Highlights
Net Profit
` 14,550 crore
An increase of 18.3% compared to the previous year.
Balance Sheet Size
` 863,840 crore
An increase of 16.6% compared to the previous year.
Total Deposits
` 643,640 crore
An increase of 17.8% compared to the previous year.
Total Advances
` 554,568 crore
An increase of 19.4% compared to the previous year.
Capital Adequacy Ratio
14.6%
Tier I Capital Ratio
12.8%
Gross Non-performing Assets
1.05% of Gross Advances
Network
(cid:116)(cid:1)(cid:35)(cid:83)(cid:66)(cid:79)(cid:68)(cid:73)(cid:70)(cid:84)(cid:27)(cid:1)(cid:21)(cid:13)(cid:24)(cid:18)(cid:22)
(cid:116)(cid:1)(cid:34)(cid:53)(cid:46)(cid:84)(cid:27)(cid:1)(cid:18)(cid:19)(cid:13)(cid:19)(cid:23)(cid:17)
(cid:116)(cid:1)(cid:36)(cid:74)(cid:85)(cid:74)(cid:70)(cid:84)(cid:16)(cid:53)(cid:80)(cid:88)(cid:79)(cid:84)(cid:27)(cid:1)(cid:19)(cid:13)(cid:23)(cid:22)(cid:24)
Engineering Change:
Banking on Bharat
Banking in rural areas has not been able to keep up with the
growth in urban banking. But we have strived to create a
responsive, sustainable, and all-encompassing ecosystem,
which is key to India’s economic upliftment.
More than half of the bank’s branches are in semi-urban
and rural areas, demonstrating our commitment to promote
rural banking.
Rural Banking Group
Farmers are the backbone of our country’s economy, integral
to its eventual growth and development. The bank’s principal
objective is to empower rural India.
The bank has penetrated several remote geographies through
its flagship product, the Kisan Gold Card. It has covered
approximately 60,000 villages so far. The bank has designed a
range of crop and geography-specific products based on
respective harvest cycles and the local needs of farmers based
in diverse agro-climatic zones across India. Exclusive products
ensure credit for activities allied to agriculture such as dairy,
pisciculture and sericulture.
The bank has established a footprint in the hinterlands
leveraging its extensive know-how of rural customers and
delivering the right products at affordable prices with rapid
turnaround times.
Technology and deep branch penetration have enabled the
bank to deliver agricultural loans within three to four working
days in certain geographies. Additionally, an eligible farmer can
avail of an enhancement to a loan in a few seconds using ATMs
or mobile phones.
The bank also offers many other credit products such as
two-wheeler loans, car loans, and mortgage loans to bolster
financial inclusion in rural areas. Specific needs are addressed
with individualised offerings to manage multiple consumption
requirements. The bank has shifted from a product-centric
approach to a customer-centric one to expand its presence in
rural territories in a cost-effective manner.
With a sound knowledge of the rural ecosystem, the bank
endeavors to augment penetration of the liability base in rural
geographies. The bank has a symbiotic relationship with rural
customers and is making efforts to empower them by providing
technical support, besides offering financial products.
Kisan Dhan Vikas Kendras, launched across the country
as a part of these efforts, can help a farmer with free Soil
Health Cards, Mandi prices, financial literacy, digital literacy,
information on various government initiatives, etc.
Farmers can avail the benefits of these services online on
the bank’s website at Kisan Dhan Vikas e-Kendras. This
service is available in multiple vernacular languages. The
bank is constantly striving to improve the platform to make
it more user-friendly considering the requirements of the
rural population.
The bank, through various collaborative efforts, provides free
SMS advice on weather, cropping and harvesting.
Further, HDFC Bank digitized payments at over 1,200 milk
cooperatives across the nation. The move is part of the bank's
Milk to Money (M2M) program, benefitting 3.2 lakh dairy
farmers in 16 states. M2M aims to bring dairy farmers into the
organized banking system by digitizing the supply chain, with
specific and customized products targeted at satisfying their
banking and financial needs.
M2M ATMs at large collection centers are equipped with cash
have business
dispensers. Smaller
correspondents who operate micro ATMs allowing dairy farmers
to withdraw cash from their accounts.
collection points
The program has enunciated greater transparency in the milk
collection process impacting society at large by eradicating
cash management worries. A credit history is also generated
which helps farmers take out loans or avail other banking
products. Further, the society functioning as a business
correspondent is able to distribute the bank’s products to all
households in the catchment area.
HDFC Bank’s Sustainable Livelihood Initiative (SLI) aims to
include and uplift households at the bottom of the pyramid.
The bank has adopted a holistic approach that encompasses
occupational training, financial literacy, and credit counselling
to empower people. Self-Help Groups and Joint-Liability
Groups have been instrumental in helping the bank accelerate
its direct linkage program. The bank aims to reach out to
1 crore households with the initiative, for which it has hired
thousands of employees.
important
institutions. The National Bank
The SLI program has been hugely successful, which has been
noted by
for
Agriculture and Rural Development has commended the bank’s
SLI program in its publication, The Status of Microfinance in
India 2014-15. It recommended that HDFC Bank’s SLI model be
studied for adoption by other banks.
The bank has also been at the centre of crafting innovations
in retail banking. It offers recharge facilities through missed
calls. The move is targeted at semi-urban and rural
customers. The idea has been extended to include fixed
deposits and fund transfers.
A larger proportion of the bank’s business is expected to
accrue from rural banking in the years to come. With rural
household incomes on the rise, the bank is well poised to
participate in the expanding demand in financial services
and products.
Pradhan Mantri
Jan Dhan Yojana
At HDFC Bank, we believe in ensuring financial transactions
HDFC Bank feels that financial literacy is at the core of
are more personal, inclusive, and far-reaching. This mandate
efficient fiscal inclusion, smart digital transactions, and
is in alignment with the Pradhan Mantri Jan Dhan Yojana
reliable customer protection. The bank’s model for the same
(PMJDY) launched on August 28, 2014, by the Honorable
brings together financial inclusion and financial literacy – as
Prime Minister of India and Jan Dhan-Aadhaar-Mobile (JAM),
two concurrent pillars operating seamlessly towards a
underlining a steadfast commitment to welfare and upliftment
composite whole. Financial literacy helps customers make
for all.
These vibrant and unique notions are actively propagated by
the Indian government in its quest to empower and transform
the nation’s social fabric for the better.
Aadhaar pivots the bank’s financial inclusion strategy where
every bank mitra (business correspondent) is equipped with
Aadhaar and e-KYC enabled micro-ATMs. The micro-ATMs
allow customers to effectively action basic banking activities
using the “power of the thumb”. Each micro-ATM is fully
compliant with contemporary regulatory standards and
enlightened fiscal choices, imbibing the benefits of a strong
linkage with the banking system and its various digital
pipelines for transactions. Educational material for financial
literacy is printed in 13 regional languages, simplifying the
dissemination of information among attendees.
Till date, HDFC Bank has carried out 1.29 lakh financial
literacy camps through its various educational centers
spread across schools, gram panchayats, self-help groups,
and the like. A total of 11.68 lakh people have benefited from
these programs.
ensures that customers can perform Rupay card-based
The road to a sustainable and financially enriched future for
transactions. As of March 31, 2017, HDFC Bank has opened
the nation has several milestones. At HDFC Bank, we believe
17.33 lakh PMJDY accounts (since inception).
these are some of our proudest achievements - and we remain
committed toward the creation of a secure and thriving
tomorrow for all of India’s populace.
The bank firmly believes in the importance of Aadhaar-linked
accounts, particularly in the scenario of direct benefit
transfers (DBT), and has pledged to educate and inform its
customers on the same. Our plan enables all its digital
channels to become Aadhaar-seeding vehicles. Customers
can use a variety of options — NetBanking, PhoneBanking,
MobileBanking, SMS, and ATM – to seed Aadhaar.
The bank has consistently been a part of several social security
schemes launched by the government, and is now recognized
as a leader among the private sector banks involved in Pradhan
Mantri Jeevan Jyoti Bima Yojana, Pradhan Mantri Suraksha
Bima Yojana and Atal Pension Yojana.
For FY 2016-17, HDFC Bank disbursed a total amount of
Rs. 5,522 crore to 14.78 lakh customers - thereby achieving
104% of the target fixed for the bank. Further, Rs. 147 crore was
also disbursed by the bank under the Stand-Up India Program-
facilitating loans between Rs. 10 lakh and Rs. 1 crore for
Scheduled Caste
(SC) or Scheduled Tribe
(ST) women
borrowers involved in the development of greenfield enterprises.
Financial Highlights
Interest income
Interest expense
Net interest income
Other income
Net revenues
Operating costs
Operating result
Provisions and contingencies
Loan loss provisions
Others
Profit before tax
Provision for taxation
Profit after tax
Funds :
Deposits
Subordinated debt
Stockholders’ equity
Working funds****
Loans
Investments****
Key Ratios :
Earnings per share (`) *
Return on average networth
Tier 1 capital ratio
Total capital ratio
Dividend per share (`) *
Dividend payout ratio
Book value per share as at March 31 (`) *
Market price per share as at March 31 (`) **
Price to earnings ratio
2007-2008
2008-2009
2009-2010
10,530.43
16,584.01
16,467.92
4,887.12
8,911.10
7,786.30
5,643.31
7,672.91
8,681.62
2,495.94
3,700.65
4,573.63
8,139.25
11,373.56
13,255.25
4,311.03
5,950.54
6,475.71
3,828.22
5,423.02
6,779.54
1,547.59
2,123.78
2,490.40
1,278.84
1,970.35
2,288.74
268.75
153.43
201.66
2,280.63
3,299.24
4,289.14
690.45
1,054.31
1,340.44
1,590.18
2,244.93
2,948.70
100,768.60
142,811.58
167,404.44
3,249.10
8,738.58
6,353.10
11,497.23
14,646.33
21,519.58
138,027.78
183,270.77
222,458.57
63,426.90
98,883.05
125,830.59
53,607.57
53,309.31
51,013.32
9.24
16.05%
10.30%
13.60%
1.70
22.17%
64.88
266.25
28.80
10.57
16.12%
10.58%
15.69%
2.00
22.17%
68.86
194.68
18.42
13.51
16.80%
13.26%
17.44%
2.40
21.72%
94.02
386.70
28.62
1 Crore = ` 10 Million
`
* Figures for the years prior to 2011-2012 have been adjusted to reflect the effect of split of equity shares from nominal value of ` 10 each into
five equity shares of nominal value of ` 2 each.
** Source : NSE (prices for years prior to 2011-2012 have been divided by five to reflect the sub-division of shares)
*** Proposed
**** Figures for the previous years have been adjusted to reflect the effect of reclassification as mentioned in Schedule 18, Note no.1 forming part
of ‘Notes to Accounts’.
HDFC Bank Limited Annual Report 2016-17
12
(` crore)
2010-2011
2011-2012
2012-2013
2013-2014
2014-2015
2015-2016
2016-2017
20,380.77
27,874.19
35,064.87
41,135.53
48,469.91
60,221.45
9,385.08
14,989.58
19,253.75
22,652.90
26,074.23
32,629.93
10,995.69
12,884.61
15,811.12
18,482.63
22,395.68
27,591.52
4,945.23
5,783.62
6,852.62
7,919.64
8,996.34
10,751.72
15,940.92
18,668.23
22,663.74
26,402.28
31,392.02
38,343.24
7,780.02
9,277.64
11,236.11
12,042.20
13,987.55
16,979.69
8,160.90
9,390.59
11,427.63
14,360.08
17,404.47
21,363.55
2,342.24
1,877.44
1,677.01
1,588.03
2,075.75
2,725.61
1,198.55
1,091.77
1,234.21
1,632.58
1,723.58
2,133.63
1,143.69
785.67
442.80
(44.56)
352.17
591.98
69,305.96
36,166.74
33,139.22
12,296.49
45,435.71
19,703.32
25,732.39
3,593.30
3,145.30
448.00
5,818.66
7,513.15
9,750.62
12,772.05
15,328.72
18,637.94
22,139.09
1,892.26
2,346.08
3,024.34
4,293.67
5,112.80
6,341.71
7,589.43
3,926.40
5,167.07
6,726.28
8,478.38
10,215.92
12,296.23
14,549.66
208,586.41
246,706.45
296,246.98
367,337.48
450,795.65
546,424.19
643,639.66
7,393.05
11,105.65
16,586.75
16,643.05
16,254.90
15,090.45
25,376.35
29,924.37
36,214.15
43,478.63
62,009.42
72,677.77
13,182.00
89,462.38
283,634.24
345,248.26
421,327.31
491,599.50
595,695.13
740,796.07
863,840.19
159,982.67
195,420.03
239,720.64
303,000.27
365,495.04
464,593.96
554,568.20
67,952.59
89,967.10
111,303.21
100,111.88
156,833.82
195,836.29
214,463.34
17.00
16.52%
12.23%
16.22%
3.30
22.72%
109.09
469.17
27.59
22.11
18.37%
11.60%
16.52%
4.30
22.70%
127.52
519.85
23.51
28.49
20.07%
11.08%
16.80%
5.50
22.77%
152.20
625.35
21.95
35.47
20.88%
11.77%
16.07%
6.85
22.68%
181.23
748.80
21.11
42.15
20.36%
13.66%
16.79%
8.00
23.62%
247.39
48.84
17.97%
13.22%
15.53%
9.50
23.51%
287.47
1,022.70
1,071.15
24.26
21.93
57.18
18.04%
12.79%
14.55%
11.00
***
23.32%
349.12
1,442.55
25.23
HDFC Bank Limited Annual Report 2016-17
13
BOARD OF DIRECTORS
STATUTORY AUDITORS
Mrs. Shyamala Gopinath, Chairperson
Mr. A. N. Roy
Mr. Bobby Parikh
Mr. Partho Datta
Mr. Keki Mistry
Mrs. Renu Karnad
Mr. Malay Patel
Mr. Umesh Chandra Sarangi
Mr. Srikanth Nadhamuni
(Appointed as Additional Director w.e.f. September 20, 2016)
Mr. Aditya Puri, Managing Director
Mr. Paresh Sukthankar, Deputy Managing Director
Mr. Kaizad Bharucha, Executive Director
KEY MANAGERIAL PERSONS
Mr. Aditya Puri, Managing Director
Mr. Paresh Sukthankar, Deputy Managing Director
Mr. Kaizad Bharucha, Executive Director
Mr. Sashidhar Jagdishan, Chief Financial Officer
Mr. Sanjay Dongre, Executive Vice President (Legal) &
Company Secretary
Deloitte Haskins & Sells
Chartered Accountants
REGISTERED OFFICE
HDFC Bank House,
Senapati Bapat Marg,
Lower Parel,
Mumbai 400 013.
Tel: + 91 22 66521000
Fax: + 91 22 24960737
Website: www.hdfcbank.com
CORPORATE IDENTIFICATION NO
CIN - L65920MH1994PLC080618
SENIOR MANAGEMENT TEAM
REGISTRARS & TRANSFER AGENTS
Datamatics Financial Services Ltd
Plot No. B 5,
Part B Crosslane,
MIDC, Marol, Andheri (East),
Mumbai 400 093.
Tel: + 91 22 66712213-14
Fax: + 91 22 66712011
E-mail: hdinvestors@dfssl.com
Mr. Abhay Aima
Mr. Ashish Parthasarthy
Mrs. Ashima Bhat
Mr. Ashok Khanna
Mr. Arvind Kapil
Mr. Aseem Dhru
Mr. Bhavesh Zaveri
Mr. Chakrapani Venkatachari
Mr. Dhiraj Relli (on deputation to HDFC Securities Limited,
the Bank’s subsidiary)
Mr. Jimmy M Tata
Mr. K Balasubramanian
Mr. Munish Mittal
Mr. Navin Puri
Mr. Neil Francisco
Mr. Nitin Chugh
Mr. Nitin Rao
Mr. Nirav Shah
Mr. Parag Rao
Mr. Philip Mathew
Mr. Rajender Sehgal
Mr. Rakesh K. Singh
Mr. Rajesh Kumar R
Mr. Ravi Narayanan
HDFC Bank Limited Annual Report 2016-17
14
23rd ANNUAL GENERAL MEETING
Date
Day
Time
Place
July 24, 2017
:
: Monday
:
: Birla Matushri Sabhagar,
19, New Marine Lines,
2.30 p.m.
Mumbai 400 020
Record date for determining
eligibility of dividend
:
June 30, 2017 (both physical and electronic)
Contents
Directors’ Report
Independent Auditor's Report
Financial Statements
16 - 64
65 - 67
68 - 143
Independent Auditor's Report for Consolidated Financial Statements
144 - 147
Consolidated Financial Statements
Basel III - Pillar 3 Disclosures
Secretarial Auditor's Certificate on Corporate Governance
Corporate Governance
Shareholder Information
148 - 196
197
198
199 - 215
216
HDFC Bank Limited Annual Report 2016-17
15
Directors' Report
To the Members,
Introduction:
Your Directors take great pleasure in presenting the 23rd Annual Report on the business and operations of your Bank, together with
the audited accounts for the year ended March 31, 2017.
The year under review has been extremely satisfying with your Bank witnessing an increase in asset size, revenues and profitability.
What is more, it was able to manage the bad loans much better than the industry. The metric that best captures performance is the
domestic loan growth which stood at about 23.7 per cent against the overall banking system loan growth of around 5 per cent. The
other key performance indicators are Balance Sheet size (up 16.6 per cent), Total Deposits (up 17.8 per cent), Net Profit (up 18.3
per cent) and Net Interest Income (up 20.1 per cent). Cost to Income Ratio improved to 43.4 per cent. This assumes even more
significance as it came in the face of demonetisation which led to growth pangs in the third quarter.
The performance is a reflection of the following:
1) Leveraging digitization to improve customer experience, productivity and Cost to Income Ratio
2) Consolidation of its lead over peers as India’s top Digital Bank in metro, urban, semi urban and rural markets
3) Establishing itself as India’s leading rural focused bank with unmatched reach, product range and innovation
4) Unique use of artificial intelligence and data analytics to sharpen product offering
It is also an outcome of a strong brand built on the twin engines of customer and community centricity. As you are aware, your Bank
has been ‘Creating Sustainable Communities’ through its social initiatives which help people break out of the vicious circle of poverty
and enable them to lead a better life. In pursuance of the Board mandate to make 1 crore families economically self-reliant, we are
happy to report that 68 lakh families at the bottom of the pyramid have already been covered. We are also proud to state that during
the year, your Bank has crossed the mandatory 2 per cent CSR spend.
Last but not the least, words cannot be enough to thank our employees who made all this possible. Especially during demonetisation
when they were faced with chaos and crises by the day and went beyond the call of duty.
Summary of Financial Performance
Particulars
(` crore)
For the year ended / As on
March 31, 2017
March 31, 2016
6,31,393.2
4,64,594
70,973.2
19,343.8
12,296.2
18,627.8
30,924
7,17,668.5
5,54,568.2
81,602.5
22,972.2
14,549.6
23,527.7
38,077.3
Deposits and Other Borrowings
Advances
Total Income
Profit Before Depreciation and Tax
Profit After Tax
Profit Brought Forward
Total Profit Available for Appropriation
Appropriations
Transfer to Statutory Reserve
Transfer to General Reserve
Transfer to Capital Reserve
Transfer to / (from) Investment Reserve
Proposed Dividend*
Tax (including cess) on Dividend*
Dividend (including tax / cess thereon) pertaining to previous year paid during the year,
net of dividend tax credits
Balance carried over to Balance Sheet
*The Board of Directors, at the meeting held on April 21, 2017 has proposed a dividend of ` 11.00 per equity share aggregating
` 3,392.7 crore, inclusive of tax on dividend. The proposal is subject to the approval of shareholders at the Annual General Meeting.
In terms of revised Accounting Standard (AS) 4-Contingencies and Events Occurring after the Balance Sheet date as notified by
3,074.1
1,229.6
222.2
(8.5)
2,401.8
488.9
3,637.4
1,455
313.4
4.3
-
-
32,668.9
23,527.6
(11.7)
(1.7)
HDFC Bank Limited Annual Report 2016-17
16
Directors' Report
the Ministry of Corporate Affairs through amendments to Companies (Accounting Standards) Amendment Rules, 2016, the Bank
has not appropriated proposed dividend from Statement of Profit and Loss for the year ended March 31, 2017. However, the effect
of the proposed dividend has been reckoned in determining capital funds in the computation of the Capital Adequacy Ratio as on
March 31, 2017.
The Bank’s Total Income rose to ` 81,602.5 crore for the year under review from ` 70,973.2 crore in the previous year. Its Net Profit
increased by 18.3 per cent to ` 14,549.7 crore from ` 12,296.2 crore.
Appropriations from Net Profit have been effected as per the table given above.
Dividend
Your Bank has a dividend policy that, inter alia, balances the objectives of appropriately rewarding shareholders and retaining capital
in order to maintain a healthy Capital Adequacy Ratio. It has had a consistent track record of steady increase in dividend distribution
over its history with the Dividend Pay-Out Ratio ranging between 20 to 25 per cent. The dividend policy of your Bank is available
on the Bank’s website at the following link: http://www.hdfcbank.com/htdocs/common/pdf/corporate/Dividend-Distribution-Policy.pdf
Consistent with this policy and in recognition of the overall performance during the year under review, your Directors are pleased to
recommend a dividend of ` 11 per equity share of ` 2 as against ` 9.50 in the previous year. As you are aware, this dividend shall be
subject to tax to be paid by the Bank.
Ratings
Instrument
Fixed Deposit
Programme
Rating
Rating Agency Comments
CARE AAA (FD) CARE Ratings
IND Taaa
India Ratings
Instruments with this rating are considered to have very strong
degree of safety regarding timely servicing of financial obligations.
Such instruments carry lowest credit risk.
Instruments with this rating are considered to have very strong
degree of safety regarding timely servicing of financial obligations.
Such instruments carry lowest credit risk.
Instruments with this rating are considered to have very strong
degree of safety regarding timely servicing of financial obligations.
Such instruments carry lowest credit risk.
Instruments with this rating are considered to have very strong
degree of safety regarding timely servicing of financial obligations.
Such instruments carry lowest credit risk.
Instruments with this rating are considered to have very strong
degree of safety regarding timely servicing of financial obligations.
Such instruments carry lowest credit risk.
Instruments with this rating are considered to have very strong
degree of safety regarding timely servicing of financial obligations.
Such instruments carry lowest credit risk.
Instruments with this rating are considered to have very strong
degree of safety regarding timely servicing of financial obligations.
Such instruments carry lowest credit risk.
Instruments with this rating are considered to have very strong
degree of safety regarding timely servicing of financial obligations.
Such instruments carry lowest credit risk.
Instruments with this rating are considered to have very strong
degree of safety regarding timely servicing of financial obligations.
Such instruments carry lowest credit risk.
Instruments with this rating are considered to have very strong
degree of safety regarding timely servicing of financial obligations.
Such instruments carry lowest credit risk.
Certificate of Deposits
Programme
CARE A1+
CARE Ratings
IND A1+
India Ratings
Long Term Unsecured,
Subordinated (Lower
Tier 2) Bonds
CARE AAA
CARE Ratings
IND AAA
India Ratings
Tier I Perpetual Bonds CARE AAA
CARE Ratings
CRISIL AAA
CRISIL
Upper Tier 2 Bonds
CARE AAA
CARE Ratings
CRISIL AAA
CRISIL
HDFC Bank Limited Annual Report 2016-17
17
Directors' Report
Infrastructure Bonds
CARE AAA
CARE Ratings
CRISIL AAA
CRISIL
Tier I Bonds (Under
Basel III)
CARE AA+
CARE Ratings
CRISIL AA+
CRISIL
IND AA+
India Ratings
Instruments with this rating are considered to have very strong
degree of safety regarding timely servicing of financial obligations.
Such instruments carry lowest credit risk.
Instruments with this rating are considered to have very strong
degree of safety regarding timely servicing of financial obligations.
Such instruments carry lowest credit risk.
Instruments with this rating are considered to have high degree
of safety regarding timely servicing of financial obligations. Such
instruments carry very low credit risk.
Instruments with this rating are considered to have high degree
of safety regarding timely servicing of financial obligations. Such
instruments carry very low credit risk.
Instruments with this rating are considered to have high degree
of safety regarding timely servicing of financial obligations. Such
instruments carry very low credit risk.
Issuance of Equity Shares
During the year under review, 3,43,59,200 equity shares
were allotted to the employees of your Bank in respect of the
equity stock options exercised under the Employee Stock
Option Schemes. As on March 31, 2017, the issued, paid up
and authorised capital of your Bank stood at ` 512,50,91,434
comprising 256,25,45,717 equity shares of ` 2 each.
Employee Stock Options
The information pertaining to Employee Stock Options is given
in ANNEXURE 1 to this report.
Capital Adequacy Ratio
Your Bank’s total Capital Adequacy Ratio (CAR) calculated in
line with Basel III capital regulations stood at 14.6 per cent as
on March 31, 2017, well above the regulatory minimum of 10.25
per cent including Capital Conservation Buffer of 1.25 per cent.
Of this, Tier I CAR was 12.8 per cent. The effect of the proposed
dividend has been taken into account in computing these ratios.
Subsidiary Companies
Your Bank has two subsidiaries, HDB Financial Services Limited
(HDBFSL) and HDFC Securities Limited (HSL). The detailed
financial performance of the companies is given below.
HDB Financial Services Limited
HDBFSL is a leading Non-Banking Financial Company that
caters to segments not covered by the Bank through a network
of 1,151 branches in 22 states and 3 Union Territories. Using
both physical and digital channels, the company offers loan and
asset finance products to individuals, emerging businesses, and
micro enterprises across manufacturing, trading and services
sectors. Additionally, the company provides Business Process
Outsourcing (BPO) solutions to HDFC Bank.
In the year under review, HDBFSL’s Net Interest Income grew
by 41 per cent to ` 2,037.2 crore from ` 1,444.5 crore in the
previous year. Net Profit rose 28 per cent to ` 684.2 crore from
` 534.4 crore.
HDBFSL is rated AAA for its long-term debt and A1+ for its short-
term debt facilities by CARE & CRISIL respectively indicating the
highest degree of safety regarding timely servicing of financial
obligations.
Under the scheme of amalgamation approved by the Bombay
and Gujarat High Courts, two associate companies, Atlas
Documentary Facilitators Company Private Limited (ADFC) and
HBL Global Private Limited (HBL) have been amalgamated with
HDBFSL with effect from December 1, 2016. The appointed date
of the merger was April 1, 2014. The scheme has accordingly
been given effect to in these financial statements. HBL provided
marketing and promotion services while ADFC was in the BPO
business.
In the year under review, HDBFSL raised ` 1,099.4 crore
through a rights issue. This resulted in a higher capital base and
Capital Adequacy Ratio (CAR) of 20.8 per cent, well beyond
the mandatory requirement of 15 per cent. The proceeds of this
issue will be utilised for capital expenditure, working capital and
business growth. As on March 31, 2017, your Bank held 96.2 per
cent stake in the company.
HDFC Securities Limited
HDFC Securities Limited (HSL) is among India’s largest retail
broking firms offering its 18 lakh customers a large bouquet of
services. The company had the second highest number of active
(transacting) customers among all broking houses.
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In the year under review, the capital markets surged on the
back of a good monsoon, higher FII inflows, improved corporate
performance and the passing of the Goods and Services Tax
Bill. This is reflected in the company’s performance.
HSL’s Total Income grew by 37.7 per cent to ` 553.2 crore from
` 401.6 crore in the previous year. Net Profit grew by 61.9 per
cent to ` 215.9 crore from ` 133.3 crore.
Digital channels remain a core focus with more than 20 per cent
of customers transacting through the mobile app and overall
68 per cent of customers being serviced digitally. In line with
its increased thrust on digitisation, HSL added 11 branches in
the year under review as against 12 in the previous year. As on
March 31, 2017, it had 273 branches.
During the year under review, HSL won three prestigious PFRDA
Awards for National Pension Scheme (NPS), viz. Best Point of
Presence (POP) All Citizen, Best POP NPS Corporate and Best
POP NPS Private Sector. It was adjudged runner up in the Best
e-Brokerage category at the Outlook Money Awards 2016.
As on March 31, 2017, your Bank held 97.9 per cent stake in
HSL.
The annual reports of HDBFSL and HSL are available on
the website of the Bank (www.hdfcbank.com). Shareholders
who wish to have a copy of the annual accounts and detailed
information may write to the Bank. These documents shall also
be available for inspection by shareholders at the registered
offices of the Bank and its two subsidiaries.
MANAGEMENT DISCUSSION AND ANALYSIS
Macroeconomic and Industry Developments
India’s economy recorded a growth rate of 7.1 per cent in
terms of real Gross Domestic Product (GDP) in 2016-17.
While agriculture growth rose to 4.4 per cent in 2016-17 from
0.8 per cent in 2015-16, services sector growth declined to 7.9
per cent from 9.8 per cent during the same period. Inflation
moderated, with the average level of Consumer Price Inflation
declining to an estimated level of 4.6 per cent in 2016-17 from
4.9 per cent in 2015-16. Foreign Direct Investment inflows (FDI)
increased by 12 per cent in the April–December period of 2016
over the corresponding period of the previous year.
A range of supply side measures, including prudent food stock
management, appropriate monetary policy action and subdued
global commodity prices led to the decline in inflation. Meanwhile,
a close to normal monsoon, liberalisation of FDI rules and higher
government capital expenditure supported domestic economic
growth in 2016-17. While the cash-squeeze in the third quarter
of the year under review had an impact on private consumption,
there has been a speedy recovery in consumer demand since
then.
Going forward, weakness in private investment cycle and asset
quality strain in the banking sector could prevent a full-fledged
recovery though some improvement in the growth rate is quite
likely. Risks on the external front continue to loom on account of
policy uncertainty in the US and a slew of impending elections
in Europe.
The growth inflation mix should continue to remain broadly
unchanged in 2017-18. Going by the Union Budget, the focus of
fiscal policy in the coming year will be the revival of rural economy
and sustained increase in capital expenditure. Besides, higher
outlay on various social sector programmes and implementation
of 7th Central Pay Commission Awards should boost consumer
spending. Going forward, headline GDP growth is likely to
increase to 7.5 per cent in 2017-18 from 7.1 per cent in 2016-17.
Mission, Business Strategy and Approach to Business
Your Bank’s mission is to be a ‘World Class Indian Bank’,
benchmarking itself against international standards and best
practices in terms of product offerings, technology, service
levels, risk management, audit and compliance. The objective is
to continue building sound customer franchises across distinct
businesses so as to be a preferred provider of banking services
for its target retail and wholesale customer segments, and to
achieve a healthy growth in profitability consistent with the
Bank’s risk appetite.
Your Bank’s business philosophy has been based on 5 core values:
Customer Focus, Operational Excellence, Product Leadership,
People and Sustainability. Based on these cornerstones, it is
your Bank’s aim to build an Indian Bank that meets the financial
needs of, and provides services of a high quality to its customers
across the country. Your Bank is committed to do this while
ensuring the highest levels of ethical standards, professional
integrity, corporate governance and regulatory compliance.
This is articulated through a well-documented Code of Conduct
that every employee, including senior management, has to
affirm annually that he/she will abide by.
Consistent with the mission and approach, your Bank’s business
strategy emphasises the following:
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financial services industry
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HDFC Bank Limited Annual Report 2016-17
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base
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strategy
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management
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Financial Performance
The financial performance of your Bank during the year ended
March 31, 2017 remained healthy with Total Net Revenues (Net
Interest Income plus Other Income) increasing by 18.5 per cent
to ` 45,435.7 crore from ` 38,343.2 crore in the previous year.
Revenue growth was driven by an increase in both Net Interest
Income and Other Income. Net Interest Income grew by 20.1
per cent due to acceleration in loan growth coupled with a core
Net Interest Margin (NIM) of 4.3 per cent in the year ended
March 31, 2017.
Other Income grew 14.4 per cent to ` 12,296.5 crore. The largest
component was fees and commissions, which increased by 13.6
per cent to ` 8,812 crore. Foreign exchange and derivatives
revenue was ` 1,263.4 crore, gain on revaluation and sale of
investments was ` 1,139.4 crore and recoveries from written-off
accounts was ` 864.3 crore in the year under review.
Operating (Non-Interest) Expenses increased to ` 19,703.3
crore from ` 16,979.7 crore. During the year under review, your
Bank opened 195 new branches and 260 ATMs. This, along
with strong growth in retail asset and card products resulted
in higher infrastructure and staffing expenses. Staff expenses
also increased on account of annual wage revisions. Despite the
addition to the infrastructure, your Bank’s Cost to Income Ratio
improved to 43.4 per cent.
Total Provisions & Contingencies was ` 3,593.3 crore as
to ` 2,725.6 crore. Your Bank’s provisioning
compared
policies remain more stringent than regulatory requirements.
The Coverage Ratio based on specific provisions alone
excluding write-offs stood at around 69 per cent and including
general and floating provisions around 130 per cent as on March
31, 2017. Your Bank made General Provisions of ` 392.2 crore
during the year.
In the year under review, your Bank’s Profit Before Tax grew by
18.8 per cent to ` 22,139.1 crore. After providing for Income Tax
of ` 7,589.4 crore, the Net Profit increased by 18.3 per cent to
` 14,549.7 crore from ` 12,296.2 crore. Return on Average Net
Worth was 18 per cent while the Basic Earnings Per Share was
` 57.2 up from ` 48.8.
As on March 31, 2017, your Bank’s Total Balance Sheet
stood at ` 8,63,840 crore, an increase of 16.6 per cent over
` 7,40,796 crore on March 31, 2016. Total Deposits increased by
17.8 per cent to ` 6,43,640 crore from ` 5,46,424 crore. This was
after considering maturities of about US $ 3 billion of Foreign
Currency Non-Resident (FCNR) deposits raised (and swapped
into rupees with RBI at a concessional rate) during the year
ended March 31, 2014. Current Account and Savings Account
(CASA) Deposit growth witnessed a spurt during the year under
review largely attributable to the demonetisation exercise.
Savings Account Deposits grew by 30.9 per cent
to
` 1,93,579 crore while Current Account Deposits grew by 30.7
per cent to ` 1,15,574 crore. Time Deposits stood at ` 3,34,487
crore representing an increase of 7.9 per cent. CASA Deposits
accounted for 48 per cent of the Total Deposits as against 43 per
cent earlier. Advances stood at ` 5,54,568 crore, an increase of
19.4 per cent. This was after considering repayments during the
year of about US $ 2 billion of overseas loans linked to FCNR
deposits. The Bank’s domestic loan portfolio of ` 5,38,642 crore
grew by 23.7 per cent over March 31, 2016. The Bank had a
share of 5.9 per cent in Total Domestic Deposits and 6.8 per cent
in Total Domestic Advances. Its Credit Deposit (CD) Ratio stood
at 86 per cent on March 31, 2017.
Business Segments Update
Retail Banking
Your Bank follows a multi-channel strategy to reach out to its
customers bringing to them choice, convenience and a superior
experience. Innovation has been the springboard of growth in
this segment. So has a strong focus on analytics and Customer
Relationship Management (CRM) which has helped the Bank
know the customer better and offer tailor-made solutions. This
leads to deeper customer engagement in a cost effective manner.
The growth in your Bank’s retail banking business was robust
during the year under review. Total Retail Deposits grew by
17.7 per cent to ` 5,06,843 crore on the back of a higher than
usual CASA which, thanks to demonetisation, grew at 32.9 per
cent.
Auto Loans, Personal Loans and Credit Cards accounted for a
bulk of the retail business revenues. Your Bank is a leader in
the Auto Loans segment with a strong presence in commercial
vehicle and two wheeler financing.
The Bank’s Retail Advances grew by 18.9 per cent to ` 2,95,161
crore.
During the year under review, your Bank added 195 branches
taking its physical distribution network to 4,715 branches in
2,657 cities/towns. Number of ATMs increased to 12,260 from
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12,000 during the same period. The Bank grew its customer
base to 4.05 crore from 3.77 crore with a continued focus on
semi-urban and rural markets that accounted for more than
52 per cent of its branches.
In Credit Cards, the Bank’s focus on existing customers
continued, who accounted for about 75 per cent of the new cards
issued with the number of Point-of-Sale (PoS) terminals crossing
4.25 lakh. What is more, the transactions on these witnessed a
sharp spurt in the third quarter due to demonetisation.
In addition to this, the Bank operates in the Home Loan business
in conjunction with HDFC Limited. As per this arrangement, the
former sells loans provided by the latter through its branches,
while the latter approves and disburses it. The Bank receives
sourcing fee for these loans and has the option to purchase up
to 70 per cent of the fully disbursed loans either through the
issue of mortgage backed Pass Through Certificates (PTCs)
or by a direct assignment of loans. The balance is retained by
HDFC Limited. Your Bank originated, on an average, ` 1,500
crore of Home Loans every month in the year under review.
It also purchased loans worth ` 13,146 crore under the ‘Loan
Assignment’ route during the year ended March 31, 2017.
Your Bank also distributes Life Insurance, General Insurance
and Mutual Fund products through its tie-ups with insurance
companies and mutual fund houses. Third Party Distribution
Income contributed approximately 16 per cent of total fee income
for the year ended March 31, 2017, compared to 14 per cent in
the previous year.
Wholesale Banking
Like in retail, the Wholesale Banking business logged a strong
growth ending the year under review with a loan book of about
` 2,63,000 crore constituting 47 per cent of the Bank’s total
book. It grew 20.1 per cent in the year under review catering
to institutional customers like large and emerging corporates,
and SMEs. Government business is another major contributor.
The breadth of offering includes Working Capital and Term
Loans as well as Trade, Cash Management, Foreign Exchange
and Investment Banking services.
Growth came primarily on the back of impeccable execution of your
Bank’s time-tested strategy of offering customers a wide range of
products and services, customisation and cross selling. Dedicated
Relationship Managers helped in the customisation and cross
selling process. Technology further aided to improve the customer
experience. All this led to higher share of customer wallet.
Corporate Banking, which focuses on large and well rated
companies was the biggest contributor with its asset size
growing by over 20 per cent to cross ` 1,25,000 crore in the
year under review. This growth was achieved, in an otherwise
subdued credit environment, through securing a higher share
of the customer wallet, addition of new clients, introduction of
differentiated product offerings in the market place and gaining
market share from competition. It pioneered in creating products
and services to match the changing market dynamics and
customer behaviour.
focuses on
Emerging Corporates Group, which
the
mid-market segment, recorded a 34 per cent growth in asset
size to cross ` 65,000 crore on March 31, 2017. The strength
of this business lies in its diversified portfolio in terms of both
industry and geography. Its success was due to its ability to
acquire a higher share of wallet from existing clients as well as
securing new ones on the strength of a strong product offering
plus a solution based approach.
The Investment Banking business cemented its prominent
position in Debt Capital Markets. A testimony to this is the
Bloomberg rankings of INR Bond book runners where your Bank
was placed 2nd for two consecutive years.
In Government business, your Bank’s focus on tax collections
continued to gather pace. In the year under review, the direct tax
collected by your Bank was about ` 2.16 lakh crore and indirect
tax ` 1.19 lakh crore. Apart from the several state Governments
for which your Bank has been collecting taxes/duties, the Bank
has also been authorised to collect GST. Your Bank continues to
enjoy its eminent position in both Cash Management Services
(CMS) and Cash Settlement Services for major stock and
commodity exchanges in the country.
In line with the Bank’s drive towards digitisation, it has further
ensured a larger conversion of cash payments into electronic
ones. The ‘Trade-on-Net’ offering which provides customers
access to a host of services like Remittances, Letters of Credit
and Guarantees gained even greater acceptance.
International Operations
Your Bank currently has branches at three locations outside
India. These are at Bahrain, Hong Kong and Dubai International
Finance Centre (DIFC) in Dubai. The DIFC branch offers
advisory services to High Net Worth Individuals and Corporates.
Your Bank also has Representative Offices in Abu Dhabi, Dubai
and Nairobi which are engaged in promotional and marketing
activities of the Bank’s brand name among the Non-Resident
Indians. As on March 31, 2017, the combined balance sheet
size of overseas branches was around US $ 4 billion. Advances
at these branches constituted close to 4 per cent of the Bank’s
gross advances as on March 31, 2017. The total income of the
HDFC Bank Limited Annual Report 2016-17
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Directors' Report
overseas branches constituted over 1.2 per cent of the Bank’s
total income for the year.
Your Bank had mobilised US $ 3.4 billion in special FCNR (B)
deposits from NRI clients under RBI swap window in 2013.
As a major portion of these deposits were for a 3-year tenor,
they came up for redemption during September-November 2016.
US $ 3.02 billion of these flowed out and US $ 355.67 million
was outstanding for the year ended March 31, 2017.
Treasury
The Treasury Group is responsible for compliance with reserve
requirements and management of liquidity and interest rate
risk on the Bank’s balance sheet. On the foreign exchange and
derivatives front, revenues accrue from spreads on customer
transactions based on trade flows and their demonstrated
hedging needs. Your Bank recorded revenues of ` 1,263.4 crore
from foreign exchange and derivative transactions in the year
under review. These revenues were distributed across large and
emerging corporates, business banking and retail customer
segments for plain vanilla foreign exchange products and across
primarily large and emerging corporate segments for derivatives.
The Bank offers Indian Rupee and foreign exchange derivative
products to its customers, who use them to hedge their market
risks.
Your Bank enters into foreign exchange and derivative deals with
counterparties after it has set up appropriate counterparty credit
limits based on its evaluation of the ability of the counterparty to
meet its obligations in the event of crystallisation of the exposure.
Appropriate credit covenants may be stipulated where required
as trigger events to call for collaterals or terminate a transaction
and contain the risk. Where the Bank enters into foreign
currency derivative contracts not involving the Indian Rupee
with its customers, it lays them off in the inter-Bank market on
a matched basis. For such foreign currency derivatives, the
Bank primarily carries the counterparty credit risk (where the
customer has crystallised payables or mark-to-market losses).
The Bank also deals in derivatives on its own account, including
for the purpose of its own balance sheet risk management.
to meet
the Statutory Liquidity Ratio
Given the regulatory requirement of holding government
(SLR)
securities
requirement, your Bank maintains a portfolio of Government
Securities. While a significant portion of these SLR securities
are held in the ‘Held-to-Maturity’ (HTM) category, some of these
are held in the ‘Available for Sale’ (AFS) category. Your Bank is
also a Primary Dealer for Government Securities. As a part of
this business, as well as otherwise, the Bank holds fixed income
securities in the ‘Held for Trading’ (HFT) category.
Implementation of Indian Accounting Standards (IND-AS)
The Ministry of Corporate Affairs, in its press release dated
January 18, 2016, issued a roadmap for implementation of Indian
Accounting Standards (IND-AS) for scheduled commercial
banks, insurers/insurance companies and non-banking financial
companies. This roadmap requires these institutions to prepare
IND-AS based financial statements for the accounting periods
beginning from April 1, 2018 onwards with comparatives for the
periods beginning April 1, 2017 and thereafter. The Reserve
Bank of India (RBI), vide its circular dated February 11, 2016
requires all scheduled commercial banks to comply with the
Indian Accounting Standards (IND-AS) for financial statements
for the periods stated above. RBI does not permit banks to adopt
IND-AS earlier than the timelines stated above. The said
guidelines also state that RBI shall issue necessary instructions/
guidance/clarifications on the relevant aspects for implementation
of IND-AS as and when required.
Your Bank has formed a steering committee comprising
members from cross-functional areas for the purpose of
implementation oversight. Under the guidance of the steering
committee, the Bank has formed working groups, including
external consultants, dedicated to specific functional areas.
The objective of these working groups is to undertake a review
of the diagnostic analysis of the differences between the current
accounting framework and IND-AS, review the accounting
policy options provided under IND-AS 101-First Time Adoption,
determine the methodologies for each accounting treatment,
finalise process and system changes, review and update policies
and incorporate in business planning any specific action points
over the transition period. In addition, the Audit Committee of
the Board of Directors oversees the progress of the IND-AS
implementation process.
The Bank has undertaken a diagnostic analysis of the
differences between the current accounting framework and
IND-AS, including the disclosure requirements.The Bank is
currently in the process of finalising its accounting policies
under IND-AS. The Bank has evaluated the systems requiring
significant changes and identified additional system and process
requirements for implementation of IND-AS. The Bank is engaging
with vendors for technology solutions for implementation of
IND-AS. The Bank undertakes training programs for its personnel
in business and support functions.
The implementation of IND-AS is expected to result in significant
changes to the way the Bank prepares and presents its financial
statements. The areas that are expected to have significant
accounting impact on the application of IND-AS are summarised
below:
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a) Financial assets (which include advances and investments)
shall be classified under amortised cost, fair value through
other comprehensive income (a component of Reserves and
Surplus) or fair value through profit/loss categories on the
basis of the nature of the cash flows and the intention of
holding the financial assets.
b) Interest will be recognised in the income statement using the
effective interest method, whereby the coupon, fees net of
transaction costs and all other premiums or discounts will be
amortised over the life of the financial instrument.
c) Stock options will be required to be fair valued on the date
of grant and be recognised as staff expense in the income
statement over the vesting period of the stock options.
d) The impairment requirements of IND-AS 109, Financial
Instruments, are based on an Expected Credit Loss (ECL)
model that replaces the incurred loss model under the extant
framework. The Bank will be generally required to recognise
either a 12-Month or Lifetime ECL, depending on whether
there has been a significant increase in credit risk since
initial recognition. IND-AS 109 will change the Bank’s current
methodology for calculating the provision for standard
assets and non-performing assets (NPAs). The Bank will be
required to apply a three-stage approach to measure ECL on
financial instruments accounted for at amortised cost or fair
value through other comprehensive income. Financial assets
will migrate through the following three stages based on the
changes in credit quality since initial recognition:
Stage 1: 12 Months ECL
For exposures which have not been assessed as credit-impaired
or where there has not been a significant increase in credit risk
since initial recognition, the portion of the ECL associated with
the probability of default events occurring within the next twelve
months will need to be recognised.
Stage 2: Lifetime ECL-Not Credit Impaired
For credit exposures where there has been a significant increase
in credit risk since initial recognition but are not credit-impaired,
a lifetime ECL will need to be recognised.
Stage 3: Lifetime ECL- Credit Impaired
Financial assets will be assessed as credit impaired when one
or more events having a detrimental impact on the estimated
future cash flows of that asset have occurred. For financial
assets that have become credit impaired, a lifetime ECL will
need to be recognised.
Interest revenue will be recognised at the original effective
interest rate applied on the gross carrying amount for assets
falling under stages 1 and 2 and on written down amount for the
assets falling under stage 3.
e) Accounting impact on the application of IND-AS at the
transition date shall be recognised in Equity (Reserves and
Surplus).
Information Technology
A pioneer in digital banking among private banks in India, your
Bank has a following firsts to its credit:
(cid:115)(cid:0) (cid:35)(cid:69)(cid:78)(cid:84)(cid:82)(cid:65)(cid:76)(cid:73)(cid:90)(cid:69)(cid:68)(cid:0)(cid:35)(cid:79)(cid:82)(cid:69)(cid:0)(cid:34)(cid:65)(cid:78)(cid:75)(cid:73)(cid:78)(cid:71)(cid:0)(cid:51)(cid:89)(cid:83)(cid:84)(cid:69)(cid:77)(cid:0)
(cid:115)(cid:0) (cid:37)(cid:78)(cid:84)(cid:69)(cid:82)(cid:80)(cid:82)(cid:73)(cid:83)(cid:69)(cid:0)(cid:68)(cid:65)(cid:84)(cid:65)(cid:0)(cid:87)(cid:65)(cid:82)(cid:69)(cid:72)(cid:79)(cid:85)(cid:83)(cid:69)(cid:0)
(cid:115)(cid:0) (cid:47)(cid:78)(cid:76)(cid:73)(cid:78)(cid:69)(cid:0)(cid:82)(cid:69)(cid:65)(cid:76)(cid:0)(cid:84)(cid:73)(cid:77)(cid:69)(cid:0)(cid:67)(cid:69)(cid:78)(cid:84)(cid:82)(cid:65)(cid:76)(cid:73)(cid:83)(cid:69)(cid:68)(cid:0)(cid:33)(cid:52)(cid:45)(cid:0)(cid:83)(cid:87)(cid:73)(cid:84)(cid:67)(cid:72)
(cid:115)(cid:0) (cid:36)(cid:69)(cid:66)(cid:73)(cid:84)(cid:0)(cid:67)(cid:65)(cid:82)(cid:68)(cid:83)
(cid:115)(cid:0) (cid:33)(cid:78)(cid:65)(cid:76)(cid:89)(cid:84)(cid:73)(cid:67)(cid:65)(cid:76)(cid:0)(cid:35)(cid:50)(cid:45)(cid:0)(cid:83)(cid:89)(cid:83)(cid:84)(cid:69)(cid:77)(cid:0)(cid:70)(cid:79)(cid:82)(cid:0)(cid:68)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:0)(cid:77)(cid:65)(cid:82)(cid:75)(cid:69)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)
(cid:115)(cid:0) (cid:51)(cid:79)(cid:76)(cid:85)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:84)(cid:79)(cid:0)(cid:67)(cid:72)(cid:69)(cid:67)(cid:75)(cid:0)(cid:82)(cid:69)(cid:84)(cid:65)(cid:73)(cid:76)(cid:0)(cid:76)(cid:79)(cid:65)(cid:78)(cid:0)(cid:65)(cid:80)(cid:80)(cid:76)(cid:73)(cid:67)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:70)(cid:82)(cid:65)(cid:85)(cid:68)
(cid:115)(cid:0) (cid:45)(cid:79)(cid:66)(cid:73)(cid:76)(cid:69)(cid:0)(cid:66)(cid:65)(cid:78)(cid:75)(cid:73)(cid:78)(cid:71)(cid:0)(cid:65)(cid:80)(cid:80)(cid:0)
(cid:115)(cid:0) (cid:51)(cid:45)(cid:51)(cid:0)(cid:66)(cid:65)(cid:83)(cid:69)(cid:68)(cid:0)(cid:77)(cid:79)(cid:66)(cid:73)(cid:76)(cid:69)(cid:0)(cid:67)(cid:79)(cid:77)(cid:77)(cid:69)(cid:82)(cid:67)(cid:69)
The list has only been growing. The recent ones being the ‘10
Second Loan’ and ‘Digital Loan Against Securities’ (Digital LAS).
Technology has enabled your Bank to improve process and
system efficiencies, scale up and offer customer convenience
across the country. To address the infrastructure limitations in
deep geographies, branches and ATMs have been commissioned
using both fixed line and mobile broadband telecom networks.
Bandwidth acceleration and compression technology has been
implemented to improve telecom network speeds in rural/semi
urban branches. QuickBanking, a mobile app catering to the
off-line Internet has been further enhanced this year to incorporate
Unified Payment Interface (UPI) which rides on the USSD 2.0
platform of National Payments Corporation of India and enables
fund transfer to beneficiaries across banks on a 24*7 basis.
Cyber Security
Your Bank has set up an effective governance framework to
manage cyber security. A suitable organisational structure has
been put in place to monitor various cyber security threats
and minimize them. In order to protect critical assets from
cyber attacks, the Cyber Security Operations Center (SoC)
operates on a 24*7 basis. In the year under review, your Bank
further enhanced SoC to manage, respond and resolve cyber
security incidents in an effective/timely manner.
HDFC Bank Limited Annual Report 2016-17
23
Directors' Report
Further your Bank conducts:
(cid:115)(cid:0) (cid:50)(cid:69)(cid:71)(cid:85)(cid:76)(cid:65)(cid:82)(cid:0) (cid:86)(cid:85)(cid:76)(cid:78)(cid:69)(cid:82)(cid:65)(cid:66)(cid:73)(cid:76)(cid:73)(cid:84)(cid:89)(cid:0) (cid:65)(cid:83)(cid:83)(cid:69)(cid:83)(cid:83)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:0) (cid:65)(cid:78)(cid:68)(cid:0) (cid:80)(cid:69)(cid:78)(cid:69)(cid:84)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0) (cid:84)(cid:69)(cid:83)(cid:84)(cid:83)(cid:0)
to assess/ remedy vulnerabilities in applications and IT
infrastructure
(cid:115)(cid:0) (cid:33)(cid:78)(cid:84)(cid:73)(cid:13)(cid:80)(cid:72)(cid:73)(cid:83)(cid:72)(cid:73)(cid:78)(cid:71)(cid:0)(cid:83)(cid:69)(cid:82)(cid:86)(cid:73)(cid:67)(cid:69)(cid:83)(cid:0)(cid:72)(cid:65)(cid:86)(cid:69)(cid:0)(cid:66)(cid:69)(cid:69)(cid:78)(cid:0)(cid:83)(cid:85)(cid:66)(cid:83)(cid:67)(cid:82)(cid:73)(cid:66)(cid:69)(cid:68)(cid:0)(cid:84)(cid:79)(cid:0)(cid:69)(cid:78)(cid:83)(cid:85)(cid:82)(cid:69)(cid:0)(cid:84)(cid:72)(cid:65)(cid:84)(cid:0)
the phishing sites are shutdown in a timely manner and
customers prevented from being lured to fraudulent sites
(cid:115)(cid:0) (cid:50)(cid:73)(cid:83)(cid:75)(cid:0) (cid:69)(cid:78)(cid:71)(cid:73)(cid:78)(cid:69)(cid:0) (cid:65)(cid:78)(cid:68)(cid:0)
(cid:84)(cid:82)(cid:65)(cid:78)(cid:83)(cid:65)(cid:67)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0) (cid:77)(cid:79)(cid:78)(cid:73)(cid:84)(cid:79)(cid:82)(cid:73)(cid:78)(cid:71)(cid:0) (cid:83)(cid:89)(cid:83)(cid:84)(cid:69)(cid:77)(cid:83)(cid:0) (cid:65)(cid:82)(cid:69)(cid:0)
implemented to monitor suspicious transactions on Internet
Banking, ATM and e-commerce channels
(cid:115)(cid:0) (cid:40)(cid:85)(cid:77)(cid:65)(cid:78)(cid:83)(cid:0) (cid:66)(cid:69)(cid:73)(cid:78)(cid:71)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:87)(cid:69)(cid:65)(cid:75)(cid:69)(cid:83)(cid:84)(cid:0) (cid:76)(cid:73)(cid:78)(cid:75)(cid:0) (cid:73)(cid:78)(cid:0) (cid:67)(cid:89)(cid:66)(cid:69)(cid:82)(cid:0) (cid:83)(cid:69)(cid:67)(cid:85)(cid:82)(cid:73)(cid:84)(cid:89)(cid:12)(cid:0) (cid:89)(cid:79)(cid:85)(cid:82)(cid:0)
Bank has been carrying out continuous awareness among
employees and customers
(cid:115)(cid:0) (cid:52)(cid:72)(cid:69)(cid:0)(cid:67)(cid:82)(cid:73)(cid:84)(cid:73)(cid:67)(cid:65)(cid:76)(cid:0)(cid:87)(cid:69)(cid:66)(cid:83)(cid:73)(cid:84)(cid:69)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:34)(cid:65)(cid:78)(cid:75)(cid:0)(cid:65)(cid:82)(cid:69)(cid:0)(cid:83)(cid:67)(cid:65)(cid:78)(cid:78)(cid:69)(cid:68)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:77)(cid:79)(cid:78)(cid:73)(cid:84)(cid:79)(cid:82)(cid:69)(cid:68)(cid:0)
continuously for early detection of any malware
A testimony to the Bank’s crisis preparedness is that it has
secured PCI DSS 3.0 certification and ISO 27001 certification
for its critical information assets. Its efforts have been further
recognized through awards from IDRBT, DSCI-NASSCOM for
various cyber security initiatives.
Particularly in the year under review, your Bank made significant
investments in strengthening protection against Distributed
Denial of Service (DDoS) attacks and Web Application Firewall
(WAF). Various simulation exercises were carried out to learn
from techniques like ethical hacking and smoke screen & decoy
testing. The Bank also participated in IDBRT’s cyber security
drills to identify weak links and strengthen defence. It will
continue to invest further in the coming years in the areas of
cyber security to take it to the next level.
During the year under review, it implemented a 3-way disaster
recovery solution for its Core Banking platform. This ensured
that Core Banking Systems went without any prolonged outage.
In addition, your Bank has a well-rehearsed disaster recovery
set-up, so as to ensure 99.5 per cent up-time of important
applications.
Service Quality Initiatives
feedback
the service
levels and
A regular process of reviewing
capturing
for
from customers
continuous improvement in product, processes and services.
The multi-channel strategy of the Bank necessitates real-time
monitoring of customer experience, securing feedback and
response. This process is critical as the customer can now
access the Bank’s services across traditional touchpoints like
is undertaken
branches, ATMs as well as the digital ones like the Internet and
Mobile. Your Bank has therefore augmented the training and
skill development mechanism to empower and equip employees
to deliver improved quality of customer service, as well as put
in place a more stringent grievance monitoring and redressal
mechanism. Mystery shopping activities using decoy customers
are also undertaken across branches and retail asset centres to
continuously evaluate regulatory compliance, process adherence
and quality of service delivery to customers. The findings are
worked upon using Lean and Six Sigma methodologies to
bring in process improvements. The effectiveness of these
measures is reviewed periodically at different levels including
the Customer Service Committee of the Board. In addition to
the aforementioned measures, in compliance with regulatory
guidelines, your Bank has appointed a senior retired banker as
Internal Ombudsman.
As a result of the continued focus on customer service, your
Bank has received written appreciation from many Banking
Ombudsmen appointed by Reserve Bank of India across
locations such as Andhra Pradesh, Chhattisgarh, Goa, Gujarat,
Himachal Pradesh, Kerala, Lakshadweep, Madhya Pradesh,
Maharashtra, Odisha, Puducherry, Punjab, Sikkim, Tamil Nadu
and West Bengal.
Risk Management and Portfolio Quality
The Bank is exposed to risk by the very nature of its business.
These can be classified as:
(cid:115)(cid:0) (cid:35)(cid:82)(cid:69)(cid:68)(cid:73)(cid:84)(cid:0)(cid:50)(cid:73)(cid:83)(cid:75)(cid:0)(cid:73)(cid:78)(cid:67)(cid:76)(cid:85)(cid:68)(cid:73)(cid:78)(cid:71)(cid:0)(cid:50)(cid:69)(cid:83)(cid:73)(cid:68)(cid:85)(cid:65)(cid:76)(cid:0)(cid:50)(cid:73)(cid:83)(cid:75)(cid:83)(cid:0)
(cid:115)(cid:0) (cid:35)(cid:82)(cid:69)(cid:68)(cid:73)(cid:84)(cid:0)(cid:35)(cid:79)(cid:78)(cid:67)(cid:69)(cid:78)(cid:84)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:50)(cid:73)(cid:83)(cid:75)
(cid:115)(cid:0) (cid:45)(cid:65)(cid:82)(cid:75)(cid:69)(cid:84)(cid:0)(cid:50)(cid:73)(cid:83)(cid:75)(cid:0)
(cid:115)(cid:0) (cid:34)(cid:85)(cid:83)(cid:73)(cid:78)(cid:69)(cid:83)(cid:83)(cid:0)(cid:50)(cid:73)(cid:83)(cid:75)
(cid:115)(cid:0) (cid:47)(cid:80)(cid:69)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:65)(cid:76)(cid:0)(cid:50)(cid:73)(cid:83)(cid:75)(cid:0)
(cid:115)(cid:0) (cid:51)(cid:84)(cid:82)(cid:65)(cid:84)(cid:69)(cid:71)(cid:73)(cid:67)(cid:0)(cid:50)(cid:73)(cid:83)(cid:75)
(cid:115)(cid:0)
(cid:41)(cid:78)(cid:84)(cid:69)(cid:82)(cid:69)(cid:83)(cid:84)(cid:0)(cid:50)(cid:65)(cid:84)(cid:69)(cid:0)(cid:50)(cid:73)(cid:83)(cid:75)(cid:0)(cid:73)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:34)(cid:65)(cid:78)(cid:75)(cid:73)(cid:78)(cid:71)(cid:0)(cid:34)(cid:79)(cid:79)(cid:75)(cid:0)
(cid:115)(cid:0) (cid:35)(cid:79)(cid:77)(cid:80)(cid:76)(cid:73)(cid:65)(cid:78)(cid:67)(cid:69)(cid:0)(cid:50)(cid:73)(cid:83)(cid:75)
(cid:115)(cid:0) (cid:44)(cid:73)(cid:81)(cid:85)(cid:73)(cid:68)(cid:73)(cid:84)(cid:89)(cid:0)(cid:50)(cid:73)(cid:83)(cid:75)(cid:0)
(cid:115)(cid:0) (cid:50)(cid:69)(cid:80)(cid:85)(cid:84)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:50)(cid:73)(cid:83)(cid:75)
(cid:115)(cid:0)
(cid:41)(cid:78)(cid:84)(cid:82)(cid:65)(cid:68)(cid:65)(cid:89)(cid:0)(cid:50)(cid:73)(cid:83)(cid:75)
(cid:115)(cid:0) (cid:45)(cid:79)(cid:68)(cid:69)(cid:76)(cid:0)(cid:50)(cid:73)(cid:83)(cid:75)
(cid:115)(cid:0) (cid:52)(cid:69)(cid:67)(cid:72)(cid:78)(cid:79)(cid:76)(cid:79)(cid:71)(cid:89)(cid:0)(cid:50)(cid:73)(cid:83)(cid:75)
HDFC Bank Limited Annual Report 2016-17
24
Directors' Report
(cid:115)(cid:0) (cid:35)(cid:79)(cid:85)(cid:78)(cid:84)(cid:69)(cid:82)(cid:80)(cid:65)(cid:82)(cid:84)(cid:89)(cid:0)(cid:35)(cid:82)(cid:69)(cid:68)(cid:73)(cid:84)(cid:0)(cid:50)(cid:73)(cid:83)(cid:75)
(cid:115)(cid:0) (cid:47)(cid:85)(cid:84)(cid:83)(cid:79)(cid:85)(cid:82)(cid:67)(cid:73)(cid:78)(cid:71)(cid:0)(cid:50)(cid:73)(cid:83)(cid:75)
(cid:115)(cid:0) (cid:39)(cid:82)(cid:79)(cid:85)(cid:80)(cid:0)(cid:50)(cid:73)(cid:83)(cid:75)(cid:0)(cid:8)(cid:67)(cid:79)(cid:86)(cid:69)(cid:82)(cid:73)(cid:78)(cid:71)(cid:0)(cid:40)(cid:36)(cid:34)(cid:38)(cid:51)(cid:44)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:40)(cid:51)(cid:44)(cid:9)
These material risks are factored in while determining the
capital requirements. The most important of these are Credit
Risk, Market Risk, Liquidity Risk and Operational Risk which
are explained below. Identifying, measuring, monitoring and
managing these are critical to balancing the risk-return trade off
and determining the ultimate success of the Bank.
Your Bank has a Board approved risk strategy and policy in place.
The implementation of this well-defined policy is supervised
by the Risk Policy and Monitoring Committee of the Board.
The committee periodically reviews risk level and direction,
portfolio composition, status of impaired credits as well as limits
for treasury operations.
Credit Risk
The Bank has a comprehensive centralised risk management
function, independent of the operations and business units of
the Bank. Distinct policies, processes and systems are in place
for the Retail and Wholesale Lending businesses. In the Retail
Loan business, the credit cycle is managed through appropriate
front-end credit, operational and collection processes. For each
product, programmes defining customer segments, underwriting
standards and security structure are specified to ensure
consistency of credit buying patterns. Given the granularity of
individual exposures, retail credit risk is monitored largely on a
portfolio basis, across various products and customer segments.
For wholesale credit exposures, management of credit risk is
done through target market definition, appropriate credit approval
processes, ongoing post-disbursement monitoring and remedial
management procedures. Overall portfolio diversification,
prudential ceilings across various dimensions (individual/
borrower group, industry, credit risk rating grades and country),
product mix, security structures and periodic as well as proactive
reviews facilitate risk mitigation and management.
The asset quality of the Indian banking industry continued to be
under severe pressure due to macroeconomic factors as well
as sector specific issues. The banking industry on an overall
basis saw a sharp increase in stress and non-performing assets.
Your Bank did not witness any significant deterioration in overall
asset quality and continues to maintain the highest standards
of governance in respect of recognition and provisioning of
non-performing loans.
As on March 31, 2017, your Bank’s ratio of Gross Non-Performing
to gross advances was 1.05 per cent.
Assets (NPAs)
Net Non-Performing Assets (Gross Non-Performing Assets
less Specific Loan Loss provisions) was 0.3 per cent of Net
Advances as on March 31, 2017. Total restructured assets
(including applications under process for restructuring) was
0.06 per cent of gross advances as on March 31, 2017.
As a matter of abundant caution, the Bank provides more than
regulatory requirements for its NPAs while adhering to regulatory
norms for the provision of Standard Assets.
Market Risk
This arises out of the Bank’s trading portfolio and is managed
through a well-defined Board approved investment policy which
caps exposures to various securities through stringent trading
risk limits/triggers. These include position limits, gap limits, tenor
restrictions, sensitivity limits viz. PV01, Modified Duration of Hold
To Maturity Portfolio and Option Greeks, Value-at-Risk (VaR)
Limit, Stop Loss Trigger Level (SLTL) and Potential Loss Trigger
Level (PLTL). This is backed up further by a Board approved
stress testing policy and framework which simulates various
market risk scenarios in order to measure losses and initiate
control measures.
Liquidity Risk
The framework for liquidity and interest rate risk management
is established in the Bank’s Asset Liquidity-Management policy
which is in line with regulatory requirements. Your Bank has
established various Board approved limits like maturity gap limits
and limits on stock ratios for liquidity risk and limits on income
impact and market value impact for interest rate risk. Your Bank’s
Asset Liability Committee (ALCO) is responsible for adherence
to liquidity risk and interest rate risk limits. Additionally, your Bank
has a comprehensive Board approved stress testing programme
covering liquidity and interest rate risk which is aligned with the
regulatory guidelines. The Liquidity Coverage Ratio (LCR) is a
global minimum standard for Bank liquidity. The ratio aims to
ensure that a bank has an adequate stock of unencumbered
High-Quality Liquid Assets (HQLA) that can be converted
into cash easily and immediately to meet its liquidity needs
for a 30-day calendar liquidity stress scenario. In June 2014,
RBI released Basel III Framework on Liquidity Standards-
Liquidity Coverage Ratio (LCR), Liquidity Risk Monitoring
Tools and LCR Disclosure Standards. Based on the guidelines,
LCR became effective on January 1, 2015.
The minimum requirement for the ratio was 80 per cent on January
1, 2017. This was to increase by 10 percentage points every year
to touch 100 per cent on January 1, 2019. The Bank’s average
LCR was in excess of this stipulation and was 99.52 per cent on a
consolidated basis for the quarter ended March 31, 2017.
HDFC Bank Limited Annual Report 2016-17
25
Directors' Report
In accordance with RBI’s guidelines, the Bank is currently on the
Standardized Approach for Credit as well as Market Risk and the
Basic Indicator Approach for Operational Risk. It is at the same
time progressing towards migrating to an advanced approach
for these risks when permitted by the regulator. The Bank has
a structured management framework in the Internal Capital
Adequacy Assessment Process (ICAAP) for the identification
and evaluation of the significance of all risks that the Bank faces,
which may have a material adverse impact on its business and
financial position and the adequacy of capital to cover these
risks.
Its Board approved Stress Testing Policy and Framework entails
the use of various techniques to assess potential vulnerability
to extreme but plausible stressed business conditions.
The changes in the levels of various risks and the changes in the on
and off balance sheet positions of the Bank are assessed under
such assumed scenarios and sensitivity factors which generally
relate to the impact on its profitability and capital adequacy.
Operational Risk
A Board approved Operational Risk Management Framework
has been put in place which is implemented by a dedicated team
within the Risk Management function. A bottom up risk control
self-assessment process identifies high risk areas, potential
gaps and serves as an early warning system so that remedial
measures can be initiated in a timely manner.
Internal Controls, Audit and Compliance
Your Bank has Internal Audit and Compliance functions which
are responsible for independently evaluating the adequacy
of all internal controls and ensuring operating and business
units adhere to internal processes and procedures as well
as to regulatory and legal requirements. The audit function
also proactively recommends improvements in operational
processes and service quality. To mitigate operational risks,
the Bank has put in place extensive internal controls including
audit trails, appropriate segregation of front and back office
operations, post transaction monitoring processes at the back
end to ensure independent checks and balances, adherence to
the laid down policies and procedures of the Bank and to all
applicable regulatory guidelines. The internal audit function also
carries out management self-assessment of adequacy of the
Bank’s internal financial controls and operating effectiveness
of such controls in terms of Sarbanes Oxley (SOX) Act and
Companies Act, 2013. Your Bank has always adhered to the
highest standards of compliance and governance and has put
in place controls and an appropriate structure to ensure this.
To ensure independence, the internal audit function has a
reporting line to the Chairman of the Audit Committee of the
Board and only a dotted line reporting to the Managing Director.
The Audit Committee of the Board also reviews the performance of
the audit and compliance functions and reviews the effectiveness
of controls and compliance with regulatory guidelines.
Corporate Social Responsibility (CSR)-Creating Sustainable
Communities
‘Creating Sustainable Communities’ is the underlying philosophy
that drives your Bank’s CSR initiatives and it springs from one of
its Core Values: Sustainability. The objective is to enable families
break the vicious circle of poverty and draw them into a cycle of
growth, development and empowerment without disturbing the
ecological balance.
Your Bank is committed to identifying and supporting outreach
programmes aimed at developing and advancing the community
in this manner. The Bank works through partnerships with
Non-Governmental Organisations (NGOs) as well as directly
through its various businesses to create social value through its
products and services.
Your Bank’s Holistic Rural Development Programme (HRDP)
is its flagship CSR initiative. This programme aims to improve
the economic and social conditions of the villages where it
operates. The focus areas of HRDP are Promoting Education;
Skills Training and Livelihood Enhancement; Natural Resources
Management; Healthcare and Hygiene; Financial Literacy and
Inclusion. Under the programme, the Bank is working in over 500
villages across 14 states in the country.
Promoting Education
Your Bank’s education programmes are structured to create
a conducive and effective learning environment in schools.
This includes providing basic infrastructure, teacher training,
learning improvements, scholarships and career guidance
programmes. The programmes are spread across a wide
geography and close to 900 schools are being covered.
The distinctiveness of these programmes is the focus on
improving the skills of teachers, which in turn benefits the
students. More than 65,000 students have benefitted through
these programmes.
the Zero
Innovation
Investment
Through
for Educational
Initiatives (ZIIEI), your Bank has reached out to more than 5.5
lakh school teachers. ZIIEI is a unique platform to implement
best practices in education across more than 75,000 schools
in Uttar Pradesh. The project has been executed jointly with a
leading NGO for the state government.
HDFC Bank Limited Annual Report 2016-17
26
Directors' Report
Skills Training and Livelihood Enhancement
Financial Literacy
To create a sustainable community, your Bank believes
that people must have a steady source of income which
will contribute to a thriving economy. To this end, the Bank
provides skills training and development to enable beneficiaries
to earn a living, with a special focus on women and youth.
Your Bank addresses this need through multiple projects ranging
from competency-based skill-oriented training and placement,
capacity building, promoting entrepreneurial activities and
upskilling for agricultural and allied practices. These initiatives
are tailor-made programmes that focus on addressing the
specific needs of a community.
Nearly 16,000 individuals have benefited through the Bank’s
efforts in skills based training. It has supported more than 1,100
individuals to become entrepreneurs. The projects are spread
across varied geographies from Jammu & Kashmir in the
North, Meghalaya in the North East, Tamil Nadu in the South
to Gujarat in the West. One of the projects to provide job-based
skills training in Uttar Pradesh, has benefitted more than 5,000
individuals.
Natural Resource Management
While working on issues such as livelihood and water, your Bank
makes a concerted effort towards managing local natural resources.
The multi-focused interventions include the areas of soil and water
conservation, water management, construction, renovation and
maintenance of water harvesting structures for improving surface
and ground water availability as well as for promoting organic
fertilisers and renewable energy.
Your Bank has planted more than 67,000 trees, with the twin
objectives of developing horticulture and ensuring top soil
retention for better agriculture yield. A little over 3,800 acres
of agricultural land has been treated for enhanced agricultural
produce. In order to provide proper irrigation support more
than 200 water harvesting structures have been constructed
or renovated. Crop diversification has been carried out in over
840 acres for higher output as well as enriched fertility of the soil.
Healthcare & Hygiene
Your Bank promotes the cause of good hygiene and sanitation
practices in the community. Towards this end, the Bank supports
construction of toilets and provision of clean drinking water
facilities. Close to 7,500 households and 900 schools in rural
India have been covered under the toilet programme so far.
A primary healthcare centre was set up in the flood affected
regions of Uttarakhand, which benefited around 50,000 people.
Financial literacy is the first step towards real financial inclusion.
With this belief, the Bank conducts financial literacy workshops
for communities to enable them to make smart financial decisions
and sustain themselves. These workshops are executed through
the Bank’s business units as well as its NGO partners.
Dhanchayat, is the Bank’s financial literacy programme on
wheels and this has been running successfully, making more
and more people in the rural areas aware of the perils of
informal banking. Your Bank also disseminates information on
general banking, credit counselling and digital banking across a
wider society such as schools, colleges, pensioners and senior
citizens.
Over 40 lakh households have benefited from the Bank’s
financial literacy drive.
Financial Inclusion
Your Bank is fully committed to digital transactions and the recent
push given to it by the Union Government. It now offers last mile
access through mobile applications like BHIM, UPI, USSD,
Scan & Pay as well as Aadhaar and RuPay enabled Micro-ATMs.
In another ongoing effort to bring more of the under-banked
sections of the population into formal financial channels, your
Bank has opened over 17 lakh accounts under the Pradhan
Mantri Jan Dhan Yojana (PMJDY) and enrolled over 26 lakh
customers in social security schemes since inception. It now ranks
among the leading private sector banks in this regard. Loans to
the tune of ` 5,522.5 crore were extended under the Pradhan
Mantri Mudra Yojana (PMMY) and nearly ` 143.5 crore under the
‘Stand Up India’ scheme to Scheduled Caste/Scheduled Tribe
women borrowers in the year under review.
Environment Sustainability
integral
the natural capital and
Maintaining a balance between
communities
functioning.
the Bank’s
to
is now
Towards this end, your Bank’s ATMs have gone paperless,
enabling reduction of carbon footprint. The Bank has given this
effort a further fillip by ensuring multi-channel delivery through
NetBanking, PhoneBanking and MobileBanking. This reduces
carbon emission from operations as well as on account of reduced
customer travel requirements. Another source for reducing the
environmental footprint is solar ATMs. These use rechargeable
Lithium Ion batteries that reduce power consumption.
Blood Donation Campaign
The year 2016 was a milestone year for the campaign for two
reasons. One, it was its 10th year. Two, it witnessed record
participation in terms of cities, camps and colleges resulting in
over 1.7 lakh blood units being collected from more than 2 lakh
HDFC Bank Limited Annual Report 2016-17
27
Directors' Report
people. The tie up with corporate and defence establishments
to organise camps at their premises also helped in the
unprecedented collection.
Sustainable Livelihood Initiative (SLI)
Your Bank’s Sustainable Livelihood Initiative (SLI) is about
‘Creating Sustainable Communities’ by empowering people,
and helping them break the vicious circle of poverty. The Bank
takes immense pride in stating that through its Board mandated
SLI, it has made a difference in the lives of lakhs of women at
the bottom of the pyramid by creating long-term sustainable
solutions rather than just providing short-term relief.
The basic premise of the SLI model is that empowering women
means empowering families. Women participants form Self
Help Groups (SHGs) or Joint Liability Groups (JLGs) that are
nurtured by the Bank’s employees. The approach under SLI
covers occupational skills training, financial literacy, credit
counselling, livelihood finance and market linkage. Today, SLI
is harnessing the collective power of women’s groups to make
an impact in village communities by implementing health and
sanitation programmes.
Apart from the holistic approach, what makes this programme
one-of-its-kind in the world is its scale. Sample this; 8,000
dedicated bank employees working with millions of people at
the bottom of the pyramid in trying conditions driven purely by a
passion to transform lives.
The SLI programme is being accelerated further through
digitisation notwithstanding hurdles like poor awareness and
telecom infrastructure. These are being overcome by using
platforms like USSD which work on feature phones. Furthermore,
to facilitate card-based transactions, the Bank has installed PoS
machines in more than 200 villages.
At the end of the year under review, 68 lakh households in
25 states were covered through this programme. These include
Assam, Bihar, Chhattisgarh, Meghalaya, Madhya Pradesh,
Odisha, Rajasthan, Sikkim, Tripura, Uttar Pradesh and
Uttarakhand.
The disclosures pertaining to CSR as required under Rule 8
of the Companies (Accounts) Rules, 2014 have been given in
ANNEXURE 2 to this report.
Agriculture & Allied Activities
Your Bank’s credit to Agriculture & Allied activities stood at
` 77,921 crore on March 31, 2017 representing an increase
of about 17 per cent over the March 31, 2016 figure of
` 66,890.4 crore.
With about half of India’s population living on agriculture, this
is an important business segment for the Bank. The suite of
products offered include the Kisan Gold Card, Tractor and Cattle
Loans. Apart from loans directly linked to agriculture, the Bank
offers other credit products such as two-wheeler loans, car
loans, loans against gold jewellery and mortgage loans.
The Kisan Gold Card is now being offered in 60,000 villages.
Your Bank has designed a range of crop and geography specific
products keeping in mind the harvest cycles and local needs
of farmers spread across diverse agro climatic zones. Credit is
targeted at allied agricultural activities like dairy, pisciculture and
sericulture through specific products.
Using technology, your Bank is able to deliver some loans
within three working days in select geographies, and loan
enhancements in a few seconds through ATMs or mobile
phones. The Bank also enables faster cash flows to the farmer
through products like post-harvest Cash Credit and Warehouse
Receipt Financing.
HDFC Bank’s focus in the rural markets has not just been on
increasing credit off-take but also on cementing relationships
with customers by empowering them. As a part of these efforts,
11 Kisan Dhan Vikas Kendras have been rolled out across
Punjab, Maharashtra, Uttar Pradesh and Madhya Pradesh where
farmers secure information on soil health, mandi prices, various
government initiatives and expert advice. These services are
also available on the Bank’s website in vernacular languages.
Advisories on weather, cropping and harvesting are also shared
through SMS.
Milk-to-Money (MTM)
The Bank’s MTM footprint (including Micro ATMs) crossed the
landmark of 1,000 in the year under review. Approximately 3.17
lakh farmers are covered across 16 states including Gujarat,
Maharashtra, Punjab and Rajasthan. Farmers receive Direct
Benefit Transfers from the Government in the same account.
Under this initiative, Multi-function Terminals (MFTs), popularly
known as Milk-to-Money ATMs, are deployed in dairy societies.
The MFTs link the milk procurement system of the dairy society to
the farmers’ account to enable faster payments. MFTs have cash
dispensers that function as standard ATMs. The transparency
in the milk collection process benefits both farmers and society.
Payments are credited without the difficulties associated with
the cash distribution process. What is more, this creates a credit
history which can then be used as the basis for accessing bank
credit. Apart from the Dairy and Cattle Loans, customers gain
access to all bank products including digital offerings such as
10 Second Personal Loans, Kisan Credit Card, Bill Pay and
Missed Call Mobile Recharge.
HDFC Bank Limited Annual Report 2016-17
28
Directors' Report
Loans against Gold Jewellery
As on March 31, 2017, Loans against Gold Jewellery stood at
` 4,800 crore as against ` 4,531 crore on March 31, 2016.
Banks have started making inroads in a market traditionally
dominated by the unorganised sector and pawn brokers.
The entry of such players has resulted in increased awareness,
and at the same time provided greater transparency by
substituting the money lenders. The availability of the asset and
the ease of securing a loan have made this a convenient and
viable credit option.
Micro, Small and Medium Enterprises (MSME)
The year under review has been a challenging but defining
one for the MSME business. Demonetisation was a temporary
setback for a business whose customers traditionally transact
in cash. Your Bank was able to overcome this in the last quarter.
The Bank’s advances to MSMEs grew by 14.4 per cent to touch
` 85,166.6 crore on March 31, 2017 from ` 74,657.3 crore on
March 31, 2016.
Demonetisation and
the next-generation
the advent of
of entrepreneurs has seen a steady shift towards digital
transactions. In what could be a potential game changer for the
business, the Bank launched a complete online solution-the
‘SM@Bank’. Through this, customers can access-credit facility
information, request adhoc/temporary overdraft facilities, ask
for new facilities and submit documents to the Bank for straight
through processing on a 24*7 basis. This gained significant
traction in the very first year and is now poised to gain further
momentum.
Within this segment, the Bank continued its approach of
targeting the manufacturing, retailing, wholesale, trading, and
services sectors.
Innovation
Your Bank has embarked on a ‘Mobile First’ digital strategy
that builds on the last two decades of investment in technology.
This strategy enables your Bank to offer an entire spectrum
of banking products which can now be accessed not only on
high-end smart phones and tablets, but also on feature phones
that require little or no Internet connectivity.
As you are aware, digital innovation has been the prime driver
across businesses for the last two years. It has got further
impetus with emphasis on artificial intelligence, chatbots
and machine learning enabling your Bank to offer a superior
customer experience.
The Bank hosted the 2nd Digital Innovation Summit in February
2017 to tap into the fin-tech and start-up ecosystem and harness
the emerging technological trends. In the 2nd Digital Innovation
Summit, the Bank invited entries in rural fin-tech category as
well along with submissions in other categories. Five companies
have been chosen as winners, whose solutions the Bank is
evaluating for potential application. These companies are in
Artificial Intelligence, Marketing, Mobile Payments, Quality
Assurance and Biometric Payments domains with special focus
on solutions that will help semi-urban and rural customers.
Some of the major digital innovations introduced in the year
ended March 31, 2017 are:
(cid:115)
Interactive Humanoid ‘IRA’: HDFC Bank now has a
humanoid, IRA, which is a technology demonstrator in the
field of artificial intelligence and robotics. It can support
customer service.
(cid:115) HDFC Bank’s Virtual Assistant
‘EVA’: An Artificial
Intelligence based customer service chatbot deployed on
your Bank’s website that responds to customer queries and
provides product information.
(cid:115) HDFC Bank OnChat: Your Bank has forayed into social
media banking to reach out to the millennial customers.
At present, customers and non-customers can complete
e-commerce transactions on Facebook Messenger.
(cid:115) Expense Tracker: This personal financial management
tool gives customers a snapshot of their income, expenses,
and investments and helps them secure control over their
finances. This enhancement in your Bank’s MobileBanking
app has received encouraging customer response.
(cid:115) Other innovations like PayZapp, SmartBuy and the 10
second personal loan continued to gather momentum in the
year under review.
People
Your Bank believes that the key to building an organization
is People. The philosophy of the Bank can be summarised
as: Hiring right talent and retaining them by creating a
conducive environment through a combination of financial and
non-financial incentives. Besides innovation, the organization
also
fosters a culture of empowerment and ownership.
This paid-off during demonetisation, when our employees went
well beyond the call-of-duty to make customers comfortable.
In an extremely chaotic environment with crises erupting by the
day, they came up with creative solutions.
HDFC Bank Limited Annual Report 2016-17
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Directors' Report
To reiterate the five broad pillars of HDFC Bank’s People
Strategy are:
(cid:115)(cid:0) Resourcing and Hiring: In an industry where agility in talent
acquisition and deployment is key to geographic expansion
and growth, your Bank has leveraged online recruitment
along with other channels like job-ready model to develop
reach and quality of hires. It has created a strong leadership
pipeline across levels by identifying the right talent internally
and grooming them for challenging roles. This has resulted in
an 84,000 plus work force that is well motivated and trained
to deliver value to the customer. Increased digitisation,
improved process efficiencies and rebalancing capacities
over the years has led to a small decrease in the employee
base.
(cid:115)(cid:0) Career Management: Your Bank’s talent management
processes create opportunities for employees to develop
and grow. The systematic investment of time in career
discussion with employees, competency assessment and
intensive functional as well as behavioural training through
the Gurukul programmes reiterate the Bank’s commitment to
employees on career progression.
(cid:115)(cid:0) Employee Engagement: The Bank has nurtured an
enabling performance culture in line with its vision to be a
`World Class Indian Bank’. The Performance Management
System aligns organization goals with key objectives for
each business. Role-based scorecards at the employee
level coupled with managerial feedback provide clarity and
support to help employees excel.
In addition, your Bank strives to strengthen its connect with
employees. The Bank conducted an employee survey to
understand various aspects of their experience and followed
through with appropriate interventions spanning from the
local to pan-Bank level. The Bank also conducts several
employee engagement events, both at local and national
levels.
(cid:190) Josh Unlimited: Pan-India Sports event conducted in
27 cities
(cid:190) Stepathlon: An Employee Wellness initiative that saw
the participation rise by 1,000 to about 3,500
(cid:190) Hunar: Pan-India in-house talent competition
(cid:190) Corporate Online Library: A knowledge resource
available to all employees for accessing nearly 1.5 lakh
books
(cid:190) Employees can also participate in the ‘HDFC Bank Voice
Hunt Contest’ in association with Shankar Mahadevan
Academy and ‘Corporate Photography Contest’ which is
an inter-corporate event.
The Bank encourages employees to participate in community
and social work. Through your Bank’s Employee Payroll Giving’
programme, personnel can choose to donate a certain amount
from their salary each month towards specific social causes.
The other flagship programmes are the Blood Donation Drive
and the Bank’s volunteering programme which entails employees
imparting financial literacy and contributing to relief efforts in
case of natural calamities.
‘HDFC Bank Cares’ is an initiative to address healthcare needs
of employees. Benefits under this programme include health
mailers, doctor on call, health check-up camps and talks
on wellness by experts. The Bank runs an on-site crèche at
Kanjurmarg, Mumbai.
These initiatives create a connect among employees and also
helps them forge an emotional bond with the organization.
Further, a strong feedback mechanism helps shape the
programmes and aligns them with people’s expectations and
organisation policies.
training ensures
(cid:115) Training and Development: Training plans are developed
based on analysis of training needs identified in consultation
with various businesses. An extensive bouquet of training
programmes are delivered covering on-boarding, product
and process training, advanced programmes and behavioural
training. The on-boarding
that new
employees are trained comprehensively and equipped with
necessary know-how, as well as functional and behavioural
skills required for the role. The product training and advanced
programmes enable skill development, regular updates and
build expertise. The training methodology has evolved to
application based training including simulations, case studies
and games. Leveraging technology, many of the class room
programmes are now being delivered through online mode.
The role specific learning plan ensures effective use of
blended learning method.
(cid:115) Rewards: Merit is the driving force in the organisation
and objectivity the watchword while rewarding employees
on a financial and non-financial basis. This fair and
equitable approach encourages people to give their best.
The compensation policy ensures that remuneration is
not only competitive but also includes wealth creation
opportunities through long-term rewards like ESOPs. Your
Bank’s comprehensive compensation policy is aligned
with the guidelines of the Reserve Bank of India. The ‘Star
Awards’ is an institutionalised recognition programme that
periodically recognizes performers. The ‘Tejaswini Awards’ is
a special category to recognize women achievers.
HDFC Bank Limited Annual Report 2016-17
30
Directors' Report
Other Statutory Disclosures
Board and Board Committees
The details of Board meetings held during the year, attendance
of Directors at the meetings and constitution of various
Committees of the Board are included separately in the
Corporate Governance Report.
Extract of Annual Return
Pursuant to section 92 (3) of the Companies Act, 2013 and Rule
12 (1) of the Companies (Management and Administration)
Rules, 2014, the extract of the Annual Return is annexed as
ANNEXURE 3 to this report.
Directors’ Responsibility Statement
Pursuant to Section 134 (3) (c) read with Section 134 (5) of the
Companies Act, 2013, the Board of Directors hereby state that:
(cid:115)(cid:0)
(cid:41)(cid:78)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:80)(cid:82)(cid:69)(cid:80)(cid:65)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0) (cid:79)(cid:70)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:65)(cid:78)(cid:78)(cid:85)(cid:65)(cid:76)(cid:0) (cid:65)(cid:67)(cid:67)(cid:79)(cid:85)(cid:78)(cid:84)(cid:83)(cid:12)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:65)(cid:80)(cid:80)(cid:76)(cid:73)(cid:67)(cid:65)(cid:66)(cid:76)(cid:69)(cid:0)
accounting standards have been followed along with proper
explanation relating to material departures, if any
(cid:115)(cid:0) (cid:55)(cid:69)(cid:0)(cid:72)(cid:65)(cid:86)(cid:69)(cid:0)(cid:83)(cid:69)(cid:76)(cid:69)(cid:67)(cid:84)(cid:69)(cid:68)(cid:0)(cid:83)(cid:85)(cid:67)(cid:72)(cid:0)(cid:65)(cid:67)(cid:67)(cid:79)(cid:85)(cid:78)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)(cid:80)(cid:79)(cid:76)(cid:73)(cid:67)(cid:73)(cid:69)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:65)(cid:80)(cid:80)(cid:76)(cid:73)(cid:69)(cid:68)(cid:0)(cid:84)(cid:72)(cid:69)(cid:77)(cid:0)
consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of
the state of affairs of the Bank as on March 31, 2017 and of
the profit of the Bank for the year ended on that date
(cid:115)(cid:0) (cid:55)(cid:69)(cid:0)(cid:72)(cid:65)(cid:86)(cid:69)(cid:0)(cid:84)(cid:65)(cid:75)(cid:69)(cid:78)(cid:0)(cid:80)(cid:82)(cid:79)(cid:80)(cid:69)(cid:82)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:83)(cid:85)(cid:70)(cid:108)(cid:67)(cid:73)(cid:69)(cid:78)(cid:84)(cid:0)(cid:67)(cid:65)(cid:82)(cid:69)(cid:0)(cid:70)(cid:79)(cid:82)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:77)(cid:65)(cid:73)(cid:78)(cid:84)(cid:69)(cid:78)(cid:65)(cid:78)(cid:67)(cid:69)(cid:0)
of adequate accounting records in accordance with the
provisions of the Companies Act, 2013 for safeguarding the
assets of the Bank and for preventing and detecting fraud
and other irregularities
(cid:115)(cid:0) (cid:55)(cid:69)(cid:0)(cid:72)(cid:65)(cid:86)(cid:69)(cid:0)(cid:80)(cid:82)(cid:69)(cid:80)(cid:65)(cid:82)(cid:69)(cid:68)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:65)(cid:78)(cid:78)(cid:85)(cid:65)(cid:76)(cid:0)(cid:65)(cid:67)(cid:67)(cid:79)(cid:85)(cid:78)(cid:84)(cid:83)(cid:0)(cid:79)(cid:78)(cid:0)(cid:65)(cid:0)(cid:71)(cid:79)(cid:73)(cid:78)(cid:71)(cid:0)(cid:67)(cid:79)(cid:78)(cid:67)(cid:69)(cid:82)(cid:78)(cid:0)
basis
(cid:115)(cid:0) (cid:55)(cid:69)(cid:0)(cid:72)(cid:65)(cid:86)(cid:69)(cid:0)(cid:76)(cid:65)(cid:73)(cid:68)(cid:0)(cid:68)(cid:79)(cid:87)(cid:78)(cid:0)(cid:73)(cid:78)(cid:84)(cid:69)(cid:82)(cid:78)(cid:65)(cid:76)(cid:0)(cid:108)(cid:78)(cid:65)(cid:78)(cid:67)(cid:73)(cid:65)(cid:76)(cid:0)(cid:67)(cid:79)(cid:78)(cid:84)(cid:82)(cid:79)(cid:76)(cid:83)(cid:0)(cid:84)(cid:79)(cid:0)(cid:66)(cid:69)(cid:0)(cid:70)(cid:79)(cid:76)(cid:76)(cid:79)(cid:87)(cid:69)(cid:68)(cid:0)
by the Bank and that such internal financial controls are
adequate and were operating effectively
(cid:115)(cid:0) (cid:55)(cid:69)(cid:0)(cid:72)(cid:65)(cid:86)(cid:69)(cid:0)(cid:68)(cid:69)(cid:86)(cid:73)(cid:83)(cid:69)(cid:68)(cid:0)(cid:80)(cid:82)(cid:79)(cid:80)(cid:69)(cid:82)(cid:0)(cid:83)(cid:89)(cid:83)(cid:84)(cid:69)(cid:77)(cid:83)(cid:0)(cid:84)(cid:79)(cid:0)(cid:69)(cid:78)(cid:83)(cid:85)(cid:82)(cid:69)(cid:0)(cid:67)(cid:79)(cid:77)(cid:80)(cid:76)(cid:73)(cid:65)(cid:78)(cid:67)(cid:69)(cid:0)(cid:87)(cid:73)(cid:84)(cid:72)(cid:0)
the provisions of all applicable laws and that such systems
were adequate and were operating effectively
Auditors
The Auditors, M/s. Deloitte Haskins & Sells, Chartered
Accountants, will retire at the conclusion of the forthcoming
Annual General Meeting and are eligible for re-appointment.
During the year under review, fees paid to the auditors were as
follows:
Fees (including taxes)
Statutory Audit (` 1,90,00,000 plus taxes)
Certification & other services provided as statutory
auditors
Total
` lacs
218.50
39.08
257.58
Members are requested to consider their re-appointment for
financial year 2017-18.
Disclosure under Foreign Exchange Management Act, 1999
The Bank is in compliance with the Foreign Exchange
Management Act, 1999 (FEMA) provisions with respect to
downstream investments made in its subsidiaries. Further,
the Bank has obtained a certificate from its statutory auditors
certifying that the Bank is in compliance with the FEMA
provisions with respect to downstream investments made in its
subsidiaries in the year under review.
Related Party Transactions
Particulars of transactions with related parties referred to
in Section 188 (1), as prescribed in Form AOC-2 under Rule
8 (2) of the Companies (Accounts) Rules, 2014 is enclosed as
ANNEXURE 4.
Particulars of Loans, Guarantees or Investments
Pursuant to Section 186 (11) of the Companies Act, 2013,
the provisions of Section 186 of Companies Act, 2013, except
sub-section (1), do not apply to a loan made, guarantee given or
security provided by a banking company in the ordinary course
of business. Further, in terms of the Companies (Removal of
Difficulties) Order, 2015, nothing in Section 186 except sub
section (1) shall apply to any acquisition made by a banking
company in the ordinary course of business. The particulars
of investments made by the Bank are disclosed in Schedule 8
of the Financial Statements as per the applicable provisions of
Banking Regulation Act, 1949.
Financial Statements of Subsidiaries and Associates
In terms of Section 134 of the Companies Act, 2013 and read
with Rule 8 (1) of the Companies (Accounts) Rules, 2014 the
performance and financial position of the Bank’s subsidiaries
and associates are enclosed as ANNEXURE 5 to this report.
There were no entities which became or ceased to be the
Bank’s subsidiaries, associates or joint ventures during the
year, except Atlas Documentary Facilitators Company Private
Limited and HBL Global Private Limited, associates of the Bank,
which amalgamated with the Bank’s subsidiary HDB Financial
Services Limited, pursuant to the approval of the Honourable
HDFC Bank Limited Annual Report 2016-17
31
Directors' Report
High Court of Gujarat and Bombay with effect from December
1, 2016. The appointed date of the merger as per the scheme of
amalgamation was April 1, 2014.
Whistle Blower Policy/Vigil Mechanism
The Bank has adopted a Whistle Blower Policy pursuant to
which employees of the Bank can raise their concerns relating
to fraud, malpractice or any other activity or event which is
against the interest of the Bank or society as a whole. Details
of complaints received and the action taken are reviewed by
the Audit Committee. The functioning of the Whistle Blower
mechanism is reviewed by the Audit Committee from time to
time. None of the Bank’s personnel have been denied access to
the Audit Committee.
Declaration by Independent Directors
Mrs. Shyamala Gopinath, Mr. Partho Datta, Mr. Bobby Parikh,
Mr. A. N. Roy, Mr. Malay Patel and Mr. Umesh Chandra Sarangi
are Independent Directors on the Board of the Bank as on
March 31, 2017. All the Independent Directors have given
their respective declarations under Section 149 (6) and (7) of
the Companies Act, 2013 and the Rules made thereunder. In
the opinion of the Board, the Independent Directors fulfil the
conditions relating to their status as Independent Directors as
specified in Section 149 of the Companies Act, 2013 and the
Rules made thereunder.
Board Performance Evaluation
The Nomination and Remuneration Committee (NRC) has
approved a framework/policy for evaluation of the Board,
Committees of the Board and the individual members of the
Board. The said framework/policy was duly reviewed during
the year. A questionnaire for the evaluation of the Board and its
Committees, designed in accordance with the said framework
and covering various aspects of the performance of the Board
and its Committees, including composition and quality, roles
and responsibilities, processes and functioning, adherence to
Code of Conduct and Ethics and best practices in Corporate
Governance was sent out to the Directors. The responses
received to the questionnaires on evaluation of the Board and its
Committees were placed before the meeting of the Independent
Directors for consideration. The assessment of the Independent
Directors on the performance of the Board and its Committees
was subsequently discussed by the Board at its meeting.
Your Bank has in place a process wherein declarations are
obtained from the directors regarding fulfilment of the ‘fit and
proper’ criteria in accordance with the guidelines of the Reserve
Bank of India. The declarations from the Directors other than
members of the NRC are placed before the NRC and the
declarations of the members of the NRC are placed before
the Board. Assessment on whether the Directors fulfil the
said criteria is made by the NRC and the Board on an annual
basis. In addition, the framework/policy approved by the NRC
provides for a performance evaluation of the Non-Independent
Directors by the Independent Directors on key personal and
professional attributes and a similar performance evaluation of
the Independent Directors by the Board, excluding the Director
being evaluated. Such performance evaluation has been duly
completed as above.
Policy on Appointment and Remuneration of Directors and
Key Managerial Personnel
The Nomination and Remuneration Committee
(NRC)
recommends the appointment of Directors to the Board.
It identifies persons who are qualified to become Directors on the
Board and evaluates criteria such as academic qualifications,
previous experience, track record and integrity of the persons
identified before recommending their appointment to the Board.
The remuneration of whole time Directors is governed by the
compensation policy of the Bank. The compensation policy of the
Bank, duly reviewed and recommended by the NRC has been
articulated in line with the Reserve Bank of India guidelines.
Your Bank’s compensation policy is aimed to attract, retain,
reward and motivate talented individuals critical for achieving
strategic goals and long term success. Compensation policy
is aligned to business strategy, market dynamics, internal
characteristics and complexities within the Bank. The ultimate
objective is to provide a fair and transparent structure that helps
the Bank to retain and acquire the talent pool critical to building
competitive advantage and brand equity.
Your Bank’s approach is to have a pay for performance culture
based on the belief that the Performance Management System
provides a sound basis for assessing performance holistically.
The compensation system should also take into account factors
like roles, skills/competencies, experience and grade / seniority
to differentiate pay appropriately on the basis of contribution,
skill and availability of talent on account of competitive market
forces. The details of the compensation policy are also included
in Schedule 18 Notes forming part of the Accounts - Note no. 25.
Non-Executive Directors are paid remuneration by way of sitting
fees for attending meetings of the Board and its Committees,
which are determined by the Board based on applicable regulatory
prescriptions. Non-Executive Directors are also reimbursed
expenses incurred by them for attending meetings of the Board
and its Committees at actuals. The remuneration payable to
is
the Non-Executive Directors and
Independent Directors
HDFC Bank Limited Annual Report 2016-17
32
Directors' Report
governed by the provisions of the Banking Regulation Act, 1949,
RBI guidelines issued from time to time and the provisions of
the Companies Act, 2013 and related rules to the extent it is not
inconsistent with the provisions of the Banking Regulation Act, 1949
and RBI guidelines. In terms of the guidelines issued by RBI
for compensation of Non-Executive Directors of private sector
banks dated June 1, 2015 and the approval of shareholders at
the 22nd Annual General Meeting, Non-Executive Directors of
the Bank, other than the Chairperson, are paid profit-related
commission of ` 10,00,000/- (Rupees Ten Lakh only) per annum
for each Non-Executive Director.
Mr. Aditya Puri is the Non-Executive Chairman of HDB Financial
Services Limited, Bank’s subsidiary. Mr. Puri does not receive
any remuneration from the subsidiary. None of the Directors
of your Bank other than Mr. Puri is a director of the Bank’s
subsidiaries as on March 31, 2017.
Significant and Material Orders Passed By Regulators
During the financial year 2016-17, further to the media reports in
October 2015 about irregularities in advance import remittances
in various banks, the Reserve Bank of India (RBI) had conducted
a scrutiny of the transactions carried out by the Bank under
Section 35 (1A) of the Banking Regulation Act, 1949. The RBI
issued a Show Cause notice to which the Bank had submitted
its detailed response. After considering the Bank’s submission,
the RBI imposed a penalty of ` 2 crore on the Bank vide its
letter dated July 19, 2016 on account of pendency in receipt
of bill of entry relating to advance import remittances made
and lapses in adhering to KYC/AML guidelines in this respect.
The penalty has since been paid. The Bank has implemented a
comprehensive corrective action plan, to strengthen its internal
control mechanisms so as to ensure that such incidents do not
recur.
a period of three years commencing from January 2, 2018 till
January 1, 2021 or till such other earlier or later date(s) as may
be approved by Reserve Bank of India, and as subsequently
extended by the Reserve Bank of India from time to time.
During the year, Mr. Srikanth Nadhamuni was appointed
as an Additional Director of the Bank with effect from
September 20, 2016 to hold office till the conclusion of the
ensuing Annual General Meeting. Mr. Nadhamuni has been
appointed as a director having expertise in the field of Information
Technology. In terms of Section 152 of the Companies Act,
2013, it is proposed to appoint Mr. Nadhamuni as a Director of
the Bank at the ensuing Annual General Meeting. The Bank has
received a notice from a member proposing his candidature as
Director of the Bank. Mr. Nadhamuni shall be liable to retire by
rotation.
The brief resume/details regarding the Directors proposed to
be appointed/re-appointed as above are furnished in the report
on Corporate Governance. There have been no changes in the
Directors and Key Managerial Personnel of the Bank other than
the above.
Familiarisation Programme for Independent Directors
The various programmes undertaken
familiarising
Independent Directors with the functions and procedures of the
Bank are disclosed in the Corporate Governance Report.
for
Particulars of Employees
The information in terms of Rule 5 of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014 is
given in ANNEXURE 6 and ANNEXURE 7 to this report.
