#1HDFC Housing Development Finance Corporation Limited HDFC#2● HDFC Snapshot CONTENTS Mortgage Market in India Operational and Financial Highlights: Mortgages • Shareholding ● Financials: Standalone Key Subsidiaries and Associates Financials: Consolidated Environmental, Social & Governance • IT & Digitalisation Initiatives HDFC 2#3HDFC SNAPSHOT HDFC#4HDFC Snapshot WHO WE ARE... Incorporated in 1977 as the first specialised mortgage company in India Now a Financial Conglomerate with interests beyond mortgages 72% shares held by Foreign Investors GHDFC Market capitalisation*: US$ 67 bn HDFC 21.03% 49.92% 52.63% 49.98% HDFC BANK Market capitalisation*: US$ 119 bn ADRs listed on NYSE HDFC Life Market capitalisation*: US$ 20 bn Ranks 1st in overall new business premium amongst private players GHDFC MUTUAL FUND Market capitalisation*: US$ 8 bn Ranks amongst the top 3 largest AMCs with quarterly avg. AUM of US$ 59 bn HDFC ERGO GENERAL INSURANCE Ranks amongst the top 3 private players in general insurance 100% >> HDFC SALES Financial services distribution company 100% HDFC CREDILA The Education Loan Specialist Sources more than half of HDFC's home loans India's first dedicated education loan company with outstanding loan book of US$ 1 bn *As at September 30, 2021 US$ amounts converted based on exchange rate of US$ 1 = Rs. 74.23 100% GHDFC HDFC PROPERTY FUND HDFC Capital Advisors Property funds with AUM of US$ 2.2 bn; of which US$ 1.1 bn is committed for development of affordable housing#5HDFC Snapshot BUSINESS SUMMARY . Loans Outstanding (Gross loans) (As at September 30, 2021) : Rs. 5,973.39 bn : US$ 80.47 bn Individual Loans Originated CAGR (5 years) : 16% Cumulative Housing Units Financed : 8.8 million Cost to Income Ratio (excluding notional cost of Employee Stock Option Scheme & Corporate Social Responsibility Expenses) : 8.2% Unaccounted gains on listed investments in subsidiary and associate companies Consolidated Profit After Tax CAGR (5 years) : Rs. 2,759.17 bn : US$ 37.17 bn : 21% HDFC 5#6HDFC Snapshot HDFC SHARP RECOVERY FROM 2nd WAVE OF COVID-19 • • While the first quarter witnessed an eruption of a second wave of COVID-19 in India, there has been a sharp recovery in business in the second quarter The demand for housing continues to remain strong . During H1FY22, individual loan approvals and disbursements grew by 67% and 80% respectively over the corresponding period in the previous year Scale up on all digital platforms for borrowers, depositors, channel partners and deposit agents, amongst others. • 89% of new loan applications were received through the digital mode • 61% of retail deposits digitally on-boarded • Total provisions carried as at September 30, 2021 stood at Rs 133.40 billion compared to the regulatory requirement of Rs 66.05 billion (based on period of default and standard assets). COVID-19 provision as at September 30, 2021 stood at Rs 13.04 billion. Total loans restructured under the RBI's Resolution Framework - OTR 1& 2.0, amounted to 1.4% of the loan book. 35% of the loans restructured is in respect of one account only, where resolution is underway. Total loans disbursed as at September 30, 2021 under the Emergency Credit Line Guarantee Scheme (ECLGS) stood at Rs 17.38 billion.#7HDFC MORTGAGE MARKET IN INDIA#8Mortgage Market in India HDFC DRIVERS OF MORTGAGE GROWTH Improved Affordability Low Penetration Government Incentives ● Enhanced Fiscal Benefits ● Credit Linked Subsidy Scheme Other Demand Drivers#950 50 Mortgage Market in India 60 60 IMPROVED AFFORDABILITY Best affordability in 2.5 decades. Government support towards housing has helped improve affordability. 