HDB Financial Services Limited Unlisted Shares Annual Reports

HDB Financial Services Limited Unlisted Shares

Expanding Horizons. Empowering Lives. **About the Report:** This 2023-24 Annual Report offers a comprehensive evaluation of HDB Financial Services' (HDBFS) financial and non-financial performance and significant initiatives undertaken to serve the wider community. It provides stakeholders with a comprehensive view of the company’s value-creation ability, competitive advantages, operating context, performance highlights, future prospects, risks, opportunities, governance structure, and approach towards long-term sustainability. The report covers the period from April 1, 2023, to March 31, 2024, and has been reviewed and approved by senior management and the Board of Directors to ensure accuracy, completeness, and relevance. The Board of Directors provides assurance regarding the accuracy and reliability of the information presented, affirming that the report reflects the company's performance, financial position, and strategic endeavors. **Company Overview:** HDBFS is a prominent Non-Banking Financial Company (NBFC) in India, established in 2007. It is renowned for its proficiency in loan origination, underwriting, and a broad product range, offering diverse financial products and services, including enterprise lending, asset financing, consumer loans, fee-based products, and business process outsourcing (BPO) services. As of 2023-24, the company has 1,682 branches across 31 states/UTs. HDBFS holds a ‘CARE AAA/Stable’ rating by CARE Ratings Limited and ‘CRISIL AAA/Stable’ rating by CRISIL Ratings Limited for Long-Term Debt, Bank Facilities, Subordinated Debt, and Perpetual Bonds. **Values, Vision and Mission:** HDBFS ensures the highest standard of professional conduct in every corner of the organization, defining how business is conducted and people are treated. The company is committed to transparency and ethical practices, ensuring honesty and fairness in all conclusions. HDBFS’s vision is to be India's most admired NBFC; through great execution, driving simplicity, and developing humility, while its mission is to deliver innovative products and services to cater to the growing needs of an aspirational India, serving both individual and business clients. **Message from the Chairman (Arijit Basu):** The Chairman communicates optimism regarding India's economic resilience and adaptability amidst global challenges. He notes that the global economy is projected to expand, while India's GDP growth has consistently exceeded 7% since FY 2021-22. He also highlights the significant role of Micro, Small and Medium Enterprises (MSMEs) and the Digital India program in India's economic transformation. For achievements in FY 2023-24, HDBFS expanded its branch network to 1,682 branches, expanded reach across 31 states/UTs, and achieved 28.75% growth in Assets Under Management (AUM). **Message from the MD & CEO (Ramesh G.):** The MD & CEO emphasizes HDBFS's commitment to excellence, strengthening its position as a leading NBFC. They report a healthy AUM growth of 28.75% and expansion of the branch network to 1,682 branches, improving accessibility to underserved areas. Asset quality remained robust, with a GNPA ratio of 1.90% and NNPA ratio of 0.63% as of March 31, 2024. Total revenue grew by 14.26% to ₹14,171 Crore, and profit after tax rose by 25.59% to ₹2,461 Crore. They also focus on sustainable growth and profitability while maintaining asset quality, diversification of product suite and broad geographic presence, risk management and regulatory compliance. They discuss technological integration for enhanced operating efficiency, including the HDB on-the-go mobile app, WhatsApp bot, and Chatbot. **Expanding Horizons over the Last Five Years:** HDBFS navigated the evolving financial landscape with consistent growth and profitability. Over the past five years, the total revenue has grown from ₹10,756 Crore in FY 2019-20 to ₹14,171 Crore in FY 2023-24. Profit before tax has grown from ₹1,464 Crore in FY 2019-20 to ₹3,305 Crore in FY 2023-24. Profit after tax has grown from ₹1,005 Crore in FY 2019-20 to ₹2,461 Crore in FY 2023-24. Assets under management have grown from ₹58,833 Crore in FY 2019-20 to ₹90,235 Crore in FY 2023-24. Shareholder’s funds