Conservation of Energy, Technology Absorption, Foreign
Exchange Earnings and Outgo
Directors and Key Managerial Personnel
(A) Conservation of Energy
The Bank proposes to re-appoint Mr. Paresh Sukthankar and
Mr. Kaizad Bharucha as Deputy Managing Director and Executive
Director of the Bank, respectively, for a period of three years
each with effect from June 13, 2017, subject to the approval of
the Reserve Bank of India and the shareholders at the ensuing
Annual General Meeting. In compliance with Section 152 of the
Companies Act, 2013, Mr. Sukthankar and Mr. Bharucha will also
retire by rotation at the ensuing Annual General Meeting and are
eligible for re-appointment. The Bank also proposes to re-appoint
Mrs. Shyamala Gopinath at the ensuing Annual General Meeting
as the Part Time Non-Executive Chairperson of the Bank for
Your Bank has undertaken several initiatives in this area such as
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:41)(cid:78)(cid:83)(cid:84)(cid:65)(cid:76)(cid:76)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0) (cid:79)(cid:70)(cid:0) (cid:71)(cid:82)(cid:69)(cid:69)(cid:78)(cid:0) (cid:76)(cid:79)(cid:67)(cid:75)(cid:83)(cid:0) (cid:65)(cid:78)(cid:68)(cid:0) (cid:33)(cid:35)(cid:0) (cid:67)(cid:79)(cid:78)(cid:84)(cid:82)(cid:79)(cid:76)(cid:76)(cid:69)(cid:82)(cid:83)(cid:0) (cid:73)(cid:78)(cid:0) (cid:65)(cid:73)(cid:82)(cid:0)
conditioning machines in order to save energy and support
go-green initiative
(cid:41)(cid:78)(cid:83)(cid:84)(cid:65)(cid:76)(cid:76)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:79)(cid:70)(cid:0)(cid:69)(cid:78)(cid:69)(cid:82)(cid:71)(cid:89)(cid:0)(cid:67)(cid:65)(cid:80)(cid:65)(cid:67)(cid:73)(cid:84)(cid:79)(cid:82)(cid:83)(cid:0)(cid:65)(cid:84)(cid:0)(cid:72)(cid:73)(cid:71)(cid:72)(cid:0)(cid:67)(cid:79)(cid:78)(cid:83)(cid:85)(cid:77)(cid:80)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:79)(cid:70)(cid:108)(cid:67)(cid:69)(cid:83)(cid:0)
to control the power factor and to reduce energy consumption
(cid:115)(cid:0) (cid:33)(cid:76)(cid:76)(cid:0)(cid:77)(cid:65)(cid:73)(cid:78)(cid:0)(cid:83)(cid:73)(cid:71)(cid:78)(cid:66)(cid:79)(cid:65)(cid:82)(cid:68)(cid:83)(cid:0)(cid:73)(cid:78)(cid:0)(cid:66)(cid:82)(cid:65)(cid:78)(cid:67)(cid:72)(cid:69)(cid:83)(cid:0)(cid:83)(cid:87)(cid:73)(cid:84)(cid:67)(cid:72)(cid:69)(cid:68)(cid:0)(cid:79)(cid:70)(cid:70)(cid:0)(cid:80)(cid:79)(cid:83)(cid:84)(cid:0)(cid:17)(cid:16)(cid:0)(cid:80)(cid:14)(cid:77)(cid:14)
(cid:115)(cid:0) (cid:48)(cid:85)(cid:84)(cid:0)(cid:67)(cid:79)(cid:78)(cid:84)(cid:82)(cid:79)(cid:76)(cid:83)(cid:0)(cid:79)(cid:78)(cid:0)(cid:85)(cid:83)(cid:65)(cid:71)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0)(cid:76)(cid:73)(cid:70)(cid:84)(cid:83)(cid:12)(cid:0)(cid:33)(cid:35)(cid:83)(cid:12)(cid:0)(cid:67)(cid:79)(cid:77)(cid:77)(cid:79)(cid:78)(cid:0)(cid:80)(cid:65)(cid:83)(cid:83)(cid:65)(cid:71)(cid:69)(cid:0)(cid:76)(cid:73)(cid:71)(cid:72)(cid:84)(cid:83)(cid:0)
and other electrical equipment
HDFC Bank Limited Annual Report 2016-17
33
Directors' Report
(B) Technology Absorption
Business Responsibility Report
Your Bank has been at the forefront of using technology
absorption and evaluates innovative technology with multiple
fintech partners. In the year under review, it organised its
2nd ‘Digital Innovation Summit’ and shortlisted several fintech
startups to carry out multiple proof of concepts in both
customer facing and internal processes.
Your Bank uses advanced analytics to create a 360
degree view of all 4.05 crore customers. The analytics
engine uses machine learning to analyze structured and
unstructured data which help in offering relevant product/
recommendations using advanced algorithms.
service
These are delivered via personalized campaigns through an
omni-channel approach. Your Bank has also begun using
robotics and artificial intelligence in digital commerce,
corporate supply chain and payment settlement systems to
reduce time to market and turnaround time.
(C) Foreign Exchange Earnings and Outgo
During the year, the total foreign exchange earned by the
Bank was ` 1,263.4 crore (on account of net gains arising
on all exchange/derivative transactions) and the total foreign
exchange outgo was about ` 221 crore towards the operating
and capital expenditure requirements.
Secretarial Audit
In terms of Section 204 of the Companies Act, 2013 and the
Rules made thereunder, M/s. BNP & Associates, Practising
Company Secretaries have been appointed as Secretarial
Auditors of the Bank for the financial year 2016-17. The report
of the Secretarial Auditors is enclosed as ANNEXURE 8 to this
Report. The observations in the said report are self-explanatory
and no further comments/explanations are called for.
Corporate Governance
In compliance with Regulation 34 and other applicable provisions
of the Securities and Exchange Board of India (Listing Obligations
and Disclosure Requirements) Regulations, 2015, a separate
report on Corporate Governance along with a certificate of
compliance from the Secretarial Auditors, forms an integral part
of this Report.
The Bank’s Business Responsibility Report containing a report
on its Corporate Social Responsibility Activities and Initiatives in
the format adopted by companies in India as per the guidelines
of the Securities and Exchange Board of India in this regard is
available on its web site www.hdfcbank.com
Information under the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act,
2013
The relevant information is included in Section E-Principle 3 of
the Business Responsibility Report for 2016-17.
Acknowledgement
Your Directors would like to place on record their gratitude for
all the guidance and co-operation received from the Reserve
Bank of India and other government and regulatory agencies.
Your Directors would also like to take this opportunity to express
their appreciation for the hard work and dedicated efforts put
in by the Bank’s employees and look forward to their continued
contribution in building a ‘World Class Indian Bank.’
Conclusion
The global economy is facing risks emanating from policy
uncertainty in the US, imminent elections in several European
countries and rising protectionism. The Indian economy seems
better placed. And so is your Bank which is on course to continue
to outgrow the system, as it has in the year under review.
Like in the past, the Bank will continue to leverage its distribution
strength and digital platforms especially in the rural and
semi-urban parts of the country for sustainable growth.
Needless to say, the Bank will continue to focus on its 5 core
values namely Customer Focus, Operational Excellence,
Product Leadership, People and Sustainability. Its commitment
to the highest possible standards of corporate governance
remains unwavering. All of this will help the Bank on its onward
growth journey and help create long-term shareholder value.
On behalf of the Board of Directors
Mrs. Shyamala Gopinath
Chairperson
Mumbai, May 29, 2017
HDFC Bank Limited Annual Report 2016-17
34
Directors' Report
ANNEXURE 1 to the Directors’ Report
The ESOP Schemes of the Bank are in compliance with SEBI (Share Based Employee Benefits) Regulations, 2014 (“the Regulations”)
and the details as per the Regulations are as under:
EMPLOYEES’ STOCK OPTIONS AS ON MARCH 31, 2017
Plan/ Schemes
Date of
Shareholders’
Approval
Total No.
of Options
Approved
Grant
Price
(`)
Number
of Options
Outstanding at
the beginning
of the year
Number
of Options
Granted /
Options
Re-instated
Options
Vested
Number
of Options
Exercised &
Shares Allotted
during the year
Number
of Options
Forfeited
during the
year
Number
of Options
Lapsed
during the
year
Number of
Options in
Force at the
end of the
year
Plan E- ESOS XVI
30th June, 2010 100,000,000
440.16
1,674,000
Plan E- ESOS XVII
30th June, 2010 100,000,000
508.23
111,600
Plan E- ESOS XVIII 30th June, 2010 100,000,000
468.40
12,552,500
Plan E- ESOS XIX
30th June, 2010 100,000,000
680.00
23,512,100
Plan D- ESOS XX
16th June, 2007
75,000,000
680.00
5,133,900
Plan C- ESOS XXI
17th June, 2005
50,000,000
680.00
5,260,800
Plan E- ESOS XXII
30th June, 2010 100,000,000
664.45
-
Plan C- ESOS XXIII 17th June, 2005
50,000,000
835.50
480,000
Plan F- ESOS XXIV 27th June, 2013 100,000,000
835.50
36,442,200
Plan F- ESOS XXV
27th June, 2013 100,000,000 1092.65
43,484,200
Plan F- ESOS XXVI 27th June, 2013 100,000,000 1097.80
3,000
Total
-
-
-
128,654,300
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,674,000
111,600
10,413,000
-
-
-
-
-
-
-
100
2,139,400
8,878,500
10,449,800
86,100
21,000 12,955,200
1,835,400
1,748,800
30,000
20,800
3,334,300
1,719,300
942,400
-
-
-
-
-
-
4,318,400
-
142,200
122,600
24,000
7,400
326,000
11,282,900
7,059,900
651,400
59,000 28,671,900
17,291,600
1,837,100
1,201,000
38,000 40,408,100
1,200
-
-
-
3,000
411,51,100
343,59,200 1,992,500
146,300 92,156,300
Options Exercised during the aforesaid period
Share Capital Money received during the above period (`)
Share Premium Money received during the above period (`)
Perquisite Tax Amount collected during the aforesaid period (`)
Total Amount collected during the aforesaid period (`)
Note:
1. One (1) share of the face value of ` 2/- each would arise on exercise of One (1) Equity Stock Option.
2. No Stock Options were granted during the year 2016-17.
HDFC Bank Limited Annual Report 2016-17
35
34,359,200
68,718,400
22,546,443,173
7,074,356,786
29,689,518,359
Directors' Report
Vesting Requirements
Except for the death / permanent disablement or retirement of the employee, the options will vest only
if the employee is in the continuous employment of the Bank as on the date of vesting
Maximum Term of Options
Provided the employee is in the continuous employment of the Bank, the options vested will lapse
in case the same are not exercised by the employee within 4 years from the date of vesting. Except
in the case of death/ permanent disablement or retirement of the employee, all unvested options get
forfeited on the employee’s last working date in the Bank.
Source of shares
Primary
Variation in terms of ESOS Nil
Diluted Earnings Per Share (EPS) pursuant to the issue of shares
The diluted EPS of the Bank calculated after considering the
on exercise of option calculated in accordance with Accounting
Standard (AS) - 20 (Earnings Per Share)
effect of potential equity shares arising on account of exercise
of options is ` 56.4
Where the company has calculated the employee compensation
Had the Bank followed fair value method for accounting, the
cost using the intrinsic value of the stock options, the difference
between the employee compensation cost so computed and the
employee compensation cost that shall have been recognized
if it had used the fair value of the options, shall be disclosed.
The impact of this difference on profits and on EPS of the company
shall also be disclosed
stock option compensation expense would have been higher
by ` 812.7 crore. Consequently profit after tax would have been
lower by ` 812.7 crore and the basic EPS of the Bank would
have been ` 54.0 per share (lower by ` 3.2 per share) and the
diluted EPS would have been `53.3 per share (lower by ` 3.2
per share)
Weighted average exercise prices and weighted average fair
values of options shall be disclosed separately for options whose
The weighted average price of the stock options exercised is
`658.2 and the weighted average fair value is `235.3
exercise price either equals or exceeds or is less than the market
price of the stock options
Method used and assumptions made to incorporate effects of
The exercise multiple, which is based on historical data of early
expected early exercise
option exercise decisions of the employees, incorporates early
exercise price effect in the valuation of ESOPs. The exercise
multiple indicates that option holders tend to exercise their
options when the share price reaches a particular multiple of
the exercise price.
How expected volatility was determined, including explanation
Stock expected volatility is completely based on GARCH
of the extent to which expected volatility was based on historical
volatility forecasting model using historical stock prices from
volatility
the market.
Whether and how any other features of the option grant were
Stock price and risk free interest rate are variables based on
incorporated into the measurement of fair value, such as a market
actual market data at the time of ESOP valuation.
condition
HDFC Bank Limited Annual Report 2016-17
36
Directors' Report
ANNEXURE 2 to the Directors’ Report
1. Brief outline of the CSR Policy
HDFC Bank Annual CSR Report 2016–2017
HDFC Bank, has worked towards the vision of “Creating Sustainable Communities” through its CSR Programmes. In line with the
requirements of Section 135 of the Companies Act, the Bank has instituted the CSR Policy, duly approved by the Board. HDFC
Bank’s CSR policy outlines the Bank’s mission to contribute to social and economic development of the communities at large.
During the financial year 2016-17, the Bank has undertaken CSR Programmes aligned to the CSR Policy in the below focus
areas -
1. Promoting Education
2. Skill Training and Livelihood Enhancement
3. Health Care
4. Environmental Sustainability
5. Eradicating Poverty
6. Rural Development
The Bank’s CSR Policy can be found on the corporate Website at http://www.hdfcbank.com/assets/pdf/CSR_Policy.pdf
2. Composition of CSR Committee
The Bank has also constituted a Board-level CSR Committee to govern the implementation of the policy. The composition of the
Committee is as follows:
(cid:115)(cid:0) (cid:45)(cid:83)(cid:14)(cid:0)(cid:50)(cid:69)(cid:78)(cid:85)(cid:0)(cid:43)(cid:65)(cid:82)(cid:78)(cid:65)(cid:68)(cid:0)
(cid:0)
(cid:0)
(cid:115)(cid:0) (cid:45)(cid:82)(cid:14)(cid:0)(cid:34)(cid:79)(cid:66)(cid:66)(cid:89)(cid:0)(cid:48)(cid:65)(cid:82)(cid:73)(cid:75)(cid:72)(cid:0)(cid:8)(cid:41)(cid:78)(cid:68)(cid:69)(cid:80)(cid:69)(cid:78)(cid:68)(cid:69)(cid:78)(cid:84)(cid:0)(cid:36)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:9)(cid:0)
(cid:115)(cid:0) (cid:45)(cid:82)(cid:14)(cid:0)(cid:48)(cid:65)(cid:82)(cid:84)(cid:72)(cid:79)(cid:0)(cid:36)(cid:65)(cid:84)(cid:84)(cid:65)(cid:0)(cid:8)(cid:41)(cid:78)(cid:68)(cid:69)(cid:80)(cid:69)(cid:78)(cid:68)(cid:69)(cid:78)(cid:84)(cid:0)(cid:36)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:9)
(cid:115)(cid:0) (cid:45)(cid:82)(cid:14)(cid:0)(cid:53)(cid:0)(cid:35)(cid:0)(cid:51)(cid:65)(cid:82)(cid:65)(cid:78)(cid:71)(cid:73)(cid:0)(cid:8)(cid:41)(cid:78)(cid:68)(cid:69)(cid:80)(cid:69)(cid:78)(cid:68)(cid:69)(cid:78)(cid:84)(cid:0)(cid:36)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:9)(cid:0)
(cid:0)
(cid:0)
(cid:0)
(cid:115)(cid:0) (cid:45)(cid:82)(cid:14)(cid:0)(cid:33)(cid:68)(cid:73)(cid:84)(cid:89)(cid:65)(cid:0)(cid:48)(cid:85)(cid:82)(cid:73)(cid:0)
(cid:0)
(cid:0)
(cid:115)(cid:0) (cid:45)(cid:82)(cid:14)(cid:0)(cid:48)(cid:65)(cid:82)(cid:69)(cid:83)(cid:72)(cid:0)(cid:51)(cid:85)(cid:75)(cid:84)(cid:72)(cid:65)(cid:78)(cid:75)(cid:65)(cid:82)
3. Average net profit of the company for last three financial years
INR 15,200 CR
4. Prescribed CSR Expenditure (two percent of the amount as in item 4 above)
INR 304 CR
5. Details of CSR spent during the financial year
(cid:115)(cid:0) (cid:52)(cid:79)(cid:84)(cid:65)(cid:76)(cid:0)(cid:65)(cid:77)(cid:79)(cid:85)(cid:78)(cid:84)(cid:0)(cid:83)(cid:80)(cid:69)(cid:78)(cid:84)(cid:0)(cid:68)(cid:85)(cid:82)(cid:73)(cid:78)(cid:71)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:108)(cid:78)(cid:65)(cid:78)(cid:67)(cid:73)(cid:65)(cid:76)(cid:0)(cid:89)(cid:69)(cid:65)(cid:82)(cid:0)(cid:26)(cid:0)(cid:41)(cid:46)(cid:50)(cid:0)(cid:0)(cid:19)(cid:16)(cid:21)(cid:14)(cid:20)(cid:18)(cid:0)(cid:35)(cid:50)
(cid:115)(cid:0) (cid:33)(cid:77)(cid:79)(cid:85)(cid:78)(cid:84)(cid:0)(cid:85)(cid:78)(cid:83)(cid:80)(cid:69)(cid:78)(cid:84)(cid:12)(cid:0)(cid:73)(cid:70)(cid:0)(cid:65)(cid:78)(cid:89)(cid:26)(cid:0)(cid:0)(cid:41)(cid:46)(cid:50)(cid:0)(cid:16)(cid:0)(cid:35)(cid:50)
HDFC Bank Limited Annual Report 2016-17
37
Directors' Report
(cid:115)(cid:0) (cid:52)(cid:72)(cid:69)(cid:0)(cid:77)(cid:65)(cid:78)(cid:78)(cid:69)(cid:82)(cid:0)(cid:73)(cid:78)(cid:0)(cid:87)(cid:72)(cid:73)(cid:67)(cid:72)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:65)(cid:77)(cid:79)(cid:85)(cid:78)(cid:84)(cid:0)(cid:73)(cid:83)(cid:0)(cid:83)(cid:80)(cid:69)(cid:78)(cid:84)(cid:0)(cid:68)(cid:85)(cid:82)(cid:73)(cid:78)(cid:71)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:108)(cid:78)(cid:65)(cid:78)(cid:67)(cid:73)(cid:65)(cid:76)(cid:0)(cid:89)(cid:69)(cid:65)(cid:82)(cid:0)(cid:73)(cid:83)(cid:0)(cid:68)(cid:69)(cid:84)(cid:65)(cid:73)(cid:76)(cid:69)(cid:68)(cid:0)(cid:66)(cid:69)(cid:76)(cid:79)(cid:87)
Sr.
no
CSR project /
Activity
Sector
(Schedule VII)
Projects or
programs
1. Local area or
Amount outlay
(project-wise)
(INR Cr)
Promoting Education
Promotion of Education
others
2. State and district
Pan India
Skill Training and Livelihood
Enhancement
Skill development and
Vocational Training
Health Care
Preventive and Curative
Healthcare
Environmental Sustainability Environment
Pan India
Pan India
Pan India
Eradicating Poverty
Eradicating poverty
Pan India
25.48
30.41
23.56
1.01
4.46
Rural Development
Rural Development
Projects
Pan India
220.50
1
2
3
4
5
6
Amount spent
(INR Cr)
1.Direct
expenditure
2.Overheads
7.10
0.37
1.
2.
1.
2.
1.
2.
18.03
0.37
23.19
0.37
1.
2.
1.01
0.00
1.
2.
0.00
0.00
1.
2.
126.71
0.37
Cumulative
expenditure
up to reporting
period (INR Cr)*
Amount spent:
Direct or through
*implementing
agency (INR Cr)
58.63
60.93
39.10
2.68
6.82
441.95
Implementing
Agency - 18.01
Implementing
Agency - 12.01
Direct
Direct
Implementing
Agency - 4.46
Implementing
Agency - 93.42
*Details of the implementing agencies are listed below:
Promotion of Education(cid:26)(cid:0) (cid:34)(cid:79)(cid:68)(cid:72)(cid:0) (cid:51)(cid:72)(cid:73)(cid:75)(cid:83)(cid:72)(cid:65)(cid:0) (cid:51)(cid:65)(cid:77)(cid:73)(cid:84)(cid:73)(cid:12)(cid:0) (cid:35)(cid:72)(cid:65)(cid:84)(cid:85)(cid:82)(cid:65)(cid:78)(cid:71)(cid:0) (cid:48)(cid:82)(cid:65)(cid:84)(cid:73)(cid:83)(cid:84)(cid:72)(cid:65)(cid:78)(cid:12)(cid:0) (cid:38)(cid:82)(cid:73)(cid:69)(cid:78)(cid:68)(cid:83)(cid:0) (cid:53)(cid:78)(cid:73)(cid:79)(cid:78)(cid:0) (cid:70)(cid:79)(cid:82)(cid:0) (cid:37)(cid:78)(cid:69)(cid:82)(cid:71)(cid:73)(cid:90)(cid:73)(cid:78)(cid:71)(cid:0) (cid:44)(cid:73)(cid:86)(cid:69)(cid:83)(cid:12)(cid:0) (cid:41)(cid:83)(cid:72)(cid:65)(cid:0) (cid:37)(cid:68)(cid:85)(cid:67)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:12)(cid:0)
(cid:43)(cid:65)(cid:84)(cid:72)(cid:65)(cid:12)(cid:0)(cid:45)(cid:65)(cid:71)(cid:73)(cid:67)(cid:0)(cid:34)(cid:85)(cid:83)(cid:0)(cid:41)(cid:78)(cid:68)(cid:73)(cid:65)(cid:0)(cid:38)(cid:79)(cid:85)(cid:78)(cid:68)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:12)(cid:0)(cid:45)(cid:69)(cid:76)(cid:74)(cid:79)(cid:76)(cid:12)(cid:0)(cid:45)(cid:79)(cid:73)(cid:78)(cid:69)(cid:69)(cid:0)(cid:38)(cid:79)(cid:85)(cid:78)(cid:68)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:12)(cid:0)(cid:46)(cid:73)(cid:83)(cid:86)(cid:65)(cid:82)(cid:84)(cid:72)(cid:65)(cid:0)(cid:38)(cid:79)(cid:85)(cid:78)(cid:68)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:12)(cid:0)(cid:48)(cid:82)(cid:65)(cid:84)(cid:72)(cid:65)(cid:77)(cid:0)(cid:37)(cid:68)(cid:85)(cid:67)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:38)(cid:79)(cid:85)(cid:78)(cid:68)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:12)(cid:0)(cid:51)(cid:79)(cid:67)(cid:73)(cid:69)(cid:84)(cid:89)(cid:0)(cid:70)(cid:79)(cid:82)(cid:0)
(cid:33)(cid:67)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:73)(cid:78)(cid:0)(cid:35)(cid:79)(cid:77)(cid:77)(cid:85)(cid:78)(cid:73)(cid:84)(cid:89)(cid:0)(cid:40)(cid:69)(cid:65)(cid:76)(cid:84)(cid:72)(cid:12)(cid:0)(cid:51)(cid:82)(cid:73)(cid:0)(cid:33)(cid:85)(cid:82)(cid:79)(cid:66)(cid:73)(cid:78)(cid:68)(cid:79)(cid:0)(cid:51)(cid:79)(cid:67)(cid:73)(cid:69)(cid:84)(cid:89)(cid:12)(cid:0)(cid:51)(cid:82)(cid:73)(cid:0)(cid:51)(cid:65)(cid:84)(cid:72)(cid:89)(cid:65)(cid:0)(cid:51)(cid:65)(cid:73)(cid:0)(cid:52)(cid:82)(cid:85)(cid:83)(cid:84)(cid:12)(cid:0)(cid:52)(cid:69)(cid:65)(cid:67)(cid:72)(cid:0)(cid:52)(cid:79)(cid:0)(cid:44)(cid:69)(cid:65)(cid:68)(cid:12)(cid:0)(cid:57)(cid:85)(cid:86)(cid:65)(cid:0)(cid:53)(cid:78)(cid:83)(cid:84)(cid:79)(cid:80)(cid:80)(cid:65)(cid:66)(cid:76)(cid:69)(cid:27)(cid:0)Rural Development :
(cid:33)(cid:67)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:38)(cid:79)(cid:82)(cid:0)(cid:38)(cid:79)(cid:79)(cid:68)(cid:0)(cid:48)(cid:82)(cid:79)(cid:68)(cid:85)(cid:67)(cid:84)(cid:73)(cid:79)(cid:78)(cid:12)(cid:0)(cid:33)(cid:71)(cid:65)(cid:0)(cid:43)(cid:72)(cid:65)(cid:78)(cid:0)(cid:50)(cid:85)(cid:82)(cid:65)(cid:76)(cid:0)(cid:51)(cid:85)(cid:80)(cid:80)(cid:79)(cid:82)(cid:84)(cid:0)(cid:48)(cid:82)(cid:79)(cid:71)(cid:82)(cid:65)(cid:77)(cid:77)(cid:69)(cid:0)(cid:8)(cid:41)(cid:78)(cid:68)(cid:73)(cid:65)(cid:9)(cid:12)(cid:0)(cid:33)(cid:82)(cid:79)(cid:72)(cid:0)(cid:38)(cid:79)(cid:85)(cid:78)(cid:68)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:12)(cid:0)(cid:33)(cid:83)(cid:72)(cid:87)(cid:65)(cid:77)(cid:69)(cid:71)(cid:72)(cid:0)(cid:39)(cid:82)(cid:65)(cid:77)(cid:73)(cid:78)(cid:0)(cid:48)(cid:65)(cid:78)(cid:76)(cid:79)(cid:84)(cid:0)(cid:43)(cid:83)(cid:72)(cid:69)(cid:84)(cid:82)(cid:65)(cid:0)
Vikas Va Shaikshanik Sanstha, BAIF Development Research Foundation, Community Advancement & Rural Development
(cid:51)(cid:79)(cid:67)(cid:73)(cid:69)(cid:84)(cid:89)(cid:12)(cid:0)(cid:38)(cid:56)(cid:34)(cid:0)(cid:41)(cid:78)(cid:68)(cid:73)(cid:65)(cid:0)(cid:51)(cid:85)(cid:82)(cid:65)(cid:75)(cid:83)(cid:72)(cid:65)(cid:12)(cid:0)(cid:39)(cid:82)(cid:65)(cid:77)(cid:0)(cid:53)(cid:78)(cid:78)(cid:65)(cid:84)(cid:73)(cid:0)(cid:38)(cid:79)(cid:85)(cid:78)(cid:68)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:12)(cid:0)(cid:40)(cid:73)(cid:84)(cid:69)(cid:83)(cid:72)(cid:73)(cid:0)(cid:51)(cid:65)(cid:77)(cid:65)(cid:74)(cid:0)(cid:51)(cid:69)(cid:86)(cid:65)(cid:0)(cid:51)(cid:65)(cid:78)(cid:83)(cid:84)(cid:72)(cid:65)(cid:12)(cid:0)(cid:41)(cid:78)(cid:84)(cid:69)(cid:71)(cid:82)(cid:65)(cid:84)(cid:69)(cid:68)(cid:0)(cid:36)(cid:69)(cid:86)(cid:69)(cid:76)(cid:79)(cid:80)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:38)(cid:79)(cid:85)(cid:78)(cid:68)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:12)(cid:43)(cid:39)(cid:54)(cid:43)(cid:12)(cid:0)
(cid:43)(cid:82)(cid:85)(cid:83)(cid:72)(cid:73)(cid:0)(cid:54)(cid:73)(cid:75)(cid:65)(cid:83)(cid:0)(cid:54)(cid:65)(cid:0)(cid:39)(cid:82)(cid:65)(cid:77)(cid:73)(cid:78)(cid:0)(cid:48)(cid:82)(cid:65)(cid:83)(cid:72)(cid:73)(cid:75)(cid:83)(cid:72)(cid:65)(cid:78)(cid:0)(cid:51)(cid:65)(cid:78)(cid:83)(cid:84)(cid:72)(cid:65)(cid:12)(cid:0)(cid:45)(cid:57)(cid:50)(cid:33)(cid:36)(cid:33)(cid:12)(cid:0)(cid:46)(cid:65)(cid:86)(cid:0)(cid:34)(cid:72)(cid:65)(cid:82)(cid:65)(cid:84)(cid:0)(cid:42)(cid:65)(cid:71)(cid:82)(cid:73)(cid:84)(cid:73)(cid:0)(cid:43)(cid:69)(cid:78)(cid:68)(cid:82)(cid:65)(cid:12)(cid:0)(cid:46)(cid:65)(cid:86)(cid:82)(cid:65)(cid:67)(cid:72)(cid:78)(cid:65)(cid:0)(cid:45)(cid:65)(cid:72)(cid:73)(cid:76)(cid:65)(cid:0)(cid:54)(cid:73)(cid:75)(cid:65)(cid:83)(cid:0)(cid:52)(cid:82)(cid:85)(cid:83)(cid:84)(cid:12)(cid:0)(cid:48)(cid:65)(cid:82)(cid:84)(cid:73)(cid:67)(cid:73)(cid:80)(cid:65)(cid:84)(cid:79)(cid:82)(cid:89)(cid:0)
Action for Community Empowerment, Peoples Action for National Integration, Professional Assistance for Development Action,
(cid:51)(cid:65)(cid:72)(cid:66)(cid:65)(cid:71)(cid:73)(cid:0)(cid:51)(cid:72)(cid:73)(cid:75)(cid:83)(cid:72)(cid:65)(cid:78)(cid:0)(cid:43)(cid:69)(cid:78)(cid:68)(cid:82)(cid:65)(cid:12)(cid:0)(cid:51)(cid:65)(cid:78)(cid:74)(cid:69)(cid:69)(cid:86)(cid:65)(cid:78)(cid:73)(cid:0)(cid:41)(cid:78)(cid:83)(cid:84)(cid:73)(cid:84)(cid:85)(cid:84)(cid:69)(cid:0)(cid:70)(cid:79)(cid:82)(cid:0)(cid:37)(cid:77)(cid:80)(cid:79)(cid:87)(cid:69)(cid:82)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:6)(cid:0)(cid:36)(cid:69)(cid:86)(cid:69)(cid:76)(cid:79)(cid:80)(cid:77)(cid:69)(cid:78)(cid:84)(cid:12)(cid:0)(cid:51)(cid:72)(cid:65)(cid:82)(cid:69)(cid:0)(cid:51)(cid:79)(cid:67)(cid:73)(cid:69)(cid:84)(cid:89)(cid:0)(cid:84)(cid:79)(cid:0)(cid:40)(cid:69)(cid:65)(cid:76)(cid:0)(cid:33)(cid:73)(cid:68)(cid:0)(cid:50)(cid:69)(cid:83)(cid:84)(cid:79)(cid:82)(cid:69)(cid:0)(cid:37)(cid:68)(cid:85)(cid:67)(cid:65)(cid:84)(cid:69)(cid:12)(cid:0)
Shikhar Yuva Manch, Shramik Bharti, Society for Action in Community Health, Vikalp, Watershed Organisation Trust, Yuva Rural
(cid:33)(cid:83)(cid:83)(cid:79)(cid:67)(cid:73)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:12)(cid:0)(cid:33)(cid:71)(cid:82)(cid:65)(cid:83)(cid:65)(cid:82)(cid:12)(cid:0)(cid:57)(cid:85)(cid:86)(cid:65)(cid:0)(cid:53)(cid:78)(cid:83)(cid:84)(cid:79)(cid:80)(cid:80)(cid:65)(cid:66)(cid:76)(cid:69)(cid:12)(cid:0)(cid:51)(cid:72)(cid:65)(cid:75)(cid:84)(cid:73)(cid:83)(cid:72)(cid:65)(cid:76)(cid:73)(cid:0)(cid:45)(cid:65)(cid:72)(cid:73)(cid:76)(cid:65)(cid:0)(cid:51)(cid:65)(cid:78)(cid:71)(cid:84)(cid:72)(cid:65)(cid:78)(cid:0)(cid:51)(cid:65)(cid:77)(cid:73)(cid:84)(cid:73)(cid:12)(cid:0)(cid:54)(cid:79)(cid:76)(cid:85)(cid:78)(cid:84)(cid:65)(cid:82)(cid:89)(cid:0)(cid:33)(cid:83)(cid:83)(cid:79)(cid:67)(cid:73)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:70)(cid:79)(cid:82)(cid:0)(cid:48)(cid:69)(cid:79)(cid:80)(cid:76)(cid:69)(cid:0)(cid:51)(cid:69)(cid:82)(cid:86)(cid:73)(cid:67)(cid:69)(cid:12)(cid:0)(cid:43)(cid:65)(cid:76)(cid:80)(cid:84)(cid:65)(cid:82)(cid:85)(cid:0)
(cid:54)(cid:73)(cid:75)(cid:65)(cid:83)(cid:0)(cid:51)(cid:65)(cid:77)(cid:73)(cid:84)(cid:73)(cid:12)(cid:0)(cid:41)(cid:78)(cid:68)(cid:79)(cid:0)(cid:39)(cid:76)(cid:79)(cid:66)(cid:65)(cid:76)(cid:0)(cid:51)(cid:79)(cid:67)(cid:73)(cid:65)(cid:76)(cid:0)(cid:51)(cid:69)(cid:82)(cid:86)(cid:73)(cid:67)(cid:69)(cid:0)(cid:51)(cid:79)(cid:67)(cid:73)(cid:69)(cid:84)(cid:89)(cid:12)(cid:0)(cid:33)(cid:82)(cid:79)(cid:72)(cid:0)(cid:38)(cid:79)(cid:85)(cid:78)(cid:68)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:12)(cid:0)(cid:35)(cid:79)(cid:77)(cid:77)(cid:85)(cid:78)(cid:73)(cid:84)(cid:89)(cid:0)(cid:33)(cid:68)(cid:86)(cid:65)(cid:78)(cid:67)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:6)(cid:0)(cid:50)(cid:85)(cid:82)(cid:65)(cid:76)(cid:0)(cid:36)(cid:69)(cid:86)(cid:69)(cid:76)(cid:79)(cid:80)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:51)(cid:79)(cid:67)(cid:73)(cid:69)(cid:84)(cid:89)(cid:12)(cid:0)(cid:51)(cid:33)(cid:43)(cid:51)(cid:40)(cid:41)(cid:27)(cid:0)
Skills Training & Livelihood Enhancement(cid:26)(cid:0)(cid:33)(cid:82)(cid:79)(cid:72)(cid:0)(cid:38)(cid:79)(cid:85)(cid:78)(cid:68)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:12)(cid:0)(cid:36)(cid:82)(cid:0)(cid:45)(cid:0)(cid:44)(cid:0)(cid:36)(cid:72)(cid:65)(cid:87)(cid:65)(cid:76)(cid:69)(cid:0)(cid:45)(cid:69)(cid:77)(cid:79)(cid:82)(cid:73)(cid:65)(cid:76)(cid:0)(cid:52)(cid:82)(cid:85)(cid:83)(cid:84)(cid:12)(cid:0)(cid:38)(cid:82)(cid:73)(cid:69)(cid:78)(cid:68)(cid:83)(cid:0)(cid:53)(cid:78)(cid:73)(cid:79)(cid:78)(cid:0)(cid:70)(cid:79)(cid:82)(cid:0)(cid:37)(cid:78)(cid:69)(cid:82)(cid:71)(cid:73)(cid:90)(cid:73)(cid:78)(cid:71)(cid:0)
Lives, FXB India Suraksha, Indo Global Social Service Society, Navrachna MahilaVikas Trust, Pune City Connect Development
(cid:38)(cid:79)(cid:85)(cid:78)(cid:68)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:12)(cid:0)(cid:51)(cid:65)(cid:77)(cid:86)(cid:69)(cid:68)(cid:78)(cid:65)(cid:0)(cid:36)(cid:69)(cid:86)(cid:69)(cid:76)(cid:79)(cid:80)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:51)(cid:79)(cid:67)(cid:73)(cid:69)(cid:84)(cid:89)(cid:12)(cid:0)(cid:51)(cid:39)(cid:34)(cid:51)(cid:0)(cid:53)(cid:78)(cid:78)(cid:65)(cid:84)(cid:73)(cid:0)(cid:38)(cid:79)(cid:85)(cid:78)(cid:68)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:12)(cid:0)(cid:51)(cid:41)(cid:38)(cid:37)(cid:0)(cid:41)(cid:78)(cid:68)(cid:73)(cid:65)(cid:12)(cid:0)(cid:52)(cid:65)(cid:84)(cid:65)(cid:0)(cid:41)(cid:78)(cid:83)(cid:84)(cid:73)(cid:84)(cid:85)(cid:84)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0)(cid:51)(cid:79)(cid:67)(cid:73)(cid:65)(cid:76)(cid:0)(cid:51)(cid:67)(cid:73)(cid:69)(cid:78)(cid:67)(cid:69)(cid:83)(cid:12)(cid:0)(cid:52)(cid:72)(cid:69)(cid:0)(cid:44)(cid:69)(cid:80)(cid:82)(cid:79)(cid:83)(cid:89)(cid:0)
(cid:45)(cid:73)(cid:83)(cid:83)(cid:73)(cid:79)(cid:78)(cid:0)(cid:52)(cid:82)(cid:85)(cid:83)(cid:84)(cid:0) (cid:41)(cid:78)(cid:68)(cid:73)(cid:65)(cid:12)(cid:0)(cid:54)(cid:79)(cid:76)(cid:85)(cid:78)(cid:84)(cid:65)(cid:82)(cid:89)(cid:0) (cid:33)(cid:83)(cid:83)(cid:79)(cid:67)(cid:73)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0) (cid:70)(cid:79)(cid:82)(cid:0) (cid:48)(cid:69)(cid:79)(cid:80)(cid:76)(cid:69)(cid:0) (cid:51)(cid:69)(cid:82)(cid:86)(cid:73)(cid:67)(cid:69)(cid:27)(cid:0) Other Donations under different projects(cid:26)(cid:0) (cid:34)(cid:72)(cid:65)(cid:74)(cid:65)(cid:78)(cid:68)(cid:65)(cid:83)(cid:0) (cid:34)(cid:65)(cid:74)(cid:65)(cid:74)(cid:0)
Foundation, Chetana Foundation, GiveIndia, Helpage India, Commissioner of Municipal Administration
6. In case company has failed to spend the two percent of the average net profit for the last three financial years or any
part thereof, the reasons for not spending the amount.
NA
7. A responsibility statement of CSR committee:
(cid:0) (cid:47)(cid:85)(cid:82)(cid:0)(cid:35)(cid:51)(cid:50)(cid:0)(cid:65)(cid:67)(cid:84)(cid:73)(cid:86)(cid:73)(cid:84)(cid:73)(cid:69)(cid:83)(cid:0)(cid:65)(cid:82)(cid:69)(cid:0)(cid:71)(cid:85)(cid:73)(cid:68)(cid:69)(cid:68)(cid:0)(cid:66)(cid:89)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:86)(cid:73)(cid:83)(cid:73)(cid:79)(cid:78)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:79)(cid:66)(cid:74)(cid:69)(cid:67)(cid:84)(cid:73)(cid:86)(cid:69)(cid:83)(cid:0)(cid:65)(cid:83)(cid:0)(cid:80)(cid:82)(cid:79)(cid:86)(cid:73)(cid:68)(cid:69)(cid:68)(cid:0)(cid:73)(cid:78)(cid:0)(cid:79)(cid:85)(cid:82)(cid:0)(cid:35)(cid:51)(cid:50)(cid:0)(cid:48)(cid:79)(cid:76)(cid:73)(cid:67)(cid:89)(cid:14)(cid:0)(cid:55)(cid:69)(cid:0)(cid:72)(cid:65)(cid:86)(cid:69)(cid:0)(cid:65)(cid:76)(cid:83)(cid:79)(cid:0)(cid:80)(cid:85)(cid:84)(cid:0)(cid:73)(cid:78)(cid:0)(cid:80)(cid:76)(cid:65)(cid:67)(cid:69)(cid:0)(cid:65)(cid:0)(cid:82)(cid:79)(cid:66)(cid:85)(cid:83)(cid:84)(cid:0)
monitoring and reporting mechanism to ensure effective implementation of our CSR activities, in line with the requirements of
Companies Act 2013.
(cid:0) (cid:33)(cid:0)(cid:68)(cid:69)(cid:84)(cid:65)(cid:73)(cid:76)(cid:69)(cid:68)(cid:0)(cid:68)(cid:69)(cid:83)(cid:67)(cid:82)(cid:73)(cid:80)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:79)(cid:70)(cid:0)(cid:79)(cid:85)(cid:82)(cid:0)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:84)(cid:0)(cid:80)(cid:82)(cid:79)(cid:74)(cid:69)(cid:67)(cid:84)(cid:83)(cid:0)(cid:73)(cid:83)(cid:0)(cid:73)(cid:78)(cid:67)(cid:76)(cid:85)(cid:68)(cid:69)(cid:68)(cid:0)(cid:73)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:36)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:83)(cid:7)(cid:0)(cid:82)(cid:69)(cid:80)(cid:79)(cid:82)(cid:84)(cid:14)
(cid:0)
(cid:45)(cid:82)(cid:14)(cid:0)(cid:33)(cid:68)(cid:73)(cid:84)(cid:89)(cid:65)(cid:0)(cid:48)(cid:85)(cid:82)(cid:73)(cid:0)
Managing Director
Date: April 13, 2017
(cid:0)
(cid:0)
(cid:0)
(cid:0)
(cid:45)(cid:82)(cid:83)(cid:14)(cid:0)(cid:50)(cid:69)(cid:78)(cid:85)(cid:0)(cid:43)(cid:65)(cid:82)(cid:78)(cid:65)(cid:68)
Chairperson, CSR Committee
HDFC Bank Limited Annual Report 2016-17
38
Directors' Report
ANNEXURE 3 to the Directors’ Report
Form No. MGT-9
Extract of the Annual Return as on the financial year ended March 31, 2017
[Pursuant to section 92(3) of the Companies Act, 2013 and Rule 12(1) of the
Companies (Management and Administration) Rules, 2014]
I. REGISTRATION AND OTHER DETAILS:
i. CIN: L65920MH1994PLC080618
ii. Registration Date: August 30, 1994
iii. Name of the Company: HDFC Bank Limited
iv. Category / Sub-category of the Company: Company limited by shares / Indian Non-Government Company
v. Address of the Registered office and contact details:
HDFC Bank Limited
HDFC Bank House, Senapati Bapat Marg, Lower Parel, Mumbai - 400 013. Tel: 022 2498 8484
vi. Whether listed: Yes
vii. Name, Address and contact details of Registrar and Transfer Agent:
Datamatics Financial Services Limited
Plot no. B 5, Part B, Cross Lane, MIDC, Marol, Andheri East, Mumbai - 400 093
Tel: 022-66712213/14, Email: hdinvestors@dfssl.com
II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY:
All the business activities contributing 10 per cent or more of the total turnover of the Company shall be stated:
Name and Description of the main products / services
NIC Code
Per cent to Total Turnover of the Bank
Banking and Financial Services
64191
100 per cent
III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES:
Name and Address of the Company
CIN/ GLN
Sr.
no.
Holding / Subsidiary
/ Associate
Percentage of
shares held
Applicable section
1 HDB Financial Services Limited
(cid:53)(cid:22)(cid:21)(cid:25)(cid:25)(cid:19)(cid:39)(cid:42)(cid:18)(cid:16)(cid:16)(cid:23)(cid:48)(cid:44)(cid:35)(cid:16)(cid:21)(cid:17)(cid:16)(cid:18)(cid:24)
Subsidiary
96.20
Radhika, 2nd Floor, Law Garden Road,
Navrangpura, Ahmedabad - 380 009.
2 HDFC Securities Limited
(cid:53)(cid:22)(cid:23)(cid:17)(cid:18)(cid:16)(cid:45)(cid:40)(cid:18)(cid:16)(cid:16)(cid:16)(cid:48)(cid:44)(cid:35)(cid:17)(cid:21)(cid:18)(cid:17)(cid:25)(cid:19)
Subsidiary
97.91
I Think, Techno Campus, Building-B,
“Alpha” office, 8th Floor, opposite
(cid:35)(cid:82)(cid:79)(cid:77)(cid:80)(cid:84)(cid:79)(cid:78)(cid:0)(cid:39)(cid:82)(cid:69)(cid:65)(cid:86)(cid:69)(cid:83)(cid:12)(cid:0)(cid:43)(cid:65)(cid:78)(cid:74)(cid:85)(cid:82)(cid:77)(cid:65)(cid:82)(cid:71)(cid:0)(cid:8)(cid:37)(cid:65)(cid:83)(cid:84)(cid:9)(cid:12)(cid:0)
Mumbai - 400 042.
3
International Asset Reconstruction
Company Private Limited
709, 7th Floor, Ansal Bhavan,
(cid:17)(cid:22)(cid:12)(cid:0)(cid:43)(cid:65)(cid:83)(cid:84)(cid:85)(cid:82)(cid:66)(cid:65)(cid:0)(cid:39)(cid:65)(cid:78)(cid:68)(cid:72)(cid:73)(cid:0)(cid:45)(cid:65)(cid:82)(cid:71)(cid:12)(cid:0)
New Delhi - 110 001
(cid:53)(cid:23)(cid:20)(cid:25)(cid:25)(cid:25)(cid:36)(cid:44)(cid:18)(cid:16)(cid:16)(cid:18)(cid:48)(cid:52)(cid:35)(cid:17)(cid:17)(cid:23)(cid:19)(cid:21)(cid:23)
Associate
29.41
Sec 2(87) of
Companies Act,
2013
Sec 2(87) of
Companies Act,
2013
Sec 2(6) of
Companies Act,
2013
Note: Atlas Documentary Facilitators Company Private Limited and HBL Global Private Limited ceased to be associates of the
Bank consequent to their amalgamation with HDB Financial Services Limited, with effect from December 1, 2016.
HDFC Bank Limited Annual Report 2016-17
39
Directors' Report
IV. SHAREHOLDING PATTERN: (EQUITY SHARE CAPITAL BREAKUP AS PERCENTAGE OF TOTAL EQUITY)
(i) Category-wise Share Holding
Category
code
Category of shareholder
No. of Shares held at the beginning of the year
No. of Shares held at the end of the year
(II)
Demat
Physical
Total
Percentage of
total shares
Demat
Physical
Total
Percentage of
total shares
Promoters
Indian
Individuals/HUF
Central Government
State Government(s)
0
0
0
Bodies Corporate (#)
543,216,100
Banks / FI
Any Other (specify)
0
0
Sub Total (A)(1)
543,216,100
0
0
0
0
0
0
0
543,216,100
(f)
Any Other (specify)
Foreign
NRIs - Individuals
Other - Individuals
Bodies Corporate
Banks / FI
Qualified Foreign
Investor
Sub Total (A)(2)
Total Shareholding of
Promoter and Promoter
Group (A)=(A)(1)+(A)(2)
Public shareholding
Institutions
Mutual Funds
Banks / FI
Central Government
State Government(s)
Venture Capital Funds
(I)
(A)
1
(a)
(b)
(c)
(d)
(e)
(f)
2
(a)
(b)
(c)
(d)
(e)
(B)
1
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0.00
0.00
0.00
0
0
0
543,216,100
21.49
543,216,100
0
0
0.00
0.00
0
0
543,216,100
21.49
543,216,100
0
0
0
0
0
0
0
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0
0
0
0
0
0
0
543,216,100
21.49
543,216,100
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
543,216,100
0
0
543,216,100
0
0
0
0
0
0
0
543,216,100
211,659,875
33,185
211,693,060
8.37
206,150,669
33,185
206,183,854
2,822,510
2,676,950
0
0
17,390
2,839,900
0
0
0
0
2,676,950
0
0
68,146,983
0.11
0.11
0.00
0.00
2.70
2,308,514
2,767,437
0
0
61,511,040
17,390
2,325,904
0
0
0
0
2,767,437
0
0
61,511,040
Insurance Companies
68,146,983
FIIs
814,448,518
15,170
814,463,688
32.22
880,321,745
15,170
880,336,915
Foreign Venture Capital
Funds
Qualified Foreign
Investor
Alternate Investment
Funds
(k)
Other (specify)
0
0
0
0
0
0
0
0
0
0
0
0
0.00
0.00
0
0
0.00
313,796
0.00
0
0
0
0
0
0
0
313,796
0
Sub Total (B)(1)
1,099,754,836
65,745 1,099,820,581
43.50 1,153,373,201
65,745 1,153,438,946
HDFC Bank Limited Annual Report 2016-17
40
Percentage
Change during
the year
0.00
0.00
0.00
21.20
0.00
0.00
21.20
0.00
0.00
0.00
0.00
0.00
0.00
0.00
21.20
8.05
0.09
0.11
0.00
0.00
2.40
34.35
0.00
0.00
0.01
0.00
45.01
0.00
0.00
0.00
(0.29)
0.00
0.00
(0.29)
0.00
0.00
0.00
0.00
0.00
0.00
0.00
(0.29)
(0.33)
(0.02)
0.00
0.00
0.00
(0.30)
2.14
0.00
0.00
0.01
0.00
1.51
Directors' Report
Category
code
(I)
2
(a)
(a)(i)
(a)(ii)
(b)
(b)(i)
(b)(ii)
(c)
(d)
d-i
d-ii
d-iii
d-iv
Non-institutions
Bodies Corporate
Indian
Overseas
Individuals
Individual shareholders
holding nominal share
capital up to ` 1 Lakh
Individual shareholders
holding nominal share
capital in excess of
` 1 Lakh
Qualified Foreign
Investor
Other (specify)
NRI Rep
NRI Non -Rept
Foreign Bodies
Foreign National
Sub Total (B)(2)
Total Public
Shareholding (B) = (B)
(1)+(B)(2)
(C)
Custodians for GDRs
and ADRs
GRAND TOTAL
(A)+(B)+(C)
Category of shareholder
No. of Shares held at the beginning of the year
No. of Shares held at the end of the year
(II)
Demat
Physical
Total
Percentage of
total shares
Demat
Physical
Total
Percentage of
total shares
Percentage
Change during
the year
0
0
0
185,438,125
183,245
185,621,370
1,248
0
10,075
11,323
0
0
146,520,140
17,200,720
163,720,860
0.00
7.34
0.00
0.00
6.48
0
0
0
165,798,090
181,005
165,979,095
1,248
0
10,075
11,323
0
0
147,394,271
16,210,855
163,605,126
0.00
6.48
0.00
0.00
6.38
0.00
(0.86)
0.00
0.00
(0.09)
55,330,724
191,000
55,521,724
2.20
56,969,465
191,000
57,160,465
2.23
0.03
0
0
2,360,398
4,833,762
31,000
1,505
0
0
41,720
2,765
0
0
0
0
2,402,118
4,836,527
31,000
1,505
0.00
0.00
0.10
0.19
0.00
0.00
0
0
2,308,878
3,756,747
21,000
1,068
0
0
41,295
2,265
0
0
0
0
2,350,173
3,759,012
21,000
1,068
394,516,902
17,629,525
412,146,427
16.30
376,250,767
16,636,495
392,887,262
1,494,271,738
17,695,270 1,511,967,008
59.80 1,529,623,968
16,702,240 1,546,326,208
0.00
0.00
0.09
0.15
0.00
0.00
15.33
60.34
81.54
18.46
0.00
0.00
0.00
(0.04)
0.00
0.00
(0.97)
0.54
0.25
(0.25)
Total (A+B)
2,037,487,838
17,695,270 2,055,183,108
81.29 2,072,840,068
16,702,240 2,089,542,308
473,003,409
0
473,003,409
18.71
473,003,409
0
473,003,409
2,510,491,247
17,695,270 2,528,186,517
100.00 2,545,843,477
16,702,240 2,562,545,717
100.00
0.00
# Promoters are Indian Companies incorporated under the Indian Companies Act 1956 and are controlled by Indian management. Foreign
shareholding in the principal promoter company exceeds 51 per cent of their paid up share capital and accordingly the shareholding of the
company in the Bank may be deemed as indirect foreign shareholding in terms of the extant FDI Policy. The Bank has made a representation
to the Ministry of Finance stating that the shareholding of the Indian Promoters should not be treated as foreign shareholding. Confirmation
is awaited from the Ministry of Finance in this regard.
(ii) Shareholding of Promoters
Sr.
No.
Shareholder’s Name
Shareholding at the beginning of the year
Shareholding at the end of the year
No.of
Shares
Percentage
of total
Shares of the
company
Percentage of
Shares
Pledged /
encumbered to
total shares
No.of
Shares
Percentage of
total
Shares of the
company
Percentage of
Shares
Pledged /
encumbered to
total shares
Percentage
change in
shareholding
during the
year**
1 Housing Development Finance
Corporation Ltd
393,211,100
15.55
2 HDFC Investments Ltd
3 HDFC Holdings Ltd
150,000,000
5,000
5.93
0
Total
543,216,100
21.49
0
0
0
0
393,211,100
15.35
150,000,000
5,000
5.85
0
543,216,100
21.20
0
0
0
0
0
0
0
0
HDFC Bank Limited Annual Report 2016-17
41
Directors' Report
(iii) Change in Promoters’ Shareholding:
Shareholder’s Name
Shareholding at the beginning of the year
Cumulative Shareholding during the year
No. of shares
Percentage of total Shares
of the company
No.of Shares
Percentage of total Shares
of the company
At the beginning of the year
543,216,100
21.49
Date wise Increase / Decrease in Promoters
shareholding during the year specifying the reasons
for increase/ decrease (e.g. allotment / transfer /
bonus / sweat / equity etc.) **
At the end of the year
543,216,100
21.20
(**)
** During the year under review, there is no change with respect to the shares held by the promoters. However, there is a change in the
percentage to capital because of issuance and allotment of additional equity shares by the Bank upon exercise of equity stock options by
the employees during the FY 2016-17.
(iv) Shareholding Pattern of top ten shareholders (other than directors, promoters and holders of GDRs and ADRs):
Name
Sl.
No.
Remarks
Date ***
Shareholding at the
beginning of the year
No. of
shares
Percentage of
total shares of
the Bank
Cumulative shareholding
during the year
No. of
shares
Percentage of
total shares of
the Bank
1
EUROPACIFIC GROWTH FUND
At the beginning of the Year 31-MAR-2016
98,038,464
Increase
Increase
Increase
Increase
29-APR-2016
06-MAY-2016
03-JUN-2016
8,257
370,190
789,848
3.88
0.00
0.02
0.03
98,046,721
98,416,911
99,206,759
13-JAN-2017
1,105,000
0.04
100,311,759
2
LIFE INSURANCE CORPORATION
OF INDIA
At the beginning of the Year 31-MAR-2016
61,303,525
Decrease
27-MAY-2016
(5,000)
At the END of the Year
31-MAR-2017
100,311,759
2.43
0.00
61,298,525
Decrease
Decrease
Decrease
Decrease
Decrease
Decrease
Decrease
Decrease
Decrease
Decrease
Decrease
Decrease
Decrease
Decrease
Decrease
Increase
03-JUN-2016
(2,612,303)
(0.10)
58,686,222
10-JUN-2016
(2,282,968)
(0.09)
56,403,254
17-JUN-2016
(880,816)
(0.04)
55,522,438
24-JUN-2016
(480,363)
(0.02)
55,042,075
30-JUN-2016
(50,000)
0.00
54,992,075
08-JUL-2016
(370,825)
(0.02)
54,621,250
14-JUL-2016
(1,375,005)
(0.05)
53,246,245
15-JUL-2016
(460,000)
(0.02)
52,786,245
26-AUG-2016
(516,330)
(0.02)
52,269,915
02-SEP-2016
09-SEP-2016
16-SEP-2016
23-SEP-2016
30-SEP-2016
07-OCT-2016
28-OCT-2016
(509,927)
(104,221)
(36,000)
(453,600)
(234,356)
(20,000)
46,855
(0.02)
51,759,988
0.00
0.00
51,655,767
51,619,767
(0.02)
51,166,167
(0.01)
50,931,811
0.00
0.00
50,911,811
50,958,666
HDFC Bank Limited Annual Report 2016-17
42
3.88
3.89
3.92
3.93
3.92
2.42
2.32
2.23
2.19
2.17
2.17
2.16
2.10
2.08
2.06
2.04
2.03
2.03
2.01
2.00
2.00
2.00
Directors' Report
Name
Sl.
No.
Remarks
Date ***
Shareholding at the
beginning of the year
No. of
shares
Percentage of
total shares of
the Bank
Cumulative shareholding
during the year
No. of
shares
Percentage of
total shares of
the Bank
Increase
Increase
Increase
Increase
Increase
Increase
Decrease
Decrease
Decrease
Decrease
Decrease
Decrease
Decrease
04-NOV-2016
11-NOV-2016
18-NOV-2016
30-DEC-2016
06-JAN-2017
13-JAN-2017
17-FEB-2017
24-FEB-2017
03-MAR-2017
10-MAR-2017
17-MAR-2017
24-MAR-2017
31-MAR-2017
1,388,247
2,110,648
454,250
596,695
923,327
627,943
(7,775)
(1,000)
(42,000)
(383,600)
(560,412)
(551,014)
(56,160)
3 CAPITAL WORLD GROWTH AND
At the beginning of the Year 31-MAR-2016
36,585,126
At the END of the Year
31-MAR-2017
INCOME FUND
4
ICICI PRUDENTIAL LIFE
INSURANCE COMPANY LIMITED
Increase
Increase
Increase
09-DEC-2016
24-FEB-2017
03-MAR-2017
499,000
336,620
215,864
At the END of the Year
31-MAR-2017
At the beginning of the Year 31-MAR-2016
41,523,802
0.05
0.08
0.02
0.02
0.04
0.03
0.00
0.00
0.00
(0.02)
(0.02)
(0.02)
52,346,913
54,457,561
54,911,811
55,508,506
56,431,833
57,059,776
57,052,001
57,051,001
57,009,001
56,625,401
56,064,989
55,513,975
0.00
55,457,815
55,457,815
1.45
0.02
0.01
0.01
1.64
37,084,126
37,420,746
37,636,610
37,636,610
Decrease
Increase
Increase
Increase
Decrease
Decrease
Decrease
Decrease
Decrease
Increase
Decrease
Increase
Decrease
Decrease
Increase
Decrease
Decrease
Decrease
Decrease
Decrease
Increase
Decrease
08-APR-2016
(119,872)
(0.01)
41,403,930
15-APR-2016
22-APR-2016
29-APR-2016
06-MAY-2016
13-MAY-2016
20-MAY-2016
27-MAY-2016
03-JUN-2016
10-JUN-2016
17-JUN-2016
24-JUN-2016
90,888
21,800
238,410
(143,296)
(172,416)
(127,732)
(510,048)
(28,822)
206,566
(18,843)
29,954
0.00
0.00
0.01
(0.01)
(0.01)
(0.01)
(0.02)
0.00
0.01
0.00
0.00
41,494,818
41,516,618
41,755,028
41,611,732
41,439,316
41,311,584
40,801,536
40,772,714
40,979,280
40,960,437
40,990,391
30-JUN-2016
(859,052)
(0.03)
40,131,339
01-JUL-2016
08-JUL-2016
14-JUL-2016
15-JUL-2016
22-JUL-2016
29-JUL-2016
05-AUG-2016
12-AUG-2016
19-AUG-2016
(2,100)
819,945
(141,613)
(30,677)
(291,424)
(66,419)
(100,763)
332,202
(46,444)
0.00
0.03
40,129,239
40,949,184
(0.01)
40,807,571
0.00
40,776,894
(0.01)
40,485,470
0.00
0.00
0.01
0.00
40,419,051
40,318,288
40,650,490
40,604,046
2.05
2.14
2.15
2.17
2.21
2.23
2.23
2.23
2.23
2.21
2.19
2.17
2.16
2.16
1.45
1.46
1.47
1.47
1.64
1.64
1.64
1.65
1.65
1.64
1.63
1.61
1.61
1.62
1.62
1.62
1.58
1.58
1.62
1.61
1.61
1.60
1.59
1.59
1.60
1.60
HDFC Bank Limited Annual Report 2016-17
43
Directors' Report
Name
Sl.
No.
Remarks
Date ***
Shareholding at the
beginning of the year
No. of
shares
Percentage of
total shares of
the Bank
Cumulative shareholding
during the year
No. of
shares
Percentage of
total shares of
the Bank
Decrease
Increase
Increase
Decrease
Decrease
Decrease
Increase
Increase
Increase
Increase
Increase
Decrease
Decrease
Increase
Increase
Decrease
Decrease
Decrease
Increase
Decrease
Decrease
Decrease
Decrease
Increase
Increase
Increase
Decrease
Increase
Increase
Decrease
Increase
Decrease
26-AUG-2016
(1,249,468)
(0.05)
39,354,578
02-SEP-2016
09-SEP-2016
16-SEP-2016
23-SEP-2016
30-SEP-2016
07-OCT-2016
14-OCT-2016
21-OCT-2016
28-OCT-2016
04-NOV-2016
11-NOV-2016
18-NOV-2016
25-NOV-2016
02-DEC-2016
09-DEC-2016
16-DEC-2016
23-DEC-2016
30-DEC-2016
06-JAN-2017
13-JAN-2017
20-JAN-2017
27-JAN-2017
03-FEB-2017
10-FEB-2017
17-FEB-2017
166,966
270,918
(455,385)
(606,008)
(82,983)
12,018
306,875
567,503
180
84,161
(817,487)
(252,113)
293,609
45,996
(1,821)
(43,019)
(11,103)
90,350
(584,328)
(138,675)
(653,020)
(625,450)
275,392
194,701
153,125
0.01
0.01
(0.02)
(0.02)
0.00
0.00
0.01
0.02
0.00
0.00
(0.03)
(0.01)
0.01
0.00
0.00
0.00
0.00
0.00
(0.02)
(0.01)
(0.03)
(0.02)
0.01
0.01
0.01
39,521,544
39,792,462
39,337,077
38,731,069
38,648,086
38,660,104
38,966,979
39,534,482
39,534,662
39,618,823
38,801,336
38,549,223
38,842,832
38,888,828
38,887,007
38,843,988
38,832,885
38,923,235
38,338,907
38,200,232
37,547,212
36,921,762
37,197,154
37,391,855
37,544,980
24-FEB-2017
(1,494,486)
(0.06)
36,050,494
03-MAR-2017
10-MAR-2017
133,629
15,775
0.01
0.00
36,184,123
36,199,898
17-MAR-2017
(240,824)
(0.01)
35,959,074
24-MAR-2017
138,824
0.01
36,097,898
31-MAR-2017
(233,106)
(0.01)
35,864,792
5 SBI-ETF NIFTY 50
At the beginning of the Year 31-MAR-2016
21,028,634
At the END of the Year
31-MAR-2017
Increase
Increase
Increase
Increase
Increase
Increase
Increase
Increase
08-APR-2016
15-APR-2016
22-APR-2016
29-APR-2016
06-MAY-2016
13-MAY-2016
20-MAY-2016
27-MAY-2016
211,633
242,220
28,876
205,474
281,396
7,903
488,992
169,314
35,864,792
21,240,267
21,482,487
21,511,363
21,716,837
21,998,233
22,006,136
22,495,128
22,664,442
0.83
0.01
0.01
0.00
0.01
0.01
0.00
0.02
0.01
HDFC Bank Limited Annual Report 2016-17
44
1.55
1.56
1.57
1.55
1.52
1.52
1.52
1.53
1.55
1.55
1.55
1.52
1.51
1.52
1.52
1.52
1.52
1.52
1.52
1.50
1.50
1.47
1.45
1.45
1.46
1.47
1.41
1.41
1.41
1.41
1.41
1.40
1.40
0.84
0.85
0.85
0.86
0.87
0.87
0.89
0.90
Directors' Report
Name
Sl.
No.
Remarks
Date ***
Shareholding at the
beginning of the year
No. of
shares
Percentage of
total shares of
the Bank
Cumulative shareholding
during the year
No. of
shares
Percentage of
total shares of
the Bank
Decrease
Decrease
Increase
Increase
Decrease
Decrease
Increase
Increase
Increase
Increase
Decrease
Increase
Decrease
Increase
Increase
Increase
Increase
Increase
Increase
Increase
Increase
Decrease
Increase
Increase
Increase
Increase
Increase
Decrease
Increase
Increase
Increase
Increase
Increase
Increase
Increase
Increase
Increase
Increase
Increase
Increase
Decrease
Increase
Increase
03-JUN-2016
10-JUN-2016
17-JUN-2016
24-JUN-2016
30-JUN-2016
01-JUL-2016
08-JUL-2016
14-JUL-2016
15-JUL-2016
22-JUL-2016
29-JUL-2016
05-AUG-2016
12-AUG-2016
19-AUG-2016
26-AUG-2016
02-SEP-2016
09-SEP-2016
16-SEP-2016
23-SEP-2016
30-SEP-2016
07-OCT-2016
14-OCT-2016
21-OCT-2016
28-OCT-2016
04-NOV-2016
11-NOV-2016
18-NOV-2016
(182,651)
(0.01)
22,481,791
(8,956)
9,456
225,573
(116,294)
(217,366)
7,047
155,816
443
86,694
0.00
0.00
0.01
(0.01)
(0.01)
0.00
0.01
0.00
0.00
22,472,835
22,482,291
22,707,864
22,591,570
22,374,204
22,381,251
22,537,067
22,537,510
22,624,204
(269,570)
(0.01)
22,354,634
486,892
(5,489)
129,450
338,444
1,788,415
992,506
221,590
235,147
656,519
478,658
0.02
0.00
0.01
0.01
0.07
0.04
0.01
0.01
0.03
0.02
22,841,526
22,836,037
22,965,487
23,303,931
25,092,346
26,084,852
26,306,442
26,541,589
27,198,108
27,676,766
(748,280)
(0.03)
26,928,486
260,328
140,057
217,199
310,428
567,176
0.01
0.01
0.01
0.01
0.02
27,188,814
27,328,871
27,546,070
27,856,498
28,423,674
25-NOV-2016
(815,434)
(0.03)
27,608,240
02-DEC-2016
09-DEC-2016
16-DEC-2016
23-DEC-2016
30-DEC-2016
06-JAN-2017
13-JAN-2017
20-JAN-2017
27-JAN-2017
03-FEB-2017
10-FEB-2017
17-FEB-2017
747,891
173,896
665,065
628,940
552,115
727,054
229,910
119,075
144,954
507,978
319,845
92,124
0.03
0.01
0.03
0.03
0.02
0.03
0.01
0.01
0.01
0.02
0.01
0.00
28,356,131
28,530,027
29,195,092
29,824,032
30,376,147
31,103,201
31,333,111
31,452,186
31,597,140
32,105,118
32,424,963
32,517,087
24-FEB-2017
(2,647,573)
(0.10)
29,869,514
03-MAR-2017
10-MAR-2017
135,299
345,751
0.01
0.01
30,004,813
30,350,564
0.89
0.89
0.89
0.90
0.89
0.88
0.88
0.89
0.89
0.89
0.88
0.90
0.90
0.91
0.92
0.99
1.03
1.04
1.04
1.07
1.09
1.06
1.07
1.07
1.08
1.09
1.12
1.08
1.11
1.12
1.14
1.17
1.19
1.22
1.23
1.23
1.24
1.26
1.27
1.27
1.17
1.17
1.19
HDFC Bank Limited Annual Report 2016-17
45
Directors' Report
Name
Sl.
No.
Remarks
Date ***
Shareholding at the
beginning of the year
No. of
shares
Percentage of
total shares of
the Bank
Cumulative shareholding
during the year
No. of
shares
Percentage of
total shares of
the Bank
Increase
Decrease
Increase
17-MAR-2017
24-MAR-2017
31-MAR-2017
103,860
(327,170)
532,932
At the END of the Year
31-MAR-2017
6 GOVERNMENT OF SINGAPORE
At the beginning of the Year 31-MAR-2016
28,474,691
Increase
Decrease
Decrease
Decrease
Decrease
Decrease
Increase
Decrease
Increase
Increase
Increase
Increase
Increase
Increase
Increase
Decrease
Increase
Increase
Increase
Increase
Increase
Decrease
Increase
Increase
Increase
Increase
Decrease
Decrease
08-APR-2016
22-APR-2016
13-MAY-2016
20-MAY-2016
03-JUN-2016
10-JUN-2016
17-JUN-2016
24-JUN-2016
30-JUN-2016
01-JUL-2016
08-JUL-2016
14-JUL-2016
15-JUL-2016
22-JUL-2016
29-JUL-2016
12-AUG-2016
21-OCT-2016
28-OCT-2016
04-NOV-2016
11-NOV-2016
18-NOV-2016
16-DEC-2016
27-JAN-2017
24-FEB-2017
03-MAR-2017
10-MAR-2017
24-MAR-2017
31-MAR-2017
338,037
(75,098)
(53,503)
(2,432)
(169,242)
(75,734)
56,676
(8,067)
21,628
2,785
69,534
23,572
1,083
2,134
8,567
(59,283)
85,229
3,232
6,215
17,243
13,737
(68,252)
58,096
654,662
852,556
97,472
(148,008)
(12,200)
At the END of the Year
31-MAR-2017
0.00
3,045,4424
(0.01)
30,127,254
0.02
30,660,186
30,660,186
1.13
0.01
0.00
0.00
0.00
28,812,728
28,737,630
28,684,127
28,681,695
(0.01)
28,512,453
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.03
0.03
0.00
28,436,719
28,493,395
28,485,328
28,506,956
28,509,741
28,579,275
28,602,847
28,603,930
28,606,064
28,614,631
28,555,348
28,640,577
28,643,809
28,650,024
28,667,267
28,681,004
28,612,752
28,670,848
29,325,510
30,178,066
30,275,538
(0.01)
30,127,530
0.00
30,115,330
30,115,330
7
ICICI PRUDENTIAL VALUE
DISCOVERY FUND
At the beginning of the Year 31-MAR-2016
28,708,163
1.14
Decrease
Increase
Increase
Increase
Decrease
Decrease
Increase
Increase
Increase
08-APR-2016
15-APR-2016
22-APR-2016
29-APR-2016
06-MAY-2016
13-MAY-2016
20-MAY-2016
27-MAY-2016
03-JUN-2016
(290,104)
(0.01)
28,418,059
53,274
58,627
296,922
(208,630)
(496,056)
164,011
44,359
312,721
0.00
0.00
0.01
(0.01)
(0.02)
0.01
0.00
0.01
28,471,333
28,529,960
28,826,882
28,618,252
28,122,196
28,286,207
28,330,566
28,643,287
HDFC Bank Limited Annual Report 2016-17
46
1.19
1.18
1.20
1.20
1.14
1.14
1.13
1.13
1.13
1.12
1.13
1.13
1.13
1.13
1.13
1.13
1.13
1.13
1.13
1.13
1.13
1.13
1.12
1.13
1.13
1.12
1.12
1.15
1.18
1.18
1.18
1.18
1.18
1.12
1.13
1.13
1.14
1.13
1.11
1.12
1.12
1.13
Directors' Report
Name
Sl.
No.
Remarks
Date ***
Shareholding at the
beginning of the year
No. of
shares
Percentage of
total shares of
the Bank
Cumulative shareholding
during the year
No. of
shares
Percentage of
total shares of
the Bank
Decrease
Decrease
Decrease
Increase
Increase
Increase
Increase
Increase
Increase
Increase
Increase
Increase
Increase
Increase
Increase
Decrease
Increase
Increase
Decrease
Increase
Increase
Increase
Increase
Decrease
Decrease
Increase
Decrease
Decrease
Decrease
Increase
Increase
Increase
Decrease
Increase
Decrease
Decrease
Decrease
Decrease
Decrease
Decrease
Decrease
Decrease
Decrease
Decrease
Increase
At the END of the Year
10-JUN-2016
17-JUN-2016
24-JUN-2016
30-JUN-2016
01-JUL-2016
08-JUL-2016
14-JUL-2016
15-JUL-2016
22-JUL-2016
29-JUL-2016
05-AUG-2016
12-AUG-2016
19-AUG-2016
26-AUG-2016
02-SEP-2016
09-SEP-2016
16-SEP-2016
23-SEP-2016
30-SEP-2016
07-OCT-2016
14-OCT-2016
21-OCT-2016
28-OCT-2016
04-NOV-2016
11-NOV-2016
18-NOV-2016
25-NOV-2016
02-DEC-2016
09-DEC-2016
16-DEC-2016
23-DEC-2016
30-DEC-2016
06-JAN-2017
13-JAN-2017
20-JAN-2017
27-JAN-2017
03-FEB-2017
10-FEB-2017
17-FEB-2017
24-FEB-2017
03-MAR-2017
10-MAR-2017
17-MAR-2017
24-MAR-2017
31-MAR-2017
31-MAR-2017
(124,126)
(54,359)
(7,310)
413,292
598,896
1,894,309
1,255,349
694,063
5,021
1,440,642
309,035
633,866
980,866
3,073,721
1445835
(174,239)
204,282
11,214
(97,499)
405,230
431,693
82,656
137,588
(104,359)
(292,130)
13,187
(137,872)
(1,021,148)
(181,156)
707,813
85,679
8,242
(295,053)
575,783
(343,773)
(1,740,249)
(1,802,625)
(1,125,875)
(119,547)
(5,270,140)
(6,985)
(502,860)
(536,984)
(626,159)
213,866
(0.01)
0.00
0.00
0.02
0.02
0.08
0.05
0.03
0.00
0.06
0.01
0.03
0.04
0.12
0.06
(0.01)
0.01
0.00
0.00
0.02
0.02
0.00
0.01
0.00
(0.01)
0.00
(0.01)
(0.04)
(0.01)
0.03
0.00
0.00
(0.01)
0.02
(0.01)
(0.07)
(0.07)
(0.04)
(0.01)
(0.21)
0.00
(0.02)
(0.02)
(0.02)
0.01
28,519,161
28,464,802
28,457,492
28,870,784
29,469,680
31,363,989
32,619,338
33,313,401
33,318,422
34,759,064
35,068,099
35,701,965
36,682,831
39,756,552
41,202,387
41,028,148
41,232,430
41,243,644
41,146,145
41,551,375
41,983,068
42,065,724
42,203,312
42,098,953
41,806,823
41,820,010
41,682,138
40,660,990
40,479,834
41,187,647
41,273,326
41,281,568
40,986,515
41,562,298
41,218,525
39,478,276
37,675,651
36,549,776
36,430,229
31,160,089
31,153,104
30,650,244
30,113,260
29,487,101
29,700,967
29,700,967
1.13
1.12
1.12
1.14
1.16
1.24
1.29
1.31
1.31
1.37
1.38
1.41
1.45
1.57
1.62
1.61
1.62
1.62
1.62
1.63
1.65
1.65
1.66
1.65
1.64
1.64
1.64
1.59
1.59
1.61
1.62
1.62
1.60
1.63
1.61
1.55
1.47
1.43
1.42
1.22
1.22
1.20
1.18
1.15
1.16
1.16
HDFC Bank Limited Annual Report 2016-17
47
Directors' Report
Name
Sl.
No.
Remarks
Date ***
Shareholding at the
beginning of the year
No. of
shares
Percentage of
total shares of
the Bank
Cumulative shareholding
during the year
No. of
shares
Percentage of
total shares of
the Bank
8 MORGAN STANLEY MAURITIUS
COMPANY LIMITED
At the beginning of the Year 31-MAR-2016
08-APR-2016
15-APR-2016
22-APR-2016
29-APR-2016
06-MAY-2016
20-MAY-2016
27-MAY-2016
03-JUN-2016
10-JUN-2016
17-JUN-2016
24-JUN-2016
30-JUN-2016
01-JUL-2016
08-JUL-2016
14-JUL-2016
15-JUL-2016
22-JUL-2016
29-JUL-2016
05-AUG-2016
12-AUG-2016
19-AUG-2016
26-AUG-2016
02-SEP-2016
09-SEP-2016
16-SEP-2016
23-SEP-2016
30-SEP-2016
07-OCT-2016
21-OCT-2016
28-OCT-2016
04-NOV-2016
11-NOV-2016
18-NOV-2016
25-NOV-2016
02-DEC-2016
09-DEC-2016
16-DEC-2016
23-DEC-2016
06-JAN-2017
13-JAN-2017
20-JAN-2017
27-JAN-2017
03-FEB-2017
10-FEB-2017
17-FEB-2017
24-FEB-2017
03-MAR-2017
Decrease
Increase
Increase
Decrease
Decrease
Increase
Increase
Increase
Increase
Increase
Increase
Decrease
Decrease
Decrease
Increase
Increase
Decrease
Decrease
Increase
Decrease
Decrease
Increase
Increase
Increase
Increase
Increase
Increase
Increase
Decrease
Decrease
Decrease
Increase
Increase
Increase
Increase
Increase
Increase
Increase
Increase
Increase
Increase
Increase
Increase
Increase
Increase
Increase
Increase
1,754,601
(12)
97,817
15,231
(3,864)
(153,311)
184,500
40,538
100,585
56,069
155,563
346,501
(68,200)
(50,000)
(250,470)
21
1,968
(12,000)
(82,034)
14,771
(59,821)
(188,299)
13,900
9
6,526
390,060
784,500
95,373
14,000
(184,374)
(966)
(30,501)
27,000
354,195
182,126
131,099
131,117
408,330
919,700
24,747
390,472
2,370,428
1,822,194
1,127,144
463,112
199,000
9,019,226
1,668,702
0.07
0.00
0.00
0.00
0.00
(0.01)
0.01
0.00
0.00
0.00
0.01
0.01
0.00
0.00
(0.01)
0.00
0.00
0.00
0.00
0.00
0.00
(0.01)
0.00
0.00
0.00
0.02
0.03
0.00
0.00
(0.01)
0.00
0.00
0.00
0.01
0.01
0.01
0.01
0.02
0.04
0.00
0.02
0.09
0.07
0.04
0.02
0.01
0.35
0.07
1,754,589
1,852,406
1,867,637
1,863,773
1,710,462
1,894,962
1,935,500
2,036,085
2,092,154
2,247,717
2,594,218
2,526,018
2,476,018
2,225,548
2,225,569
2,227,537
2,215,537
2,133,503
2,148,274
2,088,453
1,900,154
1,914,054
1,914,063
1,920,589
2,310,649
3,095,149
3,190,522
3,204,522
3,020,148
3,019,182
2,988,681
3,015,681
3,369,876
3,552,002
3,683,101
3,814,218
4,222,548
5,142,248
5,166,995
5,557,467
7,927,895
9,750,089
10,877,233
11,340,345
11,539,345
20,558,571
22,227,273
0.07
0.07
0.07
0.07
0.07
0.08
0.08
0.08
0.08
0.09
0.10
0.10
0.10
0.09
0.09
0.09
0.09
0.08
0.09
0.08
0.08
0.08
0.08
0.08
0.09
0.12
0.13
0.13
0.12
0.12
0.12
0.12
0.13
0.14
0.14
0.15
0.17
0.20
0.20
0.22
0.31
0.38
0.43
0.44
0.45
0.80
0.87
HDFC Bank Limited Annual Report 2016-17
48
Directors' Report
Name
Sl.
No.
Remarks
Date ***
Shareholding at the
beginning of the year
No. of
shares
Percentage of
total shares of
the Bank
Cumulative shareholding
during the year
No. of
shares
Percentage of
total shares of
the Bank
9
FRANKLIN TEMPLETON MUTUAL
FUND A/C FRANKLIN INDIA PRIMA
PLUS
Increase
Increase
Increase
Decrease
At the END of the Year
10-MAR-2017
17-MAR-2017
24-MAR-2017
31-MAR-2017
31-MAR-2017
At the beginning of the Year 31-MAR-2016
08-APR-2016
15-APR-2016
22-APR-2016
29-APR-2016
06-MAY-2016
13-MAY-2016
20-MAY-2016
27-MAY-2016
03-JUN-2016
10-JUN-2016
17-JUN-2016
24-JUN-2016
30-JUN-2016
08-JUL-2016
14-JUL-2016
22-JUL-2016
05-AUG-2016
12-AUG-2016
19-AUG-2016
26-AUG-2016
02-SEP-2016
09-SEP-2016
16-SEP-2016
23-SEP-2016
07-OCT-2016
14-OCT-2016
21-OCT-2016
28-OCT-2016
04-NOV-2016
11-NOV-2016
18-NOV-2016
25-NOV-2016
02-DEC-2016
09-DEC-2016
16-DEC-2016
23-DEC-2016
30-DEC-2016
13-JAN-2017
27-JAN-2017
03-FEB-2017
10-FEB-2017
Decrease
Increase
Increase
Increase
Increase
Increase
Increase
Increase
Increase
Increase
Increase
Increase
Decrease
Increase
Increase
Increase
Decrease
Increase
Decrease
Increase
Increase
Decrease
Decrease
Increase
Increase
Decrease
Increase
Decrease
Increase
Decrease
Decrease
Increase
Increase
Increase
Increase
Increase
Increase
Increase
Decrease
Increase
Decrease
1,044,741
38,272
31,946
(113,945)
19,482,226
(4,123)
78,926
4,699
388,599
311,037
346,483
101,025
1,184
100,668
101,067
2,622
50,000
(342)
532
43
150,448
(190)
100,000
(6,142)
598,422
227,830
(310)
(10,448)
67,346
180,678
(940)
125,000
(313)
119,621
(834)
(359,952)
549
93,757
340
80,000
100,669
286,619
148,799
(447)
99,339
(242,350)
0.04
0.00
0.00
0.00
0.77
0.00
0.00
0.00
0.02
0.01
0.01
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.01
0.00
0.00
0.00
0.02
0.01
0.00
0.00
0.00
0.01
0.00
0.01
0.00
0.01
0.00
(0.01)
0.00
0.00
0.00
0.00
0.00
0.01
0.01
0.00
0.00
(0.01)
23,272,014
23,310,286
23,342,232
23,228,287
23,228,287
19,478,103
19,557,029
19,561,728
19,950,327
20,261,364
20,607,847
20,708,872
20,710,056
20,810,724
20,911,791
20,914,413
20,964,413
20,964,071
20,964,603
20,964,646
21,115,094
21,114,904
21,214,904
21,208,762
21,807,184
22,035,014
22,034,704
22,024,256
22,091,602
22,272,280
22,271,340
22,396,340
22,396,027
22,515,648
22,514,814
22,154,862
22,155,411
22,249,168
22,249,508
22,329,508
22,430,177
22,716,796
22,865,595
22,865,148
22,964,487
22,722,137
0.91
0.91
0.91
0.91
0.91
0.77
0.77
0.77
0.79
0.80
0.82
0.82
0.82
0.82
0.83
0.83
0.83
0.83
0.83
0.83
0.83
0.83
0.84
0.84
0.86
0.87
0.87
0.87
0.87
0.88
0.88
0.88
0.88
0.88
0.88
0.87
0.87
0.87
0.87
0.88
0.88
0.89
0.90
0.90
0.90
0.89
HDFC Bank Limited Annual Report 2016-17
49
Directors' Report
Name
Sl.
No.
Remarks
Date ***
Shareholding at the
beginning of the year
No. of
shares
Percentage of
total shares of
the Bank
Cumulative shareholding
during the year
No. of
shares
Percentage of
total shares of
the Bank
10 RELIANCE CAPITAL TRUSTEE CO
LTD A/C-RELIANCE VISION FUND
Decrease
Decrease
Decrease
Decrease
Decrease
Decrease
Decrease
At the END of the Year
17-FEB-2017
24-FEB-2017
03-MAR-2017
10-MAR-2017
17-MAR-2017
24-MAR-2017
31-MAR-2017
31-MAR-2017
At the beginning of the Year 31-MAR-2016
08-APR-2016
15-APR-2016
22-APR-2016
29-APR-2016
06-MAY-2016
13-MAY-2016
20-MAY-2016
27-MAY-2016
03-JUN-2016
10-JUN-2016
17-JUN-2016
24-JUN-2016
30-JUN-2016
01-JUL-2016
08-JUL-2016
14-JUL-2016
15-JUL-2016
22-JUL-2016
29-JUL-2016
05-AUG-2016
12-AUG-2016
19-AUG-2016
26-AUG-2016
02-SEP-2016
09-SEP-2016
16-SEP-2016
23-SEP-2016
30-SEP-2016
07-OCT-2016
14-OCT-2016
21-OCT-2016
28-OCT-2016
04-NOV-2016
11-NOV-2016
18-NOV-2016
25-NOV-2016
02-DEC-2016
09-DEC-2016
16-DEC-2016
23-DEC-2016
Increase
Decrease
Decrease
Increase
Increase
Decrease
Decrease
Decrease
Increase
Increase
Increase
Decrease
Decrease
Decrease
Increase
Decrease
Increase
Decrease
Decrease
Decrease
Increase
Decrease
Decrease
Increase
Decrease
Decrease
Increase
Decrease
Decrease
Decrease
Decrease
Increase
Decrease
Increase
Decrease
Increase
Increase
Increase
Increase
Increase
(98,279)
(130,280)
(428)
(172,076)
(420)
(23,391)
(152,111)
25,085,373
347,322
(14,000)
(157,783)
178,453
322,848
(99,538)
(276)
(59,000)
47,782
19,138
97,400
(226,811)
(200,000)
(30,000)
13,877
(290,482)
3,375
(349,473)
(122,625)
(311,591)
5,827
(58,394)
(21,054)
256,501
(66,429)
(162,127)
28,996
(171,800)
(148,943)
(113,150)
(421,988)
403,629
(682,896)
2,369,372
(231,715)
89,789
533,220
261,242
247,872
318,737
0.00
(0.01)
0.00
(0.01)
0.00
0.00
(0.01)
0.99
0.01
0.00
(0.01)
0.01
0.01
0.00
0.00
0.00
0.00
0.00
0.00
(0.01)
(0.01)
0.00
0.00
(0.01)
0.00
(0.01)
(0.01)
(0.01)
0.00
0.00
0.00
0.01
0.00
(0.01)
0.00
(0.01)
(0.01)
0.00
(0.02)
0.02
(0.03)
0.09
(0.01)
0.00
0.02
0.01
0.01
0.01
22,623,858
22,493,578
22,493,150
22,321,074
22,320,654
22,297,263
22,145,152
22,145,152
25,432,695
25,418,695
25,260,912
25,439,365
25,762,213
25,662,675
25,662,399
25,603,399
25,651,181
25,670,319
25,767,719
25,540,908
25,340,908
25,310,908
25,324,785
25,034,303
25,037,678
24,688,205
24,565,580
24,253,989
24,259,816
24,201,422
24,180,368
24,436,869
24,370,440
24,208,313
24,237,309
24,065,509
23,916,566
23,803,416
23,381,428
23,785,057
23,102,161
25,471,533
25,239,818
25,329,607
25,862,827
26,124,069
26,371,941
26,690,678
0.88
0.88
0.88
0.87
0.87
0.87
0.86
0.86
1.01
1.01
1.00
1.01
1.02
1.02
1.02
1.01
1.01
1.01
1.02
1.01
1.00
1.00
1.00
0.99
0.99
0.97
0.97
0.96
0.96
0.95
0.95
0.96
0.96
0.95
0.95
0.95
0.94
0.94
0.92
0.93
0.91
1.00
0.99
0.99
1.01
1.02
1.03
1.05
HDFC Bank Limited Annual Report 2016-17
50
Directors' Report
Name
Sl.
No.
Remarks
Date ***
Shareholding at the
beginning of the year
No. of
shares
Percentage of
total shares of
the Bank
Cumulative shareholding
during the year
No. of
shares
Percentage of
total shares of
the Bank
Decrease
Decrease
Increase
Increase
Increase
Increase
Decrease
Decrease
Decrease
Increase
Increase
Decrease
Increase
Decrease
At the END of the Year
30-DEC-2016
06-JAN-2017
13-JAN-2017
20-JAN-2017
27-JAN-2017
03-FEB-2017
10-FEB-2017
17-FEB-2017
24-FEB-2017
03-MAR-2017
10-MAR-2017
17-MAR-2017
24-MAR-2017
31-MAR-2017
31-MAR-2017
(477,654)
(463,276)
3,275
260,992
85,347
705,947
(7,682)
(183,837)
(8,678,520)
3,103,896
587,459
(96,151)
1,031,778
(1,204,792)
(0.02)
(0.02)
0.00
0.01
0.00
0.03
0.00
(0.01)
(0.34)
0.12
0.02
0.00
0.04
(0.05)
26,213,024
25,749,748
25,753,023
26,014,015
26,099,362
26,805,309
26,797,627
26,613,790
17,935,270
21,039,166
21,626,625
21,530,474
22,562,252
21,357,460
21,357,460
1.03
1.01
1.01
1.02
1.02
1.05
1.05
1.04
0.70
0.82
0.85
0.84
0.88
0.83
0.83
*** Date of transfer has been considered as the date on which the beneficiary position was provided by the Depositories to the Bank.
Increase = Purchase of shares of the Bank Decrease = Sale of shares of the Bank
(v) Shareholding of Directors and Key Managerial Personnel
Name
Sr.
No.
1
Aditya Puri
2
Bobby Parikh
Remarks
Date ***
Shareholding at the
beginning of the year
No.
of
shares
Percentage of
total shares of
the Bank
Cumulative
shareholding during the year
No.
of
shares
Percentage of
total shares of
the Bank
At the beginning of the Year
Increase in shareholding during the year
Decrease in shareholding during the year
Increase in shareholding during the year
At the END of the Year
At the beginning of the Year
Increase
At the END of the Year
Jointly With Relatives At the beginning of the Year
3
Kaizad Bharucha
At the END of the Year
At the beginning of the Year
Decrease in shareholding during the year
Decrease in shareholding during the year
Decrease in shareholding during the year
Increase in shareholding during the year
Decrease in shareholding during the year
Increase in shareholding during the year
Increase in shareholding during the year
Decrease in shareholding during the year
Decrease in shareholding during the year
At the END of the Year
Jointly With Relatives At the beginning of the Year
4
Keki Minoo Mistry
At the END of the Year
At the beginning of the Year
At the END of the Year
Jointly With Relatives At the beginning of the Year
At the END of the Year
31-MAR-2016
02-DEC-2016
23-DEC-2016
03-FEB-2017
31-MAR-2017
31-MAR-2016
13-MAY-2016
31-MAR-2017
31-MAR-2016
31-MAR-2017
31-MAR-2016
29-JUL-2016
05-AUG-2016
12-AUG-2016
02-SEP-2016
30-SEP-2016
04-NOV-2016
02-DEC-2016
24-MAR-2017
31-MAR-2017
31-MAR-2017
31-MAR-2016
31-MAR-2017
31-MAR-2016
31-MAR-2017
31-MAR-2016
31-MAR-2017
3,069,044
112,500
(415,000)
675,000
0.12
0.00
(0.02)
0.03
3,837
875
3,538
884,455
(35,000)
(25,000)
(20,000)
136,000
(16,000)
28,000
28,000
(30,000)
(12,404)
500
291,915
4,215
0.00
0.00
0.00
0.04
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.01
0.00
3,181,544
2,766,544
3,441,544
3,441,544
4,712
4,712
3,538
849,455
824,455
804,455
940,455
924,455
952,455
980,455
950,455
938,051
938,051
500
291,915
4,215
0.12
0.11
0.13
0.13
0.00
0.00
0.00
0.03
0.03
0.03
0.04
0.04
0.04
0.04
0.04
0.04
0.04
0.00
0.01
0.00
HDFC Bank Limited Annual Report 2016-17
51
Directors' Report
Name
Sl.
No.
Remarks
Date ***
Shareholding at the
beginning of the year
No. of
shares
Percentage of
total shares of
the Bank
Cumulative shareholding
during the year
No. of
shares
Percentage of
total shares of
the Bank
5
Renu Sud Karnad
6
Paresh Sukthankar
At the beginning of the Year
Decrease in shareholding during the year
At the END of the Year
At the beginning of the Year
Decrease in shareholding during the year
Decrease in shareholding during the year
Decrease in shareholding during the year
Decrease in shareholding during the year
Increase in shareholding during the year
Decrease in shareholding during the year
Decrease in shareholding during the year
Decrease in shareholding during the year
Decrease in shareholding during the year
Decrease in shareholding during the year
Decrease in shareholding during the year
Decrease in shareholding during the year
Increase in shareholding during the year
Increase in shareholding during the year
Decrease in shareholding during the year
Decrease in shareholding during the year
Decrease in shareholding during the year
Increase in shareholding during the year
Increase in shareholding during the year
Decrease in shareholding during the year
Decrease in shareholding during the year
Decrease in shareholding during the year
Decrease in shareholding during the year
Decrease in shareholding during the year
At the END of the Year
Jointly With Relatives At the beginning of the Year
At the END of the Year
7
Sashidhar Jagdishan At the beginning of the Year
8
Sanjay Dongre
Decrease in shareholding during the year
Decrease in shareholding during the year
Increase in shareholding during the year
Increase in shareholding during the year
Decrease in shareholding during the year
At the END of the Year
At the beginning of the Year
Decrease in shareholding during the year
Decrease in shareholding during the year
Increase in shareholding during the year
Increase in shareholding during the year
Increase in shareholding during the year
Decrease in shareholding during the year
At the END of the Year
31-MAR-2016
10-MAR-2017
31-MAR-2017
31-MAR-2016
06-MAY-2016
20-MAY-2016
27-MAY-2016
03-JUN-2016
30-JUN-2016
29-JUL-2016
05-AUG-2016
12-AUG-2016
19-AUG-2016
26-AUG-2016
02-SEP-2016
30-SEP-2016
04-NOV-2016
02-DEC-2016
09-DEC-2016
16-DEC-2016
23-DEC-2016
30-DEC-2016
03-FEB-2017
10-FEB-2017
17-FEB-2017
10-MAR-2017
17-MAR-2017
24-MAR-2017
31-MAR-2017
31-MAR-2016
31-MAR-2017
31-MAR-2016
09-DEC-2016
23-DEC-2016
30-DEC-2016
03-FEB-2017
10-MAR-2017
31-MAR-2017
31-MAR-2016
29-APR-2016
06-MAY-2016
30-SEP-2016
04-NOV-2016
02-DEC-2016
24-FEB-2017
31-MAR-2017
294,620
(7,000)
842,655
(25,000)
(8,900)
(36,100)
(10,000)
10,000
(30,000)
(25,000)
(9,500)
(15,500)
(29,000)
(1,000)
(4,000)
30,000
72,500
(10,000)
(24,000)
(36,000)
110,000
110,000
(15,000)
(20,000)
(15,000)
(30,000)
(20,000)
3,250
582,594
(30,000)
(65,195)
30,195
138,000
(4,000)
85,250
(19,000)
(2,000)
10,000
7,500
64,000
(15,000)
0.01
0.00
0.03
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.02
0.00
0.00
0.00
0.01
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
287,620
287,620
817,655
808,755
772,655
762,655
772,655
742,655
717,655
708,155
692,655
663,655
662,655
658,655
688,655
761,155
751,155
727,155
691,155
801,155
911,155
896,155
876,155
861,155
831,155
811,155
811,155
3,250
552,594
487.399
517,594
655,594
651,594
651,594
66,250
64,250
74,250
81,750
145,750
130,750
130,750
0.01
0.01
0.03
0.03
0.03
0.03
0.03
0.03
0.03
0.03
0.03
0.03
0.03
0.03
0.03
0.03
0.03
0.03
0.03
0.03
0.03
0.03
0.03
0.03
0.03
0.03
0.03
0.00
0.02
0.02
0.02
0.03
0.03
0.03
0.00
0.00
0.00
0.00
0.01
0.01
0.01
*** Date of transfer has been considered as the date on which the beneficiary position was provided by the Depositories to the Bank.
Increase in shareholding during the year = Allotment of equity shares on exercise of equity stock options
Decrease in shareholding during the year = Sale of shares of the Bank during the year
HDFC Bank Limited Annual Report 2016-17
52
Directors' Report
V. INDEBTEDNESS
Indebtedness of the Bank including interest outstanding / accrued but not due for payment:
(` crore)
Secured Loans
excluding
deposits
Unsecured
Loans (1)
Deposits (2)
Total
Indebtedness
Indebtedness at the beginning of the financial year
i) Principal Amount
ii) Interest due but not paid
iii) Interest accrued but not due
Total (i+ii+iii)
Change in Indebtedness during the financial year
(cid:115)(cid:0)(cid:33)(cid:68)(cid:68)(cid:73)(cid:84)(cid:73)(cid:79)(cid:78)
(cid:115)(cid:0)(cid:50)(cid:69)(cid:68)(cid:85)(cid:67)(cid:84)(cid:73)(cid:79)(cid:78)
Net change
Indebtedness at the end of the financial year
i) Principal Amount
ii) Interest due but not paid
iii) Interest accrued but not due
Total (i+ii+iii)
(1) Movement in long-term subordinated debt is shown on a gross basis.
-
-
-
-
-
-
-
-
-
-
-
84,969.0
-
438.0
85,407.0
480.8
(10,940.1)
(10,459.3)
74,028.9
-
918.8
74,947.7
84,969.0
-
438.0
85,407.0
480.8
(10,940.1)
(10,459.3)
74,028.9
-
918.8
74,947.7
(2) Section 73 (1) of the Companies Act, 2013, states that the provisions of the said Act relating to acceptance of deposits by companies do not
apply to a Banking company as defined in the Reserve Bank of India Act, 1934. Accordingly, information relating to the Bank’s deposits is not
disclosed in the table above. As per the applicable provisions of the Banking Regulation Act, 1949, details of the Bank’s deposits have been
included under Schedule 3 - Deposits, in the preparation and presentation of the financial statements of the Bank.
(3) Figures for the previous years have been adjusted to reflect the effect of reclassification as mentioned in point no. 1 of Sch 18 - Notes to
accounts.
VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:
A. Remuneration to Managing Director, Whole-time Directors and/or Manager:
Sr.
no.
Particulars of Remuneration
1 Gross Salary
a) Salary as per provisions contained in
Section 17(1) of the Income Tax Act, 1961
b) Value of perquisites u/s. 17(2) of Income
Tax Act, 1961 except stock options
Name of Managing Director / Whole Time Director / Manager
Paresh Sukthankar (cid:43)(cid:65)(cid:73)(cid:90)(cid:65)(cid:68)(cid:0)(cid:34)(cid:72)(cid:65)(cid:82)(cid:85)(cid:67)(cid:72)(cid:65)
(Deputy Managing
Director)
Aditya Puri
(Managing
Director)
(Executive
Director)
(`)
Total
Amount
81,204,425
50,114,058
38,618,286 169,936,769
14,487,838
7,912,926
6,078,549
28,479,313
c) Profits in lieu of salary under section 17(3)
-
-
-
-
of Income Tax Act, 1961.
2 Stock options exercised during the year***
3 Sweat Equity
4 Commission
574,256,250
-
-
310,810,225
-
-
149,017,994 1,034,084,469
-
-
-
-
- as per cent of profits
- others, specify
5 Others *
Total (A) **
Ceiling as per the Act^
4,879,884
100,572,147
2,781,456
60,808,440
1,914,000
9,575,340
46,610,835 207,991,422
^ Section 198 of the Companies Act, 1956 (which corresponds to the now applicable section 197 of the Companies Act, 2013) does not by virtue
of section 35B (2A) of the Banking Regulation Act, 1949, apply to Banking companies.
*
Includes Provident Fund and tax exempted portion of Superannuation.
** Does not include the value of the stock options exercised during the year.
*** This includes stock options granted and vested over several previous years, but exercised during the last financial year.
HDFC Bank Limited Annual Report 2016-17
53
Directors' Report
B. Remuneration to other Directors:
Sr.
no.
Name of Director
Independent Directors
Particulars of Remuneration
Fees for attending
Board / committee
meetings
Commission#
Others
(`)
Total
Amount
1 Mrs. Shyamala Gopinath
2,700,000
-
3,000,000
5,700,000
2 Mr. Partho Datta
3 Mr. Bobby Parikh
4 Mr. A.N. Roy
5 Mr. Malay Patel
Sub total (i)
2,300,000
1,000,000
2,750,000
1,000,000
2,500,000
1,000,000
1,450,000
1,000,000
3,300,000
3,750,000
3,500,000
2,450,000
11,700,000
4,000,000
3,000,000
18,700,000
Other Non-Executive Directors
-
1 (cid:45)(cid:82)(cid:83)(cid:14)(cid:0)(cid:50)(cid:69)(cid:78)(cid:85)(cid:0)(cid:43)(cid:65)(cid:82)(cid:78)(cid:65)(cid:68)
2 (cid:45)(cid:82)(cid:14)(cid:0)(cid:43)(cid:69)(cid:75)(cid:73)(cid:0)(cid:45)(cid:73)(cid:83)(cid:84)(cid:82)(cid:89)
1,500,000
1,000,000
1,750,000
1,000,000
3 (cid:45)(cid:82)(cid:14)(cid:0)(cid:53)(cid:77)(cid:69)(cid:83)(cid:72)(cid:0)(cid:35)(cid:72)(cid:65)(cid:78)(cid:68)(cid:82)(cid:65)(cid:0)(cid:51)(cid:65)(cid:82)(cid:65)(cid:78)(cid:71)(cid:73)(cid:0)(cid:8)(cid:65)(cid:80)(cid:80)(cid:79)(cid:73)(cid:78)(cid:84)(cid:69)(cid:68)(cid:0)(cid:87)(cid:14)(cid:69)(cid:14)(cid:70)(cid:0)
1,200,000
March 01, 2016)
4 Mr. Srikanth Nadhamuni (appointed w.e.f
550,000
-
-
2,500,000
2,750,000
1,200,000
-
550,000
September 20, 2016)
Sub total (ii)
Total (i+ii)
Overall ceiling as per the Act ^
5,000,000
2,000,000
7,000,000
1,670,0000
6,000,000
3,000,000
25,700,000
# Pursuant to RBI Guidelines on Compensation To Non-Executive Directors of Private Sector Banks dated June 1, 2015 and the resolution
passed by the shareholders at the 22nd Annual General Meeting of the Bank held on July 21, 2016, the non-executive directors, including the
independent directors, other than the Chairperson, were paid profit-related commission of ` 10,00,000/- each. The commission paid during
FY 2016-17 pertains to the FY 2015-16.
Total Managerial Remuneration = (A)+(B) = ` 233,691,422
^ Section 198 of the Companies Act, 1956 (which corresponds to the now applicable section 197 of the Companies Act, 2013) does not, by
virtue of section 35B (2A) of the Banking Regulation Act, 1949, apply to Banking companies.
HDFC Bank Limited Annual Report 2016-17
54
Directors' Report
C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MANAGING DIRECTOR/ WHOLE TIME DIRECTOR
(`)
/ MANAGER
Sr.
no.
Particulars of Remuneration
1 Gross salary
(a) Salary as per provisions contained in
section 17(1) of the Income-tax Act, 1961
Key Managerial Personnel
Mr. Sanjay Dongre
(Company Secretary)
Mr. Sashidhar Jagdishan
(Chief Financial Officer)
Total
94,13,304
1,93,28,104
2,87,41,408
(b) Value of perquisites u/s 17(2) of Income-tax
859,587
3,299,469
4,159,056
Act, 1961 except stock options
(c) Profits in lieu of salary under section 17(3)
-
-
-
of Income-tax Act, 1961
2 Stock options exercised during the year***
63,472,275
138,076,540
201,548,815
3 Sweat Equity
4 Commission
- as percent of profits
- others, specify
5 Others*
Total**
-
-
-
-
-
-
335,592
10,608,483
507,096
842,688
23,134,669
33,743,152
* Includes Provident Fund and tax exempted portion of superannuation.
** Does not include the value of stock options exercised during the year.
*** This includes stock options granted and vested over several previous years, but exercised during the last financial year.
VII. PENALTIES / PUNISHMENT / COMPOUNDING OF OFFENCES:
Type
Section of the
Companies Act
Brief
description
Details of penalties
/ punishment /
compounding fees
imposed
Authority (RD /
NCLT / Court)
Appeal made,
if any
(give details)
A. COMPANY
Penalty
Punishment
Compounding
B. DIRECTORS
Penalty
Punishment
Compounding
C. OTHER OFFICERS IN DEFAULT
Penalty
Punishment
Compounding
NONE
NONE
NONE
HDFC Bank Limited Annual Report 2016-17
55
Directors' Report
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HDFC Bank Limited Annual Report 2016-17
56
Directors' Report
ANNEXURE 5 to the Directors’ Report
Performance and financial position of subsidiaries and associates of the Bank as on March 31, 2017
(` crore)
Name of entity
Net assets as of
March 31, 2017
Profit or loss for the
year ended March 31, 2017
As percentage
of consolidated
net assets**
Amount***
As percentage
of consolidated
profit or loss
Amount***
Parent:
HDFC Bank Limited
97.46%
89,462.38
95.39%
14,549.66
Subsidiaries*:
1. HDFC Securities Limited
2. HDB Financial Services Limited
Minority Interest in all subsidiaries
*The subsidiaries are domestic entities
0.88%
5.84%
0.32%
807.41
5,362.90
291.44
1.42%
4.49%
0.24%
215.90
684.21
36.72
**Consolidated net assets are total assets minus total liabilities including minority interest
***Amounts are before inter-company adjustments.
(` crore)
Name of entity
Investment as per equity method as
of March 31, 2017
Share of profit or loss for the year
ended March 31, 2017
As percentage
of consolidated
net assets
Amount
As percentage
of consolidated
profit or loss
Amount
0.04%
40.30
0.02%
2.34
Associate*:
International Asset Reconstruction
Company Private Limited
*The associate is a domestic entity
HDFC Bank Limited Annual Report 2016-17
57
Directors' Report
ANNEXURE 6 to the Directors’ Report
Disclosures on Remuneration
1.
