summary term sheet1 ncd series 150 ine756i07da3 17-apr-20 44.17 - 2 ncd series 151 a ine756i07da3...

1

SUMMARY TERM SHEET

Issuer HDB Financial Services Limited Type of Instrument Secured, Rated, Listed, Redeemable, Non-Convertible Debentures Nature of Instrument Secured Seniority Senior Mode of Issue Private placement Eligible Investors Please refer paragraph “Who can apply” of the Shelf Disclosure Document

dated May 19, 2020 Listing

The ISIN No. INE756I07DA3 is already listed on the BSE. Necessary arrangements will be made to give effect to the further issuance. The Series 2020/156 is proposed to be listed on WDM segment of BSE Limited. BSE has given its in-principle approval to list the NCDs issued under this Tranche to be issued and allotted in terms of the Shelf DD vide its letter dated May 19, 2020. In the event that any Debenture Holders are Foreign Institutional Investors or sub-accounts of Foreign Institutional Investors, or Qualified Foreign Investors, the Issuer shall get the securities listed on the BSE within 15 days of allotment. In case of delay in listing of this Tranche beyond 20 (Twenty) days from the deemed date of allotment, the Company will pay penal interest, of 1% (one percent) p.a. over the interest/coupon rate/implicit yield from the expiry of 30 (thirty) days from the deemed date of allotment till the listing of this Tranche, to the investor.

Rating of the Instrument CARE Ratings Ltd has assigned a “CARE AAA; Stable” (pronounced “CARE Triple A with stable outlook”) and CRISIL Limited has assigned a “CRISIL AAA/Stable” (pronounced “CRISIL Triple A with stable outlook),to this long term Non-convertible Debenture issue programme of upto Rs.15,000 Crore, of the Company. Instruments with this rating are considered to have the high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk.

Issue Size The aggregate size of the Issue program is for Rs.170,00,00,00,000/- (Rupees Seventeen Thousand Crore only), including Market Linked Debentures amounting to Rs.2000 Crore, which Issue shall comprise of one or more Tranches of Debentures, out of which the aggregate size of this Tranche is Rs. 350,00,00,000/- (Rupees Three Hundred Fifty Crore Only) with Green Shoe Option of Rs. 150,00,00,000/- (Rupees One Hundred Fifty Crore Only) to retain total subscription upto Rs. 500,00,00,000/- (Rupees Five Hundred Crore only)

Option to retain oversubscription (Amount)

Yes, Green Shoe Option of Rs. 150,00,00,000/- (Rupees One Hundred Fifty Crore Only)

Past Issue history:

2

Series 2020 / 150 - Series 2020 A/1(FX)/150

Series 2020 / 151 - Series 2020 A/1(FX)/150_INE756I07DA3 (Further Issuance I)

Rs.380,00,00,000/- (Rupees Three Hundred Eighty Crore Only) allotted on Monday, February 17, 2020 Rs.50,00,00,000/- (Rupees Fifty Crore Only) allotted on Tuesday March 03, 2020

Objects of the Issue The funds raised through the Issue comprising of this Tranche will be utilized as per the section “Utilisation of Issue Proceeds” stipulated in the Shelf DD dated May 19, 2020.

Details of the utilization of the Proceeds

The proceeds of the Issue comprising of this Tranche would be utilised by the Company, inter-alia, for disbursements of loans to borrowers, refinancing existing borrowings, augmenting the business capital requirements of the Company, and for the general corporate purposes of the Company.

Repurchase, Reissue and Consolidation of Debentures

The Company shall be entitled to re-purchase and re-issue and/or consolidate the Debentures as per the terms and in the manner set out in the Debenture Trust Deed.

Consolidation of ISINs

The Company shall have the right/shall be entitled to add additional securities (for such additional amounts as may be issued by the Company from time to time) to the existing ISINs from time to time in accordance with the terms as set out in the Debenture Trust Deed.

Step Up/Step Down Coupon Rate

N.A.

Coupon Reset Process (including rates, spread, effective date, interest rate cap and floor etc.)

As mentioned below.

Day Count Basis Actual/ Actual Default Interest Rate In case of default in payment of interest and/or principal redemption on the

due dates, additional interest @ 2% (Two percent) p.a. over the applicable coupon rate will be payable by the Company from the date of the occurrence of the default until the default is cured or the debentures are redeemed pursuant to such default, as applicable.

Put Option Date N.A. Put Option Price N.A. Call Option Date N.A. Call Option Price N.A. Put Notification Time N.A. Call Notification Time N.A. Rollover Option N.A. Face Value Rs. 10,00,000/- (Rs. Ten Lakh only) per Debenture Minimum Application and in multiples of __ Debt securities thereafter

Minimum 10 Debentures and in multiples of 1 Debenture thereafter

Issuance mode of the Instrument

Demat only

Trading mode of the Instrument

Demat only

3

Settlement mode of the Instrument

NEFT / RTGS

Depository(ies) NSDL / CDSL Business Day means any day of the week (excluding non-business Saturdays, Sundays and

any day which is a public holiday for the purpose of Section 25 of the Negotiable Instruments Act, 1881 (26 of 1881) (as may be amended/supplemented from time to time) or any other day on which banks are closed for customer business in Mumbai, India) on which money market is functioning in Mumbai.

Business Day Convention Should any of the Due Date(s) fall on a non-Business Day, the next Business Day shall be considered as the effective date for the purpose of coupon/interest payment and the previous Business Day shall be considered as the effective date for the purpose of payment of redemption proceeds. However, in case any such payment falls on a holiday, the amount of that payment and the amounts and dates of all future payments shall remain as originally stipulated at the time of issuing the Debentures.

Record Date Means in relation to any Due Date on which any payments are scheduled to be made by the Issuer to the Debenture Holders, the day falling at least 15 (Fifteen) calendar days prior to such Due Date.

Security (where applicable) (Including description, type of security, type of charge, likely date of creation of security, minimum security cover, revaluation, replacement of security, Ranking of Security and interest to the debenture holder over and above the coupon rate as specified in the Trust Deed and disclosed in the Offer Document).

Series 2020 / 156 being issued under this Disclosure Document shall be secured through: First and exclusive charge by way of hypothecation over present and future receivables of the Issuer having minimum asset cover of 1.10 times of the principal outstanding and interest accrued but not paid, to be maintained throughout the tenure of the NCDs. and First pari passu mortgage in favour of the Trustees on all the Company's immovable property situated at Heera Panna Commercial Complex, 3rd Floor, Dr. Yagnik Road, Rajkot. The Company shall endeavor for security to be created prior to allotment of the NCDs being issued and allotted under each Tranche. The Company may provide or cause to be provided (without being obliged to) such further security (including over moveable/immoveable property) for securing its obligations in respect of the Debentures or any Tranche(s) thereof as may be decided by the Company without requiring the consent of the Debenture Trustee and/or the Debenture Holders.

Release of Excess Hypothecated Assets Notwithstanding anything contained in the Deed, in the event that the Hypothecated Assets are of a book value greater than that required for the maintenance of the Asset Cover, the Company shall be entitled to require the Debenture Trustee to release the excess Hypothecated Assets such that the Hypothecated Assets remaining after such release would be sufficient for maintenance of the Asset Cover at or above the Minimum Asset Cover (“Released Assets”). The Company shall, for such release, issue a letter to the Debenture Trustee substantially in the format set out in Schedule II of the Deed of Hypothecation describing the Hypothecated

4

Assets to be released (“Release Request Letter”). The Debenture Trustee shall effectuate such release by issuing a no objection letter in response to the Release Request Letter and shall also, if requested by the Company execute all such documents as may be required for such release. The Release Request Letter shall be accompanied by a certificate from the independent chartered accountant of the Company confirming to the Debenture Trustee in writing the amount of Released Assets and that the Asset Cover Ratio shall be maintained at or above the Minimum Security Cover post such excess release. The Debenture Trustee shall not be required to provide any notice to or obtain any consent of the Debenture Holders for issuing the no-objection letter and releasing the excess Hypothecated Assets under the terms hereof. The Debenture Trustee shall not be liable for any consequences for having acted in terms hereof and having made such release. The Released Assets shall not be construed to be a part of the Security and the Company shall be entitled to deal with the Released Assets in the manner it deems fit.