have grown from ₹8,018 Crore in FY 2019-20 to ₹13,743 Crore in FY 2023-24. Borrowings have grown from ₹49,804 Crore in FY 2019-20 to ₹74,331 Crore in FY 2023-24. Earnings per share has grown from ₹12.78 in FY 2019-20 to ₹31.08 in FY 2023-24. Book value per share has grown from ₹101.80 in FY 2019-20 to ₹173.28 in FY 2023-24. **Empowering Lives through Diverse Range of Offerings:** HDBFS aims to empower individuals and businesses through diverse financial solutions. These include consumer loans (consumer durable loans, digital product loans, lifestyle product loans, personal loans, auto loans, two-wheeler loans, gold loans), enterprise loans (unsecured business loan, enterprise business loan, loan against property, loan against lease rental, loan against securities), asset finance (commercial vehicle loan, construction equipment loan, tractor loan), micro lending, fee-based products/insurance services, and BPO services (collection services, back-office and sales support). **Creating Value for Customers and Empowering Lives:** HDBFS's value creation process involves leveraging financial capital (strong equity, robust assets, prudent borrowings) and manufactured capital (branch network, corporate office) to offer consumer loans, enterprise loans, asset finance, micro lending, and fee-based products/services. Output includes financial capital metrics (28.75% AUM growth, ₹2,461 Crores net profit, ₹31.08 EPS, 3.03% ROA, 19.55% ROE) and manufactured capital metrics (1,682 branch presence, 31 State/UTs presence). There is a dedicated employee base; employee benefits; learning and development opportunities; and employee engagement initiatives. The company is also committed to compliance with regulatory framework. Social and relationship capital includes expanding customer base; CSR beneficiaries; strategic partners; investors/lenders/rating agencies; and compliance with regulatory framework. HDBFS values integrity, excellence, collaboration, respect, simplicity, and agility. Human capital includes 9.75 per person hours training, 21% of women employees, and 32,45,570 ESOPs granted. Social and relationship capital includes 1,34,000 CSR beneficiaries and AAA/Stable ratings (CARE and CRISIL) for Long-Term Debt & Bank Facilities and A1+ (CARE and CRISIL) Ratings for Commercial Papers. **Understanding the Operating Environment for Better Growth:** The financial sector's growth is influenced by various factors, including demographic shifts, increased access to financial services, and government policies. The Indian economy is expected to grow by 7.6% in FY 2023-24, due to robust domestic demand. The Company's mobile apps and online platforms provide seamless credit access promoting financial inclusion. HDBFS strives to enhance service delivery and customer experience by embracing digital transformation and technological capabilities. The Company is also committed to supporting economic development through accessible financial solutions. HDBFS has established a strong presence in urban, semi-urban and rural areas of India, enabling it to understand and cater to the diverse needs of its customers. The company has also aligned its operations and risk management practices to comply with regulatory requirements for categorization. **Competitive Strengths:** NBFCs have emerged as a crucial source of finance for a large segment of the population. HDBFS implements automated loan application processes and uses tools like CRM, Rule Engine, and Bureau Integration. HDBFS is able to cater to the needs of aspirational India with substantial endeavors to expand its reach. HDBFS stands out for delivering streamlined and effective financial solutions customized to address the distinct needs of its customers and various stakeholders. 