10 Property Value (Rs. 100,000) & 10 20 Affordability 30 40 40 0 20 22.0 15.6 11.1 8.3 6.6 5.9 5.3 5.1 4.7 4.3 4.7 5.0 5.1 5.1 4.5 4.7 4.8 4.6 4.7 4.6 4.4 4.1 3.8 3.7 3.5 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Based on customer data 2005 2006 2007 2008 Affordability 2009 2010 2011 2012 2013 HDFC 18.00 16.00 14.00 12.00 10.00 8.00 6.00 4.00 2.00 3.3 3.2 0.00 Property Cost Representation of property price estimates Annual Income Affordability equals property prices by annual income 2014 2015 2016 2017 2018 2019 2020 2021 Annual Income (Rs. 100,000)#10100% Mortgage Market in India HDFC LOW PENETRATION IMPLIES ROOM FOR GROWTH MORTGAGES AS A PERCENT OF NOMINAL GDP 80% 60% 40% 20% 0% 11% India China 89% 83% 68% 56% 52% 45% 44% 39% 34% 20% 18% Thailand Malaysia Japan Singapore Germany USA Australia UK Denmark Netherlands Source: European Mortgage Federation, Hofinet & HDFC estimates for India. Note: India's lower GDP resulted in an increase in the mortgage to GDP ratio. 10#11Mortgage Market in India HDFC GOVERNMENT/REGULATORY INITIATIVES Government Incentives Liquidity Measures Supply Side Incentives Tax incentives on interest and principal amount for home loan borrowers Interest rate subsidy under the Credit Linked Subsidy Scheme for EWS/LIG* Liquidity schemes and special refinance facilities for Non- Banking Financial Companies - Housing Finance Companies Incentives to developers to build affordable housing 'Infrastructure' status accorded to affordable housing External Commercial Borrowings/Rupee Denominated Bonds Issued Overseas Economically Weaker Section (EWS): Income up to Rs 0.3 mn p.a; Low Income Group (LIG): Income above Rs 0.3 mn to Rs 0.6 mn p.a. 11#12Mortgage Market in India HDFC TAX INCENTIVES HAVE LOWERED THE EFFECTIVE RATES ON MORTGAGES FY 2021 FY 2002 FY 2000 Loan amount 3,190,000 3,190,000 3,190,000 Nominal Interest Rate (%) 6.70% 10.75% 13.25% Max deduction for interest allowed 200,000 150,000 75,000 Deduction on principal 150,000 20,000 20,000 Tax rate 30.90% 31.50% 34.50% Tenor (years) 20 20 20 Total amount paid per year 363,730 359,400 421,068 Interest component 213,730 342,925 422,675 Principal repaid 150,000 16,475 (1,607) Tax amount saved 108,150 53,550 32,775 Effective interest paid on home loan 105,580 289,375 389,900 Effective interest on home loan 3.3% 9.1% 12.2% Note: Union Budget 2021-22: Additional interest deduction of Rs.1.5 lac for loans sanctioned from April 1, 2021 to March 31, 2022. This is for first-time home-buyers; house cost: up to Rs 4.5 mn. 12#13Mortgage Market in India ● . OTHER DEMAND DRIVERS HDFC Favourable Demographics: 66% of India's population is below 35 years of age, hence large potential for home loans Nuclear Households: Rise in the number of households with a shift towards nuclear families Urbanisation: Currently 32% of the Indian population reside in cities; estimated to be 50% by 2030 . Interest Rates: Improved affordability through rising disposable incomes and lowest ever interest rates on home loans 13#14HDFC OPERATIONAL & FINANCIAL HIGHLIGHTS: MORTGAGES#15Operational & Financial Highlights: Mortgages CORE BUSINESS - LENDING HDFC (As at September 30, 2021: Gross Loans - US$ 80.47 bn) INDIVIDUAL LOANS - Home Loans • Fixed rate loans • Floating rate loans -Home Improvement - Loans Home Extension Loans - Home Equity Loans - Rural Home Loans - Loans to NRIs Individuals 78% Corporate 5% Construction Finance 9% Lease Rental Discounting 8% As at September 30, 2021 Loan Book