Ratio of Remuneration of each director to the median employees’ remuneration for the year
Designation
Managing Director
Deputy Managing Director
Executive Director
Note:
Ratio
187:1
113:1
93:1
a. We have considered fixed pay for the computation of ratios as the performance bonus for the previous year for Whole time Directors is
subject to RBI approval.
b.
c.
Fixed pay includes-Salary, Allowances, Retiral Benefits as well as value of perquisites excluding ESOPs
The above includes all employees of the Bank excluding overseas employees.
2.
Percentage increase in remuneration of each Director, CFO, CEO, CS or Manager, if any, in the FY
Designation
Managing Director
Deputy Managing Director
Executive Director *
Chief Financial Officer
Company Secretary
Percentage Increase
20.00
20.00
40.00
5.00
7.00
*The increase in the remuneration includes increase given for salary alignment with Whole Time Directors both internally and externally.
3.
Percentage Increase in the median remuneration of employees in the financial year
The percentage increase in median remuneration of employees in the financial year was 11.12 per cent. The percentage
movement in the median remuneration of the employees for the financial year was 1.51 per cent.
4.
The number of permanent employees on the rolls of the Bank
As of March 31, 2017 the number of permanent employees on the rolls of the Bank was 84,325.
5.
Average percentage increase already made in the salaries of employees other than the managerial personnel in the
last financial year and its comparison with the percentage increase in the managerial remuneration and justification
thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration.
(cid:0)
(cid:52)(cid:72)(cid:69)(cid:0)(cid:65)(cid:86)(cid:69)(cid:82)(cid:65)(cid:71)(cid:69)(cid:0)(cid:80)(cid:69)(cid:82)(cid:67)(cid:69)(cid:78)(cid:84)(cid:65)(cid:71)(cid:69)(cid:0)(cid:73)(cid:78)(cid:67)(cid:82)(cid:69)(cid:65)(cid:83)(cid:69)(cid:0)(cid:70)(cid:79)(cid:82)(cid:0)(cid:43)(cid:69)(cid:89)(cid:0)(cid:45)(cid:65)(cid:78)(cid:65)(cid:71)(cid:69)(cid:82)(cid:73)(cid:65)(cid:76)(cid:0)(cid:48)(cid:69)(cid:82)(cid:83)(cid:79)(cid:78)(cid:78)(cid:69)(cid:76)(cid:0)(cid:0)(cid:0)(cid:0)(cid:26)(cid:0)(cid:17)(cid:24)(cid:14)(cid:20)(cid:16)(cid:0)(cid:80)(cid:69)(cid:82)(cid:0)(cid:67)(cid:69)(cid:78)(cid:84)
The average percentage increase for Non Managerial Staff : 9.69 per cent
6.
Affirmation that the remuneration is as per the remuneration policy of the company: YES
HDFC Bank Limited Annual Report 2016-17
58
Directors' Report
ANNEXURE 7 to the Directors’ Report
Statement under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
for year ended March 31, 2017
Sr.
No.
Name of the
Employee
Designation
Date of
joining
the Bank
Details of top ten employees in terms of remuneration drawn
Qualifications
Age Exp.
Total (`)
Last Employment
1 Aditya Puri
Managing Director
12-Sep-94 B.Com, CA.
2 Paresh Sukthankar
Deputy Managing Director
01-Sep-94 B.Com, M.M.S, A.M.P
66
54
44 100,572,147 Citibank
32
60,808,440 Citibank
(Harvard Business School)
3 Kaizad M. Bharucha
Executive Director
04-Oct-95 B.Com
52
31
46,610,835 SBI Commercial &
International Bank Ltd.
4 Abhay Aima
Group Head
02-Jan-95 Grad. from National Defence
55
30
26,264,867 INDSEC Securities & Finance
5 Rakesh Singh
6 Navin Puri
Group Head
Group Head
7 Ashish Parthasarthy Group Head
8 Bhavesh Zaveri
Group Head
9 Sashidhar Jagdishan Group Head
Academy
11-Apr-11 MBA, B.Sc
01-Feb-99 B.Com, MBA, CA
01-Nov-94 B.E., PGDM
13-Apr-98 M.Com., CAIIB
05-Feb-96 B.Sc., ACA., M.A
(Economics)
48
59
49
51
52
24
34
28
28
25
Ltd.
24,476,625 Roth Child
24,090,454 ANZ Grindlays Bank
23,523,385 INDSEC Investments Ltd.
23,389,168 Barclays Bank
23,134,669 Deutsche Bank
10 Payal Mandhyan*
Vice President
18-Jan-05 PGDBM
39
13
22,684,467 India Bulls Securities Ltd.
Persons in service for the whole year and drawing emoluments more than ` 10,200,000/- per annum, other than the above
1 Abhishek Bhuwalka
Sr Vice President-I
10-Jun-99 MBA, CWA, B.Com
40
21
13,784,220 Matchless Packaging
2 Ajay Kumar Kapoor
Sr Exe Vice President
09-Oct-95 M.Sc.
3 Akshat Lakhera
Sr Vice President-I
09-Sep-10 PGDM, B.Sc
4 Ameya Shekhar
Vice President
20-Mar-06 MBA, CA, B.Com
Shenoy
53
40
38
31
16
13
Industries (P) Ltd.
12,955,221 Times Bank Ltd.
15,567,571 BNP Paribas
11,499,582 Tionale Enterprises Pvt Ltd
5 Amit Dayal
Exe. Vice President
19-Dec-94 B.Sc., DBM
50
26
16,814,052 SBI Commercial &
International Bank Ltd
6 Anil L. Bhavnani
Exe. Vice President
7 Ankush Pitale
Exe. Vice President
16-Jun-03 CS, B.Com
28-Jul-14 MMS
44
45
23
21
11,082,765 CitiCorp Finance I Ltd.
13,324,739 Religare Capital Markets Pvt.
Limited
Sr Vice President-I
14-Feb-07 LL.B, B.Com
49
25
13,680,448 Strategic Capital Corporation
8 Anupama Rajesh
Munagekar
9 Arun Mohanty
Exe. Vice President
09-Nov-05 BA
10 Arup Kumar Rakshit
Sr Exe Vice President
11 Arvind Kapil
Group Head
01-Aug-06 PGDM, B.E
18-Dec-98 MMS, B.E
12 Aseem Dhru
Group Head
13 Ashima Khanna Bhat Group Head
14 Ashok Khanna
Group Head
15 Ashtosh Raina
Sr Vice President-I
16 Atul Sadashiv Barve
Exe. Vice President
02-May-15 CA,CWA, B.Com
07-Nov-94 B. Bus, MMS
19-Jun-02 MA
03-Sep-07 CAIIB, B.Sc
28-Feb-07 MMS, MA, B.Sc
17 Benjamin Frank
Sr Exe Vice President
05-Apr-04 MBA, B.Sc
18 Bhaskar C. Panda
Sr Vice President-II
19 Charmaine Pereira
Sr Vice President-II
20 Debajeet Das
Sr Vice President-II
21 Dolreich D'Mello*
Dy. Vice President
22 Farid Ahmed*
Asst. Vice President
23 Fayaz Ainodin Patel*
Asst. Vice President
24 Gopalkrishnan Santosh Exe. Vice President
25 Govind Pandey
Sr Exe Vice President
21-Nov-97 BA
01-Nov-94 DBM, BA
06-Aug-96 MA
09-Jan-97 B.Com
07-May-07 MBA, B.Sc
02-Aug-10 MBA, B.Com
17-Jan-01 B.Com
05-Aug-98 MSC
26 Gulzar Singh
Sr Exe Vice President
28-Oct-96 PGDM, BA
27 Harsh S Gupta*
Sr Vice President-I
04-Sep-00 PGDBA, B.Sc
HDFC Bank Limited Annual Report 2016-17
59
59
48
46
47
46
60
49
54
53
55
44
45
41
39
38
47
60
46
41
35
31
23
22
24
36
26
33
31
32
22
22
20
17
14
25
34
23
19
Pvt Ltd
12,791,009 Reserve Bank Of India
21,287,305 ABN Amro Bank
15,214,374 GE Countrywide Consumer
Financial Services Ltd.
18,399,069 HDFC Securities Ltd
17,617,273 A F Ferguson & Co
15,977,850 Centurion Bank
13,352,345 State Bank Of India
11,704,496 IDBI Ltd
12,044,784 IDBI Bank Ltd.
17,049,345 Times Bank Ltd.
13,759,774 Fresher
18,032,347 Texport Syndicate
12,406,545 ANZ Grindlays Bank
11,767,196 Kotak Mahindra Bank Ltd
10,303,038 Sharekhan Ltd
10,882,803 American Express Bank
13,312,806 State Bank of Saurashtra
12,895,189 Times Bank Ltd.
18,189,331 ICICI Cap Ltd
Directors' Report
Sr.
No.
Name of the
Employee
Designation
Date of
joining
the Bank
Qualifications
Age Exp.
Total (`)
Last Employment
28 Imran Ali Baig*
Vice President
(cid:16)(cid:21)(cid:13)(cid:42)(cid:85)(cid:78)(cid:13)(cid:25)(cid:23) PGDBA, CFA-A, B.Sc
29 (cid:42)(cid:65)(cid:89)(cid:0)(cid:51)(cid:79)(cid:78)(cid:65)(cid:87)(cid:65)(cid:76)(cid:65)(cid:0)(cid:0)
Sr Vice President-II
12-Aug-99 MMS, B.Com
30 (cid:42)(cid:73)(cid:77)(cid:77)(cid:89)(cid:0)(cid:52)(cid:65)(cid:84)(cid:65)(cid:0)(cid:0)
Group Head
15-Dec-94 B.Com., M.F.M., CFA
31 (cid:43)(cid:14)(cid:0)(cid:45)(cid:65)(cid:78)(cid:79)(cid:72)(cid:65)(cid:82)(cid:65)(cid:0)(cid:50)(cid:65)(cid:74)(cid:0)(cid:0)
Sr Exe Vice President
06-Dec-96 CAIIB, B.Com
32 (cid:43)(cid:65)(cid:80)(cid:73)(cid:76)(cid:0)(cid:34)(cid:65)(cid:78)(cid:83)(cid:65)(cid:76)(cid:0)(cid:0)
Sr Vice President-I
30-Sep-04 PGPM, B.Com
44
41
51
59
39
33 (cid:43)(cid:73)(cid:78)(cid:74)(cid:85)(cid:76)(cid:0)(cid:51)(cid:72)(cid:65)(cid:82)(cid:77)(cid:65)(cid:10)
Asst. Vice President
22-Sep-08 Master's Degree/Dip,B.Com 36
34 Madhusoodan Hegde Exe. Vice President
11-Feb-97 CAIIB, B.Sc.
35 (cid:45)(cid:65)(cid:72)(cid:69)(cid:83)(cid:72)(cid:0)(cid:43)(cid:85)(cid:77)(cid:65)(cid:82)(cid:0)(cid:42)(cid:85)(cid:71)(cid:65)(cid:76)(cid:0)
(cid:43)(cid:73)(cid:83)(cid:72)(cid:79)(cid:82)(cid:69)(cid:84)(cid:65)(cid:80)(cid:65)(cid:82)(cid:73)(cid:65)(cid:0)(cid:0)
Sr Vice President-I
(cid:17)(cid:17)(cid:13)(cid:42)(cid:85)(cid:78)(cid:13)(cid:16)(cid:21) LLB, CS, CA, B.Com
36 Maheswara P Reddy Sr Vice President-I
06-May-02 MBA, BA
37 Makarand Shrikant
Asst. Vice President
18-Mar-14 B.E
(cid:43)(cid:72)(cid:65)(cid:78)(cid:68)(cid:69)(cid:75)(cid:65)(cid:82)(cid:0)(cid:0)
38 (cid:45)(cid:65)(cid:78)(cid:85)(cid:0)(cid:42)(cid:79)(cid:83)(cid:69)(cid:80)(cid:72)(cid:10)
Dy. Vice President
39 Mathew Varghese*
Asst. Vice President
13-Nov-11 MMS,B.E
(cid:17)(cid:21)(cid:13)(cid:42)(cid:85)(cid:76)(cid:13)(cid:17)(cid:16) MMS,B.E
40 Mayuresh Vasant Apte Sr Vice President-II
06-Nov-00 MMS, B.TECH, C.H.S.E,
C.B.S.E
41 Michael Andrade
Exe. Vice President
01-Aug-97 MFA, DSM, B.Sc.
42 Mohammed Hannan
Asst. Vice President
(cid:16)(cid:17)(cid:13)(cid:42)(cid:85)(cid:76)(cid:13)(cid:16)(cid:25) MBA, BSc
Abdul*
43 Munish Mittal
Group Head
17-Aug-96 PGDM, B.Sc.
44 N. Srinivasan
Exe. Vice President
11-Nov-96 CA, CWA, CS., B.Com
45 Neil Percy Francisco Group Head
46 Nirav Shah
Group Head
20-May-02 MBA, M.Sc., BE
(cid:17)(cid:21)(cid:13)(cid:42)(cid:85)(cid:76)(cid:13)(cid:25)(cid:25) MMS, B.Com
47 Nishant Nangia*
Asst. Vice President
04-Apr-05 B.Com
48 Nishikant Das
Exe. Vice President
23-Apr-12 PGDM, B.TECH
49 Nitin Chugh
Group Head
16-Apr-01 PGDM, B.TECH
50 Nitin Subramanya Rao Group Head
(cid:18)(cid:21)(cid:13)(cid:42)(cid:85)(cid:76)(cid:13)(cid:16)(cid:18) BE, MBA
51 Pallava Rathore*
Vice President
(cid:18)(cid:23)(cid:13)(cid:42)(cid:85)(cid:78)(cid:13)(cid:16)(cid:24) Master's Degree/Dip, BSc
52 Parag Rao
Group Head
53 Philip Mathew
Group Head
54 Pratap Luthra
Dy. Vice President
15-Apr-02 MMS, B.E
03-Apr-02 MA, B.Sc
13-Aug-05 MBA,BA
55 Rahul Bhandari*
Vice President
05-Feb-02 PGDBM, B.Com
56 (cid:50)(cid:65)(cid:74)(cid:69)(cid:69)(cid:86)(cid:0)(cid:0)(cid:51)(cid:69)(cid:78)(cid:71)(cid:85)(cid:80)(cid:84)(cid:65)(cid:0)(cid:0)
Exe. Vice President
21-Sep-07 PG (Gen Mgmt), B.E
57 (cid:50)(cid:65)(cid:74)(cid:69)(cid:69)(cid:86)(cid:0)(cid:55)(cid:65)(cid:82)(cid:73)(cid:65)(cid:82)(cid:10)
Vice President
58 (cid:50)(cid:65)(cid:74)(cid:69)(cid:78)(cid:68)(cid:69)(cid:82)(cid:0)(cid:51)(cid:69)(cid:72)(cid:71)(cid:65)(cid:76)(cid:0)(cid:0)
Group Head
59 (cid:50)(cid:65)(cid:74)(cid:69)(cid:83)(cid:72)(cid:0)(cid:43)(cid:85)(cid:77)(cid:65)(cid:82)(cid:0)
Rathanchand
Group Head
15-Apr-10 PGDBA, B.E
23-Feb-98 B.Sc, MBA
22-May-00 PGDM, B.Sc
60 (cid:50)(cid:65)(cid:74)(cid:69)(cid:83)(cid:72)(cid:0)(cid:51)(cid:72)(cid:65)(cid:82)(cid:77)(cid:65)(cid:0)(cid:0)
Sr Vice President-II
15-Nov-00 CA,CS, B.Com
61 (cid:50)(cid:65)(cid:74)(cid:73)(cid:78)(cid:68)(cid:69)(cid:82)(cid:0)(cid:34)(cid:65)(cid:66)(cid:66)(cid:65)(cid:82)(cid:0)(cid:0)
Exe. Vice President
(cid:17)(cid:22)(cid:13)(cid:42)(cid:65)(cid:78)(cid:13)(cid:16)(cid:17) LLB, B.Sc
62 (cid:50)(cid:65)(cid:86)(cid:69)(cid:69)(cid:83)(cid:72)(cid:0)(cid:43)(cid:85)(cid:77)(cid:65)(cid:82)(cid:0)(cid:34)(cid:72)(cid:65)(cid:84)(cid:73)(cid:65)(cid:0)(cid:0) Sr Exe Vice President
03-May-10 PGDM, B.Com
63 Ravi Narayan
Group Head
03-May-99 MBA, B.TECH
64 Ravi Ssn
65 (cid:50)(cid:69)(cid:74)(cid:73)(cid:0)(cid:42)(cid:79)(cid:72)(cid:78)(cid:10)
Sr Vice President-II
26-Nov-10 B.Com
Manager
30-Aug-10 PG Diploma, MA, BA
56
40
46
42
40
38
48
49
38
49
49
55
45
35
45
46
50
41
52
54
35
39
56
42
62
46
41
50
51
48
49
36
20
18
29
37
18
12
32
15
21
19
15
15
24
29
14
30
27
26
22
14
19
22
27
16
28
28
14
15
34
18
40
28
23
30
26
24
17
13
11,440,147 Fresher
12,498,838 Fresher
20,012,753 Apple Industries Ltd.
11,579,370 Times Bank Ltd.
13,053,654 ICICI Bank Ltd.
11,004,904 Citifinancial
12,095,216 Times Bank Ltd.
11,183,867 (cid:53)(cid:52)(cid:41)(cid:0)(cid:34)(cid:65)(cid:78)(cid:75)(cid:0)(cid:44)(cid:84)(cid:68)(cid:0)
14,042,294 American Express Bank
12,260,022 ICICI Securities Limited
12,467,442 Citibank
10,613,306 Citibank
11,889,576 Centurion Bank Ltd
10,359,492 Barclays Bank
12,313,621 Barclays Bank PLC
14,329,500 (cid:34)(cid:65)(cid:78)(cid:75)(cid:0)(cid:47)(cid:70)(cid:0)(cid:48)(cid:85)(cid:78)(cid:74)(cid:65)(cid:66)(cid:0)
11,349,866 Credential Finance
13,108,718 Standard Chartered bank
19,186,484 Global Trust Bank
12,816,723 E-Serve International Ltd
18,011,034 Standard Chartered Bank
17,069,362 Standered Chartered Bank
19,003,464 BNP Paribas
10,566,455 IDBI Bank Ltd
14,487,588 IBM Global Services
13,402,369 (cid:51)(cid:51)(cid:43)(cid:41)(cid:0)(cid:41)(cid:78)(cid:86)(cid:69)(cid:83)(cid:84)(cid:79)(cid:82)(cid:0)(cid:51)(cid:69)(cid:82)(cid:86)(cid:73)(cid:67)(cid:69)(cid:83)(cid:0)
12,284,191 ABN Amro Bank Ltd
14,318,661 Fresher
11,452,865 Hutchison Essar Ltd
16,800,081 Citi Bank
17,558,390 Times Bank Ltd.
14,425,888 Trans America Apple Finance
Ltd.
10,326,591 LCC Infotech Ltd
13,530,295 Centurion Bank Ltd
13,371,292 Fore Consultants Pvt Ltd
15,488,261 Bank Of America
11,133,605 Deutsche Bank
11,600,552 Aviva India Life Insurance
Co Ltd
66 Resham A. Mahtani
Sr Vice President-I
01-May-01 PGPIM, PGDBM, BA
41
19
12,978,555 Mecklai Financial &
Commercial Services Ltd.
HDFC Bank Limited Annual Report 2016-17
60
Directors' Report
Sr.
No.
Name of the
Employee
Designation
Date of
joining
the Bank
Qualifications
Age Exp.
Total (`)
Last Employment
67 Ritesh Sampat
Sr Vice President-II
(cid:16)(cid:19)(cid:13)(cid:42)(cid:65)(cid:78)(cid:13)(cid:17)(cid:18) CA, B.Com
68 (cid:50)(cid:79)(cid:76)(cid:73)(cid:0)(cid:42)(cid:65)(cid:77)(cid:84)(cid:72)(cid:69)(cid:10)
Asst. Vice President
05-Apr-11 MBA, B.Sc, PGDSM
41
40
69 (cid:51)(cid:65)(cid:78)(cid:74)(cid:65)(cid:89)(cid:0)(cid:36)(cid:79)(cid:78)(cid:71)(cid:82)(cid:69)(cid:0)(cid:0)
Exe. Vice President
02-May-95 B.Com, ACS, CWAINT, LL.B. 59
70 (cid:51)(cid:65)(cid:78)(cid:74)(cid:65)(cid:89)(cid:0)(cid:43)(cid:14)(cid:51)(cid:73)(cid:78)(cid:71)(cid:76)(cid:65)(cid:0)(cid:0)
Sr Vice President-II
10-Nov-07 PGDM, B.Com
71 Sanmoy Chakrabarti
Exe. Vice President
72 Sathyamurthy Sampath
Exe. Vice President
(cid:17)(cid:21)(cid:13)(cid:42)(cid:85)(cid:78)(cid:13)(cid:17)(cid:16) MS, B.Sc
07-Aug-00 B.Com
58
42
45
17
16
35
35
18
27
15,096,463 Standard Chartered Bank
19,818,230 Royal Bank Of Scotland
10,608,483 Boehringer Mannheim Ltd.
14,887,359 State Bank of India
12,792,397 Bank Danamon
14,737,500 Integrated Finance Co. Ltd.
(cid:43)(cid:85)(cid:77)(cid:65)(cid:82)(cid:0)(cid:0)
73 Shailesh B.
Sukhthankar
Exe. Vice President
01-Dec-94 MMS, B.Com
52
30
10,430,441 Citicorp Overseas s/w Ltd
74 Sharad Rungta
Sr Vice President-II
75 (cid:51)(cid:72)(cid:69)(cid:69)(cid:84)(cid:65)(cid:76)(cid:0)(cid:43)(cid:65)(cid:80)(cid:65)(cid:68)(cid:73)(cid:65)(cid:10)
Asst. Vice President
(cid:16)(cid:18)(cid:13)(cid:42)(cid:85)(cid:78)(cid:13)(cid:17)(cid:18) CFA, CA, B.Com
06-May-09 PGDMS, B.Com
76 Silvestre Anthony
Vice President
15-Sep-06 MBA, PG Diploma, B.Com
Pereira
77 Sitanshu Mitra
Exe. Vice President
01-Sep-95 MBA, B.Sc
78 Smita Bhagat
Sr Exe Vice President
79 Sukarm Bali*
Sr Vice President-I
80 Sumant Rampal
Exe. Vice President
(cid:17)(cid:18)(cid:13)(cid:42)(cid:85)(cid:76)(cid:13)(cid:25)(cid:25) M.Com, MBA
(cid:18)(cid:19)(cid:13)(cid:42)(cid:85)(cid:76)(cid:13)(cid:25)(cid:25) CA, B.Com
10-Aug-99 MBA, B.Com
40
40
39
49
52
50
42
81 Sundaresan M.
Exe. Vice President
02-May-02 B.E (Mechanical), PSG, MBA 46
82 (cid:53)(cid:77)(cid:65)(cid:83)(cid:72)(cid:65)(cid:78)(cid:75)(cid:65)(cid:82)(cid:0)(cid:39)(cid:79)(cid:80)(cid:65)(cid:76)(cid:65)(cid:78)(cid:10) Dy. Vice President
13-Dec-12 B.Com
83 (cid:54)(cid:0)(cid:51)(cid:0)(cid:53)(cid:78)(cid:78)(cid:73)(cid:75)(cid:82)(cid:73)(cid:83)(cid:72)(cid:78)(cid:65)(cid:78)(cid:10)
Vice President
84 V. Chakrapani
Group Head
12-Apr-03 (cid:45)(cid:34)(cid:33)(cid:12)(cid:0)(cid:34)(cid:14)(cid:51)(cid:67)(cid:12)(cid:0)(cid:48)(cid:53)(cid:35)
24-Nov-94 B.Com, CAIIB, ACS
85 Veerendra Rai*
Asst. Vice President
23-Apr-11 PGDBA, BBA
86 (cid:54)(cid:73)(cid:74)(cid:65)(cid:89)(cid:0)(cid:0)(cid:43)(cid:82)(cid:73)(cid:83)(cid:72)(cid:78)(cid:65)(cid:0)(cid:45)(cid:85)(cid:76)(cid:66)(cid:65)(cid:71)(cid:65)(cid:76)(cid:0)(cid:0) Exe. Vice President
(cid:16)(cid:18)(cid:13)(cid:42)(cid:65)(cid:78)(cid:13)(cid:16)(cid:23) PGPM, B.Sc
49
42
53
38
46
16
17
15
29
29
25
20
30
23
19
33
14
22
15,368,533 Credit Suisse AG
13,535,124 ICICI Bank Ltd
14,974,588 (cid:53)(cid:52)(cid:41)(cid:0)(cid:34)(cid:65)(cid:78)(cid:75)(cid:0)(cid:44)(cid:84)(cid:68)(cid:0)
10,609,777 ABN Amro Bank Ltd.
13,347,040 PDCOR Ltd.
18,515,532 Times Bank Ltd.
10,834,497 Walchnad Capital Ltd.
10,289,554 GE Countrywide Consumer
Financial Services Ltd.
14,509,765 ICICI Bank
13,101,738 Global Trust Bank Ltd
17,244,662 Standard Chartered Bank
11,350,131 (cid:50)(cid:33)(cid:43)(cid:0)(cid:34)(cid:65)(cid:78)(cid:75)(cid:0)
14,077,651 Diamond Management &
Technology Consultants
87 Vitthal Mangesh
Sr Vice President-I
22-Sep-07 M.Sc., B.E
46
23
12,147,623 Barclays Capital
(cid:43)(cid:85)(cid:76)(cid:75)(cid:65)(cid:82)(cid:78)(cid:73)(cid:0)(cid:0)
Persons employed for part of the year drawing emoluments more than ` 850,000 per month
88 Deepak Maheshwari Group Head
09-Feb-96 CAIIB, B.Com
62
42
12,429,522 Times Bank Ltd.
89 Harsh Dugar
Executive Vice President
23-Oct-96 CFA, CWA, B.Com
90 (cid:43)(cid:0)(cid:34)(cid:65)(cid:76)(cid:65)(cid:83)(cid:85)(cid:66)(cid:82)(cid:65)(cid:77)(cid:65)(cid:78)(cid:73)(cid:65)(cid:78)(cid:0)(cid:0)
Group Head
03-May-16 CA, ICWA, B.Com
91 (cid:43)(cid:65)(cid:82)(cid:84)(cid:73)(cid:75)(cid:0)(cid:42)(cid:65)(cid:73)(cid:78)(cid:0)(cid:0)
Executive Vice President
09-May-11 PGDM, B.Tech
44
46
47
26
21
24
8,840,172 ICFAI Business School
15,479,725 Citibank
12,623,837 ICICI Lombard General
Insurance Company Limited
92 (cid:46)(cid:73)(cid:84)(cid:73)(cid:78)(cid:0)(cid:42)(cid:65)(cid:73)(cid:78)(cid:0)(cid:0)
Sr Vice President-II
29-Sep-14 PGDBM, B.E
52
29
2,818,964 Cipher Capital Advisors Pvt
93 Ravi Santhanam
Exe. Vice President
01-Mar-17 PG Diploma, B.E
94 T V N Raghuram*
Senior Vice President - I
09-Oct-98 B.Com
Notes:
Ltd
47
48
24
28
1,154,682 Vodafone India
9,989,208 Times Bank Ltd
1. Remuneration shown above includes basic salary, allowances, performance bonus, cash allowances in lieu of perquisites or taxable value of perquisites, if availed as
computed as per Income-tax rules but excludes Gratuity, PF settlement, Super Annuation settlement, Perquisite on ESOP & Super Annuation perquisite.
2. All appointments are terminable by one / three months’ notice as the case may be on either side.
3. The above list does not include Employees sent on Deputation whose salary is reimbursed by the other company.
4. *Employee in overseas location.
5. None of the employees listed above hold 2% or more of the paid-up share capital of the Bank as at March 31, 2017.
6. Other than Mr. Aditya Puri, Managing Director who holds 0.13% of the paid up share capital of the Bank, the shareholding of the employees listed above does not
exceed 0.05% of the paid up share capital of the Bank as at March 31, 2017.
7. None of the employees listed above is a relative of any director of the Bank.
HDFC Bank Limited Annual Report 2016-17
61
Directors' Report
ANNEXURE 8 to the Directors’ Report
Form No. MR-3
SECRETARIAL AUDIT REPORT
For the financial year ended March 31, 2017
[Pursuant to section 204 (1) of the Companies Act, 2013 and Rule No.9 of the Companies
(Appointment and Remuneration of Personnel) Rules, 2014]
To
The Members
HDFC Bank Limited
HDFC Bank House,
Senapati Bapat Marg,
Lower Parel (West),
Mumbai - 400 013
We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to corporate
practices by HDFC Bank Limited (hereinafter called the ‘Bank’) for the audit period from April 1, 2016 to March 31, 2017. Secretarial
Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts / statutory compliances
and expressing our opinion thereon.
Based on our verification of the books, papers, minute books, forms and returns filed and other records maintained by the Bank
and also the information provided by the Bank, its officers, agents and authorized representatives during the conduct of Secretarial
(cid:33)(cid:85)(cid:68)(cid:73)(cid:84)(cid:27)(cid:0)(cid:87)(cid:69)(cid:0)(cid:72)(cid:69)(cid:82)(cid:69)(cid:66)(cid:89)(cid:0)(cid:82)(cid:69)(cid:80)(cid:79)(cid:82)(cid:84)(cid:0)(cid:84)(cid:72)(cid:65)(cid:84)(cid:0)(cid:73)(cid:78)(cid:0)(cid:79)(cid:85)(cid:82)(cid:0)(cid:79)(cid:80)(cid:73)(cid:78)(cid:73)(cid:79)(cid:78)(cid:12)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:34)(cid:65)(cid:78)(cid:75)(cid:0)(cid:72)(cid:65)(cid:83)(cid:12)(cid:0)(cid:68)(cid:85)(cid:82)(cid:73)(cid:78)(cid:71)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:65)(cid:85)(cid:68)(cid:73)(cid:84)(cid:0)(cid:80)(cid:69)(cid:82)(cid:73)(cid:79)(cid:68)(cid:0)(cid:70)(cid:82)(cid:79)(cid:77)(cid:0)(cid:33)(cid:80)(cid:82)(cid:73)(cid:76)(cid:0)(cid:17)(cid:12)(cid:0)(cid:18)(cid:16)(cid:17)(cid:22)(cid:0)(cid:84)(cid:79)(cid:0)(cid:45)(cid:65)(cid:82)(cid:67)(cid:72)(cid:0)(cid:19)(cid:17)(cid:12)(cid:0)(cid:18)(cid:16)(cid:17)(cid:23)(cid:0)(cid:8)(cid:84)(cid:72)(cid:69)(cid:0)(cid:64)(cid:65)(cid:85)(cid:68)(cid:73)(cid:84)(cid:0)
period’), complied with the statutory provisions listed hereunder and also that the Bank has proper Board processes and compliance
(cid:77)(cid:69)(cid:67)(cid:72)(cid:65)(cid:78)(cid:73)(cid:83)(cid:77)(cid:0)(cid:73)(cid:78)(cid:0)(cid:80)(cid:76)(cid:65)(cid:67)(cid:69)(cid:0)(cid:84)(cid:79)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:69)(cid:88)(cid:84)(cid:69)(cid:78)(cid:84)(cid:12)(cid:0)(cid:73)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:77)(cid:65)(cid:78)(cid:78)(cid:69)(cid:82)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:83)(cid:85)(cid:66)(cid:74)(cid:69)(cid:67)(cid:84)(cid:0)(cid:84)(cid:79)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:82)(cid:69)(cid:80)(cid:79)(cid:82)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)(cid:77)(cid:65)(cid:68)(cid:69)(cid:0)(cid:72)(cid:69)(cid:82)(cid:69)(cid:73)(cid:78)(cid:65)(cid:70)(cid:84)(cid:69)(cid:82)(cid:14)
We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Bank for the
financial year ended on March 31, 2017 according to the provisions of:
(cid:8)(cid:73)(cid:9)(cid:0)
(cid:52)(cid:72)(cid:69)(cid:0)(cid:35)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:73)(cid:69)(cid:83)(cid:0)(cid:33)(cid:67)(cid:84)(cid:12)(cid:0)(cid:18)(cid:16)(cid:17)(cid:19)(cid:0)(cid:8)(cid:64)(cid:84)(cid:72)(cid:69)(cid:0)(cid:33)(cid:67)(cid:84)(cid:7)(cid:9)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:50)(cid:85)(cid:76)(cid:69)(cid:83)(cid:0)(cid:77)(cid:65)(cid:68)(cid:69)(cid:0)(cid:84)(cid:72)(cid:69)(cid:82)(cid:69)(cid:0)(cid:85)(cid:78)(cid:68)(cid:69)(cid:82)(cid:27)
(cid:8)(cid:73)(cid:73)(cid:9)(cid:0) (cid:52)(cid:72)(cid:69)(cid:0)(cid:51)(cid:69)(cid:67)(cid:85)(cid:82)(cid:73)(cid:84)(cid:73)(cid:69)(cid:83)(cid:0)(cid:35)(cid:79)(cid:78)(cid:84)(cid:82)(cid:65)(cid:67)(cid:84)(cid:83)(cid:0)(cid:8)(cid:50)(cid:69)(cid:71)(cid:85)(cid:76)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:9)(cid:0)(cid:33)(cid:67)(cid:84)(cid:12)(cid:0)(cid:17)(cid:25)(cid:21)(cid:22)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:50)(cid:85)(cid:76)(cid:69)(cid:83)(cid:0)(cid:77)(cid:65)(cid:68)(cid:69)(cid:0)(cid:84)(cid:72)(cid:69)(cid:82)(cid:69)(cid:0)(cid:85)(cid:78)(cid:68)(cid:69)(cid:82)(cid:27)
(cid:8)(cid:73)(cid:73)(cid:73)(cid:9)(cid:0) (cid:52)(cid:72)(cid:69)(cid:0)(cid:36)(cid:69)(cid:80)(cid:79)(cid:83)(cid:73)(cid:84)(cid:79)(cid:82)(cid:73)(cid:69)(cid:83)(cid:0)(cid:33)(cid:67)(cid:84)(cid:12)(cid:0)(cid:17)(cid:25)(cid:25)(cid:22)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:50)(cid:69)(cid:71)(cid:85)(cid:76)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:34)(cid:89)(cid:69)(cid:13)(cid:76)(cid:65)(cid:87)(cid:83)(cid:0)(cid:70)(cid:82)(cid:65)(cid:77)(cid:69)(cid:68)(cid:0)(cid:84)(cid:72)(cid:69)(cid:82)(cid:69)(cid:0)(cid:85)(cid:78)(cid:68)(cid:69)(cid:82)(cid:27)
(iv) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):
(cid:8)(cid:65)(cid:9)(cid:0)(cid:0) (cid:52)(cid:72)(cid:69)(cid:0)(cid:51)(cid:69)(cid:67)(cid:85)(cid:82)(cid:73)(cid:84)(cid:73)(cid:69)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:37)(cid:88)(cid:67)(cid:72)(cid:65)(cid:78)(cid:71)(cid:69)(cid:0)(cid:34)(cid:79)(cid:65)(cid:82)(cid:68)(cid:0)(cid:79)(cid:70)(cid:0)(cid:41)(cid:78)(cid:68)(cid:73)(cid:65)(cid:0)(cid:8)(cid:51)(cid:85)(cid:66)(cid:83)(cid:84)(cid:65)(cid:78)(cid:84)(cid:73)(cid:65)(cid:76)(cid:0)(cid:33)(cid:67)(cid:81)(cid:85)(cid:73)(cid:83)(cid:73)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:79)(cid:70)(cid:0)(cid:51)(cid:72)(cid:65)(cid:82)(cid:69)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:52)(cid:65)(cid:75)(cid:69)(cid:79)(cid:86)(cid:69)(cid:82)(cid:83)(cid:9)(cid:0)(cid:50)(cid:69)(cid:71)(cid:85)(cid:76)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:12)(cid:0)(cid:18)(cid:16)(cid:17)(cid:17)(cid:27)
(cid:8)(cid:66)(cid:9)(cid:0)(cid:0) (cid:52)(cid:72)(cid:69)(cid:0)(cid:51)(cid:69)(cid:67)(cid:85)(cid:82)(cid:73)(cid:84)(cid:73)(cid:69)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:37)(cid:88)(cid:67)(cid:72)(cid:65)(cid:78)(cid:71)(cid:69)(cid:0)(cid:34)(cid:79)(cid:65)(cid:82)(cid:68)(cid:0)(cid:79)(cid:70)(cid:0)(cid:41)(cid:78)(cid:68)(cid:73)(cid:65)(cid:0)(cid:8)(cid:48)(cid:82)(cid:79)(cid:72)(cid:73)(cid:66)(cid:73)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:79)(cid:70)(cid:0)(cid:41)(cid:78)(cid:83)(cid:73)(cid:68)(cid:69)(cid:82)(cid:0)(cid:52)(cid:82)(cid:65)(cid:68)(cid:73)(cid:78)(cid:71)(cid:9)(cid:0)(cid:50)(cid:69)(cid:71)(cid:85)(cid:76)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:12)(cid:0)(cid:18)(cid:16)(cid:17)(cid:21)(cid:27)
(cid:8)(cid:67)(cid:9)(cid:0)(cid:0) (cid:52)(cid:72)(cid:69)(cid:0)(cid:51)(cid:69)(cid:67)(cid:85)(cid:82)(cid:73)(cid:84)(cid:73)(cid:69)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:37)(cid:88)(cid:67)(cid:72)(cid:65)(cid:78)(cid:71)(cid:69)(cid:0)(cid:34)(cid:79)(cid:65)(cid:82)(cid:68)(cid:0)(cid:79)(cid:70)(cid:0)(cid:41)(cid:78)(cid:68)(cid:73)(cid:65)(cid:0)(cid:8)(cid:51)(cid:72)(cid:65)(cid:82)(cid:69)(cid:0)(cid:34)(cid:65)(cid:83)(cid:69)(cid:68)(cid:0)(cid:37)(cid:77)(cid:80)(cid:76)(cid:79)(cid:89)(cid:69)(cid:69)(cid:0)(cid:34)(cid:69)(cid:78)(cid:69)(cid:108)(cid:84)(cid:83)(cid:9)(cid:0)(cid:50)(cid:69)(cid:71)(cid:85)(cid:76)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:12)(cid:0)(cid:18)(cid:16)(cid:17)(cid:20)(cid:27)
(cid:8)(cid:68)(cid:9)(cid:0)(cid:0) (cid:52)(cid:72)(cid:69)(cid:0)(cid:51)(cid:69)(cid:67)(cid:85)(cid:82)(cid:73)(cid:84)(cid:73)(cid:69)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:37)(cid:88)(cid:67)(cid:72)(cid:65)(cid:78)(cid:71)(cid:69)(cid:0)(cid:34)(cid:79)(cid:65)(cid:82)(cid:68)(cid:0)(cid:79)(cid:70)(cid:0)(cid:41)(cid:78)(cid:68)(cid:73)(cid:65)(cid:0)(cid:8)(cid:41)(cid:83)(cid:83)(cid:85)(cid:69)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:44)(cid:73)(cid:83)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)(cid:79)(cid:70)(cid:0)(cid:36)(cid:69)(cid:66)(cid:84)(cid:0)(cid:51)(cid:69)(cid:67)(cid:85)(cid:82)(cid:73)(cid:84)(cid:73)(cid:69)(cid:83)(cid:9)(cid:0)(cid:50)(cid:69)(cid:71)(cid:85)(cid:76)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:12)(cid:0)(cid:18)(cid:16)(cid:16)(cid:24)(cid:27)
(e) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993
(cid:82)(cid:69)(cid:71)(cid:65)(cid:82)(cid:68)(cid:73)(cid:78)(cid:71)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:35)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:73)(cid:69)(cid:83)(cid:0)(cid:33)(cid:67)(cid:84)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:68)(cid:69)(cid:65)(cid:76)(cid:73)(cid:78)(cid:71)(cid:0)(cid:87)(cid:73)(cid:84)(cid:72)(cid:0)(cid:67)(cid:76)(cid:73)(cid:69)(cid:78)(cid:84)(cid:27)
(cid:8)(cid:70)(cid:9)(cid:0)(cid:0) (cid:52)(cid:72)(cid:69)(cid:0)(cid:51)(cid:69)(cid:67)(cid:85)(cid:82)(cid:73)(cid:84)(cid:73)(cid:69)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:37)(cid:88)(cid:67)(cid:72)(cid:65)(cid:78)(cid:71)(cid:69)(cid:0)(cid:34)(cid:79)(cid:65)(cid:82)(cid:68)(cid:0)(cid:79)(cid:70)(cid:0)(cid:41)(cid:78)(cid:68)(cid:73)(cid:65)(cid:0)(cid:8)(cid:44)(cid:73)(cid:83)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)(cid:47)(cid:66)(cid:76)(cid:73)(cid:71)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:36)(cid:73)(cid:83)(cid:67)(cid:76)(cid:79)(cid:83)(cid:85)(cid:82)(cid:69)(cid:0)(cid:50)(cid:69)(cid:81)(cid:85)(cid:73)(cid:82)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:9)(cid:0)(cid:50)(cid:69)(cid:71)(cid:85)(cid:76)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:12)(cid:0)(cid:18)(cid:16)(cid:17)(cid:21)(cid:27)
(cid:8)(cid:71)(cid:9)(cid:0)(cid:0) (cid:52)(cid:72)(cid:69)(cid:0)(cid:51)(cid:69)(cid:67)(cid:85)(cid:82)(cid:73)(cid:84)(cid:73)(cid:69)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:37)(cid:88)(cid:67)(cid:72)(cid:65)(cid:78)(cid:71)(cid:69)(cid:0)(cid:34)(cid:79)(cid:65)(cid:82)(cid:68)(cid:0)(cid:79)(cid:70)(cid:0)(cid:41)(cid:78)(cid:68)(cid:73)(cid:65)(cid:0)(cid:8)(cid:45)(cid:69)(cid:82)(cid:67)(cid:72)(cid:65)(cid:78)(cid:84)(cid:0)(cid:34)(cid:65)(cid:78)(cid:75)(cid:69)(cid:82)(cid:83)(cid:9)(cid:0)(cid:50)(cid:69)(cid:71)(cid:85)(cid:76)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:12)(cid:0)(cid:17)(cid:25)(cid:25)(cid:18)(cid:27)
(h) The Securities and Exchange Board of India (Bankers to an Issue) Regulation, 1994
(v) The Banking Regulation Act, 1949 as specifically applicable to the Bank.
We have also examined compliance with the applicable clauses of the following:
(cid:17)(cid:14)(cid:0)
(cid:51)(cid:69)(cid:67)(cid:82)(cid:69)(cid:84)(cid:65)(cid:82)(cid:73)(cid:65)(cid:76)(cid:0)(cid:51)(cid:84)(cid:65)(cid:78)(cid:68)(cid:65)(cid:82)(cid:68)(cid:83)(cid:0)(cid:73)(cid:83)(cid:83)(cid:85)(cid:69)(cid:68)(cid:0)(cid:66)(cid:89)(cid:0)(cid:52)(cid:72)(cid:69)(cid:0)(cid:41)(cid:78)(cid:83)(cid:84)(cid:73)(cid:84)(cid:85)(cid:84)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0)(cid:35)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:89)(cid:0)(cid:51)(cid:69)(cid:67)(cid:82)(cid:69)(cid:84)(cid:65)(cid:82)(cid:73)(cid:69)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)(cid:41)(cid:78)(cid:68)(cid:73)(cid:65)(cid:0)(cid:82)(cid:69)(cid:76)(cid:65)(cid:84)(cid:69)(cid:68)(cid:0)(cid:84)(cid:79)(cid:0)(cid:77)(cid:69)(cid:69)(cid:84)(cid:73)(cid:78)(cid:71)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:77)(cid:73)(cid:78)(cid:85)(cid:84)(cid:69)(cid:83)(cid:27)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)
2.
Listing Agreement entered into by the Bank with the Stock Exchanges.
HDFC Bank Limited Annual Report 2016-17
62
Directors' Report
During the period under review, the Bank has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards
etc. mentioned above.
During the period under review, provisions of the following regulations were not applicable to the Bank:
(cid:8)(cid:73)(cid:9)(cid:0)
(cid:52)(cid:72)(cid:69)(cid:0)(cid:51)(cid:69)(cid:67)(cid:85)(cid:82)(cid:73)(cid:84)(cid:73)(cid:69)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:37)(cid:88)(cid:67)(cid:72)(cid:65)(cid:78)(cid:71)(cid:69)(cid:0)(cid:34)(cid:79)(cid:65)(cid:82)(cid:68)(cid:0)(cid:79)(cid:70)(cid:0)(cid:41)(cid:78)(cid:68)(cid:73)(cid:65)(cid:0)(cid:8)(cid:41)(cid:83)(cid:83)(cid:85)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0)(cid:35)(cid:65)(cid:80)(cid:73)(cid:84)(cid:65)(cid:76)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:36)(cid:73)(cid:83)(cid:67)(cid:76)(cid:79)(cid:83)(cid:85)(cid:82)(cid:69)(cid:0)(cid:50)(cid:69)(cid:81)(cid:85)(cid:73)(cid:82)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:9)(cid:0)(cid:50)(cid:69)(cid:71)(cid:85)(cid:76)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:12)(cid:0)(cid:18)(cid:16)(cid:16)(cid:25)(cid:27)
(cid:8)(cid:73)(cid:73)(cid:9)(cid:0)(cid:0) (cid:52)(cid:72)(cid:69)(cid:0)(cid:51)(cid:69)(cid:67)(cid:85)(cid:82)(cid:73)(cid:84)(cid:73)(cid:69)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:37)(cid:88)(cid:67)(cid:72)(cid:65)(cid:78)(cid:71)(cid:69)(cid:0)(cid:34)(cid:79)(cid:65)(cid:82)(cid:68)(cid:0)(cid:79)(cid:70)(cid:0)(cid:41)(cid:78)(cid:68)(cid:73)(cid:65)(cid:0)(cid:8)(cid:36)(cid:69)(cid:76)(cid:73)(cid:83)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)(cid:79)(cid:70)(cid:0)(cid:37)(cid:81)(cid:85)(cid:73)(cid:84)(cid:89)(cid:0)(cid:51)(cid:72)(cid:65)(cid:82)(cid:69)(cid:83)(cid:9)(cid:0)(cid:50)(cid:69)(cid:71)(cid:85)(cid:76)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:12)(cid:0)(cid:18)(cid:16)(cid:16)(cid:25)(cid:27)
(cid:8)(cid:73)(cid:73)(cid:73)(cid:9)(cid:0)(cid:0) (cid:52)(cid:72)(cid:69)(cid:0)(cid:51)(cid:69)(cid:67)(cid:85)(cid:82)(cid:73)(cid:84)(cid:73)(cid:69)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:37)(cid:88)(cid:67)(cid:72)(cid:65)(cid:78)(cid:71)(cid:69)(cid:0)(cid:34)(cid:79)(cid:65)(cid:82)(cid:68)(cid:0)(cid:79)(cid:70)(cid:0)(cid:41)(cid:78)(cid:68)(cid:73)(cid:65)(cid:0)(cid:8)(cid:34)(cid:85)(cid:89)(cid:66)(cid:65)(cid:67)(cid:75)(cid:0)(cid:79)(cid:70)(cid:0)(cid:51)(cid:69)(cid:67)(cid:85)(cid:82)(cid:73)(cid:84)(cid:73)(cid:69)(cid:83)(cid:9)(cid:0)(cid:50)(cid:69)(cid:71)(cid:85)(cid:76)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:12)(cid:0)(cid:17)(cid:25)(cid:25)(cid:24)(cid:27)
(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct
Investment, Overseas Direct Investment and External Commercial Borrowings.
We further report that-
The Board of Directors of the Bank is duly constituted with proper balance of Executive Directors, Non-Executive Directors and
Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were
carried out in compliance with the provisions of the Act.
Proper notice is given to all Directors to schedule the Board meetings in compliance with the provisions of Section 173(3) of the
Companies Act, 2013, agenda and detailed notes on agenda were sent at least seven days in advance and where the same were
given at shorter notice than 7 (seven) days, proper consent thereof were obtained and a system exists for seeking and obtaining
further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.
(cid:36)(cid:69)(cid:67)(cid:73)(cid:83)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0) (cid:65)(cid:84)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:77)(cid:69)(cid:69)(cid:84)(cid:73)(cid:78)(cid:71)(cid:83)(cid:0) (cid:79)(cid:70)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:34)(cid:79)(cid:65)(cid:82)(cid:68)(cid:0) (cid:79)(cid:70)(cid:0) (cid:36)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:83)(cid:0) (cid:79)(cid:70)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:34)(cid:65)(cid:78)(cid:75)(cid:0) (cid:87)(cid:69)(cid:82)(cid:69)(cid:0) (cid:67)(cid:65)(cid:82)(cid:82)(cid:73)(cid:69)(cid:68)(cid:0) (cid:84)(cid:72)(cid:82)(cid:79)(cid:85)(cid:71)(cid:72)(cid:0) (cid:79)(cid:78)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:66)(cid:65)(cid:83)(cid:73)(cid:83)(cid:0) (cid:79)(cid:70)(cid:0) (cid:77)(cid:65)(cid:74)(cid:79)(cid:82)(cid:73)(cid:84)(cid:89)(cid:14)(cid:0)(cid:52)(cid:72)(cid:69)(cid:82)(cid:69)(cid:0) (cid:87)(cid:69)(cid:82)(cid:69)(cid:0) (cid:78)(cid:79)(cid:0)
dissenting views by any member of the Board of Directors during the period under review.
We further report that there are adequate systems and processes in the Bank commensurate with the size and operations of the
Bank to monitor and ensure compliance with the applicable laws, rules, regulations and guidelines.
We further report that during the audit period, the Bank has following specific events:
The Bank has obtained approval of members for issue of Perpetual Debt Instruments, Tier II Capital Bonds and Senior Long Term
Infrastructure Bonds on a private placements basis of an amount in aggregate not exceeding Rs 50,000 Crore.
(cid:52)(cid:72)(cid:69)(cid:0)(cid:34)(cid:65)(cid:78)(cid:75)(cid:0)(cid:72)(cid:65)(cid:83)(cid:0)(cid:73)(cid:83)(cid:83)(cid:85)(cid:69)(cid:68)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:65)(cid:76)(cid:76)(cid:79)(cid:84)(cid:84)(cid:69)(cid:68)(cid:0)(cid:79)(cid:78)(cid:0)(cid:51)(cid:69)(cid:80)(cid:84)(cid:69)(cid:77)(cid:66)(cid:69)(cid:82)(cid:0)(cid:18)(cid:17)(cid:12)(cid:0)(cid:18)(cid:16)(cid:17)(cid:22)(cid:0)(cid:79)(cid:78)(cid:0)(cid:65)(cid:0)(cid:80)(cid:82)(cid:73)(cid:86)(cid:65)(cid:84)(cid:69)(cid:0)(cid:80)(cid:76)(cid:65)(cid:67)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:66)(cid:65)(cid:83)(cid:73)(cid:83)(cid:0)(cid:51)(cid:69)(cid:78)(cid:73)(cid:79)(cid:82)(cid:12)(cid:0)(cid:53)(cid:78)(cid:83)(cid:69)(cid:67)(cid:85)(cid:82)(cid:69)(cid:68)(cid:12)(cid:0)(cid:50)(cid:69)(cid:68)(cid:69)(cid:69)(cid:77)(cid:65)(cid:66)(cid:76)(cid:69)(cid:12)(cid:0)(cid:44)(cid:79)(cid:78)(cid:71)(cid:0)(cid:52)(cid:69)(cid:82)(cid:77)(cid:12)(cid:0)
Non-Convertible Bonds in the nature of Debentures amounting to ` 6700 Crore (67000 Bonds of face value ` 10,00,000/- each).
For BNP & Associates
Company Secretaries
[Firm Regn. No. P2014MH037400]
B Narasimhan
Partner
FCS No.: 1303
C P No.: 10440
Place: Mumbai
Date: May 15, 2017
Note: This report is to be read with our letter of even date which is annexed as Annexure A and forms an integral part of this report.
HDFC Bank Limited Annual Report 2016-17
63
Directors' Report
To
The Members
HDFC Bank Limited
HDFC Bank House,
Senapati Bapat Marg,
Lower Parel (West),
Mumbai - 400 013
Annexure A
Secretarial Audit Report of even date is to be read along with this letter.
1. The compliance of provisions of all laws, rules, regulations, standards applicable to HDFC Bank Limited (hereinafter called ‘the
Bank’) is the responsibility of the management of the Bank. Our examination was limited to the verification of records and proce-
dures on test check basis for the purpose of issue of the Secretarial Audit Report.
2. Maintenance of secretarial and other records of applicable laws is the responsibility of the management of the Bank. Our respon-
sibility is to issue Secretarial Audit Report, based on the audit of the relevant records maintained and furnished to us by the Bank,
along with explanations where so required.
3. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of
the contents of the secretarial and other legal records, legal compliance mechanism and corporate conduct. The verification was
done on test check basis to ensure that correct facts as reflected in secretarial and other records produced to us. We believe that
the processes and practices we followed, provides a reasonable basis for our opinion for the purpose of issue of the Secretarial
Audit Report.
4. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Bank.
5. Wherever required, we have obtained the management representation about list of applicable laws, compliance of laws, rules and
(cid:82)(cid:69)(cid:71)(cid:85)(cid:76)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:77)(cid:65)(cid:74)(cid:79)(cid:82)(cid:0)(cid:69)(cid:86)(cid:69)(cid:78)(cid:84)(cid:83)(cid:0)(cid:68)(cid:85)(cid:82)(cid:73)(cid:78)(cid:71)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:65)(cid:85)(cid:68)(cid:73)(cid:84)(cid:0)(cid:80)(cid:69)(cid:82)(cid:73)(cid:79)(cid:68)(cid:14)
6. The Secretarial Audit Report is neither an assurance as to the future viability of the Bank nor of the efficacy or effectiveness with
which the management has conducted the affairs of the Bank.
For BNP & Associates
Company Secretaries
[Firm Regn. No. P2014MH037400]
B Narasimhan
Partner
FCS No.: 1303
C P No.: 10440
HDFC Bank Limited Annual Report 2016-17
64
Independent Auditor's Report
To the Members of HDFC Bank Limited
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial
statements of HDFC BANK LIMITED (“the Bank”), which
comprise the Balance Sheet as at 31st March, 2017, the
Statement of Profit and Loss and the Cash Flow Statement
for the year then ended, and a summary of the significant
accounting policies and other explanatory information.
Management’s Responsibility for the Standalone Financial
Statements
The Bank’s Board of Directors is responsible for the matters
stated in Section 134(5) of the Companies Act, 2013 (“the Act”)
with respect to the preparation of these standalone financial
statements that give a true and fair view of the financial
position, financial performance and cash flows of the Bank in
accordance with the provisions of Section 29 of the Banking
Regulation Act, 1949, accounting principles generally accepted
in India, including the Accounting Standards prescribed under
Section 133 of the Act, in so far as applicable to banks, and the
guidelines issued by the Reserve Bank of India.
frauds and other
This responsibility also includes maintenance of adequate
accounting records in accordance with the provisions of the
Act for safeguarding the assets of the Bank and for preventing
and detecting
irregularities; selection
and application of appropriate accounting policies; making
judgments and estimates that are reasonable and prudent;
and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting
records, relevant to the preparation and presentation of the
standalone financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud
or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit.
In conducting our audit, we have taken into account the
provisions of the Act, the accounting and auditing standards
and matters which are required to be included in the audit
report under the provisions of the Act and the Rules made
thereunder.
We conducted our audit of the standalone financial statements
in accordance with the Standards on Auditing specified under
Section 143(10) of the Act. Those Standards require that
we comply with ethical requirements and plan and perform
the audit to obtain reasonable assurance about whether
the standalone financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit
evidence about the amounts and the disclosures in the
standalone financial statements. The procedures selected
depend on the auditor’s judgment, including the assessment of
the risks of material misstatement of the standalone financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial controls
relevant to the Bank’s preparation of the standalone financial
statements that give a true and fair view, in order to design audit
procedures that are appropriate in the circumstances. An audit
also includes evaluating the appropriateness of the accounting
policies used and the reasonableness of the accounting
estimates made by the Bank’s Directors, and evaluating the
overall presentation of the standalone financial statements.
We believe that the audit evidence obtained by us is sufficient
and appropriate to provide a basis for our audit opinion on the
standalone financial statements.
Opinion
In our opinion and to the best of our information and according
to the explanations given to us, the aforesaid standalone
financial statements give the information required by the
Banking Regulation Act, 1949 and the Act in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India, of the state
of affairs of the Bank as at 31st March, 2017, and its profit and
its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act and Section 30
of the Banking Regulation Act, 1949, based on our audit,
we report to the extent applicable that:
a) We have sought and obtained all the information and
explanations which to the best of our knowledge and
belief were necessary for the purposes of our audit
and found them to be satisfactory.
b)
In our opinion, the transactions of the Bank which
have come to our notice have been within the powers
of the Bank.
c) As explained in paragraph 2 below, the financial
accounting systems of the Bank are centralised and,
therefore, accounting returns are not required to be
submitted by the Branches.
d)
In our opinion, proper books of account as required
by law have been kept by the Bank so far as it
appears from our examination of those books.
e) The Balance Sheet, the Statement of Profit and Loss,
and the Cash Flow Statement dealt with by this
Report are in agreement with the books of account.
HDFC Bank Limited Annual Report 2016-17
65
f)
In our opinion, the aforesaid standalone financial
statements comply with the Accounting Standards
prescribed under Section 133 of the Act, as
applicable.
g) On the basis of the written representations received
from the directors as at 31st March, 2017 taken on
record by the Board of Directors, none of the
directors is disqualified as at 31st March, 2017 from
being appointed as a director in terms of Section
164(2) of the Act.
h) With respect to the adequacy of the internal financial
controls over financial reporting of the Bank and
the operating effectiveness of such controls, refer
to our separate report in “Annexure A”. Our report
expresses an unmodified opinion on the adequacy
and operating effectiveness of the Bank’s internal
financial controls over financial reporting.
i) With respect to the other matters to be included in
the Auditor’s Report in accordance with Rule 11 of
the Companies (Audit and Auditors) Rules, 2014,
as amended, in our opinion and to the best of our
information and according to the explanations given
to us:
i.
The Bank has disclosed the impact of pending
litigations on
its
standalone financial statements;
its financial position
in
ii.
the applicable
The Bank has made provision, as required
under
law or accounting
standards, for material foreseeable losses,
if any, on long-term contracts including
derivative contracts;
iii. There has been no delay in transferring
amounts, required to be transferred, to the
Investor Education and Protection Fund by the
Bank.
2. We report that during the course of our audit we performed
select relevant procedures at 85 branches. Since the
Bank considers its key operations to be automated, with
the key applications largely integrated to the core banking
systems, it does not require its branches, to submit any
financial returns. Accordingly our audit is carried out
centrally at the Head Office and Central Processing
Units, based on the necessary records and data required
for the purposes of the audit being made available to us.
For Deloitte Haskins & Sells
Chartered Accountants
(Firm’s Registration No. 117365W)
Porus B. Pardiwalla
Partner
(Membership No. 40005)
Mumbai
April 21, 2017
HDFC Bank Limited Annual Report 2016-17
66
ANNEXURE “A” TO THE
REPORT
INDEPENDENT AUDITOR’S
(Referred to in paragraph 1.h under ‘Report on Other Legal
and Regulatory Requirements’ section of the auditor’s
report of even date)
Report on the Internal Financial Controls Over Financial
Reporting under Clause (i) of Sub-section 3 of Section 143
of the Companies Act, 2013 (“the Act”)
We have audited the internal financial controls over financial
reporting of HDFC BANK LIMITED (“the Bank”) as at
31st March, 2017 in conjunction with our audit of the standalone
financial statements of the Bank for the year ended on that date.
Management’s Responsibility for Internal Financial Controls
The Bank’s Management is responsible for establishing and
maintaining internal financial controls based on the internal
control over financial reporting criteria established by the Bank
considering the essential components of internal control stated
in the Guidance Note on Audit of Internal Financial Controls
Over Financial Reporting issued by the Institute of Chartered
Accountants of India. These responsibilities include the
design, implementation and maintenance of adequate internal
financial controls that were operating effectively for ensuring
the orderly and efficient conduct of its business, including
adherence to Bank’s policies, the safeguarding of its assets,
the prevention and detection of frauds and errors, the accuracy
and completeness of the accounting records, and the timely
preparation of reliable financial information, as required under
the Companies Act, 2013, the Banking Regulation Act, 1949
and the guidelines issued by the Reserve Bank of India.
Auditor’s Responsibility
Our responsibility is to express an opinion on the Bank’s
internal financial controls over financial reporting based on our
audit. We conducted our audit in accordance with the Guidance
Note on Audit of Internal Financial Controls Over Financial
Reporting (the “Guidance Note”) issued by the Institute of
Chartered Accountants of India and the Standards on Auditing
prescribed under Section 143(10) of the Companies Act,
2013, to the extent applicable to an audit of internal financial
controls. Those Standards and the Guidance Note require that
we comply with ethical requirements and plan and perform
the audit to obtain reasonable assurance about whether
adequate internal financial controls over financial reporting
were established and maintained and if such controls operated
effectively in all material respects.
the
the adequacy of
An audit involves performing procedures to obtain audit
evidence about
internal financial
controls system over financial reporting and their operating
effectiveness. Our audit of internal financial controls over
financial reporting included obtaining an understanding of
internal financial controls over financial reporting, assessing
the risk that a material weakness exists, and testing and
evaluating the design and operating effectiveness of internal
control based on the assessed risk. The procedures selected
depend on the auditor’s judgement, including the assessment
of the risks of material misstatement of the financial statements,
whether due to fraud or error.
regarding prevention or
the reliability of financial reporting and
We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit
opinion on the Bank’s internal financial controls system over
financial reporting.
Meaning of Internal Financial Controls Over Financial
Reporting
A company’s internal financial control over financial reporting
is a process designed to provide reasonable assurance
regarding
the
preparation of financial statements for external purposes in
accordance with generally accepted accounting principles and
other applicable regulations. A company’s internal financial
control over financial reporting includes those policies and
procedures that (1) pertain to the maintenance of records
that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company
are being made only in accordance with authorisations of
management and directors of the company; and (3) provide
reasonable assurance
timely
detection of unauthorised acquisition, use, or disposition of
the company’s assets that could have a material effect on the
financial statements.
Inherent Limitations of Internal Financial Controls Over
Financial Reporting
Because of the inherent limitations of internal financial
controls over financial reporting, including the possibility
of collusion or improper management override of controls,
material misstatements due to error or fraud may occur and
not be detected. Also, projections of any evaluation of the
internal financial controls over financial reporting to future
periods are subject to the risk that the internal financial control
over financial reporting may become inadequate because of
changes in conditions, or that the degree of compliance with
the policies or procedures may deteriorate.
Opinion
In our opinion, to the best of our information and according
to the explanations given to us, the Bank has, in all material
respects, an adequate internal financial controls system over
financial reporting and such internal financial controls over
financial reporting were operating effectively as at 31st March,
2017, based on the internal control over financial reporting
criteria established by the Bank considering the essential
components of internal control stated in the Guidance Note on
Audit of Internal Financial Controls Over Financial Reporting
issued by the Institute of Chartered Accountants of India.
For Deloitte Haskins & Sells
Chartered Accountants
(Firm’s Registration No. 117365W)
Mumbai
April 21, 2017
Porus B. Pardiwalla
Partner
(Membership No. 40005)
HDFC Bank Limited Annual Report 2016-17
67
Balance Sheet
As at March 31, 2017
CAPITAL AND LIABILITIES
Capital
Reserves and surplus
Deposits
Borrowings
Other liabilities and provisions
ASSETS
Cash and balances with Reserve Bank of India
Balances with banks and money at call and short notice
Investments
Advances
Fixed assets
Other assets
Contingent liabilities
Bills for collection
Schedule
As at
31-Mar-17
` in ‘000
As at
31-Mar-16
1
2
3
4
5
5,125,091
5,056,373
889,498,416
721,721,274
6,436,396,563
5,464,241,920
740,288,666
849,689,823
567,093,181
367,251,338
Total
8,638,401,917
7,407,960,728
6
7
8
9
10
11
378,968,755
300,583,087
110,552,196
88,605,293
2,144,633,366
1,958,362,768
5,545,682,021
4,645,939,589
36,267,379
33,431,573
422,298,200
381,038,418
Total
8,638,401,917
7,407,960,728
12
8,178,695,893
8,533,181,145
308,480,352
234,899,997
Significant accounting policies and notes to the financial statements
17 & 18
The schedules referred to above form an integral part of the Balance Sheet.
As per our report of even date.
For and on behalf of the Board
For Deloitte Haskins & Sells
Chartered Accountants
Shyamala Gopinath
Chairperson
Aditya Puri
Managing Director
P. B. Pardiwalla
Partner
Membership No.: 40005
Mumbai, April 21, 2017
Paresh Sukthankar
Deputy Managing Director
Kaizad Bharucha
Executive Director
Sanjay Dongre
Executive Vice President
(Legal) & Company Secretary
Sashidhar Jagdishan
Chief Financial Officer
Anami Roy
Bobby Parikh
Keki Mistry
Malay Patel
Partho Datta
Renu Karnad
Srikanth Nadhamuni
Umesh Sarangi
Directors
HDFC Bank Limited Annual Report 2016-17
68
Statement of Profit and Loss
For the year ended March 31, 2017
I
INCOME
Interest earned
Other income
II
EXPENDITURE
Interest expended
Operating expenses
Provisions and contingencies
III PROFIT
Net profit for the year
Balance in Profit and Loss account brought forward
IV APPROPRIATIONS
Transfer to Statutory Reserve
Proposed dividend [Refer Schedule 18(2)]
Tax (including cess) on dividend [Refer Schedule 18(2)]
Dividend (including tax / cess thereon) pertaining to previous year paid
during the year, net of dividend tax credits
Transfer to General Reserve
Transfer to Capital Reserve
Transfer to / (from) Investment Reserve Account
Balance carried over to Balance Sheet
Schedule
Year ended
31-Mar-17
` in ‘000
Year ended
31-Mar-16
13
14
693,059,578
602,214,451
122,964,990
107,517,233
Total
816,024,568
709,731,684
15
16
361,667,334
326,299,330
197,033,442
169,797,000
111,827,380
90,673,223
Total
670,528,156
586,769,553
145,496,412
122,962,131
235,276,891
186,277,944
Total
380,773,303
309,240,075
36,374,103
30,740,533
-
-
24,017,772
4,889,453
(16,909)
(117,135)
14,549,641
12,296,213
3,134,100
2,221,532
42,934
(85,184)
326,689,434
235,276,891
380,773,303
`
309,240,075
`
57.18
56.43
48.84
48.26
V EARNINGS PER EQUITY SHARE (Face value ` 2 per share)
Total
Basic
Diluted
Significant accounting policies and notes to the financial statements
17 & 18
The schedules referred to above form an integral part of the
Statement of Profit and Loss.
As per our report of even date.
For and on behalf of the Board
For Deloitte Haskins & Sells
Chartered Accountants
Shyamala Gopinath
Chairperson
Aditya Puri
Managing Director
P. B. Pardiwalla
Partner
Membership No.: 40005
Mumbai, April 21, 2017
Paresh Sukthankar
Deputy Managing Director
Kaizad Bharucha
Executive Director
Sanjay Dongre
Executive Vice President
(Legal) & Company Secretary
Sashidhar Jagdishan
Chief Financial Officer
Anami Roy
Bobby Parikh
Keki Mistry
Malay Patel
Partho Datta
Renu Karnad
Srikanth Nadhamuni
Umesh Sarangi
Directors
HDFC Bank Limited Annual Report 2016-17
69
Cash Flow Statement
For the year ended March 31, 2017
Cash flows from operating activities
Profit before income tax
Adjustments for:
Depreciation on fixed assets
(Profit) / loss on revaluation of investments
Amortisation of premia on held to maturity investments
(Profit) / loss on sale of fixed assets
Provision / charge for non performing assets
Provision for dimunition in value of investment
Floating provisions
Provision for standard assets
Year ended
31-Mar-17
` in ‘000
Year ended
31-Mar-16
221,390,750
186,379,247
8,331,247
7,058,390
(87,543)
173,689
1,756,569
1,002,801
14,735
626
33,443,592
22,963,803
(76,417)
151,722
250,000
1,150,000
3,921,811
4,399,962
Dividend from subsidiaries / associates / joint ventures
(1,628,640)
(1,490,542)
Contingency provisions
Adjustments for:
(Increase) / decrease in investments
(Increase) / decrease in advances
Increase / (decrease) in deposits
(Increase) / decrease in other assets
384,640
218,102
267,700,744
222,007,800
(177,259,533)
(391,352,982)
(933,161,021)
(1,015,961,758)
972,154,643
956,285,495
(38,752,713)
(37,562,160)
Increase / (decrease) in other liabilities and provisions
223,763,890
32,720,884
Direct taxes paid (net of refunds)
314,446,010
(233,862,721)
(78,591,989)
(67,459,133)
Net cash flow (used in) / from operating activities
235,854,020
(301,321,854)
Cash flows used in investing activities
Purchase of fixed assets
Proceeds from sale of fixed assets
(10,681,751)
(8,159,133)
94,269
111,518
Investment in subsidiaries / associates / joint ventures
(10,603,674)
-
Dividend from subsidiaries / associates / joint ventures
1,628,640
1,490,542
Net cash used in investing activities
(19,562,516)
(6,557,074)
HDFC Bank Limited Annual Report 2016-17
70
Cash Flow Statement
For the year ended March 31, 2017
` in ‘000
Year ended
31-Mar-17
Year ended
31-Mar-16
Cash flows from financing activities
Money received on exercise of stock options by employees
22,615,161
12,229,008
Increase / (decrease) in borrowings (excluding subordinate debt,
perpetual debt and upper Tier II instruments)
Redemption of subordinated debt
Dividend paid during the year
Tax on dividend
Net cash generated from financing activities
Effect of exchange fluctuation on translation reserve
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents as at April 1st
Cash and cash equivalents as at March 31st
(90,316,657)
357,278,283
(19,084,500)
(12,020,000)
(24,083,093)
(20,091,666)
(4,807,223)
(3,925,269)
(115,676,312)
333,470,356
(282,622)
282,433
100,332,571
25,873,862
389,188,380
363,314,518
489,520,951
389,188,380
As per our report of even date.
For and on behalf of the Board
For Deloitte Haskins & Sells
Chartered Accountants
Shyamala Gopinath
Chairperson
Aditya Puri
Managing Director
P. B. Pardiwalla
Partner
Membership No.: 40005
Mumbai, April 21, 2017
Paresh Sukthankar
Deputy Managing Director
Kaizad Bharucha
Executive Director
Sanjay Dongre
Executive Vice President
(Legal) & Company Secretary
Sashidhar Jagdishan
Chief Financial Officer
Srikanth Nadhamuni
Umesh Sarangi
Directors
Anami Roy
Bobby Parikh
Keki Mistry
Malay Patel
Partho Datta
Renu Karnad
HDFC Bank Limited Annual Report 2016-17
71
Schedules to the Financial Statements
As at March 31, 2017
SCHEDULE 1 - CAPITAL
Authorised capital
3,25,00,00,000 (31 March, 2016: 2,75,00,00,000) Equity Shares of ` 2/- each
Issued, subscribed and paid-up capital
2,56,25,45,717 (31 March, 2016: 2,52,81,86,517) Equity Shares of ` 2/- each
SCHEDULE 2 - RESERVES AND SURPLUS
I
Statutory reserve
Opening balance
Additions during the year
II
General reserve
Opening balance
Additions during the year
As at
31-Mar-17
` in ‘000
As at
31-Mar-16
6,500,000
5,500,000
Total
5,125,091
5,125,091
5,056,373
5,056,373
147,384,755
116,644,222
36,374,103
30,740,533
Total
183,758,858
147,384,755
57,119,509
44,823,296
14,549,641
12,296,213
Total
71,669,150
57,119,509
III Balance in profit and loss account
326,689,434
235,276,891
IV Share premium account
Opening balance
Additions during the year
V
Amalgamation reserve
Opening balance
Additions during the year
VI Capital reserve
Opening balance
Additions during the year
VII
Investment reserve account
Opening balance
Additions during the year
Deductions during the year
VIII Foreign currency translation account
Opening balance
Additions / (deductions) during the year
HDFC Bank Limited Annual Report 2016-17
72
261,716,858
249,531,232
22,546,443
12,185,626
Total
284,263,301
261,716,858
10,635,564
10,635,564
-
-
Total
10,635,564
10,635,564
8,866,583
6,645,051
3,134,100
2,221,532
Total
12,000,683
8,866,583
399,084
109,506
(66,572)
442,018
322,030
(282,622)
39,408
484,268
76
(85,260)
399,084
39,597
282,433
322,030
889,498,416
721,721,274
Total
Total
Total
Schedules to the Financial Statements
As at March 31, 2017
SCHEDULE 3 - DEPOSITS
A
I
Demand deposits
(i)
From banks
(ii) From others
II
Savings bank deposits
III Term deposits
(i)
From banks
(ii) From others
B
I
Deposits of branches in India
II Deposits of branches outside India
SCHEDULE 4 - BORROWINGS
I Borrowings in India
(i) Reserve Bank of India
(ii) Other banks
(iii) Other institutions and agencies
(iv) Upper and lower tier II capital and innovative perpetual debts
(v) Bonds and Debentures (excluding subordinated debt)
II Borrowings outside India*
*Includes Upper Tier II debt of Nil (previous year: ` 662.55 crore)
Secured borrowings included in I & II above: Nil (previous year: Nil)
SCHEDULE 5 - OTHER LIABILITIES AND PROVISIONS
I Bills payable
II
Interest accrued
III Others (including provisions)
IV Contingent provisions against standard assets
V Proposed dividend (including tax on dividend) [Refer Schedule 18(2)]
HDFC Bank Limited Annual Report 2016-17
73
As at
31-Mar-17
` in ‘000
As at
31-Mar-16
20,806,377
22,017,200
1,134,932,192
862,229,501
Total
1,155,738,569
884,246,701
1,935,786,335
1,478,861,798
53,520,609
25,095,540
3,291,351,050
3,076,037,881
Total
3,344,871,659
3,101,133,421
Total
6,436,396,563
5,464,241,920
6,396,405,854
5,397,071,812
39,990,709
67,170,108
Total
6,436,396,563
5,464,241,920
-
319,505,077
21,202,156
15,792,856
224,500,000
-
131,820,000
144,279,000
126,750,000
59,750,000
Total
504,272,156
539,326,933
236,016,510
310,362,890
Total
740,288,666
849,689,823
166,670,863
73,784,974
38,488,877
35,987,631
338,011,290
208,559,451
23,922,151
20,012,057
-
28,907,225
Total
567,093,181
367,251,338
Schedules to the Financial Statements
As at March 31, 2017
SCHEDULE 6 - CASH AND BALANCES WITH RESERVE BANK OF INDIA
I
Cash in hand (including foreign currency notes)
II Balances with Reserve Bank of India:
(a)
In current accounts
(b) In other accounts
SCHEDULE 7 - BALANCES WITH BANKS AND MONEY AT CALL AND SHORT NOTICE
As at
` in ‘000
As at
31-Mar-17
31-Mar-16
42,635,945
55,694,577
284,332,810
242,888,510
52,000,000
2,000,000
Total
Total
336,332,810
244,888,510
378,968,755
300,583,087
I
In India
(i) Balances with banks:
(a) In current accounts
(b) In other deposit accounts
(ii) Money at call and short notice:
(a) With banks
(b) With other institutions
II Outside India
(i)
In current accounts
(ii)
In deposit accounts
(iii) Money at call and short notice
SCHEDULE 8 - INVESTMENTS
A
Investments in India in
(i) Government securities
(ii) Other approved securities
(iii) Shares
(iv) Debentures and bonds
(v) Subsidiaries / joint ventures
(vi) Others (Units, CDs / CPs, PTCs and security receipts)
B
Investments outside India in
Other investments
(a) Shares
(b) Debentures and bonds
HDFC Bank Limited Annual Report 2016-17
74
5,107,980
6,686,831
Total
11,794,811
2,380,626
6,824,510
9,205,136
-
1,359,867
1,359,867
-
-
-
Total
Total
Total
Total
11,794,811
10,565,003
36,772,777
23,909,955
2,529,150
3,776,535
59,455,458
50,353,800
98,757,385
78,040,290
110,552,196
88,605,293
1,624,186,994
1,576,610,655
-
-
1,113,742
739,032
194,698,472
48,873,774
38,433,239
27,829,565
275,020,773
290,582,987
Total
2,133,453,220
1,944,636,013
28,375
28,375
11,151,771
13,698,380
11,180,146
13,726,755
2,144,633,366
1,958,362,768
Total
Total
Schedules to the Financial Statements
As at March 31, 2017
C
Investments
(i) Gross value of investments
(a)
In India
(b) Outside India
(ii) Provision for depreciation
(a)
In India
(b) Outside India
(iii) Net value of investments
(a)
In India
(b) Outside India
SCHEDULE 9 - ADVANCES
A
(i)
Bills purchased and discounted
(ii) Cash credits, overdrafts and loans repayable on demand
(iii) Term loans
B
(i)
Secured by tangible assets*
(ii) Covered by bank / government guarantees
(iii) Unsecured
* Including advances against book debts
C
I
Advances in India
(i)
(ii)
Priority sector
Public sector
(iii) Banks
(iv) Others
C
II
Advances outside India
(i) Due from banks
(ii) Due from others
(a) Bills purchased and discounted
(b) Syndicated loans
(c) Others
(Advances are net of provisions)
HDFC Bank Limited Annual Report 2016-17
75
As at
` in ‘000
As at
31-Mar-17
31-Mar-16
2,134,071,702
1,945,831,421
11,206,487
13,726,755
Total
2,145,278,189
1,959,558,176
618,482
26,341
644,823
1,195,408
-
1,195,408
Total
2,133,453,220
1,944,636,013
11,180,146
13,726,755
Total
2,144,633,366
1,958,362,768
287,159,641
185,136,903
1,336,174,162
1,242,774,115
3,922,348,218
3,218,028,571
Total
5,545,682,021
4,645,939,589
4,108,555,199
3,458,703,399
107,864,309
114,128,823
1,329,262,513
1,073,107,367
Total
5,545,682,021
4,645,939,589
1,625,180,583
1,417,909,585
157,741,065
134,556,082
9,092,668
4,659,631
3,555,635,492
2,767,906,764
Total
5,347,649,808
4,325,032,062
6,500,391
6,879,777
2,560,707
1,245,263
17,845,564
38,624,247
171,125,551
274,158,240
198,032,213
320,907,527
5,545,682,021
4,645,939,589
Total
Total
Schedules to the Financial Statements
As at March 31, 2017
SCHEDULE 10 - FIXED ASSETS
A
Premises (including land)
Gross block
At cost on 31 March of the preceding year
Additions during the year
Deductions during the year
Depreciation
As at 31 March of the preceding year
Charge for the year
On deductions during the year
Net block
B
Other fixed assets (including furniture and fixtures)
Gross block
At cost on 31 March of the preceding year
Additions during the year
Deductions during the year
Depreciation
As at 31 March of the preceding year
Charge for the year
On deductions during the year
Net block
C
Assets on lease (plant and machinery)
Gross block
At cost on 31 March of the preceding year
Additions during the year
HDFC Bank Limited Annual Report 2016-17
76
As at
31-Mar-17
` in ‘000
As at
31-Mar-16
15,511,704
14,756,943
669,442
839,927
(70,347)
(85,166)
Total
16,110,799
15,511,704
4,246,842
3,764,471
590,691
551,090
(59,060)
(68,719)
Total
4,778,473
4,246,842
11,332,326
11,264,862
72,467,567
65,329,178
10,604,552
8,548,465
(2,153,212)
(1,410,076)
Total
80,918,907
72,467,567
50,300,856
45,104,307
7,738,599
6,510,901
(2,055,601)
(1,314,352)
Total
55,983,854
50,300,856
24,935,053
22,166,711
4,546,923
4,546,923
-
-
Total
4,546,923
4,546,923
Schedules to the Financial Statements
As at March 31, 2017
Depreciation
As at 31 March of the preceding year
Charge for the year
Lease adjustment account
As at 31 March of the preceding year
Charge for the year
Unamortised cost of assets on lease
SCHEDULE 11 - OTHER ASSETS
I
II
III
IV
V
VI
Interest accrued
Advance tax / tax deducted at source (net of provisions)
Stationery and stamps
Non banking assets acquired in satisfaction of claims
Bond and share application money pending allotments
Security deposit for commercial and residential property
VII Others*
As at
31-Mar-17
` in ‘000
As at
31-Mar-16
4,104,467
4,104,467
-
-
Total
4,104,467
4,104,467
442,456
442,456
-
-
Total
442,456
442,456
-
-
Total
36,267,379
33,431,573
83,095,335
75,482,713
17,442,504
17,646,013
267,871
220,786
-
-
-
-
4,934,536
4,626,811
316,557,954
283,062,095
Total
422,298,200
381,038,418
*Includes deferred tax asset (net) of ` 2,447.34 crore (previous year: ` 2,116.62 crore) and deposits
placed with NABARD / SIDBI / NHB on account of shortfall in lending to priority sector of ` 11,882.37
crore (previous year: ` 13,719.68 crore)
SCHEDULE 12 - CONTINGENT LIABILITIES
I
II
III
IV
V
Claims against the bank not acknowledged as debts - taxation
Claims against the bank not acknowledged as debts - others
Liability on account of outstanding forward exchange contracts
Liability on account of outstanding derivative contracts
Guarantees given on behalf of constituents:
- In India
- Outside India
VI Acceptances, endorsements and other obligations
VII Other items for which the Bank is contingently liable
HDFC Bank Limited Annual Report 2016-17
77
10,721,500
11,877,300
1,081,701
762,010
4,699,301,366
5,290,757,746
2,723,068,634
2,570,471,528
366,232,012
301,311,242
953,405
31,094,714
359,613,744
317,525,754
17,723,531
9,380,851
Total
8,178,695,893
8,533,181,145
Schedules to the Financial Statements
For the year ended March 31, 2017
SCHEDULE 13 - INTEREST EARNED
I
II
III
Interest / discount on advances / bills
Income from investments
Interest on balance with RBI and other inter-bank funds
IV Others
SCHEDULE 14 - OTHER INCOME
I
Commission, exchange and brokerage
II Profit / (loss) on sale of investments (net)
III Profit / (loss) on revaluation of investments (net)
IV Profit / (loss) on sale of building and other assets (net)
V Profit / (loss) on exchange / derivative transactions (net)
VI
Income earned by way of dividends from subsidiaries /
associates and / or joint ventures abroad / in India
VII Miscellaneous income
SCHEDULE 15 - INTEREST EXPENDED
I
Interest on deposits
II
Interest on RBI / inter-bank borrowings
III Other interest
SCHEDULE 16 - OPERATING EXPENSES
I
II
Payments to and provisions for employees
Rent, taxes and lighting
III Printing and stationery
IV Advertisement and publicity
V Depreciation on bank's property
VI Directors' fees / remuneration, allowances and expenses
VII Auditors' fees and expenses
VIII Law charges
IX Postage, telegram, telephone etc.
X
Repairs and maintenance
XI
Insurance
XII Other expenditure*
Year ended
` in ‘000
Year ended
31-Mar-17
31-Mar-16
520,552,624
448,278,559
159,443,391
141,200,321
5,320,205
7,743,358
3,616,100
9,119,471
Total
693,059,578
602,214,451
88,115,530
77,590,448
11,306,936
87,543
(14,735)
7,491,483
(173,689)
(626)
12,633,895
12,277,267
1,628,640
1,490,542
9,207,181
8,841,808
Total
122,964,990
107,517,233
313,314,571
291,782,889
46,727,790
33,664,532
1,624,973
851,909
Total
361,667,334
326,299,330
64,836,646
57,021,980
13,373,647
12,326,423
4,757,998
2,046,418
8,331,247
32,021
25,758
1,249,095
4,149,947
4,234,603
2,483,938
7,058,390
25,761
19,331
998,702
3,997,235
12,562,041
10,287,303
6,906,612
5,613,318
78,762,012
65,730,016
*Includes professional fees, commission to sales agents, card and merchant acquiring expenses and
system management fees.
Total
197,033,442
169,797,000
HDFC Bank Limited Annual Report 2016-17
78
Schedules to the Financial Statements
For the year ended March 31, 2017
SCHEDULE 17 - Significant accounting policies appended to and forming part of the financial statements for the year
ended March 31, 2017
A
BACKGROUND
HDFC Bank Limited (‘HDFC Bank’ or ‘the Bank’), incorporated in Mumbai, India is a publicly held banking company engaged
in providing a range of banking and financial services including retail banking, wholesale banking and treasury operations.
The Bank is governed by the Banking Regulation Act, 1949 and the Companies Act, 2013. The Bank has overseas branch
operations in Bahrain, Hong Kong and Dubai. The financial accounting systems of the Bank are centralised and, therefore,
accounting returns are not required to be submitted by branches of the Bank.
B
BASIS OF PREPARATION
The financial statements have been prepared and presented under the historical cost convention and accrual basis of
accounting, unless otherwise stated and are in accordance with Generally Accepted Accounting Principles in India (‘GAAP’),
statutory requirements prescribed under the Banking Regulation Act, 1949, circulars and guidelines issued by the Reserve
Bank of India (‘RBI’) from time to time, Accounting Standards (‘AS’) specified under Section 133 of the Companies Act, 2013,
in so far as they apply to banks and current practices prevailing within the banking industry in India.
Use of estimates
The preparation of financial statements in conformity with GAAP requires the management to make estimates and assumptions
considered in the reported amounts of assets and liabilities (including contingent liabilities) as of the date of the financial
statements and the reported income and expenses for the reporting period. Management believes that the estimates used in
the preparation of the financial statements are prudent and reasonable. Actual results could differ from these estimates. Any
revision in the accounting estimates is recognised prospectively in the current and future periods.
C
1
PRINCIPAL ACCOUNTING POLICIES
Investments
Classification:
In accordance with the RBI guidelines on investment classification and valuation, investments are classified on the date of
purchase into “Held for Trading” (‘HFT’), “Available for Sale” (‘AFS’) and “Held to Maturity” (‘HTM’) categories (hereinafter
called “categories”). Subsequent shifting amongst the categories is done in accordance with the RBI guidelines. Under
each of these categories, investments are further classified under six groups (hereinafter called “groups”) - Government
Securities, Other Approved Securities, Shares, Debentures and Bonds, Investments in Subsidiaries / Joint Ventures and
Other Investments.
Purchase and sale transactions in securities are recorded under ‘Settlement Date’ of accounting, except in the case of equity
shares where ‘Trade Date’ accounting is followed.
Basis of classification:
Investments that are held principally for resale within 90 days from the date of purchase are classified under HFT category.
Investments which the Bank intends to hold till maturity are classified as HTM securities. Investments in the equity of
subsidiaries / joint ventures are categorised as HTM in accordance with the RBI guidelines. Investments which are not
classified in either of the above categories are classified under AFS category.
Acquisition cost:
Brokerage, commission, etc. and broken period interest on debt instruments are recognised in the Statement of Profit and
Loss and are not included in the cost of acquisition.
Disposal of investments:
Profit / Loss on sale of investments under the aforesaid three categories is recognised in the Statement of Profit and Loss.
Cost of investments is based on the weighted average cost method. The profit from sale of investment under HTM category,
net of taxes and transfer to statutory reserve is appropriated from the Statement of Profit and Loss to “Capital Reserve” in
accordance with the RBI Guidelines.
HDFC Bank Limited Annual Report 2016-17
79
Schedules to the Financial Statements
For the year ended March 31, 2017
Short sale:
The Bank undertakes short sale transactions in Central Government dated securities in accordance with RBI guidelines.
The short position is reflected as the amount received on sale and is classified under ‘Other Liabilities’. The short position is
marked to market and loss, if any, is charged to the Statement of Profit and Loss while gain, if any, is ignored. Profit / Loss on
settlement of the short position is recognised in the Statement of Profit and Loss.
Valuation:
Investments classified under AFS and HFT categories are marked to market as per the RBI guidelines.
Traded investments are valued based on the trades / quotes on the recognised stock exchanges, price list of RBI or prices
declared by Primary Dealers Association of India (‘PDAI’) jointly with Fixed Income Money Market and Derivatives Association
(‘FIMMDA’), periodically.
The market value of unquoted government securities which qualify for determining the Statutory Liquidity Ratio (‘SLR’)
included in the AFS and HFT categories is computed as per the Yield-to-Maturity (‘YTM’) rates published by FIMMDA.
The valuation of other unquoted fixed income securities (viz. State Government securities, other approved securities, bonds
and debentures) and preference shares, is done with a mark-up (reflecting associated credit and liquidity risk) over the YTM
rates for government securities published by FIMMDA.
Special bonds such as oil bonds, fertilizer bonds etc. which are directly issued by Government of India (‘GOI’) that do not
qualify for SLR are also valued by applying the mark-up above the corresponding yield on GOI securities.
Unquoted equity shares are valued at the break-up value, if the latest balance sheet is available or at ` 1 as per the RBI
guidelines.
Units of mutual funds are valued at the latest repurchase price / net asset value declared by the mutual fund.
Treasury bills, commercial papers and certificate of deposits being discounted instruments, are valued at carrying cost and
stated at acquisition cost.
Security receipts are valued as per the net asset value provided by the issuing Asset Reconstruction Company from time to
time.
Net depreciation in the value, if any, compared to the acquisition cost, in any of the six groups, is charged to the Statement
of Profit and Loss. The net appreciation, if any, in any of the six groups is not recognised except to the extent of depreciation
already provided. The valuation of investments includes securities under repo transactions. The book value of individual
securities is not changed after the valuation of investments.
Investments classified under HTM category are carried at their acquisition cost and not marked to market. Any premium
on acquisition is amortised over the remaining maturity period of the security on a constant yield-to-maturity basis. Such
amortisation of premium is adjusted against interest income under the head “Income from investments” as per the RBI
guidelines. Any diminution, other than temporary, in the value of investments in subsidiaries / joint ventures is provided for.
Non-performing investments are identified and depreciation / provision are made thereon based on the RBI guidelines.
The depreciation / provision on such non-performing investments are not set off against the appreciation in respect of other
performing securities. Interest on non-performing investments is not recognised in the Statement of Profit and Loss until
received.
Repo and reverse repo transactions:
In accordance with the RBI guidelines, repurchase and reverse repurchase transactions in government securities and
corporate debt securities are reflected as borrowing and lending transactions respectively.
Borrowing cost on repo transactions is accounted for as interest expense and revenue on reverse repo transactions is
accounted for as interest income.
HDFC Bank Limited Annual Report 2016-17
80
Schedules to the Financial Statements
For the year ended March 31, 2017
2
Advances
Classification:
Advances are classified as performing and non-performing based on the RBI guidelines and are stated net of bills rediscounted,
inter-bank participation with risk, specific provisions, interest in suspense for non-performing advances, claims received from
Export Credit Guarantee Corporation, provisions for funded interest term loan classified as non-performing advances and
provisions in lieu of diminution in the fair value of restructured assets. Interest on non-performing advances is transferred to
an interest suspense account and not recognised in the Statement of Profit and Loss until received.
Provisioning:
Specific loan loss provisions in respect of non-performing advances are made based on management’s assessment of the
degree of impairment of wholesale and retail advances, subject to the minimum provisioning level prescribed by the RBI.
The specific provision levels for retail non-performing assets are also based on the nature of product and delinquency levels.
Specific loan loss provisions in respect of non-performing advances are charged to the Statement of Profit and Loss and
included under Provisions and Contingencies.
In accordance with RBI guidelines, accelerated provision is made on non-performing advances which were not earlier
reported by the Bank as Special Mention Account under “SMA-2” category to Central Repository of Information on Large
Credits (CRILC). Accelerated provision is also made on non-performing advances which are erstwhile SMA-2 accounts with
Aggregate Exposure (AE) ` 1,000 million or above and Joint Lenders’ Forum (JLF) is not formed or they fail to agree upon a
common Corrective Action Plan (CAP) within the stipulated time frame.
Non-performing advances are written-off in accordance with the Bank’s policies. Recoveries from bad debts written-off are
recognised in the Statement of Profit and Loss and included under other income.
In relation to non-performing derivative contracts, as per the extant RBI guidelines, the Bank makes provision for the entire
amount of overdue and future receivables relating to positive marked to market value of the said derivative contracts.
The Bank maintains general provision for standard assets including credit exposures computed as per the current marked
to market values of interest rate and foreign exchange derivative contracts, and gold in accordance with the guidelines and
at levels stipulated by RBI from time to time. In the case of overseas branches, general provision on standard advances is
maintained at the higher of the levels stipulated by the respective overseas regulator or RBI. Provision for standard assets is
included under other liabilities.
Provisions made in excess of the Bank’s policy for specific loan loss provisions for non-performing assets and regulatory
general provisions are categorised as floating provisions. Creation of floating provisions is considered by the Bank up to a
level approved by the Board of Directors. In accordance with the RBI guidelines, floating provisions are used up to a level
approved by the Board only for contingencies under extraordinary circumstances and for making specific provisions for
impaired accounts as per these guidelines or any regulatory guidance / instructions. Floating provisions are included under
other liabilities.
Further to the provisions required to be held according to the asset classification status, provisions are held for individual
country exposures (other than for home country exposure). Countries are categorised into risk categories as per Export
Credit Guarantee Corporation of India Ltd. (‘ECGC’) guidelines and provisioning is done in respect of that country where
the net funded exposure is one percent or more of the Bank’s total assets. Provision for country risk is included under other
liabilities.
In addition to the above, the Bank on a prudential basis makes provisions on advances or exposures which are not NPAs,
but has reasons to believe on the basis of the extant environment or specific information or basis regulatory guidance /
instructions, of a possible slippage of a specific advance or a group of advances or exposures or potential exposures. These
are classified as contingent provisions and included under other liabilities.
The Bank considers a restructured account as one where the Bank, for economic or legal reasons relating to the borrower’s
financial difficulty, grants to the borrower concessions that the Bank would not otherwise consider. Restructuring would
HDFC Bank Limited Annual Report 2016-17
81
Schedules to the Financial Statements
For the year ended March 31, 2017
normally involve modification of terms of the advance / securities, which would generally include, among others, alteration
of repayment period / repayable amount / the amount of installments / rate of interest (due to reasons other than competitive
reasons). Restructured accounts are classified as such by the Bank only upon approval and implementation of the restructuring
package. Necessary provision for diminution in the fair value of a restructured account is made and classification thereof is
as per the extant RBI guidelines. Restructuring of an account is done at a borrower level.
3
Securitisation and transfer of assets
The Bank securitises out its receivables to Special Purpose Vehicles (‘SPVs’) in securitisation transactions. Such
securitised-out receivables are de-recognised in the balance sheet when they are sold (true sale criteria being fully met
with) and consideration is received by the Bank. Sales / Transfers that do not meet these criteria for surrender of control are
accounted for as secured borrowings. In respect of receivable pools securitised-out, the Bank provides liquidity and credit
enhancements, as specified by the rating agencies, in the form of cash collaterals / guarantees and / or by subordination of
cash flows in line with RBI guidelines. The Bank also acts as a servicing agent for receivable pools securitised-out.
The Bank also enters into transactions for transfer of standard assets through the direct assignment of cash flows, which
are similar to asset-backed securitisation transactions through the SPV route, except that such portfolios of receivables are
assigned directly to the purchaser and are not represented by Pass Through Certificates (‘PTCs’).
The RBI issued addendum guidelines on securitisation of standard assets vide its circular dated May 7, 2012.
Accordingly, the Bank does not provide liquidity or credit enhancements on the direct assignment transactions undertaken
subsequent to these guidelines. The Bank amortises any profit received for every individual securitisation or direct assignment
transaction based on the method prescribed in these guidelines.
In relation to securitisation transactions undertaken prior to the aforementioned RBI guidelines, including those undertaken
through the direct assignment route, the Bank continues to amortise the profit / premium that arose on account of sale of
receivables over the life of the securities sold, in accordance with the RBI guidelines on securitisation of standard assets
issued vide its circular dated February 1, 2006.
Any loss arising on account of sale of receivables is recognised in the Statement of Profit and Loss for the period in which the
sale occurs in accordance with the said RBI guidelines.
The Bank transfers advances through inter-bank participation with and without risk. In accordance with the RBI guidelines,
in the case of participation with risk, the aggregate amount of the participation issued by the Bank is reduced from advances
and where the Bank is participating, the aggregate amount of the participation is classified under advances. In the case of
participation without risk, the aggregate amount of participation issued by the Bank is classified under borrowings and where
the Bank is participating, the aggregate amount of participation is shown as due from banks under advances.
The Bank enters into transactions for the sale or purchase of Priority Sector Lending Certificates (PSLCs). In the case of a
sale transaction, the Bank sells the fulfillment of priority sector obligation and in the case of a purchase transaction the Bank
buys the fulfillment of priority sector obligation through the RBI trading platform. There is no transfer of risks or loan assets.
The fee received for the sale of PSLCs is recorded as ‘Miscellaneous Income’ and the fee paid for purchase of the PSLCs is
recorded as ‘Other Expenditure’ in Statement of Profit and Loss.
In accordance with RBI guidelines on sale of non-performing advances, if the sale is at a price below the net book value
(i.e., book value less provisions held), the shortfall is charged to the Statement of Profit and Loss and if the sale is for a value
higher than the net book value, the excess provision is credited to the Statement of Profit and Loss in the year the amounts
are received.
The Bank invests in PTCs issued by other SPVs. These are accounted for at the deal value and are classified as investments.
The Bank also buys loans through the direct assignment route which are classified as advances. These are carried at
acquisition cost unless it is more than the face value, in which case the premium is amortised over the tenor of the loans.
4
Fixed assets and depreciation
Fixed assets are stated at cost less accumulated depreciation as adjusted for impairment, if any. Cost includes cost of
purchase and all expenditure like site preparation, installation costs and professional fees incurred on the asset before it is
HDFC Bank Limited Annual Report 2016-17
82
Schedules to the Financial Statements
For the year ended March 31, 2017
ready to use. Subsequent expenditure incurred on assets put to use is capitalised only when it increases the future benefit /
functioning capability from / of such assets.
Depreciation is charged over the estimated useful life of the fixed asset on a straight-line basis. The management believes
that the useful life of assets assessed by the Bank, pursuant to the Companies Act, 2013, taking into account changes in
environment, changes in technology, the utility and efficacy of the asset in use, fairly reflects its estimate of useful lives of the
fixed assets. The estimated useful lives of key fixed assets are given below:
Asset
Owned Premises
Automated Teller Machines (‘ATMs’)
Electrical equipment and installations
Office equipment
Computers
Estimated useful
life as assessed
by the Bank
Estimated useful life
specified under Schedule II
of the Companies Act, 2013
61 years
10 years
6 to 10 years
3 to 6 years
3 years
60 years
15 years
10 years
5 years
3 years
6 years
8 years
10 years
Modems, routers, switches, servers, network and related IT equipment
3 to 6 years
Motor cars
Furniture and fittings
4 years
16 years
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:41)(cid:77)(cid:80)(cid:82)(cid:79)(cid:86)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:0)(cid:84)(cid:79)(cid:0)(cid:76)(cid:69)(cid:65)(cid:83)(cid:69)(cid:0)(cid:72)(cid:79)(cid:76)(cid:68)(cid:0)(cid:80)(cid:82)(cid:69)(cid:77)(cid:73)(cid:83)(cid:69)(cid:83)(cid:0)(cid:65)(cid:82)(cid:69)(cid:0)(cid:67)(cid:72)(cid:65)(cid:82)(cid:71)(cid:69)(cid:68)(cid:0)(cid:79)(cid:70)(cid:70)(cid:0)(cid:79)(cid:86)(cid:69)(cid:82)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:82)(cid:69)(cid:77)(cid:65)(cid:73)(cid:78)(cid:73)(cid:78)(cid:71)(cid:0)(cid:80)(cid:82)(cid:73)(cid:77)(cid:65)(cid:82)(cid:89)(cid:0)(cid:80)(cid:69)(cid:82)(cid:73)(cid:79)(cid:68)(cid:0)(cid:79)(cid:70)(cid:0)(cid:76)(cid:69)(cid:65)(cid:83)(cid:69)(cid:14)
(cid:51)(cid:79)(cid:70)(cid:84)(cid:87)(cid:65)(cid:82)(cid:69)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:83)(cid:89)(cid:83)(cid:84)(cid:69)(cid:77)(cid:0)(cid:68)(cid:69)(cid:86)(cid:69)(cid:76)(cid:79)(cid:80)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:69)(cid:88)(cid:80)(cid:69)(cid:78)(cid:68)(cid:73)(cid:84)(cid:85)(cid:82)(cid:69)(cid:0)(cid:73)(cid:83)(cid:0)(cid:68)(cid:69)(cid:80)(cid:82)(cid:69)(cid:67)(cid:73)(cid:65)(cid:84)(cid:69)(cid:68)(cid:0)(cid:79)(cid:86)(cid:69)(cid:82)(cid:0)(cid:65)(cid:0)(cid:80)(cid:69)(cid:82)(cid:73)(cid:79)(cid:68)(cid:0)(cid:79)(cid:70)(cid:0)(cid:21)(cid:0)(cid:89)(cid:69)(cid:65)(cid:82)(cid:83)(cid:14)
(cid:48)(cid:79)(cid:73)(cid:78)(cid:84)(cid:0)(cid:79)(cid:70)(cid:0)(cid:83)(cid:65)(cid:76)(cid:69)(cid:0)(cid:84)(cid:69)(cid:82)(cid:77)(cid:73)(cid:78)(cid:65)(cid:76)(cid:83)(cid:0)(cid:65)(cid:82)(cid:69)(cid:0)(cid:70)(cid:85)(cid:76)(cid:76)(cid:89)(cid:0)(cid:68)(cid:69)(cid:80)(cid:82)(cid:69)(cid:67)(cid:73)(cid:65)(cid:84)(cid:69)(cid:68)(cid:0)(cid:73)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:89)(cid:69)(cid:65)(cid:82)(cid:0)(cid:79)(cid:70)(cid:0)(cid:80)(cid:85)(cid:82)(cid:67)(cid:72)(cid:65)(cid:83)(cid:69)(cid:14)
(cid:38)(cid:79)(cid:82)(cid:0)(cid:65)(cid:83)(cid:83)(cid:69)(cid:84)(cid:83)(cid:0)(cid:80)(cid:85)(cid:82)(cid:67)(cid:72)(cid:65)(cid:83)(cid:69)(cid:68)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:83)(cid:79)(cid:76)(cid:68)(cid:0)(cid:68)(cid:85)(cid:82)(cid:73)(cid:78)(cid:71)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:89)(cid:69)(cid:65)(cid:82)(cid:12)(cid:0)(cid:68)(cid:69)(cid:80)(cid:82)(cid:69)(cid:67)(cid:73)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:73)(cid:83)(cid:0)(cid:80)(cid:82)(cid:79)(cid:86)(cid:73)(cid:68)(cid:69)(cid:68)(cid:0)(cid:79)(cid:78)(cid:0)(cid:80)(cid:82)(cid:79)(cid:13)(cid:82)(cid:65)(cid:84)(cid:65)(cid:0)(cid:66)(cid:65)(cid:83)(cid:73)(cid:83)(cid:0)(cid:66)(cid:89)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:34)(cid:65)(cid:78)(cid:75)(cid:14)
(cid:55)(cid:72)(cid:69)(cid:78)(cid:69)(cid:86)(cid:69)(cid:82)(cid:0)(cid:84)(cid:72)(cid:69)(cid:82)(cid:69)(cid:0)(cid:73)(cid:83)(cid:0)(cid:65)(cid:0)(cid:82)(cid:69)(cid:86)(cid:73)(cid:83)(cid:73)(cid:79)(cid:78)(cid:0)(cid:79)(cid:70)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:69)(cid:83)(cid:84)(cid:73)(cid:77)(cid:65)(cid:84)(cid:69)(cid:68)(cid:0)(cid:85)(cid:83)(cid:69)(cid:70)(cid:85)(cid:76)(cid:0)(cid:76)(cid:73)(cid:70)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0)(cid:65)(cid:78)(cid:0)(cid:65)(cid:83)(cid:83)(cid:69)(cid:84)(cid:12)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:85)(cid:78)(cid:65)(cid:77)(cid:79)(cid:82)(cid:84)(cid:73)(cid:83)(cid:69)(cid:68)(cid:0)(cid:68)(cid:69)(cid:80)(cid:82)(cid:69)(cid:67)(cid:73)(cid:65)(cid:66)(cid:76)(cid:69)(cid:0)(cid:65)(cid:77)(cid:79)(cid:85)(cid:78)(cid:84)(cid:0)(cid:73)(cid:83)(cid:0)(cid:67)(cid:72)(cid:65)(cid:82)(cid:71)(cid:69)(cid:68)(cid:0)
over the revised remaining useful life of the said asset.
