HDB Annual Report11 12

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Transcript of HDB Annual Report11 12

5th Annual Report 2011-2012

Distribution Network

Pathankot Amritsar Mandi Jalandhar Baddi Ludhiana Ropar Moga Chandigarh Khanna Patiala Dehradun Bathinda Yamunanagar Ambala Hardiwar Kurukshetra Shahpura Sirsa Karnal Panipat Haldwani Hissar Meerut Sonepat Bareilly Noida New Delhi Moradabad Ghaziabad Gurgaon Faridabad Bikaner Alwar Agra Lucknow Jaipur Ajmer Jodhpur Kanpur Bhilwara Udaipur Bhuj Palanpur Mehesana Himmatnagar Burdwan Ambikapur Bilaspur Raigarh Kota

Ankleshwar Bhopal Ahmedabad Godhra Jamnagar Morbi Anand Kalol Rajkot Bhavnagar Bharuch Junagadh Gandhidham Veraval Nagpur Raipur Jalgaon Vapi Dhule Bhilai Amravati Navsari Akola Silvassa Nashik Chandrapur Aurangabad Mumbai Ahmednagar Pune Nanded Latur Solapur Ratnagiri Hyderabad Sangli Kolhapur Kurnool Hubli Ongole Nizamabad Karimnagar Khammam Kodad Vijaywada Guntur

Visakhapatnam Rajmundhy

Vellore

Dharmapuri Mysore Tambaram Pondicherry Erode Salem Chengalpattu Karur Perambur Tanjavur Pollachi Tirrupur Trichy Kumbakonam Thrissur Madurai Kochi Tirunelveli Trivandrum Tuticorin

Tirupati Chennai Kanchipuram

Board of Directors Mr. G. Subramanian Mr. Pralay Mondal Mr. Kaizad Bharucha Mr. Anil Jaggia (Appointed w.e.f. 23/12/2011) Mr. Aseem Dhru (Retired w.e.f. 10/06/2011) Mr. Vinod Yennemadi (Resigned w.e.f. 01/12/2011) Auditors Haribhakti & Co, Chartered Accountants Registered Office Radhika, 2nd Floor, Law Garden Road, Navrangpura, Ahmedabad - 380 009. Corporate Office Madhusudan Estate, Ground floor, Pandurang Budhkar Marg, Lower Parel, Mumbai 400013. Bankers Andhra Bank * Bank of India * Bank of Maharashtra * Canara Bank * HDFC Bank Ltd. * Indus Ind Bank Ltd. * Indian Overseas Bank * Jammu & Kashmir Bank Ltd. * Karur Vysya Bank * Punjab National Bank * State Bank of Mysore * State Bank of Bikaner & Jaipur * State Bank of Patiala * South Indian Bank * Syndicate Bank * Union Bank of India * Vijaya Bank * Yes Bank Ltd. Management Team Mr. G Ramesh, Chief Executive Officer Mr. Rohit Patwardhan, Head - Risk Mr. Haren Parekh, Head - Finance Mr. Sanjay Raghuraman, Head - Operations Mr. Ashish Ghatnekar, Head- Human Resources Company Secretary Mr. Rakesh Pathak Registrar & Share Transfer Agents Datamatics Financial Services Limited Plot No A-16 & 17, Part B, Crossline, MIDC, Andheri (E), Mumbai 400 093. Debenture Trustees IDBI Trusteeship Services Limited Asian Building, Kamani Marg, Ballard Estate, Mumbai 400038.

ContentsPage No.

Notice to Members

1

Directors Report

3

Auditors Report

10

Balance Sheet

14

Profit and Loss Account

15

Notes on Accounts

16

Cash Flow Statement

39

RBI Disclosure

41

NoticeNOTICE is hereby given that an Annual General Meeting of HDB Financial Services Limited (the Company) will be held on June 14, 2012 at 12.00 Noon at HDFC Bank House, Final Plot No-287, Ellis bridge Township Scheme No.3, Navarangpura, Ahmedabad, Gujarat-380009, to transact the following business: Ordinary Business 1. 2. 3. 4. To consider and adopt the audited Balance Sheet as at March 31, 2012 and Profit and Loss Account for the year ended on that date and Reports of the Directors and Auditors. To declare dividend, if any. To appoint a Director in place of Mr. Kaizad Bharucha who retires by rotation, and being eligible, offers himself for re-appointment. To re-appoint the Auditors of the Company to hold office from the conclusion of this Meeting until the conclusion of the next Annual General Meeting.

