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Corporate Information
Housing Development Finance Corporation Ltd
Industry : Finance - Housing
BSE Code:500010NSE Symbol:HDFCP/E(TTM):18.03
ISIN Demat:INE001A01036Div & Yield %:1.14EPS(TTM):102.44
Book Value (Rupee ):496.7031841Market Cap (Rupee Cr.):320295.52Face Value(Rupee):2
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Your directors are pleased to present the forty-second annual report of your Corporation with the audited accounts for the year ended March 31, 2019.

Financial Results For the year ended March 31, 2019 For the year ended March 31, 2018
(Rs. in crore) (Rs. in crore)
Profit Before Sale of Investments and Provision for Expected Credit Loss 12,841.42 9,695.64
Profit on Sale of Investments 1,212.35 5,609.00
Impairment on Financial Instruments (Expected Credit Loss) (935.00) (2,115.00)
Profit Before Tax 13,118.77 13,189.64
Tax Expense 3,486.31 2,230.30
Net Profit After Tax 9,632.46 10,959.34
Other Comprehensive Income (131.53) (71.97)
Total Comprehensive Income 9,500.93 10,887.37
Retained Earnings
Opening Balance 7,929.24 5,295.72
Profit for the year 9,632.46 10,959.34
Re-measurement of Defined Benefit Plan (11.94) (6.23)
Amount Available for Appropriations 17,549.76 16,248.83
Special Reserve No. II 1,850.00 1,355.00
General Reserve - 2,432.10
Statutory Reserve (Under Section 29C of the National Housing Bank Act, 1987) 100.00 1,078.00
Interim Dividend (Rs. 3.50 per equity share of Rs. 2 each) & Tax on Interim Dividend 616.70 590.87
Final Dividend & Tax pertaining to the previous year paid during the year 3,347.82 2,863.62
Surplus in Statement of Profit & Loss 11,635.24 7,929.24

Note: The nancial statements for the year ended March 31, 2019 have been prepared under Indian Accounting Standards (Ind AS). The nancial statements for the year ended March 31, 2018 have been restated in accordance with Ind AS for comparative purposes.

In March 2019, your directors declared an interim dividend of Rs. 3.50 per equity share of Rs. 2 each which was same as in the previous nancial year. The interim dividend was paid in March 2019.

Your directors recommend payment of nal dividend for the nancial year ended March 31, 2019 of Rs. 17.50 per equity share of Rs. 2 each compared to Rs. 16.50 per equity share for the previous year.

The total dividend for the year is Rs. 21 per equity share as against Rs. 20 per equity share for the previous year.

The dividend pay-out ratio for the year ended March 31, 2019 is 44.1%.

The dividend declared/recommended is in accordance with the principles and criteria as set out in the Dividend Distribution Policy which has been approved by the Board of Directors. The policy is placed on the Corporation’s website, www.hdfc.com.

Management Discussion and Analysis Report, Report of the Directors on Corporate Governance and Business Responsibility Report In accordance with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) and directions issued by the National Housing Bank (NHB), the Management Discussion and Analysis Report (MD&A) and the Report of the Directors on Corporate Governance form part of this report.

In accordance with the Listing Regulations, the Business Responsibility Report (BRR) has been placed on the Corporation’s website. Members who wish to receive a physical copy of the BRR are requested to write to the Corporation.

The policy on Business Responsibility is also placed on the Corporation’s website.

Adoption of Indian Accounting Standards (Ind AS)

The Ministry of Corporate Affairs vide its press release dated January 18, 2016 had issued directions for implementation of Ind AS for the accounting period beginning April 1, 2018 along with comparatives for the period beginning April 1, 2017. NHB vide its circular dated April 16, 2018 and June 14, 2018 had directed HFCs to comply with Ind AS as stated above. Accordingly, the standalone and the consolidated financial statements for the financialyear ended March 31, 2019, forming part of this annual report, have been prepared in accordance with Ind AS specified under the Companies Act, 2013 and other relevant provisions of the Companies Act, 2013. The adoption of Ind AS has resulted in significant changes in the financial details of which are provided in the notes to accounts.

Conversion of Warrants

In October 2015, the Corporation had issued 3,65,00,000 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 5, 2018, at a warrant exercise price of Rs. 1,475 per equity share, to be paid by the warrant holder at the time of exchange of the warrants.