Outstanding (After Sell Down) Loan Book o/s Before Sell Down in last 12 months Assets Under Management Rs. bn US$ bn % Growth Rs. bn US$ bn % Growth Rs. bn US$ bn % Growth Individuals Non-Individuals Total 3,912 53 15% 4,184 56 23% 4,676 63 16% 1,296 17 -5% 1,296 17 -5% 1,298 17 -5% 5,208 70 10% 5,480 73 15% 5,974 80 11% Individual loans sold (outstanding): Rs. 763.66 bn (US$ 10.29 bn) 15#16Operational & Financial Highlights: Mortgages GHDFC HOUSING ACROSS INCOME GROUPS In Value terms HIG 43% Housing Loan Approvals Based on Income Slabs H1FY22 In Number terms HIG 21% MIG 43% MIG 49% LIG / EWS 14% LIG/EWS 30% Economically Weaker Section: Up to Rs 0.3 mn p.a Middle Income Group: Above Rs 0.6 mn to Rs 1.8 mn p.a. Housing Loans to EWS & LIG Segments Low Income Group: Above Rs 0.3 mn to Rs 0.6 mn p.a. High Income Group: Above Rs 1.8 mn p.a. 30% of home loan approvals in volume terms and 14% in value terms has been to the EWS & LIG segments Average home loan - EWS: Rs 1.11 mn, LIG: Rs 1.94 mn Credit Linked Subsidy Scheme (CLSS): HDFC has the highest number of beneficiaries at over 270,000, with cumulative disbursements of Rs 459 bn and a subsidy amount of Rs 63 bn. 16#17Operational & Financial Highlights: Mortgages GHDFC 82% OF OUR MORTGAGES ARE SOURCED BY OURSELVES OR THROUGH OUR AFFILIATES Other Direct Selling Agents 18% Direct Walk-ins 1% HDFC Sales Private Limited 53% September 30, 2021 HDFC Bank 28% Deposit & loan products offered at several locations through outreach programmes. Total number of offices: 616 which is inclusive of 202 outlets of HDFC's wholly owned distribution company. 17#18Operational & Financial Highlights: Mortgages INDIVIDUAL LOANS H1FY22 * HDFC 79% Employment Employed Self-Employed (incl: professionals) 21% * Based on value of approvals Acquisition Mode 55% First Purchase Geographic Spread Re-sale East 37% South 33% 4% 8% Self- 27% Construction 36% North West 18#19Operational & Financial Highlights: Mortgages ● ● ● ● . HDFC OUR CONSERVATIVE LOAN PROFILE UNDERLIES OUR HIGH CREDIT QUALITY Average Loan Size Average Loan to Value Average Loan Term Average Age Primary Security Repayment Type : Rs. 3.19 mn (~US$ 43,000) : 69% (at origination) : 11 years : 38 years : Mortgage of property financed : Amortising 19#20Operational & Financial Highlights: Mortgages NON-PERFORMING LOANS (NPLs) & PROVISIONS CARRIED HDFC Percentage 2.60% 2.64% 2.56% 3.00% As at September 30, 2021 2.24% 2.00% 2.50% 1.81% (Rs. in bn) 2.00% 1.50% 103.41 1.00% 0.50% 0.00% Sep-20 Jun-21 Sep-21 NPLs GROSS NPLs Individual Loans PROVISIONS CARRIED AS % OF EAD* Sep 30, 2021 Jun 30, 2021 1.10% 1.37% Non-Individual Loans Overall NPLs 4.69% 4.87% 2.00% 2.24% *EAD: Exposure at Default NPLs (90 days): Provisions Carried: Regulatory provision as per period of default & standard assets: 133.40 66.05 20 20#21Operational & Financial Highlights: Mortgages HDFC EXPECTED CREDIT LOSS (ECL) BASED ON EXPOSURE AT DEFAULT (EAD) As per IND AS Gross Stage 1 ECL Provision Stage 1 Sep-21 Rs bn Mar-21 Sep-20 4,752.19 4,540.29 4,404.30 14.05 10.87 13.16 Net Stage 1 4,738.14 4,529.42 4,391.14 Coverage Ratio % Stage 1 0.30% 0.24% 0.30% Gross Stage 2 321.46 315.47 233.13 ECL Provision Stage 2 48.09 58.81 Net Stage 2 273.37 256.66 59.05 174.08 Coverage Ratio % Stage 2 15% 19% 25% Gross Stage 3 129.93 ECL Provision Stage 3 71.26 116.32 60.57 103.70 50.83 Net Stage 3 58.67 55.75 52.87 Coverage Ratio % Stage 3 55% 52% 49% EAD 5,203.58 4,972.08 4,741.13 ECL Provision 133.40 130.25 123.04 Net 5,070.18 4,841.83 4,618.09 ECL/EAD 2.56% 2.62% 2.60% Note: Loans under the one-time restructuring framework due to COVID-19 stress are classified under Stage 2. 