivalent) in December 2018. As on 31 March 2019, the Corporation has 18 subsidiaries and 4 associate companies under its roof. The corporation's Assets Under Management (AUM) as at 31 March 2020 amounted to Rs 5,16,773 crore as compared to Rs 4,61,913 crore in the previous year. On an AUM basis, the growth in the individual loan book was 14% and the non-individual loan book was 6%. The growth in the total loan book on an AUM basis was 12%. During the FY2019, the Corporation's loan book increased from Rs 4,06,607 crore to Rs 4,50,903 crore as at 31 March 31 2020. In addition, total loans securitised and/or assigned by the Corporation and outstanding as at 31 March 2020 amounted to Rs 65,870 crore. As at 31 March 2020, the investment portfolio stood at Rs 64,944 crore compared to Rs 46,240 crore in the previous year. In May 2019, the Corporation raised an ECB of USD 200 million in the form of a syndicated loan facility. The ECB was for a tenor of 3 years. As on March 2020, the risk weighted assets of the corporation stood at around Rs 3,93,000 crore. As on 31 March 2020, the Corporation has 19 subsidiaries and 3 associate companies under its roof. During the FY2020, the corporation has issued NCDs amounting to Rs 46,190 crore from series V-005 to V-008 and W-001 to W-010. The Corporation acquired 51.16% stake HDFC ERGO Health Insurance Ltd., subsequent to this, HDFC ERGO became the subsidiary of the corporation. During December 2020, the Corporation has sold 25,48,750 equity shares of HDFC Life Insurance Company Limited (HDFC Life) and complied with the direction from the RBI to reduce the shareholding in HDFC Life to 50% or below. As a result, a pre tax profit on sale of investments of Rs 157.10 Crore has been recognised in the quarter ended 31 December 2020 and the Corporation's equity shareholding in HDFC Life stood at 49.99%. In December 2020, the Corporation raised additional capital through a Qualified Institutions Placement of 5,68, 18, 181 equity shares at a price of Rs 1760 per share and 1,70,57,400 convertible warrants at an issue price of Rs 180 per warrant with a right to exchange one warrant with one equity share of Rs 2 each, any time before the expiry of 36 months from the date of allotment, at an exercise price of Rs 2.165 per warrant. In December 2020, the National Company Law Tribunal has sanctioned the Scheme of Amalgamation for merger of HDFC ERGO Health Insurance Limited (formerly Apollo Munich Health Insurance Company Limited) (HDFC ERGO Health) with and into HDFC ERGO General Insurance Company Limited (HDFC ERGO), subsidiaries of the Corporation and Insurance Regulatory and Development Authority of India (IRDAI) has issued final approval for the merger. Consequently, HDFC ERGO Health has been merged with HDFC ERGO from appointed date i.e. 01 March 2020. As at the end of March 2021, the Corporation's holding in HDFC ERGO, the merged entity is 50.56%. As per the directions of RBI, the Corporation is required to reduce its shareholding in the merged entity to 50% or below within 6 months post amalgamation. During the year 2020-21, the Corporation has sold 2,85,48,750 equity shares of HDFC Life Insurance Company Limited (HDFC Life), in two tranches in May 2020 and November 2020, to comply with the RBI direction to reduce the shareholding in HDFC Life to 50% or below. As a result, a pre tax profit on sale of investments of Rs 1,240.59 crore and Rs 157.10 crore has been recognised in the respective periods and aggregate profit of Rs 1,397.69 Crore for the year ended 31 March 2021. Consequently, the Corporation's equity shareholding in HDFC Life stood at 49.99% as on 31 March 2021. The Assets Under Management (AUM) as at 31 March 2021 amounted to Rs 5,69,894 crore as compared to Rs 5,16,773 crore in the previous year. On an AUM basis, the growth in the individual loan book was 12%. The growth in the total loan book on an AUM basis was 10%. The Corporation's outstanding loan book stood at Rs 4,98,298 crore as at 31 March 2021, compared to Rs 4,50,903 crore in the previous year. During the year,total Deposits outstanding as at 31 March 2021 amounted to Rs 1,50,131 crore as compared to Rs 1,32,324 crore in the previous year,resulting a growth of 13%. HDFC Credila Financial Services Limited, a wholly owned subsidiary of the Corporation was converted into a public limited company (from a private limited company) with effect from 08 October 2020. During the quarter ended 30 June 2021, the Corporation has sold its entire holding i.e. 47,75,241 equity shares representing 24.48% of the equity capital of Good Host Spaces Private Limited (Good Host). As at 30 June 2021, the assets under management stood at Rs 5,74,136 crore as against Rs 5,31,186 crore in the previous year. As at 30 June 2021, individual loans comprise 78% of the Assets Under Management (AUM). On an AUM basis, the growth in the individual loan book was 14% and growth in the total loan book was 8%. The growth in the individual loan book, after adding back loans sold in the preceding 12 months was 22%. The growth in the total loan book after adding back loans sold was 12%. The Board of Directors of the HDFC Life Insurance Company Limited (HDFC Life), a subsidiary company of the Corporation has approved the Share Purchase and Share Swap Agreement between HDFC Life, Exide Industries Limited and Exide Life Insurance Company Limited (Exide Life), in connection with the acquisition of 100% of the share capital of and subsequent merger of Exide Life into HDFC Life for a total consideration of ~ 6,687 crore, subject to necessary regulatory approvals. As at 30 September 2021, the assets under management stood at Rs 5,97,339 crore as against Rs 5,40,270 crore in the previous year. As at 30 September 2021, individual loans comprise 78% of the Assets Under Management (AUM). On an AUM basis, the growth in the individual loan book was 16% and growth in the total loan book on an AUM basis was 11%. During the quarter ended 30 September 2021, the growth in the individual loan book, after adding back loans sold in the preceding 12 months was 23%. The growth in the total loan book after adding back loans sold was 15%. The Board of Directors of the Corporation at its meeting held on April 4, 2022, approved a Composite Scheme of Amalgamation for the amalgamation of: (i) HDFC Investments Limited and HDFC Holdings Limited, wholly-owned subsidiaries of the Corporation, with and into the Corporation and (ii) the Corporation with and into HDFC Bank Limited. With effect from the appointed date and upon the amalgamation of the Corporation with and into HDFC Bank becoming effective, the Corporation shall stand transferred to and vest in or shall be deemed to have been transferred to and vested in HDFC Bank, as a going concern. Upon the Scheme becoming effective and in consideration of the proposed amalgamation of the Corporation with and into HDFC Bank, the Corporation will stand dissolved without being wound up. On April 22, 2021, the Corporation sold equity shares of Good Host Spaces Private Limited aggregating to a total consideration of Rs. 216 crore. Post the said sale, Good Host ceased to be an associate of the Corporation. With regards to reduction of the Corporation's shareholding in HDFC ERGO General Insurance Company Limited to 50% or below, the Corporation on May 11, 2021 sold 44,12,000 equity shares of HDFC ERGO to ERGO International AG, the foreign promoter of HDFC ERGO at a price of Rs. 536 per equity share, aggregating to a total consideration of Rs. 236 crore. Post the said sale, shareholding of Corporation in HDFC ERGO stood at 49.98% of its issued and paid-up capital and accordingly, HDFC ERGO ceased to be a subsidiary of Corporation. On January 1, 2022, HDFC Life Insurance Company Limited acquired 100% shareholding of Exide Life Insurance Company Limited from Exide Industries Limited. Consequently, Exide Life became a wholly-owned subsidiary of HDFC Life. On January 21, 2022, the Board of Directors of HDFC Life approved a Scheme of Amalgamation between Exide Life and HDFC Life. During the year 2022, subsequent to Rights Issue of True North Ventures Private Limited, shareholding of the Corporation in True North reduced to 19.79% and accordingly, True North ceased to be an associate of the Corporation. As at March 31, 2022, cumulatively, the Corporation had financed 9.3 million housing units.

Housing Development Finance Corporation Ltd Chairman Speech

There are two dates which are perhaps of most significance for HDFC. First, is October 17, 1977. This date marked the fulfilment of a dream to establish India's first retail housing finance company. The second significant date is April 4, 2022, when the board of directors of HDFC and HDFC Bank respectively, approved a merger of two equals.