Transaction Documents Shelf Disclosure Document, Supplemental Disclosure Document, Debenture Trust Deed, Debenture Trustee Agreement, Deed of Hypothecation and any other document that may be designated by the Debenture Trustee as a Transaction Document

Delay in execution of the Debenture Trust Deed/ Security Documents

In the event of delay in execution of the Debenture Trust Deed and/or the Deed of Hypothecation beyond a period of 3 month from the Deemed Date of Allotment, the Company will ensure refund of the Application Money at an agreed rate of interest or will pay penal interest of 2% over the coupon rate/ yield from the date being the 31st date from the Deemed Date of Allotment till the execution of Debenture Trust Deed and Deed of Hypothecation are complied with at the option of the investor

Conditions Precedent to Disbursement

As per the relevant Debenture Trust Deed

Condition Subsequent to Disbursement


Events of Default As per the relevant Debenture Trust Deed Provisions related to Cross Default Clause


Covenants As per the relevant Debenture Trust Deed Role and Responsibilities of Debenture Trustee

To oversee and monitor the overall transaction for and on behalf of the Debenture Holders as customary for transaction of a similar nature and size and as executed under the appropriate Transaction Documents.

Governing Law and Jurisdiction

The Debentures are governed by and will be construed in accordance with the Indian Law and the parties submit to the exclusive jurisdiction of the courts and tribunals in Ahmedabad or Mumbai.

FII Investment The guideline for FII Investment in Debt Securities issued by RBI on March 1, 2012 vide its circular no.89 will be complied with for listing of the above Debentures.

Manner of bidding in the issue

Open bidding on the BSE Electronic Bidding platform.

Manner of settlement Through Indian Clearing Corporation Limited Settlement cycle Settlement shall be on T+1 day

5

Manner of allotment Series 2020 / 156 - Series 2020 A/1(FX)/150_INE756I07DA3 (Further Issuance II) - Uniform (Fixed Rate bidding)

Note: The Company reserves the right to amend the Tranche timetable including the Date of Allotment Series 2020 / 156 - Series 2020 A/1(FX)/150_INE756I07DA3 (Further Issuance II)

Arranger HDFC Bank Limited Tranche Size of the Further Issuance

Rs. 350,00,00,000/- (Rupees Three Hundred Fifty Crore Only) with Green Shoe Option of Rs. 150,00,00,000/- (Rupees One Hundred Fifty Crore Only) to retain total subscription upto Rs. 500,00,00,000/- (Rupees Five Hundred Crore only)

Issue Price (Original Issuance) Rs.10,00,000/- per debenture Issue Price (Further Issuance) Clean Price : Rs. 10,32,561/-per debenture and accrued interest of

Rs.26,612/-per debenture till pay in date (Accrued interest calculated for 137 days i.e. April 17, 2020 to August 31, 2020 includes interest for August 31, 2020)

Pay-in Amount (Further Issuance) Rs. 10,59,173/- per debenture Premium/Discount at which security is issued

Premium of Rs. 32,561/-per debenture Effective Yield- 5.70% p.a.

Interest/Coupon Rate 7.09% p.a. Coupon Type Annual Coupon Coupon Reset Process N.A. Redemption Premium / Discount N.A. Redemption Amount Rs. 10,00,000/- per Debenture Interest on Application Money 7.09% p.a.

Also refer Shelf Disclosure Document. Tenor (Original Tenor) 1155 days from the deemed date of allotment

i.e. Monday, February 17, 2020 Tenor (Further Issuance) (Residual Maturity)

958 days from the deemed date of allotment i.e. Tuesday, September 01, 2020

Issue Timing (Further Issuance) Tranche Opening Date : Monday, August 31, 2020 Tranche Closing Date : Monday, August 31, 2020 Pay-in Date : Tuesday, September 01, 2020 Deemed Date of Allotment : Tuesday, September 01, 2020

Redemption Date Monday, April 17, 2023 Disclosure of cash flows (pursuant to SEBI Circular no. CIR/IMD/DF/18/2013 dated 29th October 2013) Company HDB Financial Services Limited Face Value (per security) Rs.10,00,000/- per instrument Date of Allotment Tuesday, September 01, 2020 Redemption Monday, April 17, 2023 Coupon Rate 7.09% p.a.

Frequency of the interest payment with specified dates

Payable Annually, Saturday, April 17, 2021, Sunday, April 17, 2022 And on maturity i.e. Monday, April 17, 2023

Day Count Convention Actual/Actual

6

Cash Flows Date Day

No. Of Days in Coupon

Period

Amount in Rupees per debenture of Rs.10 lakh

Principal inflow including accrued interest (Further Issuance)

September 01, 2020 Tuesday - 10,59,173

1st coupon April 17, 2021 Saturday 365 70,900

2nd coupon April 17, 2022 Sunday 365 70,900

3rd coupon April 17, 2023 Monday 365 70,900

Principal Repayment April 17, 2023 Monday N.A. 10,00,000 MODE OF PAYMENT All transfers/RTGS must be made payable to “ICCL”. Details for RTGS payments are mentioned herein below:

Name of Bank HDFC BANK

IFSC Code HDFC0000060

Account number ICCLEB

Name of beneficiary INDIAN CLEARING CORPORATION LIMITED

Name of Bank ICICI Bank Ltd.

IFSC Code ICIC0000106


Name of beneficiary INDIAN CLEARING CORPORATION LTD

Name of Bank YES BANK

IFSC Code YESB0CMSNOC


Name of beneficiary INDIAN CLEARING CORPORATION LTD

For HDB Financial Services Limited SD/- Authorised Signatory Name: Haren Parekh Title : Chief Financial Officer Date : August 27, 2020

HDB Financial Services Limited Ground Floor, Zenith House, Keshavrao Khadye Marg, Opp. Race Course, Mahalaxmi, Mumbai - 400034. Tel : 022 - 39586300 Fax : 022 - 39586666 Web : www.hdbfs.com CIN : U65993GJ2007PLC051028 Email ID : [email protected]

Registered Office : Radhika, 2nd Floor, Law Garden Road, Navrangpura, Ahmedabad - 380 009.

HDB/TROPS/2020/229 May 13, 2020 To, The Department of Corporate Affairs BSE Limited P J Towers, Dalal Street Mumbai- 400 001 K.A.: Ms. Netra Sahani Subject: Submission of Audited Financial Results for the half year and year ended March 31, 2020 Dear Sir / Madam, Pursuant to the provisions of Regulation 52 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, enclosed please find the audited financial results for the half year and year ended March 31, 2020 as reviewed by the Audit Committee and approved by the Board of Directors of the Company at its meeting held on May 13, 2020. Further, please note that the Statutory Auditor of the Company, M/s. B.S.R. & Co. LLP has submitted Audit Report for the year ended March 31, 2020 with unmodified opinion. The disclosures in compliance with Regulations 52(4) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 for the year ended March 31, 2020 is enclosed herewith.

