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Application
Form
PLEASE STAPLE THE CHEQUE/BANK DRAFT HERE
HOUSING DEVELOPMENT FINANCE CORPORATION BANK OF SRI LANKA – DEBENTURE ISSUE 2015
APPLICATION FORM AN INITIAL ISSUE OF THIRTY MILLION (30,000,000) RATED SENIOR UNSECURED REDEEMABLE DEBENTURES AT THE PAR VALUE OF LKR 100/- EACH WITH AN OPTION TO ISSUE UP TO A FURTHER TEN
MILLION (10,000,000) OF SAID DEBENTURES AT THE DISCRETION OF THE BANK IN THE EVENT OF AN OVERSUBSCRIPTION OF THE INITIAL ISSUE TOTALLING UP TO A MAXIMUM OF FORTY MILLION
(40,000,000) DEBENTURES TO BE LISTED ON THE COLOMBO STOCK EXCHANGE PAYABLE IN FULL ON APPLICATION
To: Board of Directors –
I/We, the undersigned hereby apply for and request you to allot me/us the number of Debentures stated below as per the Prospectus dated 05th November 2015. The amount payable on
application is attached herewith. I/We, hereby agree to accept the Debentures applied for or such smaller number as may be allotted to me/us, subject to the terms and conditions contained in
the Prospectus. I/We irrevocably give my/our authority and consent to Bank of Ceylon to act as my/our Trustee subject to the terms and conditions stipulated in the Trust Deed dated
07th October 2015 entered into between Housing Development Finance Corporation of Sri Lanka and the said Trustee. I/We authorise you to procure my/our name(s) to be placed in the register
of the holders of the above mentioned Debentures for such number of Debentures that may be allotted on the basis of acceptance by Housing Development Finance Corporation of Sri Lanka.
Please use block capitals and read Instructions on the reverse carefully.
TYPES OF DEBENTURES (Please tick () one Type only)
Type A 5 Year - Floating interest rate of AWPLR +1.50% p.a. payable quarterly
Type B 5 Year - Fixed interest rate of 10.50% p.a. payable semi-annually AER of 10.78% p.a.)
Type C 10 Year – Fixed interest rate of 12.00% p.a. payable annually (AER of 12.00% p.a.)
NUMBER OF DEBENTURES Minimum of 100 Debentures and in multiples of 100 Debentures thereof
PRICE
(LKR)
TOTAL AMOUNT TO BE PAID (LKR) Minimum Amount Rs. 10,000/-
, , 0 0 100/- , , 0 , 0 0 0
MODE OF PAYMENT DETAILS – CHEQUE/BANK DRAFT/ BANK GUARANTEE/RTGS /INTERNAL FUND TRANSFER WITHIN NATIONAL DEVELOPMENT BANK PLC (NDB BANK)
PLEASE SELECT APPROPRIATELY NAME OF BANK NAME OF BRANCH CHEQUE/BANK DRAFT/BANK
GUARANTEE NUMBER
Cheque Bank Draft Bank Guarantee RTGS Internal Fund Transfer within NDB Bank
The allotted Debentures would be credited to the CDS account specified below. (Please refer instructions overleaf)
CDS ACCOUNT NO. - - -
SOLE/FIRST APPLICANT JOINT APPLICANTS
STATUS (MR./ MRS./ MS./ OTHER) 1 2
SURNAME WITH INITIALS/
NAME OF CORPORATE BODY 1
2 NAMES DENOTED BY INITIALS
1 2
ADDRESS 1
2
CONTACT TELEPHONE NO.
1 2
NATIONAL IDENTITY CARD NO. /PASSPORT NO.
(Please refer Section XIV overleaf) 1 2
NATIONALITY
(Please tick () as appropriate) SRI LANKAN OTHER
1 SRI LANKAN OTHER
2 SRI LANKAN OTHER
RESIDENCY IN SRI LANKA
(Please tick () as appropriate) RESIDENT OTHER
1 RESIDENT NON-RESIDENT
2 RESIDENT NON-RESIDENT
COMPANY NO.
(Corporate Applicants only)
CDS IDENTIFICATION NO. (CDS ID)
(Non-Resident Individual Applicants and Corporate Applicants only)
NAME, ADDRESS AND SIGNATURE OF
FINANCIER (Margin Trading only)
REFUND PAYMENT INSTRUCTIONS
(Please tick () as appropriate)
DIRECT TRANSFER VIA SLIPS (Non-Resident applicants : Please include
SIA details) CHEQUE SENT BY ORDINARY MAIL TO THE ADDRESS INDICATED ABOVE
BANK CODE BRANCH CODE ACCOUNT NUMBER
DECLARATION IN TERMS OF THE PROVISIONS OF THE EXCHANGE CONTROL ACT
TICK () ONE
BOX ONLY
For Sri Lankan Citizens resident in Sri Lanka, and Corporate Bodies Incorporated in Sri Lanka in terms of the provisions of the Exchange Control Act
I/We, the Applicant(s) of the abovementioned Debentures hereby declare that I am/we are a citizen(s) of and resident in Sri Lanka and I am/we are not acting as nominee(s) of any person(s) resident outside Sri Lanka.
For Non-Residents and Non-Citizens in terms of the provisions of the Exchange Control Act
I/We, the Applicant(s) of the abovementioned Debentures hereby declare that, I am/we are resident outside of Sri Lanka and that, I/we have made the remittance as stipulated by the Controller of Exchange. A confirmation/endorsement from my/our bank to such effect is attached to this Application.
SIGNATURE(S) OF
APPLICANT(S)
SOLE/FIRST APPLICANT JOINT APPLICANT (1) JOINT APPLICANT (2)
Issue Opens 16 11 2015 BANKER’S/ STOCKBROKER’S SEAL Issue Closes 04 12 2015
Earliest Closing 16 11 2015 MASTER SERIAL NO. (For office use only) Date DD MM 2015
A licensed specialised bank under the provisions of Housing Development Finance Corporation, Act
No. 07 of 1997, amended by Act No. 15 of 2003 and No. 45 of 2011
.
INSTRUCTIONS
(1) HOW TO APPLY
(i) The Application Form must be completed in FULL, in BLOCK CAPITALS.
(ii) Please tick () in the boxes appropriate to you.
(iii) In the event a particular section in this Application Form is not applicable, please indicate
“N/A” in the relevant section.
(iv) All Applicants should meet the eligibility criteria set out under Section 6.2 of the Prospectus.
(v) Applications should be made on the Application Forms, issued with the Prospectus. Application
Forms will be made available from the collection points listed in Annexure II of the Prospectus
and can also be downloaded from www.cse.lk, www.hdfc.lk, www.boc.lk and www.ndbib.com.
Exact sized photocopies of the original Application Form will also be permissible. Care must
be taken to follow the instructions given in the Application Form.
(vi) Applications for Debentures should apply for a minimum of One Hundred (100) Debentures
(LKR 10,000/-) and in multiples of One Hundred (100) Debentures (LKR 10,000/-) thereafter.
(vii) Applications which do not strictly conform to instructions and the other conditions set out
herein or which are incomplete or illegible may be rejected.
(viii) Applicants should apply only for one Type of Debentures (i.e. either Type A or Type B or Type C
Debentures) under one Application Form.
(ix) In the event an Applicant wishes to apply for more than one Type of Debentures, separate
Application Forms should be used. Once an Application Form has been submitted for a
particular Type of Debentures, it will not be possible for an Applicant to switch between the
Types of Debentures.
(x) If the ownership of the Debentures is desired in the name of one Applicant, full details should
be given only under the heading SOLE/FIRST APPLICANT in the Application Form. In the case of
joint Applicants, the signatures and particulars in respect of all Applicants must be given under
the relevant headings in the Application Form.
(xi) In the case of joint Applicants, a joint CDS account in the name of the joint Applicants should
be indicated.
(xii) An Applicant of a joint Application for the Debentures will not be eligible to apply through a
separate Application Form either individually or jointly. Such Applicants are also deemed to
have made multiple Applications and will be rejected.
In the case of joint Applications, the refunds (if any), interest payments and the Redemption
will be remitted in favour of the first Applicant as identified in the Application Form.
The Bank shall not be bound to register more than three (03) natural persons as joint holders
of any Debentures (except in the case of executors, administrators or heirs of a deceased
member).
Joint Applicants should note that all parties should either be residents of Sri Lanka or
Non-Residents. (xiii) Applications by companies, corporate bodies, societies, approved provident funds, trust funds
and approved contributory pension schemes registered/incorporated/established in Sri Lanka
should have obtained necessary internal approvals as provided by their internal approval
procedures at the time of applying for the Debentures and should be made under their
common seal or in any other manner as provided by their articles of association or such other
constitutional documents of such Applicant or as per the statutes governing them. In the case
of approved provident funds, trust funds and approved contributory pension schemes, the
Applications should be in the name of the trustee/board of management.
(xiv) All Applicants should indicate in the Application for Debentures, their CDS account number.
All resident individual Applicants should ensure that;
If the Applicant’s CDS account carries the NIC number, the NIC number of the Applicant
is stated in the relevant cage of the Application Form; or
If the Applicant’s CDS account carries the passport number, the passport number of the
Applicant is stated in the relevant cage of the Application Form.
All Non-Resident individual Applicants and corporate Applicants should ensure that the
passport number/company number and CDS Identification Number (CDS ID) are stated in the
relevant cages of the Application Form.
In the event the name, address or NIC number/passport number/company number of the
Applicant mentioned in the Application Form differ from the name, address or
NIC number/passport number/company number as per the CDS records, the name, address
or NIC number/passport number/company number as per the CDS records will prevail and
be considered as the name, address or NIC number/passport number/company number of
such Applicant. Therefore, Applicants are advised to ensure that the name, address or
NIC number/passport number/company number mentioned in the Application Form tally
with the name, address or NIC number/passport number/company number given in the CDS
account as mentioned in the Application Form.
Application Forms stating third party CDS accounts, instead of Applicants’ own CDS account
numbers, except in the case of margin trading, will be rejected.
(xv) Applicants who wish to apply through their margin trading accounts should submit the
Application Forms in the name of the ‘Margin Provider/Applicant’s name” signed by the margin
provider, requesting a direct deposit of the Debentures to the Applicant’s margin trading
account in CDS. The margin provider should indicate the relevant CDS account number relating
to the margin trading account in the Application Form. A photocopy of the margin trading
agreement must be submitted along with the Application.
Margin providers can apply under their own name and such Applications will not be construed
as multiple Applications.
(xvi) Application Forms may be signed by a third party on behalf of the Applicant(s) provided that
such person holds the Power of Attorney (POA) of the Applicant(s). A copy of such POA
certified by a Notary Public as “True Copy” should be attached with the Application Form.
Original of the POA should not be attached.
(xvii) Funds for the investments in Debentures and the payment for Debentures by foreign
institutional investors including country funds, regional funds or mutual funds, corporate
bodies incorporated outside Sri Lanka, citizens of foreign states whether resident in Sri Lanka
or outside Sri Lanka and Sri Lankans resident outside Sri Lanka should be made only out of the
monies available to the credit of a “Securities Investment Account” (SIA) of the foreign investor
opened and maintained in a licensed commercial bank in Sri Lanka in accordance with the
directions given by the Controller of Exchange in that regard to licensed commercial banks.
An endorsement by way of a letter by the licensed commercial bank in Sri Lanka in which the
Applicant maintains the SIA, should be attached to the Application Form to the effect that
such payment through bank draft/bank guarantee/RTGS has been made out of the funds
available in the SIA.
(xviii) Foreign institutional investors including country funds, regional funds or mutual funds,
corporate bodies incorporated outside Sri Lanka, citizens of foreign states whether resident in
Sri Lanka or outside Sri Lanka and Sri Lankans resident outside Sri Lanka should have obtained
necessary internal approvals as provided by their internal approval procedures at the time of
applying for the Debentures and may be affected by the laws of the jurisdiction of their
residence. If the Non-Resident Applicants wish to apply for the Debentures, it is their
responsibility to comply with the laws relevant to the jurisdiction of their residence and of
Sri Lanka.
(2) MODE OF PAYMENT
(i) Payment in full for the total value of Debentures applied for should be made either by
cheque/s, bank draft/s, bank guarantee drawn upon any licensed commercial bank operating
in Sri Lanka or RTGS transfer directed through any licensed commercial bank operating in
Sri Lanka, as the case may be, subject to (ii) below. Cash will not be accepted.
(ii) Payments for Applications should be supported by either;
Bank draft(s)/cheque(s) drawn upon any licensed commercial bank operating in Sri Lanka;
or
A bank guarantee issued by a licensed commercial bank; or
An RTGS transfer with value on the Issue opening date; or
An internal fund transfer within National Development Bank PLC with value on the Issue
opening date.
Multiple cheques/ RTGS transfers/internal fund transfers within National Development Bank
PLC will not be accepted for Application values below Sri Lanka Rupees One Hundred Million
(LKR 100,000,000/-).
In the case of Application values above and inclusive of Sri Lanka Rupees One Hundred
Million (LKR 100,000,000/-), multiple bank drafts/cheques drawn upon any licensed
commercial bank operating in Sri Lanka each of which should be for a value less than LKR
100,000,000/- will be accepted.
(iii) Cheques or bank drafts should be made payable to “HDFC BANK OF SRI LANKA – DEBENTURE
ISSUE 2015” and crossed "Account Payee Only”, and must be honoured on the first
presentation.
In case of bank guarantees, such bank guarantees should be issued by any licensed commercial
bank in Sri Lanka in favour of “HDFC BANK OF SRI LANKA – DEBENTURE ISSUE 2015” in a
manner acceptable to the Company, and be valid for a minimum of one (01) month from the
Issue opening date (i.e. 16th November 2015).
(iv) In case of RTGS transfers (only for Application values above and inclusive of Sri Lanka Rupees
One Hundred Million (LKR 100,000,000/-) such transfers should be made to the credit of
“HDFC BANK OF SRI LANKA – DEBENTURE ISSUE 2015” bearing the account number
101000404382 at National Development Bank PLC with value on the Issue opening date (i.e.
the funds to be made available to the above account on the Issue opening date).
The applicant should obtain a confirmation from the Applicant’s bank, to the effect that
arrangements have been made to transfer payment in full and should be attached to the
Application Form.
For such RTGS transfers, an interest at the rate of three per centum (3.00%) per annum will be
paid from the date of such transfer up to the date of refunds. If any transfers are effected prior
to the Issue opening date, no interest will be paid for the period prior to the Issue opening
date. No interest will be paid if the RTGS transfers are not realised before the end of the
Closure Date.
(v) All cheques/bank drafts received in respect of the Applications for Debentures will be banked
commencing from the Working Day immediately following the Closure Date. Cheques must be
honoured on first presentation for the Application to be valid.
(vi) Please refer Section 6.5 of the Prospectus for further details.
(3) FORWARDING COMPLETED APPLICATIONS
Application Forms properly filled in accordance with the instructions thereof together with the
remittance for the full amount payable on Application should be enclosed in an envelope
marked “HDFC BANK OF SRI LANKA – DEBENTURE ISSUE 2015” on the top left hand corner in
capital letters and dispatched by post or courier or delivered by hand to the Registrars to the
Issue or collection points mentioned in Annexure II of the Prospectus.
Applications sent by post or courier or delivered to any collection point in Annexure II should
reach the office of the Registrars to the Issue; S S P Corporate Services (Private) Limited,
No. 101, Inner Flower Road, Colombo 03 (Tel: +94 11 2 573 894) at least by 4.30 p.m. on the
following Market Day immediately upon the Closure Date. Applications received after the said
period will be rejected even though they have been delivered to any of the said collection
points prior to the Closure Date or carry a postmark dated prior to the Closure Date.
Applications delivered by hand to the Registrars to the Issue after the Closure Date of the Issue
will also be rejected.
(4) REFUNDS ON APPLICATIONS
Refunds on Applications rejected or partly allotted Debentures would be made within ten (10) Market Days excluding the Closure Date. In the event refunds are made to Non-Resident applicants, the funds will be refunded through their SIA accounts.
Please refer Section 6.9 of the Prospectus for further details.
All Applicants should indicate their CDS account number in the Application Form
Any Application which does not carry a valid CDS account number or indicates a number of a CDS account which is not opened at the time of the closure of the subscription list or which indicates an inaccurate/incorrect CDS account number will be rejected and no allotment will be made.
If you wish to open a CDS account, you may do so prior to making the application through any Member/Trading Member of the CSE as set out in Annexure II or through any Custodian Bank as set out in Annexure III of the Prospectus.
The allotted Debentures would only be credited to the Applicant’s CDS account.
NO DEBENTURE CERTIFICATE WILL BE ISSUED.
PLEASE REFER PROSPECTUS FOR FURTHER DETAILS. APPLICATIONS NOT MADE IN LINE WITH INSTRUCTIONS WILL BE REJECTED.
Prospectus
Des
igne
d &
Prin
ted
by: C
eylo
n Pr
inte
rs P
LC
HDFC Bank of Sri LankaP.O. Box 2085, Sir Chittampalam A Gardiner Mawatha, Colombo 02.