For HDFC, in between these two landmark dates lie several milestones and memories. During this period, HDFC seized the opportunity to create many new institutions, whilst continuing the pursuit of cumulatively financing over 9.3 million housing units. Nothing has been more gratifying than HDFC being described as an extraordinary company, run for ordinary Indians by ordinary Indians.

To many, including myself, HDFC is not just an institution, it is a feeling. HDFC has always felt like home and family. Working with like-minded people who place honesty, integrity and transparency as the foundation of everything they do is the reason why HDFC is a cocoon of security and comfort. I cannot be more grateful to so many colleagues who are true ‘HDFC lifers'. They are the ones who have patented ‘the HDFC way' of doing things and they are the ones who have gone on to nurture many others within the organisation.

Each day, year and decade has been rewarding in building a customer-centric organisation. I truly believe our 45 years of expertise in housing finance in India is unparalleled. We stand out particularly because of our time-tested, efficient and low-cost operating model. This efficiency has been achieved despite a small staff base and supported by smart investments in processes and systems. It is our customers who help us evolve our product offerings and service delivery mechanisms.

Today, we have the digitalisation tools and expertise to provide an in-principle home loan approval within two minutes. In equal measure, we also recognise that many still want counselling and handholding in their home buying journey. No customer's story is alike. Yet, all home buyers are alike as a home is probably the single largest investment a person makes in his or her lifetime.

Housing finance products are largely standardised. The key differentiator between home loan providers is the emotional quotient -- empathy and understanding the needs and feelings of customers. We remain committed to offering inclusive and customised housing finance solutions across all income segments, increasing women homeownership, encouraging green housing and extending our reach in deep geographies.

Over the past two years, I have been on record several times stating that I have never been as optimistic about the demand for home loans as I am currently. Despite the recent headwinds in the global macro landscape, I continue to maintain this stance. India is on the cusp of an economic transformation. As the pivot of global growth shifts, India is envisaged to remain amongst the fastest growing major economies. Much of India's growth will continue to be powered from domestic consumption.

The aspiration to own a home in India will only grow further. The home loan market in India is estimated at slightly over US$ 300 billion, which represents a mortgage to GDP ratio of just 11%. Favourable conditions like rising income levels, improved affordability and fiscal support augur well for the demand for homes. Real estate in India is on an upcycle. Developers are now financially stronger and more disciplined.

India should be able to double its home loans to around US$ 600 billion within the next five years. This would coincide with the period when India attains its much-aspired goal of being a US$ 5 trillion economy. Despite the doubling of housing loans, India's mortgage penetration would still remain low at an estimated 13% of GDP. Now is the time to ask ourselves what will it take for India's mortgage to GDP ratio to cross 20% and beyond? When one looks at comparable Asian economies, the average mortgage to GDP ratios range between 20 to 30%. This implies that housing loans in India will have an exponential growth trajectory for decades to come.

At HDFC, we know that this is the right time for strategic choices as we prioritise pathways for future growth. Our moment of truth is that the optimum path to scale up housing finance is to be housed within a banking structure. The pool of resources for lending will be significantly larger and at lower costs. From a regulatory perspective, it is prudent for all large providers of housing finance to operate on a level playing field, with the same rules. Globally too, the scale of mortgage assets is exponentially larger in banks compared to non-banking financial entities.

We have at length, already articulated the rationale for the proposed merger, which takes cognisance of the future growth potential of the country, the evolving macro environment and changes in the regulatory architecture.

Trust is the foundation for a successful merger. Fortunately, between HDFC and HDFC Bank, there is a natural affinity. Financial and human capital is critical through a merger process, as is a lucid communication strategy on key developments during this period. It remains our every endeavour to be available and accessible to all our stakeholders to assuage concerns in an open and transparent manner. Further, both entities stand strongly committed to enhanced environmental, social and governance (ESG) disclosures.

At this juncture, we are awaiting regulatory guidance on the path forward. We remain respectful of all our regulators and are confident that the outcome will be judicious and fair at a systemic level. My only ask of our stakeholders is for your patience as we navigate through the complexities of this transaction. More than ever before, we need your trust and support.

All the members of the board and senior management - past and present have individually and collectively helped the Corporation stand tall through the decades. I remain extremely grateful to all of them through the years.

After 45 glorious years of providing homes to millions of customers, the time is right for HDFC to find a new home.

With the blessings of our regulators, shareholders, creditors and other stakeholders, we look forward to being able to add the third and final significant date in the history of HDFC, which would mark the conclusion of the proposed merger.

Till then, I have promises to keep and miles to go before I sleep.