Kindly take the same on records for the information of the Non-Convertible Debenture holders, Market Linked Debentures holders, Perpetual Debt Instruments holders and Subordinated Bond holders of the Company. Thanking you, For HDB Financial Services Limited Dipti Khandelwal Company Secretary Encl: a/a

DIPTI KHANDELWAL

Digitally signed by DIPTI KHANDELWAL Date: 2020.05.14 00:19:17 +05'30'

HDB Financial Services Limited

a) Credit ratingThe Credit Analysis & Research Limited (CARE) and CRISIL Limited (CRISIL) have assigned following ratings to the Company:Facility CARE CRISILBank facilities AAA/Stable AAA/StableNon-convertible debentures AAA/Stable AAA/StableShort term debt program A1+ A1+Subordinated bond issue AAA/Stable AAA/StablePerpetual bond issue AAA/Stable AAA/StableMarket Linked Debentures PP-MLD AAA/Stable PP-MLD AAAr/Stable

b) Asset cover availableNot applicable

c) Debt-Equity ratio*

d)

e)

f) Debt service coverage ratioNot applicable

g) Interest service coverage ratioNot applicable

h) Outstanding redeemable preference shares (quantity and value)Not applicable

i) Capital redemption reserve / Debenture redemption reserve

j) Net worth**Rs. 76,026 millions

k) Net profit after taxRs. 10,048 millions

l) Earnings per sharea. Basic - Rs. 12.78b. Diluted - Rs. 12.77

* Debt equity ratio is (Debt securities + Borrowings + Subordinated liabilities) / Networth** Networth is equal to paid up equity share capital plus other equity less deferred tax

The due dates of interest and principal payment on non-convertible debentures during next six months along with the amount areprovided at Appendix B. The Company has not issued any non-convertible redeemable preference shares.

Debenture redemption reserve is not required in respect of privately placed debentures in terms of Rule 18(7)(b)(ii) of Companies(Share Capital and Debenture) Rules, 2014.

Disclosures in compliance with Regulations 52(4) of the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations, 2015 for the year ended 31 March 2020

The debt-equity ratio of the Company as per the reviewed standalone financial results by statutory auditors for the year ended 31March 2020 is 6.55

Previous due date for the payment of interest/dividend for non-convertible redeemable preference shares / repayment ofprincipal of non-convertible preference shares / non-convertible debt securities and whether the same has been paid or not.The Company has paid interest and principal on non-convertible debentures on due dates and the said details of previous sixmonths are provided at Appendix A. The Company has not issued any non-convertible redeemable preference shares.

Next due date for the payment of interest/dividend of non-convertible preference shares / principal along with the amount ofinterest / dividend of non-convertible preference shares payable and the redemption amount.


Appendix A

Interest Principle1 NCD Series 2016 A/1/93 INE756I07AL6 25-Oct-19 25-Oct-19 Paid2 NCD Series 2017 A/1/115 INE756I07BS9 31-Oct-19 31-Oct-19 Paid3 NCD Series 2017 A/1/114 INE756I07BR1 18-Nov-19 - Paid4 NCD Series 2019 A/1(FX)/142 INE756I07CV1 18-Nov-19 - Paid5 NCD Series 2016 A/1/97 INE756I07AQ5 2-Dec-19 - Paid6 NCD Series 2017 A/1/116 INE756I07BT7 6-Dec-19 - Paid7 NCD Series 2019 / 131 - Series 2017 A/1/116_INE756I07BT7 (Further Issuance I) INE756I07BT7 6-Dec-19 - Paid8 NCD Series 2016 A/1/94_Option 2 INE756I07AN2 6-Dec-19 6-Dec-19 Paid9 NCD Series 2018 A/1(FX)/127_Option 2 INE756I07CH0 13-Dec-19 13-Dec-19 Paid10 NCD Series 2016 A/0/89_Option 2 INE756I07AF8 16-Dec-19 16-Dec-19 Paid11 NCD Series 2019 / 146 - Series 2019 A/1(FX)/146 INE756I07CX7 26-Dec-19 - Paid12 NCD Series 2018 A/0/120_Option 2 INE756I07BZ4 27-Dec-19 27-Dec-19 Paid13 NCD Series 2016 A/1/97 INE756I07AQ5 3-Jan-20 3-Jan-20 Paid14 NCD Series 2018 A/1/117 INE756I07BU5 15-Jan-20 - Paid15 NCD Series 2016 A/1/99_Option 1 INE756I07AS1 17-Jan-20 - Paid16 NCD Series 2016 A/1/99_Option 3 INE756I07AU7 17-Jan-20 - Paid17 NCD Series 2016 A/1/99_Option 1 INE756I07AS1 27-Jan-20 27-Jan-20 Paid18 NCD Series 2017 A/1/101_Option 3 INE756I07AZ6 31-Jan-20 - Paid19 NCD Series 2020 / 148 - Series 2020 A/1(FX)/148 INE756I07CY5 17-Feb-20 - Paid20 NCD Series 2016 A/1/99_Option 3 INE756I07AU7 17-Feb-20 17-Feb-20 Paid21 NCD Series 2019 / 132- Series 2019 A/1(FX)/132 INE756I07CM0 24-Feb-20 - Paid22 NCD Series 2019 / 133- Series 2019 A/1(FX)/132_INE756I07CM0 (Further Issuance I) INE756I07CM0 24-Feb-20 - Paid23 NCD Series 2017 A/1/101_Option 3 INE756I07AZ6 24-Feb-20 24-Feb-20 Paid24 NCD Series 2017 A/1/102 Option 2 INE756I07BB5 24-Feb-20 24-Feb-20 Paid25 NCD Series 2018 A/1(FX)/127_Option 1 INE756I07CG2 24-Feb-20 24-Feb-20 Paid26 NCD Series 2016 A/1/88 INE756I07AD3 2-Mar-20 2-Mar-20 Paid27 NCD Series 2019 / 133-Series 2019 A/1(FX)/133 INE756I07CO6 13-Mar-20 - Paid28 NCD Series 2016 A/1/82_Option 1 INE756I07944 13-Mar-20 13-Mar-20 Paid29 NCD Series 2017 A/0/100_Option 2 INE756I07AW3 20-Mar-20 20-Mar-20 Paid30 NCD Series 2018 A/1(FX)/125 INE756I07CE7 26-Mar-20 - Paid

Details of payment of interest/principal of the secured listed non-convertible debentures in accordance with Regulation 52(4)(d) of the Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations, 2015

Sr. no. Non Convertible Debenture Series

ISIN no. Previous due date Payment status


Appendix B

(Rupees in million)

Due date Interest amount Principal amount1 NCD Series 150 INE756I07DA3 17-Apr-20 44.17 - 2 NCD Series 151 A INE756I07DA3 17-Apr-20 5.81 - 3 NCD Series 103 INE756I07BC3 27-Apr-20 105.05 - 4 NCD Series 131 INE756I07CK4 4-May-20 341.70 - 5 NCD Series 104 INE756I07BE9 11-May-20 78.30 - 6 NCD Series 135 B INE756I07CQ1 17-May-20 317.92 - 7 NCD Series 136 INE756I07CQ1 17-May-20 261.30 - 8 NCD Series 105 INE756I07BG4 18-May-20 77.57 - 9 NCD Series 103 INE756I07BC3 26-May-20 8.32 1,350.00 10 NCD Series 106 INE756I07BH2 29-May-20 234.00 - 11 NCD Series 151 B INE756I07DB1 3-Jun-20 88.95 - 12 NCD Series 104 INE756I07BE9 11-Jun-20 6.65 1,000.00 13 NCD Series 107 INE756I07BJ8 12-Jun-20 153.58 2,000.00 14 NCD Series 126 INE756I07CF4 15-Jun-20 362.15 3,850.00 15 NCD Series 134 INE756I07CP3 17-Jun-20 192.26 - 16 NCD Series 137 INE756I07CP3 17-Jun-20 260.62 - 17 NCD Series 140 B INE756I07CP3 17-Jun-20 234.99 - 18 NCD Series 105 INE756I07BG4 18-Jun-20 6.62 1,000.00 19 NCD Series 108 INE756I07BK6 19-Jun-20 283.13 3,750.00 20 NCD Series 129 INE756I07BK6 19-Jun-20 215.18 2,850.00 21 NCD Series 120 INE756I07BY7 27-Jun-20 189.42 - 22 NCD Series 140 A INE756I07BY7 27-Jun-20 286.33 - 23 NCD Series 149 A INE756I07BY7 27-Jun-20 220.25 - 24 NCD Series 106 INE756I07BH2 29-Jun-20 19.87 3,000.00 25 NCD Series 104 INE756I07BF6 8-Jul-20 336.43 1,250.00 26 NCD Series 129 INE756I07BF6 8-Jul-20 336.43 1,250.00 27 NCD Series 130 INE756I07BF6 8-Jul-20 538.29 2,000.00 28 NCD Series 121 INE756I07CA5 11-Jul-20 489.90 - 29 NCD Series 109 INE756I07BL4 17-Jul-20 374.97 - 30 NCD Series 110 INE756I07BM2 27-Jul-20 297.20 - 31 NCD Series 139 INE756I07CT5 7-Aug-20 241.50 - 32 NCD Series 130 INE756I07CJ6 10-Aug-20 215.71 2,450.00 33 NCD Series 122 INE756I07CB3 14-Aug-20 311.49 3,600.00 34 NCD Series 109 INE756I07BL4 17-Aug-20 31.93 5,000.00 35 NCD Series 138 INE756I07CS7 25-Aug-20 93.60 - 36 NCD Series 143 INE756I07CS7 25-Aug-20 160.00 - 37 NCD Series 144 INE756I07CS7 25-Aug-20 176.00 - 38 NCD Series 141 INE756I07CU3 28-Aug-20 225.40 - 39 NCD Series 151 B INE756I07DB1 3-Sep-20 88.95 - 40 NCD Series 112 INE756I07BP5 8-Sep-20 291.20 4,000.00 41 NCD Series 123 INE756I07CC1 9-Sep-20 486.96 - 42 NCD Series 110 INE756I07BM2 28-Sep-20 51.30 4,000.00