As at October 5, 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). The equity shares so issued rank pari passu with the existing equity shares of the Corporation in all respects.

The amount received upon the exchange of warrants was utilised for on lending for housing finance and capital requirements of the Corporation.

Lending Operations

The Corporation is a housing finance company registered with NHB 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.

The Assets Under Management (AUM) as at March 31, 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%.

The Corporation’s outstanding loan book stood at Rs. 4,06,607 crore as at March 31, 2019, compared to Rs. 3,62,811 crore in the previous year. The lower growth in the loan book was due to the unfavourable lending environment for non-individual loans that prevailed in the second half of the financial year. Tight liquidity conditions, over leverage and credit rating downgrades led to heightened risks across the corporate sector. In order to preserve asset quality, the Corporation opted to be prudent by curtailing some of its lending to non-individual loans. The loan book also reflects a lower growth because loans assigned during the year were significantly higher at Rs. 25,150 crore compared to Rs. 6,453 crore in the previous year. Loans assigned during the year included a backlog of loans of the previous year. There were no loans assignments in the second half of FY18 as certain regulatory clarifications pertaining to the Goods and Services Tax were awaited. Loan assignments resumed from June 2018 onwards once necessary clarifications were received.

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

Market Borrowings

The Corporation is in compliance with the provisions of the Housing Finance Companies issuance of Non-Convertible Debentures on private placement basis (NHB) Directions, 2014 and has been regular in payment of principal and interest on the non-convertible debentures. During the year, the Corporation also raised funds under its Medium Term Note (MTN) Programme in accordance with Reserve Bank of India’s External Commercial Borrowings policy. Details of market borrowings are provided in the MD&A and notes to accounts.


Deposits outstanding as at March 31, 2019 amounted to Rs. 1,05,599 crore as compared to Rs. 91,269 crore in the previous year. CRISIL and ICRA have for the twenty-fourth 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. Increasing uncertainties in market conditions led to a flight to safety, which was reflected in the strong mobilisation of retail deposits of the Corporation, particularly in the second half of the financial year. There has been no default in repayment of deposits or payment of interest during the year. All the deposits accepted by the Corporation are in compliance with the requirements of Chapter V of the Companies Act, 2013.

As of March 31, 2019, public deposits amounting to Rs. 769 crore had not been claimed by 45,752 depositors. Since then, 10,007 depositors have claimed or renewed deposits of Rs. 223 crore. Depositors were intimated regarding the maturity of deposits with a request to either renew or claim their deposits. Where the deposit remains unclaimed, reminder letters are sent to depositors periodically and follow up action is initiated through the concerned agent or branch. Deposits remaining unclaimed for a period of seven years from the date they became due for payment have to be transferred to the Investor Education and Protection Fund (IEPF) established by the central government. The concerned depositor can claim the deposit from the IEPF. During the year, an amount of Rs. 1.56 crore was transferred to the IEPF.

Capital Adequacy Ratio

The Corporation’s capital adequacy ratio (CAR) stood at 19.1%, of which Tier I capital was 17.5% and Tier II capital was 1.6%. The investment in HDFC Bank has been considered as a deduction in the computation of Tier I capital. As per regulatory norms, the minimum requirement for the capital adequacy ratio and Tier I capital is 12% and 6% respectively.

Regulatory Guidelines

The Corporation has complied with the Housing Finance Companies (NHB) Directions, 2010 and other directions/guidelines prescribed by NHB regarding deposit acceptance, accounting standards, prudential norms for asset classification, income recognition, provisioning, capital adequacy, credit rating, corporate governance, information technology framework, fraud monitoring, concentration of investments, capital market exposure norms and know your customer and anti-money laundering.

Corporate Social Responsibility (CSR)

During the year, the Corporation’s CSR activities focused on three key sectors – healthcare, education and skilling and livelihoods. The Corporation contributed to rebuilding efforts of homes in the state of Kerala that were damaged due to floods in August 2018. The Corporation also supported projects relating to community development, differently abled, environment and sports. The Corporation contributed directly and through H T Parekh Foundation to these identifiedsocial sectors. Further details on the prescribed CSR spend under Section 135 of the Companies Act, 2013 and the amount committed and disbursed during the year under review are provided in the Annual Report on CSR activities annexed to this report.