Telephone : 2356800, 2446241, 2446239, 2447354Fax : 2446392, 2356829, 2356827
Web Site : www.hdfc.lk
Prospectus
HDFC Bank of Sri LankaDebenture Issue 2015
Growing with Confidence
HDFC BANK OF SRI LANKA
PROSPECTUS
AN INITIAL ISSUE OF THIRTY MILLION (30,000,000) RATED SENIOR
UNSECURED REDEEMABLE DEBENTURES AT THE PAR VALUE OF LKR 100/- EACH TO RAISE SRI LANKA RUPEES THREE BILLION (LKR 3,000,000,000/-)
WITH AN OPTION TO ISSUE UP TO A FURTHER TEN MILLION (10,000,000) OF SAID DEBENTURES TO RAISE UP TO
SRI LANKA RUPEES ONE BILLION (LKR 1,000,000,000/-), AT THE DISCRETION OF THE BANK IN THE EVENT OF AN
OVERSUBSCRIPTION OF THE INITIAL ISSUE
Rated “BBB (lka)” by Fitch Ratings Lanka Limited
ISSUE OPENS ON
16th November 2015
Joint Financial Advisors and Managers to the Issue
TO BE LISTED ON THE
COLOMBO STOCK EXCHANGE
HDFC Bank of Sri Lanka – Debenture Issue 2015 | i
This Prospectus is dated 05th November 2015
Responsibility for the Content of the Prospectus
This Prospectus has been prepared from information provided by Housing Development Finance Corporation Bank of Sri Lanka (hereinafter referred to as the “Bank”, “HDFC” or the “Issuer”) and from publicly available sources. The Directors of the Bank have seen and approved this Prospectus and collectively and individually, accept full responsibility for the accuracy of the information given and confirm that after making all reasonable enquires and to the best of their knowledge and belief, there are no other facts the omission of which would make any statement herein misleading or inaccurate. Where representations regarding the future performance of HDFC have been given in this Prospectus, such representations have been made after due and careful enquiry of the information available to HDFC and making assumptions that are considered to be reasonable at the present point in time in their best judgment. HDFC accepts responsibility for the information contained in this Prospectus. While the Bank has taken reasonable care to ensure full and fair disclosure of information, prospective investors are advised to carefully read this Prospectus and rely on their own examination and assessment of the Bank including the risks involved prior to making any investment decision. FOR ENQUIRIES, PLEASE CONTACT THE JOINT FINANCIAL ADVISORS AND MANAGERS TO THE ISSUE Registration of the Prospectus in Jurisdictions Outside of Sri Lanka This Prospectus has not been registered with any authority outside of Sri Lanka. Non-Resident investors may be affected by the laws of the jurisdiction of their residence. Such investors are responsible to comply with the laws relevant to the country of residence and the laws of Sri Lanka, when making the investment. Representation The Debentures are issued solely on the basis of the information contained and representations made in this Prospectus. No dealer, sales person or any other person has been authorised to give any information or to make any representations in connection with the Issue other than the information and representations contained in this Prospectus, and if given or made, such information or representations must not be relied upon as having been authorised by the Bank.
The delivery of this Prospectus will not under any circumstance constitute a representation or create any implication or suggestion that there has been no material change in the affairs of the Bank since the date of this Prospectus.
If you are in doubt regarding the contents of this document, you should consult your stockbroker, bank manager, lawyer or any other professional advisor.
HDFC Bank of Sri Lanka - Debenture Issue 2015 | i
ii | HDFC Bank of Sri Lanka – Debenture Issue 2015
Forward Looking Statements Any statements included in this Prospectus that are not statements of historical fact constitute “Forward Looking Statements”. These can be identified by the use of forward looking terms such as “expect”, “anticipate”, “intend”, “may”, “plan to”, “believe”, “could” and similar terms or variations of such terms. However, these words are not the exclusive means of identifying Forward Looking Statements. As such, all or any statements pertaining to expected financial position, business strategy, plans and prospects of the Bank are classified as Forward Looking Statements.
Such Forward Looking Statements involve known and unknown risks, uncertainties and other factors including but not limited to regulatory changes in the sectors in which the Bank operates and its ability to respond to them, the Bank’s ability to successfully adapt to technological changes, exposure to market risks, general economic and fiscal policies of Sri Lanka, inflationary pressures, interest rate volatilities, the performance of financial markets both globally and locally, changes in domestic and foreign laws, regulation of taxes and changes in competition in the industry and further uncertainties that may or may not be in the control of the Bank. Such factors may cause actual results, performance and achievements to materially differ from any future results, performance or achievements expressed or implied by Forward Looking Statements herein. Forward Looking Statements are also based on numerous assumptions regarding the Bank’s present and future business strategies and the environment in which the Bank will operate in the future. Given the risks and uncertainties that may cause the Bank’s actual future results, performance or achievements to materially differ from that expected, expressed or implied by Forward Looking Statements in this Prospectus, investors are advised not to place sole reliance on such statements.
Presentation of Currency Information and Other Numerical Data The financial statements of the Bank and currency values of economic data or industry data in a local context will be expressed in Sri Lanka Rupees. References in the Prospectus to “LKR”, “Rupees” or “Rs.” are to the lawful currency of Sri Lanka. Certain numerical figures in the Prospectus have been subject to rounding adjustments, accordingly numerical figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.
The Colombo Stock Exchange (CSE) has taken reasonable care to ensure full and fair disclosure of information in this Prospectus. However, the CSE assumes no responsibility for accuracy of the statements made, opinions expressed or reports included in this Prospectus. The interest rate, Redemption and other terms and conditions of the Debentures issued herein have been decided by the Bank.
ii | HDFC Bank of Sri Lanka - Debenture Issue 2015
HDFC Bank of Sri Lanka – Debenture Issue 2015 | iii
All Applicants should indicate in the Application for Debentures, their Central Depository Systems (Private) Limited (CDS) account number. In the event the name, address or NIC number/passport number/company number of the Applicant mentioned in the Application Form differ from the name, address or NIC number/passport number/company number as per the CDS records, the name, address or NIC number/passport number/company number as per the CDS records will prevail and be considered as the name, address or NIC number/passport number/company number of such Applicant. Therefore Applicants are advised to ensure that the name, address or NIC number/passport number/company number mentioned in the Application Form tally with the name, address or NIC number/passport number/company number given in the CDS account as mentioned in the Application Form. As per the directive of the Securities and Exchange Commission made under Circular No. 08/2010 dated 22nd November 2010 and Circular No. 13/2010 issued by the CDS dated 30th November 2010, all Debentures are required to be directly deposited in to the CDS. To facilitate compliance with this directive, all Applicants are required to indicate their CDS accounts number. In line with this directive, THE DEBENTURES ALLOTTED TO AN APPLICANT WILL BE DIRECTLY DEPOSITED IN THE CDS ACCOUNT OF SUCH APPLICANT, the details of which is indicated in his/her Application Form. PLEASE NOTE THAT DEBENTURE CERTIFICATES WILL NOT BE ISSUED. Debentures will not be allotted to Applicants who have not indicated their CDS account details in the Application Form. Applications which do not specify a CDS account number will be rejected. Applicants who wish to open a CDS account, may do so through a Member/Trading Member of the CSE as set out in Annexure II or through any Custodian Bank as set out in Annexure III of this Prospectus. If the CDS account number indicated in the Application Form is found to be inaccurate/incorrect or there is no CDS number indicated, the Application will be rejected and no allotments will be made.
HDFC Bank of Sri Lanka - Debenture Issue 2015 | iii
iv | HDFC Bank of Sri Lanka – Debenture Issue 2015
ISSUE AT A GLANCE
Issuer Housing Development Finance Corporation Bank of Sri Lanka
Instrument Rated Senior Unsecured Redeemable Debentures
Listing The Debentures will be listed on the Colombo Stock Exchange
Number of Debentures to be Issued
An initial Issue of Thirty Million (30,000,000) Rated Senior Unsecured Redeemable Debentures with an option to issue up to a further Ten Million (10,000,000) of said Debentures, at the discretion of the Bank, in the event of an oversubscription of the initial Issue
Amount to be Raised Sri Lanka Rupees Three Billion (LKR 3,000,000,000/-) with an option to raise up to a further Sri Lanka Rupees One Billion (LKR 1,000,000,000/-), at the discretion of the Bank, in the event of an oversubscription of the initial Issue
Entity Rating “BBB (lka)“ with a Stable Outlook by Fitch Ratings Lanka Limited
Issue Rating “BBB (lka)“ by Fitch Ratings Lanka Limited
Issue Price LKR 100/- per each Debenture
Par Value LKR 100/- per each Debenture
Details of Debentures
Type
Interest Rate (per
annum)
Type of Interest
Coupon
Payment Frequency
Annual Effective Rate (AER)
Redemption (from the Date of
Allotment)
A AWPLR+ 1.50%
Floating Quarterly 60 Months (5 Years)
B 10.50% Fixed Semi
Annually 10.78%60 Months (5 Years)
C 12.00% Fixed Annually 12.00%120 Months (10 Years)
Number of Debentures to be Subscribed
Applicants are allowed to invest in either; Debentures of Type A; and/or Debentures of Type B; and/or Debentures of Type C
Subject to the minimum subscription under each type as given below. A minimum of One Hundred (100) Debentures (LKR 10,000/-) and in multiples of One Hundred (100) Debentures (LKR 10,000/-) thereafter
iv | HDFC Bank of Sri Lanka - Debenture Issue 2015
HDFC Bank of Sri Lanka – Debenture Issue 2015 | v
Interest Payment Date(s) Debentures of Type A The three month period from the date immediately succeeding a particular Interest Payment Date and ending on the next Interest Payment Date (inclusive of the aforementioned commencement date and end date) and shall include the period commencing from the Date of Allotment and ending on the first Interest Payment Date (inclusive of the aforementioned commencement date and end date) and the period from the date immediately succeeding the last Interest Payment Date before the Date of Redemption and ending on the date immediately preceding the Date of Redemption (inclusive of the aforementioned commencement date and end date). Debentures of Type B The six month period from the date immediately succeeding a particular Interest Payment Date and ending on the next Interest Payment Date (inclusive of the aforementioned commencement date and end date) and shall include the period commencing from the Date of Allotment and ending on the first Interest Payment Date (inclusive of the aforementioned commencement date and end date) and the period from the date immediately succeeding the last Interest Payment Date before the Date of Redemption and ending on the date immediately preceding the Date of Redemption (inclusive of the aforementioned commencement date and end date). Debentures of Type C The twelve month period from the date immediately succeeding a particular Interest Payment Date and ending on the next Interest Payment Date (inclusive of the aforementioned commencement date and end date) and shall include the period commencing from the Date of Allotment and ending on the first Interest Payment Date (inclusive of the aforementioned commencement date and end date) and the period from the date immediately succeeding the last Interest Payment Date before the Date of Redemption and ending on the date immediately preceding the Date of Redemption (inclusive of the aforementioned commencement date and end date). Interest would be paid not later than Three (03) Working Days from each Interest Payment Date
Mode of Payment of Principal Sum and Interest
By cheque marked "Account Payee Only" or through an electronic fund transfer mechanism recognised by the banking system of Sri Lanka such as SLIPS and RTGS
RTGS transfers however could be effected only for amounts over and above the maximum value that can be accommodated via SLIPS transfers (i.e. LKR 5,000,000/- as of the date of this Prospectus)
Issue Opening Date 16th November 2015
HDFC Bank of Sri Lanka - Debenture Issue 2015 | v
vi | HDFC Bank of Sri Lanka – Debenture Issue 2015
Closure Date of the Subscription List
04th December 2015 or such earlier date on which; The maximum of 30,000,000 Debentures are fully subscribed; or The Board of Directors of the Bank decides to close the Issue upon
the initial Issue of 30,000,000 Debentures becoming fully subscribed or such other higher amount less than the maximum amount of 40,000,000 Debentures becoming fully subscribed
with the notification to the CSE on the occurrence of the above. In the event the Board of Directors of the Bank decides to exercise the option to issue further upto 10,000,000 Debentures (having subscribed the initial Issue of 30,000,000 Debentures) but subsequently decides to close the subscription list upon part of the further Issue of 10,000,000 Debentures becoming subscribed, such decision is to be notified to the CSE on the day such decision is made and the subscription list will be closed on the following Market day.
Date of Allotment The date on which the Debentures will be allotted by the Bank to Applicants subscribing thereto
Basis of Allotment In the event of an oversubscription, the Board of HDFC will endeavour to decide the basis of allotment in a fair manner as soon as practicable so as to ensure compliance with the CSE Listing Rules. Upon the allotments being decided, an announcement will be made to the CSE.
The Board however shall reserve the right to allocate up to 75% of the number of Debentures to be allotted under this Prospectus on a preferential basis, to identified institutional investor/s of strategic and operational importance with whom the Bank might have mutually beneficial relationships in the future.
The number of Debentures to be issued under Debentures of Type A, Debentures of Type B and Debentures of Type C will be in accordance with the basis of allotment which will be decided at the discretion of the Board of HDFC in a fair manner in the event of an oversubscription.
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TABLE OF CONTENTS
1.0 CORPORATE INFORMATION ......................................................................................................... 1
2.0 RELEVANT PARTIES TO THE ISSUE ............................................................................................. 3
3.0 LIST OF ABBREVIATIONS................................................................................................................ 4
4.0 GLOSSARY OF TERMS RELATED TO THE ISSUE ..................................................................... 5
5.0 PRINCIPAL FEATURES OF THE RATED SENIOR UNSECURED REDEEMABLE DEBENTURES ....................................................................................................................................... 8
5.1 INVITATION TO SUBSCRIBE ...................................................................................................... 8 5.2 SUBSCRIPTION LIST ..................................................................................................................... 9 5.3 OBJECTIVE OF THE ISSUE ........................................................................................................... 9 5.4 DEBENTURES TO BE ISSUED .....................................................................................................10 5.5 INTEREST .......................................................................................................................................11 5.6 REDEMPTION ................................................................................................................................13 5.7 PAYMENT OF PRINCIPAL SUM AND INTEREST .................................................................14 5.8 TRUSTEE TO DEBENTURE HOLDERS .....................................................................................14 5.9 RATING OF THE DEBENTURES ................................................................................................14 5.10 RIGHTS AND OBLIGATIONS OF DEBENTURE HOLDERS .................................................15 5.11 BENEFITS OF INVESTING IN DEBENTURES OFFERED BY THE BANK ...........................15 5.12 RISKS INVOLVED IN INVESTING IN THE DEBENTURES ..................................................16 5.13 TRANSFER OF DEBENTURES ....................................................................................................17 5.14 LISTING ...........................................................................................................................................17 5.15 COST OF THE ISSUE .....................................................................................................................18 5.16 BROKERAGE FEE ..........................................................................................................................18 5.17 UNDERWRITING ..........................................................................................................................18
6.0 PROCEDURE FOR APPLICATION .................................................................................................19
6.1 INSPECTION OF DOCUMENTS .................................................................................................19 6.2 ELIGIBLE APPLICANTS ..............................................................................................................19 6.3 HOW TO APPLY ............................................................................................................................20 6.4 NUMBER OF DEBENTURES TO BE SUBSCRIBED .................................................................23 6.5 MODE OF PAYMENT OF THE INVESTMENT BY THE APPLICANTS ..............................24 6.6 REJECTION OF APPLICATIONS ................................................................................................26 6.7 BANKING OF PAYMENTS ..........................................................................................................26 6.8 BASIS OF ALLOTMENT OF DEBENTURES .............................................................................26 6.9 REFUNDS ........................................................................................................................................27 6.10 CDS ACCOUNTS AND SECONDARY MARKET TRADING ................................................28
7.0 THE BANK ............................................................................................................................................29
7.1 BACKGROUND AND NATURE OF BUSINESS.......................................................................29 7.2 STATED CAPITAL ........................................................................................................................34 7.3 FINANCIAL RATIOS ....................................................................................................................34 7.4 MAJOR SHAREHOLDERS ...........................................................................................................35 7.5 SUBSIDIARY/ASSOCIATE COMPANIES .................................................................................35 7.6 FINANCIAL INFORMATION .....................................................................................................36 7.7 PARTICULARS OF LONG TERM LOANS AND OTHER BORROWINGS ..........................36 7.8 DETAILS OF OTHER DEBENTURES IN ISSUE .......................................................................37
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7.9 DETAILS OF CONVERTIBLE DEBT SECURITIES ...................................................................37 7.10 CONTINGENT LIABILITIES .......................................................................................................37 7.11 LITIGATION AGAINST THE BANK .........................................................................................37 7.12 DETAILS OF PENALTIES IMPOSED BY REGULATORY AND STATE AUTHORITIES ..38 7.13 DETAILS OF MATERIAL CONTRACTS OF THE BANK .......................................................38 7.14 DETAILS OF COMMISSIONS PAID ...........................................................................................38 7.15 TRANSACTIONS RELATING TO THE PROPERTY ................................................................38 7.16 DETAILS OF BENEFITS PAID TO PROMOTERS .....................................................................38 7.17 DIVIDEND POLICY ......................................................................................................................38 7.18 TAXATION .....................................................................................................................................38
8.0 BOARD OF DIRECTORS ...................................................................................................................39
8.1 DETAILS OF THE DIRECTORS ...................................................................................................39 8.2 RELATED PARTY TRANSACTIONS REVIEW COMMITTEE ...............................................43
9.0 CORPORATE MANAGEMENT .......................................................................................................44
9.1 DETAILS OF THE MANAGEMENT ...........................................................................................44
10.0 STATUTORY DECLARATIONS ....................................................................................................48
10.1 STATUTORY DECLARATION BY THE DIRECTORS .............................................................48 10.2 STATUTORY DECLARATION BY THE JOINT FINANCIAL ADVISORS AND
MANAGERS TO THE ISSUE .......................................................................................................50
11.0 FINANCIAL INFORMATION ........................................................................................................51
11.1 ACCOUNTANT’S REPORT AND FIVE YEAR SUMMARY OF FINANCIAL STATEMENTS ................................................................................................................................51
ANNEXURE I - COPY OF THE RATING CERTIFICATE ...................................................................56
ANNEXURE II - COLLECTION POINTS..............................................................................................58
ANNEXURE III - CUSTODIAN BANKS ...............................................................................................69
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HDFC Bank of Sri Lanka - Debenture Issue 2015 | 1
HDFC Bank of Sri Lanka – Debenture Issue 2015 | 1
1.0 CORPORATE INFORMATION
The Bank/HDFC/Issuer Housing Development Finance Corporation Bank of Sri Lanka
Legal Status A licensed specialised bank under the provisions of Housing Development Finance Corporation, Act No. 07 of 1997, amended by Act No. 15 of 2003 and No. 45 of 2011
Place of Incorporation Colombo, Sri Lanka
Registered Address Housing Development Finance Corporation Bank of Sri Lanka P.O Box 2085, Sir Chittampalam A Gardiner Mawatha Colombo 02.