(cid:48)(cid:82)(cid:79)(cid:108)(cid:84)(cid:0)(cid:79)(cid:78)(cid:0)(cid:83)(cid:65)(cid:76)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0)(cid:73)(cid:77)(cid:77)(cid:79)(cid:86)(cid:65)(cid:66)(cid:76)(cid:69)(cid:0)(cid:80)(cid:82)(cid:79)(cid:80)(cid:69)(cid:82)(cid:84)(cid:89)(cid:0)(cid:78)(cid:69)(cid:84)(cid:0)(cid:79)(cid:70)(cid:0)(cid:84)(cid:65)(cid:88)(cid:69)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:84)(cid:82)(cid:65)(cid:78)(cid:83)(cid:70)(cid:69)(cid:82)(cid:0)(cid:84)(cid:79)(cid:0)(cid:83)(cid:84)(cid:65)(cid:84)(cid:85)(cid:84)(cid:79)(cid:82)(cid:89)(cid:0)(cid:82)(cid:69)(cid:83)(cid:69)(cid:82)(cid:86)(cid:69)(cid:12)(cid:0)(cid:65)(cid:82)(cid:69)(cid:0)(cid:84)(cid:82)(cid:65)(cid:78)(cid:83)(cid:70)(cid:69)(cid:82)(cid:82)(cid:69)(cid:68)(cid:0)(cid:84)(cid:79)(cid:0)(cid:67)(cid:65)(cid:80)(cid:73)(cid:84)(cid:65)(cid:76)(cid:0)(cid:82)(cid:69)(cid:83)(cid:69)(cid:82)(cid:86)(cid:69)(cid:0)
account.
5
Impairment of assets
The Bank assesses at each balance sheet date whether there is any indication that an asset may be impaired. Impairment
loss, if any, is provided in the Statement of Profit and Loss to the extent the carrying amount of assets exceeds their estimated
recoverable amount.
6
Transactions involving foreign exchange
Foreign currency income and expenditure items of domestic operations are translated at the exchange rates prevailing on the
date of the transaction. Income and expenditure items of integral foreign operations (representative offices) are translated at the
weekly average closing rates and of non-integral foreign operations (foreign branches) at the monthly average closing rates.
Foreign currency monetary items of domestic and integral foreign operations are translated at the closing exchange rates
notified by Foreign Exchange Dealers’ Association of India (‘FEDAI’) as at the Balance Sheet date and the resulting net valuation
profit or loss arising due to a net open position in any foreign currency is recognised in the Statement of Profit and Loss.
Both monetary and non-monetary foreign currency assets and liabilities of non-integral foreign operations are translated at
closing exchange rates notified by FEDAI at the Balance Sheet date and the resulting profit / loss arising from exchange
differences are accumulated in the Foreign Currency Translation Account until remittance or the disposal of the net investment
in the non-integral foreign operations in accordance with AS - 11, The Effects of Changes in Foreign Exchange Rates.
HDFC Bank Limited Annual Report 2016-17
83
Schedules to the Financial Statements
For the year ended March 31, 2017
Foreign exchange spot and forward contracts outstanding as at the Balance Sheet date and held for trading, are revalued at the
closing spot and forward rates respectively as notified by FEDAI and at interpolated rates for contracts of interim maturities. The
USD-INR rate for valuation of contracts having longer maturities i.e. greater than one year, is implied from MIFOR and LIBOR
curves. For other currency pairs, the forward points (for rates / tenors not published by FEDAI) are obtained from Reuters for
valuation of the FX deals. As directed by FEDAI to consider P&L on present value basis, the forward profit or loss on the deals
are discounted till the valuation date using the discounting yields. The resulting profit or loss on valuation is recognised in the
Statement of Profit and Loss. Foreign exchange contracts are classified as assets when the fair value is positive (positive marked
to market value) or as liabilities when the fair value is negative (negative marked to market value).
Foreign exchange forward contracts not intended for trading, that are entered into to establish the amount of reporting currency
required or available at the settlement date of a transaction, and are outstanding at the Balance Sheet date, are effectively
valued at the closing spot rate. The premia or discount arising at the inception of such forward exchange contract is amortised
as expense or income over the life of the contract.
Currency future contracts are marked to market daily using settlement price on a trading day, which is the closing price of the
(cid:82)(cid:69)(cid:83)(cid:80)(cid:69)(cid:67)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:70)(cid:85)(cid:84)(cid:85)(cid:82)(cid:69)(cid:0)(cid:67)(cid:79)(cid:78)(cid:84)(cid:82)(cid:65)(cid:67)(cid:84)(cid:83)(cid:0)(cid:79)(cid:78)(cid:0)(cid:84)(cid:72)(cid:65)(cid:84)(cid:0)(cid:68)(cid:65)(cid:89)(cid:14)(cid:0)(cid:55)(cid:72)(cid:73)(cid:76)(cid:69)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:68)(cid:65)(cid:73)(cid:76)(cid:89)(cid:0)(cid:83)(cid:69)(cid:84)(cid:84)(cid:76)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:80)(cid:82)(cid:73)(cid:67)(cid:69)(cid:0)(cid:73)(cid:83)(cid:0)(cid:67)(cid:79)(cid:77)(cid:80)(cid:85)(cid:84)(cid:69)(cid:68)(cid:0)(cid:79)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:66)(cid:65)(cid:83)(cid:73)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:76)(cid:65)(cid:83)(cid:84)(cid:0)(cid:72)(cid:65)(cid:76)(cid:70)(cid:0)(cid:65)(cid:78)(cid:0)(cid:72)(cid:79)(cid:85)(cid:82)(cid:0)(cid:87)(cid:69)(cid:73)(cid:71)(cid:72)(cid:84)(cid:69)(cid:68)(cid:0)
average price of such contract, the final settlement price is taken as the RBI reference rate on the last trading day of the future
contract or as may be specified by the relevant authority from time to time. All open positions are marked to market based on the
settlement price and the resultant marked to market profit / loss is daily settled with the exchange.
Contingent liabilities on account of foreign exchange contracts, currency future contracts, guarantees, letters of credit,
acceptances and endorsements are reported at closing rates of exchange notified by FEDAI as at the Balance Sheet date.
7
Derivative contracts
The Bank recognises all derivative contracts (other than those designated as hedges) at fair value, on the date on which the
derivative contracts are entered into and are re-measured at fair value as at the Balance Sheet or reporting dates. Derivatives
are classified as assets when the fair value is positive (positive marked to market value) or as liabilities when the fair value is
negative (negative marked to market value). Changes in the fair value of derivatives other than those designated as hedges are
recognised in the Statement of Profit and Loss.
Derivative contracts designated as hedges are not marked to market unless their underlying transaction is marked to market. In
respect of derivative contracts that are marked to market, changes in the market value are recognised in the Statement of Profit
and Loss in the relevant period. The Bank identifies the hedged item (asset or liability) at the inception of the transaction itself.
Hedge effectiveness is ascertained at the time of the inception of the hedge and periodically thereafter. Gains or losses arising
from hedge ineffectiveness, if any, are recognised in the Statement of Profit and Loss.
Contingent liabilities on account of derivative contracts denominated in foreign currencies are reported at closing rates of
exchange notified by FEDAI as at the Balance Sheet date.
8
Revenue recognition
Interest income is recognised in the Statement of Profit and Loss on an accrual basis, except in the case of non-performing
assets and loan accounts where restructuring has been approved by the RBI under Strategic Debt Restructuring (SDR) scheme
where it is recognised upon realisation as per RBI norms.
Interest income on investments in PTCs and loans bought out through the direct assignment route is recognised at their effective
interest rate.
Income on non-coupon bearing discounted instruments is recognised over the tenor of the instrument on a constant effective
yield basis.
Loan processing fee is recognised as income when due. Syndication / Arranger fee is recognised as income when a significant
act / milestone is completed.
Gain / loss on sell down of loans is recognised in line with the extant RBI guidelines.
Dividend on equity shares, preference shares and on mutual fund units is recognised as income when the right to receive the
dividend is established.
HDFC Bank Limited Annual Report 2016-17
84
Schedules to the Financial Statements
For the year ended March 31, 2017
Guarantee commission, commission on letter of credit, annual locker rent fees and annual fees for credit cards are recognised
on a straight-line basis over the period of contract. Other fees and commission income are recognised when due, where the
Bank is reasonably certain of ultimate collection.
9
Employee benefits
Employee Stock Option Scheme (‘ESOS’):
The Employee Stock Option Scheme (‘the Scheme’) provides for the grant of options to acquire equity shares of the Bank to its
employees. The options granted to employees vest in a graded manner and these may be exercised by the employees within a
specified period.
The Bank follows the intrinsic value method to account for its stock-based employee compensation plans. Compensation cost
is measured by the excess, if any, of the market price of the underlying stock over the exercise price as determined under the
option plan. The market price is the closing price on the stock exchange where there is highest trading volume on the working
day immediately preceding the date of grant. Compensation cost, if any is amortised over the vesting period.
Gratuity:
The Bank provides for gratuity to all employees. The benefit vests upon completion of five years of service and is in the form
of lump sum payment to employees on resignation, retirement, death while in employment or on termination of employment
of an amount equivalent to 15 days basic salary payable for each completed year of service. The Bank makes contributions to
funds administered by trustees and managed by insurance companies for amounts notified by the said insurance companies.
In respect of erstwhile Lord Krishna Bank (‘eLKB’) employees, the Bank makes contribution to a fund set up by eLKB and
administered by the Board of Trustees.
The defined gratuity benefit plans are valued by an independent actuary as at the Balance Sheet date using the projected
unit credit method as per the requirement of AS-15, Employee Benefits, to determine the present value of the defined benefit
obligation and the related service costs. Under this method, the determination is based on actuarial calculations, which include
assumptions about demographics, early retirement, salary increases and interest rates. Actuarial gain or loss is recognised in
the Statement of Profit and Loss.
Superannuation:
Employees of the Bank, above a prescribed grade, are entitled to receive retirement benefits under the Bank’s Superannuation
Fund. The Bank contributes a sum equivalent to 13% of the employee’s eligible annual basic salary (15% for the whole time
directors and for certain eligible erstwhile Centurion Bank of Punjab (‘eCBoP’) staff) to insurance companies, which administer
the fund. The Bank has no liability for future superannuation fund benefits other than its contribution, and recognises such
contributions as an expense in the year incurred, as such contribution is in the nature of defined contribution.
Provident fund:
In accordance with law, all employees of the Bank are entitled to receive benefits under the provident fund. The Bank contributes
an amount, on a monthly basis, at a determined rate (currently 12% of employee’s basic salary). Of this, the Bank contributes
an amount equal to 8.33% of employee’s basic salary up to a maximum salary level of ` 15,000/- per month, to the Pension
Scheme administered by the Regional Provident Fund Commissioner (‘RPFC’). The balance amount is contributed to a fund
set up by the Bank and administered by a Board of Trustees. In respect of eCBoP employees, employer’s and employee’s
share of contribution to Provident Fund till March 2009, was administered by RPFC and from April 2009 onwards, the same is
transferred to the fund set up by the Bank and administered by the Board of Trustees. In respect of eLKB employees, the Bank
contributes to a fund set up by eLKB and administered by a Board of Trustees. The Bank recognises such contributions as an
expense in the year in which it is incurred. Interest payable to the members of the trust shall not be lower than the statutory rate
of interest declared by the Central Government under the Employees Provident Funds and Miscellaneous Provisions Act, 1952
and shortfall, if any, shall be made good by the Bank.
The guidance note on implementing AS-15, Employee Benefits, states that benefits involving employer established provident
funds, which require interest shortfalls to be provided, are to be considered as defined benefit plans. Actuarial valuation of this
Provident Fund interest shortfall is done as per the guidance note issued in this respect by The Institute of Actuaries of India (IAI)
and provision towards this liability is made.
HDFC Bank Limited Annual Report 2016-17
85
Schedules to the Financial Statements
For the year ended March 31, 2017
The overseas branches of the Bank make contribution to the respective relevant government scheme calculated as a percentage
of the employees’ salaries. The Bank’s obligations are limited to these contributions, which are expensed when due, as such
contribution is in the nature of defined contribution.
Leave encashment / Compensated absences:
The Bank does not have a policy of encashing unavailed leave for its employees, except for certain eLKB employees under
Indian Banks’ Association (‘IBA’) structure. The Bank provides for leave encashment / compensated absences based on an
independent actuarial valuation at the Balance Sheet date, which includes assumptions about demographics, early retirement,
salary increases, interest rates and leave utilisation.
Pension:
In respect of pension payable to certain eLKB employees under IBA structure, which is a defined benefit scheme, the Bank
contributes 10% of basic salary to a pension fund set up by the Bank and administered by the Board of Trustees and the balance
amount is provided based on actuarial valuation as at the Balance Sheet date conducted by an independent actuary.
In respect of certain eLKB employees who had moved to a Cost to Company (‘CTC’) driven compensation structure and
had completed less than 15 years of service, the contribution which was made until then, is maintained as a fund and will be
converted into annuity on separation after a lock-in-period of two years. For this category of employees, liability stands frozen
and no additional provision is required except for interest as applicable to Provident Fund, which is provided for.
In respect of certain eLKB employees who moved to a CTC structure and had completed service of more than 15 years, pension
would be paid on separation based on salary applicable as on the date of movement to CTC structure. Provision thereto is made
based on actuarial valuation as at the Balance Sheet date conducted by an independent actuary.
10
Debit and credit cards reward points
The Bank estimates the probable redemption of debit and credit card reward points and cost per point using an actuarial method
by employing an independent actuary, which includes assumptions such as mortality, redemption and spends. Provisions for
liabilities on the outstanding reward points are made based on the actuarial valuation report as furnished by the said independent
actuary and included in other liabilities.
11
Bullion
The Bank imports bullion including precious metal bars on a consignment basis for selling to its wholesale and retail customers.
The imports are typically on a back-to-back basis and are priced to the customer based on an estimated price quoted by the
supplier. The Bank earns a fee on such wholesale bullion transactions. The fee is classified under commission income.
The Bank also deals in bullion on a borrowing and lending basis and the interest paid / received thereon is classified as interest
expense / income respectively.
12
Lease accounting
Lease payments including cost escalation for assets taken on operating lease are recognised in the Statement of Profit and Loss
over the lease term on a straight-line basis in accordance with the AS-19, Leases.
13
Income tax
Income tax expense comprises current tax provision (i.e. the amount of tax for the period determined in accordance with the
Income Tax Act, 1961, the rules framed there under and considering the material principles set out in Income Computation and
Disclosure Standards) and the net change in the deferred tax asset or liability during the year. Deferred tax assets and liabilities
are recognised for the future tax consequences of timing differences between the carrying values of assets and liabilities and
their respective tax bases, and operating loss carried forward, if any. Deferred tax assets and liabilities are measured using the
enacted or substantively enacted tax rates as at the Balance Sheet date.
Current tax assets and liabilities and deferred tax assets and liabilities are off-set when they relate to income taxes levied by the
same taxation authority, when the Bank has a legal right to off-set and when the Bank intends to settle on a net basis.
Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be realised in future. In
case of unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is
HDFC Bank Limited Annual Report 2016-17
86
Schedules to the Financial Statements
For the year ended March 31, 2017
virtual certainty of realisation of such assets. Deferred tax assets are reviewed at each Balance Sheet date and appropriately
adjusted to reflect the amount that is reasonably / virtually certain to be realised.
14
Earnings per share
The Bank reports basic and diluted earnings per equity share in accordance with AS-20, Earnings per Share. Basic earnings per
equity share has been computed by dividing net profit for the year attributable to equity shareholders by the weighted average
number of equity shares outstanding for the period. Diluted earnings per share reflect the potential dilution that could occur
if securities or other contracts to issue equity shares were exercised or converted to equity during the year. Diluted earnings
per equity share are computed using the weighted average number of equity shares and the dilutive potential equity shares
outstanding during the period except where the results are anti-dilutive.
15
Share issue expenses
Share issue expenses are adjusted from Share Premium Account in terms of Section 52 of the Companies Act, 2013.
16
Segment information
The disclosure relating to segment information is in accordance with AS-17, Segment Reporting and as per guidelines issued
by RBI.
17
Accounting for provisions, contingent liabilities and contingent assets
In accordance with AS-29, Provisions, Contingent Liabilities and Contingent Assets, the Bank recognises provisions when it has
a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be
required to settle the obligation and when a reliable estimate of the amount of the obligation can be made.
Provisions are determined based on management estimate required to settle the obligation at the Balance Sheet date,
supplemented by experience of similar transactions. These are reviewed at each Balance Sheet date and adjusted to reflect the
current management estimates.
A disclosure of contingent liability is made when there is:
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:65)(cid:0) (cid:80)(cid:79)(cid:83)(cid:83)(cid:73)(cid:66)(cid:76)(cid:69)(cid:0) (cid:79)(cid:66)(cid:76)(cid:73)(cid:71)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0) (cid:65)(cid:82)(cid:73)(cid:83)(cid:73)(cid:78)(cid:71)(cid:0) (cid:70)(cid:82)(cid:79)(cid:77)(cid:0) (cid:65)(cid:0) (cid:80)(cid:65)(cid:83)(cid:84)(cid:0) (cid:69)(cid:86)(cid:69)(cid:78)(cid:84)(cid:12)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:69)(cid:88)(cid:73)(cid:83)(cid:84)(cid:69)(cid:78)(cid:67)(cid:69)(cid:0) (cid:79)(cid:70)(cid:0) (cid:87)(cid:72)(cid:73)(cid:67)(cid:72)(cid:0) (cid:87)(cid:73)(cid:76)(cid:76)(cid:0) (cid:66)(cid:69)(cid:0) (cid:67)(cid:79)(cid:78)(cid:108)(cid:82)(cid:77)(cid:69)(cid:68)(cid:0) (cid:66)(cid:89)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:79)(cid:67)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:67)(cid:69)(cid:0) (cid:79)(cid:82)(cid:0)
non-occurrence of one or more uncertain future events not within the control of the Bank; or
(cid:65)(cid:0)(cid:80)(cid:82)(cid:69)(cid:83)(cid:69)(cid:78)(cid:84)(cid:0)(cid:79)(cid:66)(cid:76)(cid:73)(cid:71)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:65)(cid:82)(cid:73)(cid:83)(cid:73)(cid:78)(cid:71)(cid:0)(cid:70)(cid:82)(cid:79)(cid:77)(cid:0)(cid:65)(cid:0)(cid:80)(cid:65)(cid:83)(cid:84)(cid:0)(cid:69)(cid:86)(cid:69)(cid:78)(cid:84)(cid:0)(cid:87)(cid:72)(cid:73)(cid:67)(cid:72)(cid:0)(cid:73)(cid:83)(cid:0)(cid:78)(cid:79)(cid:84)(cid:0)(cid:82)(cid:69)(cid:67)(cid:79)(cid:71)(cid:78)(cid:73)(cid:83)(cid:69)(cid:68)(cid:0)(cid:65)(cid:83)(cid:0)(cid:73)(cid:84)(cid:0)(cid:73)(cid:83)(cid:0)(cid:78)(cid:79)(cid:84)(cid:0)(cid:80)(cid:82)(cid:79)(cid:66)(cid:65)(cid:66)(cid:76)(cid:69)(cid:0)(cid:84)(cid:72)(cid:65)(cid:84)(cid:0)(cid:65)(cid:78)(cid:0)(cid:79)(cid:85)(cid:84)(cid:109)(cid:79)(cid:87)(cid:0)(cid:79)(cid:70)(cid:0)(cid:82)(cid:69)(cid:83)(cid:79)(cid:85)(cid:82)(cid:67)(cid:69)(cid:83)(cid:0)
will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.
(cid:0)
(cid:55)(cid:72)(cid:69)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:82)(cid:69)(cid:0)(cid:73)(cid:83)(cid:0)(cid:65)(cid:0)(cid:80)(cid:79)(cid:83)(cid:83)(cid:73)(cid:66)(cid:76)(cid:69)(cid:0)(cid:79)(cid:66)(cid:76)(cid:73)(cid:71)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:79)(cid:82)(cid:0)(cid:65)(cid:0)(cid:80)(cid:82)(cid:69)(cid:83)(cid:69)(cid:78)(cid:84)(cid:0)(cid:79)(cid:66)(cid:76)(cid:73)(cid:71)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:73)(cid:78)(cid:0)(cid:82)(cid:69)(cid:83)(cid:80)(cid:69)(cid:67)(cid:84)(cid:0)(cid:79)(cid:70)(cid:0)(cid:87)(cid:72)(cid:73)(cid:67)(cid:72)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:76)(cid:73)(cid:75)(cid:69)(cid:76)(cid:73)(cid:72)(cid:79)(cid:79)(cid:68)(cid:0)(cid:79)(cid:70)(cid:0)(cid:79)(cid:85)(cid:84)(cid:109)(cid:79)(cid:87)(cid:0)(cid:79)(cid:70)(cid:0)(cid:82)(cid:69)(cid:83)(cid:79)(cid:85)(cid:82)(cid:67)(cid:69)(cid:83)(cid:0)(cid:73)(cid:83)(cid:0)(cid:82)(cid:69)(cid:77)(cid:79)(cid:84)(cid:69)(cid:12)(cid:0)
no provision or disclosure is made.
Contingent assets, if any, are not recognised in the financial statements since this may result in the recognition of income that
may never be realised.
Onerous contracts
Provisions for onerous contracts are recognised when the expected benefits to be derived by the Bank from a contract are
lower than the unavoidable costs of meeting the future obligations under the contract. The provision is measured at the
present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the
contract. Before a provision is established, the Bank recognises any impairment loss on the assets associated with that
contract.
18
Cash and cash equivalents
Cash and cash equivalents include cash and gold in hand, balances with RBI, balances with other banks and money at call
and short notice.
19
Corporate social responsibility
Expenditure towards corporate social responsibility, in accordance with Companies Act, 2013, are recognised in the Statement
of Profit and Loss.
HDFC Bank Limited Annual Report 2016-17
87
Schedules to the Financial Statements
For the year ended March 31, 2017
SCHEDULE 18 - Notes forming part of the financial statements for the year ended March 31, 2017
Amounts in notes forming part of the financial statements for the year ended March 31, 2017 are denominated in rupee crore to
conform to extant RBI guidelines.
1
Change in classification
Pursuant to RBI circular dated May 19, 2016, the Bank has, included its repurchase / reverse repurchase transactions under
Liquidity Adjustment Facility (LAF) and Marginal Standing Facility (MSF) with RBI under ‘Borrowings from RBI’ / ‘Balances with
RBI’, as the case may be. Hitherto, these transactions were netted from / included under ‘Investments’. Figures of the previous
year have been regrouped / reclassified to conform to current year’s classification. The above change in classification has no
impact on the profit of the Bank for the years ended March 31, 2017 and March 31, 2016.
2
Proposed dividend
The Board of Directors, at their meeting held on April 21, 2017 have proposed a dividend of ` 11.00 per equity share aggregating
` 3,392.71 crore, inclusive of tax on dividend. The proposal is subject to the approval of shareholders at the Annual General
Meeting. In terms of revised Accounting Standard (AS) 4 ‘Contingencies and Events occurring after the Balance sheet date’ as
notified by the Ministry of Corporate Affairs through amendments to Companies (Accounting Standards) Amendment Rules,
2016, the Bank has not appropriated proposed dividend from Statement of Profit and Loss for the year ended March 31, 2017.
Accordingly, the proposed dividend and the tax thereon, under Appropriations in the Statement of Profit and Loss is lower by
` 2,818.80 crore and ` 573.91 crore respectively and the balance of Other Liabilities is lower by an equivalent amount as
at March 31, 2017. However, the effect of the proposed dividend has been reckoned in determining capital funds in the
computation of the capital adequacy ratio as at March 31, 2017.
3
Capital adequacy
The Bank’s capital to risk-weighted asset ratio (‘Capital Adequacy Ratio’) as at March 31, 2017 is calculated in accordance with
the RBI’s guidelines on Basel III capital regulations (‘Basel III’). The phasing in of the minimum capital ratio requirement under
Basel III is as follows:
Minimum ratio of capital to risk-weighted assets
Common equity tier I
Tier I capital
Total capital
(% of RWAs)
2016
6.125
7.625
9.625
As on March 31,
2017
6.750
8.250
10.250
2018
7.375
8.875
10.875
2019
8.000
9.500
11.500
The above minimum CET1, Tier I and Total capital ratio requirement includes capital conservation buffer.
The Bank’s capital adequacy ratio computed under Basel III is given below:
Particulars
Tier I capital
Of which common equity tier I capital
Tier II capital
Total capital
Total risk weighted assets
Capital adequacy ratios under Basel lII
Tier I
Of which common equity tier I
Tier II
(` crore)
March 31, 2017
81,829.30
81,829.30
11,302.66
93,131.96
640,029.93
March 31, 2016
70,032.52
70,032.52
12,243.44
82,275.96
529,768.14
12.79%
12.79%
1.76%
14.55%
13.22%
13.22%
2.31%
15.53%
Total
The Bank has not raised any additional tier I and tier II capital during the years ended March 31, 2017 and March 31, 2016.
HDFC Bank Limited Annual Report 2016-17
88
Schedules to the Financial Statements
For the year ended March 31, 2017
Subordinated debt (lower Tier II capital), upper Tier II capital and innovative perpetual debt instruments outstanding as at
March 31, 2017 are ` 10,402.00 crore (previous year: ` 10,812.00 crore), ` 2,780.00 crore (previous year: ` 4,078.45 crore)
and nil (previous year: ` 200.00 crore) respectively.
In accordance with RBI guidelines, banks are required to make Pillar 3 disclosures under Basel III capital regulations.
The Bank’s Pillar 3 disclosures are available on its website at the following link: http://www.hdfcbank.com/aboutus/basel_
disclosures/default.htm. These Pillar 3 disclosures have not been subjected to audit or review by the statutory auditors.
Capital infusion
During the year ended March 31, 2017, the Bank allotted 3,43,59,200 equity shares (previous year: 2,16,91,200 equity shares)
aggregating to face value ` 6.87 crore (previous year: ` 4.34 crore) in respect of stock options exercised. Accordingly, share
capital increased by ` 6.87 crore (previous year: ` 4.34 crore) and share premium increased by ` 2,254.64 crore (previous year:
` 1,218.56 crore).
Details of movement in the paid-up equity share capital of the Bank are given below:
(` crore)
Particulars
Opening balance
Addition pursuant to stock options exercised
Closing balance
4
Earnings per equity share
March 31, 2017
March 31, 2016
505.64
6.87
512.51
501.30
4.34
505.64
Basic and diluted earnings per equity share have been calculated based on the net profit after taxation of ` 14,549.66
crore (previous year: ` 12,296.23 crore) and the weighted average number of equity shares outstanding during the year of
2,54,43,33,609 (previous year: 2,51,74,29,120).
Following is the reconciliation between basic and diluted earnings per equity share:
Particulars
Nominal value per share (`)
Basic earnings per share (`)
Effect of potential equity shares (per share) (`)
Diluted earnings per share (`)
For the years ended
March 31, 2017
March 31, 2016
2.00
57.18
(0.75)
56.43
2.00
48.84
(0.58)
48.26
Basic earnings per equity share has been computed by dividing net profit for the year attributable to the equity shareholders by
the weighted average number of equity shares outstanding for the year. Diluted earnings per equity share has been computed
by dividing the net profit for the year attributable to the equity shareholders by the weighted average number of equity shares
and dilutive potential equity shares outstanding during the year, except where the results are anti-dilutive. The dilutive impact is
on account of stock options granted to employees by the Bank. There is no impact of dilution on the profits in the current year
and previous year.
Following is the reconciliation of weighted average number of equity shares used in the computation of basic and diluted
earnings per share:
Particulars
Weighted average number of equity shares used in computing basic earnings
per equity share
Effect of potential equity shares outstanding
Weighted average number of equity shares used in computing diluted earnings
per equity share
For the years ended
March 31, 2017
March 31, 2016
2,54,43,33,609
2,51,74,29,120
3,40,55,428
3,04,43,320
2,57,83,89,037
2,54,78,72,440
HDFC Bank Limited Annual Report 2016-17
89
Schedules to the Financial Statements
For the year ended March 31, 2017
5
Reserves and Surplus
Draw down from reserves
Share Premium
The Bank has not undertaken any drawdown from reserves during the years ended March 31, 2017 and March 31, 2016.
Statutory Reserve
The Bank has made an appropriation of ` 3,637.41 crore (previous year: ` 3,074.05 crore) out of profits for the year ended
March 31, 2017 to Statutory Reserve pursuant to the requirements of Section 17 of the Banking Regulation Act, 1949 and
RBI guidelines dated September 23, 2000.
Capital Reserve
During the year ended March 31, 2017, the Bank appropriated ` 313.41 crore (previous year: ` 222.15 crore), being the profit
from sale of investments under HTM category and profit on sale of immovable properties, net of taxes and transfer to statutory
reserve, from Profit and Loss Account to Capital Reserve Account.
General Reserve
The Bank has made an appropriation of ` 1,454.96 crore (previous year: ` 1,229.62 crore) out of profits for the year ended
March 31, 2017 to General Reserve.
Investment Reserve Account
During the year ended March 31, 2017, the Bank has appropriated ` 4.29 crore (net) from Profit and Loss Account to Investment
Reserve Account as per RBI guidelines. In the previous year, the Bank had transferred ` 8.52 crore (net) from Investment
Reserve Account to Profit and Loss Account as per RBI guidelines.
6
Dividend on shares allotted pursuant to exercise of stock options
The Bank may allot equity shares after the Balance Sheet date but before the book closure date pursuant to the exercise of any
employee stock options. These equity shares will be eligible for full dividend for the year ended March 31, 2017, if approved at
the ensuing Annual General Meeting.
7
Accounting for employee share based payments
The shareholders of the Bank approved grant of equity share options under Plan “C” in June 2005, Plan “D” in June 2007, Plan
“E” in June 2010, Plan “F” in June 2013 and Plan “G” in July 2016. Under the terms of each of these Plans, the Bank may issue
to its employees and Whole Time Directors, Equity Stock Options (‘ESOPs’) each of which is convertible into one equity share.
All the plans were framed in accordance with the SEBI (Employee Stock Option Scheme & Employee Stock Purchase Scheme)
Guidelines, 1999 as amended from time to time and as applicable at the time of grant. Accounting for the stock options has
been in accordance with the SEBI (Share Based Employee Benefits) Regulations, 2014 to the extent applicable.
Plans C, D, E, F and G provide for the issuance of options at the recommendation of the Nomination & Remuneration Committee
at the closing price on the working day immediately preceding the date when options are granted. This closing price is the
closing price of the Bank’s equity share on an Indian stock exchange with the highest trading volume as of the working day
preceding the date of grant.
Vesting conditions applicable to the options are at the discretion of the Nomination & Remuneration Committee. These options
are exercisable on vesting, for a period as set forth by the Nomination & Remuneration Committee at the time of grant.
The period in which options may be exercised cannot exceed five years. During the years ended March 31, 2017 and March
31, 2016, no modifications were made to the terms and conditions of ESOPs as approved by the Nomination & Remuneration
Committee.
HDFC Bank Limited Annual Report 2016-17
90
Schedules to the Financial Statements
For the year ended March 31, 2017
Activity in the options outstanding under the Employee Stock Option Plans
(cid:0)
(cid:115)(cid:0)
(cid:33)(cid:67)(cid:84)(cid:73)(cid:86)(cid:73)(cid:84)(cid:89)(cid:0)(cid:73)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:79)(cid:80)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0)(cid:79)(cid:85)(cid:84)(cid:83)(cid:84)(cid:65)(cid:78)(cid:68)(cid:73)(cid:78)(cid:71)(cid:0)(cid:85)(cid:78)(cid:68)(cid:69)(cid:82)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:86)(cid:65)(cid:82)(cid:73)(cid:79)(cid:85)(cid:83)(cid:0)(cid:69)(cid:77)(cid:80)(cid:76)(cid:79)(cid:89)(cid:69)(cid:69)(cid:0)(cid:83)(cid:84)(cid:79)(cid:67)(cid:75)(cid:0)(cid:79)(cid:80)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:80)(cid:76)(cid:65)(cid:78)(cid:83)(cid:0)(cid:65)(cid:83)(cid:0)(cid:65)(cid:84)(cid:0)(cid:45)(cid:65)(cid:82)(cid:67)(cid:72)(cid:0)(cid:19)(cid:17)(cid:12)(cid:0)(cid:18)(cid:16)(cid:17)(cid:23)(cid:26)
Particulars
Options outstanding, beginning of year
Granted during the year
Exercised during the year
Forfeited / Lapsed during the year
Options outstanding, end of year
Options exercisable
Number
of options
Weighted average
exercise price (`)
12,86,54,300
-
3,43,59,200
21,38,800
9,21,56,300
5,63,14,000
840.19
-
658.20
972.97
904.97
835.06
(cid:0)
(cid:115)(cid:0)
(cid:33)(cid:67)(cid:84)(cid:73)(cid:86)(cid:73)(cid:84)(cid:89)(cid:0)(cid:73)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:79)(cid:80)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0)(cid:79)(cid:85)(cid:84)(cid:83)(cid:84)(cid:65)(cid:78)(cid:68)(cid:73)(cid:78)(cid:71)(cid:0)(cid:85)(cid:78)(cid:68)(cid:69)(cid:82)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:86)(cid:65)(cid:82)(cid:73)(cid:79)(cid:85)(cid:83)(cid:0)(cid:69)(cid:77)(cid:80)(cid:76)(cid:79)(cid:89)(cid:69)(cid:69)(cid:0)(cid:83)(cid:84)(cid:79)(cid:67)(cid:75)(cid:0)(cid:79)(cid:80)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:80)(cid:76)(cid:65)(cid:78)(cid:83)(cid:0)(cid:65)(cid:83)(cid:0)(cid:65)(cid:84)(cid:0)(cid:45)(cid:65)(cid:82)(cid:67)(cid:72)(cid:0)(cid:19)(cid:17)(cid:12)(cid:0)(cid:18)(cid:16)(cid:17)(cid:22)(cid:26)
Particulars
Options outstanding, beginning of year
Granted during the year
Exercised during the year
Forfeited / Lapsed during the year
Options outstanding, end of year
Options exercisable
Number
of options
Weighted average
exercise price (`)
10,90,33,000
4,48,36,200
2,16,91,200
35,23,700
12,86,54,300
4,96,81,000
683.16
1,092.65
563.78
895.09
840.19
661.84
(cid:115)(cid:0)(cid:0)
(cid:38)(cid:79)(cid:76)(cid:76)(cid:79)(cid:87)(cid:73)(cid:78)(cid:71)(cid:0)(cid:84)(cid:65)(cid:66)(cid:76)(cid:69)(cid:0)(cid:83)(cid:85)(cid:77)(cid:77)(cid:65)(cid:82)(cid:73)(cid:83)(cid:69)(cid:83)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:73)(cid:78)(cid:70)(cid:79)(cid:82)(cid:77)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:65)(cid:66)(cid:79)(cid:85)(cid:84)(cid:0)(cid:83)(cid:84)(cid:79)(cid:67)(cid:75)(cid:0)(cid:79)(cid:80)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0)(cid:79)(cid:85)(cid:84)(cid:83)(cid:84)(cid:65)(cid:78)(cid:68)(cid:73)(cid:78)(cid:71)(cid:0)(cid:65)(cid:83)(cid:0)(cid:65)(cid:84)(cid:0)(cid:45)(cid:65)(cid:82)(cid:67)(cid:72)(cid:0)(cid:19)(cid:17)(cid:12)(cid:0)(cid:18)(cid:16)(cid:17)(cid:23)(cid:26)
Plan
Plan C
Plan D
Plan E
Plan F
Range of exercise price
(`)
Number of shares
arising
out of options
Weighted average
life of options
(in years)
Weighted average
exercise price
(`)
680.00 to 835.50
680.00
468.40 to 680.00
835.50 to 1,097.80
46,44,400
33,34,300
1,50,94,600
6,90,83,000
2.34
2.33
2.18
3.90
690.91
680.00
650.01
985.92
(cid:115)(cid:0)(cid:0)
(cid:38)(cid:79)(cid:76)(cid:76)(cid:79)(cid:87)(cid:73)(cid:78)(cid:71)(cid:0)(cid:84)(cid:65)(cid:66)(cid:76)(cid:69)(cid:0)(cid:83)(cid:85)(cid:77)(cid:77)(cid:65)(cid:82)(cid:73)(cid:83)(cid:69)(cid:83)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:73)(cid:78)(cid:70)(cid:79)(cid:82)(cid:77)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:65)(cid:66)(cid:79)(cid:85)(cid:84)(cid:0)(cid:83)(cid:84)(cid:79)(cid:67)(cid:75)(cid:0)(cid:79)(cid:80)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0)(cid:79)(cid:85)(cid:84)(cid:83)(cid:84)(cid:65)(cid:78)(cid:68)(cid:73)(cid:78)(cid:71)(cid:0)(cid:65)(cid:83)(cid:0)(cid:65)(cid:84)(cid:0)(cid:45)(cid:65)(cid:82)(cid:67)(cid:72)(cid:0)(cid:19)(cid:17)(cid:12)(cid:0)(cid:18)(cid:16)(cid:17)(cid:22)(cid:26)
Plan
Plan C
Plan D
Plan E
Plan F
Range of exercise price
(`)
Number of shares
arising
out of options
Weighted average
life of options
(in years)
Weighted average
exercise price
(`)
680.00 to 835.50
680.00
440.16 to 680.00
835.50 to 1,097.80
57,40,800
51,33,900
3,78,50,200
7,99,29,400
3.34
3.32
2.49
4.80
693.00
680.00
598.71
975.41
HDFC Bank Limited Annual Report 2016-17
91
Schedules to the Financial Statements
For the year ended March 31, 2017
Fair value methodology
The fair value of options used to compute proforma net income and earnings per equity share have been estimated on the dates
of each grant using the binomial option-pricing model. The Bank estimates the volatility based on the historical share prices.
No stock options were granted during the year ended March 31, 2017 (previous year: 4,48,36,200). The various assumptions
considered in the pricing model for the ESOPs granted during the year ended March 31, 2016 were:
Particulars
Dividend yield
Expected volatility
Risk-free interest rate
Expected life of the options
March 31, 2016
0.73%
23.29% to 26.46%
7.71% to 8.07%
1 to 7 years
Impact of fair value method on net profit and Earnings Per Share (‘EPS’)
Had the compensation cost for the Bank’s stock option plans been determined based on the fair value approach, the Bank’s
net profit and earnings per share would have been as per the proforma amounts indicated below:
Particulars
Net profit (as reported)
Add: Stock-based employee compensation expense included in net income
Less: Stock-based compensation expense determined under fair value based
method (proforma)
Net profit (proforma)
Basic earnings per share (as reported)
Basic earnings per share (proforma)
Diluted earnings per share (as reported)
Diluted earnings per share (proforma)
8
Other liabilities
March 31, 2017
March 31, 2016
(` crore)
14,549.66
-
812.75
13,736.91
(`)
57.18
53.99
56.43
53.28
12,296.23
-
1,265.93
11,030.30
(`)
48.84
43.82
48.26
43.29
(cid:115)(cid:0)
(cid:52)(cid:72)(cid:69)(cid:0) (cid:34)(cid:65)(cid:78)(cid:75)(cid:0) (cid:72)(cid:69)(cid:76)(cid:68)(cid:0) (cid:67)(cid:79)(cid:78)(cid:84)(cid:73)(cid:78)(cid:71)(cid:69)(cid:78)(cid:84)(cid:0) (cid:80)(cid:82)(cid:79)(cid:86)(cid:73)(cid:83)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0) (cid:84)(cid:79)(cid:87)(cid:65)(cid:82)(cid:68)(cid:83)(cid:0) (cid:83)(cid:84)(cid:65)(cid:78)(cid:68)(cid:65)(cid:82)(cid:68)(cid:0) (cid:65)(cid:83)(cid:83)(cid:69)(cid:84)(cid:83)(cid:0) (cid:65)(cid:77)(cid:79)(cid:85)(cid:78)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0) (cid:84)(cid:79)(cid:0) ` 2,392.22 crore as at March 31, 2017
(previous year: ` 2,001.21 crore). These are included under other liabilities.
(cid:57)
(cid:57)
(cid:57)
Provision for standard assets is made @ 0.25% for direct advances to agriculture and Small and Micro Enterprises
(SMEs) sectors, @ 1% for advances to commercial real estate sector, @ 0.75% for advances to commercial real
estate - residential housing sector, @ 5% on restructured standard advances, @ 2% until after one year from the
date on which the rates are reset at higher rates for housing loans offered at a comparatively lower rate of interest
in the first few years and @ 2% on all exposures to the wholly owned step down subsidiaries of the overseas
subsidiaries of Indian companies, sanctioned / renewed after December 31, 2015.
Provision towards standard advances under Strategic Debt Restructuring (SDR) scheme is made @ 15% till the
outstanding loan / facilities in the account perform satisfactorily during the ‘specified period’ (as defined in the
scheme) and @ 5% for accounts classified under special mention account “SMA-2” category, where the Bank
under consortium / multiple banking arrangement has the largest Aggregate Exposure (AE) or second largest AE
with aggregate exposure of ` 1,000 million or above and Joint Lenders’ Forum (JLF) is not formed or the JLF fails
to agree upon a common corrective action plan within the stipulated time frame.
In accordance with regulatory guidelines and based on the information made available by its customers to the
Bank, for exposures to customers who have not hedged their foreign currency exposures, provision for standard
assets is made at levels ranging up to 0.80% depending on the likely loss the entities could incur on account of
exchange rate movements.
HDFC Bank Limited Annual Report 2016-17
92
Schedules to the Financial Statements
For the year ended March 31, 2017
(cid:57)
(cid:57)
Provision for standard assets of overseas branches is made at higher of rates prescribed by the overseas regulator
or RBI.
For all other loans and advances including credit exposures computed as per the current marked to market values
of interest rate and foreign exchange derivative contracts, provision for standard assets is made @ 0.40%.
(cid:115)(cid:0)
(cid:52)(cid:72)(cid:69)(cid:0)(cid:34)(cid:65)(cid:78)(cid:75)(cid:0)(cid:72)(cid:65)(cid:83)(cid:0)(cid:80)(cid:82)(cid:69)(cid:83)(cid:69)(cid:78)(cid:84)(cid:69)(cid:68)(cid:0)(cid:71)(cid:82)(cid:79)(cid:83)(cid:83)(cid:0)(cid:85)(cid:78)(cid:82)(cid:69)(cid:65)(cid:76)(cid:73)(cid:83)(cid:69)(cid:68)(cid:0)(cid:71)(cid:65)(cid:73)(cid:78)(cid:0)(cid:79)(cid:78)(cid:0)(cid:70)(cid:79)(cid:82)(cid:69)(cid:73)(cid:71)(cid:78)(cid:0)(cid:69)(cid:88)(cid:67)(cid:72)(cid:65)(cid:78)(cid:71)(cid:69)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:68)(cid:69)(cid:82)(cid:73)(cid:86)(cid:65)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:67)(cid:79)(cid:78)(cid:84)(cid:82)(cid:65)(cid:67)(cid:84)(cid:83)(cid:0)(cid:85)(cid:78)(cid:68)(cid:69)(cid:82)(cid:0)(cid:79)(cid:84)(cid:72)(cid:69)(cid:82)(cid:0)(cid:65)(cid:83)(cid:83)(cid:69)(cid:84)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)
gross unrealised loss on foreign exchange and derivative contracts under other liabilities. Accordingly, other liabilities as
at March 31, 2017 include unrealised loss on foreign exchange and derivative contracts of ` 13,880.38 crore (previous
year: ` 7,524.88 crore).
9
Unhedged foreign currency exposure
(cid:115)(cid:0)
(cid:52)(cid:72)(cid:69)(cid:0)(cid:34)(cid:65)(cid:78)(cid:75)(cid:0)(cid:72)(cid:65)(cid:83)(cid:0)(cid:73)(cid:78)(cid:0)(cid:80)(cid:76)(cid:65)(cid:67)(cid:69)(cid:0)(cid:65)(cid:0)(cid:80)(cid:79)(cid:76)(cid:73)(cid:67)(cid:89)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:80)(cid:82)(cid:79)(cid:67)(cid:69)(cid:83)(cid:83)(cid:0)(cid:70)(cid:79)(cid:82)(cid:0)(cid:77)(cid:65)(cid:78)(cid:65)(cid:71)(cid:73)(cid:78)(cid:71)(cid:0)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:67)(cid:89)(cid:0)(cid:73)(cid:78)(cid:68)(cid:85)(cid:67)(cid:69)(cid:68)(cid:0)(cid:67)(cid:82)(cid:69)(cid:68)(cid:73)(cid:84)(cid:0)(cid:82)(cid:73)(cid:83)(cid:75)(cid:14)(cid:0)(cid:52)(cid:72)(cid:69)(cid:0)(cid:67)(cid:82)(cid:69)(cid:68)(cid:73)(cid:84)(cid:0)(cid:65)(cid:80)(cid:80)(cid:82)(cid:65)(cid:73)(cid:83)(cid:65)(cid:76)(cid:0)(cid:77)(cid:69)(cid:77)(cid:79)(cid:82)(cid:65)(cid:78)(cid:68)(cid:85)(cid:77)(cid:0)
prepared at the time of origination and review of a credit is required to discuss the exchange risk that the customer is
exposed to from all sources, including trade related, foreign currency borrowings and external commercial borrowings.
It could cover the natural hedge available to the customer as well as other hedging methods adopted by the customer
to mitigate exchange risk. For foreign currency loans granted by the Bank beyond a defined threshold the customer will
be encouraged to enter into appropriate risk hedging mechanisms with the Bank. Alternatively, the Bank will satisfy itself
that the customer has the financial capacity to bear the exchange risk in the normal course of its business and / or has
other mitigants to reduce the risk. On a monthly basis, the Bank reviews information on the unhedged portion of foreign
currency exposures of customers, whose total foreign currency exposure with the Bank exceeds a defined threshold.
Based on the monthly review, the Bank proposes suitable hedging techniques to the customer to contain the risk.
A Board approved credit risk rating linked limit on unhedged foreign currency position of customers is applicable when
extending credit facilities to a customer. The compliance with the limit is assessed by estimating the extent of drop in a
customer’s annual EBID due to a potentially large adverse movement in exchange rate impacting the unhedged foreign
currency exposure of the customer. Where a breach is observed in such a simulation, the customer is advised to reduce
its unhedged exposure.
(cid:115)(cid:0)
(cid:41)(cid:78)(cid:0) (cid:65)(cid:67)(cid:67)(cid:79)(cid:82)(cid:68)(cid:65)(cid:78)(cid:67)(cid:69)(cid:0) (cid:87)(cid:73)(cid:84)(cid:72)(cid:0) (cid:50)(cid:34)(cid:41)(cid:0) (cid:71)(cid:85)(cid:73)(cid:68)(cid:69)(cid:76)(cid:73)(cid:78)(cid:69)(cid:83)(cid:12)(cid:0) (cid:80)(cid:82)(cid:79)(cid:86)(cid:73)(cid:83)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0) (cid:72)(cid:69)(cid:76)(cid:68)(cid:0) (cid:70)(cid:79)(cid:82)(cid:0) (cid:83)(cid:84)(cid:65)(cid:78)(cid:68)(cid:65)(cid:82)(cid:68)(cid:0) (cid:65)(cid:83)(cid:83)(cid:69)(cid:84)(cid:83)(cid:0) (cid:65)(cid:78)(cid:68)(cid:0) (cid:67)(cid:65)(cid:80)(cid:73)(cid:84)(cid:65)(cid:76)(cid:0) (cid:77)(cid:65)(cid:73)(cid:78)(cid:84)(cid:65)(cid:73)(cid:78)(cid:69)(cid:68)(cid:0) (cid:8)(cid:73)(cid:78)(cid:67)(cid:76)(cid:85)(cid:68)(cid:73)(cid:78)(cid:71)(cid:0) (cid:67)(cid:65)(cid:80)(cid:73)(cid:84)(cid:65)(cid:76)(cid:0)
conservation buffer) by the Bank as at March 31, 2017 in respect of the unhedged foreign currency exposure of customers
was ` 108.31 crore (previous year: ` 114.84 crore) and ` 396.86 crore (previous year: ` 294.57 crore) respectively.
10
Investments
(cid:0)(cid:115)(cid:0)
(cid:54)(cid:65)(cid:76)(cid:85)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0)(cid:73)(cid:78)(cid:86)(cid:69)(cid:83)(cid:84)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:26)(cid:0)
Particulars
Gross value of investments
- In India
- Outside India
Provisions for depreciation on investments
- In India
- Outside India
Net value of investments
- In India
- Outside India
(cid:0)(cid:115)(cid:0)
(cid:45)(cid:79)(cid:86)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:73)(cid:78)(cid:0)(cid:80)(cid:82)(cid:79)(cid:86)(cid:73)(cid:83)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0)(cid:72)(cid:69)(cid:76)(cid:68)(cid:0)(cid:84)(cid:79)(cid:87)(cid:65)(cid:82)(cid:68)(cid:83)(cid:0)(cid:68)(cid:69)(cid:80)(cid:82)(cid:69)(cid:67)(cid:73)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:79)(cid:78)(cid:0)(cid:73)(cid:78)(cid:86)(cid:69)(cid:83)(cid:84)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:26)
Particulars
Opening balance
Add: Provision made during the year
Less: Write-off, write back of excess provision during the year
Closing balance
(cid:8)` crore)
March 31, 2017
March 31, 2016
213,407.17
1,120.65
194,583.15
1,372.68
61.85
2.63
213,345.32
1,118.02
119.54
-
194,463.61
1,372.68
(` crore)
March 31, 2017
March 31, 2016
119.54
37.33
92.39
64.48
113.99
36.51
30.96
119.54
Movement in provisions held towards depreciation on investments has been reckoned on a yearly basis.
HDFC Bank Limited Annual Report 2016-17
93
Schedules to the Financial Statements
For the year ended March 31, 2017
(cid:115)(cid:0)
(cid:50)(cid:69)(cid:80)(cid:79)(cid:0)(cid:84)(cid:82)(cid:65)(cid:78)(cid:83)(cid:65)(cid:67)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)
(cid:23) Details of repo / reverse repo deals (in face value terms) done during the year ended March 31, 2017:
(` crore)
Particulars
Securities sold under repo
1. Corporate debt securities
2. Government securities
Securities purchased under reverse repo
1. Corporate debt securities
2. Government securities
Minimum
outstanding
during the year
Maximum
outstanding
during the year
Daily average
outstanding
during the year
Outstanding
as at
March 31, 2017
-
-
-
-
-
-
32,620.54
7,445.30
132.00
30.74
-
-
-
31,413.37
6,900.12
4,690.56
(cid:23) Details of repo / reverse repo deals (in face value terms) done during the year ended March 31, 2016:
(` crore)
Particulars
Securities sold under repo
1. Corporate debt securities
2. Government securities
Securities purchased under reverse repo
1. Corporate debt securities
2. Government securities
Minimum
outstanding
during the year
Maximum
outstanding
during the year
Daily average
outstanding
during the year
Outstanding
as at
March 31, 2016
-
-
-
-
-
-
-
32,530.40
11,097.06
31,950.52
211.60
144.49
132.00
20,106.00
2,868.40
-
(cid:0)
(cid:115)(cid:0)
(cid:46)(cid:79)(cid:78)(cid:13)(cid:51)(cid:44)(cid:50)(cid:0)(cid:73)(cid:78)(cid:86)(cid:69)(cid:83)(cid:84)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:80)(cid:79)(cid:82)(cid:84)(cid:70)(cid:79)(cid:76)(cid:73)(cid:79)
(cid:23)
Issuer-wise composition of non-SLR investments as at March 31, 2017:
(` crore)
Sr.
No.
Issuer
Amount
Extent of
private
placement#
Extent of
“below
investment
grade”
securities#
Extent of
“unrated”
securities# *
Extent of
“unlisted”
securities# **
1 Public sector undertakings
2,225.18
2,174.65
2
Financial institutions
3 Banks
4 Private corporate
1,400.31
1,360.00
700.36
-
41,069.41
39,337.27
5 Subsidiaries / Joint ventures
3,843.32
3,843.32
6 Others
2,870.54
2,860.53
7 Provision held towards depreciation
(64.48)
Total
52,044.64
49,575.77
-
-
-
-
-
-
-
-
-
-
-
-
-
33.51
3,793.61
-
-
-
-
33.51
3,793.61
#
*
Amounts reported under these columns above are not mutually exclusive.
Excludes investments in equity shares and units of equity oriented mutual funds in line with extant RBI
guidelines.
** Excludes investments in equity shares, units of equity oriented mutual funds, pass through certificates,
security receipts, commercial paper and certificate of deposits in line with extant RBI guidelines.
HDFC Bank Limited Annual Report 2016-17
94
Schedules to the Financial Statements
For the year ended March 31, 2017
(cid:23)
Issuer-wise composition of non-SLR investments as at March 31, 2016:
(` crore)
Sr.
No.
Issuer
1 Public sector undertakings
2
Financial institutions
3 Banks
4 Private corporate
5 Subsidiaries / Joint ventures
6 Others
Amount
Extent of
private
placement#
1,357.71
1,357.71
4,875.28
4,775.38
873.92
1.00
24,911.15
23,242.35
2,782.96
2,782.96
3,493.73
3,490.73
7 Provision held towards depreciation
(119.54)
Total
38,175.21
35,650.13
Extent of
“below
investment
grade”
securities#
Extent of
“unrated”
securities# *
Extent of
“unlisted”
securities# **
-
-
-
-
-
-
-
-
-
-
-
-
-
83.80
431.21
-
-
-
-
83.80
431.21
#
*
Amounts reported under these columns above are not mutually exclusive.
Excludes investments in equity shares and units of equity oriented mutual funds in line with extant RBI
guidelines.
** Excludes investments in equity shares, units of equity oriented mutual funds, pass through certificates,
security receipts, commercial paper and certificate of deposits in line with extant RBI guidelines.
(cid:23)(cid:3) Non-performing non-SLR investments:
Particulars
Opening balance
Additions during the year
Reductions during the year
Closing balance
Total provisions held
(cid:115)(cid:0)
(cid:36)(cid:69)(cid:84)(cid:65)(cid:73)(cid:76)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)(cid:73)(cid:78)(cid:86)(cid:69)(cid:83)(cid:84)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:0)(cid:67)(cid:65)(cid:84)(cid:69)(cid:71)(cid:79)(cid:82)(cid:89)(cid:13)(cid:87)(cid:73)(cid:83)(cid:69)(cid:0)
March 31, 2017
March 31, 2016
(` crore)
87.02
34.61
70.06
51.57
38.02
101.30
19.13
33.41
87.02
84.33
The details of investments held under the three categories viz. Held for Trading (HFT), Available for Sale (AFS) and Held
(` crore)
to Maturity (HTM) are as under:
Particulars
As at March 31, 2017
As at March 31, 2016
HFT
AFS
HTM
Total
HFT
AFS
HTM
Total
Government securities
1,736.34
35,614.27
125,068.09
162,418.70
5,444.11
46,212.83
106,004.14
157,661.08
Other approved securities
Shares
-
-
-
114.21
-
-
-
114.21
-
-
-
76.74
-
-
-
76.74
Debentures and bonds
1,734.61
17,550.42
1,300.00
20,585.03
1,474.90
4,282.31
500.00
6,257.21
Subsidiary / Joint ventures
Others
-
-
-
3,843.32
3,843.32
27,502.08
-
27,502.08
-
-
-
2,782.96
2,782.96
29,058.30
-
29,058.30
(cid:115)(cid:0)
(cid:115)(cid:0)
195,836.29
(cid:47)(cid:84)(cid:72)(cid:69)(cid:82)(cid:0)(cid:73)(cid:78)(cid:86)(cid:69)(cid:83)(cid:84)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:0)(cid:65)(cid:83)(cid:0)(cid:65)(cid:84)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:34)(cid:65)(cid:76)(cid:65)(cid:78)(cid:67)(cid:69)(cid:0)(cid:51)(cid:72)(cid:69)(cid:69)(cid:84)(cid:0)(cid:68)(cid:65)(cid:84)(cid:69)(cid:0)(cid:73)(cid:78)(cid:67)(cid:76)(cid:85)(cid:68)(cid:69)(cid:0)(cid:67)(cid:79)(cid:77)(cid:77)(cid:69)(cid:82)(cid:67)(cid:73)(cid:65)(cid:76)(cid:0)(cid:80)(cid:65)(cid:80)(cid:69)(cid:82)(cid:0)(cid:65)(cid:77)(cid:79)(cid:85)(cid:78)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)(cid:84)(cid:79)(cid:0)` 24,494.53 crore (previous year:
` 25,431.18 crore).
130,211.41
214,463.34
109,287.10
80,780.98
79,630.18
3,470.95
6,919.01
Total
(cid:41)(cid:78)(cid:86)(cid:69)(cid:83)(cid:84)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:0)(cid:73)(cid:78)(cid:67)(cid:76)(cid:85)(cid:68)(cid:69)(cid:0)(cid:83)(cid:69)(cid:67)(cid:85)(cid:82)(cid:73)(cid:84)(cid:73)(cid:69)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)(cid:38)(cid:65)(cid:67)(cid:69)(cid:0)(cid:54)(cid:65)(cid:76)(cid:85)(cid:69)(cid:0)(cid:8)(cid:38)(cid:0)(cid:54)(cid:9)(cid:0)(cid:65)(cid:71)(cid:71)(cid:82)(cid:69)(cid:71)(cid:65)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)` 1,520.00 crore (previous year: FV ` 1,520.00 crore) which
are kept as margin for clearing of securities, of FV ` 24,488.31 crore (previous year: FV ` 13,729.30 crore) which are kept
HDFC Bank Limited Annual Report 2016-17
95
Schedules to the Financial Statements
For the year ended March 31, 2017
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:115)(cid:0)
as margin for Collateralised Borrowing and Lending Obligation (CBLO) and of FV aggregating ` 100.00 crore (previous year:
FV ` 56.00 crore) which are kept as margin for Forex Forward segment - Default Fund with the Clearing Corporation of India
Limited (CCIL).
(cid:41)(cid:78)(cid:86)(cid:69)(cid:83)(cid:84)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:0)(cid:73)(cid:78)(cid:67)(cid:76)(cid:85)(cid:68)(cid:69)(cid:0)(cid:83)(cid:69)(cid:67)(cid:85)(cid:82)(cid:73)(cid:84)(cid:73)(cid:69)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)(cid:38)(cid:54)(cid:0)(cid:65)(cid:71)(cid:71)(cid:82)(cid:69)(cid:71)(cid:65)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)` 16.00 crore (previous year: FV ` 16.00 crore) which are kept as margin
with National Securities Clearing Corporation of India Limited (NSCCIL), of FV aggregating ` 13.00 crore (previous year:
FV ` 13.00 crore) which are kept as margin with Metropolitan Clearing Corporation of India Limited and of FV aggregating
` 5.00 crore (previous year: ` 1.00 crore) which are kept as margin with Indian Clearing Corporation Limited in the BSE
currency derivatives segment.
(cid:41)(cid:78)(cid:86)(cid:69)(cid:83)(cid:84)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:0)(cid:72)(cid:65)(cid:86)(cid:73)(cid:78)(cid:71)(cid:0)(cid:38)(cid:54)(cid:0)(cid:65)(cid:71)(cid:71)(cid:82)(cid:69)(cid:71)(cid:65)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)` 42,730.27 crore (previous year: FV ` 35,937.22 crore) are kept as margin towards
Real Time Gross Settlement (RTGS) and those having FV aggregating ` 41,473.92 crore (previous year: ` 13,091.46 crore)
are kept as margin towards repo transactions with the RBI.
(cid:41)(cid:78)(cid:86)(cid:69)(cid:83)(cid:84)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)(cid:38)(cid:54)(cid:0)(cid:65)(cid:71)(cid:71)(cid:82)(cid:69)(cid:71)(cid:65)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)` 11.05 crore (previous year: FV ` 10.05 crore) are kept as margin for Forex Settlement
Default Fund, of FV aggregating ` 75.40 crore (previous year: ` 85.40 crore) are kept as Cash Margin, of FV aggregating
` 65.00 crore (previous year: nil) are kept as margin for Securities Segment Default Fund, of FV aggregating ` 25.00 crore
(previous year: nil) are kept as margin for CBLO Segment Default Fund and of FV aggregating ` 41.00 crore (previous year:
` 11.00 crore) are kept as margin for Rupee Derivatives Guaranteed Settlement Default Fund with CCIL.
(cid:52)(cid:72)(cid:69)(cid:0) (cid:34)(cid:65)(cid:78)(cid:75)(cid:0) (cid:72)(cid:65)(cid:83)(cid:0) (cid:77)(cid:65)(cid:68)(cid:69)(cid:0) (cid:73)(cid:78)(cid:86)(cid:69)(cid:83)(cid:84)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:0) (cid:73)(cid:78)(cid:0) (cid:67)(cid:69)(cid:82)(cid:84)(cid:65)(cid:73)(cid:78)(cid:0) (cid:67)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:73)(cid:69)(cid:83)(cid:0) (cid:87)(cid:72)(cid:69)(cid:82)(cid:69)(cid:73)(cid:78)(cid:0) (cid:73)(cid:84)(cid:0) (cid:72)(cid:79)(cid:76)(cid:68)(cid:83)(cid:0) (cid:77)(cid:79)(cid:82)(cid:69)(cid:0) (cid:84)(cid:72)(cid:65)(cid:78)(cid:0) (cid:18)(cid:21)(cid:5)(cid:0) (cid:79)(cid:70)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:69)(cid:81)(cid:85)(cid:73)(cid:84)(cid:89)(cid:0) (cid:83)(cid:72)(cid:65)(cid:82)(cid:69)(cid:83)(cid:0) (cid:79)(cid:70)(cid:0) (cid:84)(cid:72)(cid:79)(cid:83)(cid:69)(cid:0)
companies. Such investments do not fall within the definition of a joint venture as per AS-27, Financial Reporting of Interest
in Joint Ventures and the said accounting standard is thus not applicable. However, pursuant to RBI guidelines, the Bank
has classified and disclosed these investments as joint ventures.
(cid:36)(cid:85)(cid:82)(cid:73)(cid:78)(cid:71)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:89)(cid:69)(cid:65)(cid:82)(cid:0)(cid:69)(cid:78)(cid:68)(cid:69)(cid:68)(cid:0)(cid:45)(cid:65)(cid:82)(cid:67)(cid:72)(cid:0)(cid:19)(cid:17)(cid:12)(cid:0)(cid:18)(cid:16)(cid:17)(cid:23)(cid:12)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:65)(cid:71)(cid:71)(cid:82)(cid:69)(cid:71)(cid:65)(cid:84)(cid:69)(cid:0)(cid:66)(cid:79)(cid:79)(cid:75)(cid:0)(cid:86)(cid:65)(cid:76)(cid:85)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0)(cid:73)(cid:78)(cid:86)(cid:69)(cid:83)(cid:84)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:83)(cid:79)(cid:76)(cid:68)(cid:0)(cid:70)(cid:82)(cid:79)(cid:77)(cid:12)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:84)(cid:82)(cid:65)(cid:78)(cid:83)(cid:70)(cid:69)(cid:82)(cid:82)(cid:69)(cid:68)(cid:0)(cid:84)(cid:79)(cid:0)(cid:15)(cid:0)(cid:70)(cid:82)(cid:79)(cid:77)(cid:12)(cid:0)(cid:40)(cid:52)(cid:45)(cid:0)
category was in excess of 5% of the book value of investments held in HTM category at the beginning of the year. The market
value of investments (excluding investments in subsidiaries / joint ventures and Non SLR bonds) under HTM category as at
March 31, 2017 was ` 128,886.02 crore and was higher than the book value thereof as at that date. In accordance with the
RBI guidelines, sale from, and transfer to / from, HTM category excludes the:
(cid:57)(cid:3) one-time transfer of the securities permitted to be undertaken by banks at the beginning of the accounting year with
approval of the Board of Directors;
(cid:57)
(cid:57)
(cid:57)
sales to the RBI under pre-announced open market operation auctions; and
repurchase of Government securities by Government of India from banks.
sale of securities or transfer to AFS / HFT consequent to the reduction of ceiling on SLR securities under HTM at
the beginning of January, July and September 2016, in addition to the shifting permitted at the beginning of the
accounting year, i.e, April 2016.
11 Derivatives
(cid:115)(cid:0)
(cid:38)(cid:79)(cid:82)(cid:87)(cid:65)(cid:82)(cid:68)(cid:0)(cid:50)(cid:65)(cid:84)(cid:69)(cid:0)(cid:33)(cid:71)(cid:82)(cid:69)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:0)(cid:8)(cid:38)(cid:50)(cid:33)(cid:9)(cid:0)(cid:15)(cid:0)(cid:41)(cid:78)(cid:84)(cid:69)(cid:82)(cid:69)(cid:83)(cid:84)(cid:0)(cid:50)(cid:65)(cid:84)(cid:69)(cid:0)(cid:51)(cid:87)(cid:65)(cid:80)(cid:83)(cid:0)(cid:8)(cid:41)(cid:50)(cid:51)(cid:9)(cid:10)(cid:26)(cid:0)
(cid:0)
(cid:0)(cid:8)` crore)
Sr.
No.
i)
ii)
Particulars
March 31, 2017 March 31, 2016
The total notional principal of swap agreements
238,644.16
220,137.21
Total losses which would be incurred if counter parties failed to fulfill
their obligations under the agreements
iii) Concentration of credit risk arising from swaps**
iv) Collateral required by the Bank upon entering into swaps
v)
The fair value of the swap book
917.35
69.96%
-
45.32
912.36
83.02%
-
(48.40)
* Interest Rate Swaps are comprised of INR Interest Rate Swaps and FCY Interest Rate Swaps.
** Concentration of credit risk arising from swaps is with banks as at March 31, 2017 and March 31, 2016.
HDFC Bank Limited Annual Report 2016-17
96
Schedules to the Financial Statements
For the year ended March 31, 2017
The nature and terms of rupee IRS as on March 31, 2017 are set out below:
Nature
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Nos.
Notional principal
(` crore)
Benchmark
Terms
6
6
4
1,179
1,167
292
218
7
225.00
INBMK
375.00
INBMK
Fixed receivable v/s floating payable
Floating receivable v/s fixed payable
1,250.00
INCMT
Floating receivable v/s fixed payable
78,502.69
76,008.42
OIS
OIS
21,019.00 MIFOR
12,959.00 MIFOR
Fixed receivable v/s floating payable
Floating receivable v/s fixed payable
Fixed receivable v/s floating payable
Floating receivable v/s fixed payable
450 MIOIS
Floating receivable v/s fixed payable
Total
190,789.11
The nature and terms of foreign currency IRS as on March 31, 2017 are set out below:
Nature
Trading
Trading
Trading
Trading
Trading
Trading
Hedging
Nos.
Notional principal
(` crore)
Benchmark
Terms
1
1
2
2
110
194
3
17.80 GBP Libor
Fixed receivable v/s floating payable
17.80 GBP Libor
Floating receivable v/s fixed payable
692.93 EURIBOR
Fixed receivable v/s floating payable
692.93 EURIBOR
Floating receivable v/s fixed payable
18,404.28 USD Libor
Fixed receivable v/s floating payable
24,786.81 USD Libor
Floating receivable v/s fixed payable
3,242.50 USD Libor
Fixed receivable v/s floating payable
Total
47,855.05
There were no foreign currencies FRA outstanding as at March 31, 2017.
The nature and terms of rupee IRS as on March 31, 2016 are set out below:
Nature
Nos.
Notional principal
(` crore)
Benchmark
Terms
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Trading
7
8
4
944
901
323
239
8
275.00
INBMK
450.00
INBMK
Fixed receivable v/s floating payable
Floating receivable v/s fixed payable
1,250.00
INCMT
Floating receivable v/s fixed payable
67,667.84
61,759.95
OIS
OIS
Fixed receivable v/s floating payable
Floating receivable v/s fixed payable
23,437.00 MIFOR
Fixed receivable v/s floating payable
15,135.00 MIFOR
Floating receivable v/s fixed payable
620.00 MIOIS
Floating receivable v/s fixed payable
Total
170,594.79
HDFC Bank Limited Annual Report 2016-17
97
Schedules to the Financial Statements
For the year ended March 31, 2017
The nature and terms of foreign currency IRS as on March 31, 2016 are set out below:
Nature
Nos.
Notional principal
(` crore)
Benchmark
Terms
Trading
Trading
Trading
Trading
Trading
Trading
Hedging
Hedging
1
1
2
2
90
184
3
6
29.41
GBP Libor
Fixed receivable v/s floating payable
29.41
GBP Libor
Floating receivable v/s fixed payable
753.95
EURIBOR
Fixed receivable v/s floating payable
753.95
EURIBOR
Floating receivable v/s fixed payable
14,568.32
USD Libor
Fixed receivable v/s floating payable
26,816.42
USD Libor
Floating receivable v/s fixed payable
3,312.75
USD Libor
Fixed receivable v/s floating payable
2,848.97
USD Libor
Floating receivable v/s fixed payable
Total
49,113.18
The nature and terms of foreign currency FRA as on March 31, 2016 are set out below:
Nature
Trading
Trading
Nos.
Notional principal
(` crore)
Benchmark
Terms
1
1
214.63
USD Libor
Payable FRA
214.63
USD Libor
Receivable FRA
Total
429.26
(cid:115)(cid:0)
(cid:37)(cid:88)(cid:67)(cid:72)(cid:65)(cid:78)(cid:71)(cid:69)(cid:0)(cid:84)(cid:82)(cid:65)(cid:68)(cid:69)(cid:68)(cid:0)(cid:73)(cid:78)(cid:84)(cid:69)(cid:82)(cid:69)(cid:83)(cid:84)(cid:0)(cid:82)(cid:65)(cid:84)(cid:69)(cid:0)(cid:68)(cid:69)(cid:82)(cid:73)(cid:86)(cid:65)(cid:84)(cid:73)(cid:86)(cid:69)(cid:83)(cid:0)
(cid:0)
(cid:0)(cid:8)` crore)
Particulars
March 31, 2017 March 31, 2016
Sr.
No.
i)
ii)
iii)
The total notional principal amount of exchange traded interest rate
derivatives undertaken during the years reported
The total notional principal amount of exchange traded interest rate
derivatives outstanding
The notional principal amount of exchange traded interest rate
derivatives outstanding and not ‘highly effective’
iv) Mark-to-market value of exchange traded interest rate derivatives
outstanding and not ‘highly effective’
(cid:115)(cid:0)
(cid:49)(cid:85)(cid:65)(cid:76)(cid:73)(cid:84)(cid:65)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:68)(cid:73)(cid:83)(cid:67)(cid:76)(cid:79)(cid:83)(cid:85)(cid:82)(cid:69)(cid:83)(cid:0)(cid:79)(cid:78)(cid:0)(cid:82)(cid:73)(cid:83)(cid:75)(cid:0)(cid:69)(cid:88)(cid:80)(cid:79)(cid:83)(cid:85)(cid:82)(cid:69)(cid:0)(cid:73)(cid:78)(cid:0)(cid:68)(cid:69)(cid:82)(cid:73)(cid:86)(cid:65)(cid:84)(cid:73)(cid:86)(cid:69)(cid:83)
Overview of business and processes
Nil
Nil
N.A.
N.A.
Nil
Nil
N.A.
N.A.
Derivatives are financial instruments whose characteristics are derived from underlying assets, or from interest and
exchange rates or indices. These include forwards, swaps, futures and options. The notional amounts of financial
instruments such as foreign exchange contracts and derivatives provide a basis for comparison with instruments
recognised on the Balance Sheet but do not necessarily indicate the amounts of future cash flows involved or the current
fair value of the instruments and, therefore, do not indicate the Bank’s exposure to credit or price risks. The following
sections outline the nature and terms of the derivative transactions generally undertaken by the Bank.
HDFC Bank Limited Annual Report 2016-17
98
Schedules to the Financial Statements
For the year ended March 31, 2017
Interest rate contracts
Forward rate agreements give the buyer the ability to determine the underlying rate of interest for a specified period
commencing on a specified future date (the settlement date). There is no exchange of principal and settlement is effected
on the settlement date. The settlement amount is the difference between the contracted rate and the market rate prevailing
on the settlement date.
Interest rate swaps involve the exchange of interest obligations with the counterparty for a specified period without
exchanging the underlying (or notional) principal.
Interest rate caps and floors give the buyer the ability to fix the maximum or minimum rate of interest. The writer of
the contract pays the amount by which the market rate exceeds or is less than the cap rate or the floor rate respectively.
A combination of interest rate caps and floors is known as an interest rate collar.
Interest rate futures are standardised interest rate derivative contracts traded on a recognised stock exchange to buy
or sell a notional security or any other interest bearing instrument or an index of such instruments or interest rates at a
specified future date, at a price determined at the time of the contract.
Exchange rate contracts
Forward foreign exchange contracts are agreements to buy or sell fixed amounts of currency at agreed rates of
exchange on future date. These instruments are carried at fair value, determined based on either FEDAI rates or market
quotations.
Cross currency swaps are agreements to exchange principal amounts denominated in different currencies. Cross
currency swaps may also involve the exchange of interest payments on one specified currency for interest payments in
another specified currency for a specified period.
Currency options give the buyer, on payment of a premium, the right but not an obligation, to buy or sell specified
amounts of currency at agreed rates of exchange on or before a specified future date. Option premia paid or received is
recorded in Statement of Profit and Loss for rupee options at the expiry of the option and for foreign currency options on
the trade date.
Currency futures contract is a standardised contract traded on an exchange, to buy or sell a certain underlying asset or
an instrument at a certain date in the future, at a specified price. The underlying instrument of a currency future contract
is the rate of exchange between one unit of foreign currency and the INR.
The Bank’s derivative transactions relate to sales and trading activities. Sale activities include the structuring and
marketing of derivatives to customers to enable them to hedge their market risks (both interest rate and exchange risks),
within the framework of regulations as applicable from time to time. The Bank deals in derivatives on its own account
(trading activity) principally for the purpose of generating a profit from short term fluctuations in price or yields. The Bank
also deals in derivatives to hedge the risk embedded in some of its Balance Sheet assets or liabilities.
Constituents involved in derivative business
The Treasury front-office enters into derivative transactions with customers and inter-bank counterparties. The Bank
has an independent back-office and mid-office as per regulatory guidelines. The Bank has a credit and market risk
department that assesses various counterparty risk and market risk limits, within the risk architecture and processes of
the Bank.
HDFC Bank Limited Annual Report 2016-17
99
Schedules to the Financial Statements
For the year ended March 31, 2017
Derivative policy
The Bank has in place a policy which covers various aspects that apply to the functioning of the derivative business. The
derivative business is administered by various market risk limits such as position limits, tenor limits, sensitivity limits,
GAP limit, scenario based profit and loss limit for option portfolio and value-at-risk limits that are recommended by the
Risk Policy and Monitoring Committee (‘RPMC’) to the Board of Directors for approval. All methodologies used to assess
market and credit risks for derivative transactions are specified by the credit and market risk unit. Limits are monitored on
a daily basis by the mid-office.
The Bank has implemented a Board approved policy on Customer Suitability & Appropriateness to ensure that derivative
transactions entered into are appropriate and suitable to the customer’s nature of business / operations. Before entering
into a derivative deal with a customer, the Bank scores the customer on various risk parameters and based on the overall
score level it determines the kind of product that best suits its risk appetite and the customer’s requirements.
Classification of derivatives book
The derivative book is classified into trading and hedging book. Classification of the derivative book is made on the basis
of the definitions of the trading and hedging books specified in the RBI guidelines. The trading book is managed within
the trading limits approved by the RPMC and the Board of Directors.
Hedging policy
For derivative contracts designated as hedge, the Bank documents, at inception, the relationship between the hedging
instrument and the hedged item, the risk management objective for undertaking the hedge and the methods used to
assess the hedge effectiveness. Hedge effectiveness is ascertained at the time of inception of the hedge and periodically
thereafter. Hedge effectiveness is measured by the degree to which changes in the fair value or cash flows of the hedged
item that are attributable to a hedged risk are offset by changes in the fair value or cash flows of the hedging instrument.
The hedging book consists of transactions to hedge Balance Sheet assets or liabilities. The tenor of hedging instrument
may be less than or equal to the tenor of underlying hedged asset or liability. Derivative contracts designated as hedges
are not marked to market unless their underlying asset or liability is marked to market. In respect of derivative contracts
that are marked to market, changes in the market value are recognised in the Statement of Profit and Loss in the relevant
period. Gain or losses arising from hedge ineffectiveness, if any, is recognised in the Statement of Profit and Loss.
Foreign exchange forward contracts not intended for trading, that are entered into to establish the amount of reporting
currency required or available at the settlement date of a transaction, and are outstanding at the Balance Sheet date,
are effectively valued at the closing spot rate. The premia or discount arising at the inception of such forward exchange
contract is amortised as expense or income over the life of the contract.
(cid:115)(cid:0)
(cid:48)(cid:82)(cid:79)(cid:86)(cid:73)(cid:83)(cid:73)(cid:79)(cid:78)(cid:73)(cid:78)(cid:71)(cid:12)(cid:0)(cid:67)(cid:79)(cid:76)(cid:76)(cid:65)(cid:84)(cid:69)(cid:82)(cid:65)(cid:76)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:67)(cid:82)(cid:69)(cid:68)(cid:73)(cid:84)(cid:0)(cid:82)(cid:73)(cid:83)(cid:75)(cid:0)(cid:77)(cid:73)(cid:84)(cid:73)(cid:71)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)
The Bank enters into derivative transactions with counter parties based on their business ranking and financial position.
The Bank sets up appropriate limits upon evaluating the ability of the counterparty to honour its obligations in the event
of crystallisation of the exposure. Appropriate credit covenants are stipulated where required as trigger events to call for
collaterals or terminate a transaction and contain the risk.
The Bank, at the minimum, conforms to the RBI guidelines with regard to provisioning requirements. Overdue receivables
representing crystallised positive mark-to-market value of a derivative contract are transferred to the account of the
borrower and treated as non-performing assets, if these remain unpaid for 90 days or more. Full provision is made for the
entire amount of overdue and future receivables relating to positive marked to market value of non-performing derivative
contracts.
HDFC Bank Limited Annual Report 2016-17
100
Schedules to the Financial Statements
For the year ended March 31, 2017
(cid:115)(cid:0)
(cid:49)(cid:85)(cid:65)(cid:78)(cid:84)(cid:73)(cid:84)(cid:65)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:68)(cid:73)(cid:83)(cid:67)(cid:76)(cid:79)(cid:83)(cid:85)(cid:82)(cid:69)(cid:0)(cid:79)(cid:78)(cid:0)(cid:82)(cid:73)(cid:83)(cid:75)(cid:0)(cid:69)(cid:88)(cid:80)(cid:79)(cid:83)(cid:85)(cid:82)(cid:69)(cid:0)(cid:73)(cid:78)(cid:0)(cid:68)(cid:69)(cid:82)(cid:73)(cid:86)(cid:65)(cid:84)(cid:73)(cid:86)(cid:69)(cid:83)
(` crore)
Sr.
No.
Particulars
Currency derivatives
Interest rate derivatives
March 31, 2017 March 31, 2016 March 31, 2017 March 31, 2016
1
Derivatives (notional principal amount)
a) Hedging
b) Trading
2 Marked to Market positions
156.95
160.35
3,242.50
6,161.72
32,999.13
36,149.17
235,908.28
214,575.93
a) Asset (+)
b) Liability (-)
Credit Exposure
649.32
740.09
918.74
911.43
(571.42)
(494.47)
(857.33)
(964.86)
2,487.65
2,114.96
2,941.53
2,355.78
3
4
Likely impact of one percentage change
in interest rate (100*PV01)
a) On hedging derivatives
b) On trading derivatives
5 Maximum of 100*PV01 observed during
the year
a) On hedging
b) On trading
6 Minimum of 100*PV01 observed during
the year
a) On hedging
b) On trading
0.08
25.70
0.09
35.47
0.02
21.27
0.09
35.06
0.21
39.41
0.02
0.21
15.79
19.11
43.06
79.70
15.79
19.11
32.24
30.84
44.04
116.25
30.02
30.84
(cid:57)
(cid:57)
(cid:57)
(cid:57)
(cid:57)
The notional principal amount of foreign exchange contracts classified as hedging and trading outstanding as at
March 31, 2017 amounted to ` 6,302.40 crore (previous year: ` 23,182.85 crore) and ` 463,627.74 crore (previous
year: ` 505,892.93 crore) respectively.
The notional principal amounts of derivatives reflect the volume of transactions outstanding as at the Balance Sheet
date and do not represent the amounts at risk.
For the purpose of this disclosure, currency derivatives include currency options purchased and sold and cross
currency interest rate swaps.
Interest rate derivatives include interest rate swaps, forward rate agreements and interest rate caps.
The Bank has computed the maximum and minimum of PV01 for the year based on the balances as at the end of
every month.
HDFC Bank Limited Annual Report 2016-17
101
Schedules to the Financial Statements
For the year ended March 31, 2017
(cid:57)
In respect of derivative contracts, the Bank evaluates the credit exposure arising therefrom, in line with RBI
guidelines. Credit exposure has been computed using the current exposure method which is the sum of:
(a)
the current replacement cost (marked to market value including accruals) of the contract or zero whichever is
higher; and
(b)
the Potential Future Exposure (PFE) is a product of the notional principal amount of the contract and a factor
that is based on the grid of credit conversion factors prescribed in RBI guidelines, which is applied on the
basis of the residual maturity and the type of contract.
12 Asset quality
(cid:115)(cid:0)
(cid:45)(cid:79)(cid:86)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:0)(cid:73)(cid:78)(cid:0)(cid:46)(cid:48)(cid:33)(cid:83)(cid:0)(cid:8)(cid:70)(cid:85)(cid:78)(cid:68)(cid:69)(cid:68)(cid:9)(cid:0)
(cid:0)
(cid:0)
(cid:0)
(cid:0)
(cid:0)
(cid:0)(cid:8)` crore)
Particulars
(i) Net NPAs to net advances
(ii) Movement of NPAs (Gross)
(a) Opening balance
March 31, 2017* March 31, 2016
0.33%
0.28%
4,392.83
3,438.38
(b) Additions (fresh NPAs) during the year
7,126.17
5,712.64
(c) Reductions during the year:
- Upgradation
5,633.34
4,758.19
1,519.42
1,377.12
- Recoveries (excluding recoveries made from upgraded accounts)
1,727.98
1,438.65
- Write-offs
(d) Closing balance
(iii) Movement of net NPAs
(a) Opening balance
(b) Additions during the year
(c) Reductions during the year
(d) Closing balance
(iv) Movement of provisions for NPAs (excluding provisions on standard assets)
(a) Opening balance
(b) Additions during the year
(c) Write-offs
(d) Write-back of excess provisions
(e) Closing balance
2,385.94
1,942.42
5,885.66
4,392.83
1,320.37
896.28
2,357.87
1,968.39
1,834.25
1,544.30
1,843.99
1,320.37
3,072.46
2,542.10
4,768.30
3,744.25
2,385.94
1,942.42
1,413.15
1,271.47
4,041.67
3,072.46
NPAs include all loans, investments and foreign exchange and derivatives that are classified as non-performing by the Bank.
HDFC Bank Limited Annual Report 2016-17
102
Schedules to the Financial Statements
For the year ended March 31, 2017
*The RBI, vide its circulars dated November 21, 2016 and December 28, 2016, had given banks, in respect of certain
eligible working capital accounts and loans of ` 1 crore or less, an additional 60 / 90 days for reckoning days past due
for classification as NPAs. Eligible accounts which were more than 90 days overdue as at March 31, 2017 have been
classified as non-performing as at that date without the Bank availing of the said dispensation. These accounts otherwise
would have been classified as NPAs subsequent to March 31, 2017.
(cid:115)(cid:0)
(cid:52)(cid:69)(cid:67)(cid:72)(cid:78)(cid:73)(cid:67)(cid:65)(cid:76)(cid:0)(cid:79)(cid:82)(cid:0)(cid:80)(cid:82)(cid:85)(cid:68)(cid:69)(cid:78)(cid:84)(cid:73)(cid:65)(cid:76)(cid:0)(cid:87)(cid:82)(cid:73)(cid:84)(cid:69)(cid:13)(cid:79)(cid:70)(cid:70)(cid:83)
Technical or prudential write-offs refer to the amount of non-performing assets which are outstanding in the books of the
branches, but have been written-off (fully or partially) at the head office level. The financial accounting systems of the
Bank are integrated and there are no write-offs done by the Bank which remain outstanding in the books of the branches.
(` crore)
Movement in the stock of technically or prudentially written-off accounts is given below:
Particulars
March 31, 2017 March 31, 2016
Opening balance of technical / prudential write-offs
Technical / Prudential write-offs during the year
Recoveries made from previously technically / prudentially written-off
accounts during the year
Closing balance of technical / prudential write-offs
-
-
-
-
-
-
-
-
(cid:115)(cid:0)
(cid:38)(cid:76)(cid:79)(cid:65)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)(cid:80)(cid:82)(cid:79)(cid:86)(cid:73)(cid:83)(cid:73)(cid:79)(cid:78)(cid:83)
Floating provision of ` 1,248.01 crore (previous year: ` 1,335.64 crore) have been included under “Other Liabilities”.
(` crore)
Movement in floating provision is given below:
Particulars
Opening balance
Provisions made during the year
Draw down made during the year
Closing balance
March 31, 2017 March 31, 2016
1,335.64
1,523.22
25.00
115.00
(112.63)
(302.58)
1,248.01
1,335.64
Floating provisions have been utilised as per the Board approved policy for contingencies under extraordinary
circumstances and for making specific provision for impaired accounts in accordance with the RBI guidelines / directives.
(cid:0)(cid:115)(cid:0)
Divergence in the asset classification and provisioning
There was no divergence observed by the RBI for the financial year 2015-16 in respect of the Bank’s asset classification
and provisioning under the extant prudential norms on Income Recognition, Asset Classification and Provisioning (IRACP).
HDFC Bank Limited Annual Report 2016-17
103
Schedules to the Financial Statements
For the year ended March 31, 2017
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HDFC Bank Limited Annual Report 2016-17
105
Schedules to the Financial Statements
For the year ended March 31, 2017
(cid:115)(cid:0)
(cid:36)(cid:69)(cid:84)(cid:65)(cid:73)(cid:76)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)(cid:108)(cid:78)(cid:65)(cid:78)(cid:67)(cid:73)(cid:65)(cid:76)(cid:0)(cid:65)(cid:83)(cid:83)(cid:69)(cid:84)(cid:83)(cid:0)(cid:83)(cid:79)(cid:76)(cid:68)(cid:0)(cid:68)(cid:85)(cid:82)(cid:73)(cid:78)(cid:71)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:89)(cid:69)(cid:65)(cid:82)(cid:0)(cid:84)(cid:79)(cid:0)(cid:83)(cid:69)(cid:67)(cid:85)(cid:82)(cid:73)(cid:84)(cid:73)(cid:83)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:15)(cid:0)(cid:82)(cid:69)(cid:67)(cid:79)(cid:78)(cid:83)(cid:84)(cid:82)(cid:85)(cid:67)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:67)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:73)(cid:69)(cid:83)(cid:0)(cid:8)(cid:51)(cid:35)(cid:0)(cid:15)(cid:0)(cid:50)(cid:35)(cid:9)(cid:0)(cid:70)(cid:79)(cid:82)(cid:0)(cid:65)(cid:83)(cid:83)(cid:69)(cid:84)(cid:0)
(` crore)
(cid:82)(cid:69)(cid:67)(cid:79)(cid:78)(cid:83)(cid:84)(cid:82)(cid:85)(cid:67)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:65)(cid:82)(cid:69)(cid:0)(cid:65)(cid:83)(cid:0)(cid:85)(cid:78)(cid:68)(cid:69)(cid:82)(cid:26)
March 31, 2017 March 31, 2016
Particulars
Number of accounts
Aggregate value (net of provisions) of accounts sold to SC / RC
Aggregate considerations
Additional consideration realised in respect of accounts transferred in earlier years
Aggregate gain / (loss) over net book value
Provision made to meet shortfall in sale of NPA
Amount of unamortised provision debited to ‘other reserve’
(cid:115)
(cid:36)(cid:69)(cid:84)(cid:65)(cid:73)(cid:76)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)(cid:66)(cid:79)(cid:79)(cid:75)(cid:0)(cid:86)(cid:65)(cid:76)(cid:85)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0)(cid:73)(cid:78)(cid:86)(cid:69)(cid:83)(cid:84)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:73)(cid:78)(cid:0)(cid:83)(cid:69)(cid:67)(cid:85)(cid:82)(cid:73)(cid:84)(cid:89)(cid:0)(cid:82)(cid:69)(cid:67)(cid:69)(cid:73)(cid:80)(cid:84)(cid:83)(cid:0)(cid:8)(cid:51)(cid:50)(cid:83)(cid:9)(cid:0)(cid:66)(cid:65)(cid:67)(cid:75)(cid:69)(cid:68)(cid:0)(cid:66)(cid:89)(cid:0)(cid:46)(cid:48)(cid:33)(cid:83)(cid:26)
-
-
-
-
-
-
-
1
3.96
2.95
-
(1.01)
(1.01)
-
(` crore)
Total
March 31,
2017
Particulars
(i) Backed by NPAs sold by the Bank as underlying
Provision held against (i)
(ii) Backed by NPAs sold by other banks / financial
institutions / non-banking financial companies as underlying
Provision held against (ii)
SRs
issued
within
past
5 years
195.34
-
17.17
-
Total
212.51
Particulars
(i) Backed by NPAs sold by the Bank as underlying
Provision held against (i)
(ii) Backed by NPAs sold by other banks / financial institutions
/ non-banking financial companies as underlying
Provision held against (ii)
SRs
issued
within
past
5 years
202.92
-
28.91
-
Total
231.83
SRs issued
more than
5 years ago
but within
past 8 years
SRs
issued
more than
8 years
ago
0.52
-
10.12
-
10.64
-
-
-
-
-
195.86
-
27.29
-
223.15
SRs issued
more than
5 years ago
but within
past 8 years
SRs
issued
more than
8 years
ago
Total
March 31,
2016
0.88
-
7.14
-
8.02
-
-
-
-
-
203.80
-
36.05
-
239.85
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:36)(cid:85)(cid:82)(cid:73)(cid:78)(cid:71)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:89)(cid:69)(cid:65)(cid:82)(cid:83)(cid:0)(cid:69)(cid:78)(cid:68)(cid:69)(cid:68)(cid:0)(cid:45)(cid:65)(cid:82)(cid:67)(cid:72)(cid:0)(cid:19)(cid:17)(cid:12)(cid:0)(cid:18)(cid:16)(cid:17)(cid:23)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:45)(cid:65)(cid:82)(cid:67)(cid:72)(cid:0)(cid:19)(cid:17)(cid:12)(cid:0)(cid:18)(cid:16)(cid:17)(cid:22)(cid:12)(cid:0)(cid:78)(cid:79)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:80)(cid:69)(cid:82)(cid:70)(cid:79)(cid:82)(cid:77)(cid:73)(cid:78)(cid:71)(cid:0)(cid:108)(cid:78)(cid:65)(cid:78)(cid:67)(cid:73)(cid:65)(cid:76)(cid:0)(cid:65)(cid:83)(cid:83)(cid:69)(cid:84)(cid:83)(cid:0)(cid:87)(cid:69)(cid:82)(cid:69)(cid:0)(cid:83)(cid:79)(cid:76)(cid:68)(cid:12)(cid:0)(cid:69)(cid:88)(cid:67)(cid:76)(cid:85)(cid:68)(cid:73)(cid:78)(cid:71)(cid:0)
those sold to SC / RC.
(cid:36)(cid:85)(cid:82)(cid:73)(cid:78)(cid:71)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:89)(cid:69)(cid:65)(cid:82)(cid:83)(cid:0)(cid:69)(cid:78)(cid:68)(cid:69)(cid:68)(cid:0)(cid:45)(cid:65)(cid:82)(cid:67)(cid:72)(cid:0)(cid:19)(cid:17)(cid:12)(cid:0)(cid:18)(cid:16)(cid:17)(cid:23)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:45)(cid:65)(cid:82)(cid:67)(cid:72)(cid:0)(cid:19)(cid:17)(cid:12)(cid:0)(cid:18)(cid:16)(cid:17)(cid:22)(cid:12)(cid:0)(cid:78)(cid:79)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:80)(cid:69)(cid:82)(cid:70)(cid:79)(cid:82)(cid:77)(cid:73)(cid:78)(cid:71)(cid:0)(cid:108)(cid:78)(cid:65)(cid:78)(cid:67)(cid:73)(cid:65)(cid:76)(cid:0)(cid:65)(cid:83)(cid:83)(cid:69)(cid:84)(cid:83)(cid:0)(cid:87)(cid:69)(cid:82)(cid:69)(cid:0)(cid:80)(cid:85)(cid:82)(cid:67)(cid:72)(cid:65)(cid:83)(cid:69)(cid:68)(cid:0)(cid:66)(cid:89)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)
Bank.
(cid:51)(cid:69)(cid:67)(cid:85)(cid:82)(cid:73)(cid:84)(cid:73)(cid:83)(cid:69)(cid:68)(cid:0)(cid:65)(cid:83)(cid:83)(cid:69)(cid:84)(cid:83)(cid:0)(cid:65)(cid:83)(cid:0)(cid:80)(cid:69)(cid:82)(cid:0)(cid:66)(cid:79)(cid:79)(cid:75)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)(cid:51)(cid:48)(cid:54)(cid:83)(cid:0)(cid:83)(cid:80)(cid:79)(cid:78)(cid:83)(cid:79)(cid:82)(cid:69)(cid:68)(cid:0)(cid:66)(cid:89)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:34)(cid:65)(cid:78)(cid:75)(cid:26)
There are no SPVs sponsored by the Bank as at March 31, 2017 and as at March 31, 2016.
(cid:33)(cid:67)(cid:67)(cid:79)(cid:85)(cid:78)(cid:84)(cid:83)(cid:0)under the Scheme for Sustainable Structuring of Stressed Assets (S4A), as on March 31, 2017: Nil
HDFC Bank Limited Annual Report 2016-17
106
Schedules to the Financial Statements
For the year ended March 31, 2017
(cid:115)(cid:0)
(cid:36)(cid:73)(cid:83)(cid:67)(cid:76)(cid:79)(cid:83)(cid:85)(cid:82)(cid:69)(cid:0)(cid:79)(cid:78)(cid:0)(cid:51)(cid:84)(cid:82)(cid:69)(cid:83)(cid:83)(cid:69)(cid:68)(cid:0)(cid:33)(cid:83)(cid:83)(cid:69)(cid:84)(cid:83)(cid:0)
(cid:0)
(i) Disclosures on Flexible Structuring of Existing Loans
(` crore, except numbers)
Financial year
ended
No. of borrowers
taken up for
flexible
structuring
March 31, 2017
March 31, 2016
1
1
Amount of loans taken up
for flexible structuring
Classified as
Standard
39.12*
166.67
Classified
as NPA
-
-
Exposure weighted average duration of
loans taken up for flexible structuring
Before applying
flexible structuring
8 years
5 years
After applying
flexible structuring
9.5 years
20 years #
* approval from Independent Evaluation Committee (IEC) is awaited.
# refinancing proposed at the end of 8 years.
(ii) Disclosures on Strategic Debt Restructuring Scheme (accounts which are currently under the stand-still period)
(` crore, except numbers)
No. of
accounts
where
SDR has
been
invoked
1
Amount outstanding
as at
March 31, 2017
Classified
as standard
73.06
Classified
as NPA
-
Amount outstanding as at
March 31, 2017 with respect to
accounts where conversion of
debt to equity is pending
Classified
as standard
-
Classified
as NPA
-
Amount outstanding as at
March 31, 2017 with respect to
accounts where conversion of
debt to equity has taken place
Classified
as NPA
-
Classified
as standard
73.06*
*of which ` 32.87 crore of loans where conversion to equity has taken place.
(iii) Change in Ownership outside SDR Scheme (accounts which are currently under the stand-still period): Nil
(iv) Change in Ownership of Projects Under Implementation (accounts which are currently under the stand-still period): Nil
13 Details of exposures to real estate and capital market sectors, risk category-wise country exposures, factoring
(cid:69)(cid:88)(cid:80)(cid:79)(cid:83)(cid:85)(cid:82)(cid:69)(cid:83)(cid:12)(cid:0) (cid:83)(cid:73)(cid:78)(cid:71)(cid:76)(cid:69)(cid:0) (cid:15)(cid:0) (cid:71)(cid:82)(cid:79)(cid:85)(cid:80)(cid:0) (cid:66)(cid:79)(cid:82)(cid:82)(cid:79)(cid:87)(cid:69)(cid:82)(cid:0) (cid:69)(cid:88)(cid:80)(cid:79)(cid:83)(cid:85)(cid:82)(cid:69)(cid:83)(cid:12)(cid:0) (cid:85)(cid:78)(cid:83)(cid:69)(cid:67)(cid:85)(cid:82)(cid:69)(cid:68)(cid:0) (cid:65)(cid:68)(cid:86)(cid:65)(cid:78)(cid:67)(cid:69)(cid:83)(cid:0) (cid:65)(cid:78)(cid:68)(cid:0) (cid:67)(cid:79)(cid:78)(cid:67)(cid:69)(cid:78)(cid:84)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0) (cid:79)(cid:70)(cid:0) (cid:68)(cid:69)(cid:80)(cid:79)(cid:83)(cid:73)(cid:84)(cid:83)(cid:12)(cid:0) (cid:65)(cid:68)(cid:86)(cid:65)(cid:78)(cid:67)(cid:69)(cid:83)(cid:12)(cid:0)
exposures and NPAs
(cid:115)(cid:0)
(cid:36)(cid:69)(cid:84)(cid:65)(cid:73)(cid:76)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)(cid:69)(cid:88)(cid:80)(cid:79)(cid:83)(cid:85)(cid:82)(cid:69)(cid:0)(cid:84)(cid:79)(cid:0)(cid:82)(cid:69)(cid:65)(cid:76)(cid:0)(cid:69)(cid:83)(cid:84)(cid:65)(cid:84)(cid:69)(cid:0)(cid:83)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:0)(cid:0)
(cid:0)
(cid:0)
(cid:0)
(cid:0)
Exposure is higher of limits sanctioned or the amounts outstanding as at the year end.
(` crore)
Category
a) Direct exposure
(i) Residential mortgages*
March 31, 2017 March 31, 2016
65,289.89
42,401.22
49,428.76
32,245.03
(of which housing loans eligible for inclusion in priority sector advances)
(18,951.24)
(18,697.97)
(ii) Commercial real estate
22,877.26
17,118.59
(iii) Investments in Mortgage Backed Securities (MBS) and other securitised
exposures:
(a) Residential
(b) Commercial real estate
b) Indirect exposure
Fund based and non-fund based exposures on National Housing Bank
(NHB) and Housing Finance Companies (HFCs)
11.41
-
17,832.36
17,832.36
65.14
-
14,490.76
14,490.76
Total exposure to real estate sector
83,122.25
63,919.52
*includes loans purchased under the direct loan assignment route
Of the above, exposure to real estate developers as at March 31, 2017 is 0.5% (previous year: 0.5%) of total advances.
HDFC Bank Limited Annual Report 2016-17
107
Schedules to the Financial Statements
For the year ended March 31, 2017
(cid:115)(cid:0)
(cid:36)(cid:69)(cid:84)(cid:65)(cid:73)(cid:76)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)(cid:67)(cid:65)(cid:80)(cid:73)(cid:84)(cid:65)(cid:76)(cid:0)(cid:77)(cid:65)(cid:82)(cid:75)(cid:69)(cid:84)(cid:0)(cid:69)(cid:88)(cid:80)(cid:79)(cid:83)(cid:85)(cid:82)(cid:69)(cid:0)
(cid:0)
(cid:0)
(cid:0)
(cid:0)
(cid:0)
Exposure is higher of limits sanctioned or the amount outstanding as at the year end.
(` crore)
Sr.
No.