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. In July 2018, HDFC Bank Limited on a preferential basis allotted 3,90,96,817 equity shares of Rs. 2 each at an issue price of Rs. 2,174.09 per equity share to the Corporation.

This investment amounting to Rs. 8,500 crore has enabled the Corporation, along with its wholly owned subsidiaries to retain its shareholding in HDFC Bank at 21.4%. The investment was made out of the proceeds of equity shares issued by the Corporation on a preferential and qualified institutions placement basis in the previous financial During the year, the Corporation offered for sale 4.08% of the paid-up and issued equity share capital of HDFC Asset Management Company Limited (HDFC AMC), a subsidiary of the Corporation in the initial public offer (IPO) of HDFC AMC. HDFC AMC’s equity shares were listed on BSE and NSE on August 6, 2018. As at March 31, 2019, the Corporation’s shareholding in HDFC AMC stood at 52.8%.

In August 2018, the Corporation acquired 30,52,469 equity shares of Good Host Spaces Private Limited (Good Host), representing 25.01% of the paid-up share capital of the company. Good Host operates and manages hostel facilities for students.

Pursuant to the acquisition, Good Host became an associate company of the Corporation.

On January 7, 2019, the Board of Directors of GRUH Finance Limited (GRUH), a listed subsidiary of the Corporation approved the scheme of amalgamation of GRUH with and into Bandhan Bank Limited (Bandhan). As per the scheme, the appointed date is January 1, 2019 and the share exchange ratio is 568 equity shares of face value Rs. 10 each of Bandhan for every 1,000 fully paid-up equity shares of face value Rs. 2 each of GRUH. In April 2019, the RBI granted its approval to the Corporation to acquire up to 9.9% of the paid-up voting equity capital of Bandhan upon the effective date of the scheme. The application for the proposed merger has been filed by GRUH and Bandhan with the National Company Law Tribunal, Ahmedabad and Kolkata bench respectively. The scheme has also received approval from the Competition Commission of India and remains subject to other regulatory and statutory approvals, including the respective shareholders and creditors of GRUH and Bandhan.

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 the Foreign Exchange Management Act, 1999 with respect to downstream investments made in/by its subsidiaries and in other companies during the year. Further, as required by the RBI Master Direction - Foreign Investments in India, the Corporation has obtained a certificate from its statutory auditors on the same.

A review of the key subsidiary and associate companies of the Corporation form part of the MD&A which forms part of this report.

Particulars of Employees

HDFC had 2,840 employees as of March 31, 2019. During the year, 12 employees were in receipt of remuneration of Rs. 1.02 crore or more per annum. In accordance with the provisions of Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and 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. Members of the Corporation’s ICC are responsible for reporting and 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. The Corporation also conducted a special training programme for the members of the ICC. During the year, one complaint was received by the committee. The case was reviewed and disposed of and thus there were no pending complaints with the committee as at March 31, 2019.

Particulars of Loans, Guarantees or Investments

Since the Corporation is a housing finance company, the disclosures regarding particulars of the loans given, guarantees given and security provided is exempt under the provisions of Section 186(11) of the Companies Act, 2013.

As regards investments made by the Corporation, the details of the same are provided in notes to the statements of the Corporation for the year ended March 31, 2019 (note 10).

Particulars of Contracts or Arrangements with Related Parties

The particulars of contracts or arrangements with related parties as prescribed in Form No. AOC 2 of the Companies (Accounts) Rules, 2014, 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.

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, 2019, earnings in foreign currency stood at Rs. 8 crore and expenditure in foreign currency stood at Rs. 1,367 crore.

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


Presently, stock options granted to the employees operate under the following schemes -- ESOS-07, ESOS-08, ESOS-11, ESOS-14 and ESOS-17. There has been no variation in the terms of the options granted under any of these schemes and all the schemes are in compliance with the SEBI (Share Based Employee Benefits)Regulations, 2014. The disclosures as required under the regulations have been placed on the website of the Corporation.

