HDFC Standard Life Insurance

Why HDFCSL?

HDFC

Standard Life

"Experto Credite." (Trust one who has proved it - Virgil, 2,000 years ago.)

HDFCs GEOGRAPHICAL SPREAD

No. of Offices
1992 1997 1998 1999 2000 2001 2002 2003 2004 26 32 41 49 67 87 118 142 173

Regional office Branch office

Outreach Program to 90 locations Deposit & loan products offered 31 new offices opened in 2003-04

to individuals in over 2400 towns and cities.

LOAN APPROVALS AND DISBURSEMENTS (FY04)

152.16
160.00 140.00

117.32 90.41 76.17 99.51

126.97

Total Growth FY 04 Approvals 30%

Rs. in billion

120.00 100.00 80.00 60.00 40.00 20.00 0.00

Disbursements 28%

FY 02

FY 03

FY 04

LOANS APPROVED

LOANS DISBURSED

CORE BUSINESS - LENDING

(As at March 31, 2004)
69% 30%
INDIVIDUALS Home Loans Fixed rate loan Floating rate loan Home Improvement Loans Home Extension Loans Short Term Bridging Loan Loans to NRIs

CORPORATE BODIES

1%

Others

Total loans outstanding as at Mar04 - Rs. 279.74 bn (excludes loans securitised) Y-o-Y growth of 29%

HOME LOANS - HDFCS STRENGTHS

Low average loan to value ratio Debt averse nature of borrowers PDCs obtained from most customers or DAS arrangements with employers Low instalment to income ratio Steady level of prepayments Growth in urban market / salaried class

Quality of underwriting

LOAN QUALITY & PROVISION FOR CONTINGENCIES

1.30
1.40 1.20

1.38 1.19 0.92 0.89

0.91

As at March 2004 (Rs. in billion) NPLs 2.57 Provision for Contingencies 3.43 Portfolio 288.60

Percentage

1.00 0.80 0.60 0.40 0.20 0.00 FY02 FY03 FY04

NPLs AS A % OF PORTFOLIO PROVISION FOR CONTINGENCIES AS A % OF PORTFOLIO

Portfolio includes loans, preference shares, debentures & corporate deposits for financing real estate projects

EMPLOYEE PRODUCTIVITY
2004
Number of employees Number of offices 1230 173

1995
771 28

1990
727 24

Profit per employee (Rs. in mn)

Assets per employee (Rs. in mn) Administrative expenses to

6.9
261

1.9
69

0.3
19

average total assets (%)

Cost income ratio (%)

0.49
13.3

0.67
22.3

0.76
30.9

RETURN TO INVESTORS
2004 ^
^

2003 ^ 2002

Market price per share (Rs) Market Capitalisation (USD Bn) Earnings per share (Rs) Adjusted Book value per share including appreciation in value of listed investments (Rs) Return on equity (%) Dividend payout ratio (%)

620 3.4 35

332 1.8 28

343 0.9 24

244 26.5 44.1

181

168

24.0 22.9 43.9 52.5

^ All values are adjusted for the bonus shares allotted by the Corporation in the ratio
of 1:1 in Dec-02

INTEGRATED FINANCIAL SERVICES

HDFC CHUBB GENERAL INSURANCE CO. LTD.

SECURITISATION

Future Activities

DISTRIBUTION

HDFC BANK
HDFC currently holds 24.18 % of equity in HDFC Bank
Stock also listed on NYSE in the form of American Depository Shares Network of 312 branches in 163 locations & over 910 ATMs Customer base of over 3.72 million accounts

Key business areas

Wholesale banking Retail banking Treasury operations Financials (as per Indian GAAP) for the year ended March 31, 2004 Total income: Rs 30.3 bn, increase of 20% over previous year PAT: Rs 5.1 billion, increase of 31.4% over previous year Return on Equity : 20.1% (annualised) Market capitalisation : Rs 107 billion (US$ 2.48 billion)

HDFC ASSET MANAGEMENT

Joint Participation Agreement with Standard Life Investments (SLI) HDFC MF offers 20 schemes which include equity & debt oriented schemes HDFC network distributes mutual fund products & acts as investor service centre Earned a Profit Before Tax of Rs 444.2 million for FY04 as against Rs. 224.5 million for FY03 Paid a dividend of 40% for FY04 to equity shareholders and 10% to

preference shareholders
The assets under management (AUM) of HDFC MF stood at Rs. 150.25 bn as on Mar 31, 2004 becoming the second largest private sector mutual fund house in India