Housing Development Finance Corporation Ltd Company History

Housing Development Finance Corporation Limited (HDFC) was incorporated on October 17, 1977 as the first specialized Mortgage Company in India. The principal business is to provide finance to individuals, corporate and developers for the purchase, construction, development and repair of houses, apartments and commercial property in India. The business is conducted through its branches in India and its overseas offices in London, Singapore and Dubai supported by a network of agents for sourcing loans as well as deposits and service associates in the Middle East region, to provide housing loans and property advisory services to non-resident Indians (NRIs) and persons of Indian origin (PIOs). HDFC is the Holding Company for investments in its associates and subsidiary companies. HDFC's product range includes loans for purchase and construction of a residential unit, purchase of land, home improvement loans, home extension loans, non-residential premises loans for professionals and loan against property, while its flexible repayment options include Step Up Repayment Facility (SURF) and Flexible Loan Installment Plan (FLIP). The Company's subsidiaries include HDFC Developers Ltd., HDFC Investments Ltd., HDFC Holdings Ltd., HDFC Trustee Company Ltd., HDFC Realty Ltd., HDFC Property Ventures Ltd., HDFC Sales Pvt. Ltd., HDFC Ventures Trustee Company Ltd., HDFC Venture Capital Ltd., HDFC Ergo General Insurance Company Ltd., HDFC Standard Life Insurance Company Ltd., GRUH Finance Ltd, HDFC Asset Management Company Ltd. and HDFC Bank Ltd. In the year 1979, the Corporation introduced HDFC Certificate of Deposit Scheme. In the year 1981, they introduced their first retail Deposit Product. They promoted a wholly owned subsidiary, HDFC Developers during the year. In the year 1982, the Corporation introduced the Line of Credit Product (LOC) for employee owned housing. In the year 1985, the Corporation introduced the Home Savings Plan based on the 'Bausparkassen' model, West Germany and the 'Step-up Repayment Facility'. In the year 1988, the Corporation in with India's leading financial institutions and commercial banks promoted Gujarat Rural Housing Finance Corporation Ltd (GRUH Finance), Housing Promotion and Finance Corporation Ltd (now SBI Home Finance), Can Fin Homes Ltd and Infrastructure Leasing and Financial Services (IL&FS), and the Credit Rating Information Services of India Ltd (CRISIL). They introduced Telescopic Loan Plan and Short Term Bridging Loan products. In the year 1989, the Corporation introduced two new products, namely Home Improvement loans & Home Extension loans. In the year 1990, the Corporation in association with the United Nations Centre for Human Settlements promoted the Coalition of Housing Finance Institutions in Asia. In the year 1991, they re-launched their retail fixed deposit products. In the year 1993, the company made a joint venture with General Electric Capital Corporation of US to promote Countrywide Consumer Financial Services Ltd for consumer finance. In the year 1994, the Corporation introduced Non-Residential Premises Loans for Individuals. In the year 1995, the Corporation made a Strategic alliance with NatWest Markets (UK) and promoted the HDFC Bank. They made a joint venture with IL&FS and Colliers Jardine Asia Pacific Ltd and promoted Colliers Jardine India Property Services Ltd. Also, they signed a MoU with Standard Life Assurance Co. of UK for life insurance. In the year 1997, the Corporation promoted the first private sector housing finance company, namely Delta Brac Housing Finance Corporation Ltd in Bangladesh. In the year 1998, the Corporation in partnership with a South-based NGO launched the Indian Association for Savings & Credit (IASC), a pioneering micro-finance institution operating in the states of Tamil Nadu and Kerala. Also, they introduced Home Equity Loans and Corporate Employees Group Finance Arrangement. In the year 1999, the Corporation invested in a new Housing Finance company in Sri Lanka. They launched the Corporation website www.hdfcindia.com (now hdfc.com). Also, they introduced the Adjustable Rate Home Loans and became the first housing finance institution to do so. In the year 2000, the Corporation inaugurated a new HDFC Standard Life office in Mumbai. They launched their first Property Fair and they issued their first Mortgage Backed Securities. The Corporation made a joint venture with Mahindra & Mahindra group and promoted propertymartindia.com, a website for providing a range of real estate services. During the year, the Corporation acquired the entire shareholding of Hometrust Housing Finance Company Ltd. Also, GRUH became a subsidiary of the Corporation. They made a joint venture with TCS and promoted Intelenet Global Services Limited for IT enabled services. Also, they entered into joint venture with Standard Life Investments for promoting the HDFC Mutual Fund. In the year 2001, the Corporation in association with State Bank of India, Dun & Bradstreet and Trans Union International Inc. (TU) promoted Credit Information Bureau (India) Ltd. They opened their 100th office at Amristar. In the year 2002, the company made a joint venture with Chubb Corporation, USA and promoted HDFC-Chubb General Insurance Company Ltd for non-life insurance. In June 2003, they singed a USD 200 million-loan agreement with International Finance Corporation (IFC), Washington. In May 2003, the Corporation signed a Technical Service Contract with Egyptian American Bank for providing technical assistance for setting up Egypt's first private sector led mortgage finance company Egyptian Housing Finance Company. In February 2005, the Corporation entered into an implementation agreement with NHB and Asian Development Bank for technical assistance for a study on the development of an agency/secondary mortgage institution to facilitate issuance of residential mortgage backed securities along similar lines as Fannie Mae in USA. During the year 2006-07, the Corporation approved 8 schemes in the area of low-income housing and micro-enterprise financing by way of financial intermediation to partner non-government organisations and micro-finance institutions. They divested their equity holding in HDFC-SL in favour of Standard Life Assurance Company, UK for a consideration of Rs. 5.66 crore. During the year 2007-08, the Corporation approved 16 new schemes under the KfW Entsicklungsbank lines in the area of low-income housing and micro-finance by way of financial intermediation to partner non-government organisations across India. They launched two major advertising campaigns, namely 'Asset Plus' and 'Empowerment'. 'Asset Plus' was launched primarily to create awareness about home equity loans. 'Empowerment' highlighted the fact that the Corporation's employees are empowered to deploy all resources available to them to provide professional services to customers. During the year, the Corporation acquired the entire 26% of the equity of HDFC Chubb General Insurance Company Ltd from Chubb Global Financial Service Corporation, USA, consequent to which the company became a wholly owned subsidiary of the Corporation. In June 2007, consequent to a preferential offer by HDFC Bank Ltd, the Corporation acquired 13,582,000 shares of HDFC Bank for a consideration of Rs. 1,390.11 crore. In October 2007, the Corporation and Standard Life Investments realigned their shareholding in HDFC Asset Management Company Ltd. Accordingly; the Corporation increased their stake to 60% in HDFC-AMC by acquiring 9.9% from Standard Life Investments. Also, the Corporation and ERGO International AG (ERGO), the primary insurance entity of Munich Re Group (Germany) entered into a joint venture, where by HDFC sold 26% equity stake of the company to ERGO. As a result of this new joint venture, the company was named HDFC ERGO General. During the year, the Corporation divested 7.15% of its equity holding in HDFC-SL in favour of Standard Life Assurance Company, UK for a profit of Rs. 120.94 crore. Also, they divested their entire shareholding in Intelenet Global Service Pvt Ltd for a profit of Rs. 313.25 crore. As a result, Intelenet Global Service Pvt Ltd ceased to be an associate of the Corporation. During the year 2008-09, the Corporation approved 12 new schemes under the KfW Entsicklungsbank lines in the area of low-income housing and micro-finance by way of bulk loans to partner Non-Government Organisations and micro-finance institutions. During the year 2009-10, the Corporation introduced 'HDFC Systematic Savings Plan', which is a monthly savings plan offering a variable rate of interest. They launched a key brand campaign - 'HDFC - because every family needs a home'. The objective of the campaign was to connect with HDFC' s existing customers as well as prospective customers, making the HDFC brand synonymous with a home. In April 2010, the company launched a special home loan product at a fixed rate of 8.25% per annum up to March 31, 2011, 9% for the period between April 4, 2011 and March 31, 2012 and the applicable floating rate for the balance term. This is a flexible product with dual rates. They also re-launched their product loan against property to assist customers. During the year 2010-11, HDFC Real Estate Destination (HDFC RED), an on-line real estate portal was launched with the key objective of providing a single destination to potential home buyers to search and short-list desired properties that suit their requirements. In 2011 HDFC signed MOU with Indian Army for total Salary Solutions. HDFC 5000th ATM was launched at Swami Narayan Chowk, Rajkot In 2012, the company incorporated a new wholly owned subsidiary, namely HDFC Education and Development Services Pvt Ltd. HDFC launched Solitaire' range of women's Credit Cards. HDFC Bank and Vodafone India launch m-paisa - a product for financial inclusion. The company also launches Tax payment facility through ATM and also a Bouquet of premium Travel Credit Cards. The company also launches INFINIA Credit Card In 2013 HDFC Mutual Fund Acquires the Schemes of Morgan Stanley Mutual Fund. In 2015 HDFC Life gets nod to up foreign partner stake -FDI boost for HDFC as FIPB clears Standard Life's proposal. HDFC launches its first school 'The HDFC School' in Gurgaon. HDFC announced a reduction in its Retail Prime Lending Rate (RPLR) by 20 basis points, with effect from 13 April 2015. On 8 June 2015, a Committee of the Board of Directors of the Company approved a proposal