21#22Operational & Financial Highlights: Mortgages HDFC MULTIPLE SOURCES OF BORROWINGS (As at September 30, 2021: Total Borrowings - US$ 62.34 bn) Percentage 4% 100% 3% 3% 80% External Commercial Borrowings 44% 41% 47% Debentures & Securities 60% Term Loans 18% 21% 40% 17% Deposits 20% 32% 35% 35% 0% Sep-19 Sep-20 Sep-21 Total Borrowings: Rs 4,627.37 bn (US$ 62.34 bn) 22 22#23Operational & Financial Highlights: Mortgages LOAN SPREADS HDFC 12.00% 2.40% 10.29% 10.18% 10.00% 2.35% 8.99% 8.10% 2.29% 8.00% 2.30% 2.27% 2.30% ◇ 2.29% 6.00% 2.25% 4.00% 7.99% 7.91% 2.20% 6.70% 5.81% 2.00% 2.15% 0.00% 2.10% FY19 FY20 FY21 Apr-Sep21 Return on Loans Cost of Borrowings ---Spread Apr-Sep21 Spread earned on: Individual Loans 1.93% Non-individual Loans 3.37% Loan Book 2.29% 23#24Operational & Financial Highlights: Mortgages MATURITY PROFILE (As at March 31, 2021) Rs. in billion 3,000 2,500 2,000 1,500 1,264 1,133 1,000 500 2,705 2,443 2,230 1,837 0 Up to 1 yr >1-5 yrs Over 5 yrs Assets ■Liabilities HDFC The above graph reflects adjustments for prepayments and renewals in accordance with the guidelines issued by National Housing Bank. 24#25Operational & Financial Highlights: Mortgages PRODUCTIVITY RATIOS HDFC Number of employees Number of outlets FY21 FY20 3,226 3,095 390 379 Profit per employee (US$ '000)* 468 407 Assets per employee (US$ Mn) 23.2 22.1 Admin costs/assets (%)^ 0.21 0.24 Cost income ratio (%)^ 7.7 9.0 *To make ratios comparable, profit on sale of strategic investments have not been considered. ^Excluding notional cost of ESOS and CSR expenses 25#26Operational & Financial Highlights: Mortgages KEY FINANCIAL METRICS HDFC FY21 FY20 Net Interest Margin (%) 3.5 3.4 Pre Tax RoAA (%)^ 2.6 2.5 Post Tax ROAA (%)^ 2.1 2.0 Return on Tier 1 Capital (%)^ 14.8 14.8 Capital Adequacy (%)* 22.4 17.6 Of which Tier 1 (%) 21.6 16.5 Tier II (%) 0.8 1.1 ^Adjusted for profit on sale of investments of strategic investments *In FY20, GRUH Finance merged with Bandhan Bank. As per IndAS, the Corporation had on derecognition of the investment in GRUH, recorded a fair value gain of Rs 90.20 billion through the Statement of Profit and Loss of FY20. #As at September 30, 2021 26#27HDFC VALUATION & SHAREHOLDING#28Valuation and Shareholding VALUATION - METHOD 1 Number of shares outstanding: 1.81 billion • Share Price (CMP as at September 30, 2021): Rs. 2,755 • Market Capitalisation: Rs. 4,981.6 billion (~US$ 67 bn) Rs bn US$ bn Net Worth 1,118 15.1 Add: Unaccounted gains on 2,759 37.2 strategic listed investments Add: Unaccounted gains on 203 2.7 unlisted investments Adjusted Networth 4,080 55.0 Market Capitalisation 4,982 67.1 Adjusted Price to Book Ratio 1.2 1.2 HDFC#29Valuation and Shareholding VALUATION – METHOD 2 - • Number of shares outstanding: 1.81 billion Share Price (CMP as at September 30, 2021): Rs. 2,755 Market Capitalisation: Rs. 4,981.6 billion (~US$ 67 bn) Valuation Rs bn US$ bn Market Capitalisation 4,982 67.1 Less: Unaccounted gains on strategic 2,759 37.2 listed investments Less: Unaccounted gains on unlisted 203 2.7 investments Adjusted Market Capitalisation 2,019 27.2 Net Worth (adjusted for dividend) 1,118 15.1 Adjusted Price to Book Ratio 1.8 1.8 HDFC#30Valuation and Shareholding SHAREHOLDING PATTERN As at September 30, 2021 HDFC 72% 2% 7% 10% ■Foreign Shareholders - 72% Individuals - 9% > Mutual Funds - 10% 9% Financial Institutions, Banks & Insurance Companies - 7% Companies - 2% 30 30#31FINANCIALS Standalone (Based on Indian Accounting