Tel: +94 11 2 356 800 Fax:+94 11 2 446 392
Company Secretary Mrs. Dharshani De Silva MBA, LLM, Attorney - at - Law & Notary Public, Company Secretary, Commissioner of Oaths. P.O Box 2085, Sir Chittampalam A Gardiner Mawatha Colombo 02. Tel: +94 11 2 423 362 E-mail [email protected]
Rating Agency Fitch Ratings Lanka Limited No. 15-04, East Tower World Trade Centre Colombo 01 Tel: +94 11 2 541 900 Fax:+94 11 2 501 903
Auditors
Auditor General of Sri Lanka Department of Auditor General Battaramulla
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Board of Directors Mr. R.J. De Silva (Chairman) Non – Executive, Independent Director Mr. Galhena Prasad Indika Gnanasena Non – Executive, Independent Director Mr. Muthurajah Surendran Non – Executive, Non- Independent Director Mrs. B.G.S. Gunathilake Non – Executive, Independent Director Mr. R. M. J. Rasnayake Non – Executive, Independent Director Mr. Rajiv Herath Meewakkala Non-Executive Independent Director Mr. L. S. Palansuriya Non-Executive Non-Independent Director Mr. P. S. Punchihewa Non-Executive- Non Independent Director
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HDFC Bank of Sri Lanka – Debenture Issue 2015 | 3
2.0 RELEVANT PARTIES TO THE ISSUE
Joint Financial Advisors and Managers to the Issue
Bank of Ceylon Investment Banking Unit Head Office, BOC Square No. 01, Bank of Ceylon Mawatha Colombo 01
Tel: +94 11 2 394 311 – 2 346 845 Fax: +94 11 2 346 842 NDB Investment Bank Limited No. 40, Navam Mawatha Colombo 02
Tel: +94 11 2 300 385 Fax: +94 11 2 300 393
Lawyers to the Issue
Nithya Partners No. 97A, Galle Road Colombo 03
Tel: +94 11 4 712 625 Fax: +94 11 2 328 817
Registrars to the Issue
S S P Corporate Services (Private) Limited No. 101, Inner Flower Road Colombo 03
Tel: +94 11 2 573 894 Fax: +94 11 2 573 609
Trustee to the Issue Bank of Ceylon Head Office, BOC Square No. 01, Bank of Ceylon Mawatha Colombo 01 Tel: +94 11 2 394 311 – 2 346 845 Fax: +94 11 2 346 842
Rating Agency to the Issue Fitch Ratings Lanka Limited No. 15-04, East Tower World Trade Centre Colombo 01
Tel: +94 11 2 541 900 Fax:+94 11 2 501 903
Bankers to the Issue
National Development Bank PLC No. 40, Navam Mawatha Colombo 02
Tel: +94 11 2 488 488 Fax:+94 11 2 341 044
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3.0 LIST OF ABBREVIATIONS
AER Annual Effective Rate
ATS Automated Trading System of the Colombo Stock Exchange
AWPLR Average Weighted Prime Lending Rate
CDS Central Depository Systems (Private) Limited
CSE Colombo Stock Exchange
NIC National Identity Card
POA Power of Attorney
RTGS Real Time Gross Settlements
SEC Securities and Exchange Commission of Sri Lanka
SIA Securities Investment Account
SLIPS Sri Lanka Inter Bank Payment System
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HDFC Bank of Sri Lanka – Debenture Issue 2015 | 5
4.0 GLOSSARY OF TERMS RELATED TO THE ISSUE
Applicant Any person who submits an Application Form under this Prospectus
Application Form/ Application
The application form that constitutes part of this Prospectus through which an Applicant may apply for the Debentures in Issue
Closure Date 04th December 2015 or such earlier date on which;
The maximum of 30,000,000 Debentures are fully subscribed; or The Board of Directors of the Bank decides to close the Issue upon
the initial Issue of 30,000,000 Debentures becoming fully subscribed or such other higher amount less than the maximum amount of 40,000,000 Debentures becoming fully subscribed
with the notification to the CSE on the occurrence of the above. In the event the Board of Directors of the Bank decides to exercise the option to issue further upto 10,000,000 Debentures (having subscribed the initial Issue of 30,000,000 Debentures) but subsequently decides to close the subscription list upon part of the further Issue of 10,000,000 Debentures becoming subscribed, such decision is to be notified to the CSE on the day such decision is made and the subscription list will be closed on the following Market day.
Bank/ HDFC/ Issuer Housing Development Finance Corporation Bank of Sri Lanka
Date of Allotment The date on which the Debentures will be allotted by the Bank to Applicants subscribing thereto
Date of Redemption The date on which Redemption of the Debentures will take place as referred to in Section 5.6 of this Prospectus
Debentures Rated Senior Unsecured Redeemable Debentures to be issued pursuant to this Prospectus
Debenture Holder(s) Any person who is for the time being the holder of the Debentures and includes his/her respective successors in title
Entitlement Date The Market Day immediately preceding the respective Interest Payment Date or Date of Redemption on which a Debenture Holder would need to be recorded as being a Debenture Holder on the list of Debenture Holders provided by the CDS to the Bank in order to qualify for the payment of any interest or any redemption proceeds
Par Value LKR 100/- per each Debenture
Interest Determination Date
In respect of Type A Debentures, the Date of Allotment in respect of the first Interest Period and the date immediately prior to the first date of each Interest Period in respect of each subsequent Interest Period
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GLOSSARY OF TERMS RELATED TO THE ISSUE
Interest Payment Date(s) Debentures of Type A The dates on which payments of interest in respect of the Debentures shall fall due, which shall be the three month period of the Date of Allotment and every three month period therefrom of each year from the Date of Allotment until the Date of Redemption and includes the Date of Redemption.
Debentures of Type B The dates on which payments of interest in respect of the Debentures shall fall due, which shall be the six month period of the Date of Allotment and every six month period therefrom of each year from the Date of Allotment until the Date of Redemption and includes the Date of Redemption.
Debentures of Type C The dates on which payments of interest in respect of the Debentures shall fall due, which shall be the twelve month period of the Date of Allotment and every twelve month period therefrom of each year from the Date of Allotment until the Date of Redemption and includes the Date of Redemption.
Interest would be paid not later than Three (03) Working Days from each Interest Payment Date
Interest Period Debentures of Type A The three month period from the date immediately succeeding a particular Interest Payment Date and ending on the next Interest Payment Date (inclusive of the aforementioned commencement date and end date) and will include the period commencing from the Date of Allotment and ending on the first Interest Payment Date (inclusive of the aforementioned commencement date and end date) and the period from the date immediately succeeding the last Interest Payment Date before the Date of Redemption and ending on the date immediately preceding the Date of Redemption (inclusive of the aforementioned commencement date and end date)
Debentures of Type B The six month period from the date immediately succeeding a particular Interest Payment Date and ending on the next Interest Payment Date (inclusive of the aforementioned commencement date and end date) and will include the period commencing from the Date of Allotment and ending on the first Interest Payment Date (inclusive of the aforementioned commencement date and end date) and the period from the date immediately succeeding the last Interest Payment Date before the Date of Redemption and ending on the date immediately preceding the Date of Redemption (inclusive of the aforementioned commencement date and end date)
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HDFC Bank of Sri Lanka – Debenture Issue 2015 | 7
Debentures of Type CThe twelve month period from the date immediately succeeding a particular Interest Payment Date and ending on the next Interest Payment Date (inclusive of the aforementioned commencement date and end date) and will include the period commencing from the Date of Allotment and ending on the first Interest Payment Date (inclusive of the aforementioned commencement date and end date) and the period from the date immediately succeeding the last Interest Payment Date before the Date of Redemption and ending on the date immediately preceding the Date of Redemption (inclusive of the aforementioned commencement date and end date)
Issue The offer of Debentures pursuant to this Prospectus
Issue Price LKR 100/- per each Debenture
Market Day Any day on which trading takes place at the CSE
Non-Resident(s) Foreign institutional investors including country funds, regional funds or mutual funds, corporate bodies incorporated outside Sri Lanka, citizens of foreign states whether resident in Sri Lanka or outside Sri Lanka and Sri Lankans resident outside Sri Lanka
Principal Sum The product of the number of Debentures allotted and the Par Value
Prospectus This prospectus dated 05th November 2015 issued by HDFC
Redemption Repayment of the Par Value and unpaid and accrued interest (if any) with regard to a Debenture to a Debenture Holder by the Bank
Trust Deed Trust deed executed between HDFC and Bank of Ceylon on 07th October 2015
Trustee Bank of Ceylon
Unsecured Repayment of the Principal Sum and payment of interest on the Debentures are not secured by a charge on any assets of HDFC
Working Day A day (other than a Saturday or Sunday or any statutory holiday or any special banking holiday) on which licensed commercial banks are open for business in Sri Lanka
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5.0 PRINCIPAL FEATURES OF THE RATED SENIOR UNSECURED REDEEMABLE DEBENTURES
5.1 INVITATION TO SUBSCRIBE
The Board of Directors of Housing Development Finance Corporation Bank (hereinafter referred to as the “Board”) by resolution dated 30th October 2014, 18th December 2014, 26th May 2015 and 7th September 2015 resolved to raise a sum of up to Sri Lanka Rupees Three Billion (LKR 3,000,000,000/-) by an initial Issue of up to Thirty Million (30,000,000) Debentures each with a Par Value of LKR 100/-, and issue a further sum of up to Sri Lanka Rupees One Billion (LKR 1,000,000,000/-) by an issue of up to a further Ten Million (10,000,000) of said Debentures, in the event of an oversubscription of the initial Issue. As such, a maximum amount of Sri Lanka Rupees Four Billion (LKR 4,000,000,000/-) would be raised by the issue of a maximum of Forty Million (40,000,000) Debentures each with a Par Value of LKR 100/-. The rights of the Debenture Holders with respect to payment of the Principal Sum and accrued interest due thereon upon a winding-up of the Bank will rank equal and pari passu with all other unsecured creditors of the Bank, but in priority to and over the rights of any preference and ordinary shareholders. HDFC invites Applications for Debentures of Type A and/or Debentures of Type B and/or Debentures of Type C, which will rank equal and pari passu with each other without any preference or priority of any one or more than over the others except for the interest rates and Dates of Redemption of the Debentures, as morefully described in Section 5.5 and Section 5.6 of this Prospectus respectively It is the intention of the Bank to list the Debentures on the CSE. The CSE has given its in-principle approval for the listing of the Debentures on the CSE.
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5.2 SUBSCRIPTION LIST
Subject to the provisions contained below, the subscription list for the Debentures will open at 9.30 a.m. on 16th November 2015 and will remain open for fourteen (14) Market Days including the Issue opening date until closure at 4.30 p.m. on 04th December 2015. However, the subscription list will be closed on an earlier date at 4.30 p.m. with the notification to the CSE on the occurrence of the following;
The maximum of 30,000,000 Debentures are fully subscribed; or The Board of Directors of the Bank decides to close the Issue upon the initial Issue of
30,000,000 Debentures becoming fully subscribed or such other higher amount less than the maximum amount of 40,000,000 Debentures becoming fully subscribed.
In the event the Board of Directors of the Bank decides to exercise the option to issue further upto 10,000,000 Debentures (having subscribed the initial Issue of 30,000,000 Debentures) but subsequently decides to close the subscription list upon part of the further Issue of 10,000,000 Debentures becoming subscribed, such decision is to be notified to the CSE on the day such decision is made and the subscription list will be closed on the following Market day. Applications can be made forthwith in the manner set out in Section 6.0 of this Prospectus and duly completed Application Forms will be accepted at any one of the collection points set out in Annexure II of this Prospectus.
5.3 OBJECTIVE OF THE ISSUE
1. To mobilize/raise medium term funds to manage assets and liability mismatch and associated liquidity risk
2. To finance the medium to long-term budgeted lending portfolio and to minimize the mismatch in funding exposure.
3. To minimize the interest rate risk exposures of the Bank
The Bank intends to utilize the entire proceeds of the issue to finance its medium to long-term budgeted lending portfolio in the ordinary course of business within the next 12 month from the date of allotment. The Bank has access to multiple sources of funds, including different types of deposits and borrowings. As such, the proceeds of the Debenture Issue is only one such source in financing its medium to long-term budgeted lending portfolio. The Bank is currently on a growth drive of its lending portfolio. During the first half of the FY 2015, the total disbursement of loans and advances has been over LKR 5.0 Billion compared to the budgeted lending of approximately LKR 1.0 Billion per month. Since HDFC forecasts a greater credit demand than the amount to be raised via the Debenture Issue. The Bank foresee no specific risk factor in granting loans and advances from the proceeds of the issue within the specified time period and thereby achieving the above mentioned objectives. Long term funds raised through the Debenture Issue will be utilized to finance the long term lending portfolio of HDFC which in turn will improve the assets and liability mismatch of HDFC.
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However, if the Bank fails to grant such loans and advances within the expected time period, the proceeds can be invested in Government Securities at zero default risk in the interim period until such funds are disbursed for lending purposes.
HDFC has already communicated to the Central Bank of Sri Lanka (CBSL) the details of the Debenture Issue, which is a formality and does not required an approval from CBSL.
5.4 DEBENTURES TO BE ISSUED
The Issue consists of three types of Debentures, namely Debentures of Type A, Debentures of Type B and Debentures of Type C, each with a Par Value of Rupees One Hundred (LKR 100/-). The Applicants have the discretion of applying for Debentures issued under Debentures of Type A and/or Debentures of Type B and/or Debentures of Type C.
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5.5 INTEREST
The Debentures comprise of Debentures of Type A, Debentures of Type B and Debentures of Type C and will carry rates of interest as described in the table below.
Type A
AWPLR plus One decimal Five Zero per centum (AWPLR + 1.50%) per annum, payable quarterly on the Interest Payment Dates
Type B
Ten decimal Five Zero per centum (10.50%) per annum, payable semi-annually on the Interest Payment Dates Annual Effective Rate of 10.78% per annum
Type C
Twelve decimal Zero per centum (12.00%) per annum, payable annually on the Interest Payment Dates Annual Effective Rate of 12.00% per annum
“AWPLR” which is the benchmark for the determination of interest rate for Type A Debentures means the weekly Average Weighted Prime Lending Rate published by the Central Bank of Sri Lanka (or in the event that the Central Bank of Sri Lanka ceases to publish the AWPLR, such AWPLR which may be published by any other similar authority) in the week immediately preceding the Interest Determination Date. With regard to Type A Debentures, interest on the Debentures accruing on a daily basis will be paid quarterly in each year on the three month period from the Date of Allotment and every three month period therefrom of each year from the Date of Allotment until the Date of Redemption and includes the Date of Redemption. With regard to Type B Debentures, interest on the Debentures accruing on a daily basis will be paid semi-annually in each year on the six month period from the Date of Allotment and every six month period therefrom of each year from the Date of Allotment until the Date of Redemption and includes the Date of Redemption. With regard to Type C Debentures, interest on the Debentures accruing on a daily basis will be paid annually in each year on the twelve month period from the Date of Allotment and every six month period therefrom of each year from the Date of Allotment until the Date of Redemption and includes the Date of Redemption. The interest due on the Debentures for a particular Interest Period will be calculated based on the actual number of days in such Interest Period and will be paid not later than Three (03) Working Days from each Interest Payment Date.
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In order to accommodate the debenture interest cycles in the ATS of the CSE, the payment of interest for a particular Interest Payment Date will include Debenture Holders holding Debentures in the CDS as of the Entitlement Date. Payment of the interest on the Debentures will be made after deducting any taxes and charges thereon (if any) in Sri Lanka Rupees as per the applicable law prevalent at the time of interest payment to the Debenture Holders.
As per Section 9(o) of the Inland Revenue Act No. 10 of 2006 (as amended by Section 4 of the Inland Revenue (Amendment) Act No. 18 of 2013), the interest income from any investment made on or after 01st January 2013 in corporate debt securities (i.e. debentures), quoted in any stock exchange licensed by the SEC is exempt from income tax. Furthermore, in terms of Section 13(xxxxxxx) of the Inland Revenue Act No. 10 of 2006 (as amended by Section 5 of the Inland Revenue (Amendment) Act No. 18 of 2013), the profits and income earned from any such investment has also been exempted from income tax.
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HDFC Bank of Sri Lanka – Debenture Issue 2015 | 13
5.6 REDEMPTION
Redemption of the Debentures will take place on the respective Date of Redemption in respect of each type of Debentures as described in the table below in accordance with the provisions of the Trust Deed. The Principal Sum and unpaid and accrued interest (if any) payable on the Redemption of Debentures will be paid not later than three (03) Working Days from the Date of Redemption.
Redemption Schedule
Type of Debentures Date of Redemption
Type A
The date on which a period of Sixty (60) months from the Date of Allotment expires or if such date on which a period of Sixty (60) months from the Date of Allotment expires is not a Market Day, the Market Day immediately succeeding such date
Type B
The date on which a period of Sixty (60) months from the Date of Allotment expires or if such date on which a period of Sixty (60) months from the Date of Allotment expires is not a Market Day, the Market Day immediately succeeding such date
Type C
The date on which a period of One Hundred Twenty (120) months from the Date of Allotment expires or if such date on which a period of One Hundred Twenty (120) months from the Date of Allotment expires is not a Market Day, the Market Day immediately succeeding such date
The Principal Sum and unpaid and accrued interest (if any) payable on the Redemption of Debentures will be paid to the Debenture Holders not later than three (03) Working Days from the respective Date of Redemption. If the Date of Redemption falls on a day which is not a Market Day, then the Date of Redemption shall be the immediately succeeding Market Day and for the avoidance of doubt interest shall be paid for the intervening days which are not Market Days. These Debentures will not be subject to Redemption by the Bank prior to the Date of Redemption.
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5.7 PAYMENT OF PRINCIPAL SUM AND INTEREST
The Bank will redeem the Debentures on the Date of Redemption as specified in Section 5.6 and the interest payments will be made as specified in Section 5.5. The payment of Principal Sum and interest will be made either by cheque/s marked “Account Payee Only" dispatched to the address provided by the Debenture Holders to the CDS at the risk of the Debenture Holders or through an electronic fund transfer mechanism recognised by the banking system of Sri Lanka such as SLIPS and RTGS to a bank account provided to the CDS by the Debenture Holders. RTGS transfers however could be effected only for amounts over and above the maximum value that can be accommodated via SLIPS transfers (i.e. LKR 5,000,000/- as of the date of this Prospectus)
However, in the event such payment is over the maximum amount that can be accommodated through electronic fund transfer mechanism recognised by the banking system of Sri Lanka or if the Debenture Holder has not provided to the CDS accurate and correct details of his/her bank account for the payment of Principal Sum and interest, such payment to the Debenture Holder will be made by way of a cheque and sent by post at the risk of the Debenture Holder. The payment of Principal Sum and interest will be made in Sri Lanka Rupees in favour of the Debenture Holders as of the Entitlement Date. In the case of joint Debenture Holders, the payment of Principal Sum and interest will be made to the one whose name stands first in the register of Debenture Holders.