for simultaneous offering of Secured Redeemable Non-Convertible Debentures of upto Rs. 5000 crore along with warrants convertible into equity shares. On 14 August 2015, HDFC announced that it had agreed to sell 17.95 crore shares of HDFC Standard Life Insurance Company Limited (HDFC Life) in favour of its joint venture partner Standard Life (Mauritius Holdings) 2006 Limited at a price of Rs 95 per share aggregating to 9% of the issued and paid-up share capital of HDFC Life. Post the stake sale; HDFC' s holding in HDFC Life will drop to 61.65%. HDFC announced a reduction in its Retail Prime Lending Rate (RPLR) by 25 basis points, with effect from 6 October 2015. HDFC's Board of Directors at its meeting held on 26 October 2015 granted in-principle approval for establishment of a Sponsored Level 1 ADR programme in respect of up to 10% of the issued and paid-up share capital of the company. The Sponsored ADR programme envisages conversion of existing equity shares of the company into ADRs and does not entail any issue of additional shares. On 7 January 2016, HDFC announced that HDFC Capital Affordable Real Estate Fund-1 (HCARE-1), an Alternative Investment Fund (AIF) sponsored by the company, has received an aggregate commitment for an amount of Rs. 2700 crore from various investors. The targeted fund size is approximately Rs. 5000 crore and the first close will be Rs. 2700 crore. The tenure of the fund will be 12 years and it will invest in the long-term equity of mid income housing. HDFC Capital Advisors Limited, a wholly owned subsidiary of HDFC, has been appointed as an investment manager for HCARE-1. On 3 June 2016, HDFC announced that it had completed the transfer of 12.33 crore shares of its subsidiary HDFC ERGO General Insurance Company Limited (HDFC ERGO), representing 22.902% stake in HDFC ERGO, in favour of its joint venture partner ERGO International AG. HDFC further said that it made pre tax profit of Rs. 922 crore and post tax profit of Rs. 725 crore from this transaction. On 17 December 2015, HDFC had agreed to sell 22.902% stake in HDFC ERGO to ERGO International at a price of Rs. 90.973 per share for aggregate consideration of Rs. 1122 crore. On 14 July 2016, HDFC announced that it had successfully priced Rs 3000-crore overseas issue of unrated rupee denominated bonds. HDFC thus became the first Indian corporate issuer of rupee denominated bonds overseas. Rupee-denominated bonds are instruments through which Indian entities can raise funds in overseas capital markets, while the bond investors hold the currency risk. HDFC's Board of Directors at its meeting held on 27 July 2016 granted in-principle approval for the amalgamation of five wholly-owned subsidiaries viz. Grandeur Properties Private Limited, Haddock Properties Private Limited, Winchester Properties Private Limited, Pentagram Properties Private Limited and Windermere Properties Private Limited into HDFC. The area of business of these five subsidiaries is receiving of rental income on commercial properties. On 18 November 2016, HDFC announced that it has assigned its outstanding loans to the Unitech group to JM Financial Asset Reconstruction Company (JMFARC). Against total outstanding loans of Rs. 869 crore to the Unitech group, JMFARC paid HDFC Rs. 155 crore upfront and issued Security Receipts (SRs) to HDFC amounting to Rs. 705 crore to be redeemable over the period of construction of Unitech's projects. On 30 March 2017, HDFC announced that it had raised Rs. 3300 crore through the first issue of rupee denominated bonds to overseas investors under the Medium Term Note programme. On 1 June 2017, HDFC announced that its wholly-owned subsidiary HDFC Investments Limited has made an investment about $ 1.5 million by subscribing to 15% of the share capital of First Housing Finance (Tanzania), the first housing finance company to be set up in Tanzania. On 22 June 2017, HDFC executed a subscription agreement with International Finance Corporation, Washington (IFC) whereby IFC decided to subscribed to the rupee denominated bonds to be issued overseas by HDFC up to an amount of Rs. 1300 crore. On 26 July 2017, HDFC's Board of Directors granted approval for issue of Secured Redeemable Non-Convertible Debentures (NCD) aggregating to Rs 35000 crore on a private placement basis under a Shelf Disclosure Document. On 28 July 2017, HDFC announced that it had approved offering of up to 19.12 crore equity shares of Rs 10 each of HDFC Standard Life Insurance Company (HDFC Life), representing 9.57% of the paid up and issued share capital of HDFC Life, for sale in the initial public offer of HDFC Life. HDFC Life will continue to be a subsidiary of HDFC after the IPO. On 31 July 2017, HDFC Standard Life Insurance Company and Max Group entities announced that they had called off the proposed merger of their life insurance business since the parties were unable to obtain the requisite regulatory approvals to consummate the proposed merger and other transactions contemplated under the definitive agreements for the merger. On 8 August 2016, HDFC Life and Max Group Entities had announced a proposal for the merger of their life insurance business through a composite scheme of arrangement and had entered into certain definitive agreements to implement the merger. On 17 June 2016, the Board of Directors of HDFC Standard Life Insurance Company, Max Life Insurance Company and Max Financial Services approved entering into a confidentiality, exclusivity and standstill agreement to evaluate a potential combination through a merger of Max Life Insurance Company and Max Financial Services with HDFC Standard Life Insurance Company by way of a scheme of arrangement. On 14 August 2017, the Insurance Regulatory & Development Authority of India granted its final approval for the merger of HDFC ERGO General Insurance Company Limited (HDFC ERGO), a subsidiary of the company with HDFC General Insurance Company Limited (formerly L&T General Insurance Company). On 9 September 2016, HDFC ERGO announced that it had completed the acquisition of 100% shares of L&T General Insurance Company Limited for Rs 551 crore. On 3 June 2016, the Board of Directors of HDFC ERGO had approved the acquisition of 100% stake in L&T General Insurance Company Limited for an aggregate amount of Rs. 551 crore subject to receipt of requisite approvals. On 16 November 2017, HDFC announced that it had raised Rs. 1300 crore from the issue of rupee denominated bonds to International Finance Corporation, Washington under the Medium Term Note Programme. On 30 November 2017, HDFC approved offering a part of its shareholding in its subsidiary HDFC Asset Management Company Limited (HDFC AMC) through offer for sale in the initial public offer (IPO) of HDFC AMC. As on 30 September 2017, HDFC held 57.36% stake in HDFC AMC. HDFC's Board of Directors at its meeting held on 19 December 2017 approved subscription to the securities offered by HDFC Bank on preferential basis up to an amount not exceeding Rs 8500 crore. The board also approved raising funds through issue of equity shares and/or other permissible securities up to an aggregate amount not exceeding Rs. 13000 crore. On 20 December 2017, HDFC approved the sale of 6.3% stake in Computer Age Management Services Private Limited (CAMS) to Great Terrain Investment Ltd, Mauritius, an affiliate of Warburg Pincus group, for a total consideration of Rs 209.50 crore. After completion of the sale, HDFC's holding in CAMS will drop to 4.8% of the equity capital of CAMS. On 21 December 2017, HDFC approved the sale of 100% of its equity share capital in HDFC Developers Limited, which runs the HDFC Red platform, and HDFC Realty Limited, a real estate brokerage platform, to Quikr for total consideration of Rs. 101.99 crore and Rs. 254.98 crore respectively. Quikr is India's largest classifieds platform. Simultaneously, HDFC acquired an equity stake in Quikr India Private Limited. Pursuant to receipt of approval of the members through Postal Ballot in February 2018, the Corporation issued 6,43,29,882 equity shares of Rs 2 each at an issue price of Rs 1,726.05 per equity share on preferential basis in accordance with the provisions of Chapter VII of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 (SEBI ICDR Regulations). The Corporation also issued 1,03,89,041 equity shares at an issue price of Rs 1,825 per equity share to QIBs on a qualified institutions placement basis in accordance with the provisions of Chapter VIII of the SEBI ICDR Regulations. The Corporation raised an aggregate amount of Rs 13,000 crore from both the issuances. In October 2015, the Corporation had issued 3.65 crore warrants at an issue price of Rs 14 per warrant with a right exercisable by the warrant holder to exchange each warrant for one equity share of Rs 2 each of the Corporation at any time on or before October 05, 2018, at a warrant exercise price of Rs 1,475 per equity share to be paid by the warrant holder at any time of exchange of the warrants. As at March 31, 2018, 5,14,600 warrants have been exercised and exchanged into 5,14,600 equity shares of Rs 2 each of the Corporation. The equity shares so issued rank pari passu with the existing shares of the Corporation. In January 2018, the Corporation sold its entire stake in its wholly owned subsidiary companies, HDFC Developers Limited and HDFC Realty Limited, to Quikr India Private Ltd. Consequently, HDFC Realty Limited and HDFC Developers Limited ceased to be subsidiaries of the Corporation with effect from 24 January 2018. During the year 2018, the Corporation approved offering of upto 4.08% of the paid up and issued equity share capital of HDFC Asset Management Co., Ltd., (HDFC AMC), a subsidiary of the Corporation for sale in the IPO of HDFC AMC. The Board of Directors at its earlier meeting held on 27 July 2016 had approved the scheme of amalgamation of five of its wholly- owned subsidiaries, Windermere Properties Private Limited, Haddock Properties Private Limited, Grandeur Properties Private Limited, Winchester Properties Private Limited and Pentagram Properties Private Limited with itself. The applications for the proposed merger were filed with the NCLT, Mumbai bench and in March 2018, the scheme of amalgamation was approved by the NCLT. The order was filed with the Registrar of Companies, Mumbai on April 27, 2018. Accordingly, the Corporation has considered the operations of the said subsidiaries from April 1, 2016, as its own operations and accounted for the same in its books of accounts after