Standards) HDFC#32Financials: Standalone BALANCE SHEET HDFC Sep-21 Sep-20 (Rs in billion) (Rs in billion) Sources of Funds Shareholders' Funds 1,118.18 1,001.33 Borrowings 4,627.37 4,208.99 Current Liabilities & Provisions 196.85 202.80 5,942.40 5,413.12 Application of Funds Loans^ Investments Current/Fixed Assets 5,207.98 4,751.21 695.05 611.78 39.37 50.13 5,942.40 5,413.12 ^Net of loans sold during the preceding 12 months amounting to Rs 271.99 billion of individual loans. If these loans were included, the growth in loans would have been 15%. 32#33Financials: Standalone GHDFC STATEMENT OF PROFIT AND LOSS - Q2FY22 Jul-Sep 21 Jul-Sep 20 Growth (Rs in billion) (Rs in billion) (%) Interest Income 106.82 110.46 -3% Interest Expenses Net Interest Income 65.73 73.99 -11% 41.09 36.47 13% Add: Net gain on derecognition of assigned loans 1.28 1.59 Add: Fees Net of Commission (EIR) Add: Other Operating Income Net Operating Income 0.01 (0.44) 0.88 0.78 43.26 38.40 13% Less: Non Interest Expenses 3.60 3.11 Less: Amortisation of ESOS and CSR Expenses 1.70 0.55 Add: Other Income 0.10 0.05 Profit Before Sale of Investments, Dividend, Fair Value Changes and ECL 38.06 34.79 9% Add: Net gain/(loss) on Fair Value Changes Add: Dividend 1.46 11.71 1.67 3.23 Add: Profit on Sale of Investments - (0.01) Less: Expected Credit Loss (ECL) Profit Before Tax Provision for Tax Profit After Tax Effective tax rate (%) 4.52 46.71 4.36 35.32 32% 8.91 6.62 37.80 28.70 32% 19.1% 18.7%#34Financials: Standalone GHDFC STATEMENT OF PROFIT AND LOSS - H1FY22 Interest Apr-Sep-21 Apr-Sep-20 (Rs in billion) (Rs in billion) 213.51 Growth (%) 222.55 -4% Interest Expenses Net Interest Income Add: Net gain on derecognition of assigned loans Add: Fees Net of Commission (EIR) 130.95 152.16 -14% 82.56 70.39 17% 3.95 3.43 (0.21) (1.01) Add: Other Operating Income Net Operating Income Less: Non Interest Expenses 1.49 1.27 87.79 74.08 19% 7.17 6.30 14% Less: Amortisation of ESOS and CSR Expenses 3.63 1.32 Add: Other Income 0.16 0.06 Profit Before Sale of Investments, Dividend, Fair Value 77.15 66.52 16% Changes and ECL Add: Net gain/(loss) on Fair Value Changes Add: Dividend Add: Profit on Sale of Investments Less: Expected Credit Loss (ECL) Profit Before Tax Provision for Tax Profit After Tax Effective tax rate (%) 5.48 2.60 11.88 6.21 2.63 12.41 11.38 16.35 85.76 71.39 20% 17.95 12.17 67.81 59.22 15% 20.9% 17.0% 34#35KEY ASSOCIATES AND SUBSIDIARIES HDFC#36Associates and Subsidiaries HDFC HDFC BANK . 21.03% owned by HDFC ADRs listed on NYSE 5,686 banking outlets, 16,642 ATMs Key business areas Wholesale banking Retail banking Treasury operations Financials (as per Indian GAAP) for the half year ended September 30, 2021 - - - Advances as at September 30, 2021, stood at Rs. 11,988 bn - an increase of 16% over the previous year Total deposits stood at Rs. 14,063 bn – an increase of 14% over the previous year - PAT (Indian GAAP): Rs. 165.64 bn - an increase of 17% over the previous year Arrangement between HDFC & HDFC Bank HDFC Bank sources home loans for a fee Loans originated in the books of HDFC HDFC offers a part of the disbursed loans for assignment to HDFC Bank (up to 70% of loans sourced by HDFC Bank) - HDFC retains a spread on the loans that have been assigned Market Capitalisation (September 30, 2021): ~US$ 119 bn 36#37Associates and Subsidiaries HDFC HDFC LIFE INSURANCE COMPANY LIMITED (HDFC LIFE) 49.92% owned by HDFC Share Purchase & Swap agreement between HDFC Life, Exide Industries and Exide Life Insurance Company Limited (Exide Life) to acquire 100% of Exide