5.8 TRUSTEE TO DEBENTURE HOLDERS
Bank of Ceylon has agreed to act as the Trustee to the Debenture Holders. HDFC has entered into an agreement with the Trustee (hereinafter called the "Trust Deed"). Debenture Holders in their Application Forms for subscription will be required to authorise the Trustee to act as their agent in entering into such deeds, writings, and instruments with HDFC and to act as the agent and Trustee for the Debenture Holders.
The rights and obligations of the Trustee are set out in the Trust Deed and the Debentures will be subject to the terms and conditions incorporated in the said Trust Deed. The fee payable to the Trustee will be LKR 130,000 per semi-annual period plus statutory levies. There is no conflict of interest between the Trustee and HDFC, except that the Trustee is one of the banks rendering banking related services to HDFC.
5.9 RATING OF THE DEBENTURES
Fitch Ratings Agency Limited has assigned a credit rating of “BBB (lka)” to the Debentures.
'BBB' ratings indicate that expectations of default risk are currently low. The capacity for payment of financial commitments is considered adequate but adverse business or economic conditions are more likely to impair this capacity.
The modifiers "+" or "-" may be appended to a rating to denote relative status within major rating categories. Source: https://www.fitchratings.com/creditdesk/public/ratings_defintions/index.cfm?rd_file=ltr#LTR A copy of the rating certificate is given in Annexure I of this Prospectus.
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HDFC Bank of Sri Lanka – Debenture Issue 2015 | 15
5.10 RIGHTS AND OBLIGATIONS OF DEBENTURE HOLDERS
(a) Debenture Holders are entitled to the following rights.
Receiving interest at the interest rates set out in Section 5.5 of this Prospectus on Interest Payment Dates and the Principal Sum on the Date of Redemption as set out in Section 5.6 of this Prospectus.
Ranking equal and pari passu with unsecured creditors in the event of liquidation of the Bank and above the preference shareholders and ordinary shareholders
Receiving annual report of the Bank in terms of Rule 7.5 (a) of the CSE Listing Rules. Annual report will be sent to Debenture Holders in CD form, unless a specific request for a hard copy is received by the Bank
Calling and attending meetings of Debenture Holders as set out in the Trust Deed
(b) Debenture Holders do not have the following rights
Attending and voting at meetings of holders of shares and other debentures Sharing in the profits of the Bank Participating in any surplus in the event of liquidation
(c) Each Debenture Holder must ensure that the information in respect of the securities account maintained with the CDS is up to date and accurate. Each Debenture Holder shall absolve the Bank from any responsibility or liability in respect of any error or inaccuracy or absence of necessary changes in the information recorded with the CDS. Provided further that the Debenture Holders shall absolve the CSE and the CDS from any responsibility or liability in respect of any error or inaccuracy or absence of necessary changes in the information recorded with the CDS where such errors or inaccuracies or absence of changes are attributable to any act or omission of the Debenture Holders.
5.11 BENEFITS OF INVESTING IN DEBENTURES OFFERED BY THE BANK
(a) Provides an opportunity to diversify the investment portfolio of the investor (b) Provides the investor with a regular cash inflow of interest payments (c) Provides the investor with an opportunity to invest in Debentures issued by a leading
financial institution in Sri Lanka (d) Being listed on the CSE, the Debentures will have a secondary market, thus providing the
investor with an opportunity to exit at the market price prevailing at the time of divestiture
(e) The Debentures may be used as collateral to obtain credit facilities from banks and financial institutions
(f) As per Section 9(o) of the Inland Revenue Act No. 10 of 2006 (as amended by Section 4 of the Inland Revenue (Amendment) Act No. 18 of 2013), as at the date of this Prospectus, the interest income from any investment made on or after 01st January 2013 in corporate debt securities (i.e. debentures), quoted in any stock exchange licensed by the SEC is exempt from income tax. Furthermore, in terms of Section 13(xxxxxxx) of the Inland Revenue Act No. 10 of 2006 (as amended by Section 5 of the Inland Revenue (Amendment) Act No. 18 of 2013), as at the date of this Prospectus, the profits and income earned from any such investment has also been exempted from income tax
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5.12 RISKS INVOLVED IN INVESTING IN THE DEBENTURES
Subscribers to the Debentures could be exposed to the following risks
(a) Interest Rate Risk
Provided all other factors are equal, the market price of the Debentures will generally fluctuate in the opposite direction to the fluctuation in market interest rates. Thus, the interest rate risk could be identified as the reduction in the market price of Debentures resulting from a rise in interest rates.
(b) Reinvestment Risk
Interest on the Debentures are payable quarterly/semi-annually/annually. An investor may decide to reinvest these interest payments and earn interest from that point onwards. Depending on the prevailing interest rates at the point of reinvestment, the risk of returns generated by Debenture Holders by reinvesting such interest received being higher or lower than the return offered by the Debentures is known as reinvestment risk.
(c) Call Risk
The uncertainty to the debenture investor is when an issuer has the option of redeeming the debentures before maturity, thus being called upon to terminate the investment early is known as "Call Risk". However, these Debentures do not carry this risk as call options are not available with these Debentures.
(d) Credit Risk Credit Risk is also referred to as default risk. This is the risk that the issuer of a debenture may default, i.e. the issuer will not be able to pay interest and principal payments on a timely basis. This risk is gauged in terms of rating assigned by different rating agencies. Fitch Ratings Lanka Limited has assigned a Long-term Rating of “BBB” to these Debentures and will be periodically reviewing the same.
(e) Liquidity Risk
Liquidity risk is associated with the ease in which an investment can be sold after the initial placement. In order to reduce the liquidity risk of the Debentures, the Bank has applied for a listing of these Debentures on the CSE and has received in-principle approval for such listing whereby Debenture Holders will be able to sell the Debentures through the CSE in order to convert the Debentures to cash and exit from the investment.
(f) Duration Risk
Duration is a measure of the price sensitivity of fixed income investments to a change in interest rates, based on the time to maturity of principal and coupon payments. The higher the duration, the greater the price volatility or duration risk, while a lower duration carries a lower risk. The risks involved in meeting the objectives of the Issue is discussed in Section 5.3 of this Prospectus.
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HDFC Bank of Sri Lanka – Debenture Issue 2015 | 17
5.13 TRANSFER OF DEBENTURES
The Debentures will be transferable and transmittable in the manner set out in the Trust Deed, which is reproduced below.
(a) These Debentures shall be freely transferable and the registration of such transfer shall not
be subject to any restriction, save and except to the extent required for compliance with statutory requirements.
(b) The Debentures shall be transferable and transmittable through the CDS as long as the
Debentures are listed on the CSE. Subject to the provisions contained herein, the Bank may register without assuming any liability any transfer of Debentures, which are in accordance with the statutory requirements and rules and regulations in force for the time being as laid down by the CSE, SEC and the CDS.
(c) In the case of death of a Debenture Holder;
The survivor where the deceased was a joint holder; and
The executors or administrators of the deceased or where the administration of the estate of the deceased is in law not compulsory the heirs of the deceased where such Debenture Holder was the sole or only surviving holder;
shall be the only persons recognized by the Bank as having any title to his/her Debentures.
(d) Any person becoming entitled to any Debentures in consequence of bankruptcy or winding up of any Debenture Holder, upon producing proper evidence that he/she/it sustains the character in respect of which he/she/it proposes to act or his/her/it title as the Board of Directors of the Bank thinks sufficient may in the discretion of the Board be substituted and accordingly registered as a Debenture Holder in respect of such Debentures subject to the applicable laws, rules and regulations of the Bank, CDS, CSE and SEC.
(e) No change of ownership in contravention to these conditions will be recognized by the Bank.
5.14 LISTING
An application has been made to the CSE for permission to obtain a listing for the Debentures and the CSE has granted its approval in-principle for the same. It is the intention of the Bank to list the Debentures on the Colombo Stock Exchange upon the allotment thereof. The CSE however, assumes no responsibility for the correctness of the statements made or opinions expressed or reports included in this Prospectus. Admission to the official list is not to be taken as an indication of the merits of the Bank or of its Debentures.
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5.15 COST OF THE ISSUE
The Board estimates that the total cost of the Issue including fees to professionals, printing, advertising and other costs connected with the Issue will be approximately LKR 41.20 Million. Such costs will be financed by the internally generated funds of the Bank.
5.16 BROKERAGE FEE
Brokerage fee of 15 cents (LKR 0.15) per Debenture shall be paid in respect of the number of Debentures allotted on Applications bearing the original seal of any bank operating in Sri Lanka or a member/trading member of the CSE or Joint Financial Advisors and Managers to the Issue or any other party identified by the Bank and/or Joint Financial Advisors and Managers to the Issue as involved in the Issue.
5.17 UNDERWRITING
This Issue is not underwritten. The offering is not conditional upon any minimum subscription amount being raised through this Issue. In the event of an undersubscription, the Bank will utilize the funds raised for the objectives described in Section 5.3 of this Prospectus, to the extent of funds raised through this Issue.
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HDFC Bank of Sri Lanka – Debenture Issue 2015 | 19
6.0 PROCEDURE FOR APPLICATION
6.1 INSPECTION OF DOCUMENTS
Housing Development Finance Corporation, Act No. 07 of 1997, amended by Act No. 15 of 2003 and No. 45 of 2011, the Trust Deed, Auditors’ Reports and Audited Financial Statements for the five (05) financial years ended 31st December 2014 (i.e. the five (05) financial years immediately preceding the date of this Prospectus), Interim Financial Statement as at 30th June 2015 and all other documents as applicable to HDFC referred to in Rule 3.3.11 (a) of the CSE Listing Rules, including material contracts and management agreements entered into by the Bank (if any) would be made available for inspection by the public during normal working hours, from seven (07) Market Days prior to the date of opening of the subscription list, at the registered office of the Bank at Sir Chittampalam A Gardiner Mawatha, Colombo 02 until the Date of Redemption of the Debentures. The Prospectus, Trust Deed and HDFC Act are available on the website of CSE, www.cse.lk and the website of the Bank, www.hdfc.lk from seven (07) Market Days prior to the date of opening of the subscription list until the Date of Redemption of the Debentures as stipulated in Rule 3.3.11 (b) of the CSE Listing Rules. Furthermore, copies of the Prospectus and Application Forms are available free of charge from the collection points as set out in Annexure II of this Prospectus from seven (07) Market Days prior to the date of opening of the subscription list.
6.2 ELIGIBLE APPLICANTS
Applications are invited for the subscription of Debentures from the following categories of applicants.
(a) Citizens of Sri Lanka, resident in Sri Lanka and above 18 years of age.
(b) Corporate bodies and societies registered/incorporated/established in Sri Lanka and authorized to invest in Debentures.
(c) Approved unit trusts licensed by SEC.
(d) Approved provident funds and contributory pension schemes
registered/incorporated/established in Sri Lanka and authorized to invest in Debentures. In the case of approved provident funds and approved contributory pension schemes, the Application should be in the name of the trustee/board of management.
(e) Regional and country funds approved by SEC and authorized to invest in Debentures.
(f) Non-Residents: foreign institutional investors including country funds, regional funds or
mutual funds, corporate bodies incorporated outside Sri Lanka, citizens of foreign states whether resident in Sri Lanka or outside Sri Lanka and Sri Lankans resident outside Sri Lanka.
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Applications will not be accepted from Applicants who are under the age of 18 years, or in the names of sole proprietorships, partnerships or unincorporated trusts. “Individuals resident outside Sri Lanka” will have the same meaning as in the notice published under the Exchange Control Act in Gazette No. 15007 dated 21st April 1972. When permitting Non-Residents to invest in the Debentures, the Bank will comply with the relevant Exchange Control Regulations including the conditions stipulated in the notice under the Exchange Control Act with regard to the issue and transfer of debentures of companies incorporated in Sri Lanka to foreign investors as published in the Government Gazette (Extraordinary) No. 1864/39 on 28th May 2014.
6.3 HOW TO APPLY
The terms and conditions applicable to the Applicants are as follows.
(a) Applications should be made on the Application Forms, which accompany and constitute a part of this Prospectus (exact size photocopies of Application Forms will also be accepted). Care must be taken to follow the instructions given herein and in the Application Form. Applicants using photocopies are requested to inspect the Prospectus which is available for inspection with the Registrar to the Issue and also issued free of charge by the parties listed in Annexure II of this Prospectus.
The Application Form can also be downloaded from the website of CSE, www.cse.lk, the website of HDFC, www.hdfc.lk and the websites of the Joint Financial Advisors and Managers to the Issue, www.ndbib.com and www.boc.lk until the Closure Date. The Prospectus will be made available and can be downloaded from the website of CSE, www.cse.lk and the website of HDFC, www.hdfc.lk until the Date of Redemption of the Debentures and from the Joint Financial Advisors and Managers to the Issue, www.ndbib.com and www.boc.lk until the Closure Date.
Applications which do not strictly conform to instructions and other conditions set out herein or which are incomplete or illegible may be rejected.
(b) Applicants should apply only for one Type of Debentures (i.e. either Type A or Type B
or Type C Debentures) under one Application Form.
(c) In the event an Applicant wishes to apply for more than one Type of Debentures, separate Application Forms should be used. Once an Application Form has been submitted for a particular Type of Debentures, it will not be possible for an Applicant to switch between the Types of Debentures.
(d) More than one Application submitted by an Applicant under the same Type of Debentures
will not be accepted. If more than one Application Forms are submitted for one Type of Debentures from a single Applicant, those would be construed as multiple Applications and the Bank reserves the right to reject such multiple Applications or suspected multiple Applications.
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HDFC Bank of Sri Lanka – Debenture Issue 2015 | 21
(e) If the ownership of the Debentures is desired in the name of one Applicant, full details should be given only under the heading SOLE/FIRST APPLICANT in the Application Form. In the case of joint Applicants, the signatures and particulars in respect of all Applicants must be given under the relevant headings in the Application Form.
(f) An Applicant of a joint Application for one Type of Debenture will not be eligible to apply
through a separate Application Form either individually or jointly for the same Type of Debenture. Such Applicants are also deemed to have made multiple Applications and will be rejected.
In the case of joint Applications, the refunds (if any), interest payments and the Redemption will be remitted in favour of the first Applicant as identified in the Application Form.
The Bank shall not be bound to register more than three (03) natural persons as joint holders of any Debentures (except in the case of executors, administrators or heirs of a deceased member).
Joint Applicants should note that all parties should either be residents of Sri Lanka or Non-Residents.
(g) Applications by companies, corporate bodies, societies, approved provident funds, trust
funds and approved contributory pension schemes registered/incorporated/established in Sri Lanka should have obtained necessary internal approvals as provided by their internal approval procedures at the time of applying for the Debentures and should be made under their common seal or in any other manner as provided by their articles of association or such other constitutional documents of such Applicant or as per the statutes governing them. In the case of approved provident funds, trust funds and approved contributory pension schemes, the Applications should be in the name of the trustee/board of management.
(h) All Applicants should indicate in the Application for Debentures, their CDS account
number.
In the case of resident individual Applicants, ensure that;
If the Applicant’s CDS account carries the NIC number, the NIC number of the Applicant is stated in the relevant cage of the Application Form; or
If the Applicant’s CDS account carries the passport number, the passport number of the Applicant is stated in the relevant cage of the Application Form.
In the case of Non-Resident individual Applicants and corporate Applicants, ensure to provide the passport number/company number and CDS Identification Number (CDS ID) in the relevant cages of the Application Form.
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In the event the name, address or NIC number/passport number/company number of the Applicant mentioned in the Application Form differ from the name, address or NIC number/passport number/company number as per the CDS records, the name, address or NIC number/passport number/company number as per the CDS records will prevail and be considered as the name, address or NIC number/passport number/company number of such Applicant. Therefore, Applicants are advised to ensure that the name, address or NIC number/passport number/company number mentioned in the Application Form tally with the name, address or NIC number/passport number/company number given in the CDS account as mentioned in the Application Form.
In the case of joint Applicants, a joint CDS account in the name of the joint Applicants should be indicated.
Application Forms stating third party CDS accounts, instead of Applicants’ own CDS account numbers, except in the case of margin trading, will be rejected.
(i) Applicants who wish to apply through their margin trading accounts should submit the
Application Forms in the name of the “Margin Provider/Applicant’s name” signed by the margin provider, requesting a direct deposit of the Debentures to the Applicant’s margin trading account in the CDS. The margin provider should indicate the relevant CDS account number relating to the margin trading account in the Application Form. A photocopy of the margin trading agreement must be submitted along with the Application.
Margin providers can apply under their own name and such Applications will not be construed as multiple Applications.
(j) Application Forms may be signed by a third party on behalf of the Applicant(s) provided
that such person holds the Power of Attorney (POA) of the Applicant(s). A copy of such POA certified by a Notary Public as “True Copy” should be attached with the Application Form. Original of the POA should not be attached.
(k) Funds for the investment in Debentures and the payment for Debentures by Non-Residents should be made only out of the monies available to the credit of a “Securities Investment Account” (SIA) of the Non-Resident Applicants opened and maintained in a licensed commercial bank in Sri Lanka in accordance with the directions given by the Controller of Exchange in that regard to licensed commercial banks.
An endorsement by way of a letter by the licensed commercial bank in Sri Lanka in which the Applicant maintains the SIA, should be attached to the Application Form to the effect that such payment through bank draft/bank guarantee/RTGS has been made out of the funds available in the SIA.
(l) Non-Residents should have obtained necessary internal approvals as provided by their
internal approval procedures at the time of applying for the Debentures and may be affected by the laws of the jurisdiction of their residence. If the Non-Resident Applicants wish to apply for the Debentures, it is their responsibility to comply with the laws relevant to the jurisdiction of their residence and of Sri Lanka.