(i)
(ii)
(iii)
(iv)
(v)
(vi)
Particulars
March 31, 2017
March 31, 2016
Direct investments made in equity shares, convertible bonds, convertible
debentures and units of equity oriented mutual funds the corpus of which is not
exclusively invested in corporate debt
Advances against shares, bonds, debentures or other securities or on clean basis
to individuals for investment in shares (including IPO’s / ESOP’s), convertible bonds,
convertible debentures and units of equity oriented mutual funds
90.97
86.50
186.94
158.75
Advances for any other purposes where shares or convertible bonds or convertible
debentures or units of equity oriented mutual funds are taken as primary security
3,604.58
3,133.85
Advances for any other purposes to the extent secured by collateral security of
shares or convertible bonds or convertible debentures or units of equity oriented
mutual funds i.e. where the primary security other than shares / convertible bonds
/ convertible debentures / units of equity oriented mutual funds does not fully cover
the advances
169.59
48.31
Secured and unsecured advances to stock brokers and guarantees issued on
behalf of stock brokers and market makers
8,165.08
6,881.17
Loans sanctioned to corporates against the security of shares / bonds /
debentures or other securities or on clean basis for meeting promoter’s
contribution to the equity of new companies in anticipation of raising resources
1,390.31
2,576.32
(vii)
Bridge loans to companies against expected equity flows / issues
(viii)
Underwriting commitments taken up in respect of primary issue of shares or
convertible bonds or convertible debentures or units of equity oriented mutual funds
(ix)
Financing to stock brokers for margin trading
-
-
-
-
-
-
(x)
All exposures to venture capital funds (both registered and unregistered)
0.25
0.20
Total exposure to capital market
13,607.72
12,885.10
(cid:115)(cid:0)
(cid:36)(cid:69)(cid:84)(cid:65)(cid:73)(cid:76)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)(cid:82)(cid:73)(cid:83)(cid:75)(cid:0)(cid:67)(cid:65)(cid:84)(cid:69)(cid:71)(cid:79)(cid:82)(cid:89)(cid:0)(cid:87)(cid:73)(cid:83)(cid:69)(cid:0)(cid:67)(cid:79)(cid:85)(cid:78)(cid:84)(cid:82)(cid:89)(cid:0)(cid:69)(cid:88)(cid:80)(cid:79)(cid:83)(cid:85)(cid:82)(cid:69)(cid:0)
(cid:0)
(cid:0)
(cid:0)
(cid:0)
(cid:0)(cid:0)(cid:0)(cid:8)` crore)
Risk Category
Insignificant
Low
Moderately low
Moderate
Moderately high
High
Very high
March 31, 2017
March 31, 2016
Exposure (net) Provision held Exposure (net) Provision held
17,177.70
9,653.78
247.75
164.44
9.48
-
-
Total
27,253.15
-
-
-
-
-
-
-
-
13,857.28
8,222.23
370.13
143.82
20.23
5.25
-
22,618.94
-
-
-
-
-
-
-
-
HDFC Bank Limited Annual Report 2016-17
108
Schedules to the Financial Statements
For the year ended March 31, 2017
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:36)(cid:69)(cid:84)(cid:65)(cid:73)(cid:76)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)(cid:70)(cid:65)(cid:67)(cid:84)(cid:79)(cid:82)(cid:73)(cid:78)(cid:71)(cid:0)(cid:69)(cid:88)(cid:80)(cid:79)(cid:83)(cid:85)(cid:82)(cid:69)(cid:0)
The factoring exposure of the Bank as at March 31, 2017 is ` 2,036.11 crore (previous year: ` 3,515.98 crore).
(cid:36)(cid:69)(cid:84)(cid:65)(cid:73)(cid:76)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)(cid:51)(cid:73)(cid:78)(cid:71)(cid:76)(cid:69)(cid:0)(cid:34)(cid:79)(cid:82)(cid:82)(cid:79)(cid:87)(cid:69)(cid:82)(cid:0)(cid:44)(cid:73)(cid:77)(cid:73)(cid:84)(cid:0)(cid:8)(cid:51)(cid:39)(cid:44)(cid:9)(cid:12)(cid:0)(cid:39)(cid:82)(cid:79)(cid:85)(cid:80)(cid:0)(cid:34)(cid:79)(cid:82)(cid:82)(cid:79)(cid:87)(cid:69)(cid:82)(cid:0)(cid:44)(cid:73)(cid:77)(cid:73)(cid:84)(cid:0)(cid:8)(cid:39)(cid:34)(cid:44)(cid:9)(cid:0)(cid:69)(cid:88)(cid:67)(cid:69)(cid:69)(cid:68)(cid:69)(cid:68)(cid:0)(cid:66)(cid:89)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:34)(cid:65)(cid:78)(cid:75)
The RBI has prescribed single and group borrower exposure limits linked to a Bank’s capital funds and such limits can be
enhanced by a further 5 percent thereof with the approval of the Board of Directors of the Bank. During the year ended
March 31, 2017 and March 31, 2016 the Bank was within the limits prescribed by the RBI.
(cid:115)(cid:0)
(cid:53)(cid:78)(cid:83)(cid:69)(cid:67)(cid:85)(cid:82)(cid:69)(cid:68)(cid:0)(cid:65)(cid:68)(cid:86)(cid:65)(cid:78)(cid:67)(cid:69)(cid:83)
Advances for which intangible collaterals such as rights, licenses, authority etc. are charged in favour of the Bank in
respect of projects financed by the Bank, are reckoned as unsecured advances under Schedule 9 of the Balance Sheet
in line with extant RBI guidelines. There are no such advances outstanding as at March 31, 2017 (previous year: Nil).
(cid:115)(cid:0)
(cid:41)(cid:78)(cid:84)(cid:69)(cid:82)(cid:13)(cid:66)(cid:65)(cid:78)(cid:75)(cid:0)(cid:48)(cid:65)(cid:82)(cid:84)(cid:73)(cid:67)(cid:73)(cid:80)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:87)(cid:73)(cid:84)(cid:72)(cid:0)(cid:82)(cid:73)(cid:83)(cid:75)(cid:0)(cid:83)(cid:72)(cid:65)(cid:82)(cid:73)(cid:78)(cid:71)
The aggregate amount of participation issued by the Bank and reduced from advances as per regulatory guidelines as
at March 31, 2017 was ` 7,500.00 crore (previous year: ` 6,450.00 crore).
(cid:115)(cid:0)
(cid:35)(cid:79)(cid:78)(cid:67)(cid:69)(cid:78)(cid:84)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:79)(cid:70)(cid:0)(cid:68)(cid:69)(cid:80)(cid:79)(cid:83)(cid:73)(cid:84)(cid:83)(cid:12)(cid:0)(cid:65)(cid:68)(cid:86)(cid:65)(cid:78)(cid:67)(cid:69)(cid:83)(cid:12)(cid:0)(cid:69)(cid:88)(cid:80)(cid:79)(cid:83)(cid:85)(cid:82)(cid:69)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:46)(cid:48)(cid:33)(cid:83)
a) Concentration of deposits
Particulars
Total deposits of twenty largest depositors
Percentage of deposits of twenty largest depositors to total deposits
of the Bank
(` crore)
March 31, 2017 March 31, 2016
35,562.76
28,890.12
5.5%
5.3%
b) Concentration of advances
(` crore)
Particulars
Total advances to twenty largest borrowers
Percentage of advances of twenty largest borrowers to total
advances of the Bank
March 31, 2017 March 31, 2016
83,962.09
81,781.38
9.4%
11.9%
Advances comprise credit exposure (funded and non-funded credit limits) including derivative transactions
computed as per current exposure method in accordance with RBI guidelines.
c) Concentration of exposure
(` crore)
Particulars
March 31, 2017 March 31, 2016
Total exposure to twenty largest borrowers / customers
90,046.09
89,137.40
Percentage of exposure of twenty largest borrowers / customers to
total exposure of the Bank on borrowers / customers
9.5%
12.3%
Exposures comprise credit exposure (funded and non-funded credit limits) including derivative transactions and
investment exposure in accordance with RBI guidelines.
d) Concentration of NPAs
(` crore)
Particulars
March 31, 2017 March 31, 2016
Total gross exposure to top four NPA accounts
588.99
497.16
HDFC Bank Limited Annual Report 2016-17
109
Schedules to the Financial Statements
For the year ended March 31, 2017
e)
Sector-wise advances
Sector
Sr.
No.
(` crore)
March 31, 2017
March 31, 2016
Outstanding
total
advances
Gross non-
performing
loans
Percentage
of gross
non-performing
loans to total
advances in
that sector
Outstanding
total
advances
Gross
non-
performing
loans
Percentage of
gross
non-performing
loans to total
advances in
that sector
A Priority sector
1 Agriculture and allied activities
63,186.16
1,279.98
2.03% 52,867.24
2 Advances to industries eligible
26,209.92
480.78
1.83% 24,059.96
764.18
386.90
as priority sector lending
3 Services
52,361.67
678.46
1.30% 44,202.22
431.43
4 Personal loans
22,350.27
14.43
0.06% 21,730.26
79.58
Sub-total (A) 164,108.02
2,453.65
1.50% 142,859.68
1,662.09
B Non Priority sector
1 Agriculture and allied activities
6,905.78
74.89
1.08% 7,303.08
2
Industry
3 Services
127,366.08
1,243.07
0.98% 98,854.02
127,937.51
1,037.87
0.81% 104,002.56
4 Personal loans
132,249.25
1,016.40
0.77% 114,560.04
85.77
793.83
967.17
788.74
Sub-total (B) 394,458.62
3,372.23
0.85% 324,719.70
2,635.51
Total (A) + (B) 558,566.64
5,825.88
1.04% 467,579.38
4,297.60
(cid:115)(cid:0)
(cid:36)(cid:69)(cid:84)(cid:65)(cid:73)(cid:76)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)(cid:48)(cid:82)(cid:73)(cid:79)(cid:82)(cid:73)(cid:84)(cid:89)(cid:0)(cid:51)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:0)(cid:44)(cid:69)(cid:78)(cid:68)(cid:73)(cid:78)(cid:71)(cid:0)(cid:35)(cid:69)(cid:82)(cid:84)(cid:73)(cid:108)(cid:67)(cid:65)(cid:84)(cid:69)(cid:83)(cid:0)(cid:8)(cid:48)(cid:51)(cid:44)(cid:35)(cid:83)(cid:9)(cid:0)
(cid:0)
1.45%
1.61%
0.98%
0.37%
1.16%
1.17%
0.80%
0.93%
0.69%
0.81%
0.92%
(cid:8)` crore)
Type of PSLCs
For the year ended March 31, 2017
PSLC bought during the year
PSLC sold during the year
Agriculture
Small and Marginal farmers
Micro Enterprises
General
14 Other fixed assets
-
3,269.50
-
-
Total
3,269.50
500.00
21.25
-
1,000.00
1,521.25
Other fixed assets includes amount capitalised relating to software having useful life of five years. Details regarding the same
(` crore)
are tabulated below:
Particulars
Cost
As at March 31 of the previous year
Additions during the year
Deductions during the year
March 31, 2017
March 31, 2016
1,737.09
402.61
-
Total (a)
2,139.70
1,575.65
161.45
(0.01)
1,737.09
HDFC Bank Limited Annual Report 2016-17
110
Schedules to the Financial Statements
For the year ended March 31, 2017
Particulars
Depreciation
As at March 31 of the previous year
Charge for the year
On deductions during the year
March 31, 2017
March 31, 2016
(` crore)
1,218.53
255.23
-
1,473.76
665.94
1,022.83
195.71
(0.01)
1,218.53
518.56
Total (b)
Net value (a-b)
15 Other assets
(cid:115)(cid:0)
(cid:47)(cid:84)(cid:72)(cid:69)(cid:82)(cid:0)(cid:65)(cid:83)(cid:83)(cid:69)(cid:84)(cid:83)(cid:0)(cid:73)(cid:78)(cid:67)(cid:76)(cid:85)(cid:68)(cid:69)(cid:0)(cid:68)(cid:69)(cid:70)(cid:69)(cid:82)(cid:82)(cid:69)(cid:68)(cid:0)(cid:84)(cid:65)(cid:88)(cid:0)(cid:65)(cid:83)(cid:83)(cid:69)(cid:84)(cid:0)(cid:8)(cid:78)(cid:69)(cid:84)(cid:9)(cid:0)(cid:79)(cid:70)(cid:0)` 2,447.34 crore (previous year: ` 2,116.62 crore). The break-up of the
(` crore)
same is as follows:
Particulars
(cid:36)(cid:69)(cid:70)(cid:69)(cid:82)(cid:82)(cid:69)(cid:68)(cid:0)(cid:84)(cid:65)(cid:88)(cid:0)(cid:65)(cid:83)(cid:83)(cid:69)(cid:84)(cid:0)(cid:65)(cid:82)(cid:73)(cid:83)(cid:73)(cid:78)(cid:71)(cid:0)(cid:79)(cid:85)(cid:84)(cid:0)(cid:79)(cid:70)(cid:26)
Loan loss provisions
Employee benefits
Others
(cid:36)(cid:69)(cid:70)(cid:69)(cid:82)(cid:82)(cid:69)(cid:68)(cid:0)(cid:84)(cid:65)(cid:88)(cid:0)(cid:76)(cid:73)(cid:65)(cid:66)(cid:73)(cid:76)(cid:73)(cid:84)(cid:89)(cid:0)(cid:65)(cid:82)(cid:73)(cid:83)(cid:73)(cid:78)(cid:71)(cid:0)(cid:79)(cid:85)(cid:84)(cid:0)(cid:79)(cid:70)(cid:26)
Depreciation
March 31, 2017
March 31, 2016
2,079.97
1,748.18
167.38
321.47
148.17
314.12
Total (a)
2,568.82
2,210.47
(cid:115)(cid:0)
(cid:43)(cid:69)(cid:89)(cid:0)(cid:73)(cid:84)(cid:69)(cid:77)(cid:83)(cid:0)(cid:85)(cid:78)(cid:68)(cid:69)(cid:82)(cid:0)(cid:2)(cid:47)(cid:84)(cid:72)(cid:69)(cid:82)(cid:83)(cid:2)(cid:0)(cid:73)(cid:78)(cid:0)(cid:47)(cid:84)(cid:72)(cid:69)(cid:82)(cid:0)(cid:65)(cid:83)(cid:83)(cid:69)(cid:84)(cid:83)(cid:0)(cid:65)(cid:82)(cid:69)(cid:0)(cid:65)(cid:83)(cid:0)(cid:85)(cid:78)(cid:68)(cid:69)(cid:82)(cid:26)(cid:0)
(cid:0)
(cid:0)
(cid:0)
Total (b)
Deferred tax asset (net) (a-b)
(121.48)
(121.48)
2,447.34
(93.85)
(93.85)
2,116.62
(cid:0)(cid:0)(cid:0)(cid:0)(` crore)
Particulars
March 31, 2017
March 31, 2016
Deposit with NABARD / SIDBI / NHB - PSL shortfall
Unrealised gain on foreign exchange and derivative contracts*
Deferred tax assets
Deposits & amounts paid in advance
Accounts receivable
Margin for LAF with RBI
Residual items
11,882.37
14,014.05
2,447.34
1,740.75
1,568.79
-
2.50
13,719.68
8,566.14
2,116.62
1,282.19
1,274.66
1,344.51
2.41
*The Bank has presented gross unrealised gain on foreign exchange and derivative contracts under other assets and
gross unrealised loss on foreign exchange and derivative contracts under other liabilities.
Total
31,655.80
28,306.21
HDFC Bank Limited Annual Report 2016-17
111
Schedules to the Financial Statements
For the year ended March 31, 2017
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HDFC Bank Limited Annual Report 2016-17
112
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Schedules to the Financial Statements
For the year ended March 31, 2017
17 Provisions, contingent liabilities and contingent assets
Given below is the movement in provisions and a brief description of the nature of contingent liabilities recognised by the Bank.
a)
Provision for credit card and debit card reward points
(` crore)
Particulars
Opening provision for reward points
Provision for reward points made during the year
Utilisation / write-back of provision for reward points
Closing provision for reward points
b) Provision for legal and other contingencies
Particulars
Opening provision
Movement during the year (net)
Closing provision
c)
Provision pertaining to fraud accounts
Particulars
March 31, 2017
March 31, 2016
306.36
334.24
(209.36)
431.24
200.07
179.50
(73.21)
306.36
(` crore)
March 31, 2017
March 31, 2016
344.56
(32.66)
311.90
354.91
(10.35)
344.56
No. of frauds reported during the year
Amount involved in fraud (` crore)
Amount involved in fraud net of recoveries / write-offs as at the end of the year (` crore)
Provisions held as at the end of the year (` crore)
Amount of unamortised provision debited from “other reserves” as at the end of the year (` crore)
d) Description of contingent liabilities
Sr. No. Contingent liability*
Brief description
March 31, 2017
2,319
165.20
20.83
20.83
-
1
2
3
Claims against the Bank
not acknowledged as
debts - taxation
The Bank is a party to various taxation matters in respect of which appeals are pending. The Bank
expects the outcome of the appeals to be favorable based on decisions on similar issues in the
previous years by the appellate authorities, based on the facts of the case and the provisions of
Income Tax Act, 1961.
Claims against the Bank
not acknowledged as
debts - others
The Bank is a party to various legal proceedings in the normal course of business. The Bank does
not expect the outcome of these proceedings to have a material adverse effect on the Bank’s
financial conditions, results of operations or cash flows.
Liability on account of
forward exchange and
derivative contracts
The Bank enters into foreign exchange contracts, currency options, forward rate agreements,
currency swaps and interest rate swaps with inter-bank participants on its own account and for
customers. Forward exchange contracts are commitments to buy or sell foreign currency at a
future date at the contracted rate. Currency swaps are commitments to exchange cash flows by
way of interest / principal in one currency against another, based on predetermined rates. Interest
rate swaps are commitments to exchange fixed and floating interest rate cash flows. The notional
amounts of financial instruments such as foreign exchange contracts and derivatives provide a
basis for comparison with instruments recognised on the Balance Sheet but do not necessarily
indicate the amounts of future cash flows involved or the current fair value of the instruments and,
therefore, do not indicate the Bank’s exposure to credit or price risks. The derivative instruments
become favorable (assets) or unfavorable (liabilities) as a result of fluctuations in market rates or
prices relative to their terms.
HDFC Bank Limited Annual Report 2016-17
113
Schedules to the Financial Statements
For the year ended March 31, 2017
Sr. No. Contingent liability*
Brief description
4
5
Guarantees given on
behalf of constituents,
acceptances,
endorsements and
other obligations
As a part of its commercial banking activities, the Bank issues documentary credit and guarantees
on behalf of its customers. Documentary credits such as letters of credit enhance the credit
standing of the Bank’s customers. Guarantees generally represent irrevocable assurances that the
Bank will make payments in the event of the customer failing to fulfill its financial or performance
obligations.
Other items for which the
Bank is contingently liable
These include: a) Credit enhancements in respect of securitised-out loans; b) Bills rediscounted by
the Bank; c) Capital commitments; d) Underwriting commitments; e) Investment purchases pending
settlement; f) Amount transferred to the RBI under the Depositor Education and Awareness Fund
(DEAF).
*Also refer Schedule 12 - Contingent liabilities
(cid:17)(cid:24)(cid:0) (cid:34)(cid:85)(cid:83)(cid:73)(cid:78)(cid:69)(cid:83)(cid:83)(cid:0)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:83)(cid:0)(cid:15)(cid:0)(cid:73)(cid:78)(cid:70)(cid:79)(cid:82)(cid:77)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)
Particulars
Interest income as a percentage to working funds1
Net interest income as a percentage to working funds
Non-interest income as a percentage to working funds
Operating profit2 as a percentage to working funds
Return on assets (average)
Business3 per employee (` in crore)
Profit per employee4 (` in crore)
Gross non-performing assets to gross advances5
Gross non-performing advances to gross advances
Percentage of net non-performing assets6 to net advances7
March 31, 2017
March 31, 2016
8.95%
4.28%
1.59%
3.32%
1.88%
12.36
0.16
1.05%
1.04%
0.33%
9.25%
4.24%
1.65%
3.28%
1.89%
11.39
0.15
0.94%
0.92%
0.28%
Provision coverage ratio8
68.67%
69.94%
Definitions of certain items in Business ratios / information:
1. Working funds is the daily average of total assets during the year.
2. Operating profit is net profit for the year before provisions and contingencies and profit / (loss) on sale of building and
other assets (net).
3.
4.
“Business” is the total of average of net advances and deposits (net of inter-bank deposits).
Productivity ratios are based on average employee numbers.
5. Gross advances are net of bills rediscounted and interest in suspense.
6.
7.
Net NPAs are non-performing assets net of interest in suspense, specific provisions, ECGC claims received, provisions
for funded interest term loans classified as NPAs and provisions in lieu of diminution in the fair value of restructured
assets classified as NPAs.
Net advances are equivalent to gross advances net of specific loan loss provisions, ECGC claims received, provision
for funded interest term loans classified as NPA and provisions in lieu of diminution in the fair value of restructured
assets.
8.
Provision coverage ratio does not include assets written off.
19
Interest income
Interest income under the sub-head Income from Investments includes dividend received during the year ended March 31,
2017 on units of mutual funds, equity and preference shares amounting to ` 256.64 crore (previous year: ` 182.03 crore).
HDFC Bank Limited Annual Report 2016-17
114
Schedules to the Financial Statements
For the year ended March 31, 2017
20 Earnings from standard assets securitised-out
There are no Special Purpose Vehicles (‘SPV’s) sponsored by the Bank for securitisation transactions. During the years ended
March 31, 2017 and March 31, 2016, there were no standard assets securitised-out by the Bank.
Form and quantum of services and liquidity provided by way of credit enhancement
The Bank has provided credit and liquidity enhancements in the form of cash collaterals / guarantees / subordination of
cash flows etc., to the senior Pass Through Certificates (‘PTC’s) as well as at loan assignment transactions. The RBI issued
addendum guidelines on securitisation of standard assets vide its circular dated May 7, 2012. Accordingly, the Bank does not
provide liquidity or credit enhancements on the direct assignment transactions undertaken subsequent to these guidelines.
The total value of credit enhancement outstanding in the books as at March 31, 2017 was ` 224.31 crore (previous year:
` 225.65 crore) and outstanding servicing liability was ` 0.07 crore (previous year: ` 0.10 crore).
21 Other income
(cid:115)(cid:0)
(cid:35)(cid:79)(cid:77)(cid:77)(cid:73)(cid:83)(cid:83)(cid:73)(cid:79)(cid:78)(cid:12)(cid:0)(cid:69)(cid:88)(cid:67)(cid:72)(cid:65)(cid:78)(cid:71)(cid:69)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:66)(cid:82)(cid:79)(cid:75)(cid:69)(cid:82)(cid:65)(cid:71)(cid:69)(cid:0)(cid:73)(cid:78)(cid:67)(cid:79)(cid:77)(cid:69)
(cid:57)
(cid:57)
Commission, exchange and brokerage income is net of correspondent bank charges.
Commission income for the year ended March 31, 2017 includes fees of ` 798.35 crore (previous year:
` 661.75 crore) in respect of life insurance business and ` 157.58 crore (previous year: ` 156.13 crore) in respect
of general insurance business.
(cid:115)(cid:0)
(cid:45)(cid:73)(cid:83)(cid:67)(cid:69)(cid:76)(cid:76)(cid:65)(cid:78)(cid:69)(cid:79)(cid:85)(cid:83)(cid:0)(cid:73)(cid:78)(cid:67)(cid:79)(cid:77)(cid:69)
Miscellaneous income includes recoveries from written-off accounts amounting to ` 864.31 crore (previous year:
` 807.99 crore).
22 Other expenditure
Other expenditure includes commission paid to sales agents amounting to ` 1,906.80 crore (previous year: ` 1,671.88 crore),
exceeding 1% of the total income of the Bank.
23 Provisions and contingencies
The break-up of provisions and contingencies included in the Statement of Profit and Loss is given below:
(` crore)
Particulars
Provision for income tax
- Current
- Deferred
Provision for NPAs
Provision for diminution in value of non-performing investments
Provision for standard assets
Other provisions and contingencies*
March 31, 2017
March 31, 2016
7,916.97
(327.54)
3,145.30
(7.64)
392.18
63.46
6,507.59
(165.88)
2,133.63
15.17
440.00
136.81
Total
11,182.73
9,067.32
*Includes provisions for tax, legal and other contingencies ` 38.34 crore (previous year: ` 37.28 crore), floating provisions
` 25.00 crore (previous year: ` 115.00 crore), provisions / (write-back) for securitised-out assets ` 2.62 crore (previous year:
` (2.85) crore) and standard restructured assets ` (2.50) crore (previous year: ` (12.62) crore).
HDFC Bank Limited Annual Report 2016-17
115
Schedules to the Financial Statements
For the year ended March 31, 2017
24 Employee benefits
Gratuity
Particulars
Reconciliation of opening and closing balance of the present value of
the defined benefit obligation
Present value of obligation as at April 1
Interest cost
Current service cost
Benefits paid
Actuarial (gain) / loss on obligation:
Experience adjustment
Assumption change
Present value of obligation as at March 31
Reconciliation of opening and closing balance of the fair value of the
plan assets
Fair value of plan assets as at April 1
Expected return on plan assets
Contributions
Benefits paid
Actuarial gain / (loss) on plan assets:
Experience adjustment
Assumption change
Fair value of plan assets as at March 31
Amount recognised in Balance Sheet
Fair value of plan assets as at March 31
Present value of obligation as at March 31
(cid:33)(cid:83)(cid:83)(cid:69)(cid:84)(cid:0)(cid:15)(cid:0)(cid:8)(cid:76)(cid:73)(cid:65)(cid:66)(cid:73)(cid:76)(cid:73)(cid:84)(cid:89)(cid:9)(cid:0)(cid:65)(cid:83)(cid:0)(cid:65)(cid:84)(cid:0)(cid:45)(cid:65)(cid:82)(cid:67)(cid:72)(cid:0)(cid:19)(cid:17)(cid:0)
Expenses recognised in Statement of Profit and Loss
Interest cost
Current service cost
Expected return on plan assets
Net actuarial (gain) / loss recognised in the year
Net cost
Actual return on plan assets
Estimated contribution for the next year
Assumptions
Discount rate
Expected return on plan assets
Salary escalation rate
HDFC Bank Limited Annual Report 2016-17
116
(` crore)
March 31, 2017
March 31, 2016
390.47
26.36
62.57
(38.49)
35.48
11.61
488.00
287.93
22.52
47.95
(38.49)
32.44
3.22
355.57
355.57
(488.00)
(132.43)
26.36
62.57
(22.52)
11.42
77.83
58.18
73.21
310.59
22.38
53.78
(24.30)
16.24
11.78
390.47
242.88
21.23
61.81
(24.30)
(13.69)
-
287.93
287.93
(390.47)
(102.54)
22.38
53.78
(21.23)
41.71
96.64
7.54
47.95
7.1% per annum
7.5% per annum
7.0% per annum
8.0% per annum
8.0% per annum
8.0% per annum
Schedules to the Financial Statements
For the year ended March 31, 2017
Experience adjustment
Particulars
Plan assets
Defined benefit obligation
Surplus / (deficit)
Experience adjustment gain / (loss) on plan assets
Experience adjustment (gain) / loss on plan liabilities
Years ended March 31,
2017
355.57
488.00
2016
287.93
390.47
(132.43)
(102.54)
32.44
35.48
(13.69)
16.24
2015
242.88
310.59
(67.71)
21.35
4.59
2014
172.60
237.43
(64.83)
1.87
5.87
(` crore)
2013
130.22
206.28
(76.06)
2.00
2.72
Expected rate of return on investments is determined based on the assessment made by the Bank at the beginning of the year
with regard to its existing portfolio. Major categories of plan assets as a percentage of fair value of total plan assets as of March
31, 2017 are given below:
Category of plan assets
Government securities
Debenture and bonds
Equity shares
Others
Pension
Particulars
% of fair value to total plan assets
as at March 31, 2017
28.0%
27.0%
40.8%
4.2%
100.0%
Total
March 31, 2017
March 31, 2016
(` crore)
Reconciliation of opening and closing balance of the present value of
the defined benefit obligation
Present value of obligation as at April 1
Interest cost
Current service cost
Benefits paid
Actuarial (gain) / loss on obligation:
Experience adjustment
Assumption change
Present value of obligation as at March 31
Reconciliation of opening and closing balance of the fair value of the plan
assets
Fair value of plan assets as at April 1
Expected return on plan assets
Contributions
Benefits paid
Actuarial gain / (loss) on plan assets:
Experience adjustment
70.88
4.80
1.23
(6.62)
4.65
(1.39)
73.55
38.38
2.61
1.03
(6.62)
0.39
57.45
3.92
1.12
(10.18)
17.35
1.22
70.88
41.91
3.21
2.01
(10.18)
1.43
HDFC Bank Limited Annual Report 2016-17
117
Schedules to the Financial Statements
For the year ended March 31, 2017
Particulars
Assumption change
Fair value of plan assets as at March 31
Amount recognised in Balance Sheet
Fair value of plan assets as at March 31
Present value of obligation as at March 31
Asset / (liability) as at March 31
Expenses recognised in Statement of Profit and Loss
Interest cost
Current service cost
Expected return on plan assets
Net actuarial (gain) / loss recognised in the year
Net cost
Actual return on plan assets
Estimated contribution for the next year
Assumptions
Discount rate
Expected return on plan assets
Salary escalation rate
Experience adjustment
Particulars
Plan assets
Defined benefit obligation
Surplus / (deficit)
March 31, 2017
March 31, 2016
(` crore)
0.37
36.16
36.16
(73.55)
(37.39)
4.80
1.23
(2.61)
2.50
5.92
3.37
7.18
-
38.38
38.38
(70.88)
(32.50)
3.92
1.12
(3.21)
17.14
18.97
4.64
14.00
7.1% per annum
7.5% per annum
7.0% per annum
8.0% per annum
8.0% per annum
8.0% per annum
(` crore)
Years ended March 31,
2017
2016
2015
2014
2013
36.16
73.55
38.38
70.88
41.91
57.45
47.99
58.89
(37.39)
(32.50)
(15.54)
(10.90)
48.88
58.19
(9.31)
(1.58)
6.12
Experience adjustment gain / (loss) on plan assets
Experience adjustment (gain) / loss on plan liabilities
0.39
4.65
1.43
17.35
(2.38)
(0.19)
3.45
3.62
Expected rate of return on investments is determined based on the assessment made by the Bank at the beginning of the year
with regard to its existing portfolio. Major categories of plan assets as a percentage of fair value of total plan assets as of March
31, 2017 are given below:
Category of plan assets
Government securities
Debenture and bonds
Others
% of fair value to total plan assets
as at March 31, 2017
6.9%
87.7%
5.4%
100.0%
Total
HDFC Bank Limited Annual Report 2016-17
118
Schedules to the Financial Statements
For the year ended March 31, 2017
Provident fund
The guidance note on AS-15, Employee Benefits, states that employer established provident funds, where interest is guaranteed
are to be considered as defined benefit plans and the liability has to be valued. The Institute of Actuaries of India (IAI) has
issued a guidance note on valuation of interest rate guarantees on exempt provident funds. The actuary has accordingly valued
the same and the Bank held a provision of Nil as at March 31, 2017 (previous year: Nil), towards the present value of the
guaranteed interest benefit obligation. The actuary has followed deterministic approach as prescribed by the guidance note.
Assumptions
Particulars
Discount rate (GOI security yield)
Expected guaranteed interest rate
March 31, 2017
March 31, 2016
7.1% per annum
7.5% per annum
8.7% per annum
9.0% per annum
The Bank does not have any unfunded defined benefit plan. The Bank contributed ` 216.86 crore (previous year: ` 189.00
crore) to the provident fund and ` 78.67 crore (previous year: ` 56.54 crore) to the superannuation plan.
Compensated absences
The actuarial liability of compensated absences of accumulated privileged and sick leaves of the employees of the Bank is
(` crore)
given below:
Particulars
Privileged leave
Sick leave
Total actuarial liability
Assumptions
Discount rate
Salary escalation rate
March 31, 2017
March 31, 2016
237.24
52.95
290.19
222.07
47.40
269.47
7.1% per annum
7.5% per annum
8.0% per annum
8.0% per annum
25 Disclosures on remuneration
(cid:49)(cid:85)(cid:65)(cid:76)(cid:73)(cid:84)(cid:65)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:36)(cid:73)(cid:83)(cid:67)(cid:76)(cid:79)(cid:83)(cid:85)(cid:82)(cid:69)(cid:83)
A.
Information relating to the bodies that oversee remuneration
Name and composition
The Board of Directors of the Bank has constituted the Nomination and Remuneration Committee (hereinafter, the ‘NRC’)
for overseeing and governing the compensation policies of the Bank. The NRC is comprised of four independent directors
and is chaired by the Board of Directors of the Bank. Further, two members of the NRC are also members of the Risk
Policy and Monitoring Committee (hereinafter, the ‘RPMC’) of the Board.
The NRC is comprised of the Chairperson, Mrs. Shyamala Gopinath, Mr. A N Roy, Mr. Partho Datta and Mr. Bobby
Parikh. Further, Mrs. Shyamala Gopinath and Mr. Partho Dutta are also members of the RPMC. Mr. Bobby Parikh is the
chairperson of the NRC.
Mandate of the NRC
The primary mandate of the NRC is to oversee the implementation of compensation policies of the Bank.
The NRC periodically reviews the overall compensation policy of the Bank with a view to attract, retain and motivate
employees. In this capacity it is required to review and approve the design of the total compensation framework, including
compensation strategy programs and plans, on behalf of the Board of Directors. The compensation structure and pay
revision for Whole Time Directors is also approved by the NRC. The NRC co-ordinates with the RPMC to ensure that
compensation is aligned with prudent risk taking.
HDFC Bank Limited Annual Report 2016-17
119
Schedules to the Financial Statements
For the year ended March 31, 2017
External Consultants
The Bank employed the services of the following consulting firms in the area of compensation and benefits and human
resources.
(cid:33)(cid:47)(cid:46)(cid:26)(cid:0) The Bank employed the services of AON in the area of compensation market benchmarking and executive
compensation. AON, apart from being a globally reputed consulting firm, has the longest running year on year banking
study in India and was found to be the most appropriate by the NRC.
(cid:37)(cid:82)(cid:78)(cid:83)(cid:84)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:57)(cid:79)(cid:85)(cid:78)(cid:71)(cid:26)(cid:0)The Bank employed the services of Ernst and Young to review the compensation policy of the Bank in
light of the best in class practices in the banking industry.
(cid:51)(cid:67)(cid:79)(cid:80)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:34)(cid:65)(cid:78)(cid:75)(cid:7)(cid:83)(cid:0)(cid:50)(cid:69)(cid:77)(cid:85)(cid:78)(cid:69)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:48)(cid:79)(cid:76)(cid:73)(cid:67)(cid:89)(cid:26)
(cid:0)
(cid:0)
(cid:0)
The Remuneration Policy of the Bank includes within its scope all business lines, all permanent staff in its domestic as
well as international offices. Further the principles articulated in the compensation policy are universal, however in the
event there are any statutory provisions in overseas locations the same shall take precedence over the remuneration
policy of the Bank.
All permanent employees of the Bank except those covered under the long term wage agreement are covered by the said
compensation policy. The number of employees covered under the compensation policy was 84,041as at March 31, 2017
(previous year: 87,263).
(cid:34)(cid:14)(cid:0)
(cid:41)(cid:78)(cid:70)(cid:79)(cid:82)(cid:77)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:82)(cid:69)(cid:76)(cid:65)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)(cid:84)(cid:79)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:68)(cid:69)(cid:83)(cid:73)(cid:71)(cid:78)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:83)(cid:84)(cid:82)(cid:85)(cid:67)(cid:84)(cid:85)(cid:82)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0)(cid:82)(cid:69)(cid:77)(cid:85)(cid:78)(cid:69)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:80)(cid:82)(cid:79)(cid:67)(cid:69)(cid:83)(cid:83)(cid:69)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:75)(cid:69)(cid:89)(cid:0)(cid:70)(cid:69)(cid:65)(cid:84)(cid:85)(cid:82)(cid:69)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:79)(cid:66)(cid:74)(cid:69)(cid:67)(cid:84)(cid:73)(cid:86)(cid:69)(cid:83)(cid:0)
of remuneration policy
(cid:41)(cid:14)(cid:0)
(cid:43)(cid:69)(cid:89)(cid:0)(cid:38)(cid:69)(cid:65)(cid:84)(cid:85)(cid:82)(cid:69)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:47)(cid:66)(cid:74)(cid:69)(cid:67)(cid:84)(cid:73)(cid:86)(cid:69)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)(cid:50)(cid:69)(cid:77)(cid:85)(cid:78)(cid:69)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:48)(cid:79)(cid:76)(cid:73)(cid:67)(cid:89)
The Bank’s Compensation Policy (the ‘Policy’) is aligned to business strategy, market dynamics, internal
characteristics and complexities within the Bank. The ultimate objective of the Policy is to provide a fair and
transparent structure that helps in acquiring and retaining the talent pool critical to build competitive advantage and
brand equity. The Policy has been designed basis the principles for sound compensation practices in accordance
with regulatory requirements and provides a framework to create, modify and maintain appropriate compensation
programs and processes with adequate supervision and control.
The Bank’s performance management system provides a sound basis for assessing employee performance
holistically. The Bank’s compensation framework is aligned with the performance management system and
differentiates pay appropriately amongst its employees based on degree of contribution, skill and availability of talent
owing to competitive market forces by taking into account factors such as role, skills, competencies, experience and
grade / seniority.
The NRC reviews the following critical principles enunciated in the policy and ensures that:
(a)
the compensation is adjusted for all types of prudent risk taking;
(b)
compensation outcomes are symmetric with risk outcomes;
(c)
compensation payouts are sensitive to the time horizon of risk; and
(d)
the mix of cash, equity and other forms of compensation are aligned with risk.
II.
Design and Structure of Remuneration
a)
Fixed Pay
The NRC ensures that the fixed component of the compensation is reasonable, taking into account all relevant
factors including industry practice.
Elements of Fixed Pay
The fixed pay component of the Bank’s compensation structure typically consists of elements such as base
salary, allowances, perquisites, retirement and other employee benefits. Perquisites extended are in the nature
of company car, hard furnishing, company leased accommodation, club membership and such other benefits
or allowances in lieu of such perquisites / benefits. Retirement benefits include contributions to provident fund,
superannuation fund (for certain job bands) and gratuity. The Whole Time Directors of the Bank are entitled
HDFC Bank Limited Annual Report 2016-17
120
Schedules to the Financial Statements
For the year ended March 31, 2017
to other post-retirement benefits such as car and medical facilities, in accordance with specified terms of
employment as per the policy of the Bank, subject to RBI approval. The Bank also provides pension to certain
employees of the erstwhile Lord Krishna Bank (eLKB) under the Indian Banks’ Association (‘IBA’) structure.
Determinants of Fixed Pay
The fixed pay is primarily determined by taking into account factors such as the job size, performance,
experience, location, market competitiveness of pay and is designed to meet the following key objectives of:
(a)
fair compensation given the role complexity and size;
(b)
fair compensation given the individual’s skill, competence, experience and market pay position;
(c)
sufficient contribution to post retirement benefits; and
(d)
compliance with all statutory obligations.
For Whole Time Directors additional dimensions such as prominence of leadership among industry leaders,
consistency of the Bank’s performance over the years on key parameters such as profitability, growth
and asset quality in relation to its own past performance and that of its peer banks would be considered.
The quantum of fixed pay for Whole Time Directors is approved by the NRC as well as the Board and is
subject to the approval of the RBI.
(cid:66)(cid:9)(cid:0) (cid:54)(cid:65)(cid:82)(cid:73)(cid:65)(cid:66)(cid:76)(cid:69)(cid:0)(cid:48)(cid:65)(cid:89)
The performance management system forms the basis for variable pay allocation of the Bank. The Bank
ensures that the performance management system is comprehensive and considers both, quantitative and
qualitative performance measures.
Whole Time Directors
The bonus for Whole Time Directors will not exceed 70% of the fixed pay in a year, thereby ensuring that there
is a balance between the fixed and variable pays. The variable pay for Whole Time Directors is approved by
the NRC as well as the Board and is subject to the approval of the RBI. The variable pay component is paid
out subject to the following conditions:
(cid:115)(cid:0)
(cid:55)(cid:72)(cid:69)(cid:82)(cid:69)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:86)(cid:65)(cid:82)(cid:73)(cid:65)(cid:66)(cid:76)(cid:69)(cid:0) (cid:80)(cid:65)(cid:89)(cid:0) (cid:67)(cid:79)(cid:78)(cid:83)(cid:84)(cid:73)(cid:84)(cid:85)(cid:84)(cid:69)(cid:83)(cid:0) (cid:21)(cid:16)(cid:5)(cid:0) (cid:79)(cid:82)(cid:0) (cid:77)(cid:79)(cid:82)(cid:69)(cid:0) (cid:79)(cid:70)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:108)(cid:88)(cid:69)(cid:68)(cid:0) (cid:80)(cid:65)(cid:89)(cid:12)(cid:0) (cid:65)(cid:0) (cid:80)(cid:79)(cid:82)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0) (cid:79)(cid:70)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:83)(cid:65)(cid:77)(cid:69)(cid:0) (cid:87)(cid:79)(cid:85)(cid:76)(cid:68)(cid:0) (cid:66)(cid:69)(cid:0)
deferred as per the schedule mentioned in the table below:
(cid:48)(cid:79)(cid:82)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:79)(cid:70)(cid:0)(cid:54)(cid:65)(cid:82)(cid:73)(cid:65)(cid:66)(cid:76)(cid:69)(cid:0)(cid:48)(cid:65)(cid:89) Timelines
60%
13.33%
13.33%
13.33%
Payable effective April 1 of the financial year immediately following the
performance year.
Payable effective April 1 of the second financial year following the reference
performance year.
Payable effective April 1 of the third financial year following the reference
performance year.
Payable effective April 1 of the fourth financial year following the reference
performance year.
(cid:115)(cid:0)
(cid:52)(cid:72)(cid:69)(cid:0) (cid:34)(cid:65)(cid:78)(cid:75)(cid:0) (cid:72)(cid:65)(cid:83)(cid:0) (cid:68)(cid:69)(cid:86)(cid:73)(cid:83)(cid:69)(cid:68)(cid:0) (cid:65)(cid:80)(cid:80)(cid:82)(cid:79)(cid:80)(cid:82)(cid:73)(cid:65)(cid:84)(cid:69)(cid:0) (cid:77)(cid:65)(cid:76)(cid:85)(cid:83)(cid:0) (cid:65)(cid:78)(cid:68)(cid:0) (cid:67)(cid:76)(cid:65)(cid:87)(cid:0) (cid:66)(cid:65)(cid:67)(cid:75)(cid:0) (cid:67)(cid:76)(cid:65)(cid:85)(cid:83)(cid:69)(cid:83)(cid:0) (cid:65)(cid:83)(cid:0) (cid:65)(cid:0) (cid:82)(cid:73)(cid:83)(cid:75)(cid:0) (cid:77)(cid:73)(cid:84)(cid:73)(cid:71)(cid:65)(cid:78)(cid:84)(cid:0) (cid:70)(cid:79)(cid:82)(cid:0) (cid:65)(cid:78)(cid:89)(cid:0) (cid:78)(cid:69)(cid:71)(cid:65)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)
contributions of the Bank and / or relevant line of business in any year. Under the malus clause the
incumbent foregoes the vesting of the deferred variable pay in full or in part. Under the claw back clause
the incumbent is obligated to return all the tranches of payout received of bonus amounts pertaining to
the relevant performance year. The deferred bonus is paid out post review and approval by the NRC.
Employees other than Whole Time Directors
The Bank has formulated the following variable pay plans:
(cid:115)(cid:0)
(cid:33)(cid:78)(cid:78)(cid:85)(cid:65)(cid:76)(cid:0)(cid:66)(cid:79)(cid:78)(cid:85)(cid:83)(cid:0)(cid:80)(cid:76)(cid:65)(cid:78)(cid:0)
The quantum of variable payout is a function of the performance of the Bank, performance of the
business unit, performance of the individual employee, job band of the employee and the functional
category. Basis these key determinants and due adjustment for risk alignment, a payout matrix for
HDFC Bank Limited Annual Report 2016-17
121
Schedules to the Financial Statements
For the year ended March 31, 2017
variable pay is developed. Market trends for specific businesses / functions along with inputs from
compensation surveys may also be used in finalising the payout.
Bonus pools are designed to meet specific business needs therefore resulting in differentiation in both
the quantum and the method of payout across functions. Typically higher levels of responsibility receive
a higher proportion of variable pay vis-à-vis fixed pay. The Bank ensures that the time horizon for risk is
assessed and the deferment period, if any, for bonus is set accordingly. Employees on the annual bonus
plan are not part of performance-linked plans. The following is taken into account while administering
the annual bonus:
(cid:57)
(cid:57)
In the event the proportion of variable pay to fixed pay is substantially high (variable pay exceeding
50% of fixed pay), the Bank may devise an appropriate deferment schedule after taking into
consideration the nature of risk, time horizon of risk, and the materiality of risk.
In cases of deferment of variable pay the Bank makes an assessment prior to the due date for
payment of the deferred portion for any negative contribution. The criteria for negative contribution
are decided basis pre-defined financial benchmarks. The Bank has in place appropriate methods
for prevention of vesting of deferred variable pay or any part thereof, on account of negative
contribution. The Bank also has in place claw back arrangements in relation to amounts already
paid in the eventuality of a negative contribution.
(cid:115)(cid:0)
(cid:48)(cid:69)(cid:82)(cid:70)(cid:79)(cid:82)(cid:77)(cid:65)(cid:78)(cid:67)(cid:69)(cid:13)(cid:76)(cid:73)(cid:78)(cid:75)(cid:69)(cid:68)(cid:0)(cid:48)(cid:76)(cid:65)(cid:78)(cid:83)(cid:0)(cid:8)(cid:48)(cid:44)(cid:48)(cid:83)(cid:9)(cid:0)
PLPs are formulated for sales personnel who are given sales targets but have limited impact on risk
since credit decisions are exercised independent of the sales function. All PLP payouts are based on a
balanced scorecard framework and are subject to achievement of individual targets enumerated in the
respective scorecards of the employees. A portion of the PLP payouts is deferred till the end of the year
to provide for any unforeseen performance risks.
(cid:50)(cid:69)(cid:86)(cid:73)(cid:69)(cid:87)(cid:0)(cid:79)(cid:70)(cid:0)(cid:50)(cid:69)(cid:77)(cid:85)(cid:78)(cid:69)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:48)(cid:79)(cid:76)(cid:73)(cid:67)(cid:89)(cid:0)(cid:79)(cid:70)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:34)(cid:65)(cid:78)(cid:75)(cid:0)(cid:68)(cid:85)(cid:82)(cid:73)(cid:78)(cid:71)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:80)(cid:65)(cid:83)(cid:84)(cid:0)(cid:89)(cid:69)(cid:65)(cid:82)(cid:26)
The Compensation Policy of the Bank was reviewed by the NRC during the year and there were no
material changes.
c) Guaranteed Bonus
Guaranteed Bonuses may not be consistent with sound risk management or pay for performance principles
of the Bank and therefore do not form an integral part of the general compensation practice.
For critical hiring for some select strategic roles, the Bank may consider granting of a sign-on bonus as a
prudent way to avoid loading the entire cost of attraction into the fixed component of the compensation which
could have a long term cost implication for the Bank. For such hiring, the sign-on bonus is generally decided
by taking into account appropriate risk factors and market conditions.
For hiring at levels of Whole Time Directors / Managing Director a sign-on bonus, if any, is limited to the first
year only and is in the form of Employee Stock Options.
d) Employee Stock Option Plan (‘ESOP’s)
The Bank considers ESOPs as a vehicle to create a balance between short term rewards and long term
sustainable value creation. ESOPs play a key role in the attraction and retention of key talent. The Bank grants
equity share options to its Whole Time Directors and other employees above a certain grade. All plans for
grant of options are framed in accordance with the SEBI guidelines, 1999 as amended from time to time and
are approved by the shareholders of the Bank. These plans provide for the grant of options post approval by
the NRC.
The grant of options is reviewed and approved by the NRC. The NRC grants options after considering
parameters such as the incumbent’s grade and performance rating, and such other appropriate relevant
factors as may be deemed appropriate by the NRC. Equity share options granted to the Whole Time Directors
are subject to the approval of the NRC, the Board and the RBI. With effect from April 1, 2017, the Bank has
HDFC Bank Limited Annual Report 2016-17
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Schedules to the Financial Statements
For the year ended March 31, 2017
amended its policy for grant of ESOPs. Under this policy, ESOPs granted to eligible employees vest over three
tranches spread over a period of 39 months vis-à-vis 36 months for the earlier grants. The first tranche will
vest after fifteen months from the date of grant vis-à-vis twelve months for earlier grants. Vesting for all ESOPs
granted subsequent to April 1, 2017 shall be based on the assessment of performance of the employee at the
time of vesting.
e)
Severance Pay
The Bank does not grant severance pay other than accrued benefits (such as gratuity, pension) except in
cases where it is mandated by any statute.
f)
Hedging
The Bank does not provide any facility or fund or permit its Whole Time Directors and employees to insure
or hedge their compensation structure to offset the risk alignment effects embedded in their compensation
arrangement.
g) Statutory Bonus
Some section of employees are also paid statutory bonus as per the Payment of Bonus Act (1965) as
amended from time to time.
III. Remuneration Processes
Fitment at the time of Hire
Pay scales of the Bank are set basis the job size, experience, location and the academic and professional credentials
of the incumbent.
The compensation of new hires is in line with the existing pay ranges and consistent with the compensation levels
of the existing employees of the Bank at similar profiles. The pay ranges are subject to change basis market
trends and the Bank’s talent management priorities. While the Bank believes in the internal equity and parity as a
key determinant of pay it does acknowledge the external competitive pressures of the talent market. Accordingly,
there could be certain key profiles with critical competencies which may be hired at a premium and treated as an
exception to the overall pay philosophy. Any deviation from the defined pay ranges is treated as a hiring exception
requiring approval with appropriate justification.
(cid:41)(cid:78)(cid:67)(cid:82)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:15)(cid:0)(cid:48)(cid:65)(cid:89)(cid:0)(cid:50)(cid:69)(cid:86)(cid:73)(cid:83)(cid:73)(cid:79)(cid:78)
It is the endeavor of the Bank to ensure external competitiveness as well as internal equity without diluting the overall
focus on optimising cost. In order to enhance our external competitiveness the Bank participates in an annual salary
survey of the banking sector to understand key market trends as well as get insights on relative market pay position
compared to peers. The Bank endeavors to ensure that most employees progress to the median of the market in terms
of fixed pay over time. This coupled with key internal data indicators like performance score, job family, experience, job
grade and salary budget form the basis of decision making on revisions in fixed pay.
Increments in fixed pay for majority of the employee population are generally undertaken effective April 1 every
year. However promotions, confirmations and change in job dimensions could also lead to a change in the fixed pay
during other times of the year.
The Bank also makes salary corrections and adjustments during the year for those employees whose compensation
is found to be below the market pay and who have a good performance track record. However such pay revisions
are done on an exception basis.
Risk, Control and Compliance Staff
The Bank has separated the Risk, Control and Compliance functions from the Business functions in order to create
a strong culture of checks and balances thereby ensuring good asset quality and to eliminate any possible conflict
of interest between revenue generation and risk management and control. Accordingly, the overall variable pay as
well as the annual salary increment of the employees in the Risk, Control and Compliance functions is based on
their performance, functional objectives and goals. The Bank ensures that the mix of fixed to variable compensation
for these functions is weighted in favour of fixed compensation.
HDFC Bank Limited Annual Report 2016-17
123
Schedules to the Financial Statements
For the year ended March 31, 2017
C. Description of the ways in which current and future risks are taken into account in the remuneration processes.
It should include the nature and type of the key measures used to take account of these risks
The Bank takes into account various types of risks in its remuneration processes. The Bank follows a comprehensive framework
that includes within its ambit the key dimensions of remuneration such as fixed pay, variable pay and long term incentives
(i.e. Employee Stock Options).
Fixed pay: The Bank conducts a comprehensive market benchmarking study to ensure that employees are competitively
positioned in terms of fixed pay. The Bank follows a robust salary review process wherein revisions in fixed compensation are
based on performance. The Bank also makes salary adjustments taking into consideration pay positioning of employees vis-à-
vis market reference points. Through this approach the Bank endeavors to ensure that the talent risk due to attrition is mitigated
as much as possible. Fixed Pay could be revised downwards as well in the event of certain proven cases of misconduct by an
employee.
Variable pay: The Bank has distinct types of variable pay plans as given below:
(a) Quarterly / monthly performance-linked pay (PLP) plans:
All quarterly / monthly PLP plans are based on the principle of balanced scorecard framework that includes within its
ambit both quantitative and qualitative factors including key strategic objectives that ensure future competitive advantage
for the Bank. PLP plans, by design, have deterrents that play a role of moderating payouts based on the non-fulfillment
of established quantitative / qualitative risk factors. Deterrents also include risks arising out of non-compliance, mis-sell
etc. Further, a portion of all payouts under the PLP plans is deferred till the end of the year to provide for any unforeseen
performance risks.
(b) Annual bonus plan:
The Bank takes into consideration the fact that a portion of the Bank’s profits are directly attributable to various types of
risks the Bank is exposed to such as credit risk, market risk, operational risk and other quantifiable risks.
The framework developed by the Bank in order to arrive at the quantum of bonus pool is based on the performance
of the Bank and profitability. The annual bonus is distributed based on business unit and individual performance.
The business unit performance is based on factors such as growth in revenue, growth in profit, cost to income ratio and
achievement vis-à-vis plans and key objectives. Bonus pay out for an individual employee in a particular grade is linked
to the performance rating of the employee and subject to meeting the Bank’s standards of ethical conduct.
The Bank has devised appropriate malus and claw back clauses as a risk mitigant for any negative contributions of the
Bank and / or relevant line of business in any year for Whole Time Directors. Under the malus clause the incumbent
foregoes the vesting of the deferred variable pay in full or in part. Under the claw back clause the incumbent is obligated
to return all the tranches of payout received of bonus amounts pertaining to the reference performance year. The deferred
bonus is paid out post review and approval by the NRC.
The bonus for Whole Time Directors is capped at 70% of the fixed pay in a year. The variable pay for Whole Time
Directors is approved by the NRC as well as the Board of Directors of the Bank and is subject to the approval of the RBI.
The variable pay component is paid out subject to the following conditions:
Where the variable pay constitutes 50% or more of the fixed pay, a portion of the same would be deferred as per the
schedule mentioned in the table below:
(cid:48)(cid:79)(cid:82)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:79)(cid:70)(cid:0)(cid:54)(cid:65)(cid:82)(cid:73)(cid:65)(cid:66)(cid:76)(cid:69)(cid:0)(cid:48)(cid:65)(cid:89) Timelines
60%
13.33%
13.33%
13.33%
Payable effective April 1 of the financial year immediately following the performance year.
Payable effective April 1 of the second financial year following the reference performance
year.
Payable effective April 1 of the third financial year following the reference performance year.
Payable effective April 1 of the fourth financial year following the reference performance
year.
(c)
Long term incentives (employee stock options):
The Bank also grants employee stock options to employees in certain job bands. The grant is based on performance
rating of the individual.
HDFC Bank Limited Annual Report 2016-17
124
Schedules to the Financial Statements
For the year ended March 31, 2017
D. Description of the ways in which the Bank seeks to link performance during a performance measurement period
with levels of remuneration
The Bank has a very comprehensive multi-dimensional performance measurement metrics that takes into consideration
multiple factors that include qualitative as well as quantitative factors. The following are the key performance measurement
metrics for the Bank. These also form part of the key metrics for the measurement of the performance of Whole Time
Directors and impact the final remuneration:
A.
B.
Business Growth - This includes growth in advances and deposits;
Profitability - This includes growth in profit after tax;
C. Asset Quality - Gross NPA, Net NPA and % of Restructured assets to net advances;
D.
E.
F.
Financial Soundness - Capital Adequacy Ratio Position and Tier I capital;
Shareholder value creation - Return on equity; and
Financial Inclusion - Growth in number of households covered, growth in the value of loans disbursed under this
category and achievement against priority sector lending targets.
Most of the above parameters are evaluated in two steps:
A.
B.
Achievement against the plans of the Bank; and
Achievement against the performance of peers.
Apart from the factors related to business growth there is also a key qualitative factor such as regulatory compliance.
Compliance is the key qualitative factor that acts as the moderator in the entire organisation evaluation process. A low
score on compliance can significantly moderate the other performance measures and depending on severity may even
nullify their impact.
While the above parameters form the core evaluation parameters for the Bank each of the business units are measured
on the following from a remuneration standpoint:
A.
B.
Increase in plan over the previous year;
Actual growth in revenue over previous year;
C. Growth in net revenue (%);
D.
E.
F.
Achievement of net revenue against plan (%);
Actual profit before tax;
Growth in profit before tax compared to the previous year;
G. Current cost to income; and
H.
Improvement in cost to income over the previous year.
Apart from the above the business units are also measured against certain key business objectives that are qualitative in
nature.
The process by which levels of remuneration in the Bank are aligned to the performance of the Bank, business unit and
individual employees is articulated below.
Fixed Pay
At the conclusion of every financial year the Bank reviews the fixed pay portion of the compensation structure basis
merit-based increments and market corrections. These are based on a combination of performance rating, job band
and the functional category of the individual employee. For a given job band, the merit increment is directly related to
the performance rating. The Bank strives to ensure that most employees progress to the median of the market in terms
of fixed pay over time. All other things remaining equal, the correction percentage is directly related to the performance
rating of the individual.
HDFC Bank Limited Annual Report 2016-17
125
Schedules to the Financial Statements
For the year ended March 31, 2017
Variable Pay
Basis the performance of the business unit, individual performance and role, the Bank has formulated the following
variable pay plans:
(cid:115)(cid:0)
(cid:33)(cid:78)(cid:78)(cid:85)(cid:65)(cid:76)(cid:0)(cid:34)(cid:79)(cid:78)(cid:85)(cid:83)(cid:0)(cid:48)(cid:76)(cid:65)(cid:78)
The Bank’s annual bonus is computed as a percentage of the gross salary for every job band. The bonus multiple is based
on performance of the business unit (based on the parameters above), performance rating, job band and the functional
category of the individual employee. The business performance level determines the multiplier for the bonus. All other
things remaining equal, for a given job band, the bonus is directly related to the performance rating. The proportion of
variable pay to fixed pay increases with job band. Employees on the annual bonus plan are not part of the PLPs.
(cid:115)(cid:0)
(cid:48)(cid:69)(cid:82)(cid:70)(cid:79)(cid:82)(cid:77)(cid:65)(cid:78)(cid:67)(cid:69)(cid:13)(cid:76)(cid:73)(cid:78)(cid:75)(cid:69)(cid:68)(cid:0)(cid:48)(cid:76)(cid:65)(cid:78)(cid:83)(cid:0)(cid:8)(cid:48)(cid:44)(cid:48)(cid:83)(cid:9)
The Bank has formulated PLPs for its sales personnel who are given sales targets basis a balanced scorecard methodology.
All PLP payouts are subject to the achievement of individual targets enumerated in the respective scorecards of the
employees and moderated by qualitative parameters. A portion of the PLP payouts is deferred till the end of the year to
provide for any unforeseen performance risks. All PLP plans are based on balanced scorecard framework.
(cid:37)(cid:14)(cid:0) (cid:36)(cid:69)(cid:83)(cid:67)(cid:82)(cid:73)(cid:80)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0) (cid:79)(cid:70)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:87)(cid:65)(cid:89)(cid:83)(cid:0) (cid:73)(cid:78)(cid:0) (cid:87)(cid:72)(cid:73)(cid:67)(cid:72)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:34)(cid:65)(cid:78)(cid:75)(cid:0) (cid:83)(cid:69)(cid:69)(cid:75)(cid:83)(cid:0) (cid:84)(cid:79)(cid:0) (cid:65)(cid:68)(cid:74)(cid:85)(cid:83)(cid:84)(cid:0) (cid:82)(cid:69)(cid:77)(cid:85)(cid:78)(cid:69)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0) (cid:84)(cid:79)(cid:0) (cid:84)(cid:65)(cid:75)(cid:69)(cid:0) (cid:65)(cid:67)(cid:67)(cid:79)(cid:85)(cid:78)(cid:84)(cid:0) (cid:79)(cid:70)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:76)(cid:79)(cid:78)(cid:71)(cid:69)(cid:82)(cid:0) (cid:84)(cid:69)(cid:82)(cid:77)(cid:0)
performance
A discussion of the Bank’s policy on deferral and vesting of variable remuneration and a discussion of the Bank’s policy
and criteria for adjusting deferred remuneration before vesting and after vesting
Whole Time Directors
The bonus for Whole Time Directors does not exceed 70% of the fixed pay in a year, thereby ensuring that there is a balance
between the fixed and variable pay. The variable pay for Whole Time Directors is approved by the NRC as well as the Board
and is subject to the approval of the RBI. The variable pay component is paid out subject to the following conditions:
(cid:115)(cid:0)
(cid:55)(cid:72)(cid:69)(cid:82)(cid:69)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:86)(cid:65)(cid:82)(cid:73)(cid:65)(cid:66)(cid:76)(cid:69)(cid:0)(cid:80)(cid:65)(cid:89)(cid:0)(cid:67)(cid:79)(cid:78)(cid:83)(cid:84)(cid:73)(cid:84)(cid:85)(cid:84)(cid:69)(cid:83)(cid:0)(cid:21)(cid:16)(cid:5)(cid:0)(cid:79)(cid:82)(cid:0)(cid:77)(cid:79)(cid:82)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:108)(cid:88)(cid:69)(cid:68)(cid:0)(cid:80)(cid:65)(cid:89)(cid:12)(cid:0)(cid:65)(cid:78)(cid:0)(cid:65)(cid:80)(cid:80)(cid:82)(cid:79)(cid:80)(cid:82)(cid:73)(cid:65)(cid:84)(cid:69)(cid:0)(cid:80)(cid:79)(cid:82)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:82)(cid:69)(cid:79)(cid:70)(cid:0)(cid:73)(cid:83)(cid:0)(cid:68)(cid:69)(cid:70)(cid:69)(cid:82)(cid:82)(cid:69)(cid:68)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)
vests as per the schedule mentioned in the table below:
(cid:48)(cid:79)(cid:82)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:79)(cid:70)(cid:0)(cid:54)(cid:65)(cid:82)(cid:73)(cid:65)(cid:66)(cid:76)(cid:69)(cid:0)(cid:48)(cid:65)(cid:89) Timelines
60%
13.33%
13.33%
13.33%
Payable effective April 1 of the financial year immediately following the performance year.
Payable effective April 1 of the second financial year following the reference performance
year.
Payable effective April 1 of the third financial year following the reference performance year.
Payable effective April 1 of the fourth financial year following the reference performance
year.
(cid:115)(cid:0)
(cid:52)(cid:72)(cid:69)(cid:0)(cid:34)(cid:65)(cid:78)(cid:75)(cid:0)(cid:72)(cid:65)(cid:83)(cid:0)(cid:68)(cid:69)(cid:86)(cid:73)(cid:83)(cid:69)(cid:68)(cid:0)(cid:65)(cid:80)(cid:80)(cid:82)(cid:79)(cid:80)(cid:82)(cid:73)(cid:65)(cid:84)(cid:69)(cid:0)(cid:77)(cid:65)(cid:76)(cid:85)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:67)(cid:76)(cid:65)(cid:87)(cid:0)(cid:66)(cid:65)(cid:67)(cid:75)(cid:0)(cid:67)(cid:76)(cid:65)(cid:85)(cid:83)(cid:69)(cid:83)(cid:0)(cid:65)(cid:83)(cid:0)(cid:65)(cid:0)(cid:82)(cid:73)(cid:83)(cid:75)(cid:0)(cid:77)(cid:73)(cid:84)(cid:73)(cid:71)(cid:65)(cid:78)(cid:84)(cid:0)(cid:70)(cid:79)(cid:82)(cid:0)(cid:65)(cid:78)(cid:89)(cid:0)(cid:78)(cid:69)(cid:71)(cid:65)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:67)(cid:79)(cid:78)(cid:84)(cid:82)(cid:73)(cid:66)(cid:85)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)
the Bank and / or relevant line of business in any year.
(cid:57) Malus clause
Under the malus clause the incumbent foregoes the vesting of the deferred variable pay in full or in part.
In the event there is a deterioration in specific performance criteria (such as criteria relating to profit or asset
quality) that are laid down by the NRC, then the NRC would review the deterioration in the performance
taking into consideration the macroeconomic environment as well as internal performance indicators and
accordingly decide whether any part of the deferred tranche pertaining to that financial year merits a withdrawal.
The deferred bonus is paid out post review and approval by the NRC.
(cid:57)
Claw back clause
Under the claw back clause the incumbent is obligated to return all the tranches of payout received of bonus
amounts pertaining to the relevant performance year. In the event there is any act attributable to the concerned
Whole Time Director / Managing Director resulting in an incident of willful and deliberate misinterpretation /
misreporting of financial performance (inflating the financials) of the Bank, for a financial year, which comes
to light in the subsequent three years, the incumbent is obligated to return all the tranches of bonus payout
received pertaining to the relevant performance year.
The specific criteria on the applicability of malus and claw back arrangements are reviewed by the NRC annually.
HDFC Bank Limited Annual Report 2016-17
126
Schedules to the Financial Statements
For the year ended March 31, 2017
Employees other than Whole Time Directors
The Bank has formulated the following variable pay plans:
(cid:115)(cid:0)
(cid:33)(cid:78)(cid:78)(cid:85)(cid:65)(cid:76)(cid:0)(cid:66)(cid:79)(cid:78)(cid:85)(cid:83)(cid:0)(cid:80)(cid:76)(cid:65)(cid:78)(cid:0)
The quantum of variable payout is a function of the performance of the Bank, performance of the individual
employee, job band of the employee and the functional category. Basis these key determinants and due adjustment
for risk alignment, a payout matrix for variable pay is developed. Market trends for specific businesses / functions
along with inputs from compensation surveys may also be used in finalising the payout.
Bonus pools are designed to meet specific business needs therefore resulting in differentiation in both the quantum
and the method of payout across functions. Typically higher levels of responsibility receive a higher proportion of
variable pay vis-à-vis fixed pay. The Bank ensures that the time horizon for risk is assessed and the deferment
period, if any, for bonus is set accordingly. Employees on the annual bonus plan are not part of the PLPs.
The following is taken into account while administering the annual bonus:
(cid:57)
(cid:57)
In the event the proportion of variable pay to fixed pay is substantially high (typically variable pay exceeding
50% of fixed pay), the Bank may devise an appropriate deferment schedule after taking into consideration the
nature of risk, time horizon of risk, and the materiality of risk.
In cases of deferment of variable pay the Bank makes an assessment prior to the due date for payment of
the deferred portion for any negative contribution. The criteria for negative contribution are decided basis
pre-defined financial benchmarks. The Bank has in place appropriate methods for prevention of vesting of
deferred variable pay or any part thereof, on account of negative contribution. The Bank also has in place claw
back arrangements in relation to amounts already paid in the eventuality of a negative contribution.
(cid:115)(cid:0)
(cid:48)(cid:69)(cid:82)(cid:70)(cid:79)(cid:82)(cid:77)(cid:65)(cid:78)(cid:67)(cid:69)(cid:13)(cid:76)(cid:73)(cid:78)(cid:75)(cid:69)(cid:68)(cid:0)(cid:48)(cid:76)(cid:65)(cid:78)(cid:83)(cid:0)(cid:8)(cid:48)(cid:44)(cid:48)(cid:83)(cid:9)
PLPs are formulated for sales personnel who are given sales targets but have limited impact on risk since credit
decisions are exercised independent of the sales function. All PLP payouts are subject to the achievement of
individual targets enumerated in the respective scorecards of the employees. A portion of the PLP payouts is
deferred till the end of the year to provide for any unforeseen performance risks.
F.
Description of the different forms of variable remuneration (i.e. cash, shares, ESOPs and other forms) that the
Bank utilises and the rationale for using these different forms
The Bank recognises the importance of variable pay in reinforcing a pay for performance culture. Variable pay stimulates
employees to stretch their abilities to exceed expectations.
(cid:115)(cid:0)
(cid:33)(cid:78)(cid:78)(cid:85)(cid:65)(cid:76)(cid:0)(cid:66)(cid:79)(cid:78)(cid:85)(cid:83)(cid:0)(cid:80)(cid:76)(cid:65)(cid:78)
These are paid to reward performance for a given financial year. This covers all employees and excludes employees
receiving PLP payouts. This is based on performance of the business unit, performance rating, job band and
functional category of the individual. For higher job bands the proportion of variable pay to total compensation tends
to be higher.
(cid:115)(cid:0)
(cid:48)(cid:69)(cid:82)(cid:70)(cid:79)(cid:82)(cid:77)(cid:65)(cid:78)(cid:67)(cid:69)(cid:13)(cid:76)(cid:73)(cid:78)(cid:75)(cid:69)(cid:68)(cid:0)(cid:48)(cid:76)(cid:65)(cid:78)(cid:83)(cid:0)(cid:8)(cid:48)(cid:44)(cid:48)(cid:83)(cid:9)
These are paid to frontline sales staff for the achievement of specific sales targets but have limited impact on
risk as credit decisions are exercised independent of the sales function. Further, it has been the endeavor of
the Bank to ensure that the objectives set are based on the principles of a balanced scorecard that takes into
account quantitative and qualitative measures rather than just the achievement of financial numbers. Further all
PLPs have inherent risk adjustment mechanisms manifested in the form of deterrents. All PLP payouts are subject
to the achievement of parameters, both qualitative and quantitative enumerated in the respective scorecards of
the employees. A portion of the PLP payouts is deferred till the end of the year to provide for any unforeseen
performance risks.
(cid:115)(cid:0)
(cid:37)(cid:77)(cid:80)(cid:76)(cid:79)(cid:89)(cid:69)(cid:69)(cid:0)(cid:83)(cid:84)(cid:79)(cid:67)(cid:75)(cid:0)(cid:79)(cid:80)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:80)(cid:76)(cid:65)(cid:78)
This is to reward for contribution of employees in creating a long term, sustainable earnings and enhancing
shareholder value. Only employees in a certain job band and with a specific performance rating are eligible for
stock options. Performance is the key criteria for granting stock options.
HDFC Bank Limited Annual Report 2016-17
127
Schedules to the Financial Statements
For the year ended March 31, 2017
(cid:49)(cid:85)(cid:65)(cid:78)(cid:84)(cid:73)(cid:84)(cid:65)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:68)(cid:73)(cid:83)(cid:67)(cid:76)(cid:79)(cid:83)(cid:85)(cid:82)(cid:69)(cid:83)
The quantitative disclosures cover the Bank’s Whole Time Directors and Key Risk Takers. Key Risk Takers are individuals who
can materially set, commit or control significant amounts of the Bank’s resources, and / or exert significant influence over its
risk profile. The Bank’s Key Risk Takers include Whole Time Directors, Group Heads, Business Heads directly reporting to the
Managing Director and select roles in the Bank’s Treasury and Investment Banking functions.
Sr. No.
(a)
(cid:51)(cid:85)(cid:66)(cid:74)(cid:69)(cid:67)(cid:84)
Number of meetings held by the
NRC during the financial year and
remuneration paid to its members
(b) (i) Number of employees having
received a variable remuneration
award during the financial year
March 31, 2017
March 31, 2016
Number of meetings: 10
Number of meetings: 9
Remuneration paid: ` 0.20 crore
Remuneration paid: ` 0.17 crore
33 employees
30 employees
(b) (ii) Number and
total amount of
sign-on awards made during the
financial year
(b) (iii) Number and
total amount of
guaranteed bonuses awarded
during the financial year
(b) (iv) Details of severance pay,
in
addition to accrued benefits, if any
(c) (i) Total amount of outstanding
deferred remuneration, split into
cash, shares and share-linked
instruments and other forms
(c) (ii) Total
of
deferred
the
in
amount
remuneration paid out
financial year
of
Breakdown
the
remuneration awards
financial year
to show fixed
and variable, deferred and non-
deferred
amount
for
of
(d)
(e) (i) Total amount of outstanding
and
deferred
retained
remuneration exposed
to ex-post explicit and / or implicit
adjustments
remuneration
(e) (ii) Total amount of reductions during
the financial year due to ex-post
explicit adjustments
(e) (iii) Total amount of reductions during
the financial year due to ex-post
implicit adjustments
None
None
None
None
None
None
Total amount of outstanding deferred
remuneration (cash bonus) was ` 4.62
crore.
Total amount of outstanding deferred
remuneration (cash bonus) was ` 3.13
crore.
` 1.45 crore
` 1.20 crore
` 54.75 crore (Fixed*)
` 12.90 crore (variable pay pertaining
to financial year ended March 31,
2016, in relation to employees where
there was no deferment of pay).
` 7.34 crore (variable pay pertaining to
financial year ended March 31, 2016,
in relation to employees where there
was a deferment of pay), of which
` 4.41 crore was non-deferred variable
pay and ` 2.93 crore was deferred
variable pay.
` 46.04 crore (Fixed*)
` 9.75 crore (variable pay pertaining to
financial year ended March 31, 2015,
in relation to employees where there
was no deferment of pay).
` 6.32 crore (variable pay pertaining to
financial year ended March 31, 2015,
in relation to employees where there
was a deferment of pay), of which
` 3.79 crore was non-deferred variable
pay and ` 2.53 crore was deferred
variable pay.
Number of stock options granted
during the financial year: Nil
Total amount of outstanding deferred
remuneration (cash bonus) was ` 4.62
crore.
Number of stock options granted
during the financial year: 40,86,600
Total amount of outstanding deferred
remuneration (cash bonus) was ` 3.13
crore.
Nil
Nil
Nil
Nil
* Excludes gratuity benefits, since the same is computed at Bank level.
HDFC Bank Limited Annual Report 2016-17
128
Schedules to the Financial Statements
For the year ended March 31, 2017
26 Segment reporting
Business segments
Business segments have been identified and reported taking into account, the target customer profile, the nature of products
and services, the differing risks and returns, the organisation structure, the internal business reporting system and the
guidelines prescribed by RBI. The Bank operates in the following segments:
a)
Treasury
The treasury segment primarily consists of net interest earnings from the Bank’s investment portfolio, money market
borrowing and lending, gains or losses on investment operations and on account of trading in foreign exchange and
derivative contracts.
b) Retail banking
The retail banking segment serves retail customers through a branch network and other delivery channels. This segment
raises deposits from customers and provides loans and other services to customers with the help of specialist product
groups. Exposures are classified under retail banking taking into account the status of the borrower (orientation criterion),
the nature of product, granularity of the exposure and the quantum thereof.
Revenues of the retail banking segment are derived from interest earned on retail loans, interest earned from other
segments for surplus funds placed with those segments, subvention received from dealers and manufacturers, fees
from services rendered, foreign exchange earnings on retail products etc. Expenses of this segment primarily comprise
interest expense on deposits, commission paid to retail assets sales agents, infrastructure and premises expenses
for operating the branch network and other delivery channels, personnel costs, other direct overheads and allocated
expenses of specialist product groups, processing units and support groups.
c) Wholesale banking
The wholesale banking segment provides loans, non-fund facilities and transaction services to large corporates, emerging
corporates, public sector units, government bodies, financial institutions and medium scale enterprises. Revenues of the
wholesale banking segment consist of interest earned on loans made to customers, interest / fees earned on the cash
float arising from transaction services, earnings from trade services and other non-fund facilities and also earnings from
foreign exchange and derivative transactions on behalf of customers. The principal expenses of the segment consist of
interest expense on funds borrowed from external sources and other internal segments, premises expenses, personnel
costs, other direct overheads and allocated expenses of delivery channels, specialist product groups, processing units
and support groups.
d) Other banking business
This segment includes income from para banking activities such as credit cards, debit cards, third party product
distribution, primary dealership business and the associated costs.
e) Unallocated
All items which are reckoned at an enterprise level are classified under this segment. This includes capital and reserves,
debt classified as Tier I or Tier II capital and other unallocable assets and liabilities such as deferred tax, prepaid expenses,
etc.
Segment revenue includes earnings from external customers plus earnings from funds transferred to other segments.
Segment result includes revenue less interest expense less operating expense and provisions, if any, for that segment.
Segment-wise income and expenses include certain allocations. Interest income is charged by a segment that provides
funding to another segment, based on yields benchmarked to an internally approved yield curve or at a certain agreed
transfer price rate. Transaction charges are levied by the retail banking segment to the wholesale banking segment for the
use by its customers of the retail banking segment’s branch network or other delivery channels. Such transaction costs
are determined on a cost plus basis. Segment capital employed represents the net assets in that segment.
HDFC Bank Limited Annual Report 2016-17
129
Schedules to the Financial Statements
For the year ended March 31, 2017
Geographic segments
The geographic segments of the Bank are categorised as domestic operations and foreign operations. Domestic operations
comprise branches in India and foreign operations comprise branches outside India.
Segment reporting for the year ended March 31, 2017 is given below:
(cid:0)
(cid:34)(cid:85)(cid:83)(cid:73)(cid:78)(cid:69)(cid:83)(cid:83)(cid:0)(cid:83)(cid:69)(cid:71)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:26)(cid:0)
Particulars
Sr.
No.
1
2
3
4
5
6
7
8
9
Segment revenue
Unallocated revenue
Less: Inter-segment revenue
Income from operations (1) + (2) - (3)
Segment results
Unallocated expenses
Income tax expense (including deferred tax)
Net profit (5) - (6) - (7)
Segment assets
10 Unallocated assets
11
12
Total assets (9) + (10)
Segment liabilities
13 Unallocated liabilities
14
Total liabilities (12) + (13)
Treasury
Retail
banking
Wholesale
banking
Other
banking
operations
(cid:8)` crore)
Total
21,581.79
66,147.50
31,332.24
9,046.69
128,108.22
-
46,505.77
81,602.45
1,308.38
8,432.16
10,473.77
3,365.33
23,579.64
1,440.55
7,589.43
14,549.66
264,536.14
295,828.92
270,969.09
27,205.88
858,540.03
5,300.18
863,840.21
73,857.49
525,792.90
156,129.90
3,142.74
758,923.03
15,454.80
774,377.83
15 Capital employed (9) - (12)
190,678.65 (229,963.98)
114,839.19
24,063.14
99,617.00
(Segment assets - Segment liabilities)
16
17
18
19
Unallocated (10) - (13)
Total (15) + (16)
Capital expenditure
Depreciation
(10,154.62)
89,462.38
32.85
10.15
846.56
150.30
97.69
1,127.40
659.66
90.78
72.53
833.12
(cid:0)
(cid:39)(cid:69)(cid:79)(cid:71)(cid:82)(cid:65)(cid:80)(cid:72)(cid:73)(cid:67)(cid:0)(cid:83)(cid:69)(cid:71)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:26)(cid:0)
(cid:0)
(cid:0)
(cid:0)
(cid:0)
(cid:0)
(cid:0)
(cid:0)
(cid:8)` crore)
Particulars
Revenue
Assets
Capital expenditure
Domestic
International
80,578.80
1,023.65
839,928.73
23,911.48
1,125.94
1.46
HDFC Bank Limited Annual Report 2016-17
130
Schedules to the Financial Statements
For the year ended March 31, 2017
Segment reporting for the year ended March 31, 2016 is given below:
(cid:0)
(cid:34)(cid:85)(cid:83)(cid:73)(cid:78)(cid:69)(cid:83)(cid:83)(cid:0)(cid:83)(cid:69)(cid:71)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:26)(cid:0)
(cid:0)
(cid:8)` crore)
Total
Particulars
Sr.
No.
1 Segment revenue
2 Unallocated revenue
3
4
Less: Inter-segment revenue
Income from operations (1) + (2) - (3)
Treasury
Retail
banking
Wholesale
banking
Other
banking
operations
18,264.88
59,252.34
27,162.39
7,554.42
112,234.03
-
41,260.86
70,973.17
5 Segment results
1,489.21
7,855.03
7,887.20
2,832.27
20,063.71
6 Unallocated expenses
7
Income tax expense (including deferred tax)
8 Net profit (5) - (6) - (7)
9 Segment assets
10 Unallocated assets
11 Total assets (9) + (10)
1,425.77
6,341.71
12,296.23
235,331.98 252,690.65
226,242.65
21,633.06
735,898.34
4,897.74
740,796.08
12 Segment liabilities
77,340.38
448,313.40
120,425.52
2,476.31
648,555.61
13 Unallocated liabilities
14 Total liabilities (12) + (13)
19,562.70
668,118.31
15 Capital employed (9) - (12)
157,991.60 (195,622.75)
105,817.13
19,156.75
87,342.73
(Segment assets - Segment liabilities)
16 Unallocated (10) - (13)
17 Total (15) + (16)
18 Capital expenditure
19 Depreciation
(cid:0)
(cid:39)(cid:69)(cid:79)(cid:71)(cid:82)(cid:65)(cid:80)(cid:72)(cid:73)(cid:67)(cid:0)(cid:83)(cid:69)(cid:71)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:26)(cid:0)
Particulars
Revenue
Assets
Capital expenditure
5.09
6.16
729.46
134.59
540.47
101.67
69.70
57.54
(14,664.96)
72,677.77
938.84
705.84
(cid:8)` crore)
Domestic
International
69,816.77
1,156.40
704,839.20
35,956.88
937.95
0.89
HDFC Bank Limited Annual Report 2016-17
131
Schedules to the Financial Statements
For the year ended March 31, 2017
27 Liquidity coverage ratio
Quantitative information on Liquidity Coverage Ratio (LCR) for year ended March 31, 2017 is given below:
(` crore)
(cid:0)(cid:49)(cid:85)(cid:65)(cid:82)(cid:84)(cid:69)(cid:82)(cid:0)(cid:69)(cid:78)(cid:68)(cid:69)(cid:68)
March 31, 2017
(cid:49)(cid:85)(cid:65)(cid:82)(cid:84)(cid:69)(cid:82)(cid:0)(cid:69)(cid:78)(cid:68)(cid:69)(cid:68)
December 31, 2016
(cid:49)(cid:85)(cid:65)(cid:82)(cid:84)(cid:69)(cid:82)(cid:0)(cid:69)(cid:78)(cid:68)(cid:69)(cid:68)
September 30, 2016
(cid:49)(cid:85)(cid:65)(cid:82)(cid:84)(cid:69)(cid:82)(cid:0)(cid:69)(cid:78)(cid:68)(cid:69)(cid:68)
June 30, 2016
Particulars
Total
unweighted
value
(average)*
Total
weighted
value
(average)*
Total
unweighted
value
(average)*
Total
weighted
value
(average)*
Total
unweighted
value
(average)*
Total
weighted
value
(average)*
Total
unweighted
value
(average)*
Total
weighted
value
(average)*
(cid:40)(cid:73)(cid:71)(cid:72)(cid:0)(cid:49)(cid:85)(cid:65)(cid:76)(cid:73)(cid:84)(cid:89)(cid:0)(cid:44)(cid:73)(cid:81)(cid:85)(cid:73)(cid:68)(cid:0)(cid:33)(cid:83)(cid:83)(cid:69)(cid:84)(cid:83)
1 Total High Quality
Liquid Assets
(HQLA)
Cash Outflows
2 Retail deposits and
deposits from small
business customers,
of which:
137,711.74
149,957.35
128,702.05
109,539.23
417,330.77
38,198.75
415,071.84
37,863.08
373,552.53
34,159.65
359,804.34
32,862.93
(i) Stable deposits
70,686.63
3,534.33
72,882.13
3,644.11
63,912.08
3,195.60
62,350.08
3,117.50
(ii) Less stable deposits
346,644.14
34,664.42
342,189.71
34,218.97
309,640.45
30,964.05
297,454.26
29,745.43
3 Unsecured
184,624.84
91,871.70
184,555.12
93,303.55
173,841.76
87,591.52
157,036.26
80,630.67
wholesale funding,
of which:
(i) Operational deposits
(all counterparties)
(ii) Non-operational
deposits (all
counterparties)
27,567.30
6,814.73
26,530.40
6,556.63
24,314.59
6,008.20
21,290.21
5,262.08
147,686.64
75,686.06
148,806.54
77,528.74
142,196.70
74,252.85
130,159.94
69,782.48
(iii) Unsecured debt
9,370.90
9,370.91
9,218.18
9,218.18
7,330.47
7,330.47
5,586.11
5,586.11
4 Secured wholesale
funding
161.11
-
2,150.00
-
5 Additional
85,739.97
54,644.47
94,703.09
61,891.19
90,930.14
57,181.27
93,163.68
57,797.70
requirements, of
which:
(i) Outflows related to
44,943.06
44,943.06
51,903.36
51,903.36
47,316.91
47,316.91
46,907.18
46,907.18
derivative exposures
and other collateral
requirement
(ii) Outflows related to
loss of funding on
debt products
-
-
-
-
-
-
-
-
(iii) Credit and liquidity
40,796.91
9,701.41
42,799.73
9,987.83
43,613.23
9,864.36
46,256.50
10,890.52
facilities
6 Other contractual
funding obligation
24,420.02
24,420.02
20,914.62
20,914.62
17,944.34
17,944.34
15,940.48
15,940.48
7 Other contingent
52,591.16
2,596.66
50,409.16
1,512.27
49,183.26
1,475.50
47,915.37
1,437.46
funding obligations
8 Total Cash
Outflows
211,892.71
215,484.71
200,502.28
188,669.24
HDFC Bank Limited Annual Report 2016-17
132
Schedules to the Financial Statements
For the year ended March 31, 2017
Quantitative information on Liquidity Coverage Ratio (LCR) for year ended March 31, 2017 is given below : (contd.)
(` crore)
(cid:0)(cid:49)(cid:85)(cid:65)(cid:82)(cid:84)(cid:69)(cid:82)(cid:0)(cid:69)(cid:78)(cid:68)(cid:69)(cid:68)
March 31, 2017
(cid:49)(cid:85)(cid:65)(cid:82)(cid:84)(cid:69)(cid:82)(cid:0)(cid:69)(cid:78)(cid:68)(cid:69)(cid:68)
December 31, 2016
(cid:49)(cid:85)(cid:65)(cid:82)(cid:84)(cid:69)(cid:82)(cid:0)(cid:69)(cid:78)(cid:68)(cid:69)(cid:68)
September 30, 2016
(cid:49)(cid:85)(cid:65)(cid:82)(cid:84)(cid:69)(cid:82)(cid:0)(cid:69)(cid:78)(cid:68)(cid:69)(cid:68)
June 30, 2016
Particulars
Total
unweighted
value
(average)*
Total
weighted
value
(average)*
Total
unweighted
value
(average)*
Total
weighted
value
(average)*
Total
unweighted
value
(average)*
Total
weighted
value
(average)*
Total
unweighted
value
(average)*
Total
weighted
value
(average)*
Cash Inflows
9 Secured lending
(e.g. reverse repo)
-
-
1,333.33
-
5,033.33
-
1,355.17
3.28
10 Inflows from
39,276.52
21,397.60
36,889.88
19,466.20
35,305.32
18,815.99
33,897.47
18,070.68
fully performing
exposures
11 Other cash inflows
58,695.96
53,161.71
65,066.62
59,505.52
66,471.65
61,083.74
62,858.78
57,290.61
12 Total Cash Inflows
97,972.48
74,559.31
103,289.83
78,971.72
106,810.30
79,899.73
98,111.42
75,364.57
13 (cid:52)(cid:47)(cid:52)(cid:33)(cid:44)(cid:0)(cid:40)(cid:49)(cid:44)(cid:33)
14 Total Net Cash
Outflows
Total
Adjusted
Value
137,711.74
137,334.40
Total
Adjusted
Value
149,957.35
136,512.99
Total
Adjusted
Value
128,702.05
120,602.55
Total
Adjusted
Value
109,539.23
113,304.67
15 Liquidity Coverage
100.28%
109.85%
106.72%
96.68%
Ratio (%)
* In accordance with RBI guidelines, average weighted and unweighted amounts are calculated taking simple daily average for the quarter
ended March 31, 2017 and simple average for the months in respective previous quarters in the financial year ended March 31, 2017.
(cid:49)(cid:85)(cid:65)(cid:76)(cid:73)(cid:84)(cid:65)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:68)(cid:73)(cid:83)(cid:67)(cid:76)(cid:79)(cid:83)(cid:85)(cid:82)(cid:69)(cid:0)(cid:79)(cid:78)(cid:0)(cid:44)(cid:35)(cid:50)
The Liquidity Coverage Ratio (LCR) is a global minimum standard for bank liquidity. It aims to ensure that a bank has an adequate
stock of unencumbered High Quality Liquid Assets (HQLA) that can be converted into cash easily and immediately to meet its
liquidity needs for a 30 calendar day liquidity stress scenario.
The LCR is calculated by dividing the amount of High Quality Liquid unencumbered Assets (HQLA) by the estimated net outflows
over a stressed 30 calendar day period. The net cash outflows are calculated by applying RBI prescribed outflow factors to the
various categories of liabilities (deposits, unsecured and secured wholesale borrowings), as well as to undrawn commitments and
derivative-related exposures, partially offset by inflows from assets maturing within 30 days. The average LCR for the quarter ended
March 31, 2017 was at 100.28%, above the RBI prescribed minimum requirement of 80%. The average HQLA was ` 137,711.74
crore of which government securities constituted about 75%. The outflows related to derivative exposures (net of cash inflows)
/ collateral requirements and undrawn commitments constituted about 0.3% and 5% respectively of average cash outflow of
` 211,892.70 crore. Average inflows from assets were ` 74,559.31 crore.
Average LCR compared to previous quarter ended December 31, 2016 has remained relatively stable with a slight decrease in the
average HQLA position mainly on account of decrease in unencumbered SLR securities.
Average LCR has been continuously increasing compared to that in the previous year ended March 31, 2016 primarily driven by
increase in the average HQLA position on account of increase in liquid investments as well as additional FALLCR (1% of NDTL)
permitted by RBI to be considered as HQLA from July 2016.
A strong and diversified liabilities profile has been at the helm on Bank’s growth strategy. The Bank has consistently maintained a
robust funding profile with a significant portion of funding through deposits. As at March 31, 2017 the top 20 depositors comprised
around 5% of total deposits.
HDFC Bank Limited Annual Report 2016-17
133
Schedules to the Financial Statements
For the year ended March 31, 2017
Quantitative information on Liquidity Coverage Ratio (LCR) for year ended March 31, 2016 is given below:
(` crore)
(cid:0)(cid:49)(cid:85)(cid:65)(cid:82)(cid:84)(cid:69)(cid:82)(cid:0)(cid:69)(cid:78)(cid:68)(cid:69)(cid:68)
March 31, 2016
(cid:49)(cid:85)(cid:65)(cid:82)(cid:84)(cid:69)(cid:82)(cid:0)(cid:69)(cid:78)(cid:68)(cid:69)(cid:68)
December 31, 2015
(cid:49)(cid:85)(cid:65)(cid:82)(cid:84)(cid:69)(cid:82)(cid:0)(cid:69)(cid:78)(cid:68)(cid:69)(cid:68)
September 30, 2015
(cid:49)(cid:85)(cid:65)(cid:82)(cid:84)(cid:69)(cid:82)(cid:0)(cid:69)(cid:78)(cid:68)(cid:69)(cid:68)
June 30, 2015
Particulars
Total
unweighted
value
(average)*
Total
weighted
value
(average)*
Total
unweighted
value
(average)*
Total
weighted
value
(average)*
Total
unweighted
value
(average)*
Total
weighted
value
(average)*
Total
unweighted
value
(average)*
Total
weighted
value
(average)*
(cid:40)(cid:73)(cid:71)(cid:72)(cid:0)(cid:49)(cid:85)(cid:65)(cid:76)(cid:73)(cid:84)(cid:89)(cid:0)(cid:44)(cid:73)(cid:81)(cid:85)(cid:73)(cid:68)(cid:0)(cid:33)(cid:83)(cid:83)(cid:69)(cid:84)(cid:83)
1 Total High Quality Liquid
Assets (HQLA)
Cash Outflows
2 Retail deposits and
deposits from small
business customers, of
which:
87,390.70
82,923.58
85,380.05
84,103.02
345,295.41
31,521.71
336,581.15
30,736.15
327,063.80
29,851.26
303,371.26
27,605.03
(i) Stable deposits
60,156.65
3,007.83
58,439.26
2,921.96
57,102.27
2,855.11
54,641.85
2,732.09
(ii) Less stable deposits
285,138.76
28,513.88
278,141.89
27,814.19
269,961.53
26,996.15
248,729.41
24,872.94
3 Unsecured wholesale
funding, of which:
(i) Operational deposits (all
counterparties)
(ii) Non-operational deposits
(all counterparties)
152,346.46
77,310.79
150,761.23
78,144.79
143,971.45
76,153.26
132,334.88
67,639.08
25,513.50
6,310.16
21,315.02
5,260.88
20,460.39
5,067.45
21,646.72
5,345.21
120,422.61
64,590.28
120,973.12
64,410.82
117,518.89
65,093.64
105,628.67
57,234.38
(iii) Unsecured debt
6,410.35
6,410.35
8,473.09
8,473.09
5,992.17
5,992.17
5,059.49
5,059.49
4 Secured wholesale funding
-
-
-
-
5 Additional requirements,
of which:
(i) Outflows related to
derivative exposures
and other collateral
requirement
(ii) Outflows related to loss of
funding on debt products
(iii) Credit and liquidity
facilities
6 Other contractual funding
obligation
7 Other contingent funding
obligations
97,373.97
61,003.46
104,680.45
57,231.91
167,835.96
111,671.11
185,435.72
129,455.26
49,752.81
49,752.81
46,028.74
46,028.74
101,182.99
101,182.99
118,889.35
118,889.35
-
-
-
-
-
-
-
-
47,621.16
11,250.65
58,651.71
11,203.17
66,652.97
10,488.12
66,546.37
10,565.91
14,349.84
14,349.84
12,831.35
12,831.35
13,763.63
13,763.63
14,798.60
14,798.60
46,936.27
1,724.24
45,128.25
2,256.41
42,615.71
2,130.79
43,401.88
2,170.09
8 Total Cash Outflows
185,910.04
181,200.61
233,570.05
241,668.06
HDFC Bank Limited Annual Report 2016-17
134
Schedules to the Financial Statements
For the year ended March 31, 2017
Quantitative information on Liquidity Coverage Ratio (LCR) for year ended March 31, 2016 is given below: (contd.)
(` crore)
(cid:0)(cid:49)(cid:85)(cid:65)(cid:82)(cid:84)(cid:69)(cid:82)(cid:0)(cid:69)(cid:78)(cid:68)(cid:69)(cid:68)
March 31, 2016
(cid:49)(cid:85)(cid:65)(cid:82)(cid:84)(cid:69)(cid:82)(cid:0)(cid:69)(cid:78)(cid:68)(cid:69)(cid:68)
December 31, 2015
(cid:49)(cid:85)(cid:65)(cid:82)(cid:84)(cid:69)(cid:82)(cid:0)(cid:69)(cid:78)(cid:68)(cid:69)(cid:68)
September 30, 2015
(cid:49)(cid:85)(cid:65)(cid:82)(cid:84)(cid:69)(cid:82)(cid:0)(cid:69)(cid:78)(cid:68)(cid:69)(cid:68)
June 30, 2015
Particulars
Total
unweighted
value
(average)*
Total
weighted
value
(average)*
Total
unweighted
value
(average)*
Total
weighted
value
(average)*
Total
unweighted
value
(average)*
Total
weighted
value
(average)*
Total
unweighted
value
(average)*
Total
weighted
value
(average)*
Cash Inflows
9 Secured lending (e.g.
reverse repo)
10 Inflows from fully
performing exposures
166.67
-
39.05
5.86
5,333.33
-
3,212.00
-
32,497.40
17,346.90
29,098.80
15,554.48
28,536.42
15,502.29
25,435.62
13,600.86
11 Other cash inflows
65,636.78
60,149.17
58,287.62
52,863.62
116,296.73
110,836.09
134,027.18
129,022.10
12 Total Cash Inflows
98,300.85
77,496.07
87,425.47
68,423.96
150,166.48
126,338.38
162,674.80
142,622.96
Total Adjusted
Value
Total Adjusted
Value
Total Adjusted
Value
Total Adjusted
Value
13 (cid:52)(cid:47)(cid:52)(cid:33)(cid:44)(cid:0)(cid:40)(cid:49)(cid:44)(cid:33)
14 Total Net Cash Outflows
15 Liquidity Coverage Ratio (%)
87,390.70
108,413.96
80.61%
82,923.58
112,776.65
73.53%
85,380.05
107,231.67
79.62%
84,103.02
99,045.10
84.91%
* The average weighted and unweighted amounts are calculated taking simple average for the months in the respective quarters
Qualitative disclosure on LCR
The Liquidity Coverage Ratio (LCR) is a global minimum standard for bank liquidity. It aims to ensure that a bank has an adequate
stock of unencumbered High-Quality Liquid Assets (HQLA) that can be converted into cash easily and immediately to meet its
liquidity needs for a 30 calendar day liquidity stress scenario.
The LCR is calculated by dividing the amount of High Quality Liquid unencumbered Assets (HQLA) by the estimated net outflows
over a stressed 30 calendar day period. The net cash outflows are calculated by applying RBI prescribed outflow factors to the
various categories of liabilities (deposits, unsecured and secured wholesale borrowings), as well as to undrawn commitments and
derivative-related exposures, partially offset by inflows from assets maturing within 30 days. The average LCR was at 80.61% for the
quarter ended March 31, 2016. The average HQLA was ` 87,390.70 crore of which government securities constituted about 73%.
The outflows related to derivative exposures (net of cash inflows) / collateral requirements and undrawn commitments constituted
about 2% and 6% respectively of average cash outflow of ` 185,910.04 crore. Average inflows from assets were ` 77,496.07 crore.
Average LCR for the quarter ended March 31, 2016 was 80.61%, which was above the RBI prescribed minimum requirement of 70%.
Major reasons for movement in average LCR as compared to the previous quarter ended December 31, 2015 are as follows:
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:40)(cid:49)(cid:44)(cid:33)(cid:0) (cid:70)(cid:79)(cid:82)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:81)(cid:85)(cid:65)(cid:82)(cid:84)(cid:69)(cid:82)(cid:0) (cid:69)(cid:78)(cid:68)(cid:69)(cid:68)(cid:0) (cid:45)(cid:65)(cid:82)(cid:67)(cid:72)(cid:0) (cid:19)(cid:17)(cid:12)(cid:0) (cid:18)(cid:16)(cid:17)(cid:22)(cid:0) (cid:73)(cid:78)(cid:67)(cid:82)(cid:69)(cid:65)(cid:83)(cid:69)(cid:68)(cid:0) (cid:65)(cid:83)(cid:0) (cid:65)(cid:68)(cid:68)(cid:73)(cid:84)(cid:73)(cid:79)(cid:78)(cid:65)(cid:76)(cid:0) (cid:38)(cid:33)(cid:44)(cid:44)(cid:35)(cid:50)(cid:0) (cid:8)(cid:19)(cid:5)(cid:0) (cid:79)(cid:70)(cid:0) (cid:46)(cid:36)(cid:52)(cid:44)(cid:9)(cid:0) (cid:87)(cid:65)(cid:83)(cid:0) (cid:80)(cid:69)(cid:82)(cid:77)(cid:73)(cid:84)(cid:84)(cid:69)(cid:68)(cid:0) (cid:66)(cid:89)(cid:0) (cid:50)(cid:34)(cid:41)(cid:0) (cid:84)(cid:79)(cid:0) (cid:66)(cid:69)(cid:0)
considered as HQLA from February 2016.
(cid:55)(cid:73)(cid:84)(cid:72)(cid:73)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:85)(cid:78)(cid:83)(cid:69)(cid:67)(cid:85)(cid:82)(cid:69)(cid:68)(cid:0)(cid:87)(cid:72)(cid:79)(cid:76)(cid:69)(cid:83)(cid:65)(cid:76)(cid:69)(cid:0)(cid:70)(cid:85)(cid:78)(cid:68)(cid:73)(cid:78)(cid:71)(cid:12)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:80)(cid:82)(cid:79)(cid:80)(cid:79)(cid:82)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:79)(cid:70)(cid:0)(cid:85)(cid:78)(cid:83)(cid:69)(cid:67)(cid:85)(cid:82)(cid:69)(cid:68)(cid:0)(cid:68)(cid:69)(cid:66)(cid:84)(cid:0)(cid:87)(cid:72)(cid:73)(cid:67)(cid:72)(cid:0)(cid:65)(cid:84)(cid:84)(cid:82)(cid:65)(cid:67)(cid:84)(cid:83)(cid:0)(cid:72)(cid:73)(cid:71)(cid:72)(cid:69)(cid:82)(cid:0)(cid:79)(cid:85)(cid:84)(cid:109)(cid:79)(cid:87)(cid:0)(cid:70)(cid:65)(cid:67)(cid:84)(cid:79)(cid:82)(cid:83)(cid:0)(cid:68)(cid:69)(cid:67)(cid:82)(cid:69)(cid:65)(cid:83)(cid:69)(cid:68)(cid:14)
(cid:55)(cid:73)(cid:84)(cid:72)(cid:73)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:82)(cid:69)(cid:84)(cid:65)(cid:73)(cid:76)(cid:0)(cid:68)(cid:69)(cid:80)(cid:79)(cid:83)(cid:73)(cid:84)(cid:83)(cid:12)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:80)(cid:82)(cid:79)(cid:80)(cid:79)(cid:82)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:79)(cid:70)(cid:0)(cid:76)(cid:69)(cid:83)(cid:83)(cid:0)(cid:83)(cid:84)(cid:65)(cid:66)(cid:76)(cid:69)(cid:0)(cid:70)(cid:85)(cid:78)(cid:68)(cid:73)(cid:78)(cid:71)(cid:0)(cid:87)(cid:72)(cid:73)(cid:67)(cid:72)(cid:0)(cid:65)(cid:84)(cid:84)(cid:82)(cid:65)(cid:67)(cid:84)(cid:0)(cid:72)(cid:73)(cid:71)(cid:72)(cid:69)(cid:82)(cid:0)(cid:79)(cid:85)(cid:84)(cid:109)(cid:79)(cid:87)(cid:0)(cid:70)(cid:65)(cid:67)(cid:84)(cid:79)(cid:82)(cid:83)(cid:0)(cid:0)(cid:73)(cid:78)(cid:67)(cid:82)(cid:69)(cid:65)(cid:83)(cid:69)(cid:68)(cid:14)
(cid:41)(cid:78)(cid:109)(cid:79)(cid:87)(cid:83)(cid:0)(cid:70)(cid:82)(cid:79)(cid:77)(cid:0)(cid:80)(cid:69)(cid:82)(cid:70)(cid:79)(cid:82)(cid:77)(cid:73)(cid:78)(cid:71)(cid:0)(cid:65)(cid:68)(cid:86)(cid:65)(cid:78)(cid:67)(cid:69)(cid:83)(cid:0)(cid:73)(cid:78)(cid:67)(cid:82)(cid:69)(cid:65)(cid:83)(cid:69)(cid:68)(cid:14)
(cid:47)(cid:84)(cid:72)(cid:69)(cid:82)(cid:0)(cid:67)(cid:65)(cid:83)(cid:72)(cid:0)(cid:73)(cid:78)(cid:109)(cid:79)(cid:87)(cid:83)(cid:0)(cid:73)(cid:78)(cid:67)(cid:82)(cid:69)(cid:65)(cid:83)(cid:69)(cid:68)(cid:0)(cid:77)(cid:65)(cid:73)(cid:78)(cid:76)(cid:89)(cid:0)(cid:79)(cid:78)(cid:0)(cid:65)(cid:67)(cid:67)(cid:79)(cid:85)(cid:78)(cid:84)(cid:0)(cid:79)(cid:70)(cid:0)(cid:73)(cid:78)(cid:67)(cid:82)(cid:69)(cid:65)(cid:83)(cid:69)(cid:0)(cid:73)(cid:78)(cid:0)(cid:73)(cid:78)(cid:109)(cid:79)(cid:87)(cid:83)(cid:0)(cid:70)(cid:82)(cid:79)(cid:77)(cid:0)(cid:83)(cid:72)(cid:79)(cid:82)(cid:84)(cid:0)(cid:84)(cid:69)(cid:82)(cid:77)(cid:0)(cid:76)(cid:69)(cid:78)(cid:68)(cid:73)(cid:78)(cid:71)(cid:14)
HDFC Bank Limited Annual Report 2016-17
135
Schedules to the Financial Statements
For the year ended March 31, 2017
A strong and diversified liabilities profile has been at the helm on Bank’s growth strategy. The Bank has consistently maintained a
robust funding profile with a significant portion of funding through deposits. As at March 31, 2016 the top 20 depositors comprised
around 5% of total deposits.