84% Distribution Beyond Top 20 Cities. The company has 88,824 employees. GNPA 1.90%; NNPA 0.63%; PCR 66.82%. To maintain this HDBFS focuses on maintaining robust asset quality, underpinned by its prudent risk management practices and stringent credit evaluation processes. HDBFS uses data-driven marketing techniques such as personalized campaigns based on customer segments and predictive analytics. The company has seen 97% Of Applications Processed Digitally. **Digital Transformation:** HDBFS aims to continually evolve as an organization, utilizing cutting-edge technology to efficiently address customer needs, strengthening its position as a leading NBFC. Several digital offerings have been launched for commercial and retail segments to provide integrated solutions and simplify the borrowing process. These include an improved 'HDB on-the-go' mobile app, which has had over 8 million customers use it. Their CRM implementation has enabled efficient serving of customer needs. **Environmental Stewardship:** HDBFS prioritizes eco-friendly practices, with the aim of minimizing its environmental footprint and paving the way for a greener future. To achieve this, LED lights are extensively used across all offices and light sensors are strategically placed to save energy. Efficient waste and e-waste management are key priorities for HDBFS. **Corporate Social Responsibility:** The company firmly believes that the true measure of success goes beyond profits and it is committed to fostering positive change and recognizes the important role of businesses in shaping the societal landscape. In FY 2023-24, HDBFS was engaged in a range of CSR initiatives with the objective of contributing towards building a better India. The company's initiatives were rolled out across 129 districts spanning 22 states and 2 union territories. Initiatives were run in areas that include Transport Aarogyam Kendra, Project SNEHA, WASH initiative, Water conservation, Skill development center and Mission Million Trees. **Board of Directors:** The Company benefits from a distinguished Board of Directors who offer invaluable guidance, enabling it to navigate diverse challenges and capitalize on opportunities for growth. As of 2023-24, Arijit Basu serves as the Part-Time Non-Executive Chairman and Independent Director; Ramesh G. is the Managing Director and Chief Executive Officer; and Venkatraman Srinivasan, Jimmy Tata, Jayesh Chakravarthi, Smita Affinwalla, Arundhati Mech, and Amla Samanta serve as the Independent Directors. **Awards and Accolades:** HDBFS has been featured in India's Best Workplaces in BFSI 2024 and has been certified as a Great Place to Work and For the third consecutive year, HDBFS has been honoured with the ABECA 2024 – Ambition Box Employee Choice Award as one of the Top Rated Financial Services Companies. **Statutory Reports:** The provided legal notice outlines the upcoming 17th Annual General Meeting (AGM) of HDB Financial Services Limited, scheduled for June 27, 2024. The meeting will be conducted via video conferencing and other audio-visual means. The notice details the agenda, including the adoption of audited standalone and consolidated financial statements, the declaration of a final dividend of Re. 1/- per equity share, the appointment of a director in place of Mr. Jimmy Tata, and the appointment of Joint Statutory Auditors, Kalyaniwala & Mistry LLP and GD Apte & Co. Additionally, special business items include the re-appointment of Mr. Adayapalam Kumaraswamy (AK) Viswanathan as an Independent Director, and the approval for selling/assigning/securitising receivables/book debts up to ₹9,000 Crore. It provides information on dividend distribution, remote e-voting, communication means, contact information for queries, and the process for registering email addresses. **Financial Statements:** As of March 31, 2024, HDB Financial Services (HDBFS) reported total assets of ₹92,556.51 Crore, compared to ₹70,050.39 Crore the previous year. Cash and cash equivalents amounted to ₹647.85 Crore (₹395.90 Crore in 2023). Revenue from operations increased to ₹14,171.12 Crore from ₹12,402.88 Crore. Key financial highlights: * **Total Assets:** Increased to ₹92,556.51 Crore (2024) from ₹70,050.39 Crore (2023). * **Total Revenue:** Increased to ₹14,171.12 Crore (2024) from ₹12,402.88 Crore (2023). * **Total Equity Share:** was ₹793.08 Crore (2024) from ₹791.40 (2023). The company is in compliance with Reserve Bank of India (RBI) regulations and other legal requirements. Total No. of branches stood at 1682. **Going Forward:** HDBFS is strategically positioned for sustained growth, maintaining robust asset quality and customer engagement. With increasing financialization, digitalization, and shifting demographics, the company remains dedicated to serving India's growing financial needs while fostering inclusive development.