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HDFC Bank of Sri Lanka – Debenture Issue 2015 | 23
Application Forms properly filled in accordance with the instructions thereof together with the remittance for the full amount payable on Application should be enclosed in an envelope marked “HDFC BANK OF SRI LANKA – DEBENTURE ISSUE 2015” on the top left hand corner in capital letters and dispatched by post or courier or delivered by hand to the Registrars to the Issue, S S P Corporate Services (Private) Limited, No 101, Inner Flower Road, Colombo 03 on the Closure Date.
Applications may also be handed over to any collection point set out in Annexure II of this Prospectus prior to 4.30 p.m. on the Closure Date. In the case of Applications dispatched by post, such Applications should reach the Registrars to the Issue not later than 4.30 p.m. on the Market Day immediately following the Closure Date. Any Applications received after the above deadline shall be rejected even though the postmark is dated not later than 4.30 p.m. on the Closure Date.
Please note that Applicant information such as full name, address, NIC number/passport number/company number and residency will be downloaded from the database of CDS, based on the CDS account number indicated in the Application Form. Such information will take precedence over information provided in the Application Form.
Care must be taken to follow the instructions on the reverse of the Application Form.
Applications that do not strictly conform to such instructions and additional conditions set out hereunder or which are illegible may be rejected. PLEASE NOTE THAT ALLOTMENT OF DEBENTURES WILL ONLY BE MADE IF THE APPLICANT HAS A VALID CDS ACCOUNT AT THE TIME OF SUBMISSION OF APPLICATION.
Please note that upon the allotment of Debentures under this Issue, the allotted Debentures would be credited to the Applicant’s CDS account so indicated. Hence, DEBENTURE CERTIFICATES SHALL NOT BE ISSUED.
6.4 NUMBER OF DEBENTURES TO BE SUBSCRIBED
Applicants are allowed to invest in either;
Debentures of Type A; and/or Debentures of Type B and/or Debentures of Type C subject to the minimum subscription under each type. A minimum of One Hundred (100) Debentures (LKR 10,000/-) and in multiples of One Hundred (100) Debentures (LKR 10,000/-) thereafter for each type of Debentures. An Applicant should apply only for one type of Debentures under one Application Form.
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6.5 MODE OF PAYMENT OF THE INVESTMENT BY THE APPLICANTS
(a) Payment in full for the total value of Debentures applied for should be made separately in respect of each Application either by cheque/s, bank draft/s, bank guarantee drawn upon any licensed commercial bank operating in Sri Lanka or RTGS transfer directed through any licensed commercial bank operating in Sri Lanka or internal fund transfer through National Development Bank PLC, as the case may be, subject to (b) below.
(b) Payments for Application values should be supported by either;
Bank draft(s)/cheque(s) drawn upon any licensed commercial bank operating in
Sri Lanka; or A bank guarantee issued by a licensed commercial bank; or An RTGS transfer with value on the Issue opening date; or An internal fund transfer within National Development Bank PLC with value on the
Issue opening date.
Multiple cheques/ RTGS transfers/internal fund transfers within National Development Bank PLC will not be accepted for Application values below Sri Lanka Rupees One Hundred Million (LKR 100,000,000/-). In the case of Application values above and inclusive of Sri Lanka Rupees One Hundred Million (LKR 100,000,000/-), multiple bank drafts/cheques drawn upon any licensed commercial bank operating in Sri Lanka each of which should be for a value less than LKR 100,000,000/- will be accepted.
(c) Cheques or bank drafts should be made payable to “HDFC BANK OF SRI LANKA –
DEBENTURE ISSUE 2015” and crossed “Account Payee Only”, and must be honoured on the first presentation.
(d) In case of bank guarantees, such bank guarantees should be issued by any licensed
commercial bank in Sri Lanka in favour of “HDFC BANK OF SRI LANKA – DEBENTURE ISSUE 2015” in a manner acceptable to the Bank, and be valid for a minimum of one (01) month from the Issue opening date (i.e. 16th November 2015).
Applicants are advised to ensure that sufficient funds are available in order to honour the bank guarantees, inclusive of charges when called upon to do so by the Registrars to the Issue. It is advisable that the Applicants discuss with their respective bankers the matters with regard to the issuance of bank guarantees and all charges involved. All expenses with regard to such bank guarantees should be borne by the Applicants.
(e) In case of RTGS transfers/internal fund transfers within National Development Bank PLC,
such transfers should be made to the credit of “HDFC BANK OF SRI LANKA – DEBENTURE ISSUE 2015” bearing the account number 101000404382 at National Development Bank PLC with value on the Issue opening date (i.e. the funds to be made available to the above account on the Issue opening date).
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HDFC Bank of Sri Lanka – Debenture Issue 2015 | 25
The Applicant should obtain a confirmation from the Applicant’s bank, to the effect that arrangements have been made to transfer payment in full for the total value of Debentures applied for to the credit of “HDFC BANK OF SRI LANKA – DEBENTURE ISSUE 2015” bearing the account number 101000404382 at National Development Bank PLC with value on the Issue opening date (i.e. the funds to be made available to the above account on the Issue opening date) and should be attached with the Application Form. For RTGS transfers and internal fund transfers within National Development Bank PLC above and inclusive of Sri Lanka Rupees One Hundred Million (LKR 100,000,000/-), the Applicants are entitled to and paid an interest at an interest rate of Three Decimal Zero per centum (3.00%) per annum from the date of such transfers up to the date of refunds. However, no interest will be paid if the RTGS transfers/ internal fund transfers within National Development Bank PLC are not realised before the end of the Closure Date. Furthermore, even if such RTGS transfers/internal fund transfers within National Development Bank PLC are effected prior to the Issue opening date, no interest will be paid for the period prior to the Issue opening date.
(f) Cash will not be accepted.
(g) Payment for the Debentures by Non-Residents should be made only out of the monies
available to the credit of a “Securities Investment Account” (SIA) maintained with any licensed commercial bank in Sri Lanka in accordance with the directions given by the Controller of Exchange in that regard to licensed commercial banks.
An endorsement by way of a letter by the licensed commercial bank in Sri Lanka in which the Applicant maintains the SIA, should be attached to the Application Form to the effect that such payment through bank draft/bank guarantee/RTGS/internal fund transfers within National Development Bank PLC has been made out of the funds available in the SIA.
(h) The amount payable should be calculated by multiplying the number of Debentures applied for by the Par Value (LKR 100/-). If there is a discrepancy in the amount payable and the amount specified in the cheque/bank draft or bank guarantee or transferred via RTGS, the Application will be rejected.
(i) In the event that cheques are not realised prior to the date of deciding the basis of allotment, the monies will be refunded and no allotment of Debentures will be made. Cheques must be honoured on first presentation for the Application to be valid.
(j) All cheques/bank drafts received in respect of the Applications for Debentures will be
banked commencing from the Working Day immediately following the Closure Date.
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6.6 REJECTION OF APPLICATIONS
Application Forms and the accompanying cheques/bank drafts/bank guarantee or RTGS transfers, which are illegible or incomplete in any way and/or not in accordance with the terms, conditions and instructions, set out in this Prospectus and in the Application Form will be rejected at the sole discretion of the Bank. Applications received from Applicants who are under the age of 18 years or in the names of sole proprietorships, partnerships and unincorporated trusts will also be rejected.
Any Application Form, which does not state a valid CDS account number, will be rejected.
More than one Application Form submitted under one type of Debenture by an Applicant will not be accepted. If more than one Application Form is submitted under one type of Debenture by a single Applicant, those would be considered as multiple Applications and the Bank reserves the right to reject such multiple Applications or suspected multiple Applications.
Any Application Form with more than three (03) natural persons as joint Applicants will be rejected.
Applications delivered by hand to the Registrars to the Issue after 4.30 p.m. on the Closure Date will be rejected. Applications received by post after 4.30 p.m. on the Market Day immediately following the Closure Date, will also be rejected even if they carry a post mark dated prior to the Closure Date. In the event that cheques are not realised prior to the date of deciding the basis of allotment and realised after such date, the monies will be refunded and no allotment of Debentures will be made. Cheques must be honoured on first presentation for the Application to be valid. In the event cheques are dishonoured/returned on first presentation, such Applications will be rejected.
6.7 BANKING OF PAYMENTS
All cheques or bank drafts or bank guarantees received in respect of Applications will not be banked or called on until the Working Day immediately after the Closure Date as set out in Section 5.2 of this Prospectus, in terms of the CSE Listing Rules.
6.8 BASIS OF ALLOTMENT OF DEBENTURES
In the event of an oversubscription, the Board of HDFC will endeavour to decide the basis of allotment in a fair manner as soon as practicable so as to ensure compliance with the CSE Listing Rules. Upon the allotments being decided, an announcement will be made to the CSE. The Board however shall reserve the right to allocate up to 75% of the number of Debentures to be allotted under this Prospectus on a preferential basis, to identified institutional investor/s of strategic and operational importance with whom the Bank might have mutually beneficial relationships in the future.
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HDFC Bank of Sri Lanka – Debenture Issue 2015 | 27
The number of Debentures to be issued under Debentures of Type A, Debentures of Type B and Debentures of Type C will be in accordance with the basis of allotment which will be decided at the discretion of the Board of HDFC in a fair manner in the event of an oversubscription. The Bank reserves the right to reject any Application or to accept any Application in part only, without assigning any reason thereto. A written confirmation informing successful Applicants on their allotment of Debentures will be dispatched within ten (10) Market Days from the Closure Date as required by the CSE.
6.9 REFUNDS
Monies will be refunded where;
an Application is rejected for reasons given in Section 6.6 of this Prospectus; or the Application is accepted only in part
Applicants may indicate the preferred mode of refund payments in the Application Form (i.e. direct transfer via SLIPS or cheque). Refunds due to a Non-Resident Applicant will be made only via direct transfers to the same SIA through which the payment for the investment in the Debentures was affected. It is the responsibility of the Non-Resident Applicant to ensure that the details of the SIA are accurately stated in the Application Form to facilitate the refund payment. If the Applicant has provided accurate and complete details of his/her bank account in the Application, the Bankers to the Issue will make refund payments upto and inclusive of Rupees Five Million (LKR 5,000,000/-) to the bank account specified by the Applicant, through SLIPS. If the refund payment is over Rupees Five Million (LKR 5,000,000/-), refunds will be made via RTGS. A payment advice will be sent accordingly.
In the event the Applicant has not provided accurate and correct details of his/her bank account in the Application Form, the Bank will make such refund payments to the Applicant by way of a cheque and sent by post at the risk of the Applicant. In the case of joint Applications, the cheques will be drawn in favour of the Applicant’s name appearing first in the Application Form. Applicants can obtain details on bank and branch codes required for providing instructions on SLIP transfers at the following website; http://www.lankaclear.com/product_service/pdf/slips_bank_branch_list_sep_2013.xls Refunds on Applications rejected or partly allotted Debentures would be made within ten (10) Market Days excluding the Closure Date. Applicants would be entitled to receive interest at the rate of the last quoted Average Weighted Prime Lending Rate (AWPLR) published in the immediately preceding week by the Central Bank of Sri Lanka or any other authority (in the event that the Central Bank of Sri Lanka ceases to publish the AWPLR) plus Five decimal Zero per centum (5.00%) for the delayed period on any refunds not made within this period.
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6.10 CDS ACCOUNTS AND SECONDARY MARKET TRADING
Debentures allotted will be directly deposited to the respective CDS accounts given in the Application Forms before the expiry of eighteen (18) Market Days, from the Closure Date. A written confirmation of the credit will be sent to the Applicants within two (02) Market Days of crediting the CDS account, by ordinary post to the address provided by each Applicant.
The Bank will submit to the CSE a 'Declaration' on direct upload to CDS on the Market Day immediately following the day on which the Applicants’ CDS accounts are credited with the Debentures. Trading of Debentures on the secondary market will commence on or before the third (3rd) Market Day from the receipt of the Declaration by the CSE as per the CSE Listing Rules.
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HDFC Bank of Sri Lanka – Debenture Issue 2015 | 29
7.0 THE BANK 7.1 BACKGROUND AND NATURE OF BUSINESS
Housing Development Finance Corporation Bank of Sri Lanka was incorporated as a building society in 1984 under section 11 of the National Housing Act of 1956. Subsequently, it was converted to a corporation under the Housing Development Finance Corporation of Sri Lanka Act, No.7 of 1997 and obtained the status of a specialized Bank under Housing Development Finance Corporation of Sri Lanka (Amendment) Act, No.15 of 2003.
HDFC’s core business is to provide total housing finance solutions including legal advice, architectural, research & development and other technical support. The ultimate objective of HDFC is to create a secure foundation for future generations, by making a home accessible to families from different socio-economic backgrounds. Towards this end, HDFC is armed with a new 3-year strategic plan to strengthen financial base while helping more people achieve their dream of owning a home. The Bank has currently diversified its services into investment products, deposits, lifestyle loans, education loans, leasing, SME credit, microfinance and gold loans, in addition to the traditional housing finance products. The current HDFC product portfolio is shown below.
The main delivery channels of HDFC include physical branches, shared ATM machines and mobile banking units. The Bank also leverages new technologies to assist distribution. This includes the HDFC website, which allows customer to conduct a range of internet banking activities and the HDFC mobile banking officers who are equipped with palmtop computers to record and transmit transactions. As at today HDFC has 36 branches covering all provinces and has expanded the ATM network access over 775 service points across the country.
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The future direction of HDFC is guided by the three year strategic plan which was designed through an extensive process of incorporating a detailed market intelligence report to shape the HDFC's business presence in this dynamic market. The proposed listed debenture issue is also a part of the strategic plan in order to boost the Bank’s funding base and support further expansion. The underlying principles of HDFC are spelled out in Vision, Mission and Values below; Vision To become the undisputed market leader in providing housing related finances, to realize the dream of shelter for all in Sri Lanka Mission HDFC define mission in the broader context of our shareholders, customers, staff, the national economy, regulators, and the natural environment. • To shareholders, Bank's mission is to optimize returns. • To customers, Bank's mission is to provide a caring service by anticipating their requirements
and innovatively satisfying them beyond their expectations. • To staff, Bank's mission is to identify their multi-faceted talents, develop, motivate, recognize
and reward them towards fulfilment of the institutional and national housing vision. • To the national economy and the industry regulator, Bank is a key driver and a thought
leader in shaping and financing the national housing policy. • To the natural environment, Bank enforces sustainable practices across all activities. Values Honesty in all transactions at all times Flexibility and ability to meet market changes Friendly and helpful services always Build skills, knowledge and experience to achieve the vision
The governance fame work of HDFC comply directly with the constitutional boundaries under the provisions of the Housing Development Finance Corporation of Sri Lanka Act, Finance Act, regulatory boundaries of the Central Bank of Sri Lanka and listing rules of the Colombo Stock Exchange (CSE). Further HDFC is under the purview of the Ministry of Finance and Planning. The Board of Directors of the Bank will take necessary measures to maintain an effective relationship with the aforesaid regulatory authorities. The Bank also adopts the code of best practices of corporate governance issued jointly by The Institute of Chartered Accountants of Sri Lanka and CSE on voluntary basis in addition to the Corporate Governance mandatory directions of CBSL.
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HDFC Bank of Sri Lanka – Debenture Issue 2015 | 31
Key Products and Services
Loan schemes
Savings schemes
Investment Plans
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Corporate Milestones 1984 Incorporated as a Building Society 2000 Converted to public corporation 2003 Obtained the status of a Licensed Specialised Bank 2003 Listed at the Colombo Stock Exchange 2004 Winner – NCCSL Business Excellence Award – Financial Services Sector 2005 Winner – NCCSL Business Excellence Award – Financial Services Sector 2006 Runner Up – NCCSL Business Excellence Award – Financial Services Sector 2010 Runner Up – NCCSL Business Excellence Award – Financial Services Sector
Winner – ACCA Sustainability Reporting Award 2010 – Small Scale Category Winner – ACCA Sustainability Reporting Award 2010 – Fist time entry group Winner – Golden Maco Award 2010
2011 Achieved LKR 2,000 Million capital requirement Reached LKR 20 Billion capital requirement Merit Winner - NCCSL Business Excellence Award– Financial Services Sector Winner of a certificate of recognition for the Annual Report 2010, from the Institute of Chartered Accountants of Sri Lanka Winner – ACCA Sustainability Reporting Award 2011 – Small Scale Category
2012 Winner – ACCA Sustainability Reporting Award 2012 – Small Scale Category Runner Up – NCCSL Business Excellence Award – Financial Services Sector Bronze Award – Annual Report competition 2012, the Institute of Chartered Accountants of Sri Lanka
2013 Silver Award – Corporate Accountability Rating by STING Consultants 2013 Runner Up – ACCA Sustainability Reporting Award 2013 – Banking, Finance and
Insurance Sector 2013 Association of Development Financing, Institution in Asia and the Pacific
(ADFIAP) Award – Best Annual report under the Special Awards category 2014 Certificate of Recognition, Annual Report Competition 2014
-The Institute of Chartered Accountants of Sri Lanka
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HDFC Bank of Sri Lanka – Debenture Issue 2015 | 33
Entity Rating
HDFC was rated by Fitch Ratings Lanka Limited from 2004 to 2013 and HDFC withdrew from Fitch Ratings Lanka Limited in 2014. In 2013, HDFC obtained dual entity ratings by Lanka Ratings Agency Limited (formerly known as RAM Ratings Lanka Limited) in addition to the rating by Fitch Ratings Lanka Limited. Given below is the entity rating history of HDFC.