Note: CCIL guaranteed deals were netted for computing foreign exchange & derivative values with effect from quarter ended
December 31, 2015. Hence, the numbers for serial number 5(i) and 11 are not strictly comparable with those of the previous quarters.
28 Related party disclosures
As per AS-18, Related Party Disclosure, the Bank’s related parties are disclosed below:
Promoter
Housing Development Finance Corporation Limited
Subsidiaries
HDFC Securities Limited
HDB Financial Services Limited
Associates
International Asset Reconstruction Company Private Limited
Atlas Documentary Facilitators Company Private Limited*
HBL Global Private Limited*
*Atlas Documentary Facilitators Company Private Limited and HBL Global Private Limited amalgamated with HDB
Financial Services Limited pursuant to the approval of the Honourable High courts of Gujarat and Bombay with effect from
December 1, 2016. The appointed date of the merger as per the scheme of amalgamation was April 1, 2014. Accordingly,
transactions entered into by the Bank with these entities during the financial year ended March 31, 2017 have been disclosed
under transactions with HDB Financial Services Limited.
Welfare trust of the Bank
HDB Employees Welfare Trust
Key management personnel
Aditya Puri, Managing Director
Paresh Sukthankar, Deputy Managing Director
Kaizad Bharucha, Executive Director
Related parties to key management personnel
Salisbury Investments Private Limited, Tanaksh Innovations Private Limited, Akuri by Puri, Anita Puri, Amit Puri, Amrita Puri,
Adishwar Puri, Aarti Sood, Sangeeta Sukthankar, Dattatraya Sukthankar, Shubhada Sukthankar, Akshay Sukthankar, Ankita
Sukthankar, Madhavi Lad, Havovi Bharucha, Huzaan Bharucha, Danesh Bharucha, Daraius Bharucha.
In accordance with paragraph 5 of AS-18, the Bank has not disclosed certain transactions with relatives of key management
personnel as they are in the nature of banker-customer relationship.
The significant transactions between the Bank and related parties for year ended March 31, 2017 are given below. A specific
related party transaction is disclosed as a significant transaction wherever it exceeds 10% of all related party transactions in
that category:
HDFC Bank Limited Annual Report 2016-17
136
Schedules to the Financial Statements
For the year ended March 31, 2017
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:115)(cid:0)
Interest paid: HDFC Securities Limited ` 25.03 crore (previous year: ` 18.96 crore); HDB Financial Services Limited
` 7.17 crore (previous year: ` 4.52 crore); Housing Development Finance Corporation Limited ` 5.57 crore (previous year:
` 7.25 crore).
(cid:41)(cid:78)(cid:84)(cid:69)(cid:82)(cid:69)(cid:83)(cid:84)(cid:0)(cid:82)(cid:69)(cid:67)(cid:69)(cid:73)(cid:86)(cid:69)(cid:68)(cid:26)(cid:0)(cid:40)(cid:36)(cid:34)(cid:0)(cid:38)(cid:73)(cid:78)(cid:65)(cid:78)(cid:67)(cid:73)(cid:65)(cid:76)(cid:0)(cid:51)(cid:69)(cid:82)(cid:86)(cid:73)(cid:67)(cid:69)(cid:83)(cid:0)(cid:44)(cid:73)(cid:77)(cid:73)(cid:84)(cid:69)(cid:68)(cid:0)` 139.21 crore (previous year: ` 100.06 crore).
(cid:50)(cid:69)(cid:78)(cid:68)(cid:69)(cid:82)(cid:73)(cid:78)(cid:71)(cid:0)(cid:79)(cid:70)(cid:0)(cid:83)(cid:69)(cid:82)(cid:86)(cid:73)(cid:67)(cid:69)(cid:83)(cid:26)(cid:0)(cid:40)(cid:79)(cid:85)(cid:83)(cid:73)(cid:78)(cid:71)(cid:0)(cid:36)(cid:69)(cid:86)(cid:69)(cid:76)(cid:79)(cid:80)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:38)(cid:73)(cid:78)(cid:65)(cid:78)(cid:67)(cid:69)(cid:0)(cid:35)(cid:79)(cid:82)(cid:80)(cid:79)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:44)(cid:73)(cid:77)(cid:73)(cid:84)(cid:69)(cid:68)(cid:0)` 207.45 crore (previous year: ` 178.83 crore).
(cid:50)(cid:69)(cid:67)(cid:69)(cid:73)(cid:86)(cid:73)(cid:78)(cid:71)(cid:0)(cid:79)(cid:70)(cid:0)(cid:83)(cid:69)(cid:82)(cid:86)(cid:73)(cid:67)(cid:69)(cid:83)(cid:26)(cid:0)(cid:40)(cid:36)(cid:34)(cid:0)(cid:38)(cid:73)(cid:78)(cid:65)(cid:78)(cid:67)(cid:73)(cid:65)(cid:76)(cid:0)(cid:51)(cid:69)(cid:82)(cid:86)(cid:73)(cid:67)(cid:69)(cid:83)(cid:0)(cid:44)(cid:73)(cid:77)(cid:73)(cid:84)(cid:69)(cid:68)(cid:0)` 1,453.54 crore (previous year 79.87 crore); Housing Development
Finance Corporation Limited ` 343.10 crore (previous year: ` 247.21 crore).
(cid:36)(cid:73)(cid:86)(cid:73)(cid:68)(cid:69)(cid:78)(cid:68)(cid:0)(cid:80)(cid:65)(cid:73)(cid:68)(cid:26)(cid:0)(cid:40)(cid:79)(cid:85)(cid:83)(cid:73)(cid:78)(cid:71)(cid:0)(cid:36)(cid:69)(cid:86)(cid:69)(cid:76)(cid:79)(cid:80)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:38)(cid:73)(cid:78)(cid:65)(cid:78)(cid:67)(cid:69)(cid:0)(cid:35)(cid:79)(cid:82)(cid:80)(cid:79)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:44)(cid:73)(cid:77)(cid:73)(cid:84)(cid:69)(cid:68)(cid:0)` 373.55 crore (previous year: ` 314.57 crore).
(cid:36)(cid:73)(cid:86)(cid:73)(cid:68)(cid:69)(cid:78)(cid:68)(cid:0) (cid:82)(cid:69)(cid:67)(cid:69)(cid:73)(cid:86)(cid:69)(cid:68)(cid:26)(cid:0) (cid:40)(cid:36)(cid:34)(cid:0) (cid:38)(cid:73)(cid:78)(cid:65)(cid:78)(cid:67)(cid:73)(cid:65)(cid:76)(cid:0) (cid:51)(cid:69)(cid:82)(cid:86)(cid:73)(cid:67)(cid:69)(cid:83)(cid:0) (cid:44)(cid:73)(cid:77)(cid:73)(cid:84)(cid:69)(cid:68)(cid:0) ` 102.22 crore (previous year: ` 88.40 crore); HDFC Securities
Limited ` 60.64 crore (previous year: ` 60.64 crore).
(cid:48)(cid:85)(cid:82)(cid:67)(cid:72)(cid:65)(cid:83)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0)(cid:108)(cid:88)(cid:69)(cid:68)(cid:0)(cid:65)(cid:83)(cid:83)(cid:69)(cid:84)(cid:83)(cid:26)(cid:0)(cid:40)(cid:36)(cid:34)(cid:0)(cid:38)(cid:73)(cid:78)(cid:65)(cid:78)(cid:67)(cid:73)(cid:65)(cid:76)(cid:0)(cid:51)(cid:69)(cid:82)(cid:86)(cid:73)(cid:67)(cid:69)(cid:83)(cid:0)(cid:44)(cid:73)(cid:77)(cid:73)(cid:84)(cid:69)(cid:68)(cid:0)` 0.23 crore (previous year: Nil).
(cid:115)(cid:0)
The Bank’s related party balances and transactions for the year ended March 31, 2017 are summarised as follows: (` crore)
(cid:41)(cid:84)(cid:69)(cid:77)(cid:83)(cid:0)(cid:15)(cid:0)(cid:50)(cid:69)(cid:76)(cid:65)(cid:84)(cid:69)(cid:68)(cid:0)(cid:80)(cid:65)(cid:82)(cid:84)(cid:89)
Promoter
Subsidiaries Associates
Key management
personnel
Total
Deposits taken
Deposits placed
Advances given
Fixed assets purchased from
Fixed assets sold to
Interest paid to
Interest received from
Income from services rendered to
Expenses for receiving services from
Equity investments
Other investments
Dividend paid to
Dividend received from
Receivable from
Payable to
Guarantees given
Remuneration paid
Loans purchased from
2,500.25
(2,500.25)
0.15
(0.15)
-
-
-
-
5.57
-
207.45
343.10
-
-
-
(126.48)
373.55
-
23.16
(23.16)
33.67
(33.67)
0.12
(0.14)
-
13,845.65
597.93
(816.14)
10.62
(10.65)
1,180.15
(1,588.18)
0.23
-
32.20
139.21
28.37
1,456.69
3,812.15
(3,812.15)
675.00
(675.00)
-
162.86
2.05
(2.38)
103.25
(137.18)
-
(0.05)
-
-
25.05
(25.05)
-
-
0.05
(0.05)
-
-
0.51
-
-
-
31.17
(31.17)
-
-
-
-
-
-
-
-
-
-
-
-
13.61
(60.14)
2.51
(2.51)
3.44
(3.44)
-
-
1.02
0.03
-
0.76
-
-
-
-
4.49
-
-
-
-
-
-
-
20.79
-
3,136.84
(3,401.58)
13.28
(13.31)
1,183.64
(1,591.67)
0.23
-
39.30
139.24
235.82
1,800.55
3,843.32
(3,843.32)
675.00
(801.48)
378.04
162.86
25.21
(25.54)
136.92
(170.85)
0.12
(0.19)
20.79
13,845.65
Figures in bracket indicate maximum balance outstanding during the year based on comparison of the total outstanding
balances at each quarter-end.
Remuneration paid excludes value of employee stock options exercised during the year.
HDFC Bank Limited Annual Report 2016-17
137
Schedules to the Financial Statements
For the year ended March 31, 2017
The Bank being an authorised dealer, deals in foreign exchange and derivative transactions with parties which include its
promoter. The foreign exchange and derivative transactions are undertaken in line with the RBI guidelines. The notional
principal amount of foreign exchange and derivative contracts transacted with the promoter that were outstanding as at
March 31, 2017 is ` 665.77 crore (previous year: ` 491.21 crore). The contingent credit exposure pertaining to these contracts
computed in line with the extant RBI guidelines on exposure norms is ` 40.18 crore (previous year: ` 18.90 crore).
During the year ended March 31, 2017, the Bank purchased debt securities from Housing Development Finance Corporation
Limited ` 2,320.00 crore (previous year: ` 1,415.00 crore) and from HDB Financial Services Limited ` 1,427.00 crore (previous
year: ` 322.00 crore) issued by these entities.
During the year ended March 31, 2017, the Bank has made no investment (previous year: ` 1,748.66 crore) in pass through
certificates in respect of assets securitised out by HDB Financial Services Limited.
During the year ended March 31, 2017, the Bank paid rent of ` 0.66 crore (previous year: ` 0.66 crore) to parties related to
the Bank’s key management personnel in relation to residential accommodation. As at March 31, 2017, the security deposit
outstanding was ` 3.50 crore (previous year: ` 3.50 crore).
The deposit outstanding from HDB Employees Welfare Trust as at March 31, 2017 was ` 48.52 crore (previous year:
` 46.46 crore). The Bank also paid interest on deposit from HDB Employees Welfare Trust aggregating to ` 3.68 crore (previous
year: ` 3.88 crore).
The Bank’s related party balances and transactions for the year ended March 31, 2016 are summarised as follows:
(cid:41)(cid:84)(cid:69)(cid:77)(cid:83)(cid:0)(cid:15)(cid:0)(cid:50)(cid:69)(cid:76)(cid:65)(cid:84)(cid:69)(cid:68)(cid:0)(cid:80)(cid:65)(cid:82)(cid:84)(cid:89)
Promoter
Subsidiaries
Associates
Deposits taken
Deposits placed
Advances given
Fixed assets purchased from
Fixed assets sold to
Interest paid to
Interest received from
Income from services rendered to
Expenses for receiving services from
Equity investments
Dividend paid to
Dividend received from
Receivable from
Payable to
Guarantees given
Remuneration paid
Loans purchased from
4,405.56
(4,405.56)
0.15
(0.15)
-
-
-
-
7.25
-
178.83
247.21
-
-
314.57
-
16.30
(28.42)
26.93
(26.93)
0.14
(0.14)
-
12,773.37
509.86
(811.10)
10.51
(10.51)
1,590.12
(1,590.12)
0.12
-
23.48
100.06
24.12
81.77
2,751.77
(2,751.77)
-
149.04
0.08
(1.81)
21.57
(25.65)
0.05
(0.05)
-
-
100.02
(100.02)
0.10
(7.10)
0.22
(36.95)
-
-
3.89
2.27
6.07
1,173.64
31.19
(31.19)
-
0.01
-
(0.38)
39.85
(102.70)
-
-
-
-
(` crore)
Key management
personnel
Total
10.12
(11.50)
2.51
(2.51)
0.95
(0.99)
-
-
0.84
0.02
-
0.76
-
-
3.37
-
-
-
-
-
-
-
18.34
-
5,025.56
(5,328.18)
13.27
(20.27)
1,591.29
(1,628.06)
0.12
-
35.46
102.35
209.02
1,503.38
2,782.96
(2,782.96)
317.94
149.05
16.38
(30.61)
88.35
(155.28)
0.19
(0.19)
18.34
12,773.37
Figures in bracket indicate maximum balance outstanding during the year based on comparison of the total outstanding
balances at each quarter-end.
Remuneration paid excludes value of employee stock options exercised during the year.
HDFC Bank Limited Annual Report 2016-17
138
Schedules to the Financial Statements
For the year ended March 31, 2017
29
Intra-Group exposure
Intra-Group exposures in accordance with RBI guidelines are as follows:
(` crore)
Particulars
March 31, 2017
March 31, 2016
Total amount of intra-group exposures
Total amount of top 20 intra-group exposures
Percentage of intra-group exposures to total exposure of the Bank on borrowers
/ customers
4,502.47
4,502.47
0.48%
2,413.58
2,413.58
0.33%
Details of breach of limits on intra-group exposures and regulatory action
thereon, if any
Nil
Nil
30 Leases
Operating leases primarily comprise office premises, staff residences and Automated Teller Machines (‘ATM’s), which are
renewable at the option of the Bank. The details of maturity profile of future operating lease payments are given below:
Particulars
Not later than one year
Later than one year and not later than five years
Later than five years
Total
The total of minimum lease payments recognised in the Statement of Profit and
Loss for the year
Total of future minimum sub-lease payments expected to be received under
non-cancellable sub-leases
Sub-lease amounts recognised in the Statement of Profit and Loss for the year
Contingent (usage based) lease payments recognised in the Statement of
Profit and Loss for the year
The Bank has sub-leased certain of its properties taken on lease.
(` crore)
March 31, 2017
March 31, 2016
939.53
2,980.22
3,043.98
6,963.73
1,094.86
887.30
2,805.03
2,481.82
6,174.15
1,005.70
25.33
37.13
11.31
138.79
10.67
180.53
The terms of renewal and escalation clauses are those normally prevalent in similar agreements. There are no undue restrictions
or onerous clauses in the agreements.
31 Transfers to Depositor Education and Awareness Fund (DEAF)
The details of amount transferred during the respective year to DEAF are as under:
(` crore)
Particulars
March 31, 2017
March 31, 2016
Opening balance of amounts transferred to DEAF
Add: Amounts transferred to DEAF during the year
Less: Amounts reimbursed by DEAF towards claims
Closing balance of amounts transferred to DEAF
136.85
95.10
(1.45)
230.50
92.14
45.89
(1.18)
136.85
HDFC Bank Limited Annual Report 2016-17
139
Schedules to the Financial Statements
For the year ended March 31, 2017
32 Penalties levied by the RBI
Further to the media reports in October 2015 about irregularities in advance import remittances in various banks, the Reserve
Bank of India (RBI) had conducted a scrutiny of the transactions carried out by the Bank under Section 35(1A) of the Banking
Regulation Act, 1949. The RBI issued a Show Cause Notice to which the Bank had submitted its detailed response. After
considering the Bank’s submission, the RBI imposed a penalty of ` 2.00 crore on the Bank vide its letter dated July 19, 2016
on account of pendency in receipt of bill of entry relating to advance import remittances made and lapses in adhering to
KYC / AML guidelines in this respect. The penalty has since been paid. The Bank has implemented a comprehensive corrective
action plan, to strengthen its internal control mechanisms so as to ensure that such incidents do not recur. The above matter
does not constitute a material weakness or significant deficiency in the framework of internal financial controls over financial
reporting maintained by the Bank under Section 134(3)(q) of the Companies Act 2013.
During the year ended March 31, 2016, RBI had not imposed any penalties on the Bank.
(cid:19)(cid:19)(cid:0) (cid:36)(cid:73)(cid:83)(cid:67)(cid:76)(cid:79)(cid:83)(cid:85)(cid:82)(cid:69)(cid:0)(cid:70)(cid:79)(cid:82)(cid:0)(cid:67)(cid:85)(cid:83)(cid:84)(cid:79)(cid:77)(cid:69)(cid:82)(cid:0)(cid:67)(cid:79)(cid:77)(cid:80)(cid:76)(cid:65)(cid:73)(cid:78)(cid:84)(cid:83)(cid:0)(cid:15)(cid:0)(cid:85)(cid:78)(cid:73)(cid:77)(cid:80)(cid:76)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:69)(cid:68)(cid:0)(cid:65)(cid:87)(cid:65)(cid:82)(cid:68)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)(cid:34)(cid:65)(cid:78)(cid:75)(cid:73)(cid:78)(cid:71)(cid:0)(cid:47)(cid:77)(cid:66)(cid:85)(cid:68)(cid:83)(cid:77)(cid:65)(cid:78)
(cid:115)(cid:0)
(cid:35)(cid:85)(cid:83)(cid:84)(cid:79)(cid:77)(cid:69)(cid:82)(cid:0)(cid:67)(cid:79)(cid:77)(cid:80)(cid:76)(cid:65)(cid:73)(cid:78)(cid:84)(cid:83)
(A) Customer complaints other than ATM transaction disputes
Particulars
March 31, 2017
March 31, 2016
(a) No. of complaints pending at the beginning of the year
(b) No. of complaints received during the year
(c) No. of complaints redressed during the year
(d) No. of complaints pending at the end of the year
651
96,454
94,756
2,349
496
62,224
62,069
651
(B) ATM transaction disputes relating to the Bank’s customers on the Bank’s ATMs
Particulars
March 31, 2017
March 31, 2016
(a) No. of complaints pending at the beginning of the year
(b) No. of complaints received during the year
(c) No. of complaints redressed during the year
(d) No. of complaints pending at the end of the year
(e) Complaints per ten thousand transactions
101
12,703
12,659
145
0.62
71
13,170
13,140
101
0.50
(C) ATM transaction disputes relating to the Bank’s customers on other banks’ ATMs
Particulars
March 31, 2017
March 31, 2016
(a) No. of complaints pending at the beginning of the year
(b) No. of complaints received during the year
(c) No. of complaints redressed during the year
(d) No. of complaints pending at the end of the year
(e) Complaints per ten thousand transactions
1,118
95,415
95,069
1,464
3.69
1,334
89,975
90,191
1,118
3.86
HDFC Bank Limited Annual Report 2016-17
140
Schedules to the Financial Statements
For the year ended March 31, 2017
(D) Total customer complaints and ATM transaction disputes [total of tables (A), (B) and (C) above]
Particulars
March 31, 2017
March 31, 2016
(a) No. of complaints pending at the beginning of the year
(b) No. of complaints received during the year
(c) No. of complaints redressed during the year
(d) No. of complaints pending at the end of the year
1,870
2,04,572
2,02,484
3,958
1,901
1,65,369
1,65,400
1,870
Note: ATM transaction disputes reported in the above tables are in accordance with RBI guidelines on disclosure of
customer complaints.
(cid:115)(cid:0)
(cid:33)(cid:87)(cid:65)(cid:82)(cid:68)(cid:83)(cid:0)(cid:80)(cid:65)(cid:83)(cid:83)(cid:69)(cid:68)(cid:0)(cid:66)(cid:89)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:34)(cid:65)(cid:78)(cid:75)(cid:73)(cid:78)(cid:71)(cid:0)(cid:47)(cid:77)(cid:66)(cid:85)(cid:68)(cid:83)(cid:77)(cid:65)(cid:78)(cid:0)(cid:8)(cid:34)(cid:47)(cid:9)
Particulars
March 31, 2017
March 31, 2016
(a) No. of unimplemented awards at the beginning of the year
(b) No. of awards passed by the BO during the year
(c) No. of awards implemented during the year
(d) No. of unimplemented awards at the end of the year
(cid:115)(cid:0)
(cid:52)(cid:79)(cid:80)(cid:0)(cid:65)(cid:82)(cid:69)(cid:65)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)(cid:67)(cid:85)(cid:83)(cid:84)(cid:79)(cid:77)(cid:69)(cid:82)(cid:0)(cid:67)(cid:79)(cid:77)(cid:80)(cid:76)(cid:65)(cid:73)(cid:78)(cid:84)(cid:83)
-
-
-
-
-
-
-
-
The average number of customer complaints per branch, including ATM transaction disputes, was 3.7 per month during
the year ended March 31, 2017 (previous year: 3.3 per month). For the year ended March 31, 2017, retail liability segment
accounted for 74.61% of the total complaints (a reduction from 82.60% for the previous year) followed by credit cards
at 18.15% of the total complaints (an increase from 11.86% for the previous year), retail assets at 6.08% of the total
complaints (an increase from 3.68% for the previous year), while other segments accounted for 1.16% of total complaints
(as against 1.86% in the previous year). The top 10 areas of customer complaints for the year ended March 31, 2017,
including ATM transaction disputes, accounted for 1,48,462 complaints and were 72.57% of total complaints as against
1,23,323 complaints which were 74.57% of the total complaints for the year ended March 31, 2016. The top 5 areas of
customer complaints on which the Bank is working towards root cause remediation are - ‘cash not dispensed or less cash
dispensed in the Bank’s ATMs’, phishing / unauthorized usage through debit card online, transaction dispute related –
credit cards, phishing / unauthorized usage through debit card done at other bank’s ATM outlets and customer disputes
relating to EMI / ROI / Tenor / Loan Amount.
(cid:115)
Position of BO complaints as per RBI annual report
As per a report published by the RBI for the year ended June 30, 2016, the number of BO complaints per branch for the
Bank was 1.68 (previous year: 1.36). The number of BO complaints other than credit cards per 1,000 accounts was at
0.13 (previous year: 0.10).The number of BO complaints (credit card related) per 1,000 cards was at 0.08 (previous year:
0.06) for the Bank.
34 Disclosure of Letters of Comfort (LoC) issued by the Bank
The Bank has not issued any Letter of Comfort during the years ended March 31, 2017 and March 31, 2016.
HDFC Bank Limited Annual Report 2016-17
141
Schedules to the Financial Statements
For the year ended March 31, 2017
35 Small and micro industries
Under the Micro, Small and Medium Enterprises Development Act, 2006 which came into force from October 2, 2006, certain
disclosures are required to be made relating to Micro, Small and Medium enterprises. There have been no reported cases of
delays in payments to micro and small enterprises or of interest payments due to delays in such payments. The above is based
on the information available with the Bank which has been relied upon by the auditors.
36 Overseas assets, NPAs and revenue
(` crore)
Particulars
Total Assets
Total NPAs
Total Revenue
(cid:19)(cid:23)(cid:0) (cid:47)(cid:70)(cid:70)(cid:13)(cid:34)(cid:65)(cid:76)(cid:65)(cid:78)(cid:67)(cid:69)(cid:0)(cid:51)(cid:72)(cid:69)(cid:69)(cid:84)(cid:0)(cid:51)(cid:48)(cid:54)(cid:83)
March 31, 2017
March 31, 2016
23,911.48
35,956.88
121.59
1,023.65
124.23
1,156.39
There are no Off-Balance Sheet SPVs sponsored by the Bank, which need to be consolidated as per accounting norms.
38 Credit default swaps
The Bank has not transacted in credit default swaps during the year ended March 31, 2017 (previous year: Nil).
39 Corporate social responsibility
Operating expenses include ` 305.42 crore (previous year: ` 194.81 crore) for the year ended March 31, 2017 towards
Corporate Social Responsibility (CSR), in accordance with Companies Act, 2013.
The Bank has spent 2.0% (previous year: 1.6%) of its average net profit for the last three financial years as part of its CSR
for the year ended March 31, 2017. As a responsible bank, it has approached the mandatory requirements of CSR spends
positively by laying a foundation on which it would build and scale future projects and partnerships. The Bank continues to
evaluate strategic avenues for CSR expenditure in order to deliver maximum impact. In the years to come, the Bank will further
strengthen its processes as per requirement.
The details of amount spent during the respective year towards CSR are as under:
(` crore)
Sr.
No.
Particulars
March 31, 2017
March 31, 2016
Amount
spent
Amount
(cid:85)(cid:78)(cid:80)(cid:65)(cid:73)(cid:68)(cid:0)(cid:15)
provision
Total
Amount
spent
Total
Amount
(cid:85)(cid:78)(cid:80)(cid:65)(cid:73)(cid:68)(cid:0)(cid:15)
provision
(i) Construction / acquisition of any asset
(ii) On purpose other than (i) above
-
305.42
-
-
-
-
-
-
305.42
186.46
8.35
194.81
40
Investor education and protection fund
There has been no delay in transferring amounts, required to be transferred to the Investor Education and Protection Fund by
the Bank.
HDFC Bank Limited Annual Report 2016-17
142
Schedules to the Financial Statements
For the year ended March 31, 2017
41 Disclosure on remuneration to Non-Executive Directors
Remuneration by way of sitting fees to the Non-Executive Directors for attending meetings of the Board and its committees
during the year ended March 31, 2017 amounted to ` 1.67 crore (previous year: ` 1.33 crore).
Further, in accordance with RBI guidelines, profit related commission to all Non-Executive Directors other than the Chairperson
for the year ended March 31, 2017 amounted to ` 0.80 crore (previous year: ` 0.60 crore).
42 Comparative figures
Figures for the previous year have been regrouped and reclassified wherever necessary to conform to the current year’s
presentation.
For and on behalf of the Board
Shyamala Gopinath
Chairperson
Aditya Puri
Managing Director
Paresh Sukthankar
Deputy Managing Director
Kaizad Bharucha
Executive Director
(cid:51)(cid:65)(cid:78)(cid:74)(cid:65)(cid:89)(cid:0)(cid:36)(cid:79)(cid:78)(cid:71)(cid:82)(cid:69)
Executive Vice President
(Legal) & Company Secretary
Sashidhar Jagdishan
Chief Financial Officer
Anami Roy
Bobby Parikh
Keki Mistry
Malay Patel
Partho Datta
Renu Karnad
Srikanth Nadhamuni
Umesh Sarangi
Directors
Mumbai, April 21, 2017
HDFC Bank Limited Annual Report 2016-17
143
Independent Auditor’s Report
To the Members of HDFC Bank Limited
Report on the Consolidated Financial Statements
1. We have audited the accompanying consolidated
financial statements of HDFC BANK LIMITED
(hereinafter referred to as “the Holding Company”)
and its subsidiaries (the Holding Company and its
subsidiaries together referred to as “the Group”) and its
associate, comprising the Consolidated Balance Sheet
as at 31st March, 2017, the Consolidated Statement
of Profit and Loss, the Consolidated Cash Flow
Statement for the year then ended, and a summary of
the significant accounting policies and other explanatory
information (hereinafter referred to as “the consolidated
financial statements”) - [See paragraph 5 below]
2. Management’s Responsibility for the Consolidated
Financial Statements
The Holding Company’s Board of Directors is
responsible for the preparation of these consolidated
financial statements in terms of the requirements
of the Companies Act, 2013 (hereinafter referred
to as “the Act”) that give a true and fair view of the
consolidated financial position, consolidated financial
performance and consolidated cash flows of the Group
and its associate in accordance with provisions of
Section 29 of the Banking Regulation Act, 1949, the
accounting principles generally accepted in India,
including the Accounting Standards prescribed under
Section 133 of the Act, and guidelines issued by the
Reserve Bank of India as applicable to the respective
entities. The respective Board of Directors of the
companies included in the Group and the associate are
responsible for maintenance of adequate accounting
records in accordance with the provisions of the Act
for safeguarding the assets of the Group and the
associate and for preventing and detecting frauds and
other irregularities; the selection and application of
appropriate accounting policies; making judgments and
estimates that are reasonable and prudent; and the
design, implementation and maintenance of adequate
internal financial controls, that were operating effectively
for ensuring the accuracy and completeness of the
accounting records, relevant to the preparation and
presentation of the financial statements that give a true
and fair view and are free from material misstatement,
whether due to fraud or error, which have been used for
the purpose of preparation of the consolidated financial
statements by the Directors of the Holding Company.
3. Auditor’s Responsibility
Our responsibility is to express an opinion on these
consolidated financial statements based on our audit.
In conducting our audit, we have taken into account
the provisions of the Act, the accounting and auditing
standards and matters which are required to be included
in the audit report under the provisions of the Act and
the Rules made thereunder.
We conducted our audit in accordance with the
Standards on Auditing specified under Section 143(10)
of the Act. Those Standards require that we comply
with ethical requirements and plan and perform the
audit to obtain reasonable assurance about whether the
consolidated financial statements are free from material
misstatement.
An audit involves performing procedures to obtain
audit evidence about the amounts and disclosures in
the consolidated financial statements. The procedures
selected depend on the auditor’s judgment, including
the assessment of the risks of material misstatement
of the consolidated financial statements, whether due
to fraud or error. In making those risk assessments, the
auditor considers internal financial controls relevant to
the Holding Company’s preparation of the consolidated
financial statements that give a true and fair view,
in order to design audit procedures that are appropriate
in the circumstances. An audit also includes evaluating
the appropriateness of the accounting policies used
and the reasonableness of the accounting estimates
made by the Holding Company’s Board of Directors, and
evaluating the overall presentation of the consolidated
financial statements.
We believe that the audit evidence obtained by us and
the audit evidence obtained by the other auditors in
terms of their report referred to in sub-paragraph (a)
of paragraph 5 below, is sufficient and appropriate to
provide a basis for our audit opinion on the consolidated
financial statements.
4. Opinion
In our opinion and to the best of our information and
according to the explanations given to us and based
on the matters referred to in paragraph 5 below, the
aforesaid consolidated financial statements give the
information required by the Act in the manner so
required and give a true and fair view in conformity with
the accounting principles generally accepted in India,
of the consolidated state of affairs of the Group and its
associate as at 31st March, 2017, and the consolidated
profit and consolidated cash flows for the year ended on
that date.
5. Other Matters
a) We did not audit the financial statements of a
subsidiary whose financial statements reflect
total assets of ` 3,352,692 lacs as at 31st March,
2017, total revenues of ` 572,450 lacs and net
cash (outflows) amounting to ` 2,032 lacs for the
year ended on that date, as considered in the
consolidated financial statements. These financial
statements have been audited by other auditors
whose report has been furnished to us by the
HDFC Bank Limited Annual Report 2016-17
144
b)
Management and our opinion on the consolidated
financial statements, in so far as it relates to the
amounts and disclosures included in respect
of this subsidiary, and our report in terms of
subsection (3) of Section 143 of the Act, in so far
as it relates to the aforesaid subsidiary is based
solely on the report of the other auditors.
The consolidated financial statements also include
the Group’s share of net profit of ` 234 lacs for the
year ended 31st March, 2017, as considered in
the consolidated financial statements, in respect
of an associate, whose financial statements
have not been audited by us. These financial
statements are unaudited and have been furnished
to us by the Management and our opinion on the
consolidated financial statements, in so far as it
relates to the amounts and disclosures included
in respect of this associate, is based solely on
such unaudited financial statements as certified
by the Management of that associate. In our
opinion and according to the information and
explanations given to us by the Holding Company’s
Management, these financial statements are not
material to the Group.
Our opinion on the consolidated financial
statements, and our report on Other Legal and
Regulatory Requirements below is not modified in
respect of the above matters with respect to our
reliance on the work done and the reports of the
other auditors and the financial statements certified
by the management of the associate.
6. Report on Other Legal and Regulatory Requirements
As required by Section 143(3) of the Act, based on our
audit and on the consideration of the report of the other
auditors on separate financial statements of a subsidiary
referred to in paragraph 5 above we report, to the extent
applicable, that:
(a) We have sought and obtained all the information
and explanations which to the best of our
knowledge and belief were necessary for the
purposes of our audit of the aforesaid consolidated
financial statements.
(b)
In our opinion, proper books of account as required
by law relating to preparation of the aforesaid
consolidated financial statements have been kept
so far as it appears from our examination of those
books and the report of the other auditors.
(c) The Consolidated Balance Sheet, the Consolidated
Statement of Profit and Loss, and the Consolidated
Cash Flow Statement dealt with by this Report are
in agreement with the relevant books of account
maintained for the purpose of preparation of the
consolidated financial statements.
(d)
In our opinion, the aforesaid consolidated financial
statements comply with the Accounting Standards
prescribed under Section 133 of the Act, as
applicable.
(e) On the basis of the written representations
received from the directors of the Holding
Company as at 31st March, 2017 taken on record
by the Board of Directors of the Holding Company
and the report of the statutory auditors of the
subsidiary company not audited by us, none of the
directors of the Group companies is disqualified
as at 31st March, 2017 from being appointed as a
director in terms of Section 164(2) of the Act.
(f) With respect to the adequacy of the internal
financial controls over financial reporting and the
operating effectiveness of such controls, refer to
our separate report in “Annexure A”. Our report
expresses an unmodified opinion on the adequacy
and operating effectiveness of the Group’s internal
financial controls over financial reporting.
(g) With respect to the other matters to be included in
the Auditor’s Report in accordance with Rule 11 of
the Companies (Audit and Auditor’s) Rules, 2014,
as amended, in our opinion and to the best of
our information and according to the explanations
given to us:
i.
ii.
iii.
The consolidated financial statements
disclose the impact of pending litigations
on the consolidated financial position of the
Group;
Provision has been made in the consolidated
financial statements, as required under the
applicable law or accounting standards,
for material foreseeable losses, if any, on
long-term contracts including derivative
contracts;
There has been no delay in transferring
amounts, required to be transferred, to the
Investor Education and Protection Fund by
the Holding Company and its subsidiary
companies.
For Deloitte Haskins & Sells
Chartered Accountants
(Firm’s Registration No. 117365W)
Porus B. Pardiwalla
Partner
(Membership No. 40005)
Mumbai
April 21, 2017
HDFC Bank Limited Annual Report 2016-17
145
ANNEXURE “A” TO THE INDEPENDENT AUDITOR’S
REPORT
(Referred to in paragraph f under ‘Report on Other Legal
and Regulatory Requirements’ section of the auditor’s
report of even date)
Report on the Internal Financial Controls Over Financial
Reporting under Clause (i) of Sub-section 3 of Section
143 of the Companies Act, 2013 (“the Act”)
In conjunction with our audit of the consolidated financial
statements of the Holding Company for the year as of and
for the year ended 31st March, 2017 we have audited the
internal financial controls over financial reporting of the Group
[See paragraphs 1 and 5 of our Report on the Consolidated
Financial Statements].
Management’s Responsibility for Internal Financial
Controls
The respective Board of Directors of the Holding company
and its subsidiary companies and its associate company, are
responsible for establishing and maintaining internal financial
controls based on the internal control over financial reporting
criteria established by the respective Companies considering
the essential components of internal control stated in the
Guidance Note on Audit of Internal Financial Controls
Over Financial Reporting (“the Guidance Note”) issued by
the Institute of Chartered Accountants of India (“ICAI”).
These responsibilities include the design, implementation and
maintenance of adequate internal financial controls that were
operating effectively for ensuring the orderly and efficient
conduct of its business, including adherence to the respective
company’s policies, the safeguarding of its assets, the
prevention and detection of frauds and errors, the accuracy
and completeness of the accounting records, and the timely
preparation of reliable financial information, as required under
the Companies Act, 2013, the Banking Regulation Act, 1949
and the guidelines issued by the Reserve Bank of India.
Auditor’s Responsibility
Our responsibility is to express an opinion on the internal
financial controls over financial reporting, based on our audit.
We conducted our audit in accordance with the Guidance
Note issued by the Institute of Chartered Accountants of
India and the Standards on Auditing, prescribed under
Section 143(10) of the Companies Act, 2013, to the
extent applicable to an audit of internal financial controls.
Those Standards and the Guidance Note require that we
comply with ethical requirements and plan and perform
the audit to obtain reasonable assurance about whether
adequate internal financial controls over financial reporting
was established and maintained and if such controls operated
effectively in all material respects.
An audit involves performing procedures to obtain audit
evidence about the adequacy of the internal financial
controls system over financial reporting and their operating
effectiveness. Our audit of internal financial controls over
financial reporting included obtaining an understanding of
internal financial controls over financial reporting, assessing
the risk that a material weakness exists, and testing and
evaluating the design and operating effectiveness of internal
control based on the assessed risk. The procedures selected
depend on the auditor’s judgement, including the assessment
of the risks of material misstatement of the financial
statements, whether due to fraud or error.
We believe that the audit evidence we have obtained and
the audit evidence obtained by the other auditors, in terms
of their report referred to in paragraph 5 of our Report on
the Consolidated Financial Statements, is sufficient and
appropriate to provide a basis for our audit opinion on the
internal financial controls system over financial reporting of
the Holding Company and its subsidiary companies, which are
companies incorporated in India.
Meaning of Internal Financial Controls Over Financial
Reporting
A company’s internal financial control over financial reporting
is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in
accordance with generally accepted accounting principles.
A company’s internal financial control over financial reporting
includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately
and fairly reflect the transactions and dispositions of the
assets of the company; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation
of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures
of the company are being made only in accordance with
authorisations of management and directors of the company;
and (3) provide reasonable assurance regarding prevention or
timely detection of unauthorised acquisition, use, or disposition
of the company’s assets that could have a material effect on
the financial statements.
Inherent Limitations of Internal Financial Controls Over
Financial Reporting
Because of the inherent limitations of internal financial
controls over financial reporting, including the possibility
of collusion or improper management override of controls,
material misstatements due to error or fraud may occur and
not be detected. Also, projections of any evaluation of the
internal financial controls over financial reporting to future
periods are subject to the risk that the internal financial control
HDFC Bank Limited Annual Report 2016-17
146
over financial reporting may become inadequate because of
changes in conditions, or that the degree of compliance with
the policies or procedures may deteriorate.
Our opinion is not modified in respect of the matters referred
to in paragraph 5 of our Report on the Consolidated Financial
Statements.
Opinion
In our opinion to the best of our information and according
to the explanations given to us and based on the matters
referred to in paragraph 5 of our Report on the Consolidated
Financial Statements, the Group has in all material respects,
an adequate internal financial controls system over financial
reporting and such internal financial controls over financial
reporting were operating effectively as at 31st March, 2017,
based on the essential components of internal control stated
in the Guidance Note on Audit of Internal Financial Controls
Over Financial Reporting issued by the Institute of Chartered
Accountants of India.
Mumbai
April 21, 2017
For Deloitte Haskins & Sells
Chartered Accountants
(Firm’s Registration No. 117365W)
Porus B. Pardiwalla
Partner
(Membership No. 40005)
HDFC Bank Limited Annual Report 2016-17
147
Consolidated Balance Sheet
As at March 31, 2017
CAPITAL AND LIABILITIES
Capital
Reserves and surplus
Minority interest
Deposits
Borrowings
Other liabilities and provisions
ASSETS
Cash and balances with Reserve Bank of India
Balances with banks and money at call and short notice
Investments
Advances
Fixed assets
Other assets
Contingent liabilities
Bills for collection
As at
` in ‘000
As at
Schedule
31-Mar-17
31-Mar-16
1
2
2A
3
4
5
5,125,091
5,056,373
912,814,397
737,984,869
2,914,389
1,806,228
6,431,342,479
5,458,732,889
984,156,439
1,037,139,597
587,088,812
381,403,308
Total
8,923,441,607
7,622,123,264
6
7
8
9
10
11
379,105,485
300,765,846
114,005,711
89,922,969
2,107,771,120
1,936,338,475
5,854,809,871
4,872,904,174
38,146,997
34,796,976
429,602,423
387,394,824
Total
8,923,441,607
7,622,123,264
12
8,182,842,892
8,535,273,826
308,480,352
234,899,997
Significant accounting policies and notes to the Consolidated financial
statements
17 & 18
The schedules referred to above form an integral part of the
Consolidated Balance Sheet
As per our report of even date.
(cid:2)(cid:3)(cid:4)(cid:5)(cid:6)(cid:7)(cid:8)(cid:5)(cid:3)(cid:7)(cid:5)(cid:9)(cid:10)(cid:11)(cid:6)(cid:12)(cid:13)(cid:5)(cid:3)(cid:13)(cid:5)(cid:14)(cid:11)(cid:10)(cid:5)(cid:15)(cid:3)(cid:6)(cid:4)(cid:8)
For Deloitte Haskins & Sells
Chartered Accountants
Shyamala Gopinath
Chairperson
Aditya Puri
Managing Director
P. B. Pardiwalla
Partner
Membership No.: 40005
Mumbai, April 21, 2017
Paresh Sukthankar
Deputy Managing Director
Kaizad Bharucha
Executive Director
Sanjay Dongre
Executive Vice President
(Legal) & Company Secretary
Sashidhar Jagdishan
Chief Financial Officer
Anami Roy
Bobby Parikh
Keki Mistry
Malay Patel
Partho Datta
Renu Karnad
Srikanth Nadhamuni
Umesh Sarangi
Directors
HDFC Bank Limited Annual Report 2016-17
148
Consolidated Statement of Profit and Loss
For the year ended March 31, 2017
I
II
III
INCOME
Interest earned
Other income
EXPENDITURE
Interest expended
Operating expenses
Provisions and contingencies
PROFIT
Net profit for the year
Less: Minority interest
Add: Share in profits of associates
Consolidated profit for the year attributable to the Group
Impact on amalgamation [Refer Schedule 18(1)]
Balance in Profit and Loss account brought forward
IV APPROPRIATIONS
Transfer to Statutory Reserve
Proposed dividend [Refer Schedule 18(3)]
Tax (including cess) on interim / proposed dividend
Dividend (including tax / cess thereon) pertaining to previous year
paid during the year, net of dividend tax credits
Transfer to General Reserve
Transfer to Capital Reserve
Transfer to / (from) Investment Reserve Account
Balance carried over to Balance Sheet
V
EARNINGS PER EQUITY SHARE (Face value ` 2 per share)
Basic
Diluted
Significant accounting policies and notes to the
Consolidated financial statements
The schedules referred to above form an integral part of the
Consolidated Statement of Profit and Loss
Schedule
13
14
Total
15
16
Total
Total
Total
17 & 18
Year ended
31-Mar-17
732,713,529
128,776,329
861,489,858
380,415,844
207,510,707
120,689,285
708,615,836
152,874,022
367,165
23,393
152,530,250
274,507
248,255,886
401,060,643
37,771,634
-
255,959
(16,909)
14,549,641
3,134,100
42,934
345,323,284
401,060,643
`
59.95
59.16
` in ‘000
Year ended
31-Mar-16
631,615,614
112,116,541
743,732,155
340,695,748
178,318,808
96,544,349
615,558,905
128,173,250
197,212
37,278
128,013,316
-
195,508,642
323,521,958
31,809,345
24,017,772
5,123,529
(117,135)
12,296,213
2,221,532
(85,184)
248,255,886
323,521,958
`
50.85
50.24
As per our report of even date.
(cid:2)(cid:3)(cid:4)(cid:5)(cid:6)(cid:7)(cid:8)(cid:5)(cid:3)(cid:7)(cid:5)(cid:9)(cid:10)(cid:11)(cid:6)(cid:12)(cid:13)(cid:5)(cid:3)(cid:13)(cid:5)(cid:14)(cid:11)(cid:10)(cid:5)(cid:15)(cid:3)(cid:6)(cid:4)(cid:8)
For Deloitte Haskins & Sells
Chartered Accountants
Shyamala Gopinath
Chairperson
Aditya Puri
Managing Director
P. B. Pardiwalla
Partner
Membership No.: 40005
Mumbai, April 21, 2017
Paresh Sukthankar
Deputy Managing Director
Kaizad Bharucha
Executive Director
Sanjay Dongre
Executive Vice President
(Legal) & Company Secretary
Sashidhar Jagdishan
Chief Financial Officer
Anami Roy
Bobby Parikh
Keki Mistry
Malay Patel
Partho Datta
Renu Karnad
Srikanth Nadhamuni
Umesh Sarangi
Directors
HDFC Bank Limited Annual Report 2016-17
149
Consolidated Cash Flow Statement
For the year ended March 31, 2017
Cash flows from operating activities
Consolidated profit before income tax
233,311,478
194,949,948
` in ‘000
Year ended
Year ended
31-Mar-17
31-Mar-16
Adjustments for:
Depreciation on fixed assets
(Profit) / loss on revaluation of investments
Amortisation of premia on held to maturity investments
(Profit) / loss on sale of fixed assets
Provision / charge for non performing assets
Provision for dimunition in value of Investments
Floating provisions
Provision for standard assets
Contingency provisions
Share in current year's profits of associates
Adjustments for:
8,861,876
7,380,326
(87,543)
173,689
1,756,569
1,002,801
16,229
1,185
37,024,296
25,179,864
(76,417)
146,543
250,000
1,150,000
4,312,322
4,648,890
388,440
(23,393)
218,602
(37,278)
285,733,857
234,814,570
(Increase) / decrease in investments (excluding investments in subsidiaries)
(173,257,700)
(391,159,616)
(Increase) / decrease in advances
Increase / (decrease) in deposits
(Increase) / decrease in other assets
(1,018,904,990)
(1,066,012,996)
972,609,590
955,896,412
(44,855,329)
(38,485,747)
Increase / (decrease) in other liabilities and provisions
228,337,692
31,324,658
Direct taxes paid (net of refunds)
Net cash flow (used in) / from operating activities
Cash flows used in investing activities
Purchase of fixed assets
Proceeds from sale of fixed assets
Investment in subsidiaries and / or joint ventures
249,663,120
(273,622,719)
(76,847,189)
(70,730,944)
172,815,931
(344,353,663)
(11,577,570)
(8,771,635)
100,768
116,125
-
-
Net cash used in investing activities
(11,476,802)
(8,655,510)
HDFC Bank Limited Annual Report 2016-17
150
Consolidated Cash Flow Statement
For the year ended March 31, 2017
Cash flows from financing activities
Increase in minority interest
Year ended
31-Mar-17
` in ‘000
Year ended
31-Mar-16
818,605
189,954
Money received on exercise of stock options by employees
22,615,161
12,229,008
Increase / (decrease) in borrowings (excluding subordinate debt,
perpetual debt and upper tier II instruments)
Redemption of subordinated debt
Dividend paid during the year
Tax on dividend
Net cash generated from financing activities
(33,898,658)
402,081,134
(19,084,500)
(12,020,000)
(24,083,093)
(20,091,666)
(5,297,258)
(4,237,089)
(58,929,743)
378,151,341
Effect of exchange fluctuation on translation reserve
(282,622)
282,433
Cash and cash equivalents on amalgamation [Refer Schedule 18(1)]
295,617
-
Net increase / (decrease) in cash and cash equivalents
102,422,381
25,424,601
Cash and cash equivalents as at April 1st (Schedules 6 and 7)
390,688,815
365,264,214
Cash and cash equivalents as at March 31st (Schedules 6 and 7)
493,111,196
390,688,815
As per our report of even date.
For and on behalf of the Board
For Deloitte Haskins & Sells
Chartered Accountants
Shyamala Gopinath
Chairperson
Aditya Puri
Managing Director
P. B. Pardiwalla
Partner
Membership No.: 40005
Mumbai, April 21, 2017
Paresh Sukthankar
Deputy Managing Director
Kaizad Bharucha
Executive Director
Sanjay Dongre
Executive Vice President
(Legal) & Company Secretary
Sashidhar Jagdishan
Chief Financial Officer
Anami Roy
Bobby Parikh
Keki Mistry
Malay Patel
Partho Datta
Renu Karnad
Srikanth Nadhamuni
Umesh Sarangi
Directors
HDFC Bank Limited Annual Report 2016-17
151
Schedules to the Consolidated Financial Statements
As at March 31, 2017
SCHEDULE 1 - CAPITAL
Authorised capital
3,25,00,00,000 (31 March, 2016: 2,75,00,00,000) Equity Shares of ` 2/- each
Issued, subscribed and paid-up capital
2,56,25,45,717 (31 March, 2016: 2,52,81,86,517) Equity Shares of ` 2/- each
SCHEDULE 2 - RESERVES AND SURPLUS
I
Statutory reserve
Opening balance
Additions during the year
II
General reserve
Opening balance
Additions during the year
As at
` in ‘000
As at
31-Mar-17
31-Mar-16
6,500,000
5,500,000
Total
5,125,091
5,125,091
5,056,373
5,056,373
149,931,567
118,122,222
37,771,634
31,809,345
Total
187,703,201
149,931,567
57,369,509
14,549,641
71,919,150
45,073,296
12,296,213
57,369,509
Total
III
Balance in profit and loss account
345,323,284
248,255,886
IV
Share premium account
Opening balance
Additions during the year
V
Amalgamation reserve
Opening balance
Additions during the year
VI
Capital reserve
Opening balance
Additions during the year
VII
Investment reserve account
Opening balance
Additions during the year
Deductions during the year
VIII
Foreign currency translation account
Opening balance
Additions / (deductions) during the year
HDFC Bank Limited Annual Report 2016-17
152
262,204,646
250,019,020
22,546,443
12,185,626
Total
284,751,089
262,204,646
10,635,564
10,635,564
-
-
Total
10,635,564
10,635,564
8,866,583
3,134,100
Total
12,000,683
399,084
109,506
(66,572)
442,018
322,030
(282,622)
39,408
Total
Total
Total
6,645,051
2,221,532
8,866,583
484,268
76
(85,260)
399,084
39,597
282,433
322,030
912,814,397
737,984,869
Schedules to the Consolidated Financial Statements
As at March 31, 2017
SCHEDULE 2A - MINORITY INTEREST
Minority interest at the date on which parent subsidiary relationship came into
existence
Subsequent increase
Includes reserves of Employee Welfare Trust of ` 70.83 crore (previous year ` 63.85 crore)
SCHEDULE 3 - DEPOSITS
A
I
Demand deposits
From banks
(i)
From others
(ii)
II
III
Savings bank deposits
Term deposits
(i)
(ii)
From banks
From others
B
I
II
Deposits of branches in India
Deposits of branches outside India
Reserve Bank of India
SCHEDULE 4 - BORROWINGS
Borrowings in India
I
(i)
(ii) Other banks
(iii) Other institutions and agencies
(iv) Upper and lower Tier II capital and innovative perpetual debts
(v)
Bonds and Debentures (excluding subordinated debt)
II
Borrowings outside India*
As at
31-Mar-17
` in ‘000
As at
31-Mar-16
276,029
276,029
Total
2,638,360
2,914,389
1,530,199
1,806,228
20,806,377
1,132,892,089
1,153,698,466
1,935,786,271
22,017,200
860,725,166
882,742,366
1,478,861,198
53,520,609
3,288,337,133
3,341,857,742
6,431,342,479
25,095,540
3,072,033,785
3,097,129,325
5,458,732,889
6,391,351,770
39,990,709
6,431,342,479
5,391,562,781
67,170,108
5,458,732,889
-
97,371,546
249,710,383
149,020,000
252,038,000
748,139,929
236,016,510
984,156,439
319,505,077
98,174,819
91,767,811
157,579,000
59,750,000
726,776,707
310,362,890
1,037,139,597
Total
Total
Total
Total
Total
Total
*Includes Upper Tier II debt of Nil crore (previous year: ` 662.55 crore)
Secured borrowings included in I & II above: ` 20,606.90 crore (previous year: ` 15,781.77 crore)
SCHEDULE 5 - OTHER LIABILITIES AND PROVISIONS
I
II
III
IV
V
Bills payable
Interest accrued
Others (including provisions)
Contingent provisions against standard assets
Proposed dividend (including tax on dividend) [Refer Schedule 18(3)
166,670,863
45,914,476
349,467,514
25,035,959
-
587,088,812
73,784,974
40,976,952
216,913,280
20,735,354
28,992,748
381,403,308
Total
HDFC Bank Limited Annual Report 2016-17
153
Schedules to the Consolidated Financial Statements
As at March 31, 2017
SCHEDULE 6 - CASH AND BALANCES WITH RESERVE BANK OF INDIA
I
II
Cash in hand (including foreign currency notes)
Balances with Reserve Bank of India:
(a)
(b)
In current accounts
In other accounts
SCHEDULE 7 - BALANCES WITH BANKS AND MONEY AT CALL AND SHORT NOTICE
I
In India
(i)
Balances with banks:
(a)
(b)
In current accounts
In other deposit accounts
(ii) Money at call and short notice:
(a) With banks
(b) With other institutions
II
Outside India
(i)
(ii)
(iii) Money at call and short notice
In current accounts
In deposit accounts
SCHEDULE 8 - INVESTMENTS
A
Investments in India in
(i) Government securities
(ii) Other approved securities
(iii) Shares
(iv) Debentures and bonds
(v)
(vi) Others (Units, CDs / CPs, PTCs and security receipts)
Investment in associates*
*Includes goodwill of ` 0.70 crore (previous year: ` 0.70 crore) and capital reserve of Nil on
account of investment in associates (previous year: ` 0.43 crore)
B
Investments outside India in
Other investments
(a) Shares
(b) Debentures and bonds
HDFC Bank Limited Annual Report 2016-17
154
As at
` in ‘000
As at
31-Mar-17
31-Mar-16
42,772,675
55,877,336
284,332,810
52,000,000
336,332,810
379,105,485
242,888,510
2,000,000
244,888,510
300,765,846
Total
Total
5,531,745
9,716,581
15,248,326
2,596,227
7,926,585
10,522,812
-
-
-
15,248,326
36,772,777
2,529,150
59,455,458
98,757,385
114,005,711
-
1,359,867
1,359,867
11,882,679
23,909,955
3,776,535
50,353,800
78,040,290
89,922,969
1,624,186,994
-
1,219,528
187,956,872
402,955
282,824,625
2,096,590,974
1,576,610,655
-
885,214
48,882,174
614,020
295,619,657
1,922,611,720
Total
Total
Total
Total
Total
Total
28,375
11,151,771
11,180,146
2,107,771,120
28,375
13,698,380
13,726,755
1,936,338,475
Total
Total
Schedules to the Consolidated Financial Statements
As at March 31, 2017
C
Investments
(i) Gross value of investments
(a)
In India
(b) Outside India
(ii) Provision for depreciation
(a)
In India
(b) Outside India
(iii) Net value of investments
(a)
In India
(b) Outside India
SCHEDULE 9 - ADVANCES
A
(i)
Bills purchased and discounted
(ii) Cash credits, overdrafts and loans repayable on demand
(iii)
Term loans
B
(i)
Secured by tangible assets*
(ii) Covered by bank / government guarantees
(iii) Unsecured
* Including advances against book debts
C
I
Advances in India
(i)
Priority sector
(ii) Public sector
(iii) Banks
(iv) Others
C
II
Advances outside India
(i)
Due from banks
(ii) Due from others
(a) Bills purchased and discounted
(b) Syndicated loans
(c) Others
(Advances are net of provisions)
HDFC Bank Limited Annual Report 2016-17
155
As at
31-Mar-17
` in ‘000
As at
31-Mar-16
2,097,219,426
1,923,817,098
11,206,487
13,726,755
Total
2,108,425,913
1,937,543,853
628,452
26,341
654,793
1,205,378
-
1,205,378
Total
2,096,590,974
1,922,611,720
11,180,146
13,726,755
Total
2,107,771,120
1,936,338,475
287,159,641
185,136,903
1,336,174,162
1,242,774,115
4,231,476,068
3,444,993,156
Total
5,854,809,871
4,872,904,174
4,351,900,473
3,648,290,355
107,864,309
114,128,823
1,395,045,089
1,110,484,996
Total
5,854,809,871
4,872,904,174
1,646,022,483
1,427,201,985
157,741,065
134,556,082
9,092,668
4,659,631
3,843,921,442
2,985,578,949
Total
5,656,777,658
4,551,996,647
6,500,391
6,879,777
2,560,707
1,245,263
17,845,564
38,624,247
171,125,551
274,158,240
198,032,213
320,907,527
5,854,809,871
4,872,904,174
Total
Total
Schedules to the Consolidated Financial Statements
As at March 31, 2017
SCHEDULE 10 - FIXED ASSETS
A
Premises (including land)
Gross block
At cost on 31 March of the preceding year
Additions during the year
Deductions during the year
Depreciation
As at 31 March of the preceding year
Charge for the year
On deductions during the year
Net block
B
Other fixed assets (including furniture and fixtures)
Gross block
At cost on 31 March of the preceding year
Additions on amalgamation
Additions during the year
Deductions during the year
Depreciation
As at 31 March of the preceding year
Additions on amalgamation
Charge for the year
On deductions during the year
Net block
C
Assets on lease (plant and machinery)
Gross block
At cost on 31 March of the preceding year
Additions during the year
HDFC Bank Limited Annual Report 2016-17
156
As at
31-Mar-17
` in ‘000
As at
31-Mar-16
15,785,543
15,030,782
669,452
839,927
(70,347)
(85,166)
Total
16,384,648
15,785,543
4,262,700
3,775,762
595,216
555,657
(59,060)
(68,719)
Total
4,798,856
4,262,700
11,585,792
11,522,843
74,900,241
67,150,536
377,694
-
11,525,792
9,208,628
(2,229,417)
(1,458,923)
Total
84,574,310
74,900,241
51,626,108
46,156,112
245,859
-
8,264,659
6,828,000
(2,123,521)
(1,358,004)
Total
58,013,105
51,626,108
26,561,205
23,274,133
4,546,923
4,546,923
-
-
Total
4,546,923
4,546,923
Schedules to the Consolidated Financial Statements
As at March 31, 2017
Depreciation
As at 31 March of the preceding year
Charge for the year
Lease adjustment account
As at 31 March of the preceding year
Charge for the year
Unamortised cost of assets on lease
SCHEDULE 11 - OTHER ASSETS
I
II
III
IV
V
VI
Interest accrued
Advance tax / tax deducted at source (net of provisions)
Stationery and stamps
Non banking assets acquired in satisfaction of claims
Bond and share application money pending allotment
Security deposit for commercial and residential property
VII Others *
*Includes deferred tax asset (net) of ` 2,587.06 crore (previous year: ` 2,227.23 crore), goodwill
of ` 185.00 crore (previous year: ` 187.16 crore) and deposits placed with NABARD / SIDBI
/ NHB on account of shortfall in lending to priority sector of ` 11,882.37 crore (previous year:
` 13,719.68 crore)
SCHEDULE 12 - CONTINGENT LIABILITIES
As at
` in ‘000
As at
31-Mar-17
31-Mar-16
4,104,467
4,104,467
-
-
Total
4,104,467
4,104,467
442,456
442,456
-
-
Total
442,456
442,456
-
-
Total
38,146,997
34,796,976
83,177,119
75,547,122
17,270,130
17,625,441
267,871
220,786
-
-
-
-
5,095,162
4,791,869
323,792,141
289,209,606
Total
429,602,423
387,394,824
Claims against the bank not acknowledged as debts - taxation
Claims against the bank not acknowledged as debts - others
10,724,100
11,879,900
2,010,238
777,310
Liability on account of outstanding forward exchange contracts
4,699,301,366
5,290,757,746
Liability on account of outstanding derivative contracts
2,723,068,634
2,570,471,528
I
II
III
IV
V
Guarantees given on behalf of constituents
- in India
- outside India
VI
Acceptances, endorsements and other obligations
VII Other items for which the Bank is contingently liable
HDFC Bank Limited Annual Report 2016-17
157
366,232,012
301,310,742
953,405
31,094,714
359,613,744
317,525,754
20,939,393
11,456,132
Total
8,182,842,892
8,535,273,826
Schedules to the Consolidated Financial Statements
For the year ended March 31, 2017
SCHEDULE 13 - INTEREST EARNED
I
II
III
IV
Interest / discount on advances / bills
Income from investments
Interest on balance with RBI and other inter-bank funds
Others
SCHEDULE 14 - OTHER INCOME
I
II
III
IV
V
VI
Commission, exchange and brokerage
Profit / (loss) on sale of investments (net)
Profit / (loss) on revaluation of investments (net)
Profit / (loss) on sale of building and other assets (net)
Profit / (loss) on exchange / derivative transactions (net)
Miscellaneous income
SCHEDULE 15 - INTEREST EXPENDED
I
II
III
Interest on deposits
Interest on RBI / inter-bank borrowings
Other interest
SCHEDULE 16 - OPERATING EXPENSES
I
Payments to and provisions for employees
II Rent, taxes and lighting
III
Printing and stationery
IV
V
VI
VII
VIII
IX
X
XI
XII
Advertisement and publicity
Depreciation on bank's property
Directors' fees / remuneration, allowances and expenses
Auditors' fees and expenses
Law charges
Postage, telegram, telephone etc.
Repairs and maintenance
Insurance
Other expenditure*
` in ‘000
Year ended
Year ended
31-Mar-17
31-Mar-16
559,861,841
477,361,879
159,515,563
141,254,962
5,448,567
3,751,556
7,887,558
9,247,217
Total
732,713,529
631,615,614
94,767,987
83,067,577
11,447,093
7,525,247
87,543
(173,689)
(16,229)
(1,185)
12,633,895
12,277,267
9,856,040
9,421,324
Total
128,776,329
112,116,541
312,955,921
291,509,468
65,834,950
33,664,532
1,624,973
15,521,748
Total
380,415,844
340,695,748
85,047,014
63,061,367
14,305,273
12,740,606
4,773,398
4,251,803
2,095,018
2,584,338
8,861,876
7,380,326
35,221
25,758
28,861
19,331
1,249,095
998,702
4,491,632
4,217,982
12,717,968
10,417,860
6,914,913
5,618,738
66,993,541
66,998,894
Total
207,510,707
178,318,808
*Includes professional fees, commission to sales agents, card and merchant acquiring expenses and
system management fees.
HDFC Bank Limited Annual Report 2016-17
158
Schedules to the Consolidated Financial Statements
For the year ended March 31, 2017
SCHEDULE 17 - Significant accounting policies appended to and forming part of the consolidated financial statements for
the year ended March 31, 2017
A
BACKGROUND
HDFC Bank Limited (‘HDFC Bank’ or ‘the Bank’), incorporated in Mumbai, India is a publicly held banking company engaged
in providing a range of banking and financial services including retail banking, wholesale banking and treasury operations.
The Bank is governed by the Banking Regulation Act, 1949 and the Companies Act, 2013. The Bank has overseas branch
operations in Bahrain, Hong Kong and Dubai. The financial accounting systems of the Bank are centralised and, therefore,
accounting returns are not required to be submitted by branches of the Bank.
HDB Financial Services Limited (HDBFSL) and HDFC Securities Limited (HSL) are subsidiaries of the Bank. HDBFSL
is a non-deposit taking non-banking finance company. HSL is a financial services provider along with broking as a core product.
B
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements comprise the financial statements of the Bank and its subsidiaries constituting the
‘Group’ and ‘Group’s’ share of profits of associates.
The Bank consolidates its subsidiaries in accordance with Accounting Standard (‘AS’) 21, Consolidated Financial Statements,
specified under Section 133 of the Companies Act, 2013, on a line-by-line basis by adding together the like items of assets,
liabilities, income and expenditure. Capital reserve / Goodwill on consolidation represent the difference between the Bank’s
share in the net worth of the subsidiary and the cost of acquisition at the time of making the investment in the subsidiary.
Further, the Bank accounts for investments in associates under equity method of accounting in accordance with AS-23,
Accounting for Investments in Associates in Consolidated Financial Statements, specified under Section 133 of the Companies
Act, 2013.
C
BASIS OF PREPARATION
The consolidated financial statements have been prepared and presented under the historical cost convention and accrual
basis of accounting, unless otherwise stated and are in accordance with Generally Accepted Accounting Principles in India
(‘GAAP’), statutory requirements prescribed under the Banking Regulation Act, 1949, circulars and guidelines issued by the
Reserve Bank of India (‘RBI’) from time to time, Accounting Standards (‘AS’) specified under Section 133 of the Companies
Act, 2013, in so far as they apply to banks and current practices prevailing within the banking industry in India.
Use of estimates
The preparation of consolidated financial statements in conformity with GAAP requires the management to make estimates
and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) as of the date
of the financial statements and the reported income and expenses for the reporting period. Management believes that the
estimates used in the preparation of the financial statements are prudent and reasonable. Actual results could differ from these
estimates. Any revision in the accounting estimates is recognised prospectively in the current and future periods.
Basis of consolidation
The consolidated financial statements present the accounts of HDFC Bank Limited with its following subsidiaries and associate:
Name
HDFC Securities Limited
HDB Financial Services Limited
International Asset Reconstruction Company Private Limited
HDB Employee Welfare Trust
Relation
Country of
incorporation
Ownership
interest**
Subsidiary
Subsidiary
Associate
*
India
India
India
India
97.9%
96.2%
29.4%
*
The accounts of HDB Employee Welfare Trust, a trust established for providing general welfare measures such as
medical relief and educational assistance to the employees of the Bank and their dependents has been entirely
consolidated.
** Denotes HDFC Bank’s direct interest.
HDFC Bank Limited Annual Report 2016-17
159
Schedules to the Consolidated Financial Statements
For the year ended March 31, 2017
During the year ended March 31, 2017, Atlas Documentary Facilitators Company Private Limited and HBL Global Private
Limited, associates of the Bank as at March 31, 2016, amalgamated with HDB Financial Services Limited, pursuant to the
approval of the Honourable High courts of Gujarat and Bombay with effect from December 1, 2016. The appointed date of
the merger as per the scheme of amalgamation was April 1, 2014. Accordingly, the consolidated financial statements include
the effect of the said amalgamation.
During the year ended March 31, 2017 the Bank’s shareholding in HDB Financial Services Limited decreased from
97.1% to 96.2% on account of the said amalgamation and stock options exercised by minority stakeholders.
The audited financial statements of the subsidiary companies, entity controlled by the Bank and the un-audited financial
statements of an associate have been drawn up to the same reporting date as that of the Bank, i.e. March 31, 2017.
D
1
PRINCIPAL ACCOUNTING POLICIES
Investments
HDFC Bank Limited
Classification:
In accordance with the RBI guidelines on investment classification and valuation, investments are classified on the date of
purchase into “Held for Trading” (‘HFT’), “Available for Sale” (‘AFS’) and “Held to Maturity” (‘HTM’) categories (hereinafter called
“categories”). Subsequent shifting amongst the categories is done in accordance with the RBI guidelines. Under each of these
categories, investments are further classified under six groups (hereinafter called “groups”) - Government Securities, Other
Approved Securities, Shares, Debentures and Bonds, Investments in Subsidiaries / Joint Ventures and Other Investments.
Purchase and sale transactions in securities are recorded under ‘Settlement Date’ of accounting, except in the case of equity
shares where ‘Trade Date’ accounting is followed.
Basis of classification:
Investments that are held principally for resale within 90 days from the date of purchase are classified under HFT category.
Investments which the Bank intends to hold till maturity are classified as HTM securities. Investments in the equity of
subsidiaries / joint ventures are categorised as HTM in accordance with the RBI guidelines. Investments which are not
classified in either of the above categories are classified under AFS category.
Acquisition cost:
Brokerage, commission, etc. and broken period interest on debt instruments are recognised in the Statement of Profit and
Loss and are not included in the cost of acquisition.
Disposal of investments:
Profit / Loss on sale of investments under the aforesaid three categories is recognised in the Statement of Profit and
Loss. Cost of investments is based on the weighted average cost method. The profit from sale of investment under HTM
category, net of taxes and transfer to statutory reserve is appropriated from Statement of Profit and Loss to “Capital Reserve”
in accordance with the RBI Guidelines.
Short sale:
The Bank undertakes short sale transactions in Central Government dated securities in accordance with RBI guidelines.
The short position is reflected as the amount received on sale and is classified under ‘Other Liabilities’. The short position is
marked to market and loss, if any, is charged to the Statement of Profit and Loss while gain, if any, is ignored. Profit / Loss
on settlement of the short position is recognised in the Statement of Profit and Loss.
Valuation:
Investments classified under AFS and HFT categories are marked to market as per the RBI guidelines.
Traded investments are valued based on the trades / quotes on the recognised stock exchanges, price list of RBI or prices
declared by Primary Dealers Association of India (‘PDAI’) jointly with Fixed Income Money Market and Derivatives Association
(‘FIMMDA’), periodically.
The market value of unquoted government securities which qualify for determining the Statutory Liquidity Ratio (‘SLR’)
included in the AFS and HFT categories is computed as per the Yield-to-Maturity (‘YTM’) rates published by FIMMDA.
HDFC Bank Limited Annual Report 2016-17
160
Schedules to the Consolidated Financial Statements
For the year ended March 31, 2017
The valuation of other unquoted fixed income securities (viz. State Government securities, other approved securities, bonds
and debentures) and preference shares, is done with a mark-up (reflecting associated credit and liquidity risk) over the YTM
rates for government securities published by FIMMDA.
Special bonds such as oil bonds, fertilizer bonds etc. which are directly issued by Government of India (‘GOI’) that do not
qualify for SLR are also valued by applying the mark-up above the corresponding yield on GOI securities.
Unquoted equity shares are valued at the break-up value, if the latest balance sheet is available or at ` 1 as per the RBI
guidelines.
Units of mutual funds are valued at the latest repurchase price / net asset value declared by the mutual fund.
Treasury bills, commercial papers and certificate of deposits being discounted instruments, are valued at carrying cost and
stated at acquisition cost.
Security receipts are valued as per the net asset value provided by the issuing Asset Reconstruction Company from time to
time.
Net depreciation in the value, if any, compared to the acquisition cost, in any of the six groups, is charged to the Statement
of Profit and Loss. The net appreciation, if any, in any of the six groups is not recognised except to the extent of depreciation
already provided. The valuation of investments includes securities under repo transactions. The book value of individual
securities is not changed after the valuation of investments.
Investments classified under HTM category are carried at their acquisition cost and not marked to market. Any premium
on acquisition is amortised over the remaining maturity period of the security on a constant yield to maturity basis. Such
amortisation of premium is adjusted against interest income under the head “Income from investments” as per the RBI
guidelines. Any diminution, other than temporary, in the value of investments in subsidiaries / joint ventures is provided for.
Non-performing investments are identified and depreciation / provision are made thereon based on the RBI guidelines. The
depreciation / provision on such non-performing investments are not set off against the appreciation in respect of other
performing securities. Interest on non-performing investments is not recognised in the Statement of Profit and Loss until
received.
Repo and reverse repo transactions:
In accordance with the RBI guidelines, repurchase and reverse repurchase transactions in government securities and
corporate debt securities are reflected as borrowing and lending transactions respectively.
Borrowing cost on repo transactions is accounted for as interest expense and revenue on reverse repo transactions is
accounted for as interest income.
HDFC Securities Limited
Investments that are readily realisable and are intended to be held for not more than one year from the date, on which such
investments are made, are classified as current investments. All other investments are classified as long term investments.
Current investments are carried at cost or fair value, whichever is lower. Long-term investments are carried at cost. However,
provision for diminution is made to recognise a decline, other than temporary, in the value of the investments, such reduction
being determined and made for each investment individually.
HDB Financial Services Limited
Investments expected to mature after twelve months are taken as long term / non-current investment and stated at cost. Provision
is recognised only in case of diminution, which is other than temporary in nature. Investments maturing within three months
from the date of acquisition are classified as cash equivalents if they are readily convertible into cash. All other investment are
recognised as short term / current investments and are valued at lower of cost and net realisable value.
Interest on borrowings is recognised in Statement of Profit and Loss on an accrual basis. Costs associated with borrowings are
grouped under financial charges along with the interest costs.
HDB Employees Welfare Trust
Long-term investments are stated at cost of acquisition. Provision for diminution is made if such diminution is considered as
being other than temporary in nature.
HDFC Bank Limited Annual Report 2016-17
161
Schedules to the Consolidated Financial Statements
For the year ended March 31, 2017
2
Advances
HDFC Bank Limited
Classification:
Advances are classified as performing and non-performing based on the RBI guidelines and are stated net of bills
rediscounted, inter-bank participation with risk, specific provisions, interest in suspense for non-performing advances, claims
received from Export Credit Guarantee Corporation, provisions for funded interest term loan classified as non-performing
advances and provisions in lieu of diminution in the fair value of restructured assets. Interest on non-performing advances is
transferred to an interest suspense account and not recognised in the Statement of Profit and Loss until received.
Provisioning:
Specific loan loss provisions in respect of non-performing advances are made based on management’s assessment of the
degree of impairment of wholesale and retail advances, subject to the minimum provisioning level prescribed by the RBI.
The specific provision levels for retail non-performing assets are also based on the nature of product and delinquency levels.
Specific loan loss provisions in respect of non-performing advances are charged to the Statement of Profit and Loss and
included under Provisions and Contingencies.
In accordance with RBI guidelines, accelerated provision is made on non-performing advances which were not earlier
reported by the Bank as Special Mention Account under “SMA-2” category to Central Repository of Information on Large
Credits (CRILC). Accelerated provision is also made on non-performing advances which are erstwhile SMA-2 accounts with
Aggregate Exposure (AE) ` 1,000 million or above and Joint Lenders’ Forum (JLF) is not formed or they fail to agree upon
a common Corrective Action Plan (CAP) within the stipulated time frame.
Non-performing advances are written-off in accordance with the Bank’s policies. Recoveries from bad debts written-off are
recognised in the Statement of Profit and Loss and included under other income.
In relation to non-performing derivative contracts, as per the extant RBI guidelines, the Bank makes provision for the entire
amount of overdue and future receivables relating to positive marked to market value of the said derivative contracts.
The Bank maintains general provision for standard assets including credit exposures computed as per the current marked
to market values of interest rate and foreign exchange derivative contracts and gold in accordance with the guidelines and
at levels stipulated by RBI from time to time. In the case of overseas branches, general provision on standard advances is
maintained at the higher of the levels stipulated by the respective overseas regulator or RBI. Provision for standard assets is
included under other liabilities.
Provisions made in excess of the Bank’s policy for specific loan loss provisions for non-performing assets and regulatory
general provisions are categorised as floating provisions. Creation of floating provisions is considered by the Bank up to a
level approved by the Board of Directors. In accordance with the RBI guidelines, floating provisions are used up to a level
approved by the Board only for contingencies under extraordinary circumstances and for making specific provisions for
impaired accounts as per these guidelines or any regulatory guidance / instructions. Floating provisions are included under
other liabilities.
Further to the provisions required to be held according to the asset classification status, provisions are held for individual
country exposures (other than for home country exposure). Countries are categorised into risk categories as per Export Credit
Guarantee Corporation of India Ltd. (‘ECGC’) guidelines and provisioning is done in respect of that country where the net
funded exposure is one percent or more of the Bank’s total assets. Provision for country risk is included under other liabilities.
In addition to the above, the Bank on a prudential basis makes provisions on advances or exposures which are not NPAs,
but has reasons to believe on the basis of the extant environment or specific information or basis regulatory guidance /
instructions, of a possible slippage of a specific advance or a group of advances or exposures or potential exposures. These
are classified as contingent provisions and included under other liabilities.
The Bank considers a restructured account as one where the Bank, for economic or legal reasons relating to the borrower’s
financial difficulty, grants to the borrower concessions that the Bank would not otherwise consider. Restructuring would
normally involve modification of terms of the advance / securities, which would generally include, among others, alteration of
repayment period / repayable amount / the amount of installments / rate of interest (due to reasons other than competitive
reasons). Restructured accounts are classified as such by the Bank only upon approval and implementation of the
HDFC Bank Limited Annual Report 2016-17
162
Schedules to the Consolidated Financial Statements
For the year ended March 31, 2017
restructuring package. Necessary provision for diminution in the fair value of a restructured account is made and classification
thereof is as per the extant RBI guidelines. Restructuring of an account is done at a borrower level.
HDB Financial Services Limited
Classification:
Advances are classified as standard, sub-standard and doubtful assets as per the Company policy approved by the Board.
The rates applied for making provisions on non-performing advances are higher than those required by the relevant RBI
guidelines. Interest on non-performing advances is transferred to an interest suspense account and not recognised in the
Statement of Profit and Loss until received. Loan assets are recognised on disbursement of loan and in case of new asset
financing on the transfer of ownership.
Provisioning:
The Company assesses all receivables for their recoverability and accordingly recognises provision for non-performing and
doubtful assets as per approved Company policies and guidelines. The Company ensures provisions made are not lower
than as stipulated by RBI guidelines.
The Company provides 0.35% on standard assets as stipulated by Circular No. DNBR (PD) CC.No.002/03.10.001/2014-15
dated November 10, 2014 issued by RBI under the head “Contingent Provision against Standard Assets”.
Loan origination costs:
Brokerage, commission, incentive to employee, etc. paid at the time of acquisition of loans are charged to revenue.
3
Securitisation and transfer of assets
HDFC Bank Limited
The Bank securitises out its receivables to Special Purpose Vehicles (‘SPVs’) in securitisation transactions. Such securitised-
out receivables are de-recognised in the balance sheet when they are sold (true sale criteria being fully met with) and
consideration is received by the Bank. Sales / Transfers that do not meet these criteria for surrender of control are accounted
for as secured borrowings. In respect of receivable pools securitised-out, the Bank provides liquidity and credit enhancements,
as specified by the rating agencies, in the form of cash collaterals / guarantees and / or by subordination of cash flows in line
with RBI guidelines. The Bank also acts as a servicing agent for receivable pools securitised-out.
The Bank also enters into transactions for transfer of standard assets through the direct assignment of cash flows, which
are similar to asset-backed securitisation transactions through the SPV route, except that such portfolios of receivables are
assigned directly to the purchaser and are not represented by Pass Through Certificates (‘PTCs’).
The RBI issued addendum guidelines on securitisation of standard assets vide its circular dated May 7, 2012. Accordingly,
the Bank does not provide liquidity or credit enhancements on the direct assignment transactions undertaken subsequent to
these guidelines. The Bank amortises any profit received for every individual securitisation or direct assignment transaction
based on the method prescribed in these guidelines.
In relation to securitisation transactions undertaken prior to the aforementioned RBI guidelines, including those undertaken
through the direct assignment route, the Bank continues to amortise the profit / premium that arose on account of sale of
receivables over the life of the securities sold, in accordance with the RBI guidelines on securitisation of standard assets
issued vide its circular dated February 1, 2006.
Any loss arising on account of sale of receivables is recognised in the Statement of Profit and Loss for the period in which
the sale occurs in accordance with the said RBI guidelines.
The Bank transfers advances through inter-bank participation with and without risk. In accordance with the RBI guidelines, in
the case of participation with risk, the aggregate amount of the participation issued by the Bank is reduced from advances
and where the Bank is participating, the aggregate amount of the participation is classified under advances. In the case of
participation without risk, the aggregate amount of participation issued by the Bank is classified under borrowings and where
the Bank is participating, the aggregate amount of participation is shown as due from banks under advances.
The Bank enters into transactions for the sale or purchase of Priority Sector Lending Certificates (PSLCs). In the case of a
sale transaction, the Bank sells the fulfillment of priority sector obligation and in the case of a purchase transaction the Bank
buys the fulfillment of priority sector obligation through the RBI trading platform. There is no transfer of risks or loan assets.
HDFC Bank Limited Annual Report 2016-17
163
Schedules to the Consolidated Financial Statements
For the year ended March 31, 2017
The fee received for the sale of PSLCs is recorded as ‘Miscellaneous Income’ and the fee paid for purchase of the PSLCs
is recorded as ‘Other Expenditure’ in Statement of Profit and Loss.
In accordance with RBI guidelines on sale of non-performing advances, if the sale is at a price below the net book value
(i.e., book value less provisions held), the shortfall is charged to the Statement of Profit and Loss and if the sale is for a
value higher than the net book value, the excess provision is credited to the Statement of Profit and Loss in the year the
amounts are received.
The Bank invests in PTCs issued by other SPVs. These are accounted for at the deal value and are classified as investments.
The Bank also buys loans through the direct assignment route which are classified as advances. These are carried at
acquisition cost unless it is more than the face value, in which case the premium is amortised over the tenor of the loans.
HDB Financial Services Limited
(cid:115)(cid:0)
(cid:48)(cid:82)(cid:73)(cid:79)(cid:82)(cid:0)(cid:84)(cid:79)(cid:0)(cid:41)(cid:83)(cid:83)(cid:85)(cid:65)(cid:78)(cid:67)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0)(cid:50)(cid:34)(cid:41)(cid:0)(cid:35)(cid:73)(cid:82)(cid:67)(cid:85)(cid:76)(cid:65)(cid:82)(cid:0)(cid:68)(cid:65)(cid:84)(cid:69)(cid:68)(cid:0)(cid:33)(cid:85)(cid:71)(cid:85)(cid:83)(cid:84)(cid:0)(cid:18)(cid:17)(cid:12)(cid:0)(cid:18)(cid:16)(cid:17)(cid:18)
a) On receivables being assigned / securtised, the assets are de-recognised as all the rights, title, future receivables
& interest thereof are assigned to the purchaser.
b) Gains arising on assignment of receivables will be recognised at the end of the tenure of assignment contract as
per the RBI guidelines, while loss, if any is recognised upfront.
(cid:115)(cid:0)
(cid:48)(cid:79)(cid:83)(cid:84)(cid:0)(cid:41)(cid:83)(cid:83)(cid:85)(cid:65)(cid:78)(cid:67)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0)(cid:50)(cid:34)(cid:41)(cid:0)(cid:35)(cid:73)(cid:82)(cid:67)(cid:85)(cid:76)(cid:65)(cid:82)(cid:0)(cid:68)(cid:65)(cid:84)(cid:69)(cid:68)(cid:0)(cid:33)(cid:85)(cid:71)(cid:85)(cid:83)(cid:84)(cid:0)(cid:18)(cid:17)(cid:12)(cid:0)(cid:18)(cid:16)(cid:17)(cid:18)
a)
Securitised receivables are de-recognised in the balance sheet when they are sold i.e. they meet true sale criteria.
b) Gains arising out of securitisation of assets are recognised over the tenure of the securities issued by Special
Purpose Vehicle Trust (SPV).
c)
The excess interest spread on the securitisation transactions are recognised in the Statement of Profit and Loss
only when it is redeemed in cash by the SPV after adjusting for overdue receivable for more than 90 days. Losses,
if any, are recognised upfront.
4
Fixed assets and depreciation
HDFC Bank Limited
Fixed assets are stated at cost less accumulated depreciation as adjusted for impairment, if any. Cost includes cost of
purchase and all expenditure like site preparation, installation costs and professional fees incurred on the asset before it is
ready to use. Subsequent expenditure incurred on assets put to use is capitalised only when it increases the future benefit /
functioning capability from / of such assets.
Depreciation is charged over the estimated useful life of the fixed asset on a straight-line basis. The management believes
that the useful life of assets assessed by the Bank, pursuant to the Companies Act, 2013, taking into account changes in
environment, changes in technology, the utility and efficacy of the asset in use, fairly reflects its estimate of useful lives of
the fixed assets. The estimated useful lives of key fixed assets are given below:
Asset
Owned Premises
Automated Teller Machines (‘ATMs’)
Electrical equipment and installations
Office equipment
Computers
Modems, routers, switches, servers, network and related IT equipment
Motor cars
Furniture and fittings
HDFC Bank Limited Annual Report 2016-17
164
Estimated useful life
as assessed
by the Bank
Estimated useful
life specified under
Schedule II of the
Companies Act, 2013
61 years
10 years
6 to 10 years
3 to 6 years
3 years
3 to 6 years
4 years
16 years
60 years
15 years
10 years
5 years
3 years
6 years
8 years
10 years
Schedules to the Consolidated Financial Statements
For the year ended March 31, 2017
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:41)(cid:77)(cid:80)(cid:82)(cid:79)(cid:86)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:0)(cid:84)(cid:79)(cid:0)(cid:76)(cid:69)(cid:65)(cid:83)(cid:69)(cid:0)(cid:72)(cid:79)(cid:76)(cid:68)(cid:0)(cid:80)(cid:82)(cid:69)(cid:77)(cid:73)(cid:83)(cid:69)(cid:83)(cid:0)(cid:65)(cid:82)(cid:69)(cid:0)(cid:67)(cid:72)(cid:65)(cid:82)(cid:71)(cid:69)(cid:68)(cid:0)(cid:79)(cid:70)(cid:70)(cid:0)(cid:79)(cid:86)(cid:69)(cid:82)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:82)(cid:69)(cid:77)(cid:65)(cid:73)(cid:78)(cid:73)(cid:78)(cid:71)(cid:0)(cid:80)(cid:82)(cid:73)(cid:77)(cid:65)(cid:82)(cid:89)(cid:0)(cid:80)(cid:69)(cid:82)(cid:73)(cid:79)(cid:68)(cid:0)(cid:79)(cid:70)(cid:0)(cid:76)(cid:69)(cid:65)(cid:83)(cid:69)(cid:14)
(cid:51)(cid:79)(cid:70)(cid:84)(cid:87)(cid:65)(cid:82)(cid:69)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:83)(cid:89)(cid:83)(cid:84)(cid:69)(cid:77)(cid:0)(cid:68)(cid:69)(cid:86)(cid:69)(cid:76)(cid:79)(cid:80)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:69)(cid:88)(cid:80)(cid:69)(cid:78)(cid:68)(cid:73)(cid:84)(cid:85)(cid:82)(cid:69)(cid:0)(cid:73)(cid:83)(cid:0)(cid:68)(cid:69)(cid:80)(cid:82)(cid:69)(cid:67)(cid:73)(cid:65)(cid:84)(cid:69)(cid:68)(cid:0)(cid:79)(cid:86)(cid:69)(cid:82)(cid:0)(cid:65)(cid:0)(cid:80)(cid:69)(cid:82)(cid:73)(cid:79)(cid:68)(cid:0)(cid:79)(cid:70)(cid:0)(cid:21)(cid:0)(cid:89)(cid:69)(cid:65)(cid:82)(cid:83)(cid:14)
(cid:48)(cid:79)(cid:73)(cid:78)(cid:84)(cid:0)(cid:79)(cid:70)(cid:0)(cid:83)(cid:65)(cid:76)(cid:69)(cid:0)(cid:84)(cid:69)(cid:82)(cid:77)(cid:73)(cid:78)(cid:65)(cid:76)(cid:83)(cid:0)(cid:65)(cid:82)(cid:69)(cid:0)(cid:70)(cid:85)(cid:76)(cid:76)(cid:89)(cid:0)(cid:68)(cid:69)(cid:80)(cid:82)(cid:69)(cid:67)(cid:73)(cid:65)(cid:84)(cid:69)(cid:68)(cid:0)(cid:73)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:89)(cid:69)(cid:65)(cid:82)(cid:0)(cid:79)(cid:70)(cid:0)(cid:80)(cid:85)(cid:82)(cid:67)(cid:72)(cid:65)(cid:83)(cid:69)(cid:14)
(cid:38)(cid:79)(cid:82)(cid:0)(cid:65)(cid:83)(cid:83)(cid:69)(cid:84)(cid:83)(cid:0)(cid:80)(cid:85)(cid:82)(cid:67)(cid:72)(cid:65)(cid:83)(cid:69)(cid:68)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:83)(cid:79)(cid:76)(cid:68)(cid:0)(cid:68)(cid:85)(cid:82)(cid:73)(cid:78)(cid:71)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:89)(cid:69)(cid:65)(cid:82)(cid:12)(cid:0)(cid:68)(cid:69)(cid:80)(cid:82)(cid:69)(cid:67)(cid:73)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:73)(cid:83)(cid:0)(cid:80)(cid:82)(cid:79)(cid:86)(cid:73)(cid:68)(cid:69)(cid:68)(cid:0)(cid:79)(cid:78)(cid:0)(cid:80)(cid:82)(cid:79)(cid:13)(cid:82)(cid:65)(cid:84)(cid:65)(cid:0)(cid:66)(cid:65)(cid:83)(cid:73)(cid:83)(cid:0)(cid:66)(cid:89)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:34)(cid:65)(cid:78)(cid:75)(cid:14)
(cid:55)(cid:72)(cid:69)(cid:78)(cid:69)(cid:86)(cid:69)(cid:82)(cid:0)(cid:84)(cid:72)(cid:69)(cid:82)(cid:69)(cid:0)(cid:73)(cid:83)(cid:0)(cid:65)(cid:0)(cid:82)(cid:69)(cid:86)(cid:73)(cid:83)(cid:73)(cid:79)(cid:78)(cid:0)(cid:79)(cid:70)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:69)(cid:83)(cid:84)(cid:73)(cid:77)(cid:65)(cid:84)(cid:69)(cid:68)(cid:0)(cid:85)(cid:83)(cid:69)(cid:70)(cid:85)(cid:76)(cid:0)(cid:76)(cid:73)(cid:70)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0)(cid:65)(cid:78)(cid:0)(cid:65)(cid:83)(cid:83)(cid:69)(cid:84)(cid:12)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:85)(cid:78)(cid:65)(cid:77)(cid:79)(cid:82)(cid:84)(cid:73)(cid:83)(cid:69)(cid:68)(cid:0)(cid:68)(cid:69)(cid:80)(cid:82)(cid:69)(cid:67)(cid:73)(cid:65)(cid:66)(cid:76)(cid:69)(cid:0)(cid:65)(cid:77)(cid:79)(cid:85)(cid:78)(cid:84)(cid:0)(cid:73)(cid:83)(cid:0)(cid:67)(cid:72)(cid:65)(cid:82)(cid:71)(cid:69)(cid:68)(cid:0)
over the revised remaining useful life of the said asset.
(cid:48)(cid:82)(cid:79)(cid:108)(cid:84)(cid:0) (cid:79)(cid:78)(cid:0) (cid:83)(cid:65)(cid:76)(cid:69)(cid:0) (cid:79)(cid:70)(cid:0) (cid:73)(cid:77)(cid:77)(cid:79)(cid:86)(cid:65)(cid:66)(cid:76)(cid:69)(cid:0) (cid:80)(cid:82)(cid:79)(cid:80)(cid:69)(cid:82)(cid:84)(cid:89)(cid:0) (cid:78)(cid:69)(cid:84)(cid:0) (cid:79)(cid:70)(cid:0) (cid:84)(cid:65)(cid:88)(cid:69)(cid:83)(cid:0) (cid:65)(cid:78)(cid:68)(cid:0) (cid:84)(cid:82)(cid:65)(cid:78)(cid:83)(cid:70)(cid:69)(cid:82)(cid:0) (cid:84)(cid:79)(cid:0) (cid:83)(cid:84)(cid:65)(cid:84)(cid:85)(cid:84)(cid:79)(cid:82)(cid:89)(cid:0) (cid:82)(cid:69)(cid:83)(cid:69)(cid:82)(cid:86)(cid:69)(cid:12)(cid:0) (cid:65)(cid:82)(cid:69)(cid:0) (cid:84)(cid:82)(cid:65)(cid:78)(cid:83)(cid:70)(cid:69)(cid:82)(cid:82)(cid:69)(cid:68)(cid:0) (cid:84)(cid:79)(cid:0) (cid:67)(cid:65)(cid:80)(cid:73)(cid:84)(cid:65)(cid:76)(cid:0) (cid:82)(cid:69)(cid:83)(cid:69)(cid:82)(cid:86)(cid:69)(cid:0)
account.
HDFC Securities Limited
Tangible assets are stated at acquisition cost, net of accumulated depreciation and accumulated impairment losses,
if any. Cost comprises purchase price and expenses directly attributable to bringing the asset to its working condition for the
intended use. Subsequent expenditure related to an item of fixed asset are added to its book value only if it increases the
future benefits from the existing asset beyond its previously assessed standard of performance.
Items of fixed assets that have been retired from active use and are held for disposal are stated at the lower of their net book
value and net realisable value and are shown separately in the financial statements.
Gains or losses arising from disposal or retirement of tangible fixed assets are measured as the difference between the net
disposal proceeds and the carrying amount of the asset and are recognised net, within “Other Income” or “Other Expenses”,
as the case maybe, in the Statement of Profit and Loss in the year of disposal or retirement.
Capital work-in-progress are fixed assets which are not yet ready for their intended use. Such assets are carried at cost
comprising direct cost and related incidental expenses.
Depreciation is provided on a pro-rata basis to fully depreciate the assets using the straight-line method over the estimated
useful lives of the assets.
For the following categories of assets, depreciation on tangible fixed assets has been provided on the straight-line method
as per the useful life prescribed in Schedule II to the Companies Act, 2013:
Asset
Computer hardware
Office equipment
Furniture and fixtures
Leasehold improvements
Electricals
Office premises
Estimated useful life
3 years
5 years
10 years
Over the remaining period of the lease
10 years
60 years
For the following categories of assets, the Company has assessed useful life based on technical advice, taking into account
the nature of the asset, the estimates usage of asset, the operating condition of asset, anticipated technological changes
and utility in the business, as below:
Asset
Vehicles
Network & servers
Estimated useful life
4 years
4 years
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:33)(cid:76)(cid:76)(cid:0)(cid:84)(cid:65)(cid:78)(cid:71)(cid:73)(cid:66)(cid:76)(cid:69)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:73)(cid:78)(cid:84)(cid:65)(cid:78)(cid:71)(cid:73)(cid:66)(cid:76)(cid:69)(cid:0)(cid:65)(cid:83)(cid:83)(cid:69)(cid:84)(cid:83)(cid:0)(cid:67)(cid:79)(cid:83)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)(cid:76)(cid:69)(cid:83)(cid:83)(cid:0)(cid:84)(cid:72)(cid:65)(cid:78)(cid:0)` 5,000 individually are fully depreciated in the year of purchase.
(cid:53)(cid:83)(cid:69)(cid:70)(cid:85)(cid:76)(cid:0)(cid:76)(cid:73)(cid:86)(cid:69)(cid:83)(cid:0)(cid:65)(cid:82)(cid:69)(cid:0)(cid:82)(cid:69)(cid:86)(cid:73)(cid:69)(cid:87)(cid:69)(cid:68)(cid:0)(cid:65)(cid:84)(cid:0)(cid:69)(cid:65)(cid:67)(cid:72)(cid:0)(cid:108)(cid:78)(cid:65)(cid:78)(cid:67)(cid:73)(cid:65)(cid:76)(cid:0)(cid:89)(cid:69)(cid:65)(cid:82)(cid:0)(cid:69)(cid:78)(cid:68)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:65)(cid:68)(cid:74)(cid:85)(cid:83)(cid:84)(cid:69)(cid:68)(cid:0)(cid:73)(cid:70)(cid:0)(cid:65)(cid:80)(cid:80)(cid:82)(cid:79)(cid:80)(cid:82)(cid:73)(cid:65)(cid:84)(cid:69)(cid:14)
HDFC Bank Limited Annual Report 2016-17
165
Schedules to the Consolidated Financial Statements
For the year ended March 31, 2017
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:41)(cid:78)(cid:84)(cid:65)(cid:78)(cid:71)(cid:73)(cid:66)(cid:76)(cid:69)(cid:0)(cid:65)(cid:83)(cid:83)(cid:69)(cid:84)(cid:83)(cid:0)(cid:65)(cid:82)(cid:69)(cid:0)(cid:83)(cid:84)(cid:65)(cid:84)(cid:69)(cid:68)(cid:0)(cid:65)(cid:84)(cid:0)(cid:65)(cid:67)(cid:81)(cid:85)(cid:73)(cid:83)(cid:73)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:67)(cid:79)(cid:83)(cid:84)(cid:12)(cid:0)(cid:78)(cid:69)(cid:84)(cid:0)(cid:79)(cid:70)(cid:0)(cid:65)(cid:67)(cid:67)(cid:85)(cid:77)(cid:85)(cid:76)(cid:65)(cid:84)(cid:69)(cid:68)(cid:0)(cid:65)(cid:77)(cid:79)(cid:82)(cid:84)(cid:73)(cid:83)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:65)(cid:67)(cid:67)(cid:85)(cid:77)(cid:85)(cid:76)(cid:65)(cid:84)(cid:69)(cid:68)(cid:0)(cid:73)(cid:77)(cid:80)(cid:65)(cid:73)(cid:82)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:76)(cid:79)(cid:83)(cid:83)(cid:69)(cid:83)(cid:12)(cid:0)
if any.
(cid:35)(cid:79)(cid:83)(cid:84)(cid:0)(cid:79)(cid:70)(cid:0)(cid:65)(cid:78)(cid:0)(cid:73)(cid:78)(cid:84)(cid:65)(cid:78)(cid:71)(cid:73)(cid:66)(cid:76)(cid:69)(cid:0)(cid:65)(cid:83)(cid:83)(cid:69)(cid:84)(cid:0)(cid:73)(cid:78)(cid:67)(cid:76)(cid:85)(cid:68)(cid:69)(cid:83)(cid:0)(cid:80)(cid:85)(cid:82)(cid:67)(cid:72)(cid:65)(cid:83)(cid:69)(cid:0)(cid:80)(cid:82)(cid:73)(cid:67)(cid:69)(cid:12)(cid:0)(cid:78)(cid:79)(cid:78)(cid:13)(cid:82)(cid:69)(cid:70)(cid:85)(cid:78)(cid:68)(cid:65)(cid:66)(cid:76)(cid:69)(cid:0)(cid:84)(cid:65)(cid:88)(cid:69)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:68)(cid:85)(cid:84)(cid:73)(cid:69)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:65)(cid:78)(cid:89)(cid:0)(cid:79)(cid:84)(cid:72)(cid:69)(cid:82)(cid:0)(cid:68)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:76)(cid:89)(cid:0)(cid:65)(cid:84)(cid:84)(cid:82)(cid:73)(cid:66)(cid:85)(cid:84)(cid:65)(cid:66)(cid:76)(cid:69)(cid:0)
expenditure on making the asset ready for its intended use and net of any trade discounts and rebates. Subsequent
expenditure on an intangible asset is charged to the Statement of Profit and Loss as an expense unless it is probable
that such expenditure will enable the intangible asset increase the future benefits from the existing asset beyond its
previously assessed standard of performance and such expenditure can be measured and attributed to the intangible
asset reliably, in which case, such expenditure is capitalised.
(cid:37)(cid:88)(cid:80)(cid:69)(cid:78)(cid:68)(cid:73)(cid:84)(cid:85)(cid:82)(cid:69)(cid:0) (cid:79)(cid:78)(cid:0) (cid:83)(cid:79)(cid:70)(cid:84)(cid:87)(cid:65)(cid:82)(cid:69)(cid:0) (cid:68)(cid:69)(cid:86)(cid:69)(cid:76)(cid:79)(cid:80)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0) (cid:69)(cid:76)(cid:73)(cid:71)(cid:73)(cid:66)(cid:76)(cid:69)(cid:0) (cid:70)(cid:79)(cid:82)(cid:0) (cid:67)(cid:65)(cid:80)(cid:73)(cid:84)(cid:65)(cid:76)(cid:73)(cid:83)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0) (cid:65)(cid:82)(cid:69)(cid:0) (cid:67)(cid:65)(cid:82)(cid:82)(cid:73)(cid:69)(cid:68)(cid:0) (cid:65)(cid:83)(cid:0) (cid:73)(cid:78)(cid:84)(cid:65)(cid:78)(cid:71)(cid:73)(cid:66)(cid:76)(cid:69)(cid:0) (cid:65)(cid:83)(cid:83)(cid:69)(cid:84)(cid:83)(cid:0) (cid:85)(cid:78)(cid:68)(cid:69)(cid:82)(cid:0) (cid:68)(cid:69)(cid:86)(cid:69)(cid:76)(cid:79)(cid:80)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)
where such assets are not yet ready for their intended use.
(cid:41)(cid:78)(cid:84)(cid:65)(cid:78)(cid:71)(cid:73)(cid:66)(cid:76)(cid:69)(cid:0) (cid:65)(cid:83)(cid:83)(cid:69)(cid:84)(cid:83)(cid:0) (cid:65)(cid:82)(cid:69)(cid:0) (cid:65)(cid:77)(cid:79)(cid:82)(cid:84)(cid:73)(cid:83)(cid:69)(cid:68)(cid:0) (cid:79)(cid:78)(cid:0) (cid:65)(cid:0) (cid:83)(cid:84)(cid:82)(cid:65)(cid:73)(cid:71)(cid:72)(cid:84)(cid:13)(cid:76)(cid:73)(cid:78)(cid:69)(cid:0) (cid:66)(cid:65)(cid:83)(cid:73)(cid:83)(cid:0) (cid:79)(cid:86)(cid:69)(cid:82)(cid:0) (cid:84)(cid:72)(cid:69)(cid:73)(cid:82)(cid:0) (cid:69)(cid:83)(cid:84)(cid:73)(cid:77)(cid:65)(cid:84)(cid:69)(cid:68)(cid:0) (cid:85)(cid:83)(cid:69)(cid:70)(cid:85)(cid:76)(cid:0) (cid:76)(cid:73)(cid:86)(cid:69)(cid:83)(cid:14)(cid:0) (cid:33)(cid:0) (cid:82)(cid:69)(cid:66)(cid:85)(cid:84)(cid:84)(cid:65)(cid:66)(cid:76)(cid:69)(cid:0) (cid:80)(cid:82)(cid:69)(cid:83)(cid:85)(cid:77)(cid:80)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)
that the useful life of an intangible asset will not exceed ten years from the date when the asset is available for use is
considered by the management. The amortisation period and the amortisation method are reviewed at least at each
reporting date. If the expected useful life of the asset is significantly different from previous estimates, the amortisation
period is changed accordingly.
(cid:39)(cid:65)(cid:73)(cid:78)(cid:83)(cid:0)(cid:79)(cid:82)(cid:0)(cid:76)(cid:79)(cid:83)(cid:83)(cid:69)(cid:83)(cid:0)(cid:65)(cid:82)(cid:73)(cid:83)(cid:73)(cid:78)(cid:71)(cid:0)(cid:70)(cid:82)(cid:79)(cid:77)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:82)(cid:69)(cid:84)(cid:73)(cid:82)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:79)(cid:82)(cid:0)(cid:68)(cid:73)(cid:83)(cid:80)(cid:79)(cid:83)(cid:65)(cid:76)(cid:0)(cid:79)(cid:70)(cid:0)(cid:65)(cid:78)(cid:0)(cid:73)(cid:78)(cid:84)(cid:65)(cid:78)(cid:71)(cid:73)(cid:66)(cid:76)(cid:69)(cid:0)(cid:65)(cid:83)(cid:83)(cid:69)(cid:84)(cid:0)(cid:65)(cid:82)(cid:69)(cid:0)(cid:68)(cid:69)(cid:84)(cid:69)(cid:82)(cid:77)(cid:73)(cid:78)(cid:69)(cid:68)(cid:0)(cid:65)(cid:83)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:68)(cid:73)(cid:70)(cid:70)(cid:69)(cid:82)(cid:69)(cid:78)(cid:67)(cid:69)(cid:0)(cid:66)(cid:69)(cid:84)(cid:87)(cid:69)(cid:69)(cid:78)(cid:0)
the net disposal proceeds and the carrying amount of the asset and recognised as income or expense in the Statement
of Profit and Loss in the year of disposal.