Details of payment of interest/principal of the secured listed non-convertible debentures in accordance with Regulation 52(4)(e) of the Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations, 2015

Sr. no. Non Convertible Debenture Series

ISIN no. Next due date along with amount

Q HDB FINANCIAL I SERVICES

HDB/SLC/2019/775

April 18, 2019

HDB Financial Services Limited Ground Floor, Zenith House, Keshavrao Khadye Marg, Opp. Race Course, Mahalaxmi, Mumbai -400034. Tel :022-39586300 Fax:022-39586556 Web : www.hdbfs.com . CIN : U65993GJ2007PLCO51028 Email ID: [email protected]

To, The Department of Corporate Affairs BSE Limited P J Towers, Dalal Street Munibai- 400 001

K.A.: Ms. Netra Sahani

Dear Sir / Madam,

Pursuant to the provisions of Regulation 52 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, enclosed please find the audited financial results for the year ended March 31, 2019 as reviewed by the Audit Committee and approved by the Board of Directors of the Company at its meeting held on April 18, 2019.

Further, please note that the Statutory Auditor of the Company, MM. B.S.R. & Co. LLP has submitted Audit Report for the year ended March 31, 2019 with unmodified opinion.

Kindly take the same on records for the information of the Non-Conyertible Debenture holders, Market Linked Debentures holders, Perpetual Debt Instruments holders dnd Subordinated Bond holders of the Company.

Thanking you,

For HDB Financial Services Limited

Haren Parelch Chief Financial Officer

End: ala

Registered Office: Radhika, 2nd Floor, Law Garden Road, Navranpura, Ahmedabad -380009.

HDB FINANCIAL SERVICES. LIMITED Regd. Office: Radhika, 2nd Floor, Law Garden Road, Navrangpura, Ahmedabad- 380 009

CIN: U65993G32007PLCO51028 www.hdbfs.com Tel: +912239586368 I. Fax: +912239586666 I Email: [email protected]

Standalone Statement of Profit and Loss

for year ended 31 March 2019

(Rupees in lakhs) Particulars Half Year Ended Half Year Ended Year ended Year ended

31/03/2019 3]/03/2018 31103/2019 31/03/2018 Unaudited Unaudited Audited Audited

I Revenue from operations 458,383 '~.. 368,709 865,516 702,496 II Other income 6,276 123 6,965 216

III Total Income (I+II) 464,659 368,832 872,481 702,712

IV Expenses ' Employee benefits expense 131,376 112,522 255,174 222,829 Finance costs 183,168 133,787 333,333 244,907 Depreciation and amortization 3,666 -', 2,313 6,192 4,531 Impairment on financial instruments 31,032 ', 19,271 63,694 52,478 Other expenses 24,215 - '~, 19,219 41,682 34,356

Total expenses 373,458 287,112 700,076 559,100

V Profit before tax (III-IV) 91,201 81,720 172,406 143,611

VI Tax expense:

a. Current tax 37,056 32,160 65,816 55,834 b. Deferred tax 8,619 3,465 8,734 5,525

28,437 28,695 57,081 50,309 Total tax expense

VII Net Profit for the period (V-VI) 62,764 53,025 115,324 93,302

VIII Other Comprehensive Income (net of tax) -,. - (343) (364)

IX Total Comprehensive Income (after tax) (VIl-VIII) 62,764 53,025 114,981 92,938

X Capital Adequacy Ratio (%) 17.94 17.62 17.94 17.62 XI NPA Ratio

a. Gross NPA (%) 1.78 ', 1.58 1.78 1.58 b. Net NPA (%) 1.12 0.% 1.12 0.96

XII Earnings per equity share

a. Basic (in Rupees) - 7.99 6.77 14.71 11.94 b. Diluted (in Rupees) 7.99 6.77 14.69 11.92 Face Value per share in Rupees) •10 10 10 10

HDB FINANCIAL SERVICES LIMITED Regd. Office: Radhika, 2nd Floor, Law Garden Road, Navrangpura, Ahmedabad- 380 009

CIN: U65993CJ2007PLCO5102& I www.hdbfs.com Tel: +912239586368 I Fax: +912239586666 Email: [email protected]

Standalone Balance Sheet as at3l March2019

(Rupees in lakhs Particulars As at - As at

31103/2019 31103/2018 ______________________________________________________________________ Audited Audited

ASSETS

1 Financial Assets

(a) Cash and cash equivalents 33,472 6,161 (b) Bank balances other than cash and cash equivalents 15,379 7,579 (c) Trade receivables 11,952 12,644 (d) Loans 5,470,941 4,426,831 (e) Investments 56,836 40,150 (f) Other financial assets 10,979 6,471

5,599,559 4,499,836

2 Non-financial Assets (a) Current tax assets (Net) 3,674 1,537 (I,) Deferred tax assets (Net) 38,496 29,577 (a) Property, plant and equipment 11,389 12,972 (d) Capital work-in-progress - -

(e) Other intangible assets. 914 730 54,473 44,816

TOTAL ASSETS 5,654,032 4,544,652

LIABILITIES AND EQUITY

3 Financial Liabilities (a) Trade payables

(i) Total outstanding dues of micro, small and medium enterprises - -

(ii) Total outstandingdues of creditors other than (i) above 39,491 27,950 (b) Debt securities 2,411,967 2,041,036 (c) Borrowings (other than debt securities) 1,809,565 1,335,035 (d) Subordinated liabilities 288,978 199,250 (e) Other financial liabilities 262,380 227,928

4,812,382 3,831,199

4 Non-Financial Liabilities (a) Current tax liabilities (net) 5,612 3,835 (b) Provisions 110,154 96,405 (c) Other non-financial liabilities 8,036 9,178

123,802 109,418

5 Equity (a) Equity share capital 78,570 - 78,294 (b) Other equity 639,278 525,741

717,848 604,035

TOTAL EQUITY AND LIABILITIES 5,654,032 4,544,652

Notes:

The Company is a Non-Banking Finance Company registered with the Reserve Bailc of India

The financial results for year ended 31 March 2019 have been reviewed by the Audit Committee and approved by the Board of Directors at its meeting held on 18 April 2019.