Life for a consideration of Rs. 66.87 bn, subject to the receipt of requisite regulatory approvals Total premium income for the half year ended September 30, 2021 stood at Rs. 192.9 bn - growth of 20% over the previous year HDFC Life ranked 1st in terms of overall new business premium in private sector, with market share at 22.3%. - - - - - - In H1FY22, 22% growth in new business premium. New Business Margin for the half year ended September 30, 2021: 26.4% (PY: 25.1%) Indian Embedded Value stood at Rs. 287 bn as at September 30, 2021 (PY: Rs. 233 bn) Excess Mortality Reserve (EMR) of Rs 2 bn (additional reserve created for excess mortality during COVID-19) Assets Under Management as at September 30, 2021 stood at Rs. 1,912 bn, an increase of 27% over PY PAT for the half year ended September 30, 2021 (Indian GAAP): Rs. 5.77 bn Product mix - Unit Linked: 26%, Non-Par Savings: 32%, Annuity: 5%, Non-Par Protection: 7%, Par: 30% Market capitalisation (September 30, 2021): ~US$ 20 bn 37#38Associates and Subsidiaries HDFC ASSET MANAGEMENT HDFC 52.63% owned by HDFC and Standard Life Investments holds 16.22% of the equity of HDFC Asset Management. Quarterly Average Assets under Management (QAAUM) as at September 30, 2021, stood at Rs. 4.39 trillion (US$ 59 bn), with an overall market share of 12.1% Amongst India's largest actively managed equity mutual fund, with a market share of 12.2% as on September 30, 2021 Equity-oriented assets of HDFC MF as a proportion of total AUM was 44% Individual accounts of HDFC MF as at September 30, 2021 • 9.2 million live accounts 58.8% of total monthly average AUM is contributed by individuals Market share of 12.8% of individual monthly average AUM PAT for the half year ended September 30, 2021 (as per Ind AS): Rs. 6.9 bn Market capitalisation (September 30, 2021): ~US$ 8 bn 38#39Associates and Subsidiaries GHDFC HDFC ERGO GENERAL INSURANCE COMPANY LTD. . • HDFC holds 49.98% and ERGO International AG holds 41.79% and Munich Health Holding AG holds 7.20% of the equity of HDFC ERGO General Insurance Company Limited (HDFC ERGO) In the quarter ended June 21, the Corporation's board approved the sale of 4.99% stake in HDFC ERGO to HDFC Bank, subject to the receipt of requisite regulatory approvals Gross direct premium for the half year ended September 30, 2021 stood at Rs. 65.3 bn (PY: Rs 59.2 bn) Products: Motor, health, travel, home and personal accident in the retail segment; property, marine, aviation and liability insurance in the corporate segment; and crop insurance in rural segment Retail accounts for 55% of the total business Market share of 10.6% (private sector) and 6.0% (overall) in terms of gross direct premium for the half year ended September 30, 2021 (Source: GI Council) As at September 30, 2021:Solvency Ratio - 171% (as against regulatory requirement of 150%) Profit after tax in H1FY22: Rs 1.53 bn (impacted due to higher COVID-19 losses) 39#40Associates and Subsidiaries PROPERTY FUNDS HDFC PROPERTY VENTURES HDFC India Real Estate Fund International LLC comprises two funds: HIREF International LLC - Launched in 2007 Fund corpus: US$ 800 million Fund has made 14 investments - 9 exits have been made and the Fund is in the balance process of exiting from the investments; HIREF International LLC II Pte Ltd. - Fund corpus: US$ 321 million Final close in April 2015 - International investors, 8 year close-ended fund Fund has made 10 investments of which 3 investments have been profitably exited HDFC HDFC CAPITAL ADVISORS HDFC Capital Affordable Real Estate Fund (HCARE) - ― ― - - Set