Housing Development Finance Corporation Limited

Business Responsibility Re ort Sixth Business Responsibility Report 2017-18

.i HDFC WITH YOU, RIGHT THROUGH

HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED BUSINESS RESPONSIBILITY REPORT 2017-18

(Pursuant to regulation 34(2)(f) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015)

SECTION A: ~ III GENERAL INFORMATION ABOUT THE COMPANY

1 Corporate Identity Number (CIN) L 70100M H1977PLC019916 of the Company

2 Name of the Company Housing Development Finance Corporation Limited (HDFC and Corporation)

3 Registered office address Ramon House, H. T. Parekh Marg, 169, Backbay Reclamation, Churchgate Mumbai 400 020 India

Corporate office address HDFC House, H. T. Parekh Marg, 165-166, Backbay Reclamation, Churchgate Mumbai 400 020 India

4 Website www.hdfc.com

5 E-mail id investorcare@hdfc.com

6 Financial Year Reported April 1, 2017 to March 31, 2018

7 Sector(s) that the Company is HDFC is a housing finance company regulated by the engaged in National Housing Bank (NIC Code - 64192).

8 List key products/services that the The Corporation's main business is financing by way of Company provides loans for the purchase or construction of residential

houses, commercial real estate and certain other purposes, in India. All other activities of the Corporation revolve around its main business.

9 Total number of locations where As per the applicable regulations all lending business activity is undertaken by activities are done only in India. the Company

(i) Number of International Locations To cater to non-resident Indians, the Corporation has overseas offices in London, Singapore and Dubai and service associates in the Middle East.

(ii, Number of National Locations The Corporation has a PAN-India presence. As at March 31, 2018, the Corporation has 471 offices in India including outlets of HDFC Sales Private Limited (HDFC Sales), a wholly owned subsidiary of the Corporation.

10 Markets served by the Company The Corporation has a Pan-India presence.

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SECTION B:

FINANCIAL DETAILS OF THE COMPANY

1. Paid-up capital Rs. 335.18 crore

2. Total turnover Rs. 35,229.89 crore

3. Total profit after taxes Rs. 12,163.69 crore

4. Total spending on Corporate Rs. 175.97 crore which was more than 2% of the average

Social Responsibility (CSR) as a net profits of the Corporation during the last 3 financial

percentage of profit after tax years, computed as per Section 198 of the Companies

Act, 2013.

Key areas of CSR Activities in the financial year 2017-18

healthcare, skilling & livelihood and education.

Further details are provided in the Annual Report on

Corporate Social Responsibility Activities 2017-18.

5. List of activities in which The Corporation undertakes various CSR activities in

expenditure in Sr. No. 4 above accordance with its policy on Corporate Social

has been incurred Responsibility.

Further details are provided in the Annual Report on

Corporate Social Responsibility Activities 2017-18.

SECTION C:

OTHER DETAILS

1. Does the Company have any subsidiary company/companies?

Yes. As at March 31, 2018, the Corporation had 18 subsidiary companies and 3 associate companies.

2. Do the subsidiary company/companies participate in the Business Responsibility (BR) initiatives of the parent company? If yes, then indicate the number of such subsidiary company(s).

The major subsidiary companies have their own BR initiatives and generally do not participate in the BR

initiatives of the Corporation.

3. Do any other entity/entities (e.g. suppliers, distributors etc.) that the Company does business with, participate in the BR initiatives of the Company? If yes, then indicate the percentage of such entity/ entities? [Less than 30%, 30-60%, More than 60%]

No.