The financial results of the Company have been prepared in accordance with Indan Accounting Standards ('md-AS') notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended by the Coippanies (Indian Accounting Standards) Rules, 2016. The Company has adopted Md-AS from 1 April 2018 with effective transition date of 1 April 2017 and accordingly, these financial results together with the results for the comparative reporting period have bee4 prepared in accordance with the recognition and measurement principles as laid down in Ind-AS, prescribed under Section 133 of the Companies Act, 2013 ('the Act') read with relevant rules issued thereunder and the other accounting principles generally accepted in India.

The transition to Ind-AS has been carried out from the erstwhile Accounting Standards notified under the Act read with Rule 7 of Companies (Accounts Rules 2014 (as amended), guidelines issued by the Reserv Bank of India QR8I') and other generally accepted accounting principles in India (collectively referred to as 'the Previous GAAP' :). Accordingly, the impact of transition has been recorded in the opening reserves as at 1 April 2017 and the corresponding adjuStments pertaining to comparative previous year as presented in these financial results have been restated / reclassified in order to conform to current period presentation.

These financial results have been drawn up on the basis of lnd-AS that are applicable to the Company as at 31 March 2019 based on the Press Release issued by the Ministry of Corporate Affairs on 18 January 016. Any application guidance / clarifications / directions issued by RB! or other regulators are implemented as and when they arO issued / applicable.

As required by Paragraph 32 of Ind- AS 101, the reconciliation of Net Profit, as previously reported and as restated under md-AS, for year ended 31 March 2018 is as under:

(Rupees in lakhsl Particulars Year ended

3V03/2018 Audited

Profit before tax under previous Indian GAAP 146,452 a) Adoption of Effective Interest Rate (fIR) for amortisation of upfront income (2,450) b) Fair value of stock options as per lnd AS 102 (1,453) c) Expected Credit Loss (ECL) as per Ind AS 109 - 64 d) Cain on fair value of investments 44 e) Impact of recognition of securtised portfolio (240) I) Impact of income accrued on Stage 3 assets 491 g) Deferment of borrowing costs 144 h) Remeasuremerit gain/loss on defined benefit obligation plan I 559 Profit before tax under !nd-AS 143,611

5 Information as required by Regulation 52(4) of the Securities and Exchange Bçard of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 isas per 'Annexure 1' attached.

6 The Secured listed Non-Convertible Debentures of the Company are secured by: first pan passu mortgage of immovable property situated at "Heera Panna Commercial Complex", 3rd Floor, Dr. Yagnik Road, Raikot and first and exclusive charge on receivables of the Company by way of hypothecation to the extent of minimum 1.1 times of the amount outstanding.

7 Reserves include Statutory Reserve as per Section 451C of Reserve Bank of India Act, 1934, balance in securities premium and retained earnin

By Orr ae

BOard For I/Dr I ncial Services Limited

05291597

Date : 18 April 2019 Place: Mumbai

a) Credit rating

The Credit Analysis & Research Limited (CARE and CRISIL Limited (CflSIL have Sinned following ratings to the Company: Facility CARE CRISIL Bank facilities AAA/Stable AAA/Stablé Non-convertible debentures AAA/Stable AAA/Stablé Short term debt program A1+ A1+ Subordinated bond issue AAA/Stable AAA/Stable Perpetual bond issue AAA/Stable AAA/Stable Market Linked Debentures P1'-MLD AAA/ Stable PF-MLD AAAr/Stable


Armexurel Additional information

b) Asset cover available

Not applicable

c) Debt-Equity ratio*

The debt-equity ratio of the Company as per the reviewed financial results by statutory auditors for year ended 31 March 2019 is 6.64

d) Previous due date for the payment of interesVdividend for non-convertible redeemble preference shares / repayment of principal of non-convertible preference shares/ non-convertible debt securities and whether the same has been paid or not.

All previous dues with respect to debentures were paid on due date (Refer Appendix A). The Company has not issued any non-convertible redeemable preference shares.

e) Next due date for the payment of interesVdividend of non-convertible preference shares / principal along with the amount Of interest/ dividend of non-convertible preference shares payable and the redemption amount.

The Company has not issued any non-convertible redeemable preference shares.

Debt service coverage ratio - Not applicable

g) Interest service coverage ratio

Not applicable

h) Outstanding redeemable preference shares (quantity and value)

Not applicable

i) Capital redemption reserve/ Debenture redemption reserve

Debenture redemption reserve is not required in respect of privately placed debenturs in terms of Rule 18(7)(b)(ii) of Companies (Share Capital and Debenture) Rules, 2014.

j) Net worth**

Rs.679,352 lakhs

k) Net profit after tax Rs. 115,324 lakhs

I) Earnings per share

a. Basic - Rs.14.71 b. Diluted - Rs.14.69

* Debt equity ratio is Outstanding Debt / Networth ** Networth is equal to paid up equity share capital plus reserves less rred tax


Segment wise Revenue, Results and Capital Employed:

for theyear ended 31 March 2019

(Rn. in takhsi

5.11. Particulars 31 March 2019

1. Segment Revenue

Lending business 707669.53

BPO Services 164,811 .88

Total Segment Revenue 872,481.41

Unauocated

Revenue from Operations 872,481.41

ii. Segment Results

Lending business 505,395.13

BPO Services 7,321.00

Total profit beforetax 512,716.13

Less: Finance Cost 333,333.36

Less: Other Unaltocable Expenditure net off UnallocabLe income 6,976.44

Profit before tax 172,406.34

capital Employed

iii. Segment Assets

Lending business 5,600,211.64

BPO ServIces 11,042.01

Total Segment Assets 5,611,253.66

UnaLlocated Assets 42,777.19

Net Segment Assets 5,654,031.04

iv. Segment Liabilities

Lending busThess 4,905,056.93

BPO Services 18,417.00

Total Segment Liabilities 4,923,473.93

UnaLlocated LiabIlities 12,710.17 Net Segment Liabilities 4,936,184.10

717,846.95 Segment Assets - Segment Liabilities

a) Chief Operating Decision Maker

• Operating segments are reported in a manner consistent with the Internal reporting to the Chief Operating Decision Maker (CODM). The

Managing Director ('MD') of the Company has been identified as the CODM as defined by 1 nd 43 lOS Operating Segments, who assesses

• -the financiaL performance and position of the Company and makes strategic decisions.

b) Operating Segment

- The Company fs arganised primarily into two operating segments, i.e. Lending business and BPO services. Lending business includes

providing finance to retail customers for a variety of purposes like purchase of commercial equipment and commercial vehicles, personal

- purposes, enterprise loans, etc. Revenue from tending business IncLudes (i) interest inco(ne and processing fees net of Loan origination

costs, (ii) coLlection-reLated charges like cheque bouncing charges, late payment charges and foreclosure charges, and (iii) Insurance

commission. BPO services comprises of sales support services, back office, operations, processing support, running collection call centres

and collecting overdue amounts from borrowers.