HDB Financial Services Limited Unlisted Shares

Here's a comprehensive summary of the HDB Financial Services Limited Annual Report 2022-23, addressing all your specified objectives: **Overview and Mission:** The annual report highlights HDB Financial Services Limited (HDBFS), established in 2007, as a prominent non-banking financial company (NBFC) in India. The company focuses on empowering aspirations, particularly among underserved and unbanked segments, through a comprehensive range of consumer, enterprise, and asset finance options. HDBFS’s vision is to be India’s most admired NBFC through great execution, simplicity, and humility, while its mission is to deliver innovative products and services to meet the needs of aspirational individuals and businesses. **Financial Performance and Key Metrics:** The report showcases key financial metrics and indicators for HDBFS. Total revenue increased to ₹12,403 Crore for the fiscal year 2022-23, with profit before tax reaching ₹2,627 Crore and profit after tax at ₹1,959 Crore. Assets under management grew to ₹70,084 Crore. The company's vision is underscored by these results. Other key indicators include shareholders' funds of ₹11,437 Crore and borrowings of ₹54,865 Crore. Earnings per share stood at ₹24.78, and book value per share was ₹144.52. HDBFS maintains AAA/Stable ratings from CARE and CRISIL for long-term debt and bank facilities and an A1+ rating for commercial papers. **Strategic Approach and Competitive Edge:** HDBFS emphasizes a customer-centric approach, prioritizing customer needs with precision. This is facilitated through strategically located branches that offer local knowledge, even in non-metro cities. Technology plays a central role, with digital offerings expanding financial inclusion and omnichannel servicing provided through a pan-India branch network. The company focuses on maintaining a solution-centric work culture, providing growth opportunities for employees, and empowering communities through CSR initiatives. HDBFS’s competitive edge is built on a deep understanding of customer needs, a digitally enabled branch network, and simplified financial solutions. **Corporate Social Responsibility (CSR) Initiatives:** HDBFS demonstrates a commitment to social responsibility through diverse CSR programs. The company emphasizes well-being for truck drivers by introducing Transport Aarogyam Kendras, offering physiotherapy, counseling, and treatment. HDBFS focuses on upgrading medical infrastructure, contributing to cancer care facilities, eye care, and community in-patient wards. Restoring ecological balance is another key focus, with initiatives to restore lakes, build water harvesting structures, establish farm ponds, and plant trees. The company empowers communities through literacy and livelihood interventions like HDB CAFÉ (Community Awareness on Financial Education) and skills training. In FY 2022-23, the company spent ₹20.29 Crore on CSR programs, touching 2,94,715 lives. **Board of Directors and Corporate Governance:** The report details the Board of Directors' composition, emphasizing adherence to strong governance practices. The Board includes a mix of executive, non-executive, and independent directors, with diverse skills and experience. HDBFS has established several Board-level committees, including an Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Corporate Social Responsibility Committee, Risk Management Committee, and Information Technology Strategy Committee. The board has a woman to director ratio of 3:7 (3 women and 4 men). **Risk Management and Key Challenges:** The company acknowledges and addresses various risks, including credit, digital lending, business/strategic, reputation, and technology risks. It outlines mitigation strategies for each, including strict lending guidelines, technology enhancements, robust governance, and cybersecurity measures. HDBFS acknowledges the need to manage rising interest rates and inflation, which could impact borrowers. **Auditor's Report and Financial Statements:** The report includes the Standalone and Consolidated Financial Statements for the year ended March 31, 2023, along with Independent Auditors' Reports. The Auditors' Reports state that the financial statements provide a true and fair view in conformity with accounting principles generally accepted in India and comply with the Companies Act, 2013. The report also provides details on regulatory compliance, capital adequacy, borrowings, asset quality, related party transactions, and other financial disclosures. There were no material frauds reported. The report details various notes pertaining to loans, investments, lease liabilities, provisions, related party transactions, and other financial disclosures. **Key Personnel and Disclaimer:** The report lists the key managerial personnel and includes a disclaimer noting that forward-looking statements are subject to risks and uncertainties and that actual results may differ. The AGM (Annual General Meeting) date is June 30, 2023. **Overall Outlook:** HDBFS is well-positioned to capitalize on growth opportunities in the Indian economy, supported by its customer-centric approach, technology investments, diversified product portfolio, and commitment to social responsibility. While acknowledging potential challenges, the company remains cautiously optimistic about its future outlook.