Fitch Ratings Lanka limited Lanka Ratings Agency Limited
(formerly known as RAM Ratings Lanka Limited)
2004 A(sri) -2006 A(lka) Stable Outlook -2007 A-(lka) Negative Outlook -2008 BBB+(lka) Negative Outlook -2012 BBB(lka) Stable Outlook -2013 BBB(lka) Stable Outlook BBB Stable Outlook 2014 - BBB+ Stable Outlook 2015 BBB(lka) Stable Outlook -
The mismatches in assets and liabilities maturities which is inherent to a financial institution concentrated on long term loan financing, specializing in housing loans was the main reason for the changes in the entity rating by Fitch Ratings Lanka Limited during the period 2006 to 2013. Furthermore, the long term nature of HDFC’s loan portfolio limits the ability to swiftly re-price the loans already granted abreast with the movements in market interest rates. As indicated above, HDFC withdrew from Fitch Ratings Lanka Limited in 2014 and continued with Lanka Ratings Agency Limited. At the time of the withdrawal, HDFC was rated BBB (lka) with a stable outlook. Subsequently, HDFC’s entity rating was upgraded to BBB+ with a stable outlook by Lanka Ratings Agency Limited. Further in accordance with the recent SEC guidelines, HDFC withdrew its rating from Lanka Ratings Agency Limited and re-appointed Fitch Ratings Lanka Limited as its rating agency in June 2015. Accordingly, HDFC is rated BBB (lka) with a stable outlook by Fitch Ratings Lanka Limited as of today and the Debenture Issue is rated BBB (lka) by Fitch Ratings Lanka Limited.
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7.2 STATED CAPITAL
The stated capital of Bank represents ordinary voting shares as given in the table below.
Stated Capital as at 31st December 2013
as at 31st December 2014
as at30th Sep 2015
Balance (Rs.) 962,092,936 962,092,936 962,092,936Number of Shares 64,710,520 64,710,520 64,710,520
7.3 FINANCIAL RATIOS
as at 31st December
2013
as at 31st December
2014
as at 30th June 2015
LKR Mn Gross Interest due on Debenture 57.28 303.02 150.26Debenture interest paid on due date 57.28 303.02 67.25Debenture interest paid after the due date NIL NIL NIL Debenture interest not paid NIL NIL 83.01 *
*Interest Payment due on 31st December 2015
as at 31st
December 2013as at 31st
December 2014 as at 30th
June 2015Debt to Equity 2.04 2.15 1.63Interest Cover 2.49 2.77 3.19Capital Adequacy Ratios Tier I 17.74% 13.78% 13.08%Tier II 18.29% 12.92% 12.29%Statutory Liquidity Asset Ratio 28.74% 28.90% 30.59%EPS (Basic) (LKR) 2.44 5.79 4.27DPS (LKR) 0.25 0.60 N/ANAV (LKR) 39.8 44.6 48.86
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HDFC Bank of Sri Lanka – Debenture Issue 2015 | 35
7.4 MAJOR SHAREHOLDERS
The twenty (20) largest shareholders of HDFC as at 30th September 2015 are given in the table below.
Name of the Shareholder Number of Shares
% Holding
1 National Housing Development Authority 32,180,000 49.73
2 Lanka Orix Leasing Company PLC 9,707,740 15.00
3 Thurston Investments Limited 9,155,000 14.15
4 Seylan Bank Plc//Thirugnanasambandar Senthilverl
2,364,149 3.65
5 Sampath Bank PLC/DR.T.Senthilverl 2,035,993 3.15
6 Urban Development Authority 300,000 0.46
7 Condominium Management Authority 300,000 0.46
8 Dr Ruwanpura Rohitha De Silva 295,126 0.46
9 Sampath Bank PLC/MR.Arunasalam Sithampalam
258,054 0.40
10 Finco Holdings (Private) Limited 185,000 0.29
11 The Associated Newspapers of Ceylon Limited 180,000 0.28
12 Miss Perera Sudishna Chandani 171,000 0.26
13 Mr Dinesh Ajit De Zoysa 170,000 0.26
14 Dr.Yaddehige Sena 130,000 0.20
15 Union Bank of Colombo Plc/MR.Sithampalam Abishek
120,209 0.19
16 Road Development Authority 120,000 0.19
17 National Water Supply & Drainage Board 120,000 0.19
18 State Engineering Corporation 120,000 0.19
19 Pan Asia Banking Corporation/Almar International (Pvt) Ltd.
111,725 0.17
20 Legalinc Trustee Service (Private) Limited 102,669 0.16
58,126,665 89.84 Others 6,583,855 10.16
Total 64,710,520 100.00 7.5 SUBSIDIARY/ASSOCIATE COMPANIES
HDFC do not have any subsidiaries or associate companies.
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7.6 FINANCIAL INFORMATION
The following financial information of HDFC is available on the website of CSE, www.cse.lk and the website of the Bank, www.hdfc.lk ; Audited financial statements of the Bank for the financial year ended 31st December 2014 Interim financial statements of the Bank for the six months ended 30th June 2015 Accountant’s Report and Five Year Summary of Financial Statements (Please refer Section
11.1 of this Prospectus for the same)
7.7 PARTICULARS OF LONG TERM LOANS AND OTHER BORROWINGS
As at 30th June 2015, the outstanding balance of HDFC’s interest bearing borrowings are given in the table below.
Outstanding Borrowings LKR As at 31st December 2014 6,212,961,735Net Settlements during the period (1,066,917,490)As at 30th June 2015 5,146,044,245
Total interest bearing borrowings of HDFC at as 30th June 2015 comprise of the following categories of borrowings.
Category LKRSpecial Scheme Loans 1,145,115,857Re Finance Loans 701,487,855Debentures 2,000,000,000 Other 1,299,440,534Total 5,146,044,245
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HDFC Bank of Sri Lanka – Debenture Issue 2015 | 37
7.8 DETAILS OF OTHER DEBENTURES IN ISSUE Other debentures of HDFC comprise of only listed rated secured redeemable debentures issued on 24th October 2013. The salient features of the said debentures are given in the table below.
Type of Debentures
Tenure of
Debentures
Interest Payable
Frequency
Interest Rates p.a.
Issue Date Maturity
Date
Balance Outstanding as at
30th June 2015 (LKR)
Listed, Secured, Redeemable & Rated Debentures
3 Years Quarterly 14.50% 24/10/2013 23/10/2016 476,460,000 4 Years Quarterly 15.00% 24/10/2013 23/10/2017 443,540,000 5 Years Annually 15.50% 24/10/2013 23/10/2018 1,080,000,000
Total 2,000,000,000
Type
7.9 DETAILS OF CONVERTIBLE DEBT SECURITIES
The Bank does not have convertible debt securities in issue as at 30th June 2015.
7.10 CONTINGENT LIABILITIES There are no contingency liabilities as at 30th June 2015 that would affect current and future profits.
7.11 LITIGATION AGAINST THE BANK
There are no other legal, arbitration or mediation proceedings, which may have or have had in the recent past significant effects on the Banks’s financial position or profitability other than the Pending Court Case on Investment Property (details given below).
Two lands (Deed No 1124, 1126) in extent of 3 Roods and 18.2 perches was purchased by the HDFC Bank from Building Material Corporation (BMC) in the Years 2005 and 2007. Since the BMC did not handover vacant possession of the above land to HDFC Bank, the Bank filed an ejectment case bearing No 21514/L at the District Court of Colombo against the BMC to obtain possession of the land. The Order in the above case was delivered on 18th October 2012 in favour of the HDFC Bank. The BMC has filed an appeal against this order of the District Court to Civil Appeal of Colombo under Reference No WP/HCCA/COL-180/2012 F against the order given by the District Court of Colombo in favour of the Bank, which will be taken up on 18th November 2015.
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7.12 DETAILS OF PENALTIES IMPOSED BY REGULATORY AND STATE AUTHORITIES
There are no penalties imposed by Regulatory and State Authorities on the Bank. 7.13 DETAILS OF MATERIAL CONTRACTS OF THE BANK
The Bank has not entered into any material contracts as at the date of this Prospectus other than contracts entered into in the ordinary course of business.
7.14 DETAILS OF COMMISSIONS PAID
The Bank paid LKR 10.0 Million (plus taxes) as commissions (brokerage) for the listed debenture issue concluded during the financial year 2013. Except for the above, no commission has been paid in the two (02) years preceding the Issue or payable for subscribing or agreeing to subscribe or procuring or agreeing to procure subscriptions, for any shares in or debentures of the Bank.
7.15 TRANSACTIONS RELATING TO THE PROPERTY
There is no transaction relating to the property completed within the two (02) preceding years in which any vendor of the property to the Bank or any person who is or was at the time of the transaction, a promoter or a director or proposed director of the Bank who had any interest, direct or indirect.
7.16 DETAILS OF BENEFITS PAID TO PROMOTERS
No benefit has been paid or given by the Bank within the two (02) years preceding the Issue and there are no benefits intended to be paid or given to any promoter.
7.17 DIVIDEND POLICY
The dividend policy will be determined based on number of factors, including but not limiting to the Bank’s earnings, capital requirements and overall financial condition. Dividends paid and payable are subject to the provisions of Banking Act, Housing Development Finance Corporation Act and Companies Act. The Board of Directors subject to the above Acts may recommend and declare dividends to the shareholders from and out of the profit of the bank, subject to the solvency and subject to the approvals of the shareholders. Details of dividends paid during the five (05) financial years preceding the date of this Prospectus is given under Section 11.1 of this Prospectus.
7.18 TAXATION
The Bank is not enjoying any tax exemptions as at the Date of this Prospectus.
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HDFC Bank of Sri Lanka – Debenture Issue 2015 | 39
8.0 BOARD OF DIRECTORS 8.1 DETAILS OF THE DIRECTORS
The Board of Directors of the Bank comprise of Eight (08) Non- Executive Directors as at the date of this Prospectus. Out of them, Five (05) Directors are considered as independent. The details of the Board of Directors of the Bank as at the date of this Prospectus are given below.
Name Position Independent/ Non-Independent
Mr. R.J. De Silva Non – Executive Director Independent
Mr. Galhena Prasad Indika Gnanasena
Non – Executive Director Independent
Mr. Muthurajah Surendran Non – Executive Director Non-Independent
Mrs. B.G.S. Gunathilake Non – Executive Director Independent
Mr. R. M. J. Rasnayake Non – Executive Director Independent
Mr. Rajiv Herath Meewakkala Non-Executive Director Independent
Mr. L. S. Palansuriya
Non-Executive Director Non-Independent
Mr. P. S. Punchihewa Non-Executive Director Non -Independent
A brief biography of each of the Directors is provided overleaf.
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Mr. R.J. De Silva Chairman (Non – Executive, Independent Director)
Mr. De Silva is a law graduate and passed out as an Attorney at law with a first class honors in 1977, was appointed as the Chairman of HDFC Bank in February 2015. Mr. De Silva has held several key positions earlier such as Chairman, National Lotteries Board (1982-1989), Chairman of the National Insurance Corporation (1989- 1990) and the State Distilleries Corporation (1990-1992). He was the Director General, Public Investment Management Board (1992-1994) with a mandate on behalf of the Secretary to the Treasury to oversee management and instill private sector practices in 37 corporations converted to fully Government owned companies, prior to eventual privatisation. Further, he served as a Legal Advisor to the Treasury in 1994. He was instrumental in setting up the first Life Insurance Company in Sri Lanka in 1994 and worked as the company’s first Managing Director till end 1998. After successfully navigating Janashakthi Life Insurance Company Ltd, Mr. De Silva worked as a Consultant for Legal and HR Development at Hutchison Telecom from 1999 to 2001. He also served as the Chairman of Geological Survey & Mines Bureau (GSMB) and Chairman GSMB Technical Services (Pvt.) Ltd. from 2002 to 2004. Mr. Galhena Prasad Indika Gnanasena (Non – Executive, Independent Director)
Mr. Prasad Galhena was appointed as a Board Member of the HDFC Bank in June 2013. Mr. Galhena is a Fellow member of the Chartered Institute of Management Accountants (CIMA) of UK, and a Passed finalist of the Chartered Institute of Marketing in UK. He was graduated from University of Colombo (BBA Honors) and possess an MBA (Merit) obtained from the same University. He is presently the Chairman of the Sri Lanka Sustainable Energy Authority and functions as a Commission Member of Public Utilities Commission of Sri Lanka. Previously, he has worked as Chairman for National Gem & Jewellary Authority, Ceylon Shipping Corporation Limited and Sri Lanka Handicraft Board – Laksala. Also he has a wide overseas exposure in renewable energy areas and has worked as a team member in several foreign funded consultancy projects.
Mr. Muthurajah Surendran (Non – Executive, Non-Independent Director)
Mr. Muthurajah Surendran was appointed as a Director of the HDFC Bank in June 2013 and re appointed in 2015. Mr. M. Surendran is an Investment Analyst of the Free Lanka Group and has a vast exposure to various business and finance functions and had been with the company since 1993. He has a Diploma in Marketing and a Master’s Degree in Finance. Mr. Surendran has a wealth of experience in Operations and IT and in Restructuring Companies to enhance performance.
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HDFC Bank of Sri Lanka – Debenture Issue 2015 | 41
Mrs. B. G. S. Gunathilake (Non – Executive, Independent Director)
Mrs. Gunathilake was appointed as a Director of the HDFC Bank in April 2014. Re-signed 21/01/2015. Re-appointed 20/02/2015 Mrs. Gunathilake is presently working as the Additional Secretary (Admin & Finance) to the Ministry of Housing and Samurdhi. (Special Grade SLAS Officer). She started her career as Assistant Commissioner of Labour, in 1987.
Thereafter she held many posts as an Assistant Commissioner of Motor Traffic, Assistant Director and Deputy Director of Rubber Development Department, Divisional Secretary of the Divisional Secretariat Kalutara, and Additional District Secretary of the District Secretariat, Kalutara. She holds a Bachelor of Science (Special) Degree from the University of Kelaniya and a Master of Arts Degree (Sociology) from the University of Kelaniya.
Mr. R. M. J. Rasnayake (Non – Executive, Independent Director)
Mr. R. M. J. Rasnayake (Class III SLAs Officer) has been working as an Accountant at the Ministry of Finance since 07th of January 2013. At present, he is engaged in approving and processing financial transactions and expenditures in accordance with Ministry financial rules, regulations, policies and procedures and setup accounting procedures and system to address specific requirements in line with Ministry. Also, he participates in ascertaining and evaluating the financial projection and financial progress reports of this Ministry, process and submits work plan, financial progress reports, work orders, supply orders, invoices and all other supporting documents required for Department fund utilization. Previously, he has served as the Financial Accountant to Department of small Industries-NWP and as the Development Coordinator to Divisional secretariat, Kurunegala. Mr. Rasnayake holds a BSc Management (Accountancy & Finance) Special Degree from the Rajarata University, Postgraduate Diploma in Business Management from Wayamba University and Higher National Diploma in Accountancy from Technical College, Kurunegala and Diploma in Management Accountancy from Society of Certified Management Accountants of Sri Lanka. Mr. Rajiv Herath Meewakkala (Non-Executive Independent Director) Mr. Meewakkala had his primary education at ST. Thomas College, Mount Lavinia. He is a professional Marketer, has a PG Dip from the Chartered Institute of Marketing, a MSc in International Marketing from the University of Stratchclyde along with a Phd from the University of Honalulu.
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His career spans 24 years in the marketing profession of which 19 years is at Ceylon Tobacco Company (CTC), and currently is the incumbent Marketing Director and sits on the Executive Committee of the company. At CTC he has worked in Brand Management, Market research and Trade Marketing and Distribution. His International experience covers a 03 year stint working as the Head of Brand Marketing, for British American Tobacco Cambodia and Laos and also as Marketing Director of Ceylon Tobacco Company; he is a member of the South Asia Marketing Leadership team for British American Tobacco. Mr. L. S. Palansuriya (Non-Executive Non Independent Director) Mr. Luckvijaya Sagara Palansuriya has been worked in the housing and settlement sector for the last 03 decades. He appointed as the Manager, National Housing Development Authority in year 1984 and later he has been promoted as a Senior Manager, Deputy General Manager and General Manager posts. From 1985 onwards he was the member of Sri Lankan delegation for the UN Habitat Annual Conference and he worked as an active Sri Lankan member in UN Habitat projects for the last 30 years. In year 2011 Mr. Palansuriya has been appointed as a Consultant to the Ministry of Construction, Engineering Services, Housing & Common Amenities and later he appointed as a Consultant for the National Housing Secretariat. During that period he worked as a Senior Editor in Editorial Panel of Documentation of National Housing Policy. Currently he is working as the Chairman of National Housing Development Authority and the Board Director of Urban Development Authority, Ocean view Development Company (Pvt.) Ltd., Tea, Rubber & Coconut Estates Control of Fragmentation Board and Sevana Board of Management. Mr. Palansuriya holds a general degree in University of Peradeniya in 1972 and he received higher diploma in University of Philippines – Manila for the industrial development information in 1982 when he works in the Industrial Development Board of Sri Lanka. In 2005 he received a diploma in Civil College of Singapore. Mr. Palansuriya has written various publications, articles and reports on housing and settlement sector of Sri Lanka since 1985 up to date. Mr. P. S. Punchihewa (Non-Executive Non Independent Director) Mr. Padma Sriyan Punchihewa, who is an Attorney-at-Law by profession. He entered the Faculty of Law of the University of Colombo and later was conferred with a Degree of Bachelor of Laws in year 2006. He, having been called to the Bar in 2008, has engaged in private practice since then. He was a member of the Executive Committee of the Colombo Chief Magistrate's Court Lawyers' Association in 2011 and served the said Association as it's Assistant Treasurer in the year 2013. At present, he serves as a Director of the National Housing Development Authority.
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HDFC Bank of Sri Lanka – Debenture Issue 2015 | 43
8.2 RELATED PARTY TRANSACTIONS REVIEW COMMITTEE HDFC has been functioning with a Related Party Transactions Review Committee since 31st of July 2014. The current members of such committee are as follows;
1. Mr. R. J. De Silva (Chairman of the Committee) 2. Mr. R. H. Meewakkala (Director) 3. Mr. M. Surendran (Director) 4. Mrs. B. G. S. Gunathilake (Director) 5. Mr. P. S. Punchihewa (Director)
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9.0 CORPORATE MANAGEMENT 9.1 DETAILS OF THE MANAGEMENT
The corporate management team of the Bank is given below.