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SECTION D:

BUSINESS RESPONSIBILITY (BR) INFORMATION

1. Details of Director/Directors responsible for BR

a) Details of the Director responsible for implementation of the BR policy

1. DIN Number 00030248

2. Name Mr. V. Srinivasa Rangan

3. Designation Executive Director

b) Details of the BR Head

1. Name Mr. Praveen Kumar Bhalla

2. Designation Senior General Manager - Human Resources

3. Telephone number +91-11-41596576

4. E-mail id praveenb@hdfc.com

2. Principle-wise as per National Voluntary Guidelines (NVGs) Business Responsibility Policies

The NVGs on social, environmental and economic responsibilities of business prescribed by the Ministry of

Corporate Affairs advocates nine principles referred as Pl-P9 as given below:

Pl Businesses should conduct and govern themselves with ethics, transparency and accountability

P2 Businesses should provide goods and services that are safe and contribute to sustainability throughout their life cycle

P3 Businesses should promote the well-being of all employees

P4 Businesses should respect the interests of and be responsive towards all stakeholders, especially those who are disadvantaged, vulnerable and marginalised

PS Businesses should respect and promote human rights

P6 Businesses should respect, protect and make efforts to restore the environment

P7 Businesses, when engaged in influencing public and regulatory policy, should do so in a responsible manner

PS Businesses should support inclusive growth and equitable development

pg Businesses should engage with and provide value to their customers and consumers in a responsible manner

Details on each of the principles are provided in Section E.

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Principle-wise Business Responsibility Policies (Yes/No)

Sr Questions Pl P2 P3 P4 PS P6 P7 PS pg No

Ethics Product Human Corporate Respect Respons- Public Inclusive Customer & Tran- Respon- Resou- Social for Human ible lend- Policy Growth Engag-

sparency sibility rces Responsi- Rights ing norms Advocacy ement bility

1 Is there a policy for y y y y y y N y y

2 Has the policy been y y y y y y - y y formulated in consultation with the relevant stakeholders?

3 Does the policy conform y y y y y y - y y to any national/ (Refer (Refer (Refer (Refer (Refer (Refer (Refer (Refer international standards? Note a) Note a) Note a) Note a) Note a) Note a) Note a) Note a) If yes, specify?

4 Has the policy been y y y y y y - N N approved by the Board? If yes, has it been signed by MD/ owner/ CEO/ appropriate Board Director?

5 Does the Company have y y y y y y - y y a specified committee of the Board/ Director/ Official to oversee the implementation of the policy?

6 Indicate the link for the y y y y y y - y y policy to be viewed online (Refer (Refer (Refer (Refer (Refer (Refer (Refer (Refer

Note b) Note b) Note c) Note b) Note c) Note c) Note c) Note c)

7 Has the policy been y y y y y y - y y formally communicated to all the relevant internal and external stakeholders?

8 Does the Company have y y y y y y - y y an in-house structure to implement the policy?

9 Does the Company have y y y - y - - y y a grievance redressal mechanism to address stakeholders' grievances related to the policy?

10 Has the Company carried y y y y y y - y y out independent audit/ (Refer (Refer (Refer (Refer (Refer (Refer (Refer (Refer evaluation of the working Noted) Noted) Noted) Noted) Noted) Noted) Noted) Noted) of this policy by an internal or external agency?

# Principle-wise policies

Pl Ethics & Transparency The Corporation's Code of Conduct for Employees, Executive Directors &

Senior Management and Non-Executive Directors, Fair Practices Code,

Whistle Blower Policy, Policy on Management of Conflict of Interest,

regulatory guidelines and anti-bribery and anti-corruption and other internal

policies elucidate ethical behaviour, transparency and accountability.

P2 Product Responsibility The Corporation's Fair Practices Code and Most Important Terms and

Conditions are based on ethical principles of integrity and transparency and

guide this principle. The objective of setting such standards and practices is

to foster confidence in the housing finance system.

P3 Human Resources The Corporation has various policies to support employee well-being. The

important ones include the comprehensive employee health insurance policy,

Personal accident policy, policy on maternity benefits for female employees,

policy for ensuring safety of women at the workplace, policy on self-

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education for employees, policy on providing soft loans to employees for

purchasing of house, furniture & fixtures, vehicles, sponsoring employees for

training & development, leadership development programmes etc.

P4 Corporate Social The Corporation's CSR Policy guides this principle. Responsibility

PS Respect for Human The Code of Conduct details the respect for human rights and supports

Rights the principles in the United Nations' Universal Declaration of Human Rights.