- c) Segment Revenue and Expense

Revenue and expenses have been identified to a segment on the basis of relationship to operating activities of the segment. Revenue• - and expenses which relate to enterprise as a whole and are not allocable to a segmention a reasonable basis have been disclosed as

d) Segment Assets and Liabilities

Segfrsent assets and segment liabilities represent assets and liabilities In respective segMents. Tax related assets and other assets and

liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as 'Unallocated'. -

.e) Accounting Policies -

The acco 'ng policies consistently used in the preparation of the financial statements are also applied to items of revenue and expendi re A indMdual segments. -

A -

- Por H B - Services Limited

a C.

iimging'Bi or & chief Executive Offic

tN: 05291597

Dale:. 18 April 2019

Place : Mumbat -- - - - -

Appendix A - StatEment of interest and principle on non convertible debentures falling due and paid during 1W 2018-19

Non Convertible Debenture Series Interest Redemption Date

Principle Redemp6on Date

Total Amount ils. in lakhs

Payment Status

NCD Series 28 8-Oct-2018 8-Oct-2018 11,363 Paid

MCD Series 33 28-Dec-2018 28-Dec--2018 6,550 Paid

NCD Series 34 28-Dec-2018 28-Dec-2018 10,625 Paid

MCD Series 37 15-Peb-2019 15-Feb-2019 8,796 Paid

MCD Series 38 18-Jun-2018 18-Jun-2019 946 Paid NCD Series 41 31-Jul-2018 31-JuL2019 1434 Paid

MCD Series 54 16-May-2018 16-May-2018 7,615 Paid

MCD Series 54 l6-May2018 16-May-2018 25,000 Paid

MCD Series 55 20-Jun-2018 20-Jun-2018 2,995 Paid MCD Series 55 20-Jun-2018 20-Jun-2018 10,000 Paid

NCD Series 56 2-May-2018 8-Jün-2018 - 959 Paid

MCD Series 56 8-}un-2018 8-Jun-2018 102 Paid

NCD Series 56 8-Jun-2018 8-Jur'-2018 - 11,000 Paid

NCD Series 57 28-May-2018 27-Jul-2018 994 Paid

MCD Series 57 27-Jul-2018 27-Jul-2018 169 Paid

NCD Series 57 27-Jul-2018 27-Jul-2018 11,300 Paid

MCD Series 58 2-Jun-2018 2-Jun-2018 877 Paid

NCD Series 58 . 2-Juu-2018 2-Jun-2018 * 10,000 Paid

NCD Series 61 27-Jul-2018 27-Jul-2018 969 Paid

NCD Series 61 27-Jul.2018 27-Jul-2018 11,000 Paid

MCD Series 62 A 30-Jul-2018 30-Jul-2018 1,443 Paid

MCD Series 62 A 30-JuI-2018 30-JuL2018 5,000 Paid

MCD Series 62 B 20-Jul-2018 20-JuL2018 1,199 Paid

NCD Series 62 B 20-Jul-2018 20-Jul-2018 4,200 Paid

NCD Series 63 20-Aug-2018 20-Oct-2018 - 1,737 Paid

MCD Series 63 20-Oct-2018 20-Oct-2018 - 20,291 Paid

MCD Series 65 25-Sep-2018 25-Sep-2018 - 1,673 Paid

MCD Series 65 25-Sep-2018 25-Sep-20l8 20,000 Paid

MCD Series 66 22-Oct-2018 22-Oct-2018 - 21,707 Paid

MCD Series 67 29-Oct-2018 29-Oct-2018 32,543 Paid

NCD Series 68 A 27-Dec-2018 27-Dec-2018 15,301 Paid


MCD Series 70 A 17-Dec-2018 17-Dec-2018 25,629 Paid

MCb Series 71 23-Oct-2018 23-Oct.2018 . 3,919 Paid

MCD Series 71 B 14-Mar-2019 14-Mar-2019 11,229 Paid

NCD Series 71 C 26-Dec-2018 26-Dec-2018 . 10,317 Paid

NCD Series 72 A . 11-Jan-2019 11-Jan-2019 863 Paid

MCD Series 72 A 12-Feb-2019 12-Feb2019 10,076 Paid

MCD Series 73 A 1-Mar-2019 1-Mar-2019 23,723 Paid

NCD Series 73 B 22-Jan-2019 22-Jan.2019 6,258 Paid

MCD Series 73 C. 1-Mar.2019 l7Mar-2019 537 Paid

MCD Series 73 C 26-Mar-2019 26-Mar.2019 . 6,137 Paid

MCD Series 74 4.JunL2th8 2-Mar-2019 1,061 Paid

MCD Series 74 3-Sep-2018 2-Mar2019 1,087 Paid


MCD Series 74 . 2-Mar-2019 i,.,

2-Mar.2019 51,063 Paid

Non Convertible Debenture Series Interest Redemption Date

Principle Redemption .• Date

Total Amount Rs. in lakhs

Payment Status

NCD Series 75 28-Feb-2019 28-Feb-2019 - 19,058 Paid NCD Series 76 A• 26-Mar-2019 26-Mar-2019 17,196 Paid NCD Series 76 B 12-Mar-2019 12-Mar-2019 11,967 Paid MCD Series 77 14-May-2018 13-May-2019 2,791 Paid MCD Series 78 2-May-2018 12-Jun-2019 1,495 Paid NCD Series 79 18-Jun-2018 17-Jun-2019 1,738 Paid NCD Series 80 2-Jun-2018 3-Jul-2019 - 1,127 Paid NCD Series 82 A. 14-Jun-2018 13-Mar-2020 - 866 Paid NW Series 82 B . 14-Jun-2018 13-Sep-2019 1,731 Paid NCD Series 83 9-Jul-2018 8-Mar-2019 856 . Paid NCD Series 83 8-Mar-2019 8-Mar-2019 10,569 Paid NCD Series 84 . 27-Jul-2018 27-Ju1-2018 2,931 Paid NCD Series 84 27-jul--2018 27-Jul-2018 17,500 Paid NCD Series 85 3-Aug-2018 3-Aug-2018 1,654 Paid MCD Series 85 3-Aug-2018 3-Aug-2018 20,000 Paid NCD Series 8 10-Aug-2018 9-Aug-2019 1,660 Paid

NCD Series 87 23-Aug-2018 23-Aug-2018 3,328 Paid MCD Series 87 23-Aug-2018 23-Aug-018 20,000 Paid NCD Series 88 1-Sep-2018 2-Mar-2020 2,106 Paid NCD Series 88 1-Mar-2019 2-Mar-2020 1,027 Paid

MCD Series 89 15-Sep-2018 17-Sep-2019 811 Paid NCD Series 89 C 15-Nov-2018 ... 15-NoV-2018 22,970 Paid NCD Series 90 24-Sep-2018 24-Sep-2018 2,114 Paid

NCD Series 90 24-Sep-20 18 . 24-Sep-2018 27000 Paid

NCD Series 91 26-Sep-2018 27-Sep2019 790 Paid

NCD Series 92 . 19-Oct-2018 14-Dec-2018 1,330 Paid

NW Series 92 14-Dec-2018 14-Dec-2018 17,705 Paid

NW series 93 29-Oct-2018 25-Oct-2019 1,056 Paid

NW Series 94 A . 7-Dec-2018 7-Dec-2018 21,582 Paid

NCD Series 94 B 7-Dec-2018 6-Dec-2019 2,583 Paid

NCD Series 95 . 22-Nov-2018 22-Nov-2018 26,895 Paid

NCD Series 96 29-Nov-2018 29-Nov-2018 21,482 Paid

NW Series 97 30-Nov-2018 3-Jan-2020 1,608 Paid


NCD Series 99 A 17-Jan-2019 27-Jan-2020 845 Paid

NCD Series 99 B 17-Jan-2019 17-Jan.2019 13,454 Paid

NCD Series 99 C 17-Jart-2019 17-Peb-2020 767 Paid NCD Series 100 A 25-Jan-2019 1-Mar2019 1,536 . Paid NCD Series 100 A 1-Mar-2019 1-Mar.2019 20,147 Paid MCD Series 101 31-Jul-2018. . . 31-Jul.2018 377 Paid NW Series 101 31-JuJ-2018 31-Jul-2018 10,000 Paid NCD Series 101 B 31-Jan-2019 20-Mar-2020 16,151 Paid