Valued in June 2003 at Rs 3.4 billion (17 times the capital of the
company) with AUM of Rs 85 bn

INTELENET GLOBAL SERVICES LIMITED - A JV BETWEEN TCS AND HDFC

Offers Business Process Outsourcing (BPO) services to international customers Services, E-mail management & IT Help Desk Intelenets clients reputed international companies

Contact Centre Management (CCM) ,Transaction Processing (TP), Financial & A

Financial clients : Household International, CNA Insurance, Standard Life Healthcare J P Morgan Chase, Barclays Plc

Retail clients : Britannia Music Co. , NEXT Plc. & Somerfield Stores Others :General Mills , United Utilities, RCI, NRES Other large deals: AT&T Wireless, Trans Union

Revenue for FY04 Rs.1.17 bn ; Profit before deferred tax (FY 04) Rs 108 million No. of Operational Employees 2373 ( 1686 Voice & 687 Non-Voice) Total No. of Employees - 2959

Delivery Centres - Navi Mumbai 500 seats, Mumbai 2100 seats, Chennai 150 seats

CREDIT INFORMATION BUREAU INDIA LIMITED (CIBIL)

In partnership with State Bank of India, Trans Union International Inc., Dun & Bradstreet Information Services India Pvt. Limited.

As per RBI guidelines, CIBIL maintains a database of suit filed accounts of

sold Credit information from the bureau will be sold in the form of credit reports (i) Rs. 10 mn & above (ii) willful defaulters of Rs. 2.5 mn & above The bureau deals with both positive and negative credit information which will be

Potential users of these credit reports are:

Banks , NBFCs & financial institutions Consumer & mortgage finance companies Credit card companies & other service providers e.g. mobile phones companies etc.

87 credit grantors that have accepted membership of CIBIL

60 banks, 8 NBFCs, 8 HFCs, 8 FIs, 2 SFCs & 1 credit card company CIBIL launched the Operations for its Consumer credit information bureau (software licensed by Trans Union) on April 05, 2004 The Commercial Credit Information Bureau (software licensed by Dun & Bradstreet) is expected to be launched in the second half of FY 05

HDFC CHUBB GENERAL INSURANCE COMPANY LTD.

Tie up with CHUBB Corporation, USA, a leading property & casualty insurer with $ 30 bn in assets
HDFC holds 74.8% of the equity of HCGICL HCGICL offers Auto Insurance, Home Insurance, Group Accident Insurance, Group Travel Insurance, Commercial Insurance which includes Fire and Marine and Specialty Insurance Products like Directors & Officers Liability

Achieved Gross Written Premium of Rs. 1.17 bn with over 2,20,000 customers Operating out of 26 locations across the country. HDFC network is used to cross sell Home Insurance & Accident Insurance

HDFC and HDFC Bank database is being used to cross sell Accident Insurance
Chubb's expertise in settlement & loss control will help the JV set new standards in the general insurance industry

AWARDS & ACCOLADES

CII-EXIM Bank Comendation Certificate for commitment to Total Quality

Management - 2000
Euromoney identified HDFC as one of Asias top 10 best managed companies in the finance sector - 2001 Rated as the Best Non-Banking Financial Company in Asia by Institutional Investor Research Group 2002 HDFC won the International Financing Review - Asias India Capital Markets Deal of the Year for 2002 Award for its FRN issue in the international market - 2002 HDFC was identified as the best managed financial institution in India in the FoxPitt Keltons survey of Asias best managed banks and financial institutions 2002 Among the Top 10 Most Respected Companies in India Business World Among the Top 10 Most Admired Companies in India Business Barons - 2003 Indias Second Best Managed Company Finance Asia - 2003 National Award for Excellence in Corporate Governance by The Institute of Company Secretaries of India

AWARDS & ACCOLADES

United Nations Scroll of Honour - 1991

Indias best managed company by Asiamoney magazine - 1995 and 1996

Most competitive Indian company by Euromoney - 1997 One of the 5 best Indian Boards by Business Today -1997 Best presented accounts 1994-95 and 1996-97 (3rd place) - in the SAARC region by the South Asian Federation of Accounts in the financial sector category