Mr. Nimal Mamaduwa Chief Executive Officer/General Manager
Mr. Nimal Mamaduwa is an Associate Member of the Institute of Credit Management of Sri Lanka, holds a Diploma in Bank Management from Institute of Bankers Sri Lanka and a Fellow Member of the Chartered Management Institute of UK. He is a Senior Professional Banker with 39 years’ experience in commercial and development banking. He started his banking career at Hatton National Bank PLC (HNB) and during his 29 years’ service at HNB he has held many senior positions in the areas of Credit, Development Banking and Operations. He left HNB in 2003 and joined Sanasa Development Bank PLC in the capacity of Asst. General Manager (Credit) and was elevated to Deputy General Manager in the year 2005 and in June 2006 he assumed duties as Chief Executive Officer/General Manager at Sanasa Development Bank PLC, which position he held until October 2012. He is also a Director of Sri Lanka Banks’ Association (Guarantee) Limited and the Financial Ombudsman Sri Lanka (Guarantee) Limited. He assumed duties as Chief Executive Officer/ General Manager of HDFC Bank with effect from 1st January 2013.
Mr. S. Dissanayake Chief Operating Officer
Mr. S. Dissanayake is an Associate Member of the Institute of Chartered Accountants of Sri Lanka (ICASL). He holds a Bachelor of Science (Business Administration) special degree, from the University of Sri Jayewardenepura. He counts more than 25 years’ experience in the field of accounting and finance in organisations where public and private sector. He had been the head of the Finance section of the state sector institutions for several years. He joined HDFC in 1995 as Assistant General Manager (Finance) and had been the head of the Finance since the assumption of the portfolio as Deputy General Manager (Finance) for over 11 years. In addition to being the Head of Finance he oversaw the duties of the Chief Operations Officer for two years. The Credit Division, Recovery Division, Administration division and Branch Operations had been under his supervision for several years. Presently he is the Chief Operating Officer of the Bank.
HDFC Bank of Sri Lanka - Debenture Issue 2015 | 45
HDFC Bank of Sri Lanka – Debenture Issue 2015 | 45
Mr. D. Vidana Pathirana Chief Finance Officer
Mr. D.Vidana Pathirana is a Fellow Member of the Institute of Chartered Accountants of Sri Lanka (FCA), a Fellow Member of the Institute of Certified Management Accountants of Sri Lanka (FCMA), a Fellow Member of the Institute of Certified Professional Managers of Sri Lanka (FCPM). He holds a Bachelor of Science Degree (Specialised in Public Administration) from the University of Sri Jayawardanapura, and MBA Specialised in Sustainability in Business Management. He has over 30 years’ experience in the fields of Auditing, Accounting, Financial Management, Projects and Investment Promotion, Management Accounting, Project Finance, Business Development and Marketing, Banking, Treasury Management both in Sri Lanka and overseas. He is currently responsible for Finance and Planning Department of the Bank.
41 Mr. W. M. A. Bandara Chief Information Officer
Mr. W.M.A. Bandara is the Assistant General Manager- Information Technology of the HDFC Bank. He holds a Bachelor of Science Degree from the University of Colombo followed by a Post Graduate Diploma in Information Technology from University of Stirling, Scotland. He has over 20 years of experience as an IT professional with over 10 years’ experience in senior managerial capacity. He has extensive experience in installing, configuring and maintaining a wide range of UNIX based system, specialised in configuring and maintaining Database, Network administration , Project Management and IT Governance . He had also worked in NEC Corporation in Japan.
Mr. A. J. Atukorala Chief Internal Auditor
Mr. A. J. Atukorala was appointed as the Chief Internal Auditor of HDFC Bank in 2009. He counts over 26 years of executive experience in the banking sector. Specialising in the auditing function he has the exposure to both private and public sector banks. Graduated from the University of Colombo (BSc in Physical Science), he is also an Associate Member of the Chartered Institute of Management Accountants (CIMA-UK). He also holds the Diploma in Computer Systems Design awarded by the National Institute of Business Management, Sri Lanka and also awarded with the titles of ‘Certified Information Systems Auditor’ and ‘Certified Information Security Manager’ by the Information Systems Audit & Control Association (ISACA - USA).
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Mr. L. Edirisinghe Assistant General Manager - HR & Administration Mr. Leslie Edirisinghe holds a B Sc Special Degree in Business Administration at the University of Sri Jayewardenepura and has obtained a National Diploma in Human Resource Management of the Institute of Personnel Management of Sri Lanka. He is also an Associate Member of the Institute of Personnel Management of Sri Lanka (AMIPM) and his main forte lies in Human Resource Management and Training and Development. He has over two decades of professional career experience in Human Resource Management and Training and Development in both public and private sectors, locally and overseas.
Mrs. W. W. D. S. C. Perera Assistant General Manager – Legal
Mrs. Sudishna Perera is an Attorney-At-Law by profession. She began her career at HDFC Bank as a Legal Officer in 1992 and was promoted to the post of Manager Legal, in 2001. She counts over 20 years of professional experience in the field of law, specialising in housing finance, banking and litigation.
Mrs. H.S. Gunathilake Assistant General Manager – Business Development & Marketing
Mrs. Himali Gunathilake is the Chief Manager (Business Development and Marketing) of The HDFC Bank. She holds a Bachelor of Arts Degree from the University of Peradeniya followed by a Post Graduate Diploma in Urban Management from the Institute of Housing Studies (presently integrated with Erasmus University), The Netherlands. She also holds a Master of Business Administration Degree from the University of Sri Jayewardenepura. She counts over 30 years experience in the field of housing both in public and private sector.
Mr. C. R. P. Balasooriya Assistant General Manager – Treasury
Mr. Balasuriya is a member of the Institute of Associated Accounting Technicians of Sri Lanka and he holds a Bachelor of Commerce (Special) Degree from the University of Sri Jayawardanapura, he has over two decades of professional career experience in merchant & specialised banking sector. He is currently responsible for treasury management functions of the bank.
Mr. Manjula Kithsiri Dissanayake Chief Manger – Credit
Qualification: ACA He has over 16 years’ experience in the field of Credit and Finance. Prior to joining HDFC Bank he served as Credit Officer, Account Manager, Senior Account Manager, Accountant and Senior Manager Credit and Operations in major private sector financial institutions. He has experience in the field of Auditing, Financial Management, Taxation, Operations and Credit Management.
HDFC Bank of Sri Lanka - Debenture Issue 2015 | 47
HDFC Bank of Sri Lanka – Debenture Issue 2015 | 47
Ms. K. T. Dharshani .D. De Silva Chief Manager - Secretary Bank / Board Qualification: Attorney at law. Having two Masters; Business Administration (MBA) and law (LLM- Master of laws with a distinction and awarded performance excellence award) In addition, possess post Attorneys higher diploma in Banking Finance and insurance. Attorney at law and counts over 20 years’ experience in Banking & Finance Sector Institutions.
Mr. H. A. Anura Chief Manager – Finance Qualification: MBA (RJT), B.Sc. Accy & Fin. MGT (Sp) Degree (USJ), MIPA (Aus.), MAAT, Intermediate of CA Sri Lanka, He has two decades of work experience in banking, credit, recovery, fund mobilization, branch operation, accounting, financial management, taxation, auditing, treasury management, compliance, corporate financial reporting and annual reports, budgeting and financial planning. He began his career in accounting at BMC and Ceylon Fisheries Corporation in 1996 and joined Regional Development Bank in 1998 in the capacity of Audit/Executive Officer, Assistant Manager and joined HDFC in 2004 in the capacity of Branch Manager Gampaha and from 2007, he served in the capacity of Accountant treasury, Accountant Finance, Senior Manager Finance.
Ms. W. N. D. Botheju Chief Manager – HR Qualification: B.Sc. Business Administration (special), CBA (CA Sri Lanka), CBF She counts over 20 years’ experience in private and banking sector in the field of management, finance, HR and other disciplines. Mr. K. R. M. Aruna Bandara Chief Manager- Compliance Officer Qualification: B.Com (Special), CBA (CA Sri Lanka), SAT (AAT Sri Lanka), CBF He counts more than 25 years’ experience in the field of Auditing, Accounting in organizations in the public & private sectors. Prior to joining HDFC bank he served as specializing in auditing in public corporations and forging funded projects. He was appointed Head of Compliance with effect from 02nd January 2012.
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10.0 STATUTORY DECLARATIONS
10.1 STATUTORY DECLARATION BY THE DIRECTORS
We, the undersigned who are named herein as Directors of Housing Development Finance Corporation Bank hereby declare and confirm that we have read the provisions of CSE Listing Rules and of the Companies Act No. 7 of 2007 and any amendments thereto relating to the issue of the Prospectus and those provisions have been complied with to the extent the said provisions are applicable to the HDFC Bank.
This Prospectus has been seen and approved by us and we collectively and individually accept full responsibility for the accuracy of the information given and confirm that after making all reasonable enquiries and to the best of our knowledge and belief, there are no other facts the omission of which would make any statement herein misleading or inaccurate. Where representations regarding the future performance of the Bank have been given in the Prospectus, such representations have been made after due and careful enquiry of the information available to the Bank and making assumptions that are considered to be reasonable at the present point in time in our best judgment. The parties to the Issue (i.e. Lawyers, Managers and Rating Company) have submitted declarations to the Company declaring that they have complied with all regulatory requirements applicable to such parties, and that such parties have no conflict of interest with the Bank.
An application has been made to the CSE for permission to deal in and for a listing for Debentures issued by the Bank and those Debentures which are the subject of this Issue.
Such permission will be granted when Debentures are listed on the CSE. The CSE assumes no responsibility for the correctness of any of the statements made or opinions expressed or reports included in this Prospectus. Listing on the CSE is not to be taken as an indication of the merits of the Bank or of the Debentures issued.
The Common Seal of Housing Development Finance Corporation Bank affixed.
Name of Directors Designation Signature
Mr. R.J. De Silva Chairman Non – Executive, Independent Director Sgd.
Mr. Galhena Prasad Indika Gnanasena
Non – Executive, Independent Director Sgd.
Mr. Muthurajah Surendran Non – Executive, Non- Independent Director Sgd.
Mrs. B.G.S. Gunathilake Non – Executive, Independent Director Sgd.
Mr. R. M. J. Rasnayake Non – Executive, Independent Director Sgd.
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HDFC Bank of Sri Lanka – Debenture Issue 2015 | 49
Mr. Rajiv Herath Meewakkala Non-Executive, Independent Director Sgd.
Mr. L. S. PalansuriyaNon-Executive, Non -Independent Director Sgd.
Mr. P. S. PunchihewaNon-Executive, Non- Independent Director Sgd.
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10.2 STATUTORY DECLARATION BY THE JOINT FINANCIAL ADVISORS AND MANAGERS TO THE ISSUE
We, Investment Banking Division of Bank of Ceylon, Head Office, BOC Square, No. 01, Bank of Ceylon Mawatha, Colombo 01 being the Joint Financial Advisors and Managers to the proposed issue of up to Forty Million (40,000,000) Rated Senior Unsecured Redeemable Debentures with a value of up to Rupees Four Billion (LKR 4,000,000,000/-) of Housing Development Finance Corporation Bank of Sri Lanka, hereby declare and confirm that to the best of our knowledge and belief based on the information provided to us by the Bank, the Prospectus constitutes full and true disclosure of all material facts about the Issue and Housing Development Finance Corporation Bank of Sri Lanka. The duly authorized officers of Bank of Ceylon placed their signatures on behalf of Bank of Ceylon on the 04th day of November 2015 at Colombo. Sgd. Sgd. Deputy General Manager Assistant General Manager We, NDB Investment Bank Limited, of No. 40, Navam Mawatha, Colombo 02 being the Joint Financial Advisors and Managers to the proposed issue of up to Forty Million (40,000,000) Rated Senior Unsecured Redeemable Debentures with a value of up to Rupees Four Billion (LKR 4,000,000,000/-) of Housing Development Finance Corporation Bank of Sri Lanka, hereby declare and confirm that to the best of our knowledge and belief based on the information provided to us by the Bank, the Prospectus constitutes full and true disclosure of all material facts about the Issue and Housing Development Finance Corporation Bank of Sri Lanka. The Common Seal of NDB Investment Bank Limited affixed on the 04th day of November 2015 at Colombo in the presence of two Directors. Sgd. Sgd. Director Director
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HDFC Bank of Sri Lanka – Debenture Issue 2015 | 51
11.0 FINANCIAL INFORMATION
11.1 ACCOUNTANT’S REPORT AND FIVE YEAR SUMMARY OF FINANCIAL STATEMENTS
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ANNEXURE I - COPY OF THE RATING CERTIFICATE
Fitch Rates HDFC Bank's Senior Debentures Final 'BBB(lka)'
Fitch Ratings-Colombo-12 October 2015: Fitch Ratings has today assigned Housing Development Finance Corporation Bank of Sri Lanka's (HDFC Bank; BBB(lka)/Stable) proposed senior unsecured debentures of up to LKR4.0bn a final National Long-Term Rating of 'BBB(lka)'. The assignment of the final rating follows the receipt of documents conforming to information already received, and the final rating is the same as the expected ratings assigned on 24 August 2015. The proposed issuance, which will have tenors of five and 10 years and carry fixed and floating coupons, will be listed on the Colombo Stock Exchange. HDFC Bank expects to use the proceeds to reduce asset and liability maturity mismatches. KEY RATING DRIVERS The proposed senior debentures are rated in line with HDFC Bank's National Long-Term Rating. The issues rank equally with the claims of the bank's other senior unsecured creditors. The issuer rating is driven by Fitch's expectation that the bank would receive extraordinary support from the state, if needed, given that the state effectively holds 51% of the bank. It also reflects Fitch's view of the bank's quasi-policy role in supporting the state's initiatives to develop more housing for low- and middle-income families. However, the potential for state support is lower than for larger state-owned banks in Sri Lanka due to HDFC Bank's lower systemic importance. RATING SENSITIVITIES The rating on the proposed debentures will move in tandem with HDFC Bank's National Long-Term Rating. A change in Fitch's expectation of state support to HDFC Bank due to a weakening of the linkages with the state, including a dilution of state's majority ownership in the bank or a revision of Fitch's view of HDFC Bank's policy role, could result in a downgrade of the ratings. A full list of HDFC Bank's's ratings follows: National Long-Term Rating: 'BBB(lka)'; Outlook Stable Outstanding senior secured debentures: 'BBB(lka)' Proposed senior unsecured debentures: 'BBB(lka)' Contact: Primary Analyst Rukshana Thalgodapitiya Vice President +94 1 1254 1900 Fitch Ratings Lanka Limited Level 15-04, East Tower, World Trade Center Colombo 01, Sri Lanka Secondary Analyst Nadika Ranasinghe Vice President +941 1254 1900 Committee Chairperson
HDFC Bank of Sri Lanka - Debenture Issue 2015 | 57
Jonathan Lee Senior Director +886281757601 Media Relations: Bindu Menon, Mumbai, Tel: +91 22 4000 1727, Email: [email protected]. Note to editors: Fitch's National ratings provide a relative measure of creditworthiness for rated entities in countries with relatively low international sovereign ratings and where there is demand for such ratings. The best risk within a country is rated 'AAA' and other credits are rated only relative to this risk. National ratings are designed for use mainly by local investors in local markets and are signified by the addition of an identifier for the country concerned, such as 'AAA(lka)' for National ratings in Sri Lanka. Specific letter grades are not therefore internationally comparable. Additional information is available on www.fitchratings.com. Applicable Criteria Evaluating Corporate Governance (pub. 12 Dec 2012) Global Bank Rating Criteria (pub. 20 Mar 2015) National Scale Ratings Criteria (pub. 30 Oct 2013) Additional Disclosures Solicitation Status Endorsement Policy ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.
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ANNEXURE II - COLLECTION POINTS Copies of the Prospectus and the Application Form can be obtained free of charge from the following collection points.