making necessary adjustments. During the year 2018, the Corporation sold individual loans amounting to Rs. 6,453 crore, of which Rs. 1,850 crore qualified as priority sector advances for banks. The corporation's Assets Under Management (AUM) as at 31 March 2019 amounted to Rs 4,61,913 crore as compared to Rs 4,02,880 crore in the previous year. On an AUM basis, the growth in the individual loan book was 17% and the non-individual loan book was 8%. The growth in the total loan book on an AUM basis was 15%. During the FY2019, the Corporation's loan book increased from Rs 3,62,811 crore to Rs 4,06,607 crore as at 31 March 31 2019. In addition, total loans securitised and/or assigned by the Corporation and outstanding as at 31 March 2019 amounted to Rs 55,306 crore. During the fiscal 2019, the Corporation, sold individual loans amounting to Rs 25,150 crore (Previous Year: Rs 6,453 crore). Of this, Rs 23,982 crore was assigned to HDFC Bank, pursuant to the buyback option embedded in the home loan arrangement between the Corporation and HDFC Bank and Rs 1,168 crore was assigned/ securitised to another bank. Of the total loans sold during the year, Rs 5,316 crore qualifed as priority sector advances for banks. As at 31 March 2019, the investment portfolio stood at Rs 46,240 crore compared to Rs 30,717 crore in the previous year. As at 05 October 2018, 3,64,99,471 warrants had been lodged for exchange with equity shares of the Corporation, representing 99.99% of the warrants issued. Accordingly, the Corporation issued and allotted 3,64,99,471 equity shares of Rs 2 each and realised an amount of Rs 5,384 crore (of which Rs 5,308 crore was received during the year). During the year 2019, the Corporation raised an amount of Rs 48,177 crore through secured redeemable non-convertible debentures (NCDs), issued in various tranches on a private placement basis. . The NCD issues have been assigned the highest rating of CRISIL AAA/Stable' and ICRA AAA/Stable'. In July 2018, the Corporation raised an ECB of USD 750 million in the form of a syndicated loan facility. The Corporation also raised an ECB of JPY 53.2 billion (USD 486 billion equivalent) in December 2018. As on 31 March 2019, the Corporation has 18 subsidiaries and 4 associate companies under its roof. The corporation's Assets Under Management (AUM) as at 31 March 2020 amounted to Rs 5,16,773 crore as compared to Rs 4,61,913 crore in the previous year. On an AUM basis, the growth in the individual loan book was 14% and the non-individual loan book was 6%. The growth in the total loan book on an AUM basis was 12%. During the FY2019, the Corporation's loan book increased from Rs 4,06,607 crore to Rs 4,50,903 crore as at 31 March 31 2020. In addition, total loans securitised and/or assigned by the Corporation and outstanding as at 31 March 2020 amounted to Rs 65,870 crore. As at 31 March 2020, the investment portfolio stood at Rs 64,944 crore compared to Rs 46,240 crore in the previous year. In May 2019, the Corporation raised an ECB of USD 200 million in the form of a syndicated loan facility. The ECB was for a tenor of 3 years. As on March 2020, the risk weighted assets of the corporation stood at around Rs 3,93,000 crore. As on 31 March 2020, the Corporation has 19 subsidiaries and 3 associate companies under its roof. During the FY2020, the corporation has issued NCDs amounting to Rs 46,190 crore from series V-005 to V-008 and W-001 to W-010. The Corporation acquired 51.16% stake HDFC ERGO Health Insurance Ltd., subsequent to this, HDFC ERGO became the subsidiary of the corporation. During December 2020, the Corporation has sold 25,48,750 equity shares of HDFC Life Insurance Company Limited (HDFC Life) and complied with the direction from the RBI to reduce the shareholding in HDFC Life to 50% or below. As a result, a pre tax profit on sale of investments of Rs 157.10 Crore has been recognised in the quarter ended 31 December 2020 and the Corporation's equity shareholding in HDFC Life stood at 49.99%. In December 2020, the Corporation raised additional capital through a Qualified Institutions Placement of 5,68, 18, 181 equity shares at a price of Rs 1760 per share and 1,70,57,400 convertible warrants at an issue price of Rs 180 per warrant with a right to exchange one warrant with one equity share of Rs 2 each, any time before the expiry of 36 months from the date of allotment, at an exercise price of Rs 2.165 per warrant. In December 2020, the National Company Law Tribunal has sanctioned the Scheme of Amalgamation for merger of HDFC ERGO Health Insurance Limited (formerly Apollo Munich Health Insurance Company Limited) (HDFC ERGO Health) with and into HDFC ERGO General Insurance Company Limited (HDFC ERGO), subsidiaries of the Corporation and Insurance Regulatory and Development Authority of India (IRDAI) has issued final approval for the merger. Consequently, HDFC ERGO Health has been merged with HDFC ERGO from appointed date i.e. 01 March 2020. As at the end of March 2021, the Corporation's holding in HDFC ERGO, the merged entity is 50.56%. As per the directions of RBI, the Corporation is required to reduce its shareholding in the merged entity to 50% or below within 6 months post amalgamation. During the year 2020-21, the Corporation has sold 2,85,48,750 equity shares of HDFC Life Insurance Company Limited (HDFC Life), in two tranches in May 2020 and November 2020, to comply with the RBI direction to reduce the shareholding in HDFC Life to 50% or below. As a result, a pre tax profit on sale of investments of Rs 1,240.59 crore and Rs 157.10 crore has been recognised in the respective periods and aggregate profit of Rs 1,397.69 Crore for the year ended 31 March 2021. Consequently, the Corporation's equity shareholding in HDFC Life stood at 49.99% as on 31 March 2021. The Assets Under Management (AUM) as at 31 March 2021 amounted to Rs 5,69,894 crore as compared to Rs 5,16,773 crore in the previous year. On an AUM basis, the growth in the individual loan book was 12%. The growth in the total loan book on an AUM basis was 10%. The Corporation's outstanding loan book stood at Rs 4,98,298 crore as at 31 March 2021, compared to Rs 4,50,903 crore in the previous year. During the year,total Deposits outstanding as at 31 March 2021 amounted to Rs 1,50,131 crore as compared to Rs 1,32,324 crore in the previous year,resulting a growth of 13%. HDFC Credila Financial Services Limited, a wholly owned subsidiary of the Corporation was converted into a public limited company (from a private limited company) with effect from 08 October 2020. During the quarter ended 30 June 2021, the Corporation has sold its entire holding i.e. 47,75,241 equity shares representing 24.48% of the equity capital of Good Host Spaces Private Limited (Good Host). As at 30 June 2021, the assets under management stood at Rs 5,74,136 crore as against Rs 5,31,186 crore in the previous year. As at 30 June 2021, individual loans comprise 78% of the Assets Under Management (AUM). On an AUM basis, the growth in the individual loan book was 14% and growth in the total loan book was 8%. The growth in the individual loan book, after adding back loans sold in the preceding 12 months was 22%. The growth in the total loan book after adding back loans sold was 12%. The Board of Directors of the HDFC Life Insurance Company Limited (HDFC Life), a subsidiary company of the Corporation has approved the Share Purchase and Share Swap Agreement between HDFC Life, Exide Industries Limited and Exide Life Insurance Company Limited (Exide Life), in connection with the acquisition of 100% of the share capital of and subsequent merger of Exide Life into HDFC Life for a total consideration of ~ 6,687 crore, subject to necessary regulatory approvals. As at 30 September 2021, the assets under management stood at Rs 5,97,339 crore as against Rs 5,40,270 crore in the previous year. As at 30 September 2021, individual loans comprise 78% of the Assets Under Management (AUM). On an AUM basis, the growth in the individual loan book was 16% and growth in the total loan book on an AUM basis was 11%. During the quarter ended 30 September 2021, the growth in the individual loan book, after adding back loans sold in the preceding 12 months was 23%. The growth in the total loan book after adding back loans sold was 15%. The Board of Directors of the Corporation at its meeting held on April 4, 2022, approved a Composite Scheme of Amalgamation for the amalgamation of: (i) HDFC Investments Limited and HDFC Holdings Limited, wholly-owned subsidiaries of the Corporation, with and into the Corporation and (ii) the Corporation with and into HDFC Bank Limited. With effect from the appointed date and upon the amalgamation of the Corporation with and into HDFC Bank becoming effective, the Corporation shall stand transferred to and vest in or shall be deemed to have been transferred to and vested in HDFC Bank, as a going concern. Upon the Scheme becoming effective and in consideration of the proposed amalgamation of the Corporation with and into HDFC Bank, the Corporation will stand dissolved without being wound up. On April 22, 2021, the Corporation sold equity shares of Good Host Spaces Private Limited aggregating to a total consideration of Rs. 216 crore. Post the said sale, Good Host ceased to be an associate of the Corporation. With regards to reduction of the Corporation's shareholding in HDFC ERGO General Insurance Company Limited to 50% or below, the Corporation on May 11, 2021 sold 44,12,000 equity shares of HDFC ERGO to ERGO International AG, the foreign promoter of HDFC ERGO at a price of Rs. 536 per equity share, aggregating to a total consideration of Rs. 236 crore. Post the said sale, shareholding of Corporation in HDFC ERGO stood at 49.98% of its issued and paid-up capital and accordingly, HDFC ERGO ceased to be a subsidiary of Corporation. On January 1, 2022, HDFC Life Insurance Company Limited acquired 100% shareholding of Exide Life Insurance Company Limited from Exide Industries Limited. Consequently, Exide Life became a wholly-owned subsidiary of HDFC Life. On January 21, 2022, the Board of Directors of HDFC Life approved a Scheme of Amalgamation between Exide Life and HDFC Life. During the year 2022, subsequent to Rights Issue of True North Ventures Private Limited, shareholding of the Corporation in True North reduced to 19.79% and accordingly, True North ceased to be an associate of the Corporation. As at March 31, 2022, cumulatively, the Corporation had financed 9.3 million housing units.