Rated as one of the best companies in India for strategy & management and investor relations by Asiamoney - 1998

Excellence in service industry by the Indian Institute of Marketing

Management & Top Management Club (Pune) -1998

AWARDS & ACCOLADES

1999 IMC Ramakrishna Bajaj National Quality Award in the service category
CII-EXIM Bank Comendation Certificate for commitment to Total Quality Management - 2000

Asiamoney declared HDFC as the second best managed company in India - 2001 Euromoney identified HDFC as one of Asias top 10 best managed companies in the finance sector - 2001

Rated as the Best Non-Banking Financial Company in Asia by Institutional Investor Research Group 2002

CRISIL assigned HDFC the highest governance & value creation rating CRISIL GVC Level 1 2002

HDFC won the International Financing Review - Asias India Capital Markets Deal of the Year for 2002 Award for its FRN issue in the international market - 2002

HDFC was identified as the best managed financial institution in India in the FoxPitt Keltons survey of Asias best managed banks and financial institutions 2002

AWARDS & ACCOLADES

Won the prestigious award for "The Best Presented Accounts" in
relation to the Accounts and the Annual Report for the year ended March 31, 2002 instituted by 'The Institute of Chartered Accountants of India' for 2001-02 (in the category of Banks, Financial Institutions

and Financial Companies ) for the 12th time. The Theme for this
Annual Report was "REFLECTIONS" on the 25 years of HDFC - Jan 30, 2003. CRISIL assigns Highest Rating for Governance and Value Creation

(GVC) to HDFC - Jan 17, 2003

HDFC amongst India's Most Respected Companies : Business World magazine - Jan 17, 2003 HDFC is The Best Managed Indian FI : Fox Pitt - Jan 13, 2003

AWARDS & ACCOLADES

JRD Tata Corp. Leadership Award by Tatachem Golden Jubilee Foundation and
All India Management Association - 1996. (for Mr. Deepak Parekh) Businessman of the Year by Business India - 1996. (for Mr. Deepak Parekh)

The Standard Life Insurance Assurance Company

BACKGROUND
Founded in 1825

Mutual Life Insurance Company since 1925

Largest mutual life insurance company in Europe

Standard Life - Founded 1825 Head Office - Edinburgh, Scotland (UK) Presence United Kingdom: 31 branches Canada 11 " Ireland 7 " Germany 1 " Austria 1 sales office Spain 31 branches Hong Kong 1 representative office China 2 representative office

Financial Strength Total assets under management: (2003) Rs. 7,07,836 Crores New premium income 2003: Rs. 76277 Crores

Unrivaled Reputation For Quality Year Award 1999 Company of the decade 1998 Company of the year 1997 Company of the year 1996 Company of the year 1995 4 star service award 1994 Overall best company 1993 Overall best company 1992 Overall best company 1991 3 star service award 1990 Best mortgage services

Experience In The Indian Market

First market entry - 1847 Innovative products & processes Last claim settled in 1997

Standard Life Investments

Assets under management 86.5 billion Investment provider 5 star award for the eighth successive year

Standard Life Health Care

UKs leading private medical insurers since 1988 Fourth in the private medical insurers market Health insurance company of the year 2003 25% growth in Jan Dec 2003

Standard Life Bank

Launched on 1st January 1998 Mortgages under management of 8.7 billion 30000 new motgage completions

1. History of The Joint Venture

The Partnership Discussions commenced - January 1995 Joint venture agreement signed October 1995 Joint venture agreement renewed October 1998

 Life Insurance project team established - January 2000 (Mumbai)

Company officially incorporated - 14th August 2000 First private sector Life Insurance company to be granted a certificate of registration - 23 October 2000 Shareholding Standard Life HDFC 18.6 % 81.4 %

HDFC Standard Life

First private sector life insurer First company in the private sector to declare a bonus 4th successive bonus declaration Insured over 450000 policyholders

HDFC Standard Life

New business premium of Rs. 232.5 crore in 2003-04 on annual premium income (API) basis. Registered a year-on-year growth of 76% Corporate agency channel,including its bancassurance business grew by 150% to Rs 50 Cr. The recently launched unit linked business received good market response and contributed 27% of business generated since its launch.

Vision Statement

The most successful and admired life insurance company, which means that we are the most trusted company, the easiest to deal with, offer the best value for money, and set the standards in the industry. In short, The most obvious choice for all.