P6 Responsible lending Given that the Corporation is a housing finance company, the

norms applicability of this principle is limited. However, the Corporation evaluates

environmental and social risks in its lending policies and abstains from

lending to environmentally irresponsible projects. In addition, employees are

sensitized to prevent wasteful usage of natural resources and conserve

energy.

P7 Public Policy While the Corporation may share its expertise to help in the formulation of

Advocacy public policy, it does not directly engage in lobbying or advocacy activities

and hence, does not have a specific policy for this purpose.

PS Inclusive Growth The CSR policy encompasses activities focused on the marginalised and

vulnerable sections of society. In its effort towards inclusiveness, the Corporation also offers specialized housing finance products that cater to the

vulnerable and low income segments. These policies are part of the

Corporation's lending business and hence, there is no standalone policy on

equitable growth and development.

pg Customer The Code of Conduct, internal policies, benchmarks on customer service and

Engagement policies as stipulated by the regulators encompass this principle.

Notes:

a. The policies have been developed based on the best practices or as per the regulatory requirements and through appropriate consultation with relevant stakeholders.

b. May include a combination of internal policies of the Corporation which are accessible to all internal stakeholders and the policies placed on the Corporation's website. The hyperlink is https://www.hdfc.com/investor-services/allpolicies

c. The policies of the Corporation are internal documents and are not accessible to the public.

d. The policies are internally evaluated by various Department Heads, Business Heads and the management.

3. Governance related to BR

Indicate the frequency with which the Board of Directors, Committee of the Board or CEO assesses the BR performance of the Company. Within 3 months, 3-6 months, annually, more than 7 year

The executive directors and senior management of the Corporation monitor various aspects of social, environmental, governance and economic responsibilities of the business on a continuous basis.

The Corporation's business responsibility performance is reviewed by the Board of Directors on an annual basis.

During the year under review, the Corporate Social Responsibility Committee of Directors and the Stakeholders Relationship Committee of Directors met four times.

Does the Company publish a BR or a Sustainability Report? What is the hyper/ink for viewing this report? How frequently is it published?

The Corporation publishes a Business Responsibility Report (BRR) on an annual basis. The BR reports are placed on the Corporation's website. The hyperlink is: https://www.hdfc.com/investor-relations/annual-report.

The Corporation has a Sustainability Report which is also placed on the Corporation's website. The hyperlink is https://www.hdfc.com/social-initiatives.

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SECTION E : PRINCIPLE-WISE PERFORMANCE

Principle 1111 BUSINESSES SHOULD CONDUCT AND GOVERN THEMSELVES WITH ETHICS, TRANSPARENCY AND ACCOUNTABILITY

1. Does the policy relating to ethics, bribery and corruption cover only the Company? Yes/No. Does it extend to the group/joint ventures/suppliers/contractors/NGOs/others?

Yes. HDFC's governance practices are administered by the Board of Directors and committees involved in managing stakeholder priorities and concerns. Its robust framework ensures that all its daily operations are conducted in the most transparent and accountable manner. HDFC's zero tolerance in the matters relating to unethical practices, bribery and corruption, has helped it not only gain the tremendous confidence and trust of its stakeholders' but also the market leadership.

HDFC has formulated and adopted various codes and policies to facilitate ethical decision making. They reinforce HDFC's culture of transparency in business and are continuously updated in line with the dynamic business environment and regulatory norms. The codes and policies are designed to cover employees in all functional areas by adhering to the laws applicable to the Corporation's business. Ethical values and zero tolerance to bribery and corruption percolates to all group companies of the Corporation.

HDFC ensures compliance of ethical standards not only by its employees but also by its vendors, contractors etc. through appropriate clauses in the work contract signed with them.

HDFC was the only Indian company to be included in the fifth annual list of the 'World's Most Ethical Companies' by the Ethisphere Institute, USA.

2. How many stakeholder complaints have been received in the past financial year and what percentage was satisfactorily resolved by the management? If so, provide details thereof.

HDFC categorizes its stakeholders to include housing loan customers, agents, depositors, shareholders, debenture holders, amongst others. There are various mechanisms in place for recording and redressing complaints raised by each of these stakeholders.