The estimated useful lives of intangible assets used for amortisation are:
Asset
Computer software licenses
Electronic trading platform (Website)
Bombay Stock Exchange card
HDB Financial Services Limited
Estimated useful life
5 years
5 years
10 years
Fixed assets are stated at cost less accumulated depreciation and impairment, if any. The cost of fixed assets comprise
purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Subsequent
expenditure incurred on assets put to use is capitalised only when it increases the future benefit / functioning capability from
/ of such assets.
Depreciation is charged over the estimated useful life of the fixed assets on a straight line basis in the manner prescribed in
Schedule II of the Companies Act, 2013, except for assets as under:
Asset
Motor cars
Estimated useful life
as assessed by the
Company
Estimated useful life
under Schedule II of
Companies Act, 2013
5 years
8 years
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:41)(cid:77)(cid:80)(cid:82)(cid:79)(cid:86)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:0)(cid:84)(cid:79)(cid:0)(cid:76)(cid:69)(cid:65)(cid:83)(cid:69)(cid:0)(cid:72)(cid:79)(cid:76)(cid:68)(cid:0)(cid:80)(cid:82)(cid:69)(cid:77)(cid:73)(cid:83)(cid:69)(cid:83)(cid:0)(cid:65)(cid:82)(cid:69)(cid:0)(cid:67)(cid:72)(cid:65)(cid:82)(cid:71)(cid:69)(cid:68)(cid:0)(cid:79)(cid:70)(cid:70)(cid:0)(cid:79)(cid:86)(cid:69)(cid:82)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:80)(cid:82)(cid:73)(cid:77)(cid:65)(cid:82)(cid:89)(cid:0)(cid:80)(cid:69)(cid:82)(cid:73)(cid:79)(cid:68)(cid:0)(cid:79)(cid:70)(cid:0)(cid:76)(cid:69)(cid:65)(cid:83)(cid:69)(cid:0)(cid:79)(cid:82)(cid:0)(cid:73)(cid:84)(cid:83)(cid:0)(cid:85)(cid:83)(cid:69)(cid:70)(cid:85)(cid:76)(cid:0)(cid:76)(cid:73)(cid:70)(cid:69)(cid:12)(cid:0)(cid:87)(cid:72)(cid:73)(cid:67)(cid:72)(cid:69)(cid:86)(cid:69)(cid:82)(cid:0)(cid:73)(cid:83)(cid:0)
lower.
(cid:41)(cid:84)(cid:69)(cid:77)(cid:83)(cid:0)(cid:67)(cid:79)(cid:83)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)(cid:76)(cid:69)(cid:83)(cid:83)(cid:0)(cid:84)(cid:72)(cid:65)(cid:78)(cid:0)` 5,000 are fully depreciated in the year of purchase.
(cid:52)(cid:72)(cid:69)(cid:0)(cid:35)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:89)(cid:0)(cid:72)(cid:65)(cid:83)(cid:0)(cid:69)(cid:83)(cid:84)(cid:73)(cid:77)(cid:65)(cid:84)(cid:69)(cid:68)(cid:0)(cid:46)(cid:73)(cid:76)(cid:0)(cid:82)(cid:69)(cid:83)(cid:73)(cid:68)(cid:85)(cid:65)(cid:76)(cid:0)(cid:86)(cid:65)(cid:76)(cid:85)(cid:69)(cid:0)(cid:65)(cid:84)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:69)(cid:78)(cid:68)(cid:0)(cid:79)(cid:70)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:85)(cid:83)(cid:69)(cid:70)(cid:85)(cid:76)(cid:0)(cid:76)(cid:73)(cid:70)(cid:69)(cid:0)(cid:70)(cid:79)(cid:82)(cid:0)(cid:65)(cid:76)(cid:76)(cid:0)(cid:66)(cid:76)(cid:79)(cid:67)(cid:75)(cid:0)(cid:79)(cid:70)(cid:0)(cid:65)(cid:83)(cid:83)(cid:69)(cid:84)(cid:83)(cid:14)
(cid:38)(cid:79)(cid:82)(cid:0)(cid:65)(cid:83)(cid:83)(cid:69)(cid:84)(cid:83)(cid:0)(cid:80)(cid:85)(cid:82)(cid:67)(cid:72)(cid:65)(cid:83)(cid:69)(cid:68)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:83)(cid:79)(cid:76)(cid:68)(cid:0)(cid:68)(cid:85)(cid:82)(cid:73)(cid:78)(cid:71)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:89)(cid:69)(cid:65)(cid:82)(cid:12)(cid:0)(cid:68)(cid:69)(cid:80)(cid:82)(cid:69)(cid:67)(cid:73)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:73)(cid:83)(cid:0)(cid:66)(cid:69)(cid:73)(cid:78)(cid:71)(cid:0)(cid:80)(cid:82)(cid:79)(cid:86)(cid:73)(cid:68)(cid:69)(cid:68)(cid:0)(cid:79)(cid:78)(cid:0)(cid:80)(cid:82)(cid:79)(cid:13)(cid:82)(cid:65)(cid:84)(cid:65)(cid:0)(cid:66)(cid:65)(cid:83)(cid:73)(cid:83)(cid:0)(cid:66)(cid:89)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:35)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:89)(cid:14)
Software and system development expenditure are capitalised at cost of acquisition including cost attributable to bring the same
in working condition and the useful life of the same is estimated of 3 years with zero residual value. Any expenses on such
software for support and maintenance payable annually are charged to the Statement of Profit and Loss.
HDFC Bank Limited Annual Report 2016-17
166
Schedules to the Consolidated Financial Statements
For the year ended March 31, 2017
5
Impairment of assets
Group
The Group assesses at each Balance Sheet date whether there is any indication that an asset may be impaired. Impairment
loss, if any, is provided in the Statement of Profit and Loss to the extent the carrying amount of assets exceeds their estimated
recoverable amount.
6
Transactions involving foreign exchange
HDFC Bank Limited
Foreign currency income and expenditure items of domestic operations are translated at the exchange rates prevailing on
the date of the transaction. Income and expenditure items of integral foreign operations (representative offices) are translated
at the weekly average closing rates and of non-integral foreign operations (foreign branches) at the monthly average closing
rates.
Foreign currency monetary items of domestic and integral foreign operations are translated at the closing exchange rates
notified by Foreign Exchange Dealers’ Association of India (‘FEDAI’) as at the Balance Sheet date and the resulting net
valuation profit or loss arising due to a net open position in any foreign currency is recognised in the Statement of Profit and
Loss.
Both monetary and non-monetary foreign currency assets and liabilities of non-integral foreign operations are translated at
closing exchange rates notified by FEDAI at the Balance Sheet date and the resulting profit / loss arising from exchange
differences are accumulated in the Foreign Currency Translation Account until remittance or the disposal of the net investment
in the non-integral foreign operations in accordance with AS - 11, The Effects of Changes in Foreign Exchange Rates.
Foreign exchange spot and forward contracts outstanding as at the Balance Sheet date and held for trading, are revalued at
the closing spot and forward rates respectively as notified by FEDAI and at interpolated rates for contracts of interim maturities.
The USD-INR rate for valuation of contracts having longer maturities i.e. greater than one year is implied from MIFOR and
LIBOR curves. For other currency pairs, the forward points (for rates / tenors not published by FEDAI) are obtained from
Reuters for valuation of the FX deals. As directed by FEDAI to consider P&L on present value basis, the forward profit or
loss on the deals are discounted till the valuation date using the discounting yields. The resulting profit or loss on valuation
is recognised in the Statement of Profit and Loss. Foreign exchange contracts are classified as assets when the fair value is
positive (positive marked to market value) or as liabilities when the fair value is negative (negative marked to market value).
Foreign exchange forward contracts not intended for trading, that are entered into to establish the amount of reporting currency
required or available at the settlement date of a transaction and are outstanding at the Balance Sheet date, are effectively
valued at the closing spot rate. The premia or discount arising at the inception of such forward exchange contract is amortised
as expense or income over the life of the contract.
Currency future contracts are marked to market daily using settlement price on a trading day, which is the closing price of
the respective future contracts on that day. While the daily settlement price is computed on the basis of the last half an hour
weighted average price of such contract, the final settlement price is taken as the RBI reference rate on the last trading day of
the future contract or as may be specified by the relevant authority from time to time. All open positions are marked to market
based on the settlement price and the resultant marked to market profit / loss is daily settled with the exchange.
Contingent liabilities on account of foreign exchange contracts, currency future contracts, guarantees, letters of credit,
acceptances and endorsements are reported at closing rates of exchange notified by FEDAI as at the Balance Sheet date.
7
Derivative contracts
HDFC Bank Limited
The Bank recognises all derivative contracts (other than those designated as hedges) at fair value, on the date on which the
derivative contracts are entered into and are re-measured at fair value as at the Balance Sheet or reporting dates. Derivatives
are classified as assets when the fair value is positive (positive marked to market value) or as liabilities when the fair value is
negative (negative marked to market value). Changes in the fair value of derivatives other than those designated as hedges
are recognised in the Statement of Profit and Loss.
HDFC Bank Limited Annual Report 2016-17
167
Schedules to the Consolidated Financial Statements
For the year ended March 31, 2017
Derivative contracts designated as hedges are not marked to market unless their underlying transaction is marked to market.
In respect of derivative contracts that are marked to market, changes in the market value are recognised in the Statement of
Profit and Loss in the relevant period. The Bank identifies the hedged item (asset or liability) at the inception of the transaction
itself. Hedge effectiveness is ascertained at the time of the inception of the hedge and periodically thereafter. Gains or losses
arising from hedge ineffectiveness, if any, are recognised in the Statement of Profit and Loss.
Contingent liabilities on account of derivative contracts denominated in foreign currencies are reported at closing rates of
exchange notified by FEDAI as at the Balance Sheet date.
8
Revenue recognition
HDFC Bank Limited
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assets and loan accounts where restructuring has been approved by the RBI under Strategic Debt Restructuring (SDR)
scheme where it is recognised upon realisation as per RBI norms.
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effective interest rate.
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effective yield basis.
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significant act / milestone is completed.
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the dividend is established.
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recognised on a straight-line basis over the period of contract. Other fees and commission income are recognised when
due, where the Bank is reasonably certain of ultimate collection.
HDFC Securities Limited
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term of the contract.
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the case may be, issue of the insurance policy to the applicant.
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other levies by SEBI and stock exchanges.
(cid:41)(cid:78)(cid:84)(cid:69)(cid:82)(cid:69)(cid:83)(cid:84)(cid:0)(cid:73)(cid:83)(cid:0)(cid:69)(cid:65)(cid:82)(cid:78)(cid:69)(cid:68)(cid:0)(cid:79)(cid:78)(cid:0)(cid:68)(cid:69)(cid:76)(cid:65)(cid:89)(cid:69)(cid:68)(cid:0)(cid:80)(cid:65)(cid:89)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:0)(cid:70)(cid:82)(cid:79)(cid:77)(cid:0)(cid:67)(cid:76)(cid:73)(cid:69)(cid:78)(cid:84)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:65)(cid:77)(cid:79)(cid:85)(cid:78)(cid:84)(cid:83)(cid:0)(cid:70)(cid:85)(cid:78)(cid:68)(cid:69)(cid:68)(cid:0)(cid:84)(cid:79)(cid:0)(cid:84)(cid:72)(cid:69)(cid:77)(cid:0)(cid:65)(cid:83)(cid:0)(cid:87)(cid:69)(cid:76)(cid:76)(cid:0)(cid:65)(cid:83)(cid:0)(cid:84)(cid:69)(cid:82)(cid:77)(cid:0)(cid:68)(cid:69)(cid:80)(cid:79)(cid:83)(cid:73)(cid:84)(cid:83)(cid:0)(cid:87)(cid:73)(cid:84)(cid:72)(cid:0)(cid:66)(cid:65)(cid:78)(cid:75)(cid:83)(cid:14)
(cid:41)(cid:78)(cid:84)(cid:69)(cid:82)(cid:69)(cid:83)(cid:84)(cid:0)(cid:73)(cid:78)(cid:67)(cid:79)(cid:77)(cid:69)(cid:0)(cid:73)(cid:83)(cid:0)(cid:82)(cid:69)(cid:67)(cid:79)(cid:71)(cid:78)(cid:73)(cid:83)(cid:69)(cid:68)(cid:0)(cid:79)(cid:78)(cid:0)(cid:65)(cid:0)(cid:84)(cid:73)(cid:77)(cid:69)(cid:0)(cid:80)(cid:82)(cid:79)(cid:80)(cid:79)(cid:82)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:66)(cid:65)(cid:83)(cid:73)(cid:83)(cid:0)(cid:84)(cid:65)(cid:75)(cid:73)(cid:78)(cid:71)(cid:0)(cid:73)(cid:78)(cid:84)(cid:79)(cid:0)(cid:65)(cid:67)(cid:67)(cid:79)(cid:85)(cid:78)(cid:84)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:65)(cid:77)(cid:79)(cid:85)(cid:78)(cid:84)(cid:0)(cid:79)(cid:85)(cid:84)(cid:83)(cid:84)(cid:65)(cid:78)(cid:68)(cid:73)(cid:78)(cid:71)(cid:0)(cid:70)(cid:82)(cid:79)(cid:77)(cid:0)(cid:67)(cid:85)(cid:83)(cid:84)(cid:79)(cid:77)(cid:69)(cid:82)(cid:83)(cid:0)(cid:79)(cid:82)(cid:0)
on the financial instrument and the rate applicable.
(cid:36)(cid:73)(cid:86)(cid:73)(cid:68)(cid:69)(cid:78)(cid:68)(cid:0)(cid:73)(cid:78)(cid:67)(cid:79)(cid:77)(cid:69)(cid:0)(cid:73)(cid:83)(cid:0)(cid:82)(cid:69)(cid:67)(cid:79)(cid:71)(cid:78)(cid:73)(cid:83)(cid:69)(cid:68)(cid:0)(cid:87)(cid:72)(cid:69)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:82)(cid:73)(cid:71)(cid:72)(cid:84)(cid:0)(cid:84)(cid:79)(cid:0)(cid:82)(cid:69)(cid:67)(cid:69)(cid:73)(cid:86)(cid:69)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:68)(cid:73)(cid:86)(cid:73)(cid:68)(cid:69)(cid:78)(cid:68)(cid:0)(cid:73)(cid:83)(cid:0)(cid:69)(cid:83)(cid:84)(cid:65)(cid:66)(cid:76)(cid:73)(cid:83)(cid:72)(cid:69)(cid:68)(cid:14)
HDB Financial Services Limited
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:41)(cid:78)(cid:84)(cid:69)(cid:82)(cid:69)(cid:83)(cid:84)(cid:0)(cid:73)(cid:78)(cid:67)(cid:79)(cid:77)(cid:69)(cid:0)(cid:73)(cid:83)(cid:0)(cid:82)(cid:69)(cid:67)(cid:79)(cid:71)(cid:78)(cid:73)(cid:83)(cid:69)(cid:68)(cid:0)(cid:73)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:51)(cid:84)(cid:65)(cid:84)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:79)(cid:70)(cid:0)(cid:48)(cid:82)(cid:79)(cid:108)(cid:84)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:44)(cid:79)(cid:83)(cid:83)(cid:0)(cid:79)(cid:78)(cid:0)(cid:65)(cid:78)(cid:0)(cid:65)(cid:67)(cid:67)(cid:82)(cid:85)(cid:65)(cid:76)(cid:0)(cid:66)(cid:65)(cid:83)(cid:73)(cid:83)(cid:14)(cid:0)(cid:41)(cid:78)(cid:0)(cid:67)(cid:65)(cid:83)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0)(cid:46)(cid:79)(cid:78)(cid:0)(cid:48)(cid:69)(cid:82)(cid:70)(cid:79)(cid:82)(cid:77)(cid:73)(cid:78)(cid:71)(cid:0)(cid:33)(cid:83)(cid:83)(cid:69)(cid:84)(cid:83)(cid:0)
(NPA) interest income is recognised upon realisation as per the RBI Guidelines. Interest accrued and not realised before
the classification of the asset as an NPA is reversed and credited to the interest suspense account.
(cid:41)(cid:78)(cid:67)(cid:79)(cid:77)(cid:69)(cid:0)(cid:70)(cid:82)(cid:79)(cid:77)(cid:0)(cid:34)(cid:48)(cid:47)(cid:0)(cid:83)(cid:69)(cid:82)(cid:86)(cid:73)(cid:67)(cid:69)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:79)(cid:84)(cid:72)(cid:69)(cid:82)(cid:0)(cid:108)(cid:78)(cid:65)(cid:78)(cid:67)(cid:73)(cid:65)(cid:76)(cid:0)(cid:67)(cid:72)(cid:65)(cid:82)(cid:71)(cid:69)(cid:83)(cid:0)(cid:65)(cid:82)(cid:69)(cid:0)(cid:82)(cid:69)(cid:67)(cid:79)(cid:71)(cid:78)(cid:73)(cid:83)(cid:69)(cid:68)(cid:0)(cid:79)(cid:78)(cid:0)(cid:65)(cid:78)(cid:0)(cid:65)(cid:67)(cid:67)(cid:82)(cid:85)(cid:65)(cid:76)(cid:0)(cid:66)(cid:65)(cid:83)(cid:73)(cid:83)(cid:12)(cid:0)(cid:69)(cid:88)(cid:67)(cid:69)(cid:80)(cid:84)(cid:0)(cid:73)(cid:78)(cid:0)(cid:67)(cid:65)(cid:83)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0)(cid:67)(cid:72)(cid:69)(cid:81)(cid:85)(cid:69)(cid:0)
bouncing charges, late payment charges, foreclosure charges and application money, which are accounted as and when
received.
HDFC Bank Limited Annual Report 2016-17
168
Schedules to the Consolidated Financial Statements
For the year ended March 31, 2017
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:53)(cid:80)(cid:70)(cid:82)(cid:79)(cid:78)(cid:84)(cid:0)(cid:15)(cid:0)(cid:80)(cid:82)(cid:79)(cid:67)(cid:69)(cid:83)(cid:83)(cid:73)(cid:78)(cid:71)(cid:0)(cid:70)(cid:69)(cid:69)(cid:83)(cid:0)(cid:65)(cid:82)(cid:69)(cid:0)(cid:82)(cid:69)(cid:67)(cid:79)(cid:86)(cid:69)(cid:82)(cid:69)(cid:68)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:82)(cid:69)(cid:67)(cid:79)(cid:71)(cid:78)(cid:73)(cid:83)(cid:69)(cid:68)(cid:0)(cid:65)(cid:84)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:84)(cid:73)(cid:77)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0)(cid:68)(cid:73)(cid:83)(cid:66)(cid:85)(cid:82)(cid:83)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:79)(cid:70)(cid:0)(cid:76)(cid:79)(cid:65)(cid:78)(cid:14)
(cid:41)(cid:78)(cid:67)(cid:79)(cid:77)(cid:69)(cid:0)(cid:70)(cid:82)(cid:79)(cid:77)(cid:0)(cid:68)(cid:73)(cid:86)(cid:73)(cid:68)(cid:69)(cid:78)(cid:68)(cid:0)(cid:73)(cid:83)(cid:0)(cid:82)(cid:69)(cid:67)(cid:79)(cid:71)(cid:78)(cid:73)(cid:83)(cid:69)(cid:68)(cid:0)(cid:73)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:51)(cid:84)(cid:65)(cid:84)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:79)(cid:70)(cid:0)(cid:48)(cid:82)(cid:79)(cid:108)(cid:84)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:44)(cid:79)(cid:83)(cid:83)(cid:0)(cid:87)(cid:72)(cid:69)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:82)(cid:73)(cid:71)(cid:72)(cid:84)(cid:0)(cid:84)(cid:79)(cid:0)(cid:82)(cid:69)(cid:67)(cid:69)(cid:73)(cid:86)(cid:69)(cid:0)(cid:73)(cid:83)(cid:0)(cid:69)(cid:83)(cid:84)(cid:65)(cid:66)(cid:76)(cid:73)(cid:83)(cid:72)(cid:69)(cid:68)(cid:14)
HDB Employees Welfare Trust
(cid:115)(cid:0)
(cid:0)(cid:41)(cid:78)(cid:67)(cid:79)(cid:77)(cid:69)(cid:0)(cid:73)(cid:83)(cid:0)(cid:82)(cid:69)(cid:67)(cid:79)(cid:71)(cid:78)(cid:73)(cid:83)(cid:69)(cid:68)(cid:0)(cid:79)(cid:78)(cid:0)(cid:65)(cid:67)(cid:67)(cid:82)(cid:85)(cid:65)(cid:76)(cid:0)(cid:66)(cid:65)(cid:83)(cid:73)(cid:83)(cid:14)
9
Employee benefits
HDFC Bank Limited
Employee Stock Option Scheme (‘ESOS’)
The Employee Stock Option Scheme (‘the Scheme’) provides for the grant of options to acquire equity shares of the Bank to its
employees. The options granted to employees vest in a graded manner and these may be exercised by the employees within
a specified period.
The Bank follows the intrinsic value method to account for its stock-based employee compensation plans. Compensation cost
is measured by the excess, if any, of the market price of the underlying stock over the exercise price as determined under the
option plan. The market price is the closing price on the stock exchange where there is highest trading volume on the working
day immediately preceding the date of grant. Compensation cost, if any is amortised over the vesting period.
Gratuity:
The Bank provides for gratuity to all employees. The benefit vests upon completion of five years of service and is in the form
of lump sum payment to employees on resignation, retirement, death while in employment or on termination of employment
of an amount equivalent to 15 days basic salary payable for each completed year of service. The Bank makes contributions to
funds administered by trustees and managed by insurance companies for amounts notified by the said insurance companies.
In respect of erstwhile Lord Krishna Bank (‘eLKB’) employees, the Bank makes contribution to a fund set up by eLKB and
administered by the Board of Trustees.
The defined gratuity benefit plans are valued by an independent actuary as at the Balance Sheet date using the projected
unit credit method as per the requirement of AS-15, Employee Benefits, to determine the present value of the defined benefit
obligation and the related service costs. Under this method, the determination is based on actuarial calculations, which include
assumptions about demographics, early retirement, salary increases and interest rates. Actuarial gain or loss is recognised in
the Statement of Profit and Loss.
Superannuation:
Employees of the Bank, above a prescribed grade, are entitled to receive retirement benefits under the Bank’s Superannuation
Fund. The Bank contributes a sum equivalent to 13% of the employee’s eligible annual basic salary (15% for the whole time
directors and for certain eligible erstwhile Centurion Bank of Punjab (‘eCBoP’) staff) to insurance companies, which administer
the fund. The Bank has no liability for future superannuation fund benefits other than its contribution, and recognises such
contributions as an expense in the year incurred, as such contribution is in the nature of defined contribution.
Provident fund:
In accordance with law, all employees of the Bank are entitled to receive benefits under the provident fund. The Bank contributes
an amount, on a monthly basis, at a determined rate (currently 12% of employee’s basic salary). Of this, the Bank contributes
an amount equal to 8.33% of employee’s basic salary up to a maximum salary level of ` 15,000/- per month, to the Pension
Scheme administered by the Regional Provident Fund Commissioner (‘RPFC’). The balance amount is contributed to a fund
set up by the Bank and administered by a Board of Trustees. In respect of eCBoP employees, employer’s and employee’s
share of contribution to Provident Fund till March 2009, was administered by RPFC and from April 2009 onwards, the same is
transferred to the fund set up by the Bank and administered by the Board of Trustees. In respect of eLKB employees, the Bank
contributes to a fund set up by eLKB and administered by a Board of Trustees. The Bank recognises such contributions as an
expense in the year in which it is incurred. Interest payable to the members of the trust shall not be lower than the statutory
rate of interest declared by the Central Government under the Employees Provident Funds and Miscellaneous Provisions Act,
1952 and shortfall, if any, shall be made good by the Bank.
The guidance note on implementing AS-15, Employee Benefits, states that benefits involving employer established provident
funds, which require interest shortfalls to be provided, are to be considered as defined benefit plans. Actuarial valuation of this
HDFC Bank Limited Annual Report 2016-17
169
Schedules to the Consolidated Financial Statements
For the year ended March 31, 2017
Provident Fund interest shortfall is done as per the guidance note issued in this respect by The Institute of Actuaries of India
(IAI) and provision towards this liability is made.
The overseas branches of the Bank make contribution to the respective relevant government scheme calculated as a percentage
of the employees’ salaries. The Bank’s obligations are limited to these contributions, which are expensed when due, as such
contribution is in the nature of defined contribution.
Leave encashment / Compensated absences:
The Bank does not have a policy of encashing unavailed leave for its employees, except for certain eLKB employees under
Indian Banks’ Association (‘IBA’) structure. The Bank provides for leave encashment / compensated absences based on an
independent actuarial valuation at the Balance Sheet date, which includes assumptions about demographics, early retirement,
salary increases, interest rates and leave utilisation.
Pension:
In respect of pension payable to certain eLKB employees under IBA structure, which is a defined benefit scheme, the Bank
contributes 10% of basic salary to a pension fund set up by the Bank and administered by the Board of Trustees and the
balance amount is provided based on actuarial valuation as at the Balance Sheet date conducted by an independent actuary.
In respect of certain eLKB employees who had moved to a Cost to Company (‘CTC’) driven compensation structure and
had completed less than 15 years of service, the contribution which was made until then, is maintained as a fund and will be
converted into annuity on separation after a lock-in-period of two years. For this category of employees, liability stands frozen
and no additional provision is required except for interest as applicable to Provident Fund, which is provided for.
In respect of certain eLKB employees who moved to a CTC structure and had completed service of more than 15 years,
pension would be paid on separation based on salary applicable as on the date of movement to CTC structure. Provision
thereto is made based on actuarial valuation as at the Balance Sheet date conducted by an independent actuary.
HDFC Securities Limited
Short term
Short term employee benefits include salaries and performance incentives. A liability is recognised for the amount expected to
be paid under short term cash bonus or profit sharing plans if the Company has a present legal or informal obligation to pay
this amount as a result of past service provided by the employee, and the obligation can be estimated reliably. These costs are
recognised as an expense in the Statement of Profit and Loss at the undiscounted amount expected to be paid over the period
of services rendered by the employees to the Company.
Long term
The Company offers its employees long term benefits by way of defined-contribution and defined-benefit plans, of which some
have assets in special funds or securities. The plans are financed by the Company and in the case of some defined contribution
plans by the Company along with its employees.
Defined-contribution plans
These are plans in which the Company pays pre-defined amounts to separate funds and does not have any legal or informal
obligation to pay additional sums. These comprise of contributions to the National Pension Scheme, Employees’ Provident
Fund, Family Pension Fund and Superannuation Fund. The Company’s payments to the defined-contribution plans are reported
as expenses during the period in which the employees perform the services that the payment covers.
Defined-benefit plans
Expenses for defined-benefit gratuity plan are calculated as at the Balance Sheet date by an independent actuary in a manner
that distributes expenses over the employee’s working life. These commitments are valued at the present value of the expected
future payments, with consideration for calculated future salary increases, using a discount rate corresponding to the interest
rate estimated by the actuary having regard to the interest rate on government bonds with a remaining term that is almost
equivalent to the average balance working period of employees. The fair values of the plan assets are deducted in determining
the net liability. When the fair value of plan assets exceeds the commitments computed as aforesaid, the recognised asset is
limited to the net total of any cumulative past service costs and the present value of any economic benefits available in the form
of reductions in future contributions to the plan.
Actuarial losses or gains are recognised in the Statement of Profit and Loss in the year in which they arise.
HDFC Bank Limited Annual Report 2016-17
170
Schedules to the Consolidated Financial Statements
For the year ended March 31, 2017
Other employee benefits
Compensated absences which accrue to employees and which can be carried to future periods but are expected to be availed
in twelve months immediately following the year in which the employee has rendered service are reported as expenses during
the year in which the employees perform the services that the benefit covers and the liabilities are reported at the undiscounted
amount of the benefits.
Where there are restrictions on availment of such accrued benefit or where the availment is otherwise not expected to wholly
occur in the next twelve months, the liability on account of the benefit is actuarially determined using the projected unit credit
method.
Share-based payment transactions
Equity settled stock options granted under the Company’s Employee Stock Option Schemes are accounted for as per the
accounting treatment prescribed by the Guidance Note on Employee Share-based Payments issued by the Institute of
Chartered Accountants of India. The intrinsic value of the option being excess of fair value of the underlying share immediately
prior to date of grant over its exercise price is recognised as deferred employee compensation with a credit to employee stock
option outstanding account. The deferred employee compensation is charged to Statement of Profit and Loss on straight line
basis over the vesting period of the option. The options that lapse are reversed by a credit to employee compensation expense,
equal to the amortised portion of value of lapsed portion and credit to deferred employee compensation expense equal to the
unamortised portion.
HDB Financial Services Limited
Long term employee benefits
Gratuity
The Company provides for gratuity to all employees. The benefit is in the form of lump sum payments to vested employees
on resignation, retirement, or death while in employment or on termination of employment of an amount equivalent to
15 days basic salary payable for each completed year of service. Vesting occurs upon completion of five years of service.
The Company makes annual contributions to fund administered by trustees and managed by insurance companies for amounts
notified by the said insurance companies. The defined benefit plan are valued by an independent external actuary as at the
Balance Sheet date using the projected unit credit method to determine the present value of defined benefit obligation and
the related service costs. Under this method, the determination is based on actuarial calculations, which include assumptions
about demographics, early retirement, salary increases and interest rates. Actuarial gain or loss is recognised in the Statement
of Profit and Loss.
Provident fund
In accordance with the applicable law, all employees of the Company are entitled to receive benefits under the Provident
Fund Act, 1952. The Company contributes an amount, on a monthly basis, at a determined rate (currently 12% of employee’s
basic salary) to the Pension Scheme administered by the Regional Provident Fund Commissioner (RPFC) and the Company
has no liability for future provident fund benefits other than its annual contribution. Since it is a defined contribution plan,
the contributions are accounted for on an accrual basis and recognised in the Statement of Profit and Loss.
Compensated absences
The Company does not have a policy of encashment of unavailed leaves for its employees but are permitted to carry forward
subject to a prescribed maximum days. The Company provides for compensated absences in accordance with AS 15 (revised
2005) Employee Benefits issued by Institute of Chartered Accountants of India. The provision is based on an independent
external actuarial valuation at the balance sheet date.
10 Debit and credit cards reward points
HDFC Bank Limited
The Bank estimates the probable redemption of debit and credit card reward points and cost per point using an actuarial
method by employing an independent actuary, which includes assumptions such as mortality, redemption and spends.
Provisions for liabilities on the outstanding reward points are made based on the actuarial valuation report as furnished by the
said independent actuary and included in other liabilities.
HDFC Bank Limited Annual Report 2016-17
171
Schedules to the Consolidated Financial Statements
For the year ended March 31, 2017
11 Bullion
HDFC Bank Limited
The Bank imports bullion including precious metal bars on a consignment basis for selling to its wholesale and retail customers.
The imports are typically on a back-to-back basis and are priced to the customer based on an estimated price quoted by the
supplier. The Bank earns a fee on such wholesale bullion transactions. The fee is classified under commission income.
The Bank also deals in bullion on a borrowing and lending basis and the interest paid / received thereon is classified as interest
expense / income respectively.
12 Lease accounting
Group
Lease payments including cost escalation for assets taken on operating lease are recognised in the Statement of Profit and
Loss over the lease term on a straight-line basis in accordance with the AS-19, Leases.
13
Income tax
Group
Income tax expense comprises current tax provision (i.e. the amount of tax for the period determined in accordance with the
Income Tax Act, 1961, the rules framed there under and considering the material principles set out in Income Computation and
Disclosure Standards) and the net change in the deferred tax asset or liability during the year. Deferred tax assets and liabilities
are recognised for the future tax consequences of timing differences between the carrying values of assets and liabilities and
their respective tax bases, and operating loss carried forward, if any. Deferred tax assets and liabilities are measured using the
enacted or substantively enacted tax rates as at the Balance Sheet date.
Current tax assets and liabilities and deferred tax assets and liabilities are off-set when they relate to income taxes levied by
the same taxation authority, when the Bank has a legal right to off-set and when the Bank intends to settle on a net basis.
Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be realised in future. In
case of unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is
virtual certainty of realisation of such assets. Deferred tax assets are reviewed at each Balance Sheet date and appropriately
adjusted to reflect the amount that is reasonably / virtually certain to be realised.
14 Earnings per share
Group
The Group reports basic and diluted earnings per equity share in accordance with AS-20, Earnings per Share. Basic earnings
per equity share has been computed by dividing net profit for the year attributable to equity shareholders by the weighted
average number of equity shares outstanding for the period. Diluted earnings per share reflect the potential dilution that could
occur if securities or other contracts to issue equity shares were exercised or converted to equity during the year. Diluted
earnings per equity share are computed using the weighted average number of equity shares and the dilutive potential equity
shares outstanding during the period except where the results are anti-dilutive.
15 Share issue expenses
HDFC Bank Limited
Share issue expenses are adjusted from Share Premium Account in terms of Section 52 of the Companies Act, 2013.
16 Segment information
Group
The disclosure relating to segment information is in accordance with AS-17, Segment Reporting and as per guidelines issued
by RBI.
HDFC Bank Limited Annual Report 2016-17
172
Schedules to the Consolidated Financial Statements
For the year ended March 31, 2017
17 Accounting for provisions, contingent liabilities and contingent assets
Group
In accordance with AS-29, Provisions, Contingent Liabilities and Contingent Assets, the Group recognises provisions when
it has a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits
will be required to settle the obligation and when a reliable estimate of the amount of the obligation can be made.
Provisions are determined based on management estimate required to settle the obligation at the Balance Sheet date,
supplemented by experience of similar transactions. These are reviewed at each Balance Sheet date and adjusted to reflect
the current management estimates.
A disclosure of contingent liability is made when there is:
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:65)(cid:0) (cid:80)(cid:79)(cid:83)(cid:83)(cid:73)(cid:66)(cid:76)(cid:69)(cid:0) (cid:79)(cid:66)(cid:76)(cid:73)(cid:71)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0) (cid:65)(cid:82)(cid:73)(cid:83)(cid:73)(cid:78)(cid:71)(cid:0) (cid:70)(cid:82)(cid:79)(cid:77)(cid:0) (cid:65)(cid:0) (cid:80)(cid:65)(cid:83)(cid:84)(cid:0) (cid:69)(cid:86)(cid:69)(cid:78)(cid:84)(cid:12)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:69)(cid:88)(cid:73)(cid:83)(cid:84)(cid:69)(cid:78)(cid:67)(cid:69)(cid:0) (cid:79)(cid:70)(cid:0) (cid:87)(cid:72)(cid:73)(cid:67)(cid:72)(cid:0) (cid:87)(cid:73)(cid:76)(cid:76)(cid:0) (cid:66)(cid:69)(cid:0) (cid:67)(cid:79)(cid:78)(cid:108)(cid:82)(cid:77)(cid:69)(cid:68)(cid:0) (cid:66)(cid:89)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:79)(cid:67)(cid:67)(cid:85)(cid:82)(cid:82)(cid:69)(cid:78)(cid:67)(cid:69)(cid:0) (cid:79)(cid:82)(cid:0)
non-occurrence of one or more uncertain future events not within the control of the Group; or
(cid:65)(cid:0)(cid:80)(cid:82)(cid:69)(cid:83)(cid:69)(cid:78)(cid:84)(cid:0)(cid:79)(cid:66)(cid:76)(cid:73)(cid:71)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:65)(cid:82)(cid:73)(cid:83)(cid:73)(cid:78)(cid:71)(cid:0)(cid:70)(cid:82)(cid:79)(cid:77)(cid:0)(cid:65)(cid:0)(cid:80)(cid:65)(cid:83)(cid:84)(cid:0)(cid:69)(cid:86)(cid:69)(cid:78)(cid:84)(cid:0)(cid:87)(cid:72)(cid:73)(cid:67)(cid:72)(cid:0)(cid:73)(cid:83)(cid:0)(cid:78)(cid:79)(cid:84)(cid:0)(cid:82)(cid:69)(cid:67)(cid:79)(cid:71)(cid:78)(cid:73)(cid:83)(cid:69)(cid:68)(cid:0)(cid:65)(cid:83)(cid:0)(cid:73)(cid:84)(cid:0)(cid:73)(cid:83)(cid:0)(cid:78)(cid:79)(cid:84)(cid:0)(cid:80)(cid:82)(cid:79)(cid:66)(cid:65)(cid:66)(cid:76)(cid:69)(cid:0)(cid:84)(cid:72)(cid:65)(cid:84)(cid:0)(cid:65)(cid:78)(cid:0)(cid:79)(cid:85)(cid:84)(cid:109)(cid:79)(cid:87)(cid:0)(cid:79)(cid:70)(cid:0)(cid:82)(cid:69)(cid:83)(cid:79)(cid:85)(cid:82)(cid:67)(cid:69)(cid:83)(cid:0)
will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.
When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote,
no provision or disclosure is made.
Contingent assets, if any, are not recognised in the financial statements since this may result in the recognition of income that
may never be realised.
Onerous contracts
Provisions for onerous contracts are recognised when the expected benefits to be derived by the Bank from a contract are
lower than the unavoidable costs of meeting the future obligations under the contract. The provision is measured at the present
value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract.
Before a provision is established, the Bank recognises any impairment loss on the assets associated with that contract.
18 Cash and cash equivalents
Group
Cash and cash equivalents include cash and gold in hand, balances with RBI, balances with other banks and money at call
and short notice.
19 Corporate social responsibility
Group
Expenditure towards corporate social responsibility, in accordance with Companies Act, 2013, are recognised in the Statement
of Profit and Loss.
HDFC Bank Limited Annual Report 2016-17
173
Schedules to the Consolidated Financial Statements
For the year ended March 31, 2017
SCHEDULE 18 - Notes forming part of the consolidated financial statements for the year ended March 31, 2017
Amounts in notes forming part of the consolidated financial statements for the year ended March 31, 2017 are denominated in
rupee crore to conform to extant RBI guidelines.
1
Amalgamation of Atlas Documentary Facilitators Company Private Limited and HBL Global Private Limited with
HDB Financial Services Limited
During the year ended March 31, 2017, Atlas Documentary Facilitators Company Private Limited and HBL Global Private
Limited, associates of the Bank as at March 31, 2016, amalgamated with HDB Financial Services Limited, pursuant to the
approval of the Honourable High courts of Gujarat and Bombay with effect from December 1, 2016. The appointed date of
the merger as per the scheme of amalgamation was April 1, 2014. Accordingly, the consolidated financial statements include
the effect of the said amalgamation. In view of the amalgamation, the figures for the current year are not comparable with
the corresponding figures of the previous year.
2
Change in classification
Pursuant to RBI circular dated May 19, 2016, the Bank has, included its repurchase / reverse repurchase transactions under
Liquidity Adjustment Facility (LAF) and Marginal Standing Facility (MSF) with RBI under ‘Borrowings from RBI’ / ‘Balances
with RBI’, as the case may be. Hitherto, these transactions were netted from / included under ‘Investments’. Figures of the
previous year have been regrouped / reclassified to conform to current year’s classification. The above change in classification
has no impact on the profit of the Bank for the years ended March 31, 2017 and March 31, 2016.
3
Proposed dividend
The Board of Directors of the Bank, at their meeting held on April 21, 2017, have proposed a dividend of ` 11.00 per equity
share aggregating ` 3,392.71 crore, inclusive of tax on dividend. The proposal is subject to the approval of shareholders
at the Annual General Meeting. In terms of revised Accounting Standard (AS) 4 ‘Contingencies and Events occurring after
the Balance sheet date’ as notified by the Ministry of Corporate Affairs through amendments to Companies (Accounting
Standards) Amendment Rules, 2016, the Bank has not appropriated proposed dividend from Statement of Profit and Loss
for the year ended March 31, 2017. Accordingly, the proposed dividend and the tax thereon, under Appropriations in the
Statement of Profit and Loss is lower by ` 2,818.80 crore and ` 573.91 crore respectively and the balance of Other Liabilities
is lower by an equivalent amount as at March 31, 2017. However, the effect of the proposed dividend has been reckoned in
determining consolidated capital funds in the computation of the capital adequacy ratio as at March 31, 2017.
4
Capital infusion
During the year ended March 31, 2017, the Bank allotted 3,43,59,200 equity shares (previous year: 2,16,91,200 equity shares)
aggregating to face value ` 6.87 crore (previous year: ` 4.34 crore) in respect of stock options exercised. Accordingly, share
capital increased by ` 6.87 crore (previous year: ` 4.34 crore) and share premium increased by ` 2,254.64 crore (previous
year: ` 1,218.56 crore).
Details of movement in the paid-up equity share capital of the Bank are given below:
(` crore)
Particulars
Opening balance
Addition pursuant to stock options exercised
Closing balance
5
Earnings per equity share
March 31, 2017
March 31, 2016
505.64
6.87
512.51
501.30
4.34
505.64
Basic and diluted earnings per equity share have been calculated based on the consolidated profit attributable to the Group
of ` 15,253.03 crore (previous year: ` 12,801.33 crore) and the weighted average number of equity shares outstanding during
the year of 2,54,43,33,609 (previous year: 2,51,74,29,120).
HDFC Bank Limited Annual Report 2016-17
174
Schedules to the Consolidated Financial Statements
For the year ended March 31, 2017
Following is the reconciliation between basic and diluted earnings per equity share:
Particulars
Nominal value per share (`)
Basic earnings per share (`)
Effect of potential equity shares (per share) (`)
Diluted earnings per share (`)
For the years ended
March 31, 2017
March 31, 2016
2.00
59.95
(0.79)
59.16
2.00
50.85
(0.61)
50.24
Basic earnings per equity share has been computed by dividing net profit for the year attributable to the equity shareholders by
the weighted average number of equity shares outstanding for the year. Diluted earnings per equity share has been computed
by dividing the net profit for the year attributable to the equity shareholders by the weighted average number of equity shares
and dilutive potential equity shares outstanding during the year, except where the results are anti-dilutive. The dilutive impact
is on account of stock options granted to employees by the Bank. There is no impact of dilution on the profits in the current
year and previous year.
Following is the reconciliation of weighted average number of equity shares used in the computation of basic and diluted
earnings per share:
Particulars
Weighted average number of equity shares used in computing basic earnings
per equity share
Effect of potential equity shares outstanding
Weighted average number of equity shares used in computing diluted earnings
per equity share
For the years ended
March 31, 2017
March 31, 2016
2,54,43,33,609
2,51,74,29,120
3,40,55,428
2,57,83,89,037
3,04,43,320
2,54,78,72,440
6
Reserves and Surplus
Drawdown from reserves
Share Premium
The Bank has not undertaken any drawdown from reserves during the years ended March 31, 2017 and March 31, 2016.
Statutory Reserve
The Group has made an appropriation of ` 3,777.16 crore (previous year: ` 3,180.93 crore) out of profits for the year ended
March 31, 2017 to Statutory Reserve pursuant to the requirements of Section 17 of the Banking Regulation Act, 1949 and
RBI guidelines dated September 23, 2000.
Capital Reserve
During the year ended March 31, 2017, the Bank appropriated ` 313.41 crore (previous year: ` 222.15 crore), being the
profit from sale of investments under HTM category and profit on sale of immovable properties, net of taxes and transfer to
statutory reserve, from Profit and Loss Account to Capital Reserve Account.
General Reserve
The Group has made an appropriation of ` 1,454.96 crore (previous year: ` 1,229.62 crore) out of profits for the year ended
March 31, 2017 to General Reserve.
Investment Reserve Account
During the year ended March 31, 2017, the Bank has appropriated ` 4.29 crore (net) from Profit and Loss Account to
Investment Reserve Account as per RBI guidelines. In the previous year the Bank had transferred ` 8.52 crore (net) from
Investment Reserve Account to Profit and Loss Account as per RBI guidelines.
7
Dividend on shares allotted pursuant to exercise of stock options
The Bank may allot equity shares after the Balance Sheet date but before the book closure date pursuant to the exercise
of any employee stock options. These equity shares will be eligible for full dividend for the year ended March 31, 2017,
if approved at the ensuing Annual General Meeting.
HDFC Bank Limited Annual Report 2016-17
175
Schedules to the Consolidated Financial Statements
For the year ended March 31, 2017
8
Accounting for employee share based payments
HDFC Bank Limited
The shareholders of the Bank approved grant of equity share options under Plan “C” in June 2005, Plan “D” in June 2007,
Plan “E” in June 2010, Plan “F” in June 2013 and Plan “G” in July 2016. Under the terms of each of these Plans, the Bank
may issue to its employees and Whole Time Directors, Equity Stock Options (‘ESOPs’) each of which is convertible into one
equity share. All the plans were framed in accordance with the SEBI (Employee Stock Option Scheme & Employee Stock
Purchase Scheme) Guidelines, 1999 as amended from time to time and as applicable at the time of grant. Accounting for
the stock options has been in accordance with the SEBI (Share Based Employee Benefits) Regulations, 2014 to the extent
applicable.
Plans C, D, E, F and G provide for the issuance of options at the recommendation of the Nomination & Remuneration
Committee at the closing price on the working day immediately preceding the date when options are granted. This closing
price is the closing price of the Bank’s equity share on an Indian stock exchange with the highest trading volume as of the
working day preceding the date of grant.
Vesting conditions applicable to the options are at the discretion of the Nomination & Remuneration Committee. These options
are exercisable on vesting, for a period as set forth by the Nomination & Remuneration Committee at the time of grant.
The period in which options may be exercised cannot exceed five years. During the years ended March 31, 2017 and
March 31, 2016, no modifications were made to the terms and conditions of ESOPs as approved by the Nomination &
Remuneration Committee.
Activity in the options outstanding under the Employee Stock Options Plans
(cid:0)
(cid:115)(cid:0)
(cid:33)(cid:67)(cid:84)(cid:73)(cid:86)(cid:73)(cid:84)(cid:89)(cid:0)(cid:73)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:79)(cid:80)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0)(cid:79)(cid:85)(cid:84)(cid:83)(cid:84)(cid:65)(cid:78)(cid:68)(cid:73)(cid:78)(cid:71)(cid:0)(cid:85)(cid:78)(cid:68)(cid:69)(cid:82)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:86)(cid:65)(cid:82)(cid:73)(cid:79)(cid:85)(cid:83)(cid:0)(cid:69)(cid:77)(cid:80)(cid:76)(cid:79)(cid:89)(cid:69)(cid:69)(cid:0)(cid:83)(cid:84)(cid:79)(cid:67)(cid:75)(cid:0)(cid:79)(cid:80)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:80)(cid:76)(cid:65)(cid:78)(cid:83)(cid:0)(cid:65)(cid:83)(cid:0)(cid:65)(cid:84)(cid:0)(cid:45)(cid:65)(cid:82)(cid:67)(cid:72)(cid:0)(cid:19)(cid:17)(cid:12)(cid:0)(cid:18)(cid:16)(cid:17)(cid:23)(cid:26)
Particulars
Options outstanding, beginning of year
Granted during the year
Exercised during the year
Forfeited / Lapsed during the year
Options outstanding, end of year
Options exercisable
Number of
Options
12,86,54,300
Weighted average
exercise price (`)
840.19
-
3,43,59,200
21,38,800
9,21,56,300
5,63,14,000
-
658.20
972.97
904.97
835.06
(cid:0)
(cid:115)(cid:0)
(cid:33)(cid:67)(cid:84)(cid:73)(cid:86)(cid:73)(cid:84)(cid:89)(cid:0)(cid:73)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:79)(cid:80)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0)(cid:79)(cid:85)(cid:84)(cid:83)(cid:84)(cid:65)(cid:78)(cid:68)(cid:73)(cid:78)(cid:71)(cid:0)(cid:85)(cid:78)(cid:68)(cid:69)(cid:82)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:86)(cid:65)(cid:82)(cid:73)(cid:79)(cid:85)(cid:83)(cid:0)(cid:69)(cid:77)(cid:80)(cid:76)(cid:79)(cid:89)(cid:69)(cid:69)(cid:0)(cid:83)(cid:84)(cid:79)(cid:67)(cid:75)(cid:0)(cid:79)(cid:80)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:80)(cid:76)(cid:65)(cid:78)(cid:83)(cid:0)(cid:65)(cid:83)(cid:0)(cid:65)(cid:84)(cid:0)(cid:45)(cid:65)(cid:82)(cid:67)(cid:72)(cid:0)(cid:19)(cid:17)(cid:12)(cid:0)(cid:18)(cid:16)(cid:17)(cid:22)(cid:26)
Particulars
Options outstanding, beginning of year
Granted during the year
Exercised during the year
Forfeited / Lapsed during the year
Options outstanding, end of year
Options exercisable
Number of
Options
10,90,33,000
4,48,36,200
2,16,91,200
35,23,700
12,86,54,300
4,96,81,000
Weighted average
exercise price (`)
683.16
1,092.65
563.78
895.09
840.19
661.84
(cid:0)
(cid:115)(cid:0)
(cid:38)(cid:79)(cid:76)(cid:76)(cid:79)(cid:87)(cid:73)(cid:78)(cid:71)(cid:0)(cid:84)(cid:65)(cid:66)(cid:76)(cid:69)(cid:0)(cid:83)(cid:85)(cid:77)(cid:77)(cid:65)(cid:82)(cid:73)(cid:83)(cid:69)(cid:83)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:73)(cid:78)(cid:70)(cid:79)(cid:82)(cid:77)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:65)(cid:66)(cid:79)(cid:85)(cid:84)(cid:0)(cid:83)(cid:84)(cid:79)(cid:67)(cid:75)(cid:0)(cid:79)(cid:80)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0)(cid:79)(cid:85)(cid:84)(cid:83)(cid:84)(cid:65)(cid:78)(cid:68)(cid:73)(cid:78)(cid:71)(cid:0)(cid:65)(cid:83)(cid:0)(cid:65)(cid:84)(cid:0)(cid:45)(cid:65)(cid:82)(cid:67)(cid:72)(cid:0)(cid:19)(cid:17)(cid:12)(cid:0)(cid:18)(cid:16)(cid:17)(cid:23)(cid:26)
Plan
Plan C
Plan D
Plan E
Plan F
Range of exercise price (`)
Number of
shares arising
out of options
Weighted average
life of options
(in years)
Weighted average
exercise price
(`)
680.00 to 835.50
680.00
468.40 to 680.00
835.50 to 1,097.80
46,44,400
33,34,300
1,50,94,600
6,90,83,000
2.34
2.33
2.18
3.90
690.91
680.00
650.01
985.92
HDFC Bank Limited Annual Report 2016-17
176
Schedules to the Consolidated Financial Statements
For the year ended March 31, 2017
(cid:0)
(cid:115)(cid:0)
(cid:38)(cid:79)(cid:76)(cid:76)(cid:79)(cid:87)(cid:73)(cid:78)(cid:71)(cid:0)(cid:84)(cid:65)(cid:66)(cid:76)(cid:69)(cid:0)(cid:83)(cid:85)(cid:77)(cid:77)(cid:65)(cid:82)(cid:73)(cid:83)(cid:69)(cid:83)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:73)(cid:78)(cid:70)(cid:79)(cid:82)(cid:77)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:65)(cid:66)(cid:79)(cid:85)(cid:84)(cid:0)(cid:83)(cid:84)(cid:79)(cid:67)(cid:75)(cid:0)(cid:79)(cid:80)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0)(cid:79)(cid:85)(cid:84)(cid:83)(cid:84)(cid:65)(cid:78)(cid:68)(cid:73)(cid:78)(cid:71)(cid:0)(cid:65)(cid:83)(cid:0)(cid:65)(cid:84)(cid:0)(cid:45)(cid:65)(cid:82)(cid:67)(cid:72)(cid:0)(cid:19)(cid:17)(cid:12)(cid:0)(cid:18)(cid:16)(cid:17)(cid:22)(cid:26)
Plan
Plan C
Plan D
Plan E
Plan F
Fair value methodology
Range of exercise price (`)
Number of
shares arising
out of options
Weighted average
life of options
(in years)
Weighted average
exercise price
(`)
680.00 to 835.50
680.00
440.16 to 680.00
835.50 to 1,097.80
57,40,800
51,33,900
3,78,50,200
7,99,29,400
3.34
3.32
2.49
4.80
693.00
680.00
598.71
975.41
The fair value of options used to compute proforma net income and earnings per equity share have been estimated on the
dates of each grant using the binomial option-pricing model. The Bank estimates the volatility based on the historical share
prices. No stock options were granted during the year ended March 31, 2017 (previous year: 4,48,36,200). The various
assumptions considered in the pricing model for the ESOPs granted during the year ended March 31, 2016 were:
Particulars
Dividend yield
Expected volatility
Risk - free interest rate
Expected life of the options
March 31, 2016
0.73%
23.29% to 26.46%
7.71% to 8.07%
1 to 7 years
Impact of fair value method on net profit and earnings per share (‘EPS’)
Had the compensation cost for the Bank’s stock option plans been determined based on the fair value approach, the Bank’s
(` crore)
net profit and earnings per share would have been as per the proforma amounts indicated below:
Particulars
Net profit (as reported)
Add: Stock-based employee compensation expense included in net income
Less: Stock based compensation expense determined under fair value based
method (proforma)
Net profit (proforma)
Basic earnings per share (as reported)
Basic earnings per share (proforma)
Diluted earnings per share (as reported)
Diluted earnings per share (proforma)
HDFC Securities Limited
March 31, 2017
March 31, 2016
14,549.66
-
812.75
13,736.91
(`)
57.18
53.99
56.43
53.28
12,296.23
-
1,265.93
11,030.30
(`)
48.84
43.82
48.26
43.29
The Shareholders of the Company approved a stock option scheme (viz. ESOS - II) in February 2017 (“Company Options”).
Under the terms of the scheme, the Company issues stock options to employees, whole time director, managing director and
directors (excluding Independent Directors) of the Company, each of which is convertible into one equity share.
Scheme ESOS - II provides for the issuance of options at the recommendation of the Compensation Committee of the Board
of Directors (the “Compensation Committee”) at a price of ` 1,136/- per share, being the fair market value of the share arrived
by considering the average price of the two independent valuation reports.
Such options vest at definitive dates, save for specific incidents, prescribed in the scheme as framed / approved by
the Compensation Committee. Such options are exercisable for a period following the vesting at the discretion of the
Compensation Committee.
Method used for accounting for shared based payment plan
The Company uses the Intrinsic Value method to account for the compensation cost of stock options to employees of the
Company.
HDFC Bank Limited Annual Report 2016-17
177
Schedules to the Consolidated Financial Statements
For the year ended March 31, 2017
Activity in the options outstanding under the Employee Stock Options Plan
(cid:0)
(cid:115)(cid:0)
(cid:33)(cid:67)(cid:84)(cid:73)(cid:86)(cid:73)(cid:84)(cid:89)(cid:0)(cid:73)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:79)(cid:80)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0)(cid:79)(cid:85)(cid:84)(cid:83)(cid:84)(cid:65)(cid:78)(cid:68)(cid:73)(cid:78)(cid:71)(cid:0)(cid:85)(cid:78)(cid:68)(cid:69)(cid:82)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:37)(cid:77)(cid:80)(cid:76)(cid:79)(cid:89)(cid:69)(cid:69)(cid:83)(cid:0)(cid:51)(cid:84)(cid:79)(cid:67)(cid:75)(cid:0)(cid:47)(cid:80)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0)(cid:48)(cid:76)(cid:65)(cid:78)(cid:0)(cid:65)(cid:83)(cid:0)(cid:65)(cid:84)(cid:0)(cid:45)(cid:65)(cid:82)(cid:67)(cid:72)(cid:0)(cid:19)(cid:17)(cid:12)(cid:0)(cid:18)(cid:16)(cid:17)(cid:23)(cid:26)
Particulars
Options outstanding, beginning of year
Granted during the year
Exercised during the year
Forfeited / Lapsed during the year
Options outstanding, end of year
Options exercisable
Company
options
Weighted average
exercise price (`)
-
-
2,80,000
1,136
-
-
2,80,000
-
-
-
1,136
-
(cid:0)
(cid:115)(cid:0)
(cid:38)(cid:79)(cid:76)(cid:76)(cid:79)(cid:87)(cid:73)(cid:78)(cid:71)(cid:0)(cid:84)(cid:65)(cid:66)(cid:76)(cid:69)(cid:0)(cid:83)(cid:85)(cid:77)(cid:77)(cid:65)(cid:82)(cid:73)(cid:83)(cid:69)(cid:83)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:73)(cid:78)(cid:70)(cid:79)(cid:82)(cid:77)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:65)(cid:66)(cid:79)(cid:85)(cid:84)(cid:0)(cid:83)(cid:84)(cid:79)(cid:67)(cid:75)(cid:0)(cid:79)(cid:80)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0)(cid:79)(cid:85)(cid:84)(cid:83)(cid:84)(cid:65)(cid:78)(cid:68)(cid:73)(cid:78)(cid:71)(cid:0)(cid:65)(cid:83)(cid:0)(cid:65)(cid:84)(cid:0)(cid:45)(cid:65)(cid:82)(cid:67)(cid:72)(cid:0)(cid:19)(cid:17)(cid:12)(cid:0)(cid:18)(cid:16)(cid:17)(cid:23)(cid:26)
Plan
Company Options
Range of
exercise price (`)
1,136
Number of shares
arising out of options
2,80,000
Weighted average remaining
contractual life of options (in years)
4.1 years
Weighted average
exercise price (`)
1,136
There were no stock options outstanding as at March 31, 2016.
Fair value methodology
The fair value of options used to compute proforma net income and earnings per equity share have been estimated on
dates of each grant using the Black and Scholes model. The shares of the Company are not listed on any stock exchange.
Accordingly, the Company has considered the volatility of the Company’s stock price as an average of the historical volatility
of similar listed enterprises for the purpose of calculating the fair value to reduce any company specific variations. The various
assumptions considered in the pricing model for the stock options granted by the Company during the year ended March 31,
2017 are:
Particulars
Dividend yield
Expected volatility
Risk - free interest rate
Expected life of the options
March 31, 2017
March 31, 2016
3.52%
43.53% to 42.48%
6.60% to 6.90%
3 to 5 years
-
-
-
-
Impact of fair value method on net profit and EPS
Had compensation cost for the Company’s stock option plans been determined based on the fair value approach,
the Company’s net profit and earnings per share would have been as per the proforma amounts indicated below:
Particulars
Net Profit (as reported)
Add: Stock-based employee compensation expense included in net income
Less: Stock-based compensation expense determined under fair value based
method (proforma)
Net Profit (proforma)
Basic earnings per share (as reported)
Basic earnings per share (proforma)
Diluted earnings per share (as reported)
Diluted earnings per share (proforma)
March 31, 2017
March 31, 2016
(` crore)
215.90
-
0.78
215.12
(`)
139.45
138.95
139.45
138.95
133.34
-
-
133.34
(`)
86.12
86.12
86.12
86.12
HDFC Bank Limited Annual Report 2016-17
178
Schedules to the Consolidated Financial Statements
For the year ended March 31, 2017
HDB Financial Services Limited
In accordance with resolution approved by the shareholders, the Company has reserved shares, for issue to employees
through ESOP Scheme. On the approval of Nomination and Remuneration Committee (NRC), each ESOP scheme is
issued. The NRC has approved stock option schemes ESOS-5 on July 27, 2011, ESOS-6 on June 11, 2012, ESOS-7 on
July 19, 2013, ESOS-8 on July 14, 2015 and ESOS-9 on October 18, 2016. Under the term of the schemes, the Company
may issue stock options to employees and directors of the Company, each of which is convertible into one equity share.
Such options vest at a definitive date, save for specific incidents, prescribed in the scheme as framed / approved by the NRC.
Such options are exercisable for a period following vesting at the discretion of the NRC, subject to a maximum of two years
from the date of vesting for ESOS-5, ESOS-6, ESOS-7 and ESOS-8 and maximum of four years from the date of vesting for
ESOS-9.
Method used for accounting for shared based payment plan
The Company uses intrinsic value to account for the compensation cost of stock options to employees of the Company.
Activity in the options outstanding under the Employee Stock Option Plans
(cid:0)
(cid:115)(cid:0)
(cid:33)(cid:67)(cid:84)(cid:73)(cid:86)(cid:73)(cid:84)(cid:89)(cid:0)(cid:73)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:79)(cid:80)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0)(cid:79)(cid:85)(cid:84)(cid:83)(cid:84)(cid:65)(cid:78)(cid:68)(cid:73)(cid:78)(cid:71)(cid:0)(cid:85)(cid:78)(cid:68)(cid:69)(cid:82)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:37)(cid:77)(cid:80)(cid:76)(cid:79)(cid:89)(cid:69)(cid:69)(cid:0)(cid:51)(cid:84)(cid:79)(cid:67)(cid:75)(cid:0)(cid:47)(cid:80)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:48)(cid:76)(cid:65)(cid:78)(cid:0)(cid:65)(cid:83)(cid:0)(cid:65)(cid:84)(cid:0)(cid:45)(cid:65)(cid:82)(cid:67)(cid:72)(cid:0)(cid:19)(cid:17)(cid:12)(cid:0)(cid:18)(cid:16)(cid:17)(cid:23)(cid:26)
Particulars
Options outstanding, beginning of year
Granted during the year
Exercised during the year
Forfeited / Lapsed during the year
Options outstanding, end of year
Options
48,42,950
31,17,500
15,79,440
5,02,350
58,78,660
Weighted average
exercise price (`)
88.41
137.00
77.86
93.46
112.46
(cid:115)(cid:0)
(cid:33)(cid:67)(cid:84)(cid:73)(cid:86)(cid:73)(cid:84)(cid:89)(cid:0)(cid:73)(cid:78)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:79)(cid:80)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0)(cid:79)(cid:85)(cid:84)(cid:83)(cid:84)(cid:65)(cid:78)(cid:68)(cid:73)(cid:78)(cid:71)(cid:0)(cid:85)(cid:78)(cid:68)(cid:69)(cid:82)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:37)(cid:77)(cid:80)(cid:76)(cid:79)(cid:89)(cid:69)(cid:69)(cid:0)(cid:51)(cid:84)(cid:79)(cid:67)(cid:75)(cid:0)(cid:47)(cid:80)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:48)(cid:76)(cid:65)(cid:78)(cid:0)(cid:65)(cid:83)(cid:0)(cid:65)(cid:84)(cid:0)(cid:45)(cid:65)(cid:82)(cid:67)(cid:72)(cid:0)(cid:19)(cid:17)(cid:12)(cid:0)(cid:18)(cid:16)(cid:17)(cid:22)(cid:26)
Particulars
Options outstanding, beginning of year
Granted during the year
Exercised during the year
Forfeited / Lapsed during the year
Options outstanding, end of year
Options
14,37,250
44,13,000
7,02,550
3,04,750
48,42,950
Weighted average
exercise price (`)
50.62
88.00
48.25
76.22
88.41
(cid:115)(cid:0)
(cid:38)(cid:79)(cid:76)(cid:76)(cid:79)(cid:87)(cid:73)(cid:78)(cid:71)(cid:0)(cid:84)(cid:65)(cid:66)(cid:76)(cid:69)(cid:0)(cid:83)(cid:85)(cid:77)(cid:77)(cid:65)(cid:82)(cid:73)(cid:83)(cid:69)(cid:83)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:73)(cid:78)(cid:70)(cid:79)(cid:82)(cid:77)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:65)(cid:66)(cid:79)(cid:85)(cid:84)(cid:0)(cid:83)(cid:84)(cid:79)(cid:67)(cid:75)(cid:0)(cid:79)(cid:80)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0)(cid:79)(cid:85)(cid:84)(cid:83)(cid:84)(cid:65)(cid:78)(cid:68)(cid:73)(cid:78)(cid:71)(cid:0)(cid:65)(cid:83)(cid:0)(cid:65)(cid:84)(cid:0)(cid:45)(cid:65)(cid:82)(cid:67)(cid:72)(cid:0)(cid:19)(cid:17)(cid:12)(cid:0)(cid:18)(cid:16)(cid:17)(cid:23)(cid:26)
Plan
ESOS - 6
ESOS - 7
ESOS - 8
ESOS - 9
Range of
exercise price
(`)
Number of shares
arising out
of options
Weighted average
remaining contractual life
of options (in years)
Weighted average
exercise
price (`)
31.00
56.00
88.00
137.00
1,200
1,02,700
27,71,260
30,03,500
0.50
0.50
2.74
5.49
31.00
56.00
88.00
137.00
(cid:115)(cid:0)
(cid:38)(cid:79)(cid:76)(cid:76)(cid:79)(cid:87)(cid:73)(cid:78)(cid:71)(cid:0)(cid:84)(cid:65)(cid:66)(cid:76)(cid:69)(cid:0)(cid:83)(cid:85)(cid:77)(cid:77)(cid:65)(cid:82)(cid:73)(cid:83)(cid:69)(cid:83)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:73)(cid:78)(cid:70)(cid:79)(cid:82)(cid:77)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:65)(cid:66)(cid:79)(cid:85)(cid:84)(cid:0)(cid:83)(cid:84)(cid:79)(cid:67)(cid:75)(cid:0)(cid:79)(cid:80)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0)(cid:79)(cid:85)(cid:84)(cid:83)(cid:84)(cid:65)(cid:78)(cid:68)(cid:73)(cid:78)(cid:71)(cid:0)(cid:65)(cid:83)(cid:0)(cid:65)(cid:84)(cid:0)(cid:45)(cid:65)(cid:82)(cid:67)(cid:72)(cid:0)(cid:19)(cid:17)(cid:12)(cid:0)(cid:18)(cid:16)(cid:17)(cid:22)(cid:26)
Plan
ESOS - 5
ESOS - 6
ESOS - 7
ESOS - 8
Range of
exercise price
(`)
Number of shares
arising out
of options
Weighted average
remaining contractual life
of options (in years)
Weighted average
exercise
price (`)
25.00
31.00
56.00
88.00
4,000
70,650
5,60,300
42,08,000
0.50
1.30
1.35
1.40
25.00
31.00
56.00
88.00
HDFC Bank Limited Annual Report 2016-17
179
Schedules to the Consolidated Financial Statements
For the year ended March 31, 2017
Fair Value methodology
The fair value of options used to compute proforma net income and earnings per equity share have been estimated on
the dates of each grant using the Black-Scholes model. The shares of Company are not listed on any stock exchange.
Accordingly, the Company has considered the volatility of the Company’s stock price as zero, since historical volatility of similar
listed enterprise was not available. The various assumptions considered in the pricing model for the stock options granted by
the Company during the year ended March 31, 2017 are:
Particulars
Dividend yield
Expected volatility
Risk-free interest rate
Expected life of the option
March 31, 2017
March 31, 2016
0.88%
Nil
6.54%
3 years
0.80%
Nil
7.70%
2.21 years
Impact of fair value method on net profit and EPS
Had compensation cost for the Company’s stock option plans been determined based on the fair value approach, the
Company’s net profit and earnings per share would have been as per the proforma amounts indicated below:
Particulars
Net Profit (as reported)
Add: Stock-based employee compensation expense included in net income
Less: Stock-based compensation expense determined under fair value based
method (proforma)
Net Profit (proforma)
Basic earnings per share (as reported)
Basic earnings per share (proforma)
Diluted earnings per share (as reported)
Diluted earnings per share (proforma)
Group
March 31, 2017
March 31, 2016
(` crore)
684.21
-
8.36
675.85
(`)
9.64
9.52
9.64
9.52
534.41
-
4.87
529.54
(`)
7.64
7.57
7.64
7.57
Impact of fair value method on net profit and EPS of the Group
Had compensation cost for the stock option plans outstanding been determined based on the fair value approach, the Group’s
(` crore)
net profit and earnings per share would have been as per the proforma amounts indicated below:
Particulars
Net Profit (as reported)
Less: Stock-based compensation expense determined under fair value based
method (proforma)
Net Profit (proforma)
Basic earnings per share (as reported)
Basic earnings per share (proforma)
Diluted earnings per share (as reported)
Diluted earnings per share (proforma)
March 31, 2017
March 31, 2016
15,253.03
821.89
14,431.14
(`)
59.95
56.72
59.16
55.97
12,801.33
1,270.80
11,530.53
(`)
50.85
45.80
50.24
45.26
HDFC Bank Limited Annual Report 2016-17
180
Schedules to the Consolidated Financial Statements
For the year ended March 31, 2017
9
Other liabilities
(cid:115)(cid:0)
(cid:52)(cid:72)(cid:69)(cid:0)(cid:34)(cid:65)(cid:78)(cid:75)(cid:0)(cid:72)(cid:65)(cid:83)(cid:0)(cid:80)(cid:82)(cid:69)(cid:83)(cid:69)(cid:78)(cid:84)(cid:69)(cid:68)(cid:0)(cid:71)(cid:82)(cid:79)(cid:83)(cid:83)(cid:0)(cid:85)(cid:78)(cid:82)(cid:69)(cid:65)(cid:76)(cid:73)(cid:83)(cid:69)(cid:68)(cid:0)(cid:71)(cid:65)(cid:73)(cid:78)(cid:0)(cid:79)(cid:78)(cid:0)(cid:70)(cid:79)(cid:82)(cid:69)(cid:73)(cid:71)(cid:78)(cid:0)(cid:69)(cid:88)(cid:67)(cid:72)(cid:65)(cid:78)(cid:71)(cid:69)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:68)(cid:69)(cid:82)(cid:73)(cid:86)(cid:65)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:67)(cid:79)(cid:78)(cid:84)(cid:82)(cid:65)(cid:67)(cid:84)(cid:83)(cid:0)(cid:85)(cid:78)(cid:68)(cid:69)(cid:82)(cid:0)(cid:79)(cid:84)(cid:72)(cid:69)(cid:82)(cid:0)(cid:65)(cid:83)(cid:83)(cid:69)(cid:84)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)
gross unrealised loss on foreign exchange and derivative contracts under other liabilities. Accordingly, other liabilities as
at March 31, 2017 include unrealised loss on foreign exchange and derivative contracts of ` 13,880.38 crore (previous
year: ` 7,524.88 crore)
10
Investments
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:41)(cid:78)(cid:86)(cid:69)(cid:83)(cid:84)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:0) (cid:73)(cid:78)(cid:67)(cid:76)(cid:85)(cid:68)(cid:69)(cid:0) (cid:83)(cid:69)(cid:67)(cid:85)(cid:82)(cid:73)(cid:84)(cid:73)(cid:69)(cid:83)(cid:0) (cid:79)(cid:70)(cid:0) (cid:38)(cid:65)(cid:67)(cid:69)(cid:0)(cid:54)(cid:65)(cid:76)(cid:85)(cid:69)(cid:0) (cid:8)(cid:38)(cid:54)(cid:9)(cid:0) (cid:65)(cid:71)(cid:71)(cid:82)(cid:69)(cid:71)(cid:65)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0) ` 1,520.00 crore (previous year: FV ` 1,520.00 crore)
which are kept as margin for clearing of securities, of FV ` 24,488.31 crore (previous year: FV ` 13,729.30 crore) which
are kept as margin for Collateralised Borrowing and Lending Obligation (CBLO) and of FV aggregating ` 100.00 crore
(previous year: FV ` 56.00 crore) which are kept as margin for Forex Forward segment - Default Fund with the Clearing
Corporation of India Limited (CCIL).
(cid:41)(cid:78)(cid:86)(cid:69)(cid:83)(cid:84)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:0) (cid:73)(cid:78)(cid:67)(cid:76)(cid:85)(cid:68)(cid:69)(cid:0) (cid:83)(cid:69)(cid:67)(cid:85)(cid:82)(cid:73)(cid:84)(cid:73)(cid:69)(cid:83)(cid:0) (cid:79)(cid:70)(cid:0) (cid:38)(cid:54)(cid:0) (cid:65)(cid:71)(cid:71)(cid:82)(cid:69)(cid:71)(cid:65)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0) ` 16.00 crore (previous year: FV ` 16.00 crore) which are kept as
margin with National Securities Clearing Corporation of India Limited. (NSCCIL), of FV aggregating ` 13.00 crore
(previous year: FV ` 13.00 crore) which are kept as margin with Metropolitan Clearing Corporation of India Limited and
of FV aggregating ` 5.00 crore (previous year: ` 1.00 crore) which are kept as margin with Indian Clearing Corporation
Limited in the BSE currency derivatives segment.
(cid:41)(cid:78)(cid:86)(cid:69)(cid:83)(cid:84)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:0) (cid:72)(cid:65)(cid:86)(cid:73)(cid:78)(cid:71)(cid:0) (cid:38)(cid:54)(cid:0) (cid:65)(cid:71)(cid:71)(cid:82)(cid:69)(cid:71)(cid:65)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0) ` 42,730.27 crore (previous year: FV ` 35,937.22 crore) are kept as margin
towards Real Time Gross Settlement (RTGS) and those having FV aggregating ` 41,473.92 crore (previous year:
` 13,091.46 crore) are kept as margin towards repo transactions with the RBI.
(cid:41)(cid:78)(cid:86)(cid:69)(cid:83)(cid:84)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)(cid:38)(cid:54)(cid:0)(cid:65)(cid:71)(cid:71)(cid:82)(cid:69)(cid:71)(cid:65)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)` 11.05 crore (previous year: FV ` 10.05 crore) are kept as margin for Forex Settlement
Default Fund, of FV aggregating ` 75.40 crore (previous year: ` 85.40 crore) are kept as Cash Margin, of FV aggregating
` 65.00 crore (previous year: nil) are kept as margin for Securities Segment Default Fund, of FV aggregating ` 25.00 crore
(previous year: nil) are kept as margin for CBLO Segment Default Fund and of FV aggregating ` 41.00 crore (previous
year: ` 11.00 crore) are kept as margin for Rupee Derivatives Guaranteed Settlement Default Fund with CCIL.
11 Other fixed assets
Other fixed assets includes amount capitalised relating to software, Bombay Stock Exchange card and electronic trading
(` crore)
platform. Summary regarding the same is tabulated below:
Particulars
Cost
As at March 31 of the previous year
Additions during the year
Deductions during the year
Depreciation
As at March 31 of the previous year
Charge for the year
On deductions during the year
March 31, 2017 March 31, 2016
1,774.82
413.26
-
1,609.52
165.31
(0.01)
Total (a)
2,188.08
1,774.82
1,248.71
260.41
-
1,509.12
678.96
1,049.45
199.27
(0.01)
1,248.71
526.11
Total (b)
Net value (a-b)
HDFC Bank Limited Annual Report 2016-17
181
Schedules to the Consolidated Financial Statements
For the year ended March 31, 2017
12 Other assets
(cid:115)(cid:0)
(cid:47)(cid:84)(cid:72)(cid:69)(cid:82)(cid:0)(cid:65)(cid:83)(cid:83)(cid:69)(cid:84)(cid:83)(cid:0)(cid:73)(cid:78)(cid:67)(cid:76)(cid:85)(cid:68)(cid:69)(cid:0)(cid:68)(cid:69)(cid:70)(cid:69)(cid:82)(cid:82)(cid:69)(cid:68)(cid:0)(cid:84)(cid:65)(cid:88)(cid:0)(cid:65)(cid:83)(cid:83)(cid:69)(cid:84)(cid:0)(cid:8)(cid:78)(cid:69)(cid:84)(cid:9)(cid:0)(cid:79)(cid:70)(cid:0)` 2,587.06 crore (previous year: ` 2,227.23 crore). The break-up of the
same is as follows:
Particulars
Deferred tax asset arising out of:
Loan loss provisions
Employee benefits
Others
Deferred tax liability arising out of:
Depreciation
Deferred tax asset (net) (a-b)
March 31, 2017 March 31, 2016
(` crore)
2,207.53
175.39
322.66
2,705.58
(118.52)
(118.52)
2,587.06
1,856.51
150.77
314.47
2,321.75
(94.52)
(94.52)
2,227.23
Total (a)
Total (b)
13 Provisions, contingent liabilities and contingent assets
Given below is the movement in provisions and a brief description of the nature of contingent liabilities recognised by the
Bank.
a)
Provision for credit card and debit card reward points
(` crore)
Particulars
Opening provision for reward points
Provision for reward points made during the year
Utilisation / write back of provision for reward points
Closing provision for reward points
b) Provision for legal and other contingencies
Particulars
Opening provision
Movement during the year (net)
Closing provision
c)
Provision pertaining to fraud accounts
Particulars
No. of frauds reported during the year
Amount involved in fraud (` crore)
Amount involved in fraud net of recoveries / write-offs as at the end of the year (` crore)
Provisions held as at the end of the year (` crore)
Amount of unamortised provision debited from “other reserves” as at the end of the year
(` crore)
HDFC Bank Limited Annual Report 2016-17
182
March 31, 2017 March 31, 2016
306.36
334.24
(209.36)
431.24
200.07
179.50
(73.21)
306.36
(` crore)
March 31, 2017 March 31, 2016
344.56
(32.66)
311.90
354.91
(10.35)
344.56
March 31, 2017
2,319
165.20
20.83
20.83
-
Schedules to the Consolidated Financial Statements
For the year ended March 31, 2017
d) Description of contingent liabilities
Sr.
No.
Contingent liability*
Brief description
1
2
3
4
5
Claims against the Group
not acknowledged as
debts - taxation
The Group is a party to various taxation matters in respect of which appeals are pending.
The Group expects the outcome of the appeals to be favourable based on decisions on similar
issues in the previous years by the appellate authorities, based on the facts of the case and
the provisions of Income Tax Act, 1961.
Claims against the Group
not acknowledged as
debts - others
The Group is a party to various legal proceedings in the normal course of business.
The Group does not expect the outcome of these proceedings to have a material adverse
effect on the Group’s financial conditions, results of operations or cash flows.
Liability on account of
forward exchange and
derivative contracts
Guarantees given on
behalf of constituents,
acceptances,
endorsements and other
obligations
Other items for which
the Group is contingently
liable
The Bank enters into foreign exchange contracts, currency options, forward rate
agreements, currency swaps and interest rate swaps with inter-bank participants on
its own account and for customers. Forward exchange contracts are commitments to
buy or sell foreign currency at a future date at the contracted rate. Currency swaps
are commitments to exchange cash flows by way of interest / principal in one currency
against another, based on predetermined rates. Interest rate swaps are commitments to
exchange fixed and floating interest rate cash flows. The notional amounts of financial
instruments such as foreign exchange contracts and derivatives provide a basis for
comparison with instruments recognised on the Balance Sheet but do not necessarily
indicate the amounts of future cash flows involved or the current fair value of the
instruments and therefore, do not indicate the Bank’s exposure to credit or price risks.
The derivative instruments become favorable (assets) or unfavorable (liabilities) as a
result of fluctuations in market rates or prices relative to their terms.
As a part of its commercial banking activities the Bank issues documentary credit and
guarantees on behalf of its customers. Documentary credits such as letters of credit
enhance the credit standing of the Bank’s customers. Guarantees generally represent
irrevocable assurances that the Bank will make payments in the event of the customer
failing to fulfill its financial or performance obligations.
These include: a) Credit enhancements in respect of securitised-out loans; b) Bills
rediscounted by the Bank; c) Capital commitments; d) Underwriting commitments;
e) Investment purchases pending settlement; f) Amount transferred to the RBI under the
Depositor Education and Awareness Fund (DEAF).
*Also refer Schedule 12 - Contingent Liabilities
14 Commission, exchange and brokerage income
Commission, exchange and brokerage income is net of correspondent bank charges.
15 Provisions and contingencies
The break-up of ‘Provisions and Contingencies’ included in the Statement of Profit and Loss is given below:
(` crore)
Particulars
Provision for income tax
- Current
- Deferred
Provision for NPAs
Provision for diminution in value of non-performing investments
Provision for standard assets
Other provisions and contingencies*
March 31, 2017 March 31, 2016
6,889.36
(195.70)
2,344.37
14.65
464.89
136.86
9,654.43
8,424.16
(346.04)
3,503.37
(7.64)
431.23
63.85
12,068.93
Total
*Includes provisions for tax, legal and other contingencies ` 38.72 crore (previous year: ` 37.33 crore), floating provisions
` 25.00 crore (previous year: ` 115.00 crore), provisions / (write back) for securitised-out assets ` 2.62 crore (previous year:
` (2.85) crore) and standard restructured assets ` (2.50) crore (previous year: ` (12.62) crore).
HDFC Bank Limited Annual Report 2016-17
183
Schedules to the Consolidated Financial Statements
For the year ended March 31, 2017
16 Employee benefits
Gratuity
Particulars
Reconciliation of opening and closing balance of the present value of the
defined benefit obligation
March 31, 2017
March 31, 2016
(` crore)
Present value of obligation as at April 1
Addition due to amalgamation
Interest cost
Current service cost
Benefits paid
Actuarial (gain) / loss on obligation:
Experience adjustment
Assumption change
Present value of obligation as at March 31
Reconciliation of opening and closing balance of the fair value of the plan assets
Fair value of plan assets as at April 1
Addition due to amalgamation
Expected return on plan assets
Contributions
Benefits paid
Actuarial gain / (loss) on plan assets:
Experience adjustment
Assumption change
Fair value of plan assets as at March 31
Amount recognised in Balance Sheet
Fair value of plan assets as at March 31
Present value of obligation as at March 31
Asset / (liability) as at March 31
Expenses recognised in Statement of Profit and Loss
Interest cost
Current service cost
Expected return on plan assets
Net actuarial (gain) / loss recognised in the year
Net cost
Actual return on plan assets
Estimated contribution for the next year
Assumptions (HDFC Bank Limited)
Discount rate
Expected return on plan assets
Salary escalation rate
Assumptions (HDFC Securities Limited)
Discount rate
Expected return on plan assets
Salary escalation rate
Assumptions (HDB Financial Services Limited)
Discount rate
Expected return on plan assets
Salary escalation rate
401.93
33.48
29.11
74.76
(45.47)
39.69
15.00
548.50
295.46
20.76
24.83
60.10
(45.47)
31.19
3.36
390.23
390.23
(548.50)
(158.27)
29.11
74.76
(24.83)
20.13
99.17
59.38
94.73
318.37
-
22.98
56.53
(24.88)
16.27
12.66
401.93
248.13
-
21.72
64.10
(24.88)
(13.61)
-
295.46
295.46
(401.93)
(106.47)
22.98
56.53
(21.72)
42.54
100.33
8.11
53.08
7.1% per annum
7.5% per annum
7.0% per annum
8.0% per annum
8.0% per annum
8.0% per annum
6.8% per annum
7.6% per annum
7.6% per annum
7.6% per annum
12.0% per annum
9.0% per annum
6.4% - 6.5% per annum
7.8% per annum
7.5% per annum
8.0% per annum
5% - 7.5% per annum
6.0% per annum
HDFC Bank Limited Annual Report 2016-17
184
Schedules to the Consolidated Financial Statements
For the year ended March 31, 2017
Experience adjustment
Particulars
Plan assets
Defined benefit obligation
Surplus / (deficit)
Experience adjustment gain / (loss) on plan assets
Experience adjustment (gain) / loss on plan liabilities
2017
390.23
548.50
(158.27)
31.19
39.69
Years ended March 31,
2015
2014
2016
295.46
401.93
(106.47)
(13.61)
16.27
248.13
318.37
(70.24)
21.27
4.84
176.20
242.71
(66.51)
1.82
6.30
(` crore)
2013
132.60
209.82
(77.22)
2.00
2.61
Expected rate of return on investments is determined based on the assessment made by the Group at the beginning of the
year with regard to its existing portfolio. Major categories of plan assets as a percentage of fair value of total plan assets as
at March 31, 2017 are given below:
Category of plan assets
Government securities
Debenture and bonds
Equity shares
Others
Pension
HDFC Bank
Limited
HDFC Securities
Limited
28.0%
27.0%
40.8%
4.2%
100.0%
38.0%
44.0%
13.0%
5.0%
100.0%
HDB Financial
Services Limited
55.6%
43.2%
-
1.2%
100.0%
(` crore)
Total
Particulars
Reconciliation of opening and closing balance of the present value of the
defined benefit obligation
Present value of obligation as at April 1
Interest cost
Current service cost
Benefits paid
Actuarial (gain) / loss on obligation:
Experience adjustment
Assumption change
Present value of obligation as at March 31
Reconciliation of opening and closing balance of the fair value of the plan
assets
Fair value of plan assets as at April 1
Expected return on plan assets
Contributions
Benefits paid
Actuarial gain / (loss) on plan assets:
Experience adjustment
Assumption change
Fair value of plan assets as at March 31
Amount recognised in Balance Sheet
Fair value of plan assets as at March 31
Present value of obligation as at March 31
Asset / (liability) as at March 31
March 31, 2017
March 31, 2016
70.88
4.80
1.23
(6.62)
4.65
(1.39)
73.55
38.38
2.61
1.03
(6.62)
0.39
0.37
36.16
36.16
(73.55)
(37.39)
57.45
3.92
1.12
(10.18)
17.35
1.22
70.88
41.91
3.21
2.01
(10.18)
1.43
-
38.38
38.38
(70.88)
(32.50)
HDFC Bank Limited Annual Report 2016-17
185
Schedules to the Consolidated Financial Statements
For the year ended March 31, 2017
Particulars
March 31, 2017
March 31, 2016
Expenses recognised in Statement of Profit and Loss
(` crore)
Interest cost
Current service cost
Expected return on plan assets
Net actuarial (gain) / loss recognised in the year
Net cost
Actual return on plan assets
Estimated contribution for the next year
Assumptions
Discount rate
Expected return on plan assets
Salary escalation rate
Experience adjustment
Particulars
Plan assets
Defined benefit obligation
Surplus / (deficit)
Experience adjustment gain / (loss) on plan assets
Experience adjustment (gain) / loss on plan liabilities
4.80
1.23
(2.61)
2.50
5.92
3.37
7.18
3.92
1.12
(3.21)
17.14
18.97
4.64
14.00
7.1% per annum
7.0% per annum
8.0% per annum
7.5% per annum
8.0% per annum
8.0% per annum
(` crore)
Years ended March 31,
2017
2016
2015
2014
2013
36.16
73.55
38.38
70.88
(37.39)
(32.50)
0.39
4.65
1.43
17.35
41.91
57.45
(15.54)
(2.38)
(0.19)
47.99
58.89
(10.90)
3.45
3.62
48.88
58.19
(9.31)
(1.58)
6.12
Expected rate of return on investments is determined based on the assessment made by the Bank at the beginning of the
year with regard to its existing portfolio. Major categories of plan assets as a percentage of fair value of total plan assets as
at March 31, 2017 are given below:
Category of plan assets
Government securities
Debenture and bonds
Others
Total
Provident fund
% of fair value to total plan assets
as at March 31, 2017
6.9%
87.7%
5.4%
100.0%
The guidance note on AS-15, Employee Benefits, states that employer established provident funds, where interest is
guaranteed are to be considered as defined benefit plans and the liability has to be valued. The Institute of Actuaries of
India (IAI) has issued a guidance note on valuation of interest rate guarantees on exempt provident funds. The actuary has
accordingly valued the same and the Bank held a provision of Nil as at March 31, 2017 (previous year: Nil) towards the
present value of the guaranteed interest benefit obligation. The actuary has followed deterministic approach as prescribed by
the guidance note.
Assumptions:
Particulars
Discount rate (GOI security yield)
Expected guaranteed interest rate
March 31, 2017
March 31, 2016
7.1% per annum
7.5% per annum
8.7% per annum
9.0% per annum
The Bank does not have any unfunded defined benefit plan. The Group contributed ` 292.00 crore (previous year: ` 206.99
crore) to the provident fund. The Bank contributed ` 78.67 crore (previous year: ` 56.54 crore) to the superannuation plan.
HDFC Bank Limited Annual Report 2016-17
186
Schedules to the Consolidated Financial Statements
For the year ended March 31, 2017
Compensated absences
The actuarial liability of compensated absences of accumulated privileged and sick leaves of the employees of the Group as
(` crore)
of March 31, 2017 is given below:
Particulars
Privileged leave
Sick leave
Total actuarial liability
Assumptions (HDFC Bank Limited)
Discount rate
Salary escalation rate
Assumptions (HDFC Securities Limited)
Discount rate
Salary escalation rate
Assumptions (HDB Financial Services Limited)
Discount rate
Salary escalation rate
17 Segment Reporting
Business segments
March 31, 2017
March 31, 2016
254.28
56.12
310.40
227.40
47.88
275.28
7.1% per annum
8.0% per annum
7.5% per annum
8.0% per annum
6.8% per annum
12.0% per annum
7.6% per annum
9.0% per annum
6.4% - 6.5% per annum
5% - 7.5% per annum
7.8% per annum
6.0% per annum
Business segments have been identified and reported taking into account, the target customer profile, the nature of products
and services, the differing risks and returns, the organisation structure, the internal business reporting system and the
guidelines prescribed by RBI. The Group operates in the following segments:
(a) Treasury
The treasury segment primarily consists of net interest earnings from the Bank’s investment portfolio, money market
borrowing and lending, gains or losses on investment operations and on account of trading in foreign exchange and
derivative contracts.
(b) Retail banking
The retail banking segment of the Bank serves retail customers through a branch network and other delivery channels.
This segment raises deposits from customers and provides loans and other services to customers with the help of
specialist product groups. Exposures are classified under retail banking taking into account the status of the borrower
(orientation criterion), the nature of product, granularity of the exposure and the quantum thereof.
Revenues of the retail banking segment are derived from interest earned on retail loans, interest earned from other
segments for surplus funds placed with those segments, subvention received from dealers and manufacturers, fees
from services rendered, foreign exchange earnings on retail products etc. Expenses of this segment primarily comprise
interest expense on deposits, commission paid to retail assets sales agents, infrastructure and premises expenses
for operating the branch network and other delivery channels, personnel costs, other direct overheads and allocated
expenses of specialist product groups, processing units and support groups.
(c) Wholesale banking
The wholesale banking segment provides loans, non-fund facilities and transaction services to large corporates,
emerging corporates, public sector units, government bodies, financial institutions and medium scale enterprises.
Revenues of the wholesale banking segment consist of interest earned on loans made to customers, interest / fees
earned on the cash float arising from transaction services, earnings from trade services and other non-fund facilities
and also earnings from foreign exchange and derivative transactions on behalf of customers. The principal expenses
of the segment consist of interest expense on funds borrowed from external sources and other internal segments,
premises expenses, personnel costs, other direct overheads and allocated expenses of delivery channels, specialist
product groups, processing units and support groups.
HDFC Bank Limited Annual Report 2016-17
187
Schedules to the Consolidated Financial Statements
For the year ended March 31, 2017
(d) Other banking business
This segment includes income from para banking activities such as credit cards, debit cards, third party product
distribution, primary dealership business and the associated costs. This segment also includes Bank’s subsidiaries.
(e) Unallocated
All items which are reckoned at an enterprise level are classified under this segment. This includes capital and reserves,
debt classified as Tier I or Tier II capital and other unallocable assets and liabilities such as deferred tax, prepaid
expenses, etc.
Segment revenue includes earnings from external customers plus earnings from funds transferred to other segments.
Segment result includes revenue less interest expense less operating expense and provisions, if any, for that segment.
Segment-wise income and expenses include certain allocations. Interest income is charged by a segment that provides
funding to another segment, based on yields benchmarked to an internally approved yield curve or at a certain agreed
transfer price rate. Transaction charges are levied by the retail banking segment to the wholesale banking segment for
the use by its customers of the retail banking segment’s branch network or other delivery channels. Such transaction
costs are determined on a cost plus basis. Segment capital employed represents the net assets in that segment.
Geographic segments
The geographic segments of the Bank are categorised as domestic operations and foreign operations. Domestic operations
comprise branches in India and foreign operations comprise branches outside India.
Segment reporting for the year ended March 31, 2017 is given below:
Business segments:
Sr.
No.
Particulars
Less: Inter-segment revenue
Income from operations (1) + (2) - (3)
1 Segment revenue
2 Unallocated revenue
3
4
5 Segment results
6 Unallocated expenses
7
8 Net profit (5) - (6) - (7) (net profit before
Income tax expense (including deferred tax)
Treasury
Retail
banking
Wholesale
banking
21,581.79
66,147.50
31,332.24
Other
banking
operations
13,593.23
1,308.38
8,432.16
10,473.77
4,591.77
minority interest and earnings from associates)
9 Segment assets
10 Unallocated assets
11 Total assets (9) + (10)
12 Segment liabilities
13 Unallocated liabilities
14 Total liabilities (12) + (13)
15 Capital employed (9) - (12)
(Segment assets - Segment liabilities)
16 Unallocated (10) - (13)
17 Total (15) + (16)
18 Capital expenditure
19 Depreciation
264,536.14
295,828.92
270,969.09
55,709.83
73,857.49
525,792.90
156,129.90
29,023.68
190,678.65 (229,963.98)
114,839.19
26,686.15
32.85
10.15
846.56
659.66
150.30
90.78
227.58
125.60
HDFC Bank Limited Annual Report 2016-17
188
(` crore)
Total
132,654.76
-
46,505.77
86,148.99
24,806.08
1,440.55
8,078.12
15,287.41
887,043.98
5,300.18
892,344.16
784,803.97
15,454.80
800,258.77
102,240.01
(10,154.62)
92,085.39
1,257.29
886.19
Schedules to the Consolidated Financial Statements
For the year ended March 31, 2017
Geographic segments:
Particulars
Revenue
Assets
Capital expenditure
(` crore)
Domestic
International
85,125.34
1,023.65
868,432.68
23,911.48
1,255.83
1.46
Segment reporting for the year ended March 31, 2016 is given below:
Business segments:
Sr.
No.
Particulars
1 Segment revenue
2 Unallocated revenue
3
4
Less: Inter-segment revenue
Income from operations (1) + (2) - (3)
5 Segment results
6 Unallocated expenses
7
Income tax expense (including deferred tax)
8 Net profit (5) - (6) - (7) (net profit before minority
interest and earnings from associates)
Treasury
Retail
banking
Wholesale
banking
Other
banking
operations
(` crore)
Total
18,264.88
59,252.34
27,162.39
10,954.46
115,634.07
1,489.21
7,855.03
7,887.20
3,705.31
20,936.75
0.01
41,260.86
74,373.22
1,425.76
6,693.66
12,817.33
9 Segment assets
10 Unallocated assets
11 Total assets (9) + (10)
12 Segment liabilities
13 Unallocated liabilities
14 Total liabilities (12) + (13)
235,331.98
252,690.65
226,242.65
43,049.31
757,314.59
77,340.38
448,313.40
120,425.52
22,085.58
668,164.88
4,897.74
762,212.33
19,562.70
687,727.58
15 Capital employed (9) - (12)
157,991.60 (195,622.75)
105,817.13
20,963.73
89,149.71
(Segment assets - Segment liabilities)
16 Unallocated (10) - (13)
17 Total (15) + (16)
18 Capital expenditure
19 Depreciation
Geographic segments:
Particulars
Revenue
Assets
Capital expenditure
5.09
6.16
729.46
540.47
134.59
101.67
135.72
1,004.86
89.73
738.03
(14,664.96)
74,484.75
(` crore)
Domestic
International
73,216.82
1,156.40
726,255.45
35,956.88
1,003.97
0.89
HDFC Bank Limited Annual Report 2016-17
189
Schedules to the Consolidated Financial Statements
For the year ended March 31, 2017
18 Related party disclosures
As per AS-18 on Related Party Disclosures, the Group’s related parties are disclosed below:
Promoter
Housing Development Finance Corporation Limited
Associates
International Asset Reconstruction Company Private Limited
Atlas Documentary Facilitators Company Private Limited*
HBL Global Private Limited*
*Atlas Documentary Facilitators Company Private Limited and HBL Global Private Limited amalgamated with HDB Financial
Services Limited pursuant to the approval of the Honourable High courts of Gujarat and Bombay with effect from December
1, 2016. The appointed date of the merger as per the scheme of amalgamation was April 1, 2014. Accordingly transactions
entered into by the Bank with these entities during the financial year ended March 31, 2017 have been classified under
transactions with HDB Financial Services Limited.
Key management personnel
Aditya Puri, Managing Director
Paresh Sukthankar, Deputy Managing Director
Kaizad Bharucha, Executive Director
Related parties to key management personnel
Salisbury Investments Private Limited, Tanaksh Innovations Private Limited, Akuri by Puri, Anita Puri, Amit Puri, Amrita Puri,
Adishwar Puri, Aarti Sood, Sangeeta Sukthankar, Dattatraya Sukthankar, Shubhada Sukthankar, Akshay Sukthankar, Ankita
Sukthankar, Madhavi Lad, Havovi Bharucha, Huzaan Bharucha, Danesh Bharucha, Daraius Bharucha.
In accordance with paragraph 5 of AS - 18, the Bank has not disclosed certain transactions with relatives of key management
personnel as they are in the nature of banker-customer relationship.
The significant transactions between the Bank and related parties for the year ended March 31, 2017 are given below.
A specific related party transaction is disclosed as a significant transaction wherever it exceeds 10% of all related party
transactions in that category:
(cid:0)
(cid:0)
(cid:0)
(cid:0)
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:41)(cid:78)(cid:84)(cid:69)(cid:82)(cid:69)(cid:83)(cid:84)(cid:0)(cid:80)(cid:65)(cid:73)(cid:68)(cid:26)(cid:0)(cid:40)(cid:79)(cid:85)(cid:83)(cid:73)(cid:78)(cid:71)(cid:0)(cid:36)(cid:69)(cid:86)(cid:69)(cid:76)(cid:79)(cid:80)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:38)(cid:73)(cid:78)(cid:65)(cid:78)(cid:67)(cid:69)(cid:0)(cid:35)(cid:79)(cid:82)(cid:80)(cid:79)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:44)(cid:73)(cid:77)(cid:73)(cid:84)(cid:69)(cid:68)(cid:0)` 5.57 crore (previous year: ` 7.25 crore).
(cid:50)(cid:69)(cid:78)(cid:68)(cid:69)(cid:82)(cid:73)(cid:78)(cid:71)(cid:0)(cid:79)(cid:70)(cid:0)(cid:83)(cid:69)(cid:82)(cid:86)(cid:73)(cid:67)(cid:69)(cid:83)(cid:26)(cid:0)(cid:40)(cid:79)(cid:85)(cid:83)(cid:73)(cid:78)(cid:71)(cid:0)(cid:36)(cid:69)(cid:86)(cid:69)(cid:76)(cid:79)(cid:80)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:38)(cid:73)(cid:78)(cid:65)(cid:78)(cid:67)(cid:69)(cid:0)(cid:35)(cid:79)(cid:82)(cid:80)(cid:79)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:44)(cid:73)(cid:77)(cid:73)(cid:84)(cid:69)(cid:68)(cid:0)` 207.45 crore (previous year: ` 178.83 crore).
(cid:50)(cid:69)(cid:67)(cid:69)(cid:73)(cid:86)(cid:73)(cid:78)(cid:71)(cid:0)(cid:79)(cid:70)(cid:0)(cid:83)(cid:69)(cid:82)(cid:86)(cid:73)(cid:67)(cid:69)(cid:83)(cid:26)(cid:0)(cid:40)(cid:79)(cid:85)(cid:83)(cid:73)(cid:78)(cid:71)(cid:0)(cid:36)(cid:69)(cid:86)(cid:69)(cid:76)(cid:79)(cid:80)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:38)(cid:73)(cid:78)(cid:65)(cid:78)(cid:67)(cid:69)(cid:0)(cid:35)(cid:79)(cid:82)(cid:80)(cid:79)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:44)(cid:73)(cid:77)(cid:73)(cid:84)(cid:69)(cid:68)(cid:0)` 343.10 crore (previous year: ` 247.21 crore).
(cid:36)(cid:73)(cid:86)(cid:73)(cid:68)(cid:69)(cid:78)(cid:68)(cid:0)(cid:80)(cid:65)(cid:73)(cid:68)(cid:26)(cid:0)(cid:40)(cid:79)(cid:85)(cid:83)(cid:73)(cid:78)(cid:71)(cid:0)(cid:36)(cid:69)(cid:86)(cid:69)(cid:76)(cid:79)(cid:80)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:38)(cid:73)(cid:78)(cid:65)(cid:78)(cid:67)(cid:69)(cid:0)(cid:35)(cid:79)(cid:82)(cid:80)(cid:79)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:44)(cid:73)(cid:77)(cid:73)(cid:84)(cid:69)(cid:68)(cid:0)` 373.55 crore (previous year: ` 314.57 crore).
HDFC Bank Limited Annual Report 2016-17
190
Schedules to the Consolidated Financial Statements
For the year ended March 31, 2017
The Group’s related party balances and transactions for the year ended March 31, 2017 are summarised as follows:
(` crore)
Items / related party
Promoter
Associates
Key management
personnel
Total
Deposits taken
Deposits placed
Advances given
Fixed assets purchased from
Fixed assets sold to
Interest paid to
Interest received from
Income from services rendered to
Expenses for receiving services from
Equity investments
Other investments
Dividend paid to
Dividend received from
Receivable from
Payable to
Guarantees given
Remuneration paid
Loans purchased from
2,500.25
(2,500.25)
0.15
(0.15)
-
-
-
-
5.57
-
207.45
343.10
-
-
-
(126.48)
373.55
-
23.16
(23.16)
33.67
(33.67)
0.12
(0.14)
-
13,845.65
25.05
(25.05)
-
-
0.05
(0.05)
-
-
0.51
-
-
-
31.17
(31.17)
-
-
-
-
-
-
-
-
-
-
-
-
13.61
(60.14)
2.51
(2.51)
3.44
(3.44)
-
-
1.02
0.03
-
0.76
-
-
-
-
4.49
-
-
-
-
-
-
-
20.79
-
2,538.91
(2,585.44)
2.66
(2.66)
3.49
(3.49)
-
-
7.10
0.03
207.45
343.86
31.17
(31.17)
-
(126.48)
378.04
-
23.16
(23.16)
33.67
(33.67)
0.12
(0.14)
20.79
13,845.65
Figures in bracket indicate maximum balance outstanding during the year based on comparison of the total outstanding balances
at each quarter-end.
Remuneration paid excludes value of employee stock options exercised during the year.
HDFC Bank Limited Annual Report 2016-17
191
Schedules to the Consolidated Financial Statements
For the year ended March 31, 2017
The Bank being an authorised dealer, deals in foreign exchange and derivative transactions with parties which include its
promoter. The foreign exchange and derivative transactions are undertaken in line with the RBI guidelines. The notional principal
amount of foreign exchange and derivative contracts transacted with the promoter that were outstanding as at March 31, 2017 is
` 665.77 crore (previous year: ` 491.21 crore). The contingent credit exposure pertaining to these contracts computed in line with
the extant RBI guidelines on exposure norms is ` 40.18 crore (previous year: ` 18.90 crore).
During the year ended March 31, 2017, the Bank purchased debt securities from Housing Development Finance Corporation Limited
` 2,320.00 crore (previous year: ` 1,415.00 crore) issued by it.
During the year ended March 31, 2017, the Bank paid rent of ` 0.66 crore (previous year: ` 0.66 crore) to parties related to the
Bank’s key management personnel in relation to residential accommodation. As at March 31, 2017, the security deposit outstanding
was ` 3.50 crore (previous year: ` 3.50 crore).
The Group’s related party balances and transactions for the year ended March 31, 2016 are summarised as follows:
(` crore)
Items / related party
Promoter
Associates
Deposits taken
Deposits placed
Advances given
Fixed assets purchased from
Fixed assets sold to
Interest paid to
Interest received from
Income from services rendered to
Expenses for receiving services from
Equity investments
Dividend paid to
Dividend received from
Receivable from
Payable to
Guarantees given
Remuneration paid
Loans purchased from
4,405.56
(4,405.56)
0.15
(0.15)
-
-
-
-
7.25
-
178.83
247.21
-
-
314.57
-
16.30
(28.42)
26.93
(26.93)
0.14
(0.14)
-
12,773.37
100.02
(100.02)
0.10
(7.10)
0.22
(36.95)
-
-
3.89
2.27
6.07
1,173.64
31.19
(31.19)
-
0.01
-
(0.38)
39.85
(102.70)
-
-
-
-
Key management
personnel
Total
10.12
4,515.70
(11.50)
(4,517.08)
2.51
(2.51)
0.95
(0.99)
-
-
0.84
0.02
-
0.76
-
-
3.37
-
-
-
-
-
-
-
18.34
-
2.76
(9.76)
1.17
(37.94)
-
-
11.98
2.29
184.90
1,421.61
31.19
(31.19)
317.94
0.01
16.30
(28.80)
66.78
(129.63)
0.14
(0.14)
18.34
12,773.37
Figures in bracket indicate maximum balance outstanding during the year based on comparison of the total outstanding balances
at each quarter-end.