HDB Financial Services Limited Unlisted Shares

Reimagining Opportunities: Annual Report 2021-2022 details the financial and operational performance of HDB Financial Services Limited (HDBFS). It also highlights the company's Corporate Social Responsibility (CSR) initiatives. **Financial Performance:** * Total Revenue: Increased from ₹10,944.78 crore in 2020-21 to ₹11,306.29 crore in 2021-22. * Profit before Tax: Rose significantly from ₹500.71 crore in 2020-21 to ₹1,347.56 crore in 2021-22. * Profit after Tax: Increased from ₹391.47 crore in 2020-21 to ₹1,011.40 crore in 2021-22. * Assets under Management (AUM): Slightly decreased from ₹61,561 crore to ₹61,444 crore. * The Board recommended a dividend of ₹1.00 per equity share (10%) for the financial year ending March 31, 2022. This entails a total payout of ₹79.04 crore, subject to shareholder approval on June 23, 2022. * Capital Adequacy: Capital adequacy as at March 31, 2022 under Ind-AS stood at 20.22%, which is well above the minimum regulatory norms for non-deposit accepting NBFCs. * Credit Ratings: CARE and CRISIL reaffirmed the highest ratings for various HDBFS facilities. These ratings indicate a high degree of safety concerning timely payment of interest and principal. **Corporate Social Responsibility (CSR):** * Expenditure: The Company spent ₹25.83 crore on CSR in FY22, impacting over 600,000 families. * Transport Aarogyam Kendras: HDBFS introduced Transport Aarogyam Kendras to provide physiotherapy, counseling, and treatment for truck drivers, setting up centers in Delhi, Namakkal, and Kalamboli. Over 24,000 truckers received services through these Kendras and 20 physio camps. * Healthcare Initiatives: HDBFS collaborated with healthcare agencies to improve public health, including upgrading a tribal-rural hospital in Mysore, introducing a Clinic on Wheels in Thiruvallur and Sonebhadra, subsidizing cataract surgeries and dialysis sessions, screening women for anemia, and developing sanitation blocks in schools and communities. * Environmental Sustainability: The company restored 26 waterbodies, implemented 670 water harvesting structures, and developed 11 farm ponds. It also diverted 39,000 tons of waste from landfills and planted 80,000 trees under the Mission Million Trees initiative. * Literacy & Livelihoods: The Youth Training and Development Program trained 3,300 youth in various sectors, with 85% securing jobs. Additionally, artisans and farmers received training to start nano and micro enterprises, and financial literacy sessions were conducted. * Honoring The Real Heroes: The Company celebrated Republic Day with Indian Army Soldiers and honored martyrs' families and wounded soldiers. * Acts of Simple Kindness (ASK): 15,000 HDBians across 23 states participated in ASK'22, distributing essential items and conducting community activities. **Key Operational Highlights:** * Loan Disbursements: ₹29,033 crore during the year. * Assets Under Management (AUM): ₹61,444 crore as of March 31, 2022. * The company focused on diversifying its product offerings and expanding distribution through digital infrastructure. * Digital Lending Journey: Digital offerings have been launched for commercial and retail segments including, Digital Login, e-NACH & e-Sign, and Credit Report. **Other Key Information:** * The Board of Directors includes Mr. Arijit Basu (Chairman), Mr. G Ramesh (Managing Director & CEO), and several independent directors. * The notice for the 15th Annual General Meeting (AGM) is included, outlining ordinary and special business to be transacted, including the approval of financial statements, dividend declaration, director appointments, and resolutions related to auditor appointments and executive re-appointment. The AGM is to be held via video conferencing on June 23, 2022. * The Report mentions compliance with secretarial standards, ESOS details, related party transactions, and corporate governance norms. **Risk Management:** * HDBFS is exposed to credit, operational, liquidity, technology and reputational risks. The risk management framework is overseen by the Board of Directors and addresses these risks. **Notice of AGM** * The 15th AGM is scheduled for June 23, 2022, at 12 p.m. via Video Conferencing. Items for approval include financial statements, dividend declaration, and re-appointment of Mr. G. Ramesh as Managing Director and Chief Executive Officer. Remote e-voting facilities are provided to members. Procedures for registration of email addresses and voting are detailed. The document is signed by Mr. Arijit Basu (Chairman) and Mr. G. Ramesh (Managing Director & CEO). The location is Mumbai, and the date is May 18, 2022.