HDFC believes that customers are one of the most important stakeholders and hence it is essential to engage with them, understand their expectations and accordingly, provide the desired service standards. The Corporation has in place a software called "Customer Relationship Enhancement and Managing System" (CREAMS) to record, monitor and redress the grievances/feedback received from the customers, which helps in maintaining higher service standards.

HDFC, under the CREAMS initiative has identified senior executives at all branches who are responsible for ensuring efficient and effective redressal of complaints within a prescribed turnaround time. All complaints are monitored at the corporate office by the customer engagement team.

HDFC has an in-built escalation mechanism wherein complaints are escalated to the level of business heads, regional business heads/functional heads and Managing Director. The Complaints forwarded by the regulatory and supervisory authorities are tracked separately within CREAMS. A grievance redressal procedure recommended by National Housing Bank (NHB) is also available on HDFC's website for the benefit of HDFC's customers. An escalation matrix for grievance received from the investors is also available on the website of HDFC.

Details of the stakeholder complaints received during the financial year 2017-18 and pending as on March 31, 2018 are as under:

Sr. Nature of complaints No. of complaints received Pending as on No. during the year March 31, 2018

1 Complaints/ queries received from 19,433 (0.58% of the 156*

home loan customers and depositors customer and depositor base)

2 Investor complaints 6 NIL

* Out of this, 8 complaints are pending as on April 30, 2018.

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Principle IIEII BUSINESSES SHOULD PROVIDE GOODS AND SERVICES THAT ARE SAFE AND CONTRIBUTE TO SUSTAINABILITY THROUGHOUT THEIR LIFE CYCLE

1. List up to 3 products or services whose design have incorporated social or environmental

concerns, risks and/or opportunities.

• The Corporation is a pioneer in retail housing finance in India. It is the first Indian financial

institution to fund individuals to enable them to become homeowners. The Corporation has

cumulatively financed over 6.3 million housing units in the country. HDFC recognises the

need to work with real estate developers that promote the use of innovative technologies

such as green buildings and other energy efficient measures for construction of their

projects. HDFC has always emphasized on exploring opportunities of collaboration with

partners in ensuring conservation of energy and resources. HDFC encourages the usage of

environmental friendly building materials from the local building centres as a part of its low­

income housing initiatives.

• HDFC continues to be committed to inclusive housing finance and also facilitating the

'Housing for All' initiative of the government. HDFC Reach loans aim at addressing the

housing finance needs of the customers belonging to the informal sector having sufficient

income, but limited documentation. Apart from home loans, HDFC

also extends small equity and funding lines to upcoming ventures

and customers.

• HDFC has played a developmental role in the housing finance

sector in India, having promoted a number of housing finance

companies to penetrate in the market, including India's first rural

housing finance company. HDFC has also played an internal role in

establishing housing finance companies in nascent housing

finance markets in Africa and Asia.

2. For each product, provide the following details in respect of

the resource use (energy, water, raw material etc.) per unit of

product (optional):

I. Reduction during sourcing/production/ distribution achieved

since the previous year throughout the value chain.

The housing finance regulator, NHB, prevents housing finance companies from directly undertaking

any construction activity. However, a vigorous technical assessment of properties and projects

financed by HDFC is a critical part of its approval and disbursement procedures.

Given that the Corporation is a financial services provider, one of the major resources consumed by

the Corporation is paper. HDFC promotes use of electronic means of communication with its

stakeholders. It encourages the use of electronic mode of payment to and from all its stakeholders.

Soft copies of the annual report 2016-17 alongwith the notice convening the 40 th Annual General

Meeting and the dividend e-payment advice were sent to over 1.5 lac shareholders so as to minimise

the usage of paper. Further, for the current year, annual interest certificates were sent via e-mail to

more than 13 lac customers. HDFC has also introduced an online portal to provide a user-friendly

and frictionless approach to home loan approval process.

Further, through a joint effort with the International Finance Corporation, HDFC has strengthened

its impact assessment mechanisms through increased environmental and social governance.