Housing Development Finance Corporation Ltd Directors Reports

TO THE MEMBERS

Your directors are pleased to present the forty-fifth annual report of your Corporation with the audited accounts for the year ended March 31, 2022.

Dividend

The board after assessing the capital buffers, liquidity levels and the impact of COVID-19 on the operations of the Corporation has recommended payment of dividend for the financial year ended March 31, 2022 of ' 30 per equity share of face value of ' 2 each compared to ' 23 per equity share in the previous year.

The dividend pay-out ratio for the year ended March 31, 2022 is 39.6% compared to 34.5% in the previous year.

The dividend recommended is in accordance with the principles and criteria as set out in the Dividend Distribution Policy. The Dividend Distribution Policy is placed on the Corporation's website.

Material Developments: Proposed Scheme of Amalgamation

The Board of Directors of the Corporation at its meeting held on April 4, 2022, approved a composite scheme of amalgamation ("Scheme") for the amalgamation of: (i) HDFC Investments Limited and HDFC Holdings Limited, wholly-owned subsidiaries of the Corporation, with and into the Corporation and (ii) the Corporation with and into HDFC Bank Limited ("HDFC Bank") and matters related thereto.

On April 3, 2022, the Board of Directors of HDFC Investments Limited and HDFC Holdings Limited had approved the merger of their respective companies with and into the Corporation.

With effect from the appointed date and upon the amalgamation of the Corporation with and into HDFC Bank becoming effective, the Corporation along with all its assets, liabilities, contracts, employees, licenses, records and approvals being their respective integral parts shall stand transferred to and vest in or shall be deemed to have been transferred to and vested in HDFC Bank, as a going concern.

Upon the Scheme becoming effective and in consideration of the proposed amalgamation of the Corporation with and into HDFC Bank, the Corporation will stand dissolved without being wound up and the shareholders of the Corporation as on the record date will receive 42 shares of HDFC Bank (each of face value of ' 1), for 25 shares held in the Corporation (each of face value of ' 2). This share exchange ratio has been arrived at based on a joint valuation report submitted by two registered valuers and a joint valuation report submitted by two independent chartered accountancy firms, which was supported by a fairness opinion provided by a Securities and Exchange Board of India (SEBI) registered merchant banker.

During the period between the approval of the Scheme by the respective boards of the Corporation and HDFC Bank and up to the effectiveness of the Scheme, the business of the Corporation and HDFC Bank shall be carried out with reasonable diligence and business prudence in the ordinary course, consistent with past practice, in accordance with the applicable laws and as mutually agreed.

The Board of Directors of the Corporation and HDFC Bank have opined that the proposed amalgamation would be in the best interest of the respective companies, their shareholders, employees, creditors and other stakeholders, since the proposed amalgamation will yield advantages as set out, inter alia, below:

(a) The amalgamation is based on leveraging the significant complementarities that exist amongst the parties to the Scheme. It would create meaningful value for various stakeholders, including respective shareholders, customers, employees, as the combined business would benefit from increased scale, comprehensive product offering, balance sheet resiliency and the ability to drive synergies across revenue opportunities, operating efficiencies and underwriting efficiencies, amongst others;

(b) HDFC Bank would benefit from a larger balance sheet and networth which would allow underwriting of larger ticket loans and also enable a greater flow of credit into the Indian economy;

(c) The loan book of the Corporation is diversified, having cumulatively financed 9.3 million dwelling units. With the Corporation's leadership in the home loan arena developed over the past 45 years, HDFC Bank would be able to provide customers, flexible mortgage offerings in a cost-effective and efficient manner;

(d) HDFC Bank has access to funds at lower costs due to its high level of current and savings accounts deposits (CASA). With the amalgamation of the Corporation with HDFC Bank, HDFC Bank will be able to offer more competitive housing products;

(e) The Corporation's rural housing network and affordable housing lending is likely to qualify for HDFC Bank as priority sector lending and will also enable a higher flow of credit into priority sector lending, including agriculture; and

(f) The proposed amalgamation is expected to result in bolstering the capital base and bringing in resiliency in the balance sheet of HDFC Bank.

The composite Scheme is subject to receipt of requisite approvals, including from statutory and regulatory authorities, as required under applicable laws. The Scheme has been filed with BSE Limited, National Stock Exchange of India Limited and Reserve Bank of India (RBI).

Impact of COVID-19

The financial year ended March 31, 2022 marked the second year since the World Health Organisation declared the outbreak of COVID-19 as a pandemic. During the year under review, countries across the globe continued to face economic and social disruptions along with the loss of lives and livelihoods. Eruptions of new waves and variants of the virus necessitated localised restrictions and lockdown.

In April 2021, India witnessed a second wave of infections followed by another wave of infections in the fourth quarter of FY22. Details of the impact of COVID-19 are elucidated in the Management Discussion and Analysis Report.

Management Discussion and Analysis Report (MD&A), Report of the Directors on Corporate Governance and Business Responsibility and Sustainability Report

In accordance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) and directions issued by RBI, the MD&A and the Report of the Directors on Corporate Governance form part of this report.

As recommended by SEBI, the Corporation has voluntarily adopted the Business Responsibility and Sustainability Reporting format in place of the Business Responsibility Report. In accordance with the Listing Regulations, this report has been placed on the Corporation's website.

Key Regulatory Changes

The RBI had mandated the introduction of Risk-Based Internal Audit for all deposit taking housing finance companies with effect from June 30, 2022. Accordingly, the Corporation has put in place a Risk-Based Internal Audit Policy and has appointed a senior executive, Mr. Arjun Gupta as the Head of Internal Audit.

Further, in line with Master Direction - Non-Banking Financial Company - Housing Finance Company (Reserve Bank) Directions, 2021 (RBI HFC Directions), the Corporation adopted the guidelines on maintenance of Liquidity Coverage Ratio with effect from December 1, 2021.

On October 22, 2021, RBI notified Scale Based Regulation (SBR): A Revised Regulatory Framework for NBFCs. This is an integrated framework with respect to capital requirements, governance standards, prudential regulation effective from October 1, 2022. Based on the criteria specified in the said framework, RBI is expected to intimate NBFCs categorised as NBFC-Upper Layer (NBFC- UL) in accordance with SBR. Entities classified as NBFC-UL would warrant enhanced regulatory requirements based on various parameters as identified by RBI.

The RBI vide its circular dated November 12, 2021 provided clarifications on Prudential Norms on Income Recognition, Asset Classification and Provisioning Pertaining to Advances (IRACP). The Corporation has complied with the requirements of the said circular.

The RBI has issued various other circulars, in an endeavour to streamline and harmonise regulations between banks and NBFCs. RBI has provided various timelines for compliance with the same for NBFCs. Further details are elucidated in the MD&A.

The Corporation is in compliance with the applicable provisions of the RBI HFC Directions and other directions/ guidelines issued by RBI, as applicable.

Lending Operations

The Corporation is a Non-Banking Financial Company - Housing Finance Company (NBFC-HFC) and is engaged in financing the purchase and construction of residential houses, real estate and certain other purposes in India. All other activities of the Corporation revolve around the main business.

Despite the challenges posed by the pandemic, lending operations of the Corporation continued seamlessly during the year. The demand for individual housing continued to remain robust.

During the year, individual approvals and disbursements grew by 38% and 37% respectively.

The Assets Under Management (AUM) as at March 31, 2022 amounted to ' 6,53,902 crore as compared to ' 5,69,894 crore in the previous year - a growth of 15%.

On an AUM basis, the growth in the individual loan book was 17%.

The Corporation's outstanding loan book stood at ' 5,68,363 crore as at March 31, 2022, compared to ' 4,98,298 crore in the previous year.

During the year, the Corporation assigned individual loans amounting to ' 28,455 crore compared to ' 18,980 crore in the previous year.

As at March 31, 2022, the outstanding amount in respect of individual loans sold was ' 83,880 crore. The Corporation continues to service these loans.

Further details of lending operations are provided in the MD&A.