NCD Series 101 C 31-Jan-2019 24-Feb-2020 1,542 Paid

NCD Series 102 A 22-Feb.2019 22-Feb-2019 16,240 Paid

NCD Series 102 B . 22-Feb-2019 24-Feb-2020 2,033 Paid

MCD Series 103 . . 26-Apr-2018 26-May-2020 1,048 Paid

NCD Series 104 11-May-2018 11-Jun-2020 2,536 Paid

NW Series 105 18-May-20l8 18-Jun-2020 780 Paid

Non Convertible Deberture Series Interest Redemption Date

Principle Redemption Date

Total Amount Rs. in lakbs

Payment Status

NCD Series 106 29-May2018 29-Jun--2020 - 2,340 Paid NCD Series 107 13-Jun-2018 28-Jun-201 2,655 Paid NOD Series 108 19-Jun-2018 19-Jun-2020 - 2,831 Paid NCD Series 109 15-Jul-2018 17-Aug-2020 3,760 Paid NCD Series 110 27-JuI-2018 28-Sep-2020 2,972 Paid NCD Series 111 28-Aug-2018 28-Aug-2019 2,912 Paid NCD Series 111 B 31-Jan-2019 31-Jan-2019 - 13,931 Paid NCD Series 112 lU-Sep-2018 8-Sep-2O2O - 2,936 Paid NCD Series 114 19-Nov-2018 1S-Nov-2020 3,740 Paid NCD Series 115 31-Oct-2018 31-Oct-2019 i 1,484 Paid NCD Series 116 6-Dec-2018 7-Dec-2020 6,104 Paid NCD Series 117 15-Jan-2019 15-Apr-2021 1,151 Paid NCD Series 125 26-Mar-2019 25-Mar-2022 1,739 Paid NCD Series 127 A 22-Feb-2019 24-Feb-2020 1,166 Paid NCD Series 127 B 19-Dec-2018

A 13-Dec-2019 238 Paid

BS R & Co. LLP Chartered Accountants

5th Floor, Lodha Exodus, Apollo Mills Compound N. M. Joshi Marg, Mahalaxmi, Mumbal -400 011 India

Telephone +91 (22) 4345 5300 Fax +91 (22) 4345 5399

Independent Auditors' Report

To the Members of HDB Financial Services Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of HDB Financial Services Limited ("the Company"), which comprise the standalone balance sheet as at 31 March 2019, and the standalone statement of profit and loss (including other comprehensive income);! standalone statement of changes in equity and standalone statement of cash flows for the year :then ended, and notes to the standalone financial statements, including a summary of the significant accounting policies and other explanatory information.

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 Companies Act, 2013 ("Act") in the manner so required and give a true and fair view in oonformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2019, and profit and other comprehensive income, changes in equity and:its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 14300) of the Act. Our responsibilities under those SAs are further described in the Auditor's Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements, as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on thesç matters.

B S R & Co (a partnership firm with Registration No. BA612231 convened into B SR & Co. LIP a Limited Liability, Partnership with LIP Registration No. .AAB.alel} with effect from October14, 2013

Registered Office: 5th floor, Lodha Excelus Apollo Mills Compound N. M. Joehi Maw, Mahalexml Mumbal -400011. India

B S R & Co. LLP

Independent Auditors' Report (Continued)


Key Audit Matters (Continued)

Deserintion of Key Audit Matters:

Key audit matter How the matter was addressed in our audit Transition date accounting policies

Refer to the accounting policies in the Standalone Financial S/ajeinents: SignfIcant Accounting

Policies- "Basis of preparation" and "Note 2.20 to the Standalone Financial Statements: Transition date choices and application" Adoption of new accounting framework (md AS)

Effective I April 2018, the Company adopted the Indian Accounting Standards ('md AS") notified by the Ministry of Corporate Affairs with the transition date of! April 2017.

The following are the major impact areas for the Company upon transition:

- Classification and measurement of financial assets and financial liabilities

- Measurement of loan losses (expected credit losses)

- Business combinations - Accounting for securitization and

assignment - Accounting for loan fees and costs - Accounting for employee stock

options

The migration to the new accounting framework (md AS) is a complicated process involving multiple decision points upon transition. md AS 101, First Time Adoption prescribes choices and exemptions for first time application of md AS principles at the transition date.

We identified transition date accounting as a key audit matter because of significant degree of management judgment and application on the areas noted above.

Our key audit procedures included:

Design I controls

We have also confirmed the approvals of Audit Committee for the choices and exemptions made by the Company for compliance/acceptability under IND AS 101.

Substantive tests

• Evaluated management's transition date choices and exemptions for compliance/acceptability under md AS 101.

• Understood, the methodology implemented by management to give impact on the transition.

Assessed the accuracy of the computations.

B S R & Co. LLP




Description of Key Audit Matters: (Continued)

Key audit matter How the matter was addressed in our audit Impairment of loans and advances to customers

Charge: INR 641.73 Crores for year ended 31 March 2019 Provision: INR 828.24 Crores at 31 March 2019 Refer to the accounting policies in "Note 2.2(F) to the Staiidalone Financial Statements: impairment ", "Note 3(B) to the Standalone Financial Statements: Sign(ficant Acäounting Policies- use of estimates" and "Note 19 to the Standalone Financial Statements: Provisions" Subjective estimate Our audit procedures included:

Rec.ognition and measurement of Design I controls impairment of loans and advances involve significant management Evaluation of the appropriateness of the judgement. impairment principles based on the requirements

of md AS 109. With the applicability of md AS 109 credit loss assessment is now based on expected credit loss (ECL) model. The Assessing the design and implementatioi of key Company's impairment allowance is internal financial controls over loan impairment derived from estimates including the process used to calculate the impairment charge. historical default and loss ratios. Management exercises judgement in • We used our modelling specialist to test the model determining the quantum of loss based methodology and reasonableness of assumptions on a range of factors. used.

The most significant areas are: Testing of management review controls over measurement of; impairment allowances and

- Segmentation of loan book disclosures in financial statements. - Loan staging criteria - Calculation of probability of Substantive tests

default! Loss given default - Consideration of probability . We focus on appropriate application of accounting

weighted scenarios and forward principles, validating completeness and accuracy looking macro-economic factors of the data and reasonableness of assumptions

- Complexity of disclosures used in the model:

There is a large increase in the data • Test of details over of calculation of impairment inputs required by the ECL model. This allowance for assessing the completeness, increases the risk of completeness and accuracy and relevance of data. accuracy of the data that has been used to create assumptions in the model. In • Model calculations were tested through re- some cases, data is unavailable and performance where possible. reasonable alternatives have been applied to allow calculations to be The appropriateness of management's judgments performed. was also independently reconsidered in respect of

calculation methodologies, segmentation, economic factors, the period of historical loss rates used, loss emergence periods and the valuation of

_____________________________ recovery assets and collateral.

B SR & Co. LLP




Description of Key Audit Matters: (Continued)

Key audit matter How the matter was addressed in our audit Information technology __________________________________________________ IT systems and controls

The Company's key financial Our audit procedures to assess the IT system access accounting and reporting processes are management included the following: highly dependent on the automated controls in information systems, such General IT controls / user access management that there exists a risk that gaps in the IT control environment could result in We tested a sampl of key controls operating over the financial accounting and reporting the information technology in relation to financial records being materially misstated. The accounting and reporting systems, including system Company primarily uses three systems access and system change management, program for it overall financial reporting. development and computer operations.

We have focused on user access • We tested the design and operating effectiveness of management, change management, key controls over user access management which segregation of duties, system includes granting access right, new user creation, reconciliation controls and system removal of user rights and preventative controls application controls over key financial designed to enforce segregation of duties. accounting and reporting systems.

For a selected group of key controls over financial and reporting system, we independently performed procedures to determine that these controls remained unchanged during the year or were changed following the standard change management process.

• Evaluating the design, implementation and operating effectiveress of the significant accounts- related IT automated controls which are relevant to the accuracy of system calculation, and the consistency of data 'transmission.

• Other areas that were independently assessed included password policies system configurations, system interface controls, controls over changes to applications and databases and that business users, developers and production support did not have access to change applications, the operating system or databases in the jroduction environment.

B S H & Co. LLP



Information Other than the Standalone Financial Statements and Auditors' Report Thereon

The Company's Board of Directors are responsible for the other information. The other information comprises the Directors report to be included in the Company's anbual report, but does not include the financial statements and our auditors' report thereon. The other information is expected to be made available to us after the date of this auditor's report.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtainedin the audit or otherwise appears to be materially misstated.