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HDFC has also introduced the use of kiosks at trade fairs and property exhibitions. These kiosks

facilitate electronic filing of loan application forms and directly link the data of potential customers

to its loan processing system.

II. Reduction during usage by consumers (energy, water) has been achieved since the

previous year.

HDFC constantly reviews and introduces initiatives that work towards the conservation of the

valuable resources in the surrounding environment.

Special efforts had been made during the design stage of HDFC's corporate office to ensure

abundant natural light across the work area, thereby, reducing electricity consumption. HDFC

promotes the use of energy star equipment and uses systems that conserve power.

The interiors of the corporate office building are based on guidelines from the Leadership in Energy

& Environmental Design Council (LEED). HDFC's corporate office building achieved LEED Gold

Certification under the LEED for Commercial Interiors Rating System.

HDFC has also undertaken other initiatives and energy efficient measures at its office premises such

as use of occupancy sensors, reduction of light power density by using LED light fittings, and

provision of centralised waste collection. At most of its offices across India, the CFL light fittings are

being shifted to LED light fittings to conserve energy.

HDFC has also installed solar power

roof panels to save grid power as ~lp=:~§;:;-;;-~i~~~ii~~~~~~~~~~;;-~:-:=-.._ a green initiative at our •-;;;.;.;.-~.;....-

corporate office. These solar

power panels consist of Solar PV

modules which generate DC

electricity on sunny days. The

system so installed is capable of

recording the number of units of

solar power generated and also

facilitates the storage of data for future reference. The system has been examined and certified by

an inspector from the Ministry of Natural Resources Energy, Government of India. This initiative has

resulted in saving- 4,000 KWH every month and the system is maintained to get the same output in

future. Additionally, HDFC has also adopted the practice of switching off lights at workstations,

when not in use.

While the Corporation sensitises its employees to conserve energy and water, it does not

specifically capture data on such reduction.

3. Does the company have procedures in place for sustainable sourcing (including

transportation)? If yes, what percentage of your inputs was sourced sustainably? Also, provide

details thereof.

Yes. The Corporation endeavours to use environmental friendly materials with higher recycle

content, such as green guard rated furniture and gives regional priority to material purchases of

such recycled products.

4. Has the company taken any steps to procure goods and services from local and small

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producers, including communities surrounding their place of work? If yes, what steps have been taken to improve their capacity and capability of local and small vendors?

Given that the Corporation has a PAN-India presence, the offices generally procure office utilities and other items required in the normal course of operations from local vendors. However, as per the Corporation's policies, standard procurement norms and procedures have to be adhered to.

5. Does the company have a mechanism to recycle products and waste? If yes what is the percentage of recycling of products and waste (separately as <5%, 5-10%, >10%). Also, provide details thereof.

The Corporation is a housing finance company. The key waste products of the Corporation primarily entail paper and electronic waste.

HDFC has embraced e-waste management since more than 6 years. The waste generated at the Corporation's offices is managed as per the waste disposal process. The Corporation engages with certified e-waste handlers for disposal of e-waste and uses local vendors for disposal of paper for recycling. HDFC's computer systems and electronic wastes are gathered at the branch levels. HDFC has tied up with e-waste recycling vendors who picks up the e-waste and disseminates the various parts using CRT cutters, Cable strippers and Plastic shredders at their facility. They then segregate

them on the type of materials and send it for recycling or safe disposal as per the green norms.

HDFC has also installed a plastic bottle flaking machine. The machine crushes the bottles and converted flakes are then utilized as a raw material in the manufacturing of paint and polyster

fibres.

Principle IIEJI BUSINESSES SHOULD PROMOTE THE WELL BEING OF ALL EMPLOYEES

As at March 31, 2018

1 Total number of permanent employees 2,575

2 Number of employees on 1,731

temporary/contractual/casual basis.

3 Number of permanent women employees 640

The female: male ratio stood at 25:75. The Corporation maintains a gender inclusive environment and believes in equal opportunities at the workplace.

4 Permanent employees with disabilities The Corporation upholds the importance of being an equal opportunity employer and hence makes no distinction between employees based on disabilities.