Values that will be observed while we work with HDFCSL:

Integrity What is it? Honest and Truthful in every action.

Transparency
Stick to principles irrespective of outcome. Be just and fair to everyone.

Values that will be observed while we work with HDFCSL:

Integrity Why? Integrity is the bedrock on which the company and the expectations of the customers and employees are built. Integrity establishes the credibility of the person, defines the character and empowers one to do justice to the job. Enables building confidence and trust, achieving transparency and laying a strong foundation for a binding relationship. Guiding principle for all walks of life.

Values that will be observed while we work with HDFCSL:

Innovation What is it? Building a store house of treasures through experiences.

Looking at every product and process through fresh eyes everyday.

Values that will be observed while we work with HDFCSL:

Customer centric

What is it?
Understand his expectations by keeping him as the centre point Listen actively Understand customer needs and deliver solutions. Customer interest always supreme.

Values that will be observed while we work with HDFCSL:

Customer centric Why?

Reinforce brand loyalty by complete transparency.

Customer is the source of revenue for the company. Customer is the reason for our existence. Ensure that customer chooses our company to do business with. Customers goodwill alone can bring more business and more customers.

Will contribute to customer retention.

Values that will be observed while we work with HDFCSL:

People Care What is it? Genuinely understanding the people we work with. Guiding their development through training and support Helping them develop requisite skills to reach their true potential. Know them on a personal front. Create an environment of trust and openness. Respect for the time of others.

Values that will be observed while we work with HDFCSL:

People Care

Why?
People are the most valuable assets of the company. Motivate individual to give his / her best. Establish a valuable relationship with them to create a joyful working environment . Job satisfaction

Values that will be observed while we work with HDFCSL:

Team work One for all and all for one

What is it?
Whole team takes the ownership of the deliverables Consult all involved , understand and arrive at a common objective Co-operate and support across departmental boundaries Identify strengths and weaknesses accordingly allocate responsibility to achieve common objectives.

Values that will be observed while we work with HDFCSL:

Team work

Why?
Together Everyone Achieves More :- TEAM It adds joy at work place Team work generates synergy and provides a focussed approach. An idea or activity performed in a group has greater acceptability One for all and all for one

HOUSING MARKET SCENARIO

Growth in demand - driven by improved affordability Falling property prices Lowest interest rates since inception Rising income levels Fiscal incentives on both interest and principal repayments Increasing urbanisation Increased network of outlets

Improved Affordability
30
Property Value (Rs Lac) & Affordability

3.50 3.00
22.0

25

20 2.00 15
15.6

1.50
11.1

10
8.3 6.6

1.00
5.9 5.3 5.1 4.7 4.3 0.50

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Property Cost (Lac) Affordability Annual Income (Rs)

0.00

Property price estimates in suburban Mumbai

Affordability equals property prices by annual income

Annual Income (Rs)

2.50

LIABILITIES
(As at March 31, 2004)
89%

Capital
Rupees - 2.47 bn

Rupees 31.47 bn

Reserves

Borrowings
Rupees 286.84 bn - Deposits
10% 1%
- Domestic Borrowings - International Borrowings

Total Liabilities Rs 320.78 bn (PY Rs 262.96 bn)

SHAREHOLDING PATTERN (As at March 31, 2004)

77%

Foreign Institutional Investors & Foreign Direct Investment - 77% Individuals - 14%

Financial Institutions, Banks and Insurance Companies - 5% Mutual Funds - 2%

14% 2% 2% 5%

Companies - 2%

ASSET PROFILE
(As at March 31, 2004)
90%
Total Assets as at March 31, 2004 Rs. 320.78 billion (US $ 7.17 billion) Total Assets as at March 31, 2003 Rs. 262.96 billion (US $ 5.88 billion)

Loans (including pref. shares, debentures & corporate deposits for real estate projects) Investments

1% 2% 7%
Net Current Assets Fixed Assets

BREAK-UP OF BORROWINGS
(As at March 31, 2004)
33% 33%
DEPOSITS (33%)

DOMESTIC TERM LOANS (33%)

BONDS, DEBENTURES & COMMERCIAL PAPER (23%)

11% 23%

INTERNATIONAL BORROWINGS

Total Borrowings Rs 286.84 bn (PY Rs 232.52 bn)