Market Borrowings

The Corporation is in compliance with the provisions of the guidelines on Private Placement of Non-Convertible Debentures (NCDs) as per the RBI HFC Directions. The Corporation has been regular in payment of principal and interest on the NCDs.

Details of market borrowings are provided in the MD&A and notes to accounts.

Deposits

Deposits outstanding as at March 31, 2022 amounted to ' 1,60,900 crore as compared to ' 1,50,131 crore in the previous year.

CRISIL and ICRA have for the twenty-seventh consecutive year, reaffirmed their 'CRISIL FAAA/Stable' and 'ICRA MAAA/Stable' ratings respectively for HDFC's deposits. These ratings represent the highest degree of safety regarding timely servicing of financial obligations.

There has been no default in repayment of deposits or payment of interest during the year. All the deposits accepted by the Corporation are in compliance with the requirements of the regulations regarding deposit acceptance.

As at March 31, 2022, public deposits amounting to ' 581 crore had not been claimed by 29,777 depositors. Since then, 3,697 depositors have claimed or renewed deposits of ' 95 crore.

Depositors were intimated regarding the maturity of deposits with a request to either renew or claim their deposits. Where the deposit remains unclaimed, reminders are sent to depositors periodically and follow up action is initiated through the concerned agent or branch.

Deposits remaining unclaimed for a period of seven years from the date they became due for payment have to be transferred to the Investor Education and Protection Fund (IEPF) established by the central government. The concerned depositor can claim the deposit from the IEPF. During the year, an amount of ' 5 crore was transferred to the IEPF.

Capital Adequacy Ratio

As at March 31, 2022, the Corporation's capital adequacy ratio (CAR) stood at 22.8%, of which Tier I capital was 22.2% and Tier II capital was 0.6%.

As per regulatory norms, the minimum required capital adequacy ratio is 15%, of which the minimum Tier I capital requirement is 10%.

Corporate Social Responsibility (CSR)

During the year, the Corporation's CSR activities were undertaken in accordance with the board approved Annual Action Plan, which focused primarily on core sectors of education and healthcare, including COVID-19 health measures. Other sectors included environment, supporting persons with disability, community development and livelihoods.

The Corporation prioritised key sub-thematic areas within each of the above sectors to ensure that the CSR interventions were targeted optimally. The Corporation contributed directly to implementing agencies and through the H T Parekh Foundation to the identified social sectors.

Further details on the prescribed CSR spend under Section 135 of the Companies Act, 2013, the amount spent during the year under review and the executive summaries of impact assessment reports of CSR projects completed are provided in the Annual Report on CSR activities annexed to this report.

Subsidiary and Associate Companies

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

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

On April 22, 2021, the Corporation completed the sale of equity shares of Good Host Spaces Private Limited (Good Host) aggregating to a total consideration of ' 216 crore. Post the said sale, Good Host ceased to be an associate of the Corporation.

In accordance with the directives issued by RBI with regard to reduction of the Corporation's shareholding in HDFC ERGO General Insurance Company Limited (HDFC ERGO) to 50% or below, the Corporation on May 11, 2021 completed sale of 44,12,000 equity shares of HDFC ERGO to ERGO International AG, the foreign promoter of HDFC ERGO at a price of ' 536 per equity share, aggregating to a total consideration of ' 236 crore. Post the said sale, the shareholding of the Corporation in HDFC ERGO stood at 49.98% of its issued and paid-up capital and accordingly, HDFC ERGO ceased to be a subsidiary of the Corporation under the Companies Act, 2013. It, however, continues to be consolidated as a subsidiary in terms of Indian Accounting Standards.

On January 1, 2022, pursuant to receipt of requisite approvals, HDFC Life Insurance Company Limited (HDFC Life) completed the acquisition of 100% shareholding of Exide Life Insurance Company Limited (Exide Life) from Exide Industries Limited. Consequently, Exide Life became a wholly-owned subsidiary of HDFC Life. On January 21, 2022, the Board of Directors of HDFC Life approved a Scheme of Amalgamation between Exide Life and HDFC Life, subject to approval of the shareholders and applicable regulatory authorities.

During the year, subsequent to the rights issue of True North Ventures Private Limited (True North), the shareholding of the Corporation in True North reduced to 19.79%. Accordingly, True North ceased to be an associate of the Corporation.

The Corporation has not made any loans or advances in the nature of loans to any of its subsidiary or associate company or companies in which its directors are deemed to be interested, other than in the ordinary course of business.

The Corporation is in compliance with the provisions of Foreign Exchange Management Act, 1999 with respect to downstream investments made by it/by its subsidiaries during the year. Further, as required by the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019, the Corporation has obtained a certificate from statutory auditors on the same.

A review of the key subsidiary and associate companies of the Corporation forms part of the MD&A which forms part of this report. Further, a statement containing salient features of financial statements of the subsidiaries and associates of the Corporation in the prescribed Form No. AOC-1 is provided elsewhere in this annual report.

Particulars of Employees

HDFC had 3,599 employees as of March 31, 2022. During the year, 16 employees employed throughout the year were in receipt of remuneration of ' 1.02 crore or more per annum and 4 employees employed for part of the year were in receipt of remuneration of ' 8.5 lac or more per month.

In accordance with the provisions of Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and particulars of the top ten employees in terms of remuneration drawn and of the aforesaid employees are set out in the annex to the Directors' Report. In terms of the provisions of Section 136(1) of the Companies Act, 2013 read with the rule, the Directors' Report is being sent to all shareholders of the Corporation excluding the annex. Any shareholder interested in obtaining a copy of the annex may write to the Corporation.

Further disclosures on managerial remuneration are annexed to this report.

Prevention, Prohibition and Redressal of Sexual Harassment of Women at the Workplace

The Corporation has a policy on prevention, prohibition and redressal of sexual harassment of women at the workplace and has an Internal Complaints Committee (ICC) in compliance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Corporation's policy on the same is placed on the Corporation's website. The ICC comprises majority of women members. Members of the Corporation's ICC are responsible for conducting inquiries pertaining to such complaints.

The Corporation on a regular basis sensitises its employees, including outsourced employees on the prevention of sexual harassment at the workplace through workshops, group meetings, online training modules and awareness programmes which are held on a regular basis. The Corporation also conducted a special training programme for members of the ICC. During the year, two complaints were received by the ICC which were reviewed and disposed of and accordingly, there were no complaints pending as at March 31, 2022.

Particulars of Loans, Guarantees or Investments

Since the Corporation is an NBFC-HFC, the disclosures regarding particulars of loans/guarantees given and securities provided is exempt under the provisions of Section 186(11) of the Companies Act, 2013.

As regards investments made by the Corporation, the details of the same are provided in the notes to the financial statements of the Corporation for the year ended March 31, 2022 (note 10).

Particulars of Contracts or Arrangements with Related Parties

The particulars of contracts or arrangements with related parties required to be disclosed in Form No. AOC-2 is annexed to this report. Details of related party transactions are given in the notes to the financial statements.

The policy on Related Party Transactions of the Corporation ensures proper approval and reporting of the concerned transactions between the Corporation and its related parties. During the year, pursuant to the amendment of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, with respect to related party transaction norms, the said policy was amended to align it with the applicable amendments.

The policy on Related Party Transactions is published elsewhere in the annual report and is also placed on the Corporation's website.

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

During the year ended March 31, 2022, earnings in foreign currency stood at ' 0.04 crore and expenditure in foreign currency stood at ' 448 crore (largely pertaining to interest on foreign currency borrowings).

The Corporation is in the business of housing finance and hence its operations are not energy intensive. The Corporation is cognisant of the importance of imbibing measures towards optimum energy utilisation and conservation.

Employees Stock Option Scheme (ESOS)

Presently, the stock options granted to the employees operate under ESOS-07, ESOS-08, ESOS-14, ESOS-17 and ESOS-20 schemes. During the year, there has been no variation in the terms of the options granted under any of the schemes and all the schemes are in compliance with SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (SBEB Regulations). The Corporation has obtained a certificate from secretarial auditors on the same. During the year under review, the Corporation granted 2,66,000 options under ESOS-20 to a few employees who joined the Corporation in FY22.

The disclosures as required under SBEB Regulations have been placed on the website of the Corporation.