Unclaimed Dividend and Shares

As at March 31, 2019, dividend amounting to Rs. 25.04 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 Investor Education and Protection Fund (IEPF). Unclaimed dividend amounting to Rs. 1.62 crore for FY 2010-11 was transferred to the IEPF on August 28, 2018. Further, in compliance with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 as amended, the Corporation transferred 73,237 equity shares of Rs. 2 each (corresponding to the dividend for the FY 2010-11 and 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 for which is detailed in the Shareholders’ Information section. The unclaimed dividend in respect of FY 2011-12 must be claimed by shareholders on or before August 10, 2019, 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.


Independent directors, Mr. B. S. Mehta and Dr. Bimal Jalan resigned from the board with effect from July 30, 2018. The independent directors resigned on account of personal commitments. The board placed on record its sincere appreciation for the wise counsel and enormous contributions made by the directors to the board over the years. The board appointed Dr. Bhaskar Ghosh and Ms. Ireena Vittal with effect from September 27, 2018 and January 30, 2019 respectively, as independent directors of the Corporation for a term of five consecutive years each. Their appointments are subject to the approval of the members of the Corporation at the ensuing AGM. The board has approved the reappointment of Dr. J. J. Irani and Mr. Nasser Munjee as independent directors of the Corporation for a term of two consecutive years each with effect from July 21, 2019, subject to the approval of members at the ensuing AGM as their present tenure expires on July 20, 2019. The board deliberated on the contributions made by Dr. J. J. Irani and Mr. Nasser Munjee and concluded that given their vast experience, knowledge and strategic inputs to the board, it would be benefic ial for the Corporation to retain them as directors. In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Corporation, Mr. V. Srinivasa Rangan, executive director of the Corporation is liable to retire by rotation at the ensuing AGM. He is eligible of which for reappointment. The necessary resolutions for the appointment/re-appointment of the 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 proper criteria as prescribed fit 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.


At the 40th AGM of the Corporation, the members had appointed Messrs B S R & Co. LLP, Chartered Accountants, (firm registration number 101248W/W-100022) as the statutory auditors for a term of 5 consecutive years and to hold office until the conclusion of the 45th AGM. Messrs B S R & Co. LLP, Chartered Accountants, is a leading firm of chartered accountants and adheres to high professional standards and benchmarks. The firm has several experienced partners on a pan-India basis. The Auditors’ Report annexed to the financial statements for the year under review does not contain any qualifications. During the year, Messrs B S R & Co. LLP, chartered accountants and all entities in the network firm the statutory auditor is a part received a total remuneration of Rs. 6.25 crore from the Corporation and its certain subsidiaries. The remuneration pertains to fees for audit, internal financial control reporting, limited reviews, tax audits and taxation services, certifications and other matters and reimbursement of expenses.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Corporation has appointed Messrs Vinod Kothari & Company, practicing company secretaries to undertake the secretarial audit of the Corporation. The Secretarial Audit Report is annexed to this report and does not contain any 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 significantor material orders passed by the regulators or courts or tribunals that would impact the going concern status or operations of the Corporation in the future.

Directors’ Responsibility Statement

In accordance with the provisions of Section 134(3)(c) of the Companies Act, 2013 and based on the information provided by the management, your directors state that:

a) In the preparation of annual accounts, the applicable accounting standards have been followed;

b) Accounting policies selected have been applied consistently. Reasonable and prudent judgements and estimates have been made so as to give a true and fair view of the state of affairs of the Corporation as at March 31, 2019 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 record s i n 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 control 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.

Extract of Annual Return Form No. MGT-9

The details forming part of the extract of the annual return in Form No. MGT-9 is annexed to this report. The annual return for the financial 2018-19 is uploaded on the website of the Corporation.

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

There are no material changes and commitments affecting the financial position of the Corporation which have occurred after March 31, 2019 till the date of this report.


The directors place on record their gratitude for the support of various regulatory authorities including

National Housing Bank, Reserve Bank of India, Securities and Exchange Board of India, Insurance Regulatory and Development Authority of India, Pension Fund Regulatory and Development Authority, Ministry of Housing and Urban Affairs, Ministry of Corporate Affairs, Registrar of Companies, Financial Intelligence Unit (India), the stock exchanges and the depositories.

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 of the Corporation.

On behalf of the Board of Directors

May 13, 2019 Chairman