Management's Responsibility for the Standalone Financial Statements

The Company's management and Board of Directors are responsible for the mailers stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit/loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (md AS) specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other 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.

In preparing the standalone financial statements, management and Board of Directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Board of Directors is also responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to: fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or órror and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

B S R & Co. LLP



Auditor's Responsibilities for the Audit of the Standalone Financial Statements

• Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to th audit in order to design audit procedures that are appropriate in the circumstances. Under section I 43(3)Q) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to financial statemenlEs in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves' fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors' report unless law or regulation precludes public disclosure about the matter or when,, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on other Legal and Regulatory Requirements

As required by the Companies (Auditors' Report) Order, 2016 ("the Order") issued by the Central Government in terms of section 143 (11) of the Act, we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

B S H & Co. LLP



Report on Other Legal and Regulatory Requirements (Continued)

(A) As required by Section 143(3) of the Act, we report that:

i. 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.

ii. In our opinion, proper books of account as required by lasi have been kept by the Company so far as it appears from our examination of those books. ;

iii. The standalone balance sheet, the standalone statement cif profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows dealt with by this Report are in agreement with the books of account.

iv. In our opinion, the aforesaid standalone financial statements comply with the md AS specified under section 133 of the Act.

v. On the basis of the written representations received from the directors as on 31 March 2019 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2019 from being appointed as a director in terms of Section 164(2) of the Act.

vi. With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".

(B) With respect to the other matters to be included in the Auditors' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations as at 31 March 2019 on its financial position in its standalone financial statements - Refer Note 37.2 to the standalone financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, oil long-term contracts including derivative contracts- Refer Note 37.3 to the standalone financial statements;

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

(C) With respect to the matter to be included in the Auditors' Report under section 197(16):

In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) which are required to be commented upon by us.

For B S R& Co. LLP CharteredAccountants

Firm's Registration No. 10l248W/W-100022

MKuar Vijai Place: Mumbai Partner Date: 18 April 2019 Membership No. 046882

B S R & Co. LLP

HDB Financial Services Limited Annexure A to the Independent Auditor's Reportof even date on financial statements of HDB Financial Services Limited

(i) a. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b. The Company has a regular program of physical erification to cover all the items of fixed assets in a phased manner which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the program, certain fixed assets were physically verified by the management during the year. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

c. According the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of the immovable property is held in the name of the Company.

(ii) The Company is in the business of providing services and does not have any physical inventories. Accordingly, the provision of clause 3(u) of the Order is not applicable to the Company.

(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 1:89 of the Act. Accordingly, the provision of clause 3(iii) of the Order is not applicable to the Company.

(iv) According to the information and explanations given to us, the Company has not granted any loans, made investments or provided guarantees undeE section 185 and 186 of the Act. Accordingly, the provision of clause 3(iv) of the Order is not applicable.

(v) According to the information and explanations given to u, the Company has not accepted any deposits from the public to which the directives issued by the Reserve Bank of India and the provisions of Section 73 to Section 76 or any other relevant provisions of the Act and the rules framed there under apply.

(vi) The Central Government has not prescribed the maintenance of cost records under sub section (1) of section 148 of the Act for any of the seryices rendered by the Company. Accordingly, the provision of clause 3(vi) of the Order is not applicable.

(vii) a) According to the information and explanations given to us and on the basis of our examination of records of the Company, amounts deducted / accrued in the books of account in respect of undisputed statutory dues including provident fund, employees' state insurance, income-tax, goods and service tax, cess and other material statutory dues have generally been regularly deposited by the Company with the appropriate authorities. As explained to us the Company did not have any dues on account of sales tax, duty of customs, goods and service tax or duty of excise.

According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees' state insurance, income tax, goods and service tax, cess and other material statutory dues were in arrears as at 3 1 March 2019 for a period of more than six months from the date they became payable, except as described in Note 37.1(b) to the financial statements.

b) According to the information and explanations given to us, the Company did not have any dues on account of income tax, sales tax, service tax, duty of customs, value added tax or duty of excise which have not been deposited on account of dispute.

B SR & Co. LLP

HDB Financial Services Limited Annexure A to the Independent Auditor's Report.of even date on financial statements of HDB Financiat Services Limited (Continued)

(viii) In our opinion and according to the information and explaiations given to us, the Company has not defaulted in the repayment of loans or borrowings to financial institutions, banks, Government or debenture holders.

(ix) In our opinion and according to the information and explanations given to us, the term loans taken by the Company have been generally applied for the purpose for which they were raised. The Company has not raised any money by way of initial public offer or further public offer during the year.

(x) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the explanation and information given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.

(xi) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, the provision of clause 3(xii) of the Order is not applicable.

(xiii) According to the information and explanations given to us and on the basis of our examination of the records of the Company, transactions with the related parties are in compliance with section 177 and 188 of the Act where applicable and the details have been disclosed in the financial statements, as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, the provision of clause 3(xiv) of the Order is not applicable.

(xv) According to the information and explanations given to us and based on our examination of the records, during the year the Company has not entered into any non-cash transactions with directors or persons connected with him and hence the provision of Section 192 of the Act is not applicable.

(xvi) The Company is required to be registered under section 45-IA of the Reserve Bank of India Act, 1934 and it has obtained certificate of registration dated 31 December 2Q07.

For B S R & Co. LLP Chartered Accountants

Firms Registration No: 1O -10Q022

Manoj Kumar Vijal Mumbai Partner 18 April 2019 Membership No: 046882

HDB Financial Services Limited Annexure B to the Independent Auditor's Report of even date on the standalone financial statements of 11DB Financial Services Limited for the period ended 31 March 2019

Report on the Internal Financial Controls with reference to the aforesaid standalone financial statements under Clause (1) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

(Referred to in paragraph 1(A)(vi) under 'Report on Other Legal and Regulatory Requirements' section of our report of even date)

Opinion

We have audited the internal financial controls with reference: to financial statement of HDB Financial Services Limited ("the Company") as of3l March 2019in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

In our opinion, the Company has, in all material respects, adequate internal financial controls with reference to financial statements and such internal financial controls were operating effectively as at 31 March 2019, based on the internal financial controls with reference to financial statements criteria established by the Company 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 (the "Guidance Note").

Management's Responsibility for Internal Financial Controls

The Company's management and Board of Directors are responsible for establishing and maintaining internal financial controls based on the internal financial control with reference to financial statement criteria established by the Company considering the essential components of internal control stated in the Guidance Note. 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 busjness, including adherence to the 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 Act").

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financial controls with reference to financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, prescribed under section 14300) of the Act, to the extent applicable to an audit of internal financial controls with reference to financial statements. 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 with reference to financial statements were established and maintained and whether such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining an understanding of internal financial controls, 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 judgment, including the assessment of the risks of material misstatement of the standalone finandial statements, whether due to fraud or error.

B S R & Co. LLP

HDB Financial Services Limited Annexure - B to the Independent Auditor's Report ('Gontinued,I

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company's internal financial controls with reference to financial statements.

Meaning of Internal Financial Controls with Reference to Financial Statements

A company's internal financial controls with reference to financial statements is a process designed to provide reasonable assurance regarding the reliability of; financial reporting and the preparation of standalone financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control with reference to financial statement 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 standalone financial statements.

Inherent Limitations of Internal Financial Controls with Reference to Financial Statements

Because of the inherent limitations of internal financial controls with reference to financial statements, 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 with reference to financial statements to future periods are subject to the risk that the internal financial control with reference to financial statement become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

For B S R& Co. LLP Chartered Accountants

Firm's Registration No: 10 1248 W/W-1 00022

Manoj Kumar Vijai Mumbai Partner 18 April 2019 Membership No: 046882