Remuneration paid excludes value of employee stock options exercised during the year.
HDFC Bank Limited Annual Report 2016-17
192
Schedules to the Consolidated Financial Statements
For the year ended March 31, 2017
19 Leases
Operating leases primarily comprise office premises, staff residences and Automated Teller Machines (‘ATM’s), which are
renewable at the option of the Bank. The details of maturity profile of future operating lease payments are given below:
Particulars
Not later than one year
Later than one year and not later than five years
Later than five years
(` crore)
March 31, 2017 March 31, 2016
995.56
925.82
3,185.49
2,947.21
3,154.93
2,564.32
Total
7,335.98
6,437.35
The total of minimum lease payments recognised in the Statement of Profit and Loss
for the year
1,150.97
1,038.00
Total of future minimum sub-lease payments expected to be received under
non-cancellable sub-leases
Sub-lease amounts recognised in the Statement of Profit and Loss for the year
Contingent (usage based) lease payments recognised in the Statement of Profit and
Loss for the year
25.33
37.13
11.31
138.79
10.67
180.53
The Bank has sub-leased certain of its properties taken on lease.
The terms of renewal and escalation clauses are those normally prevalent in similar agreements. There are no undue
restrictions or onerous clauses in the agreements.
20 Penalties levied by the RBI
Further to the media reports in October 2015 about irregularities in advance import remittances in various banks, the Reserve
Bank of India (RBI) had conducted a scrutiny of the transactions carried out by the bank under Section 35(1A) of the Banking
Regulation Act, 1949. The RBI issued a Show Cause Notice to which the Bank had submitted its detailed response. After
considering the Bank’s submission, the RBI imposed a penalty of ` 2.00 crore on the Bank vide its letter dated July 19, 2016 on
account of pendency in receipt of bill of entry relating to advance import remittances made and lapses in adhering to KYC / AML
guidelines in this respect. The penalty has since been paid. The Bank has implemented a comprehensive corrective action
plan, to strengthen its internal control mechanisms so as to ensure that such incidents do not recur. The above matter does
not constitute a material weakness or significant deficiency in the framework of internal financial controls over financial
reporting maintained by the Bank under Section 134(3)(q) of the Companies Act 2013.
During the year ended March 31, 2016, RBI had not imposed any penalties on the Bank.
21 Small and micro industries
HDFC Bank Limited
Under the Micro, Small and Medium Enterprises Development Act, 2006 which came into force from October 2, 2006, certain
disclosures are required to be made relating to Micro, Small and Medium enterprises. There have been no reported cases
of delays in payments to Micro and Small Enterprises or of interest payments due to delays in such payments. The above is
based on the information available with the Bank which has been relied upon by the auditors.
HDFC Bank Limited Annual Report 2016-17
193
Schedules to the Consolidated Financial Statements
For the year ended March 31, 2017
HDFC Securities Limited
On the basis of the information available with the Company and the intimation received from ‘suppliers’ regarding their status
under the Micro, Small and Medium Enterprises Development Act, 2006 the amount unpaid as at March 31, 2017 was
` 0.02 crore (previous year: ` 0.02 crore).
HDB Financial Services Limited
As per the confirmation received from the suppliers covered under the Micro, Small and Medium Enterprises Development
Act, 2006, the amount unpaid as at March 31, 2017 was Nil (previous year: Nil).
22 Corporate social responsibility
Operating expenses include ` 313.31 crore (previous year: ` 197.10 crore) for the year ended March 31, 2017 towards
Corporate Social Responsibility (CSR), in accordance with the Companies Act, 2013.
The details of amount spent during the respective years towards CSR are as under:
(` crore)
Sr.
No.
Particulars
March 31, 2017
March 31, 2016
Amount
spent
Amount
unpaid /
provision
Total
Amount
spent
Amount
unpaid /
provision
Total
(i) Construction / acquisition of any asset
-
(ii) On purpose other than (i) above
313.31
-
-
-
-
-
-
313.31
188.75
8.35
197.10
23 Additional disclosure
Additional statutory information disclosed in the separate financial statements of the Bank and subsidiaries have no material
bearing on the true and fair view of the Consolidated Financial Statements and the information pertaining to the items which
are not material have not been disclosed in the Consolidated Financial Statements.
24 Comparative figures
Figures for the previous year have been regrouped and reclassified wherever necessary to conform to the current year’s
presentation.
For and on behalf of the Board
Shyamala Gopinath
Chairperson
Aditya Puri
Managing Director
Paresh Sukthankar
Deputy Managing Director
Kaizad Bharucha
Executive Director
Sanjay Dongre
Executive Vice President
(Legal) & Company Secretary
Sashidhar Jagdishan
Chief Financial Officer
Anami Roy
Bobby Parikh
Keki Mistry
Malay Patel
Partho Datta
Renu Karnad
Srikanth Nadhamuni
Umesh Sarangi
Directors
Mumbai, April 21, 2017
HDFC Bank Limited Annual Report 2016-17
194
Statement pursuant to Section 129 of the Companies Act, 2013
Schedules to the Consolidated Financial Statements
For the year ended March 31, 2017
Form AOC - 1: Pursuant to the first proviso to sub-section (3) of Section 129 of the Companies Act, 2013 read with rule 5 of
Companies (Accounts) Rules, 2014 and Companies (Accounts) Amendment Rules, 2016
Statement containing salient features of the financial statements of subsidiaries, associate companies and joint ventures
Part A: Subsidiaries
Sr.
No.
Name of the subsidiary
HDFC Securities Limited
(` crore)
HDB Financial Services
Limited
1.
The date since when subsidiary was acquired
September 28, 2005
August 31, 2007
2. Reporting period for the subsidiary concerned, if different
from the holding company’s reporting period
Reporting period of the
subsidiary is the same as
that of the holding company
i.e. April 1, 2016 to
March 31, 2017
Reporting period of the
subsidiary is the same as
that of the holding company
i.e. April 1, 2016 to
March 31, 2017
3. Reporting currency and exchange rate as on the last date of
the relevant financial year in the case of foreign subsidiaries.
Not applicable as this is a
domestic subsidiary
Not applicable as this is a
domestic subsidiary
4. Share capital
5. Reserves & surplus
6.
7.
8.
9.
Total assets
Total liabilities
Investments
Turnover
10. Profit before taxation
11. Provision for taxation
12. Profit after taxation
13. Proposed dividend (including tax thereon)*
14. Extent of shareholding (in percentage)
15.48
791.93
1,380.23
572.82
308.61
553.20
329.45
113.55
215.90
111.80
97.9%
780.24
4,582.66
33,456.09
28,093.19
465.06
5,714.54
1,058.59
374.38
684.21
133.18
96.2%
* Includes interim dividend on equity shares paid during the year. In terms of revised Accounting Standard (AS) 4 ‘Contingencies
and Events occurring after the Balance sheet date’ as notified by the Ministry of Corporate Affairs through amendments to
Companies (Accounting Standards) Amendment Rules, 2016, the subsidiaries have not appropriated their proposed dividend
(including tax) from Statement of Profit and Loss for the year ended March 31, 2017.
Notes:
1.
2.
There are no subsidiaries that are yet to commence operations.
No subsidiaries were liquidated or sold during the year.
HDFC Bank Limited Annual Report 2016-17
195
Schedules to the Consolidated Financial Statements
Statement pursuant to Section 129 of the Companies Act, 2013
For the year ended March 31, 2017
Part B: Associate Companies and Joint Ventures
(` crore)
Sr.
No.
Name of Associates or Joint Ventures
International Asset Reconstruction
Company Private Limited
1.
Latest audited Balance Sheet Date
2. Date on which the Associate or Joint venture was associated or acquired
3. Shares of Associate or Joint Ventures held by the company on the year end:
Number of shares
Amount of investment in associates or joint venture
Extent of holding (in percentage)
4. Description of how there is significant influence
5. Reason why the associate or joint venture is not consolidated
6. Net worth attributable to the Bank’s shareholding
7. Profit / Loss for the year:
i. Considered in consolidated financial statements
ii. Not considered in consolidated financial statements
March 31, 2016*
May 23, 2008
1,61,75,507
31.17
29.4%
Extent of equity holding in the
associate company exceeds 20%
Not applicable
39.06*
2.34*
5.70*
* Unaudited financial statements drawn up to March 31, 2017 have been considered for the purpose of the Consolidated Financial
Statements for the year ended March 31, 2017.
Notes:
1.
2.
3.
There are no joint ventures as per Accounting Standard 27 - Financial Reporting of Interests in Joint Ventures.
There are no associates or joint ventures that are yet to commence operations.
During the year ended March 31, 2017, Atlas Documentary Facilitators Company Private Limited and HBL Global Private
Limited, associates of the Bank as at March 31, 2016, amalgamated with HDB Financial Services Limited, pursuant to the
approval of the Honourable High courts of Gujarat and Bombay with effect from December 1, 2016. The appointed date of
the merger as per the scheme of amalgamation was April 1, 2014.
For and on behalf of the Board
Shyamala Gopinath
Chairperson
Aditya Puri
Managing Director
Paresh Sukthankar
Deputy Managing Director
Kaizad Bharucha
Executive Director
Sanjay Dongre
Executive Vice President
(Legal) & Company Secretary
Sashidhar Jagdishan
Chief Financial Officer
Anami Roy
Bobby Parikh
Keki Mistry
Malay Patel
Partho Datta
Renu Karnad
Srikanth Nadhamuni
Umesh Sarangi
Directors
Mumbai, April 21, 2017
HDFC Bank Limited Annual Report 2016-17
196
Basel III - Pillar 3 Disclosures
As at March 31, 2017
The Reserve Bank of India (RBI) vide its circular under reference DBOD.No.BP.BC.1/21.06.201/2015-16 dated July 1, 2015 on
‘Basel III Capital Regulations’ (‘Basel III circular’) read together with the circular under reference DBR.No.BP.BC.80/21.06.201/2014-
15 dated March 31, 2015 on ‘Prudential Guidelines on Capital Adequacy and Liquidity Standards - Amendments’ requires banks
to make Pillar 3 disclosures including leverage ratio and liquidity coverage ratio under the Basel III Framework. These disclosures
are available on HDFC Bank’s website under the ‘Regulatory Disclosures’ section. The link to this section is given below:
http://www.hdfcbank.com/aboutus/basel_disclosures/default.htm.
The Regulatory Disclosures section contains the following disclosures:
(cid:115)(cid:0)
(cid:49)(cid:85)(cid:65)(cid:76)(cid:73)(cid:84)(cid:65)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:81)(cid:85)(cid:65)(cid:78)(cid:84)(cid:73)(cid:84)(cid:65)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0)(cid:48)(cid:73)(cid:76)(cid:76)(cid:65)(cid:82)(cid:0)(cid:19)(cid:0)(cid:68)(cid:73)(cid:83)(cid:67)(cid:76)(cid:79)(cid:83)(cid:85)(cid:82)(cid:69)(cid:83)(cid:26)
(cid:131)
(cid:131)
(cid:131)
(cid:131)
(cid:131)
(cid:131)
(cid:131)
(cid:131)
(cid:131)
(cid:131)
(cid:131)
Scope of application
Capital adequacy
Credit risk
Credit risk: Portfolios subject to the standardised approach
Credit risk mitigation: Disclosures for standardised approach
Securitisation exposures
Market risk in trading book
Operational risk
Asset Liability Management (‘ALM’) risk management
General disclosures for exposures related to counterparty credit risk
Equities: Disclosure for banking book positions
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:35)(cid:79)(cid:77)(cid:80)(cid:79)(cid:83)(cid:73)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:79)(cid:70)(cid:0)(cid:67)(cid:65)(cid:80)(cid:73)(cid:84)(cid:65)(cid:76)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:82)(cid:69)(cid:67)(cid:79)(cid:78)(cid:67)(cid:73)(cid:76)(cid:73)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:82)(cid:69)(cid:81)(cid:85)(cid:73)(cid:82)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:14)
(cid:45)(cid:65)(cid:73)(cid:78)(cid:0)(cid:70)(cid:69)(cid:65)(cid:84)(cid:85)(cid:82)(cid:69)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:70)(cid:85)(cid:76)(cid:76)(cid:0)(cid:84)(cid:69)(cid:82)(cid:77)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:67)(cid:79)(cid:78)(cid:68)(cid:73)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)(cid:82)(cid:69)(cid:71)(cid:85)(cid:76)(cid:65)(cid:84)(cid:79)(cid:82)(cid:89)(cid:0)(cid:67)(cid:65)(cid:80)(cid:73)(cid:84)(cid:65)(cid:76)(cid:0)(cid:73)(cid:78)(cid:83)(cid:84)(cid:82)(cid:85)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:14)
(cid:44)(cid:69)(cid:86)(cid:69)(cid:82)(cid:65)(cid:71)(cid:69)(cid:0)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:0)(cid:68)(cid:73)(cid:83)(cid:67)(cid:76)(cid:79)(cid:83)(cid:85)(cid:82)(cid:69)(cid:83)
(cid:44)(cid:73)(cid:81)(cid:85)(cid:73)(cid:68)(cid:73)(cid:84)(cid:89)(cid:0)(cid:67)(cid:79)(cid:86)(cid:69)(cid:82)(cid:65)(cid:71)(cid:69)(cid:0)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:0)(cid:68)(cid:73)(cid:83)(cid:67)(cid:76)(cid:79)(cid:83)(cid:85)(cid:82)(cid:69)
HDFC Bank Limited Annual Report 2016-17
197
Corporate Governance
CERTIFICATE OF COMPLIANCE OF CONDITIONS OF CORPORATE GOVERNANCE
To The Members of
HDFC Bank Limited
We have examined the compliance of conditions of corporate governance by HDFC Bank Limited (the ‘Company’) for the year
ended March 31, 2017, as prescribed in Regulations 17 to 27, clauses (b) to (i) of sub-regulation (2) of regulation 46 and paras
C, D and E of Schedule V to Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015 (‘LODR’).
We state that the compliance of conditions of Corporate Governance is the responsibility of the management, and our examination
was limited to procedures and implementation thereof adopted by the Company for ensuring the compliance of the conditions
of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.
In our opinion, and to the best of our information and according to the explanations given to us, we certify that the Company has
complied with the conditions of Corporate Governance as stipulated in the aforesaid provisions of LODR.
We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency
or effectiveness with which the management has conducted the affairs of the Company.
For BNP & Associates
Company Secretaries
[Firm Regn. No. P2014MH037400]
B Narasimhan
Partner
FCS No.: 1303
C P No.: 10440
Place: Mumbai
Date: May 15, 2017
HDFC Bank Limited Annual Report 2016-17
198
Corporate Governance
the
[Report on Corporate Governance pursuant
Companies Act, 2013 and the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015 {“the
SEBI Listing Regulations”} and forming a part of the report
of the Board of Directors]
to
PHILOSOPHY ON CODE OF CORPORATE GOVERNANCE
The Bank believes in adopting and adhering to the best
recognized corporate governance practices and continuously
benchmarking itself against each such practice. The Bank
understands and respects its fiduciary role and responsibility
towards its shareholders and strives hard to meet their
expectations.
The Bank believes that best board practices, transparent
disclosures and shareholder empowerment are necessary for
creating shareholder value.
The Bank has infused the philosophy of corporate governance
into all its activities. The philosophy on corporate governance is
an important tool for shareholder protection and maximization
of their long term values. The cardinal principles such as
independence, accountability, responsibility, transparency, fair
and timely disclosures, credibility, sustainability etc. serve as the
means for implementing the philosophy of corporate governance
in letter and in spirit.
BOARD OF DIRECTORS
The composition of the Board of Directors of the Bank (“Board”)
is governed by the provisions of the Companies Act, 2013, the
Banking Regulation Act, 1949 and the listing requirements of
the Indian Stock Exchanges where the securities issued by the
Bank are listed.
The Board has twelve (12) Directors as on March 31, 2017.
None of the Directors are related to each other.
(* Only Audit Committee and Stakeholders’ Relationship Committee
are considered for the purpose of this limit)
Details of directorship, memberships and chairmanships of the
committees of other companies for each Director of the Bank are as
follows:
Name of Director
Mrs. Shyamala
Gopinath
Mr. Partho Datta
Mr. Bobby Parikh
Mr. A. N. Roy
Mr. Malay Patel
Mr. Keki Mistry
Mrs. Renu Karnad
Mr. Aditya Puri
Mr. Paresh Sukthankar
Mr. Kaizad Bharucha
Mr. Umesh Chandra
Sarangi
Mr. Srikanth
Nadhamuni $
Directorships
on the Board
of other
companies *
Chairmanships
on the Board
of other
companies
Memberships
of Committees
of other
companies *
Chairmanships
of Committees
of other
companies
3
3
4
2
-
8
9
-
-
-
-
-
-
1
-
1
-
1
-
1
-
-
-
-
2
3
-
-
-
4
4
-
-
-
-
-
1
1
3
1
-
5
1
-
-
-
-
-
* Chairmanships not counted
$ Mr. Srikanth Nadhamuni was appointed as an Additional Director
Composition of the Board of Directors of the Bank as on
March 31, 2017:
w.e.f September 20, 2016.
Executive Directors: Mr. Aditya Puri (Managing Director),
Mr. Paresh Sukthankar (Deputy Managing Director) and
Mr. Kaizad Bharucha (Executive Director)
Non-Executive Directors: Mr. Keki Mistry and Mrs. Renu Karnad
Independent Directors: Mrs. Shyamala Gopinath (Part-time
Non Executive Chairperson), Mr. Partho Datta, Mr. Bobby Parikh,
Mr. A. N. Roy, Mr. Malay Patel and Mr. Umesh Chandra Sarangi
Mr. Srikanth Nadhamuni has been appointed as an Additional
Director of the Bank with effect from September 20, 2016,
to hold office till the conclusion of the ensuing Annual General
Meeting of the Bank.
Mr. Keki Mistry and Mrs. Renu Karnad represent Housing
Development Finance Corporation Limited (HDFC Limited) on
the Board of the Bank.
None of the Directors on the Board is a member of more
than ten (10) Committees* and Chairman of more than
five (5) Committees* across all the companies in which he / she
is a Director. All the Directors have made necessary disclosures
regarding Committee positions occupied by them in other
companies.
Note: For the purpose of considering the limit of the Directorships
and limits of Committees on which the directors are members /
Chairmanships, all public limited companies, whether listed or
not, are included. Private Limited companies, foreign companies
and companies under Section 8 of the Companies Act, 2013 are
excluded. Further, Chairmanships/ Memberships of only the Audit
Committee and the Stakeholders’ Relationship Committee have
been considered.
PROFILE OF BOARD OF DIRECTORS
The profiles of the Directors of the Bank as on March 31, 2017
are as under:
Mrs. Shyamala Gopinath
Mrs. Shyamala Gopinath, aged 67 years, holds a Master’s Degree
in Commerce and is a CAIIB. Mrs. Gopinath has over 40 years
of experience in financial sector policy formulation in different
capacities at RBI. As Deputy Governor of RBI for seven years,
Mrs. Gopinath had been guiding and influencing the national
policies in the diverse areas of financial sector regulation and
HDFC Bank Limited Annual Report 2016-17
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Corporate Governance
supervision, development of financial markets, capital account
management, management of government borrowings, forex
reserves management and payment and settlement systems.
During 2001-03, Mrs. Gopinath worked as senior financial sector
expert in the then Monetary Affairs and Exchange Department
of the International Monetary Fund (Financial Institutions
Division). Mrs. Gopinath was a member of the FSAP (Financial
Sector Assessment Program) missions to Tanzania, Nigeria,
Hungary and Poland and the Foreign Exchange and Reserve
Management team to Turkey and Kosovo. She also served as
RBI representative on the Financial Stability Board.
Mrs. Gopinath does not hold any shares in the Bank as on
March 31, 2017.
Mr. Aditya Puri
Mr. Aditya Puri, aged 66 years, holds a Bachelor’s degree in
Commerce from Punjab University and is an Associate Member
of the Institute of Chartered Accountants of India.
Prior to joining the Bank, Mr. Puri was the Chief Executive Officer
of Citibank, Malaysia from 1992 to 1994.
Mr. Puri has been the Managing Director of the Bank since
September 1994. Mr. Puri has over four decades of experience
in the banking sector in India and abroad.
Mr. Puri has provided outstanding leadership as the Managing
the
Director and has contributed significantly
Bank scale phenomenal heights under his stewardship.
During the year, Mr. Puri was named amongst the best 30 CEOs
in the world in the Barron’s list. The numerous awards won by
Mr. Puri and the Bank are a testimony to the tremendous
credibility that Mr. Puri has built for himself and the Bank over
the years.
to enable
The Bank has made good and consistent progress on key
parameters like balance sheet size, total deposits, net revenues,
earnings per share and net profit during Mr. Puri’s tenure.
The rankings achieved by the Bank amongst all Indian banks
with regard to market capitalization, profit after tax and balance
sheet size remain amongst the top 10.
During his tenure Mr. Puri has led the Bank through two major
mergers in the Indian banking industry i.e. merger of Times Bank
Limited and Centurion Bank of Punjab Limited with HDFC Bank
Limited. The subsequent integrations have been smooth and
seamless under his inspired leadership.
Mr. Puri’s vision and strategy have been the driving force behind
the Bank’s foray into the world of “Digital Banking” resulting in
the roll out of several digital banking products like EVA Webchat
Bot, UPI, 10 - second loans, PayZapp, Chillr, etc.
Mr. Keki Mistry
Mr. Keki Mistry, aged 62 years, holds a Bachelor’s Degree in
Commerce from the Mumbai University. Mr. Mistry is a Fellow
Member of the Institute of Chartered Accountants of India.
Mr. Mistry brings with him over three decades of varied
experience in banking and financial services domain.
Mr. Mistry started his career with AF Ferguson & Co, a renowned
Chartered Accountancy firm, followed by stints at Hindustan
Unilever Limited and Indian Hotels Company Limited.
In the year 1981, Mr. Mistry joined Housing Development Finance
Corporation Limited (HDFC Ltd.). Mr. Mistry was inducted on to
the Board of HDFC Ltd. as an Executive Director in the year
1993 and was elevated to the post of Managing Director in
November 2000. In October 2007, Mr. Mistry was appointed as
Vice Chairman & Managing Director of HDFC Ltd. and became
the Vice Chairman & CEO in January 2010. As a part of the
management team, Mr. Mistry has played a critical role in the
successful transformation of HDFC Ltd. into India’s leading
Financial Services Conglomerate by facilitating formation of
companies including HDFC Bank Ltd., HDFC Asset Management
Company Ltd., HDFC Standard Life Insurance Company Ltd. and
HDFC Ergo General Insurance Company Ltd.
Mr. Mistry, along with his relatives, holds 296,130 equity shares
in the Bank as on March 31, 2017.
Mrs. Renu Karnad
Mrs. Renu Karnad, aged 64 years, is a law graduate and also
holds a Master’s Degree in Economics from University of Delhi.
Mrs. Karnad is a Parvin Fellow-Woodrow Wilson School of
International Affairs, Princeton University, U.S.A.
Mrs. Karnad joined HDFC Ltd. in 1978. After spending two
decades in various positions, Mrs. Karnad was inducted on to the
Board as Executive Director in 2000 and was further elevated to
the post of Managing Director with effect from January 1, 2010.
Mrs. Karnad brings with her rich experience and enormous
knowledge in the mortgage sector, having been part of the
nascent real estate and mortgage sectors in India. Mrs. Karnad
is in-charge of the lending operations of the HDFC Ltd. and is
responsible for spearheading its expansion.
Over the years, Mrs. Karnad has to her credit, numerous awards
and accolades. Known for her wit and diplomacy, Mrs. Karnad has
always had a humane approach towards solving complex issues.
Mrs. Karnad firmly believes that people are key to an organization’s
success, especially in the service domain and propagates
self-belief as the strongest weapon in achieving excellence.
Mr. Puri, along with his relatives, holds 3,441,544 equity shares
in the Bank as on March 31, 2017.
Mrs. Karnad, along with her relatives, holds 287,620 equity
shares in the Bank as on March 31, 2017.
HDFC Bank Limited Annual Report 2016-17
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Corporate Governance
Mr. Partho Datta
Mr. Partho Datta, aged 68 years, is an Associate Member of
the Institute of Chartered Accountants of India. Mr. Datta joined
Indian Aluminum Company Limited (INDAL) and was with
INDAL and its parent company in Canada for 25 years and
held positions as Treasurer, Chief Financial Officer and Director
Finance during his tenure. Mr. Datta joined the Chennai based
Murugappa Group thereafter as the head of Group Finance
and was a member of the Management Board of the Group,
as well as Director in several Murugappa Group companies.
Post retirement from the Murugappa Group, Mr. Datta was an
advisor to the Central Government appointed Board of Directors
of Satyam Computers Services Limited during the restoration
process and has also been engaged in providing business /
strategic and financial consultancy on a selective basis.
Mr. Datta has rich and extensive experience in various financial
and accounting matters
including financial management,
mergers and amalgamations and capital markets strategy.
Mr. Datta is one of the financial experts on the Audit Committee
of the Board.
Mr. Datta does not hold any equity shares in the Bank as on
March 31, 2017.
Mr. Bobby Parikh
Mr. Bobby Parikh, aged 53 years, holds a Bachelor’s degree in
Commerce from the Mumbai University and has qualified as a
Chartered Accountant in 1987. Mr. Parikh is a Senior Partner
with BMR & Associates LLP and leads its financial services
practice. Prior to joining BMR & Associates LLP, Mr. Parikh was
the Chief Executive Officer of Ernst & Young in India and held
that responsibility until December 2003. Mr. Parikh worked with
Arthur Andersen for over 17 years and was its Country Managing
Partner until the Andersen practice combined with that of Ernst
& Young in June 2002.
Over the years, Mr. Parikh has had extensive experience in
advising clients across a range of industries. India has witnessed
significant deregulation and a progressive transformation of its
policy framework. An area of focus for Mr. Parikh has been to work
with businesses, both Indian and multinational, in interpreting
the implications of the deregulation as well as the changes to
India’s policy framework, to help businesses better leverage
opportunities that have become available and to address
challenges that resulted from such changes. Mr. Parikh has led
teams that have advised clients in the areas of entry strategy
(MNCs into India and Indian companies into overseas markets),
business model identification, structuring a business presence,
mergers, acquisitions and other business reorganizations.
Mr. Parikh works closely with regulators and policy formulators,
in providing inputs to aid in the development of new regulations
and policies, and in assessing the implications and efficacy of
these and providing feedback for action.
Mr. Parikh led the Financial Services industry practice at Arthur
Andersen and then also at Ernst & Young and has advised a
number of banking groups, investment banks, brokerage houses,
fund managers and other financial services intermediaries in
establishing operations in India, mergers and acquisitions and in
developing structured financial products, besides providing tax
and business advisory and tax reporting services.
Mr. Parikh has been a member of a number of trade and business
associations and their management or other committees, as well
as on the advisory or executive boards of non-Governmental
and not-for-profit organizations.
Mr. Parikh, along with his relatives, holds 8,250 equity shares in
the Bank as on March 31, 2017.
Mr. A. N. Roy
Mr. A. N. Roy, aged 67 years, is M. A., M. Phil and is a
distinguished retired civil servant. During his long career of
38 years in the Indian Police Service (IPS), Mr. Roy held with
great distinction a range of assignments, including some of
the most prestigious, challenging and sensitive ones, both in
the state of Maharashtra and Government of India, including
Commissioner of Police, Mumbai and DGP, Maharashtra before
retiring in the year 2010.
Mr. Roy’s areas of specialization include policy planning, budget,
recruitment, training and other finance and administration
functions in addition to all operational matters.
A firm believer in technology in Police for providing solutions
to a variety of complex problems or citizen facilitation and as
‘force-multiplier’, Mr. Roy brought in technology in a very big way
in the Police department with full co-operation and support of
the entire IT Industry. Mr. Roy also held the position of Director
General of the Anti-Corruption Bureau, in which capacity Mr. Roy
initiated a policy document on vigilance matters for Government
of Maharashtra.
Mr. Roy has wide knowledge and experience of security
and intelligence matters at the state and national level.
Having handled multifarious field and staff assignments,
Mr. Roy has a rich and extensive experience of functioning of the
government at various levels and of problem solving.
Mr. Roy does not hold equity shares in the Bank as on
March 31, 2017.
Mr. Paresh Sukthankar
Mr. Paresh Sukthankar, aged 54 years, completed his graduation
from Sydenham College, Mumbai and holds a Bachelor of
Commerce (B.Com) degree from University of Mumbai. He has
done his Masters in Management Studies (MMS) from Jamnalal
HDFC Bank Limited Annual Report 2016-17
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Corporate Governance
Bajaj Institute (Mumbai). Mr. Sukthankar has also completed
the Advanced Management Program (AMP) from the Harvard
Business School.
Mr. Sukthankar has been associated with the Bank since
its inception in 1994 and has total banking experience of
over three decades. At the Bank, he has contributed in and
effectively steered the various key areas including Credit, Risk
Management, Finance, Human Resources, Investor Relations,
Corporate Communications, Corporate Social Responsibility
and Information Security verticals of the Bank. He was appointed
as Executive Director on the Bank’s Board in October 2007.
In June 2014, Mr. Sukthankar was elevated to the post of Deputy
Managing Director.
in various departments
Prior to joining the Bank, Mr. Sukthankar worked in Citibank
for around 9 years,
including
corporate banking, risk management, financial control and
credit administration. Mr. Sukthankar has been a member
of various Committees formed by Reserve Bank of India and
Indian Banks’ Association. At present, Mr. Sukthankar is the
Deputy Managing Director of the Bank, and is doing a
commendable job in maintaining the overall portfolio quality of
the Bank.
Mr. Sukthankar, along with his relatives, holds 814,405 equity
shares in the Bank as on March 31, 2017.
Mr. Kaizad Bharucha
Mr. Kaizad Bharucha, aged 52 years, holds a Bachelor of
Commerce degree from University of Mumbai. He has been
associated with the Bank since 1995. In his current position as
Executive Director, he is responsible for Wholesale Banking
covering areas of Corporate Banking, Emerging Corporate Group,
Business Banking, Capital Markets & Commodities Business,
Agri Lending, Investment Banking, Financial Institutions &
Government Business and Department for Special Operations.
He has driven growth and profitability in the aforesaid areas of
the Wholesale banking segment of the Bank.
In his previous position as Group Head - Credit & Market
Risk, he was responsible for the Risk Management activities
in the Bank viz., Credit Risk, Market Risk, Debt Management,
Risk Intelligence and Control functions.
Mr. Bharucha has been a career banker with over three decades
of banking experience. Prior to joining the Bank, he worked in
SBI Commercial and International Bank in various areas
including Trade Finance and Corporate Banking.
He has represented HDFC Bank as a member of the working
group constituted by the Reserve Bank of India to examine the
role of Credit Information Bureau and on the sub-committee with
regard to adoption of the Basel II guidelines.
Mr. Bharucha, along with his relatives, holds 938,551 equity
shares in the Bank as on March 31, 2017.
Mr. Malay Patel
Mr. Malay Patel, aged 40 years, is a Major in Engineering
(Mechanical) from Rutgers University, Livingston, NJ, USA, and
an A.A.B.A. in business from Bergen County College, Fairlawn, NJ,
USA. He is a director on the Board of Eewa Engineering Company
Private Limited, a company in the plastics / packaging industry
with exports to more than 50 countries. He has been involved
in varied roles such as export / import, procurement, sales and
marketing, etc in Eewa Engineering Company Private Limited.
Mr. Malay Patel has special knowledge and practical experience
in matters relating to small scale industries in terms of
Section 10-A (2)(a) of the Banking Regulation Act, 1949.
Mr. Malay Patel does not hold any shares in the Bank as on
March 31, 2017.
Mr. Umesh Chandra Sarangi
Mr. Umesh Chandra Sarangi, aged 65 years, holds a Master’s
Degree
the Utkal University
(gold medalist).
in Science
(Botany)
from
Mr. Sarangi has 35 years of experience in the Indian Administrative
Services and brought in significant reforms in modernization
of agriculture, focus on agro processing and export. As the
erstwhile Chairman of the National Bank for Agricultural
and Rural Development (NABARD) from December 2007 to
December 2010, Mr. Sarangi focused on rural infrastructure,
accelerated initiatives such as microfinance, financial inclusion,
watershed development and tribal development.
Mr. Sarangi has been appointed as a Director having specialized
knowledge and experience in agriculture and rural economy
pursuant to Section 10-A (2)(a) of the Banking Regulation Act,
1949.
Mr. Sarangi does not hold any shares in the Bank as on
March 31, 2017.
Mr. Srikanth Nadhamuni
Mr. Srikanth Nadhamuni, aged 53 years, has been appointed
as an Additional Director on the Board of the Bank with effect
from September 20, 2016 to hold office till the conclusion of the
ensuing Annual General Meeting of the Bank.
Mr. Srikanth Nadhamuni holds a Bachelor’s degree in Electronics
and Communications from National Institute of Engineering and
a Master’s degree in Electrical Engineering from Louisiana State
University. Mr. Nadhamuni is a technologist and an entrepreneur
with 28 years of experience in the areas of CPU design,
Healthcare, e-Governance, National ID, Biometrics, Financial
Technology and Banking sectors.
HDFC Bank Limited Annual Report 2016-17
202
Corporate Governance
Mr. Nadhamuni presently is the Chairman of Novopay Solutions
Private Limited, a company involved in the area of mobile
payments and is the CEO of Khosla Labs Private Limited, a
start-up
incubator. He has also been a co-founder of
e-Governments Foundation with Mr. Nandan Nilekani which
work on the objectives to improve governance in Indian cities,
creation of Municipal ERP suite which improves service delivery
of cities.
REMUNERATION OF DIRECTORS
Managing Director and other Executive Directors:
The details of the remuneration paid to Mr. Aditya Puri, Managing
Director; Mr. Paresh Sukthankar, Deputy Managing Director
and Mr. Kaizad Bharucha, Executive Director during the year
2016-17 are as under:
(Amount in `)
Mr. Aditya
Puri
Mr. Paresh
Sukthankar
Mr. Kaizad
Bharucha
39,415,680
21,498,854
4,729,884
5,912,352
29,015,377
21,928,752
15,658,142
2,631,456
3,289,313
17,300,777
14,700,000
17,375,182
1,764,000
2,205,000
10,566,653
21,896,522
13,055,031
9,112,740
7,118,855
4,245,746
1,453,913
Mr. Nadhamuni was the Chief Technology Officer of Aadhaar
(UID Authority of India) during 2009-2012 where he participated
in design and development of the world’s largest biometric based
ID system. He was instrumental in development of Aadhaar
technology, several banking and financial protocols including
MicroATM, Aadhaar Enabled Payment System (AEPS) and
Aadhaar Payment Bridge (APB).
Particulars
Basic
Allowances and Perquisites
Provident Fund
Superannuation
Performance Bonus #
Mr. Nadhamuni spent 14 years in the silicon valley (California, US)
working for several global companies such Sun Microsystems
(CPU design), Intel Corporation (CPU design), Silicon Graphics
(Interactive TV) and WebMD (Internet Healthcare).
Mr. Nadhamuni has been appointed as a Director having
expertise in the field of Information Technology.
Mr. Nadhamuni does not hold any shares in the Bank.
BOARD MEETINGS
During the year under review, seven (7) Board Meetings
were held. The meetings were held on April 22, 2016,
May 19, 2016, July 21, 2016, October 25, 2016, December 16, 2016,
January 24, 2017 and March 14, 2017.
Details of attendance at the Board Meetings held during the year
under review, are as follows:
# Bonus pertaining to FY 2015-16
paid out in FY 2016-17
Deferred Bonus tranches for
earlier financial years
No stock options were granted to the whole-time directors during
financial year 2016-17.
The criteria for evaluation of performance of Whole-Time Directors
include performance vis-à-vis business plans, performance
vis-à-vis banking system, and performance in relation to
regulatory and compliance requirements.
All the Whole-Time Directors of the Bank have been appointed
for a period of three (3) years each. The notice period for each
of them, as specified in their respective terms of appointments,
is three months.
The remuneration of Mr. Aditya Puri, Mr. Paresh Sukthankar
and Mr. Kaizad Bharucha as above has been approved by the
Reserve Bank of India (RBI).
1. Mrs. Shyamala Gopinath, Mr. A. N. Roy, Mr. Bobby Parikh,
Mr. Malay Patel, Mr. Umesh Chandra Sarangi, Mr. Keki Mistry,
Mr. Aditya Puri and Mr. Paresh Sukthankar attended seven (7)
Board meetings each.
The Bank provides for gratuity in the form of lump-sum payment
on retirement or on death while in employment or on termination
of employment of an amount equivalent to 15 (fifteen) days basic
salary payable for each completed year of service.
2. Mrs. Renu Karnad and Mr. Partho Datta attended six (6)
Board meetings each.
3. Mr. Kaizad Bharucha, Executive Director, attended five (5)
Board meetings.
4. Mr. Srikanth Nadhamuni attended four (4) Board meetings.
(Mr. Nadhamuni was appointed as Additional Director on the
Board of the Bank w.e.f. September 20, 2016.)
ATTENDANCE AT LAST AGM
All the directors of the Bank who were on the Board of the Bank
as on the date of previous Annual General Meeting held on
July 21, 2016 attended the meeting.
The Bank makes annual contributions to funds administered
by trustees and managed by insurance companies for amounts
notified by the said insurance companies. The Bank accounts for
the liability for future gratuity benefits based on an independent
external actuarial valuation carried out annually.
Perquisites (evaluated as per Income Tax Rules, 1962 wherever
applicable and at actual cost to the Bank otherwise) such as the
benefit of the Bank’s furnished accommodation, gas, electricity,
water and furnishings, club fees, personal accident insurance,
use of car and telephone at residence, medical reimbursement,
leave and leave travel concession and other benefits like
provident fund, superannuation and gratuity are provided in
accordance with the rules of the Bank in this regard.
HDFC Bank Limited Annual Report 2016-17
203
Corporate Governance
No sitting fees are paid to Mr. Puri, Mr. Sukthankar and
Mr. Bharucha for attending meetings of the Board and / or its
Committees.
DETAILS OF REMUNERATION / SITTING FEES PAID TO
DIRECTORS
All the non-executive directors including the independent directors
and the Chairperson receive remuneration by way of sitting
fees for each meeting of the Board and its various committees.
Executive directors including independent directors other than
the Chairperson also receive profit related commission as per
the limits prescribed in the RBI guidelines. No stock options are
granted to any of the non-executive directors.
During the year, Mrs. Shyamala Gopinath was paid remuneration
of ` 3,000,000. Mrs. Gopinath is also paid sitting fees for
attending Board and Committee meetings. The remuneration
of the Chairperson has been approved by the Reserve Bank
of India. Pursuant to the provisions of Companies Act, 2013,
the Directors are paid sitting fees @ ` 50,000 and `100,000 for
attending Committee & Board meetings respectively.
The details of sitting fees paid to non-executive directors during
the year for attending meetings of the Board and its various
Committees are as under:
Name of the Director
Mrs. Shyamala Gopinath
Sitting Fees (`)
2,700,000
Mr. Partho Datta
Mr. Bobby Parikh
Mr. A. N. Roy
Mr. Malay Patel
Mr. Keki Mistry
Mrs. Renu Karnad
Mr. Umesh Chandra Sarangi
Mr. Srikanth Nadhamuni
2,300,000
2,750,000
2,500,000
1,450,000
1,750,000
1,500,000
1,200,000
550,000
to RBI guidelines dated June 1, 2015 on
Pursuant
Compensation to Non-executive Directors of Private Sector
Banks and shareholders’ resolution in this regard, each
non-executive director including the independent directors, other
than the Chairperson, also receive profit related commission
as per the limits prescribed in the RBI guidelines. Pursuant to
these guidelines and shareholders’ resolution passed at the
22nd Annual General Meeting of the Bank held on July 21, 2016,
Mr. Partho Datta, Mr. A. N. Roy, Mr. Bobby Parikh, Mr. Malay
Patel, Mr. Keki Mistry and Mrs. Renu Karnad were paid profit
related commission of `1,000,000 during the year 2016-17
pertaining to FY 2015-16. This is in addition to the sitting fees
paid to them for attending Board and Committee Meetings.
There were no other pecuniary relationships or transactions
of Non-executive Directors vis-a-vis the Bank (except banking
transactions in the ordinary course of business and on arm’s
length basis) during FY 2016-17.
COMPOSITION OF COMMITTEES OF DIRECTORS AND
ATTENDANCE AT THE MEETINGS
The Board has constituted various Committees of Directors to
take informed decisions in the best interest of the Bank. These
Committees monitor the activities falling within their terms of
reference.
The Board’s Committees are as follows:
Audit Committee:
The brief terms of reference of the Audit Committee include,
inter-alia, the following:
a) Overseeing the Bank’s financial reporting process and
disclosure of financial information to ensure that the financial
statement is correct, sufficient and credible;
b) Recommending appointment and removal of external
auditors and fixing of their fees;
c) Reviewing with management the annual financial statements
and auditor’s report before submission to the Board with
special emphasis on accounting policies and practices,
compliance with accounting standards, disclosure of related
party transactions and other legal requirements relating to
financial statements;
d) Reviewing the adequacy of the Audit and Compliance
functions, including their policies, procedures, techniques
and other regulatory requirements; and
e) Any other terms of reference as may be included from time to
time in the Companies Act, 2013, SEBI Listing Regulations,
2015, including any amendments / re-enactments thereof
from time to time.
The Board has also adopted a Charter for the Audit Committee
in accordance with certain United States regulatory standards
as the Bank’s securities are also listed on the New York Stock
Exchange.
The Audit Committee of the Bank comprises Mr. Bobby Parikh,
Mrs. Shyamala Gopinath, Mr. Partho Datta, Mr. A. N. Roy and
Mr. Umesh Chandra Sarangi. The Committee is chaired by
Mr. Bobby Parikh with effect from January 24, 2017. Prior to this,
it was chaired by Mrs. Shyamala Gopinath. All the members of
the Committee are independent directors. Mr. Sanjay Dongre,
Company Secretary of the Bank, acts as the Secretary of the
Committee. Mr. Bobby Parikh and Mr. Partho Datta are the
members of Audit Committee having financial expertise.
HDFC Bank Limited Annual Report 2016-17
204
Corporate Governance
The Committee met eight (8) times during the year on
April 21, 2016; May 19, 2016; July 20, 2016; August 9, 2016;
October 24, 2016; November 15, 2016; January 23, 2017 and
March 14, 2017.
Nomination and Remuneration Committee:
The brief terms of reference of the Nomination and Remuneration
Committee includes scrutinizing the nominations of the directors
with reference to their qualifications and experience, for identifying
‘Fit and Proper’ persons, assessing competency of the persons
and reviewing compensation levels of the Bank’s employees
vis-à-vis other banks and the banking industry in general.
The following are the criteria to assess competency of the
persons nominated:
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:115)(cid:0)
(cid:65)(cid:67)(cid:65)(cid:68)(cid:69)(cid:77)(cid:73)(cid:67)(cid:0)(cid:81)(cid:85)(cid:65)(cid:76)(cid:73)(cid:108)(cid:67)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:12)(cid:0)
(cid:80)(cid:82)(cid:69)(cid:86)(cid:73)(cid:79)(cid:85)(cid:83)(cid:0)(cid:69)(cid:88)(cid:80)(cid:69)(cid:82)(cid:73)(cid:69)(cid:78)(cid:67)(cid:69)(cid:12)(cid:0)
(cid:84)(cid:82)(cid:65)(cid:67)(cid:75)(cid:0)(cid:82)(cid:69)(cid:67)(cid:79)(cid:82)(cid:68)(cid:27)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)
(cid:73)(cid:78)(cid:84)(cid:69)(cid:71)(cid:82)(cid:73)(cid:84)(cid:89)(cid:0)(cid:79)(cid:70)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:67)(cid:65)(cid:78)(cid:68)(cid:73)(cid:68)(cid:65)(cid:84)(cid:69)(cid:83)(cid:14)
For assessing the integrity and suitability, features like criminal
records, financial position, civil actions undertaken to pursue
personal debts, refusal of admission to and expulsion from
professional bodies, sanctions applied by regulators or similar
bodies and previous questionable business practices are
considered.
The Bank’s compensation policy provides a fair and consistent
basis for motivating and rewarding employees appropriately
according to their job profile / role size, performance, contribution,
skill and competence.
including
individual directors
The Committee also formulates criteria for evaluation of
independent
performance of
directors, the Board of Directors and its Committees. The criteria
for evaluation of performance of directors (including independent
directors) include personal attributes such as attendance
at meetings, communication skills,
leadership skills and
adaptability and professional attributes such as understanding
of the Bank’s core business and strategic objectives, industry
knowledge, independent judgment, adherence to the Bank’s
Code of Conduct, Ethics and Values, etc.
Mrs. Shyamala Gopinath, Mr. Partho Datta, Mr. Bobby
Parikh and Mr. A. N. Roy are the members of the Committee.
Mr. Bobby Parikh is the Chairman of the Committee.
All the members of the Committee are independent directors.
The Committee met ten (10) times during the year on April 5, 2016;
April 21, 2016; May 13, 2016; May 18, 2016; July 20, 2016;
August 9, 2016; September 9, 2016; October 25, 2016;
January 23, 2017 and March 14, 2017.
Stakeholders’ Relationship Committee:
The Stakeholders’ Relationship Committee approves and
monitors transfer, transmission, splitting and consolidation of
shares and considers requests for dematerialization of shares.
Allotment of shares to the employees on exercise of stock
options granted under the various Employees Stock Option
Schemes which are made in terms of the powers delegated by
the Board in this regard, are placed before the Committee for
ratification. The Committee also monitors redressal of grievances
from shareholders relating to transfer of shares, non-receipt of
Annual Report, dividends etc.
The Committee is comprised of Mr. A. N. Roy, Mrs. Renu Karnad,
Mr. Aditya Puri and Mr. Paresh Sukthankar. The Committee is
chaired by Mr. A. N. Roy, who is an independent director.
The powers to approve share transfers and dematerialization
requests have been delegated to executives of the Bank
to avoid delays
to non-availability
that may arise due
of the members of the Committee. Mr. Sanjay Dongre,
Executive Vice President (Legal) & the Company Secretary of
the Bank is the Compliance Officer responsible for expediting
the share transfer formalities.
from
As on March 31, 2017, one (1) instrument of transfer for
85 equity shares was pending for transfer and this has since
been processed. The details of the transfers are reported to the
Board from time to time. During the year ended March 31, 2017,
3087 complaints were
the shareholders.
received
The Bank had attended to all the complaints. 8 complaints
remained pending and 4 complaints have not been solved to
the satisfaction of the shareholders as on March 31, 2017.
Besides, 6255 letters were received from the shareholders
relating to change of address, nomination requests, email
id and contact details updation, IFSC / MICR code updation,
National Automated Clearing House (NACH) Mandates, claim
of shares from Unclaimed Suspense account, queries relating
to the annual reports, sub-division of shares of face value of
` 10/- each to ` 2/- each, amalgamation, request for re-validation
of dividend warrants and other investor related matters.
These letters have also been responded to.
The Committee met five (5) times during the year on
April 22, 2016; July 20, 2016; October 24, 2016;
January 24, 2017 and March 14, 2017.
Risk Policy and Monitoring Committee:
The Risk Policy and Monitoring Committee has been formed as
per the guidelines of Reserve Bank of India on Asset Liability
Management / Risk Management Systems. The Committee
develops Bank’s credit and market risk policies and procedures,
verifies adherence to various risk parameters and prudential
limits for treasury operations and reviews its risk monitoring
system. The Committee also ensures that the Bank’s credit
exposure to any one group or industry does not exceed the
internally set limits and that the risk is prudentially diversified.
HDFC Bank Limited Annual Report 2016-17
205
Corporate Governance
The Committee consists of Mrs. Renu Karnad, Mrs. Shyamala
Gopinath, Mr. Partho Datta, Mr. Aditya Puri and Mr. Paresh
Sukthankar. The Committee is chaired by Mrs. Renu Karnad.
d. Ensure that staff accountability is examined at all levels
in all the cases of frauds and staff side action, if required,
is completed quickly without loss of time;
The Committee met five (5) times during the year on
April 21, 2016; June 20, 2016; July 20, 2016; October 24, 2016
and January 16, 2017.
e. Review the efficacy of the remedial action taken to prevent
recurrence of frauds, such as strengthening of internal
controls; and
Credit Approval Committee:
The Credit Approval Committee approves credit exposures,
which are beyond the powers delegated to executives of
the Bank. This facilitates quick response to the needs of the
customers and speedy disbursement of loans.
The Committee consists of Mr. Bobby Parikh, Mr. Keki Mistry,
Mr. Aditya Puri and Mr. Kaizad Bharucha.
The Committee met twelve (12) times during the year on
April 22, 2016; May 5, 2016; June 28, 2016; July 21, 2016;
August 29, 2016; September 22, 2016; October 25, 2016;
November 18, 2016; December 15, 2016; January 24, 2017,
March 1, 2017 and March 14, 2017.
Premises Committee:
The Premises Committee approves purchases and leasing of
premises for the use of Bank’s branches, back offices, ATMs and
residence of executives in accordance with the guidelines laid
down by the Board.
The Committee consists of Mrs. Renu Karnad, Mr. Aditya Puri
and Mr. Malay Patel.
The Committee met five (5) times during the year on
April 22, 2016; July 20, 2016; October 24, 2016; January 24, 2017
and March 14, 2017.
Fraud Monitoring Committee:
Pursuant to the directions of the RBI, the Bank has constituted
a Fraud Monitoring Committee, exclusively dedicated to the
monitoring and following up of cases of fraud involving amounts
of ` 1 crore and above.
The objectives of this Committee are the effective detection of
frauds and immediate reporting of the frauds and actions taken
against the perpetrators of frauds to the concerned regulatory
and enforcement agencies. The terms of reference of the
Committee are as under:
a. Identify
the systemic
facilitated
lacunae,
perpetration of the fraud and put in place measures to plug
the same;
if any,
that
b.
Identify the reasons for delay in detection, if any and report
to top management of the Bank and RBI;
f. Put in place other measures as may be considered relevant
to strengthen preventive measures against frauds.
The members of the Committee are Mrs. Shyamala Gopinath,
Mr. Partho Datta, Mr. A. N. Roy, Mr. Keki Mistry, Mr. Malay Patel
and Mr. Aditya Puri.
The Committee met five (5) times during the year on April 21, 2016;
July 20, 2016; September 9, 2016; October 24, 2016 and
January 24, 2017.
Customer Service Committee:
The Customer Service Committee monitors the quality of services
rendered to the customers and also ensures implementation of
directives received from the RBI in this regard. The terms of
reference of the Committee are to formulate comprehensive
deposit policy incorporating the issues arising out of the demise
of a depositor for operation of his account, the product approval
process, annual survey of depositor satisfaction and the triennial
audit of such services.
The members of the Committee are Mrs. Shyamala Gopinath,
Mr. A. N. Roy, Mr. Keki Mistry, Mr. Malay Patel, Mr. Srikanth
Nadhamuni and Mr. Aditya Puri. During the year, Mr. Srikanth
Nadhamuni was appointed as a member of the Committee.
The Committee met four (4) times during the year on April 21, 2016;
July 20, 2016; October 24, 2016 and January 24, 2017.
Corporate Social Responsibility Committee:
The Board has constituted a Corporate Social Responsibility
(CSR) Committee with the following terms of reference:
(cid:115)(cid:0) (cid:52)(cid:79)(cid:0)(cid:70)(cid:79)(cid:82)(cid:77)(cid:85)(cid:76)(cid:65)(cid:84)(cid:69)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:34)(cid:65)(cid:78)(cid:75)(cid:7)(cid:83)(cid:0)(cid:35)(cid:51)(cid:50)(cid:0)(cid:51)(cid:84)(cid:82)(cid:65)(cid:84)(cid:69)(cid:71)(cid:89)(cid:12)(cid:0)(cid:48)(cid:79)(cid:76)(cid:73)(cid:67)(cid:89)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:39)(cid:79)(cid:65)(cid:76)(cid:83)
(cid:115)(cid:0) (cid:52)(cid:79)(cid:0)(cid:77)(cid:79)(cid:78)(cid:73)(cid:84)(cid:79)(cid:82)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:34)(cid:65)(cid:78)(cid:75)(cid:7)(cid:83)(cid:0)(cid:35)(cid:51)(cid:50)(cid:0)(cid:80)(cid:79)(cid:76)(cid:73)(cid:67)(cid:89)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:80)(cid:69)(cid:82)(cid:70)(cid:79)(cid:82)(cid:77)(cid:65)(cid:78)(cid:67)(cid:69)
(cid:115)(cid:0) (cid:52)(cid:79)(cid:0)(cid:82)(cid:69)(cid:86)(cid:73)(cid:69)(cid:87)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:35)(cid:51)(cid:50)(cid:0)(cid:80)(cid:82)(cid:79)(cid:74)(cid:69)(cid:67)(cid:84)(cid:83)(cid:0)(cid:15)(cid:0)(cid:73)(cid:78)(cid:73)(cid:84)(cid:73)(cid:65)(cid:84)(cid:73)(cid:86)(cid:69)(cid:83)(cid:0)(cid:70)(cid:82)(cid:79)(cid:77)(cid:0)(cid:84)(cid:73)(cid:77)(cid:69)(cid:0)(cid:84)(cid:79)(cid:0)(cid:84)(cid:73)(cid:77)(cid:69)
(cid:115)(cid:0) (cid:52)(cid:79)(cid:0) (cid:69)(cid:78)(cid:83)(cid:85)(cid:82)(cid:69)(cid:0) (cid:76)(cid:69)(cid:71)(cid:65)(cid:76)(cid:0) (cid:65)(cid:78)(cid:68)(cid:0) (cid:82)(cid:69)(cid:71)(cid:85)(cid:76)(cid:65)(cid:84)(cid:79)(cid:82)(cid:89)(cid:0) (cid:67)(cid:79)(cid:77)(cid:80)(cid:76)(cid:73)(cid:65)(cid:78)(cid:67)(cid:69)(cid:0) (cid:70)(cid:82)(cid:79)(cid:77)(cid:0) (cid:65)(cid:0) (cid:35)(cid:51)(cid:50)(cid:0)
viewpoint
(cid:115)(cid:0) (cid:52)(cid:79)(cid:0)(cid:69)(cid:78)(cid:83)(cid:85)(cid:82)(cid:69)(cid:0)(cid:82)(cid:69)(cid:80)(cid:79)(cid:82)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:67)(cid:79)(cid:77)(cid:77)(cid:85)(cid:78)(cid:73)(cid:67)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:84)(cid:79)(cid:0)(cid:83)(cid:84)(cid:65)(cid:75)(cid:69)(cid:72)(cid:79)(cid:76)(cid:68)(cid:69)(cid:82)(cid:83)(cid:0)(cid:79)(cid:78)(cid:0)
the Bank’s CSR
The members of the CSR Committee are Mrs. Renu Karnad,
Mr. Partho Datta, Mr. Bobby Parikh, Mr. Aditya Puri, Mr. Umesh
Chandra Sarangi and Mr. Paresh Sukthankar. During the year,
Mr. Umesh Chandra Sarangi was appointed as a member of the
Committee.
c. Monitor progress of Central Bureau of Investigation / Police
Investigation and recovery position;
The Committee met four (4) times during the year on April 21, 2016;
July 20, 2016; October 24, 2016; and January 16, 2017.
HDFC Bank Limited Annual Report 2016-17
206
Corporate Governance
Review Committee for Wilful Defaulters’ Identification:
IT Strategy Committee
The Board has constituted a Review Committee for Wilful
Defaulters’ Identification to review the orders passed by the
Committee of Executives for Identification of Wilful Defaulters
and provide the final decision with regard to identified Wilful
defaulters. Mrs. Shyamala Gopinath, Mr. Aditya Puri, Mr. Bobby
Parikh, Mr. Partho Datta and Mr. A. N. Roy are the members
of the Committee. The Committee is chaired by Mrs. Shyamala
Gopinath or Mr. Aditya Puri in her absence.
The Committee met thrice during the year on April 22, 2016;
November 4, 2016 and March 30, 2017.
Review Committee for Non-Cooperative Borrowers:
The Board has constituted a Review Committee to review
matters related to Non-Co-operative Borrowers which are
handled by the Internal Committee of Executives appointed
for this purpose. Mrs. Shyamala Gopinath, Mr. Aditya Puri,
Mr. Bobby Parikh, Mr. Partho Datta and Mr. A. N. Roy are the
members of the Committee. The Committee is chaired by
Mrs. Shyamala Gopinath or Mr. Aditya Puri in her absence.
No meetings of the Committee were held during the year.
The Bank has in place, an IT Strategy Committee to look into
various technology related aspects. This Committee is not a
Board level Committee. However, Mr. Srikanth Nadhamuni,
Mr. Bobby Parikh, Mrs. Shyamala Gopinath and Mr. Paresh
Sukthankar are members of the Committee along with other
executives of the Bank and an external expert. The Committee
is chaired by Mr. Srikanth Nadhamuni with effect
from
January 24, 2017. Prior to this, the Committee was chaired by
Mr. Bobby Parikh.
The Committee met four times during the year on May 5, 2016;
August 2, 2016; October 21, 2016 and January 16, 2017.
Meeting of the Independent Directors:
The Independent Directors of the Bank held a meeting on March
14, 2017 without the presence of the non independent Directors
and Senior management team of the Bank. All the Independent
Directors attended the meeting. The Independent Directors
discussed matters as required under the relevant provisions
of the Companies Act, 2013 and the SEBI Listing Regulations,
2015.
COMPOSITION OF COMMITTEES OF DIRECTORS AND ATTENDANCE AT THE COMMITTEE MEETINGS
Audit Committee
[Total eight meetings held]
Name
Mrs. Shyamala Gopinath
Mr. Bobby Parikh
Mr. A. N. Roy
Mr. Partho Datta
Mr. Umesh Chandra Sarangi *
No. of meetings attended
8
8
8
8
6
Customer Service Committee
[Total four meetings held]
Name
Mrs. Shyamala Gopinath
Mr. Aditya Puri
Mr. A. N. Roy
Mr. Keki Mistry
Mr. Malay Patel
Mr. Srikanth Nadhamuni #
No. of meetings attended
4
4
4
4
4
1
Credit Approval Committee
[Total twelve meetings held]
Name
Mr. Bobby Parikh
Mr. Keki Mistry
Mr. Aditya Puri
Mr. Kaizad Bharucha
No. of meetings attended
12
12
4
12
Nomination and Remuneration Committee
[Total ten meetings held]
Name
Mrs. Shyamala Gopinath
Mr. Partho Datta
Mr. A. N. Roy
Mr. Bobby Parikh
No. of meetings attended
10
9
10
10
Stakeholders’ Relationship Committee
[Total five meetings held]
Name
Mr. A. N. Roy
Mrs. Renu Karnad
Mr. Aditya Puri
Mr. Paresh Sukthankar
No. of meetings attended
5
5
5
5
Name
Mrs. Renu Karnad
Mr. Malay Patel
Mr. Aditya Puri
Premises Committee
[Total five meetings held]
No. of meetings attended
5
5
5
HDFC Bank Limited Annual Report 2016-17
207
Corporate Governance
COMPOSITION OF COMMITTEES OF DIRECTORS AND ATTENDANCE AT THE COMMITTEE MEETINGS (CONTD.)
Fraud Monitoring Committee
[Total five meetings held]
Name
Mrs.Shyamala Gopinath
No. of meetings attended
5
Mr. Aditya Puri
Mr. Partho Datta
Mr. A. N. Roy
Mr. Keki Mistry
Mr. Malay Patel
5
5
5
5
5
Corporate Social Responsibility Committee
[Total four meetings held]
Name
Mrs. Renu Karnad
Mr. Partho Datta
Mr. Bobby Parikh
Mr. Aditya Puri
Mr. Paresh Sukthankar
Mr. Umesh Chandra Sarangi*
No. of meetings attended
4
4
4
4
4
3
Risk Policy & Monitoring Committee
[Total five meetings held]
Review Committee for Wilful Defaulters’ Identification
[Total three meetings held]
Name
Mrs. Renu Karnad
Mrs. Shyamala Gopinath
Mr. Paresh Sukthankar
Mr. Partho Datta
Mr. Aditya Puri
No. of meetings attended
4
5
5
4
5
Name
Mrs. Shyamala Gopinath
Mr. Bobby Parikh
Mr. Partho Datta
Mr. A. N. Roy
Mr. Aditya Puri
No. of meetings attended
3
2
3
3
0
*Mr. Umesh Chandra Sarangi was appointed as a member of the Committee with effect from June 28, 2016
# Mr. Srikanth Nadhamuni was appointed as a member of the Committee with effect from January 24, 2017.
OWNERSHIP RIGHTS
Certain rights that a shareholder in a company enjoys:
(cid:115)(cid:0) (cid:52)(cid:79)(cid:0) (cid:84)(cid:82)(cid:65)(cid:78)(cid:83)(cid:70)(cid:69)(cid:82)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:83)(cid:72)(cid:65)(cid:82)(cid:69)(cid:83)(cid:0) (cid:65)(cid:78)(cid:68)(cid:0) (cid:82)(cid:69)(cid:67)(cid:69)(cid:73)(cid:86)(cid:69)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:83)(cid:72)(cid:65)(cid:82)(cid:69)(cid:0) (cid:67)(cid:69)(cid:82)(cid:84)(cid:73)(cid:108)(cid:67)(cid:65)(cid:84)(cid:69)(cid:83)(cid:0)
upon transfer within the period prescribed in the SEBI Listing
Regulations.
(cid:115)(cid:0) (cid:52)(cid:79)(cid:0) (cid:82)(cid:69)(cid:67)(cid:69)(cid:73)(cid:86)(cid:69)(cid:0) (cid:78)(cid:79)(cid:84)(cid:73)(cid:67)(cid:69)(cid:0) (cid:79)(cid:70)(cid:0) (cid:71)(cid:69)(cid:78)(cid:69)(cid:82)(cid:65)(cid:76)(cid:0) (cid:77)(cid:69)(cid:69)(cid:84)(cid:73)(cid:78)(cid:71)(cid:83)(cid:12)(cid:0) (cid:65)(cid:78)(cid:78)(cid:85)(cid:65)(cid:76)(cid:0) (cid:82)(cid:69)(cid:80)(cid:79)(cid:82)(cid:84)(cid:12)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0)
balance sheet and profit and loss account and the auditor’s
report. To attend and speak in person, at general meetings.
(cid:115)(cid:0) (cid:52)(cid:79)(cid:0)(cid:65)(cid:80)(cid:80)(cid:79)(cid:73)(cid:78)(cid:84)(cid:0)(cid:80)(cid:82)(cid:79)(cid:88)(cid:89)(cid:0)(cid:84)(cid:79)(cid:0)(cid:65)(cid:84)(cid:84)(cid:69)(cid:78)(cid:68)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:86)(cid:79)(cid:84)(cid:69)(cid:0)(cid:65)(cid:84)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:71)(cid:69)(cid:78)(cid:69)(cid:82)(cid:65)(cid:76)(cid:0)(cid:77)(cid:69)(cid:69)(cid:84)(cid:73)(cid:78)(cid:71)(cid:83)(cid:14)(cid:0)
In case the member is a body corporate, to appoint a
representative to attend and vote at the general meetings of
the company on its behalf.
(cid:115)(cid:0) (cid:48)(cid:82)(cid:79)(cid:88)(cid:89)(cid:0)(cid:67)(cid:65)(cid:78)(cid:0)(cid:86)(cid:79)(cid:84)(cid:69)(cid:0)(cid:79)(cid:78)(cid:0)(cid:65)(cid:0)(cid:80)(cid:79)(cid:76)(cid:76)(cid:14)(cid:0)(cid:41)(cid:78)(cid:0)(cid:67)(cid:65)(cid:83)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0)(cid:86)(cid:79)(cid:84)(cid:69)(cid:0)(cid:79)(cid:78)(cid:0)(cid:80)(cid:79)(cid:76)(cid:76)(cid:12)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:78)(cid:85)(cid:77)(cid:66)(cid:69)(cid:82)(cid:0)
of votes of a shareholder is proportionate to the number of
equity shares held by him.
(cid:115)(cid:0)
(cid:41)(cid:78)(cid:0)(cid:84)(cid:69)(cid:82)(cid:77)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)(cid:51)(cid:69)(cid:67)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:17)(cid:18)(cid:0)(cid:79)(cid:70)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:34)(cid:65)(cid:78)(cid:75)(cid:73)(cid:78)(cid:71)(cid:0)(cid:50)(cid:69)(cid:71)(cid:85)(cid:76)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:33)(cid:67)(cid:84)(cid:12)(cid:0)(cid:17)(cid:25)(cid:20)(cid:25)(cid:0)
as amended with effect from January 18, 2013 vide the
Banking Laws Amendment Act, 2012, no person holding
shares in a banking company shall, in respect of any shares
held by him, exercise voting rights on poll in excess of ten
per cent of the total voting rights of all the shareholders
of the banking company, provided that RBI may increase,
in a phased manner, such ceiling on voting rights from ten
percent to twenty-six per cent. The Master Direction -
Ownership in Private Sector Banks, Directions, 2016 issued
by RBI on May 12, 2016, states that the current level of
ceiling on voting rights is at fifteen per cent.
(cid:115)(cid:0) (cid:52)(cid:79)(cid:0)(cid:82)(cid:69)(cid:81)(cid:85)(cid:73)(cid:83)(cid:73)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:65)(cid:78)(cid:0)(cid:69)(cid:88)(cid:84)(cid:82)(cid:65)(cid:79)(cid:82)(cid:68)(cid:73)(cid:78)(cid:65)(cid:82)(cid:89)(cid:0)(cid:71)(cid:69)(cid:78)(cid:69)(cid:82)(cid:65)(cid:76)(cid:0)(cid:77)(cid:69)(cid:69)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)(cid:79)(cid:70)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:34)(cid:65)(cid:78)(cid:75)(cid:0)
by shareholders who collectively hold not less than 1/10th
of the total paid-up capital of the company.
(cid:115)(cid:0) (cid:52)(cid:79)(cid:0) (cid:77)(cid:79)(cid:86)(cid:69)(cid:0) (cid:65)(cid:77)(cid:69)(cid:78)(cid:68)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:0) (cid:84)(cid:79)(cid:0) (cid:82)(cid:69)(cid:83)(cid:79)(cid:76)(cid:85)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0) (cid:80)(cid:82)(cid:79)(cid:80)(cid:79)(cid:83)(cid:69)(cid:68)(cid:0) (cid:65)(cid:84)(cid:0) (cid:71)(cid:69)(cid:78)(cid:69)(cid:82)(cid:65)(cid:76)(cid:0)
meetings.
(cid:115)(cid:0) (cid:52)(cid:79)(cid:0)(cid:82)(cid:69)(cid:67)(cid:69)(cid:73)(cid:86)(cid:69)(cid:0)(cid:68)(cid:73)(cid:86)(cid:73)(cid:68)(cid:69)(cid:78)(cid:68)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:79)(cid:84)(cid:72)(cid:69)(cid:82)(cid:0)(cid:67)(cid:79)(cid:82)(cid:80)(cid:79)(cid:82)(cid:65)(cid:84)(cid:69)(cid:0)(cid:66)(cid:69)(cid:78)(cid:69)(cid:108)(cid:84)(cid:83)(cid:0)(cid:76)(cid:73)(cid:75)(cid:69)(cid:0)(cid:82)(cid:73)(cid:71)(cid:72)(cid:84)(cid:83)(cid:12)(cid:0)
bonus shares etc. as and when declared / announced.
(cid:115)(cid:0) (cid:52)(cid:79)(cid:0) (cid:73)(cid:78)(cid:83)(cid:80)(cid:69)(cid:67)(cid:84)(cid:0) (cid:86)(cid:65)(cid:82)(cid:73)(cid:79)(cid:85)(cid:83)(cid:0) (cid:82)(cid:69)(cid:71)(cid:73)(cid:83)(cid:84)(cid:69)(cid:82)(cid:83)(cid:0) (cid:79)(cid:70)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0) (cid:67)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:89)(cid:12)(cid:0) (cid:77)(cid:73)(cid:78)(cid:85)(cid:84)(cid:69)(cid:0) (cid:66)(cid:79)(cid:79)(cid:75)(cid:83)(cid:0)
of general meetings and to receive copies thereof after
complying with the procedure prescribed in the Companies
Act, 2013 as amended from time to time.
(cid:115)(cid:0) (cid:52)(cid:79)(cid:0) (cid:77)(cid:65)(cid:75)(cid:69)(cid:0) (cid:78)(cid:79)(cid:77)(cid:73)(cid:78)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0) (cid:73)(cid:78)(cid:0) (cid:82)(cid:69)(cid:83)(cid:80)(cid:69)(cid:67)(cid:84)(cid:0) (cid:79)(cid:70)(cid:0) (cid:83)(cid:72)(cid:65)(cid:82)(cid:69)(cid:83)(cid:0) (cid:72)(cid:69)(cid:76)(cid:68)(cid:0) (cid:66)(cid:89)(cid:0) (cid:84)(cid:72)(cid:69)(cid:0)
shareholder.
(cid:115)(cid:0) (cid:52)(cid:79)(cid:0)(cid:80)(cid:65)(cid:82)(cid:84)(cid:73)(cid:67)(cid:73)(cid:80)(cid:65)(cid:84)(cid:69)(cid:0)(cid:73)(cid:78)(cid:12)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:66)(cid:69)(cid:0)(cid:83)(cid:85)(cid:70)(cid:108)(cid:67)(cid:73)(cid:69)(cid:78)(cid:84)(cid:76)(cid:89)(cid:0)(cid:73)(cid:78)(cid:70)(cid:79)(cid:82)(cid:77)(cid:69)(cid:68)(cid:0)(cid:79)(cid:70)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:68)(cid:69)(cid:67)(cid:73)(cid:83)(cid:73)(cid:79)(cid:78)(cid:83)(cid:0)
concerning fundamental corporate changes.
(cid:115)(cid:0) (cid:52)(cid:79)(cid:0)(cid:66)(cid:69)(cid:0)(cid:73)(cid:78)(cid:70)(cid:79)(cid:82)(cid:77)(cid:69)(cid:68)(cid:0)(cid:79)(cid:70)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:82)(cid:85)(cid:76)(cid:69)(cid:83)(cid:12)(cid:0)(cid:73)(cid:78)(cid:67)(cid:76)(cid:85)(cid:68)(cid:73)(cid:78)(cid:71)(cid:0)(cid:86)(cid:79)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)(cid:80)(cid:82)(cid:79)(cid:67)(cid:69)(cid:68)(cid:85)(cid:82)(cid:69)(cid:83)(cid:0)(cid:84)(cid:72)(cid:65)(cid:84)(cid:0)
govern general shareholder meetings.
(cid:115)(cid:0) (cid:52)(cid:79)(cid:0)(cid:72)(cid:65)(cid:86)(cid:69)(cid:0)(cid:65)(cid:68)(cid:69)(cid:81)(cid:85)(cid:65)(cid:84)(cid:69)(cid:0)(cid:77)(cid:69)(cid:67)(cid:72)(cid:65)(cid:78)(cid:73)(cid:83)(cid:77)(cid:0)(cid:84)(cid:79)(cid:0)(cid:65)(cid:68)(cid:68)(cid:82)(cid:69)(cid:83)(cid:83)(cid:0)(cid:84)(cid:72)(cid:69)(cid:0)(cid:71)(cid:82)(cid:73)(cid:69)(cid:86)(cid:65)(cid:78)(cid:67)(cid:69)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)
the shareholders.
HDFC Bank Limited Annual Report 2016-17
208
Corporate Governance
(cid:115) To ensure protection of minority shareholders from abusive
actions by, or in the interest of, controlling shareholders
acting either directly or indirectly, and effective means of
redress.
The rights mentioned above are prescribed in the Companies
Act, 2013, the SEBI Listing Regulations and Banking Regulation
Act, 1949, wherever applicable, and should be followed only
after careful reading of the relevant sections. These rights are
not necessarily absolute.
GENERAL BODY MEETINGS
(Following are the details of general body meetings for the
previous three financial years held at Birla Matushri Sabhagar,
19, New Marine Lines, Mumbai 400020 at 2.30 p. m.)
Sr.
No.
Particulars of
meeting
Date
Special
Resolutions
passed, if any
1
2
3
20th Annual General
Meeting
21st Annual General
Meeting
22nd Annual General
Meeting
June 25, 2014 Eight special
resolutions passed
July 21, 2015 Three special
resolutions passed
July 21, 2016 Three special
resolutions passed
POSTAL BALLOT
During the year, no resolutions were passed by means of postal
ballot.
DISCLOSURES
Material Subsidiary
The Bank has 2 subsidiaries namely- HDB Financial Services
Limited and HDFC Securities Limited, neither of which qualifies
to be a material subsidiary within the meaning of the SEBI
Listing Regulations. However, as a good corporate governance
practice, the Bank has formulated a policy for determining material
subsidiary. The policy is available on the Bank’s website at
http://www.hdfcbank.com/htdocs/common/pdf/Policy-for-
determining-material-subsidiary.pdf
Related Party Transactions
During the year the Bank has entered into transactions with the
related parties in the ordinary course of business. The Bank has
not entered into any materially significant transactions with the
related parties including promoters, directors, the management,
subsidiaries or relatives of the Directors, which could lead to a
potential conflict of interest between the Bank and these parties.
Transactions with related parties were placed before the Audit
Committee/Board for approval. There were no material transactions
with related parties, which were not in the normal course of
business, nor were there any material transactions, which were
not at an arm’s length basis. Details of related party transactions
entered into during the year ended March 31, 2017 are given in
Schedule 18, Note No. 28 forming part of ‘Notes to Accounts’.
The Bank has put in place a policy to deal with related party
transactions and the same has been uploaded on the Bank’s web-
site at http://www.hdfcbank.com/htdocs/common/pdf/policy_for_
dealing_with_related_party_transactions.pdf
Commodity Price Risks and Foreign Exchange Risks and
hedging activities
Being in the banking business, the Bank does not deal in any
“commodity”. The Bank may, however, be exposed to the commodity
price risks of its customers in its capacity as lender/ banker.
The Bank being an authorized dealer, deals in foreign exchange
including Gold and derivative
transactions with various
counterparties, both interbank and customers, in accordance with
the RBI guidelines. Thus, as part of foreign exchange trading, the
Bank enters into foreign exchange contracts such as spot, outright
forwards, forex swaps, currency options, long term forwards,
currency and interest rate swaps and exchange traded products in
specific currency pairs and interest rate securities. These contracts
are managed in the trading portfolio within the forex trading risk
limits viz. Net overnight open position limit, Intraday open position
limit, Gap limits, Value-at-Risk limit, Stop Loss Trigger Level,
Sensitivity limit and Option Greeks (viz. Delta / Gamma / Vega)
stipulated as part of the Bank’s Treasury Limits Package. In addition,
Bank also enters into foreign exchange contracts to hedge the
currency risk in the balance sheet on account of foreign currency
deposits and loans, which are managed as hedge positions as
per extant guidelines. Also, the Bank has initiated acceptance of
gold through gold monetization scheme and any exposures arising
are accordingly hedged through the normal course of business or
forward transactions.
The foreign exchange spot, forward and swap contracts outstanding
as on the Balance Sheet date, that are held for trading, are
revalued at the closing spot and forward rates respectively as
notified by FEDAI (Foreign Exchange Dealers’ Assocation of
India) and at interpolated rates for contracts of interim maturities.
The USD-INR rate for valuation of contracts having longer maturities
i.e. greater than one year is implied from MIFOR and LIBOR curves.
For other currency pairs, where the rates / tenors are not published
by FEDAI, the spot and forward points are obtained from Reuters
for valuation of the foreign exchange deals. The forex profit or loss
is arrived on present value basis thereafter, as directed by FEDAI,
whereby the forward profits or losses on the deals, as computed
above, are discounted till the valuation date using the discounting
yields. The resulting profit or loss on valuation is recognized in the
Statement of Profit and Loss.
HDFC Bank Limited Annual Report 2016-17
209
Corporate Governance
Currency future contracts are marked to market daily using
settlement price on a trading day, which is the closing price of the
respective futures contracts on that day. The daily settlement price
is computed on the basis of the last half an hour weighted average
price of such contract, while, the final settlement price is taken as
the RBI reference rate on the last trading day of the future contracts
or as may be specified by the relevant authority from time to time.
All open positions are marked to market based on the settlement
price and the resultant marked to market profit / loss is settled daily
with the exchange.
Foreign exchange forward contracts, outstanding on the balance
sheet date, that are not intended for trading and are entered into
to establish the amount of reporting currency required or available
on the settlement date of a transaction, to meet a balance sheet
transaction, are effectively valued at the closing spot rate.
The premia or discount arising at the inception of such forward
exchange contract is amortized as expense or income over the life
of the contract.
Contingent liabilities on account of foreign exchange contracts,
derivative transactions, currency future contracts, guarantees,
letters of credit, acceptances and endorsements are reported at
closing rates of exchange as notified by FEDAI as on the Balance
Sheet date.
Accounting Treatment
The financial statements have been prepared and presented under
the historical cost convention and accrual basis of accounting, unless
otherwise stated and are in accordance with Generally Accepted
Accounting Principles in India (‘GAAP’), statutory requirements
prescribed under the Banking Regulation Act 1949, circulars and
guidelines issued by the Reserve Bank of India (‘RBI’) from time
to time, Accounting Standards (‘AS’) specified under section 133
of the Companies Act, 2013, in so far as they apply to banks and
current practices prevailing within the banking industry in India.
There are no deviations from the statutory provisions.
Whistle Blower Policy/ Vigil Mechanism
The details of establishment of whistle blower policy / vigil
mechanism are furnished in the Directors’ Report. None of the
Bank’s personnel have been denied access to the Audit Committee.
Remuneration and Selection criteria for Directors
The relevant details are furnished in the Directors’ Report.
Appointment / Resignation of Director
Familiarization of Independent Directors
The details of familiarization programmes imparted to Independent
Directors are available on
the Bank at
http://www.hdfcbank.com/aboutus/cg/Familiarization.htm
the website of
Strictures and Penalties
During the financial year 2016-17, further to the media reports in
October 2015 about irregularities in advance import remittances in
various banks, the Reserve Bank of India (RBI) had conducted a
scrutiny of the transactions carried out by the Bank under Section
35(1A) of the Banking Regulation Act, 1949. The RBI issued a
Show Cause Notice to which the Bank had submitted its detailed
response. After considering the Bank’s submission, the RBI
imposed a penalty of ` 2.00 crore on the Bank vide its letter dated
July 19, 2016 on account of pendency in receipt of bill of entry relating
to advance import remittances made and lapses in adhering to
KYC / AML guidelines in this respect. The penalty has since been
paid. The Bank has implemented a comprehensive corrective action
plan, to strengthen its internal control mechanisms so as to ensure
that such incidents do not recur.
During the financial year 2015-16, there were no penalties imposed
on the Bank.
During the financial year 2014-15, the RBI carried out a scrutiny of a
corporate borrower’s accounts maintained with 12 banks, including
HDFC Bank. The RBI had issued show cause notices to these banks
in March 2014 and based on its assessment, the RBI in its press
release dated July 25, 2014, levied penalties totalling ` 1.5 crore on
the 12 banks. The RBI levied a penalty of ` 0.05 crore on
HDFC Bank on the grounds that the Bank failed to exchange
information about the conduct of the corporate borrower’s account
with other banks at intervals as prescribed in the RBI guidelines
on ‘Lending under Consortium Arrangement / Multiple Banking
Arrangements’. The penalty has since been paid. During the year
2014-15, FIU had imposed a penalty of ` 26 lakhs in 26 cases
reported by Cobrapost.com, stating that there was a failure in the
Bank’s internal mechanism for detecting and reporting attempted
suspicious transactions. The Bank has filed an appeal before the
Appellate Tribunal, Prevention of Money Laundering Act at New
Delhi against the impugned order stating that there were only roving
enquiries made by the reporters of Cobrapost.com and there were
no instances of any attempted suspicious transactions. The hearing
of the appeal is still in progress.
Other than the above, no penalties or strictures were imposed
on the Bank by any of the Stock Exchanges or any statutory
authority on any matter relating to capital markets, during the last
three (3) years.
During the year, Mr Srikanth Nadhamuni was appointed as
Additional Director with effect from September 20, 2016 to hold
office till the conclusion of the ensuing Annual General Meeting of
the Bank. Mr. Nadhamuni has been appointed as Director having
expertise in Information Technology.
COMPLIANCE WITH MANDATORY REQUIREMENTS
The Bank has complied with all the applicable mandatory
requirements of the Code of Corporate Governance as prescribed
under the SEBI Listing Regulations.
HDFC Bank Limited Annual Report 2016-17
210
Corporate Governance
PERFORMANCE EVALUATION
The Bank has put in place a mechanism for performance evaluation
of the Directors. The details of the same have been included in the
Directors’ Report.
COMPLIANCE WITH NON-MANDATORY REQUIREMENTS
a) Board of Directors
The Bank maintains the expenses relating to the office of
non-executive Chairperson of the Bank and reimburses all
the expenses incurred in performance of her duties. Pursuant
to Section 10-A (2)(a) of the Banking Regulation Act, 1949,
none of the directors, other than the Chairman and/or
whole-time directors, is permitted to hold office continuously
for a period exceeding eight (8) years.
All the independent directors of the Bank possess requisite
qualifications and experience which enable them to contribute
effectively to the Bank.
b) Shareholder’s Rights
The Bank publishes
its website at
www.hdfcbank.com which is accessible to the public at
large. The same are also available on the websites of the
results on
its
Stock Exchanges on which the Bank’s shares are listed.
A half-yearly declaration of financial performance including
summary of the significant events is presently not being
sent separately
to each household of shareholders.
The Bank’s results for each quarter are published in an
English newspaper having a wide circulation and in a
Marathi newspaper having a wide circulation in Maharashtra.
Hence, half-yearly results are not sent to the shareholders
individually.
c) Audit Qualifications
During the period under review, there is no audit qualification
in the Bank’s financial statements. The Bank continues to
adopt best practices to ensure regime of unqualified financial
statements.
d) Separate posts of Chairman and Managing Director/
CEO
Mrs. Shyamala Gopinath is the Chairperson of the Bank and
Mr. Aditya Puri is the Managing Director of the Bank.
e) Reporting of Internal Auditor
The Internal Auditor of the Bank reports directly to the Audit
Committee of the Bank.
SHAREHOLDERS HOLDING MORE THAN 1 % OF THE SHARE CAPITAL OF THE BANK AS AT MARCH 31, 2017
Sr No. Name of the Shareholder
1
2
3
4
5
6
7
8
9
10
JP Morgan Chase Bank, NA *
Housing Development Finance Corporation Limited
HDFC Investments Limited
Euro Pacific Growth Fund
Life Insurance Corporation of India
Capital World Growth and Income Fund
ICICI Prudential Life Insurance Company Ltd
SBI- ETF Nifty 50
Government of Singapore
ICICI Prudential Value Discovery Fund
No. of Shares held
473003409
393211100
150000000
100311759
55457815
37636610
35864792
30660186
30115330
29700967
% to share capital
18.46
15.35
5.85
3.92
2.16
1.47
1.40
1.20
1.18
1.16
* One (1) American Depository Share (ADS) represents three (3) underlying equity shares of the Bank.
DISTRIBUTION OF SHAREHOLDING AS AT MARCH 31, 2017
Share Range From Share Range To
1
2501
5001
10001
15001
20001
25001
50001
100001
TOTAL
2500
5000
10000
15000
20000
25000
50000
100000
and above
No. of Shares
100449292
18736810
17021177
9966885
7784620
7519043
25758536
33366177
2341943177
2562545717
% To Capital
3.92
0.73
0.67
0.39
0.31
0.29
1.00
1.30
91.39
100.00
No. of Holders % To No. Of Holders
97.63
1.08
0.50
0.17
0.09
0.07
0.15
0.10
0.21
100.00
470576
5209
2389
797
447
330
730
472
1033
481983
420,902 Folios comprising of 254,58,43,477 equity shares forming 99.35 % of the share capital are in Demat Form.
61,081 Folios comprising of 1,67,02,240 equity shares forming 0.65 % of the share capital are in physical form.
HDFC Bank Limited Annual Report 2016-17
211
Corporate Governance
SHARE PRICE / CHART
The monthly high and low quotation of Bank’s equity shares traded on BSE Ltd (BSE) and National Stock Exchange of India Ltd (NSE)
during FY 2016-17 and its performance vis-à-vis BSE SENSEX and S&P CNX NIFTY respectively is as under:
BSE Limited
Month
High (`)
Low (`)
April 2016
May 2016
June 2016
July 2016
August 2016
September 2016
October 2016
November 2016
December 2016
January 2017
February 2017
March 2017
1136.00
1194.80
1192.30
1250.00
1294.70
1318.20
1299.90
1288.00
1210.15
1300.00
1450.00
1478.00
1043.00
1110.05
1144.25
1161.00
1215.95
1265.50
1225.00
1159.30
1165.00
1181.75
1280.55
1369.25
National Stock Exchange of India Limited
Month
High (`)
Low (`)
April 2016
May 2016
June 2016
July 2016
August 2016
September 2016
October 2016
November 2016
December 2016
January 2017
February 2017
March 2017
1136.70
1195.00
1191.85
1251.25
1295.00
1318.45
1300.05
1289.00
1212.00
1300.00
1454.00
1479.95
1042.85
1113.15
1144.25
1160.90
1213.80
1265.40
1224.15
1158.00
1163.60
1183.10
1280.50
1369.00
Sensex
Closing
25606.62
26667.96
26999.72
28051.86
28452.17
27865.96
27930.21
26652.81
26626.46
27655.96
28743.32
29620.50
Nifty
Closing
7849.80
8160.10
8287.75
8638.50
8786.20
8611.15
8625.70
8224.50
8185.80
8561.30
8879.60
9173.75
The monthly high and low quotation and the volume of Bank’s American Depository Shares (ADS) traded on New York
Stock Exchange (NYSE) during FY 2016-17
New York Stock Exchange Limited
Month
April 2016
May 2016
June 2016
July 2016
August 2016
September 2016
October 2016
November 2016
December 2016
January 2017
February 2017
March 2017
Highest
(US$)
Lowest
(US$)
64.00
65.00
67.14
69.99
72.50
74.04
73.52
71.60
65.63
69.79
73.32
75.35
59.80
61.67
63.33
65.12
68.12
70.37
69.45
62.21
59.10
59.00
68.89
70.74
Monthly
Volume
12972200
13123218
14217339
9409748
14046411
14884299
10635478
20325287
19204381
20953151
15618873
17303079
Note: Other than the stock options granted to the employees of the Bank which will result in an addition to the equity capital of the Bank on the
exercise of the stock options and subsequent allotment of equity shares, the Bank has no outstanding warrants or other convertible instruments as
on March 31, 2017 which could have an impact on the equity capital of the Bank.
HDFC Bank Limited Annual Report 2016-17
212
i
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.
w
w
w
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e
c
r
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m
o
c
.
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e
s
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Corporate Governance
CATEGORIES OF SHAREHOLDERS AS AT MARCH 31, 2017
Promoters (*)
ADS and GDRs (#)
Foreign Institutional Investors
Overseas Corporate Bodies, Foreign Bodies, Foreign National and Non Resident Indians
Financial Institutions, Banks, Mutual Funds and Central Government
Life Insurance Corporation and its subsidiaries
Other Insurance Corporations
Indian Companies
Others
TOTAL
(*) None of the equity shares held by the Promoter Group are under pledge.
No of shares
543216100
473003409
880336915
6142576
211277195
55457815
6053225
165979095
221079387
2562545717
% to capital
21.20
18.46
34.35
0.24
8.24
2.16
0.24
6.48
8.63
100.00
(#) JP Morgan Chase Bank is the Depository for both the ADS (461557764 underlying equity shares) & GDRs (11445645 underlying
equity shares).
GLOBAL DEPOSITORY RECEIPTS (“GDRs”)*
The monthly high and low quotation of the Bank’s GDRs traded on Luxembourg Stock Exchange are as under:
(in US$)
Month
High
Low
Apr-16 May-16 Jun-16
8.829
8.871
8.525
8.408
8.535
7.938
Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17
11.285
9.543
9.330
10.305
8.491
8.668
10.550
9.660
9.852
9.516
9.639
9.165
9.698
9.264
8.895
8.631
9.534
8.703
* 2 GDRs represent one underlying equity share of the Bank
MONTHLY VOLUMES OF THE BANK'S SHARES TRADED ON NSE AND BSE
Month
BSE
NSE
May-16
Apr-16
1773754 1531540 2733826 2558930 2370643 2133759 1415832 3089054 1871409 8111762 7210020 7633392
24789397 27442206 29475908 29118968 29235419 26015242 19911162 38038267 23477472 32853352 132053238 36215227
Aug-16
Nov-16
Sep-16
Dec-16
Feb-17
Jun-16
Mar-17
Jan-17
Oct-16
Jul-16
FINANCIAL CALENDAR
[April 1, 2017 to March 31, 2018]
Board Meeting for Consideration of accounts
April 21, 2017
Dispatch of Annual Reports
June 24, 2017 to June 29, 2017
Record date for purpose of determining eligibility of dividend
Electronic and physical: June 30, 2017
Last date for receipt of proxy forms
Date, Time and Venue of 23rd AGM
Dividend Declaration Date
Probable date of payment of dividend
July 22, 2017
July 24, 2017 at 2:30 p. m.
Birla Matushri Sabhagar, 19, New Marine lines, Mumbai - 400020
July 25, 2017
Electronic: July 26, 2017 onwards
Physical: July 27, 2017 onwards
Board Meeting for considering unaudited results for first three
quarters of FY 2017-18
Within 25 days from the end of each quarter
CODE OF CONDUCT
The Bank has framed and adopted a Code of Conduct, which is approved by the Board. The Code is applicable to all directors and
senior management personnel of the Bank. This Code has been posted on the Bank’s website www.hdfcbank.com. All the Directors
and senior management personnel have affirmed compliance with the Code of Conduct / Ethics as approved and adopted by the
Board.
HDFC Bank Limited Annual Report 2016-17
213
Corporate Governance
LISTING
Listing on Indian Stock Exchanges :
The equity shares of the Bank are listed at the following Stock Exchanges and the annual fees for 2017-18 have been paid :
Sr. No. NAME AND ADDRESS OF THE STOCK EXCHANGE
1.
2.
BSE Limited, Phiroze Jeejeebhoy Towers, Dalal Street, Fort, Mumbai 400 023.
The National Stock Exchange of India Limited, Exchange Plaza, 5th Floor, Bandra Kurla Complex,
Mumbai 400 051.
Names of Depositories in India for dematerialization of equity shares (ISIN No. INE040A01026)
STOCK CODE
500180
HDFCBANK
(cid:46)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:65)(cid:76)(cid:0)(cid:51)(cid:69)(cid:67)(cid:85)(cid:82)(cid:73)(cid:84)(cid:73)(cid:69)(cid:83)(cid:0)(cid:36)(cid:69)(cid:80)(cid:79)(cid:83)(cid:73)(cid:84)(cid:79)(cid:82)(cid:89)(cid:0)(cid:44)(cid:73)(cid:77)(cid:73)(cid:84)(cid:69)(cid:68)(cid:0)(cid:8)(cid:46)(cid:51)(cid:36)(cid:44)(cid:9)
(cid:35)(cid:69)(cid:78)(cid:84)(cid:82)(cid:65)(cid:76)(cid:0)(cid:36)(cid:69)(cid:80)(cid:79)(cid:83)(cid:73)(cid:84)(cid:79)(cid:82)(cid:89)(cid:0)(cid:51)(cid:69)(cid:82)(cid:86)(cid:73)(cid:67)(cid:69)(cid:83)(cid:0)(cid:8)(cid:41)(cid:78)(cid:68)(cid:73)(cid:65)(cid:9)(cid:0)(cid:44)(cid:73)(cid:77)(cid:73)(cid:84)(cid:69)(cid:68)(cid:0)(cid:8)(cid:35)(cid:36)(cid:51)(cid:44)(cid:9)
(cid:115)(cid:0)
(cid:115)(cid:0)
International Listing :
Sr.
No.
1
Security description
The American Depository
Shares (ADS)
(CUSIP No. 40415F101)
2 Global Depository Receipts (GDRs)
(ISIN/ Trading Code : US40415F2002)
Name & Address of the International Stock
Exchange
The New York Stock Exchange (Ticker - HDB)
11, Wall Street, New York, N.Y. 10005
Luxembourg Stock Exchange
Postal Address :
Societe De La Bourse De Luxembourg
Societe Anonyme, 35A Boulevard Joseph II
L-1840 Luxembourg.
Mailing Address :
B.P. 165, L - 2011, Luxembourg
Name & Address of
Depository
J P Morgan Chase Bank, N.A.
4, New York Plaza, 12th Floor,
New York, NY 10004
J P Morgan Chase Bank, N.A.
4, New York Plaza, 12th Floor,
New York, NY 10004
The Depository for ADS and GDRs is represented in India by: J. P. Morgan Chase Bank N.A., India Sub Custody, J P Morgan Chase
Bank NA, 6th Floor, Paradigm “B” Wing, Behind Toyota Showroom, Mindspace, Malad (West), Mumbai - 400 064.
SHARE TRANSFER PROCESS
Exchanges on which the Bank’s shares are listed.
The Bank’s shares which are in compulsory dematerialized
(demat) list are transferable through the depository system.
Shares in physical form are processed by the Registrars and
Share Transfer Agents, Datamatics Financial Services Limited
and approved by the Stakeholders’ Relationship Committee of the
Bank or authorized officials of the Bank. The share transfers are
generally processed within a period of fifteen (15) days from the
date of receipt of the transfer documents by Datamatics Financial
Services Limited.
MEANS OF COMMUNICATION
The quarterly and half-yearly unaudited / audited financial
results are published in Business Standard in English and
Mumbai Sakal / Navshakti in Marathi (regional language).
The results are also displayed on the Bank’s web-site at
www.hdfcbank.com.
The shareholders can visit the Bank’s web-site for financial
information, shareholding information, dividend policy, key
shareholders’ agreements, if any, Memorandum and Articles of
Association of the Bank, etc. The web-site also gives a link to
www.sec.gov where the investors can view statutory filings of
the Bank with the Securities and Exchange Commission, USA.
The information relating to the Bank’s financial results and
shareholding pattern are displayed on the websites of the Stock
Other information such as press releases, stock exchange
disclosures and presentations made to investors and analysts
etc. are regularly displayed on the Bank’s web-site.
CODE FOR PREVENTION OF INSIDER TRADING
The Bank has adopted a share dealing code for the prevention
of insider trading in the shares of the Bank as well as in other
listed companies. The share dealing code, inter-alia, prohibits
purchase / sale of shares of the Bank by insiders while in
possession of unpublished price sensitive information in relation
to the Bank.
DEBENTURE TRUSTEES
The SEBI Listing Regulations require companies, which have
listed their debt securities, to disclose the names of their
debenture trustees with contact details in their Annual Report.
The following are the debenture trustees for the privately placed
bonds of the Bank:
1. IDBI Trusteeship Services Ltd, Asian Building, Ground
Floor, 17 R Kamani Marg, Ballard Estate, Mumbai 400001.
Tel : 022-40807000
2. Axis Trustee Services Limited, Axis House, Ground Floor,
Wadia International Centre, Pandurang Budhkar Marg, Worli
Mumbai 400025. Tel : 022-62260054/50
HDFC Bank Limited Annual Report 2016-17
214
Corporate Governance
3. Vistra ITCL (India) Limited (Formerly known as IL&FS Trust
Company Limited), The IL&FS Financial Centre, Plot C-22/G
Block, 7th Floor, Bandra Kurla Complex, Bandra (East)
Mumbai 400051. Tel : 022-26593535
SHAREHOLDERS’ HELPDESK
Share transfers, dividend payments and all other investor
related activities are attended to and processed at the office of
Registrars and Transfer Agents.
For lodgment of transfer deeds and any other documents or
for any grievances / complaints, shareholders / investors may
contact at the following address:
Mr. Sunny Abraham / Ms. Manisha Parkar / Mr. Tukaram
Thore
Datamatics Financial Services Ltd,
Plot No. B 5, Part B Crosslane,
MIDC, Marol, Andheri (East),
Mumbai 400 093,
Tel : +91-022 - 66712213-14
Fax : +91-022 - 66712011;
E-mail : hdinvestors@dfssl.com
Counter Timings : 10:00 a. m. to 4:30 p. m.
(Monday to Friday except public holidays)
For the convenience of investors, transfers up to 500 shares
and complaints from investors are accepted at the Bank’s Office
at 2nd Floor, Trade House, Senapati Bapat Marg, Kamala Mills
Compound, Lower Parel (West), Mumbai 400 013.
Shareholders’ Helpdesk Timings : 10:30 a. m . to 3.30 p. m.
Between Monday to Friday (except on Bank holidays)
Telephone : +91-022-2498 8484 Extn : 3458, 3463 & 3621
Fax : +91-022-2496 5235
Email : shareholder.grievances@hdfcbank.com
Queries relating
performance may be addressed to:
to
the Bank’s operational and financial
shareholder.grievances@hdfcbank.com
Name of the Compliance Officer of the Bank: Mr. Sanjay Dongre,
Executive Vice President (Legal) & Company Secretary
Telephone : +91-022-2498 8484 Extn : 3473
BANKING CUSTOMER HELPDESK
In the event of any queries / complaints, banking customers can
directly approach the Branch Manager or can call/write to the
Bank using the following contact details:
Call at: Our customer care (Phone Banking) numbers.
Location wise list of customer care numbers are available at:
Write to:
HDFC Bank Ltd., New Building,
“A” Wing, 2nd Floor,
26-A Narayan Property,
Chandivali Farm Road,
Off Saki Vihar Road, Chandivali,
Andheri (East), Mumbai - 400 072.
Email : support@hdfcbank.com
Contact us online:
Fill up the “Complaint Form” available at the following website
link:
https://leads.hdfcbank.com/applications/webforms/apply/
complaint_form_new.asp
For grievances other than Shareholder grievances please
send your communication to the following email addresses:
1) Depository Services: dphelp@hdfcbank.com
2) Retail Banking / ATM / Debit Cards / Mutual Fund:
support@hdfcbank.com
3) Loans, Advances / Advance against shares:
loansupport@hdfcbank.com
4) Credit Cards : customerservices.cards@hdfcbank.com
PLANT LOCATIONS
Being in the banking business, the Bank does not have plants.
However, the Bank has 4,715 branches in 2,657 cities / towns
as on March 31, 2017. The locations of the branches are also
displayed on the Bank’s website.
COMPLIANCE CERTIFICATE OF THE AUDITORS
The Secretarial Auditors have certified that the Bank has complied
with the conditions of Corporate Governance as stipulated in the
listing requirements of the Indian Stock Exchanges where the
Bank’s securities are listed. The same is annexed to the Annual
Report.
The Certificate from the Secretarial Auditors will be sent to the
Stock Exchanges along with the Annual Report of the Bank.
On behalf of the Board of Directors
Mumbai, May 29, 2017
Shyamala Gopinath
Chairperson
DECLARATION
I confirm that for the year under review, all directors and
senior management have affirmed their adherence to the
provisions of the Code of Conduct of Directors and senior
management personnel.
http://www.hdfcbank.com/personal/find-your-nearest/find-
phone-banking
Mumbai, May 29, 2017
Aditya Puri
Managing Director
HDFC Bank Limited Annual Report 2016-17
215
Shareholder Information
A)
DIVIDENDS:
Receipt of Dividends through Electronic mode:
The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 have directed that listed companies shall
mandatorily make all payments to investors including dividend to shareholders, by using any RBI approved electronic mode
of payment viz. ECS, LECS (Local ECS), RECS (Regional ECS), NECS (National ECS), direct credit, RTGS, NEFT, etc.
In order to receive the dividend without loss of time, all the eligible shareholders holding shares in demat mode are
requested to update with their respective Depository Participants before June 30, 2017, their correct Bank Account Number,
including 9 Digit MICR Code and 11 digit IFSC Code, E-Mail ID and Mobile No(s). This will facilitate the remittance of the
dividend amount as directed by SEBI in the Bank Account electronically. Updation of E-Mail IDs and Mobile No(s) will enable
sending communication relating to credit of dividend, unencashed dividend etc.
Shareholders holding shares in physical form may communicate details relating to their bank account, 9 Digit MICR Code,
11 digit IFSC Code, E- Mail ID and Mobile No(s) to the Registrar and Share Transfer Agents viz. Datamatics Financial
Services Limited, having address at Plot No. B 5, Part B Crosslane, MIDC, Marol, Andheri (E), Mumbai-400 093, before
June 30, 2017 by quoting the reference folio number and attaching a photocopy of the Cheque leaf of their active bank
account and a self-attested copy of their PAN card and Aadhaar card.
Various modes for making payment of Dividends under Electronic mode:
In case the shareholder has updated the complete and correct bank account details (including 9 digit MICR Code and
11 digit IFSC code) before the record date, i.e. June 30, 2017, which is fixed for the purpose of payment of dividend, then
the Bank shall make the payment of dividend to such shareholder under any one of the following modes:
1. National Automated Clearing House (NACH)
2. National Electronic Fund Transfer (NEFT)
3. Direct credit in case the bank account is with HDFC Bank Limited.
In case dividend payment by electronic mode is returned or rejected by the corresponding bank due to some reason,
the Bank will issue a dividend warrant and print the bank account details available on its records on the said dividend
warrant to avoid fraudulent encashment of the warrants.
Unclaimed Dividends
As per the applicable provisions of the Companies Act, the Bank is statutorily required to transfer to the Investor Education
& Protection Fund (IEPF) all dividends remaining unclaimed for a period of 7 (seven) years from the date they became due
for payment. Dividends for and up to the financial year ended March 31, 2009 have already been transferred to the IEPF
and the dividend for the financial year ended March 31, 2010 will be transferred to IEPF after June 29, 2017. The details of
unclaimed dividends for the financial year 2010-11 onwards and the last date for claiming such dividends are given below:
Dividend for the year ended
March 31, 2010
March 31, 2011
March 31, 2012
March 31, 2013
March 31, 2014
March 31, 2015
March 31, 2016
Date of Declaration of dividend
June 30, 2010
July 6, 2011
July 13, 2012
June 27, 2013
June 25, 2014
July 21, 2015
July 21, 2016
Last date for claiming dividend
June 29, 2017
July 5, 2018
July 12, 2019
June 26, 2020
June 24, 2021
July 20, 2022
July 20, 2023
B)
SHARES LYING IN UNCLAIMED SUSPENSE ACCOUNT
Particulars
Opening Balance as on April 1, 2016
Add: Transfer during the year 2016-17
Less: Claims received and shares transferred*
Closing Balance as on March 31, 2017**
Records /
No of shareholders
13075
0
214
12861
Shares
2188145
0
71680
2116465
*Number of shareholders who approached the Bank for the transfer of shares from the suspense account.
** Voting rights on these shares shall remain frozen till the rightful owners of such shares claim these shares.
HDFC Bank Limited Annual Report 2016-17
21(cid:22)