up as a SEBI registered AIF in 2016 HCARE 1 & 2 together create a US$ 1.1 bn platform targeting affordable & mid-income residential projects The objective is to provide long-term equity and mezzanine capital to developers building affordable and middle-income housing across India's leading 20 cities Primary investors in HCARE 1 & 2 is a wholly owned subsidiary of Abu Dhabi Investment Authority (ADIA) along with the National Investment and Infrastructure Fund (NIIF) in HCARE-2 HDFC Capital Advisors is the investment manager for the funds and is one of the largest real estate fund managers in the country Also an investment advisor to a special situations fund focused on high yield opportunities in the Indian residential real estate sector. 40#41Associates and Subsidiaries HDFC CREDILA . HDFC holds 100% in HDFC Credila • • HDFC HDFC Credila is a non-banking finance company and was the first Indian lender to exclusively focus on education loans The company lends to under-graduate and post-graduate students studying in India or abroad As at September 30, 2021 - Profit After Tax (as per Ind AS): Rs. 941 mn - 28% growth Cumulative loans disbursed: Rs. 144 bn Loan book outstanding as at September 30, 2021: Rs. 77 bn • 38% of the loan book is collateralised Gross non-performing assets: 0.19% 41#42FINANCIALS Consolidated (Based on Indian Accounting Standards) HDFC#43Financials: Consolidated GHDFC BALANCE SHEET (Consolidated) Sep-21 Sep-20 Growth (Rs in billion) (Rs in billion) (%) Sources of Funds Shareholders' Funds 1,727.40 1,522.24 13% Liabilities Pertaining to Insurance Business 2,141.63 1,719.22 Loan Funds 4,695.38 4,269.06 Current Liabilities & Provisions 239.61 233.95 8,804.02 7,744.47 14% Application of Funds Loans 5,145.82 4,683.64 10% Assets pertaining to Insurance Business 2,273.14 1,836.62 Investments 1,154.07 987.93 Current Assets, Advances & Fixed Assets 214.98 220.27 Goodwill on Consolidation 16.01 16.01 8,804.02 7,744.47 14% 43#44Financials: Consolidated GHDFC STATEMENT OF PROFIT AND LOSS - H1FY22 Rs. billion Apr-Sep-21 Apr-Sep-20 Growth Interest & Other Operating Income 234.35 239.14 Income from Insurance Business 447.00 390.80 Profit on Sale of Investments 0.72 Net gain on fair value changes 9.90 7.01 Net gain on derecognition of assigned loans 3.85 3.42 Other Income 0.19 0.13 Total Income 696.01 640.50 9% Finance costs 133.10 154.61 Expenses from Insurance Business 443.21 380.82 Non-Interest Expenses 18.25 13.45 Impairment on financial instruments 11.31 16.83 Total Expenses 605.87 565.71 7% Share of profit of associates (equity method) 40.61 32.43 Profit before tax 130.75 107.22 22% Total tax expense 20.93 16.28 Net Profit After Tax 109.82 90.94 21% Profit Attributable to the Corporation 102.99 82.13 25% 44#45Financials: Consolidated HDFC CONSOLIDATED PROFIT AFTER TAX - H1FY22 (As per Ind-AS) Apr-Sep 21 (Rs in Bn) Apr-Sep 20 (Rs in Bn) Growth HDFC Profit After Tax HDFC Life HDFC Ergo HDFC Bank 67.81 59.22 15% 2.77 4.97 1.00 1.16 38.24 31.88 HDFC AMC HDFC Credila 3.63 3.37 0.94 0.74 Property Funds (incl GRIHA) HDFC Invt & HDFC Holdings 0.11 (0.75) 1.95 0.16 HDFC Edu, Sales & Others 0.04 (0.48) Adjustments: Profit on Sale of Investments (1.59) (12.41) Adjustment on account of dilution of stake in associates 2.37 0.59 Dividend & Other Adjustments (14.28) (6.32) Net Profit Attributable to the Corporation 102.99 82.13 25%#46HDFC ESG & OTHER INITIATIVES#47ESG & Other Initiatives HDFC THE ESG WAY: ENCOMPASSING ALL STAKEHOLDERS ENVIRONMENTAL ESG Ratings: HDFC's environmental impact is minimal/low risk Long-term