Further, on May 2, 2022, the Nomination and Remuneration Committee of Directors of the Corporation under ESOS-20, granted 59,33,952 stock options equally to 3,672 eligible employees, including three whole-time directors at an exercise price of ' 2,229.70 per equity share, being the latest available closing price of the equity share on the National Stock Exchange of India Limited, prior to the date of the above-mentioned meeting. The vesting and exercise schedule is the same as earlier grants under ESOS-20.

Unclaimed Dividend and Shares

As at March 31, 2022, dividend amounting to ' 23 crore had not been claimed by shareholders of the Corporation.

The Corporation takes various initiatives to reduce the quantum of unclaimed dividend and has been periodically intimating the concerned shareholders, requesting them to encash their dividend before it becomes due for transfer to the IEPF.

Unclaimed dividend amounting to ' 3 crore for FY14 was transferred to the IEPF on August 30, 2021. Further, in compliance with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 as amended, the Corporation transferred 86,465 equity shares of ' 2 each (corresponding to the dividend for FY14 remaining unclaimed for a continuous period of 7 years) in favour of the IEPF. However, the concerned shareholders may claim the unclaimed dividend and unclaimed shares from IEPF, the procedure of which is detailed on the Corporation's website.

The unclaimed dividend in respect of final dividend for FY15 must be claimed by shareholders on or before August 26, 2022, failing which, the Corporation would be required to transfer the unclaimed dividend and the corresponding shares to the IEPF within a period of 30 days from the said date.

Directors

Mr. Nasser Munjee and Dr. J. J. Irani retired as the independent directors of the Corporation with effect from July 20, 2021 on account of completion of their respective tenures.

The board places on record its sincere appreciation and gratitude for the wise counsel, guidance and enormous contributions made by Mr. Nasser Munjee and Dr. J. J. Irani to the board over the years by sharing their rich experience, knowledge and varied expertise.

The board based on the recommendation of the Nomination and Remuneration Committee appointed Mr. Rajesh Narain Gupta as an independent director of the Corporation and Mr. P. R. Ramesh as a non-executive, non-independent director of the Corporation, with effect from August 2, 2021. The members of the Corporation on November 10, 2021 approved the appointment of Mr. Rajesh Narain Gupta as an independent director for a period of 5 years and Mr. P. R. Ramesh as a non-executive, non-independent director, liable to retire by rotation, through postal ballot. Further details are provided in the Report of Directors on Corporate Governance.

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Corporation, Mr. Deepak S. Parekh and Mr. V. Srinivasa Rangan are liable to retire by rotation at the ensuing Annual General Meeting (AGM). They are eligible for re-appointment.

The board at its meeting held on May 2, 2022, approved the re-appointment of Ms. Renu Sud Karnad as the Managing Director of the Corporation for a period of 2 years with effect from September 3, 2022. The re-appointment is subject to the approval of the members of the Corporation at the ensuing AGM. Ms. Renu Sud Karnad continues to be liable to retire by rotation.

Whilst considering the re-appointment of Ms. Renu Sud Karnad, the board noted that in view of the proposed amalgamation of the Corporation with and into HDFC Bank, subject to approvals and being made effective within a period of 12-15 months. The tenure of Ms. Renu Sud Karnad would be limited to the effective date of amalgamation. The board, however, after considering other contingencies that may arise in future, if any, approved the re-appointment of Ms. Renu Sud Karnad for a period of 2 years.

The necessary resolution for the re-appointment of directors and their brief profiles have been included in the notice convening the ensuing AGM.

All the directors of the Corporation have confirmed that they satisfy the fit and proper criteria as prescribed under the applicable regulations and that they are not disqualified from being appointed as directors in terms of Section 164(2) of the Companies Act, 2013.

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

Auditors

During the year, the RBI had issued guidelines for the appointment of statutory auditors and relevant FAQs (RBI guidelines). Pursuant to the said RBI guidelines, Messrs B S R & Co. LLP, Chartered Accountants, being ineligible to continue as the statutory auditors of the Corporation, tendered its resignation with effect from November 10, 2021. The board places on record its appreciation for the professional services rendered by Messrs B S R & Co. LLP during their association with the Corporation as its statutory auditors.

In line with the said RBI guidelines and based on the recommendation of the Audit and Governance Committee and the Board of Directors, the members of the Corporation vide resolution passed by way of postal ballot on November 10, 2021, approved the appointment of Messrs S.R. Batliboi & Co. LLP, Chartered Accountants (Firm Registration No. 301003E/E300005 issued by The Institute of Chartered Accountants of India) and Messrs G. M. Kapadia & Co., Chartered Accountants (Firm Registration No. 104767W issued by The Institute of Chartered Accountants of India), as joint statutory auditors of the Corporation for a period of 3 consecutive years, subject to them continuing to fulfil the applicable eligibility norms.

During the year, the total remuneration paid by the Corporation and some of its subsidiaries to Messrs B S R & Co. LLP, and its network firm entities, to Messrs S.R. Batliboi & Co. LLP, and its network firm entities and Messrs G. M. Kapadia & Co. was ' 3.41 crore, ' 2.26 crore and ' 1.34 crore respectively. The remuneration pertains to fees for audit, internal financial control reporting, limited reviews, tax audits and taxation services, certifications and other matters during their respective tenures. Further details of remuneration paid by the Corporation to the said audit firms are provided in note 33.3 of the financial statements.

The Joint Statutory Auditors' Report annexed to the financial statement for the year under review does not contain any qualifications.

The joint statutory auditors have confirmed that they continue to satisfy the eligibility norms and independence criteria as prescribed by RBI guidelines and the Companies Act, 2013.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Messrs BNP & Associates, practicing company secretaries undertook the secretarial audit of the Corporation for FY22. The Secretarial Audit Report is annexed to this report and does not contain any qualifications.

The Secretarial Compliance Report as prescribed by SEBI is provided elsewhere in the annual report.

Significant and Material Orders Passed by Regulators

During the year, there were no significant or material orders passed by the regulators or courts or tribunals against the Corporation.

In July 2021, National Housing Bank (NHB) imposed a monetary penalty of ' 4,75,000 on the Corporation for technical non-compliance with NHB circular NHB(ND)/ DRS/PolNo.58/2013-14 dated November 18, 2013 and NHB(ND)/DRS/Policy Circular No.75/2016-17 dated July 1, 2016. The Corporation paid the penalty on July 19, 2021. The Corporation maintains that this is not significant or material in nature.

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 March 31, 2022 and of the profit of the Corporation for the year ended on that date;

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

d) The annual accounts of the Corporation have been prepared on a going concern basis;

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

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

Internal Financial Control

The Corporation has put in place adequate policies and procedures to ensure that the system of internal financial controls is commensurate with the size and nature of the Corporation's business. These systems provide a reasonable assurance in respect of providing financial and operational information, complying with applicable statutes, safeguarding of assets of the Corporation, prevention and detection of frauds, accuracy and completeness of accounting records and ensuring compliance with corporate policies.

Annual Return

The Form No. MGT-7 for FY22 is uploaded on the Corporation's website.

Material changes and commitment, if any, affecting the financial position of the Corporation from the financial year end till the date of this report

Apart from the proposed amalgamation as disclosed elsewhere in this report, there are no material changes and commitments affecting the financial position of the Corporation which have occurred after March 31, 2022 till the date of this report.

Acknowledgements

The directors place on record their gratitude for the support of various regulatory authorities including RBI, NHB, Competition Commission of India, SEBI, Insurance Regulatory and Development Authority of India, Pension Fund Regulatory and Development Authority, Ministry of Finance, Ministry of Housing and Urban Affairs, Ministry of Corporate Affairs, Registrar of Companies, Financial Intelligence Unit (India), the stock exchanges, National Securities Depository Limited and Central Depository Services (India) Limited.

The Corporation acknowledges the role of all its key stakeholders - shareholders, borrowers, channel partners, depositors, deposit agents and lenders for their continued support to the Corporation.

Your directors place on record their appreciation for the hard work and dedication of all the employees and support services of the Corporation and the co-operation of all its subsidiary and associate companies, especially during the difficult times of the pandemic.

Housing Development Finance Corporation Ltd Company Background

Housing Development Finance Corporation Ltd Company Management

Housing Development Finance Corporation Ltd Listing Information

Housing Development Finance Corporation Ltd Finished Product