Issuer Housing Development Finance Corporation Bank of Sri Lanka Sir Chittampalam A Gardiner Mawatha Colombo 02 Tel: +94 11 2 356 800 Fax:+94 11 2 446 392 Joint Financial Advisors and Managers to the Issue
Bank of Ceylon Investment Banking Unit Head Office, BOC Square No. 01, bank of Ceylon Mawatha Colombo 01 Tel: +94 11 2 394 311 – 2 346 845 Fax: +94 11 2 346 842
NDB Investment Bank Limited No. 40, Navam Mawatha Colombo 02 Tel: +94 11 2 300 385 Fax: +94 11 2 300 393
Registrars to the Issue S S P Corporate Services (Private) Limited No. 101, Inner Flower Road Colombo 03 Tel: +94 11 2 573 894 Fax: +94 11 2 573 609
Bankers to the Issue National Development Bank PLC No. 40, Navam Mawatha Colombo 02 Tel : +94 11 2 448 448 Fax : +94 11 2 341 044
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Branch Network of HDFC Bank
HDFC Bank - Jaffna No-127, KKS Road Jaffna Tel : +94 21 2219 283 Fax : +94 21 2219 284
HDFC Bank - Vavuniya No-66, Station Road Vairavapuliyankulam Vavuniya E-mail : [email protected] Tel : +94 24 2225 770 Fax : +94 24 2225 771
HDFC Bank - Anuradhapura No-396/14 , Court Place Bandaranayaka Mawatha Anuradhapura E-mail : [email protected] Tel : +94 25 2223 289 / +94 25 2235 018 Fax : +94 25 2223 289
HDFC Bank - Polonnaruwa Randombe Building, Hospital Junaction Polonnaruwa E-mail : [email protected] Tel : +94 27 227 397
HDFC Bank - Chilaw No-17, Fort Road Chilaw E-mail : [email protected] Tel : +94 32 2222 594 Fax : +94 32 2222 666
HDFC Bank - Kuliyapitiya No-22/A, Parakrama Mawatha Kuliyapitiya E-mail : [email protected] Tel : +94 37 2281 406/07 Fax : +94 37 2281 407
HDFC Bank - Kurunegala No-42, Kandy Road Kurunegala E-mail : [email protected] Tel : +94 37 2224 201 / +94 37 2221 656 Fax : +94 37 222 420
HDFC Bank - Nikaweratiya No-58, Puttalam Road Nikaweratiya E-mail : [email protected] Tel : +94 34 2260 444
HDFC Bank - Ampara HDFC Bank Sri Lanka, Uhana Road Ampara E-mail : [email protected] Tel : +94 63 2224 318 Fax : +94 63 2223 762
HDFC Bank - Batticaloa No-58/1, Baily Road Batticaloa E-mail : [email protected] Tel : +94 65 2222 792 Fax : +94 65 2227 573
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HDFC Bank - Trincomalee No-99, North Coast Road Trincomalee E-mail : [email protected] Tel : +94 26 2226 405 Fax : +94 26 2226 406
HDFC Bank - GampolaNo-134, Kandy Road Gampola E-mail : [email protected] Tel : +94 81 2353 374 / +94 81 2353 394 Fax : +94 81 2353 374
HDFC Bank - Kandy NHDA Building Yatinuwara Veediya Kandy E-mail : [email protected] Tel : +94 81 2234 268 Fax : +94 81 2222 717
HDFC Bank - Matale No-11, Kandy Road Matale E-mail : [email protected] Tel :+94 66 2223 055 / +94 66 234 400 Fax :+94 66 2234 400
HDFC Bank - Nuwara Eliya No.72, Park Road Nuwara Eliya E-mail : [email protected] Tel : +94 52 2235 752 Fax : +94 52 2223 369
HDFC Bank - ColomboP.O. Box 2085 Sir Chittampalam A Gardiner Mawatha Colombo 2 E-mail : [email protected] Tel : +94 11 2446 241 / +94 11 2447 354 Fax : +94 11 4714 113
HDFC Bank - Hyde-Park No-63, Hyde-Park Corner Colombo 02 E-mail : [email protected] Tel : +94 11 2699 639 Fax : +94 11 2699 638
HDFC Bank - Kiribathgoda 3M/1/1, National Housing Scheme Kiribathgoda E-mail : [email protected] Tel : +94 11 2967 268
HDFC Bank - Nittambuwa No-48/1, Kandy road Nittambuwa E-mail : [email protected] Tel : +94 33 2246 495
HDFC Bank - Nugegoda 1st Floor, Railway Station Nugegoda. E-mail : [email protected] Tel :+94 11 2826 161 Fax :+94 11 2826 162
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HDFC Bank - Gampaha Sisira Building, No-27 Ranathunga Mawatha Gampaha E-mail : [email protected] Tel : +94 33 2222 506 / +94 33 2234 370 Fax : +94 33 2234 370
HDFC Bank - Piliyandala No-21, Vidyala Mawatha Piliyandala E-mail : [email protected] Tel : +94 11 2604 843 / +94 11 2604 876 Fax : +94 11 2604 876
HDFC Bank - Kalutara No-13, Gnanodaya Mawatha Kalutara South Kalutara E-mail : [email protected] Tel : +94 34 2222 985 Fax : +94 34 2227 700
HDFC Bank - Homagama No-99,Station Road Homagama E-mail : [email protected] Tel : +94 11 2748 218 Fax : +94 11 2857 722
HDFC Bank - Horana No-231, Panadura Road Horana E-mail : [email protected] Tel : +94 34 2260 155 / +94 34 2260 156 Fax : +94 34 2260 156
HDFC Bank - Jaela No-170/A/1, Colombo Road Ja-Ela E-mail : [email protected] Tel : +94 11 2247 750 / +94 11 2228 844 Fax : +94 11 2247 750
HDFC Bank - Peliyagoda 1st Floor Shop, No:03, RMU 06 Peliyagoda E-mail : [email protected] Tel : +94 11 2981 698 Fax : +94 11 2981 005
HDFC Bank - Ratnapura No-51, Main Street Ratnapura E-mail : [email protected] Tel : +94 45 2223 174 / +94 45 2226 954 Fax : +94 45 2223 174
HDFC Bank - Kegalle 371,Main Street Kegalle E-mail : [email protected] Tel : +94 35 2222 265 / +94 35 2222 870 Fax : +94 35 2222 870
HDFC Bank - Avissawella No 79, Ratnapura Road Avissawella. E-mail : [email protected] Tel : +94 36 2233 622 Fax : +94 36 2233 893
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HDFC Bank - Embilipitiya No-93 B, Malwatta Building New Town Road Embilipitiya E-mail : [email protected] Tel : +94 47 2230 068 Fax : +94 47 2230 069
HDFC Bank - Ambalangoda No-205/6, Galle Road Ambalangoda E-mail : [email protected] Tel : +94 91 2254 803
HDFC Bank - Galle No-4, Sri Dewamiththa Mawatha Galle E-mail : [email protected] Tel : +94 91 2234 163 Fax : +94 91 2227 060
HDFC Bank - Matara No-9, HGPM Building, Kotuwegoda Matara E-mail : [email protected] Tel : +94 41 2224 790 Fax : +94 41 2225 780
HDFC Bank - Tangalle No-31, Beach Road Tangalle E-mail : [email protected] Tel : +94 47 2240 592 Fax : +94 47 2247 774
HDFC Bank - Tissamaharama No-71, Maha Veediya Tissamaharama E-mail : [email protected] Tel : +94 47 2237 774 Fax : +94 47 2237 776
HDFC Bank - Badulla No-69/1/2 , New Passara Road Badulla E-mail : [email protected] Tel : +94 55 2223 530 Fax : +94 55 2223 130
HDFC Bank - Monaragala No-310/A, Kachcheriya Junction Wellavaya Road Monaragala E-mail : [email protected] Tel : +94 55 2277 047 Fax : +94 55 2276 814
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Members of the CSE
Acuity Stockbrokers (Private) Limited Level 6, Acuity House No. 53, Dharmapala Mawatha Colombo 03 Tel: +94 11 2 206 206 Fax: +94 11 2 206 298-9 E-mail: [email protected]
Asha Phillip Securities Limited 137, Vauxhall Street Colombo 03 Tel: +94 11 2 429 100 Fax: +94 11 2 429 199 E-mail: [email protected]
Asia Securities (Private) Limited2nd Floor No. 176/1-2/1, Thimbirigasyaya Road Colombo 05 Tel: +94 11 7 722 000 Fax: +94 11 2 584 864 E-mail: [email protected]
Assetline Securities (Private) Limited 120, 120A, Pannipitiya Road Battaramulla Tel: +94 11 4 700 111, +94 11 2 307 366 Fax: +94 11 4 700 112, +94 11 2 307 365 E-mail: [email protected]
Bartleet Religare Securities (Private) Limited Level “G”, “Bartleet House” 65, Braybrooke Place Colombo 02 Tel: +94 11 5 220 200 Fax: +94 11 2 434 985 E-mail: [email protected]
Capital TRUST Securities (Private) Limited 42, Sir Mohamed Macan Markar Mawatha Colombo 03 Tel: +94 11 2 174 174, +94 11 2 174 175 Fax: +94 11 2 174 173 E-mail: [email protected]
CT CLSA Securities Private Limited 4-14, Majestic City 10, Station Road Colombo 04 Tel: +94 11 2 552 290-4 Fax: +94 11 2 552 289 E-mail: [email protected]
First Capital Equities Private Limited No. 347/1/1, Dr. Colvin R. De Silva Mawatha Colombo 02 Tel: +94 11 2 145 000 Fax: +94 11 5 736 264 E-mail: [email protected]
J B Securities (Private) Limited No. 150, St. Joseph Street Colombo 14 Tel: +94 11 2 490 900, +94 77 2 490 900-1 Fax: +94 11 2 430 070 E-mail: [email protected]
John Keells Stockbrokers (Private) Limited No. 186, Vauxhall Street Colombo 02 Tel: +94 11 2 306 250, +94 11 2 342 066-7 Fax: +94 11 2 342 068 E-mail: [email protected]
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Lanka Securities (Private) Limited 228/1, Galle Road Colombo 04 Tel: +94 11 4 706 757, +94 11 2 554 942 Fax: +94 11 4 706 767 E-mail: [email protected]
Nation Lanka Equities (Private) Limited 44, Guildford Crescent Colombo 07 Tel: +94 11 4 889 061-3, +94 11 2 684 483, Fax: +94 11 2 688 899 E-mail: [email protected]
NDB Securities (Private) Limited 5th Floor, NDB Building 40, Navam Mawatha Colombo 02 Tel: +94 11 2 314 170-8 Fax: +94 11 2 314 181 E-mail: [email protected]
S C Securities (Private) Limited 5th Floor No. 26B, Alwis Place Colombo 03 Tel: +94 11 4 711 000-1 Fax: +94 11 2 394 405 E-mail: [email protected]
Somerville Stockbrokers (Private) Limited 137, Vauxhall Street Colombo 02 Tel: +94 11 2 329 201-5, +94 11 2 332 827, +94 11 2 338 292-3 Fax: +94 11 2 338 291 E-mail: [email protected]
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Trading Members
Softlogic Stockbrokers (Private) Limited No. 06, 37th Lane Queens Road Colombo 03 Tel: +94 11 7 277 000 Fax: +94 11 7 277 099 Email: [email protected]
Capital Alliance Securities (Private) Limited Level 5, "Millennium House" 46/58, Navam Mawatha Colombo 02 Tel: +94 11 2 317 777 Fax: +94 11 2 317 788 Email: [email protected]
LOLC Securities (Private) Limited Level 18, West Tower World Trade Centre Echelon Square Colombo 01 Tel: +94 11 7 880 880 Fax: +94 11 2 434 771
First Guardian Equities (Private) Limited 32nd Floor, East Tower World Trade Centre Echelon Square Colombo 01
Tel: +94 11 5 884 400 Fax: +94 11 5 884 401 E-mail: [email protected]
Candor Equities Limited Level 8, South Wing Millennium House 46/58, Navam Mawatha Colombo 02 Tel: +94 11 2 359 100 Fax: +94 11 2 305 522 E-mail: [email protected]
Enterprise Ceylon Capital (Private) Limited 27th Floor, East Tower World Trade Centre Echelon Square Colombo 01
Tel: +94 11 2 333 000 Fax: +94 11 2 333 383 E-mail: [email protected]
Claridge Stockbrokers (Private) Limited 10, Gnanartha Pradeepa Mawatha Colombo 08 Tel: +94 11 2 697 974 Fax: +94 11 2 689 250 E-mail: [email protected]
Navara Securities Private Limited No. 25-2/1, Milepost Avenue Colombo 03 Tel: +94 11 2 358 700/20 Fax: +94 11 5 005 551 E-mail: [email protected]
SMB Securities (Private) LimitedNo. 102/1, Dr. N.M. Perera Mawatha Colombo 08 Tel: +94 11 4 388 138 Fax: +94 11 2670294 E-mail: [email protected]
Taprobane Securities (Private) Limited 2nd Floor 10, Gothami Road Colombo 08 Tel: +94 11 5 328 200 Fax: +94 11 5 328 177 E-mail: [email protected]
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66 | HDFC Bank of Sri Lanka – Debenture Issue 2015
TKS Securities (Private) Limited 4th Floor, No. 245 Dharmapala Mawatha Colombo 7 Tel: +94 11 7 857 799 Fax: +94 11 7 857 857 E-mail: [email protected]
Richard Pieris Securities Private Limited 55/20, Vauxhall Lane, Colombo 02 Tel: +94 11 7 448 900, +94 11 5 900 800 Fax: +94 11 2 330 711 E-mail: [email protected]
Entrust Capital Markets (Pvt) Ltd. Level 15, East Tower, World Trade Center, Echelon Square, Colombo 01. Tel: +94 11 5 500 600 Fax: +94 11 5 500 699 E-mail: [email protected]
Trading Members - Debt
First Capital Markets Limited No. 2, Deal Place Colombo 3 Tel: +94 11 2 639 898, +94 11 2 681 888 Fax: +94 11 2 639 899, +94 11 2 681 460 E-Mail: [email protected]
Capital Alliance Limited Level 5, "Millenium House" 46/58, Nawam Mawatha Colombo 2 Tel: +94 11 2 317 777 Fax: +94 11 2 317 788
Wealthtrust Securities Limited No. 32, Castle Street Colombo 08 Tel: +94 11 2 689 823 Fax: +94 11 2 689 605
Perpetual Treasuries Limited Level 3, Prince Alfred Tower No 10, Alfred House Gardens Colombo 3 Tel: +94 11 2 206 123, +94 11 2 206 107 Fax: +94 11 2 206 110
NSB Fund Management Company LimitedNo. 255, 1st Floor NSB Head Office Galle Road Colombo 3 Tel: +94 11 2 565 956, +94 11 2 565 957 Fax: +94 11 2 574 387
Acuity Securities Ltd 4th Floor No. 53, Dharmapala Mawatha, Colombo 03. Tel: +94 11 2 206 280 Fax: +94 11 2 206 290
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Natwealth Securities Limited Prince Alfred Tower, No. 10-1/1, Alfred House Gardens, Colombo 3. Tel: +94 11 4716274 Fax: +94 11 4645776
Commercial Bank of Ceylon PLC Commercial House No 21, Sir Razik Fareed Mawatha Colombo 01 Tel: +94 11 2 486 334 Fax: +94 11 2 384 650
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Branch Network of National Development Bank PLC
BRANCH ADDRESS CONTACT NUMBER
Athurugiriya 70/15A, Borella Road, Athurugiriya 011 2563325 / 011 2073244
Avissawella No. 93, Ratnapura Road, Avissawella 036 2233610/1
Boralesgamuwa No 39, Kesbawa Road, Boralesgamuwa 011 2509701/0112 150798
Borella No: 31/5, Dr. N M Perera Mawatha, Borella 011 2694484 - 5 Havelock Town 117, Havelock Road, Colombo 05 011 2591140/1 HOB 103A, Dharmapala Mawatha, Colombo 7 011 2448448 Homagama 64A, Highlevel Road, Homagama 011 2894880-1 Kaduwela No: 501/2, Awissawella Road, Kaduwela 0112548571 - 2
Kohuwela No. 118, S De S Jayasinghe Mawatha, Kohuwela 011 2814224/5
Kollupitiya 712, Galle Road, Colombo 3 011 2504961/2 Kotahena 295, George R De Silva Mw, Co -13 011 2436169/70 Maharagama 108 A, Highlevel Road, Maharagama 011 2745091-2 Malabe 760, New Kandy Road, Malabe 011 2762345-6 Moratuwa 255, Galle Road, Idama, Moratuwa 011 2642021-2 Mount Lavinia 270, Galle Road, Mt Lavinia 011 2739176-2737144
Narahenpita 193, Kirula Road, Narahenpita , Colombo 5. 011 2369580 / 011 2369507
Nawam Mawatha 42 Dhpl Bldg, Nawam Mw, Colombo 02 0112 314640/1 Nugegoda 152,Nawala Rd, Nugegoda 011 2820885/7 Old Moor Street No. 311, Old Moor Street , Colombo 12 011 2 339902/3
Pelawatte 730A, Pannipitya Road, Pelawatte, Battaramulla 011 2786708/9
Pettah No 202, Main Street, Colombo 01 011 2331204 - 5 Piliyandala No 21,Second Cross Street,Piliyandala 011 2604600 Pitakotte No 322B, Kotte Road, Pitakotte 011 2856503 / 34 Rajagiriya 505, Srijayawardenapura Etul Kotte, Kotte 011 2885790/792
Ratmalana No 151, Galle Road, Ratmalana 0112 716684 / 0112 719361
Wellawatte 302, Galle Road, Colombo 6 011 2361903/4
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ANNEXURE III - CUSTODIAN BANKS
Bank of Ceylon Head Office 11th Floor 04, Bank of Ceylon Mawatha, Colombo 01 Tel: +94 11 2 317 777, +94 11 2 448 348, +94 11 2 338 742/55, +94 11 2 544 333
Citi Bank, N A 65 C, Dharmapala Mawatha P.O. Box 888, Colombo 07 Tel: +94 11 2 447 316/8, +94 11 2 447 318, +94 11 2 449 061, +94 11 2 328 526, +94 11 4 794 700
Commercial Bank of Ceylon PLC Commercial House No 21, Sir Razik Fareed Mawatha Colombo 01 Tel: +94 11 2 445010-15, 011 238193-5, 011 430420, 011 2336700
Deutsche Bank AG P.O. Box 314 86, Galle Road, Colombo 03 Tel: +94 11 2 447 062, +94 11 2 438 057
Hatton National Bank PLC HNB Towers 479, T. B. Jayah Mawatha, Colombo 10 Tel: +94 11 2 664 664
The Hong Kong and Shanghai Banking Corporation Limited 24, Sir Baron Jayathilake Mawatha Colombo 01 Tel: +94 11 2 325 435, +94 11 2 446 591, +94 11 2 446 303, +94 11 2 346 422
People’s Bank Head Office, 5th Floor Sir Chittampalam A Gardiner Mawatha, Colombo 02 Tel: +94 11 2 781 481, +94 11 2 37 841-9, +94 11 2 446 315/6, +94 11 2 430 561
Standard Chartered Bank 37, York Street P. O. Box 112, Colombo 01 Tel: +94 11 4 794 400, +94 11 2 480 000
Sampath Bank PLC 110, Sir James Peiris Mawatha, Colombo 02 Tel: +94 11 5 331 441
State Bank of India 16, Sir Baron Jayathilake Mawatha, Colombo 01 Tel: +94 11 2 326 133-5, +94 11 2 439 405-6, +94 11 2 447 166, +94 11 2 472 097
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Seylan Bank PLC Level 8, Ceylinco Seylan Towers 90, Galle Road, Colombo 03 Tel: +94 11 2 456 789, +94 11 4 701 812, +94 11 4 701 819, +94 11 4 701 829
Union Bank of Colombo PLC 64, Galle Road, Colombo 03 Tel: +94 11 2 374 100
Banque Indosuez C/o Hatton National Bank PLC Cinnamon Gardens Branch 251, Dharmapala mawatha, Colombo 07 Tel: +94 11 2 681 720
Pan Asia Banking Corporation PLC Head Office 450, Galle Road, Colombo 03 Tel: +94 11 2 565 565
Public Bank Berhad 340, R A De Mel Mawatha, Colombo 03 Tel: +94 11 2 576 289, +94 11 7 290 200-07
Nations Trust Bank PLC 256, Sri Ramanathan Mawatha, Colombo 15 Tel: +94 11 4 313 131
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HDFC Bank of Sri LankaP.O. Box 2085, Sir Chittampalam A Gardiner Mawatha, Colombo 02.
Telephone : 2356800, 2446241, 2446239, 2447354Fax : 2446392, 2356829, 2356827
Web Site : www.hdfc.lk
Prospectus
HDFC Bank of Sri LankaDebenture Issue 2015
Growing with Confidence
Trust Deed
5 year
Summary