commitment to finance affordable & green housing Focus on responsible lending 2/3rd of the lease rental discounting portfolio is certified as green by Indian Green Building Council or the Leadership in Energy and Environmental Design Supporting programmes environmental for sustainability, recycling, conservation, animal & wildlife protection and the ecology Employee sensitisation on environmental impact; initiatives to facilitate carbon offsets SOCIAL Shelter Assistance Reserve created in 1987: Set aside a portion of profits each year to support socially high impact projects Cumulatively financed 8.8 million housing units Focus on inclusion & diversity; employee engagement / training; First institution to have over 0.27 mn beneficiaries under the government's Credit Linked Subsidy Scheme HDFC primarily implements its CSR initiatives through the HT Parekh Foundation, a charitable institution set up by HDFC CSR focus areas: COVID-19 relief, healthcare, education, skilling & livelihoods GOVERNANCE Founding principles of kindness, fairness, efficiency & effectiveness Recent Awards Best Integrated Report 2020 by Asian Centre for Corporate Governance & Sustainability 'Leadership in Employee Development' by ESGRisk.ai, India's 1st ESG rating company 'Company of the Year' at The Economic Times Awards for Corporate Excellence 2020 Golden Peacock Award for Excellence in Corporate Governance 2020 Felicitated under the 'Leadership' category in the Corporate Governance Score Card, 2020 under a joint initiative by IFC-liAS-BSE No promoter holding Recycling efforts at HDFC - paper, plastic, wet waste, e-waste Launched green deposits for retail depositors in Aug 21 Well reputed, independent directors since inception; core competencies directly linked to the strategy of HDFC 47#48ESG & Other Initiatives ESG REPORTS • Report of Directors on Corporate Governance HDFC Annual Report on Corporate Social Responsibility (CSR) Activities Business Responsibility Report Business Responsibility and Sustainability Report - prescribed by SEBI in May21, voluntary for the top 1,000 companies by market cap for FY22, and mandatory from FY23 onwards. HDFC has voluntarily adopted this format in FY21 itself. Integrated Report HDFC COVID-19 Relief Response: Impact Assessment Report • COVID Relief - 2nd Wave Social Initiatives Report Independent Review of HDFC's Sustainability Initiatives Reports are available on the website: https://www.hdfc.com/investor-relations#environmental-social-and-governance 48#49ESG & Other Initiatives • • IT & DIGITALISATION INITIATIVES HDFC Board level Information Technology Committee - comprising two independent directors, a whole-time director and members of senior management. Information Security and Steering Committee monitors the progress of information security and cyber security. Emphasis on regulation and compliance with respect to consent management, data protection & privacy. • • Online portals for home loan customers, depositors, channel partners and deposit agents trend of digital on-boarding of customers. - growing HDFC's website in six vernacular languages to serve the needs of customers in Tier II and Tier-Ill cities and rural areas. Advanced conversational chatbot with Natural Language Processing (NLP) and Machine Learning (ML) technology. Using digital and social media marketing strategies and tools to reach out customers. Lifecycle management programme for upselling and cross-selling products to HDFC's existing customers using advanced predictive analytical tools. 49#50November 1, 2021 Thank You HDFC 50