Special Business 5. To consider and if thought fit, to pass with or without modification(s), the following resolution as an Ordinary Resolution: RESOLVED THAT Mr. Anil Jaggia be and is hereby appointed as a Director of the Company, liable to retire by rotation. 6. To consider and if thought fit, to pass with or without modification(s), the following resolution as a Special Resolution: RESOLVED THAT pursuant to applicable provisions of the Companies Act, 1956 and subject to the approvals, consents, permissions and sanctions as may be necessary from the Government of India and other appropriate authorities or bodies and subject to the conditions and restrictions as may be prescribed by them while granting such approvals, consents, permissions and sanctions, Mr. G. Subramanian be and is hereby appointed as Non-Executive Chairman of the Company for a period of 2 (Two) years with effect from May 1, 2012 at the remuneration and perquisite as follows: Compensation/ Professional fees ` 15,00,000/- per annum drawn on monthly basis. Taxes in the nature of service tax shall be borne and reimbursed by the Company in full. 1) 2) 3) 4) ` 600,000 per annum towards Car allowance Medical Expenses for self and family upto a limit of ` 150,000 per annum Hospitalization for self and family at actual Telephone, Mobile and other communication related expenses upto a maximum limit of ` 60,000 per annum

Perquisites

RESOLVED FURTHER THAT in case of inadequacy or absence of profit in any financial year the aforesaid remuneration shall be paid to Mr. G. Subramanian as minimum remuneration. RESOLVED FURTHER THAT the Board be and is hereby authorised to do all such acts, deeds, matters and things and to execute any agreements, documents or instructions as may be required to give effect to this resolution. By order of the Board For HDB Financial Services Limited Mumbai, April 13, 2012 Rakesh Pathak Company Secretary

1

NoticeNotes :1. A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote instead of himself / herself and a proxy need not be a member of the Company. The Proxy forms should be lodged with the Company at its registered office at least 48 hours before the time of the meeting. Explanatory statement pursuant to Section 173(2) of the Companies Act, 1956 relating to the special business is annexed herewith.

2.

Annexure EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OF THE COMPANIES ACT, 1956 Item No. 5 Mr. Anil Jaggia, is a graduate from IIM, Ahmedabad and an engineer from IIT, Kanpur; Mr. Anil Jaggia has strong credentials and brings with him 22 years of rich experience across a wide spectrum of financial services. Post merger of Centurion Bank of Punjab with HDFC Bank in May 2008, Mr. Jaggia has taken over as CIO of HDFC Bank. The Company has received notice in writing under Section 257 of the Act, proposing candidature of Mr. Anil Jaggia for the office of Director of the Company. The Directors recommend the resolution at Item No. 5 of the accompanying notice for approval of the members of the Company. None of the Directors other than Mr. Anil Jaggia is interested or concerned in the said resolution. Item No. 6 The Board of Directors has appointed Mr. G. Subramanian as a Non-Executive Chairman of the Company for a period of 2 (Two) years from May 1, 2012. Mr. G. Subramanian would render his valuable services as non-executive Chairman of the Board. He will be rendering his services to the Company in areas such as internal audit, policies and directions to Company and any other areas or matters as the Board of Directors may decide and specify from time to time, to help the Company achieve consistent and all-round growth. The approval of the members is therefore sought to ratify the terms and conditions of appointment of Mr. G. Subramanian, including the payment of remuneration from the date of appointment. The Directors recommend the resolution at Item No. 6 of the accompanying notice for approval of the members of the Company. None of the Directors other than Mr. G. Subramaniam is interested or concerned in the said resolution. By order of the Board For HDB Financial Services Limited Mumbai, April 13, 2012 Rakesh Pathak Company Secretary

2

Directors ReportThe Members HDB Financial Services Limited Your Directors have pleasure in presenting the Fifth Annual Report on the business and operations of your Company together with the Audited Accounts for the Financial Year ended March 31, 2012. FINANCIAL PERFORMANCE (` In Crores) 2011-12 Total Income Total Expenditure Profit/(Loss) before Depreciation & Tax Less: Depreciation Profit before Tax Provision for Taxation Profit / (Loss) after Taxation 431.76 357.50 74.26 3.61 70.65 19.54 51.11 2010-11 178.88 151.32 27.56 3.24 24.32 8.52 15.80

The Companys total income increased by 241% to ` 431.76 in the year 2011-12 as against ` 178.88 Crores in 2010-11 and net profit increased to ` 51.11 Crores during the financial year ended March 31, 2012 as against net profit of ` 15.80 Crores in 2010-11. During the year under review, disbursements amounted to ` 3385 Crores as against ` 1208 Crores in previous year. DIVIDEND In order to conserve resources and in view of long term capital requirement, your directors do not recommend any dividend. CREDIT RATING The Credit Analysis & Research Limited (CARE) has assigned CARE AAA rating to the Long term Bank facilities of the Company aggregating to `4250 Crores, A1+ for its short term Debt program aggregating to ` 300 Crores, A1+ for Commercial Paper program for ` 100 Cr. During the year, CARE has assigned CARE AAA rating for Non convertible Debentures issue aggregating to ` 1000 Crores. EMPLOYEES STOCK OPTION SCHEME (ESOS) The information pertaining to Employees Stock Option is given in the notes to accounts. CAPITAL ADEQUACY Companys capital adequacy ratio as on March 31, 2012 was at 19.94% as against the minimum regulatory requirement of 15% for non-deposit accepting NBFCs. MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT Macro Economic Environment During 2011, the Indian economy was affected due to persistently high inflation, high crude prices and tight monetary policy. Fiscal deficit, which was projected at 4.6% of GDP, is now estimated at 5.9%, The economy show