5 Is there an employee association that No

is recognised by management?

6 Percentage of permanent employees Not applicable

that are members of this recognised

employee association

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1. Please indicate the number of complaints relating to child labour, forced labour, involuntary labour, sexual harassment in the last financial year and pending, as on the end of the financial year.

Sr. Category No. of complaints filed No. of complaints No. during the financial year pending as at the

end of the financial year

1 Child labour/forced labour, involuntary labour Nil Nil

2 Sexual harassment 1 Nil

3 Discriminatory employment practices Nil Nil

2. What percentage of employees were given safety and skill upgradation training in the last year?

HDFC has always believed that its employees are its most valued resource and hence, has always

ensured their all round development through regular training & leadership programmes. There is a

dedicated Human Resources Department vertical that ensures that employees are sufficiently trained in

functional and behavioral skills to ensure high standards of service to internal and external stakeholders.

These training programmes are based on the needs identified, competency or job specific knowledge,

skills and attitude gaps are identified during the performance appraisal process and through discussions.

At times, customer feedback also acts a base to identify learning and development needs.

HDFC nominates staff for self-development and leadership programmes to enhance their effectiveness.

On-the-job training, job rotation or internal, external or international trainings are offered to

employees to upgrade their competencies.

L E A R N . GROW. ACH I VE.

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HDFC has also introduced an E-learning

platform called "HDFC Aspire" which allows

employees to enhance their knowledge on

products, policies and processes. Various

knowledge enhancing courses were launched

during the year on functional areas like

overview on credit, lending products of HDFC,

credit linked subsidy scheme, and critical

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aspects of loan process which were very well

received by the participants. Virtual classroom initiatives have also been undertaken to blend and

enhance the learning processes. Other programmes conducted during the year include programmes on

leadership, mentoring, train the trainer and soft skills like negotiation, communication etc.

Given below are the details of training imparted during the year:

1 Permanent employees to whom training has been imparted 2,518

2 Total training man days per employee 7.28

3 Permanent women employees to whom training has been imparted 635

For HDFC, safety of its employees is of paramount importance and as a good corporate citizen; it is

committed to ensuring safety of all its employees at the work place. Periodic communication and alerts

are sent out to employees and awareness sessions are conducted on safety related aspects. Periodic fire

safety drills and audits are also conducted.

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Principle 1111 BUSINESSES SHOULD RESPECT THE INTERESTS OF, AND BE RESPONSIVE TOWARDS ALL STAKEHOLDERS, ESPECIALLY THOSE WHO ARE DISADVANTAGED, VULNERABLE AND MARGINALISED

1. Has the company mapped its internal and external stakeholders? Yes/No

Yes.

2. Out of the above, has the company identified the disadvantaged, vulnerable and marginalised

stakeholders?

The Corporation fully endorses and supports the government's endeavour towards its flagship scheme,

"Affordable Housing for All." Towards this goal, the Corporation has given housing loans to customers

categorised as 'economically weaker sections' and 'low income group', under various schemes of the

government. Additionally, HDFC is undertaking a project by partnering with an experienced NGO to

supply safe and clean drinking water to slum communities at affordable rates, thereby assisting them to

alleviate water borne diseases and reduce health costs.

The Corporation's CSR activities focus on the disadvantaged, vulnerable and marginalised segments of

society.

3. Are there any special initiatives taken by the company to engage with the disadvantaged, vulnerable and marginalised stakeholders. If so, provide details thereof.

Yes. The Corporation continues to support a range of social interventions and development initiatives

(irrespective of the size of the implementing agency) to facilitate a deep and long-term impact for a

developed and inclusive society.

Given the projected growth of urbanization and the consequent housing demands in India, the Ministry

of Housing and Urban Affairs introduced in June 2015, an interest subsidy

scheme called the Credit Linked Subsidy Scheme (CLSS) under the Pradhan

Mantri Awas Yojana (URBAN) - Housing for All, applicable to purchase,

construct, extend and improve the houses for the Economically Weaker

Section (EWS), Lower Income Group (LIG) and Middle Income Group (MIG).

HDFC has whole heartedly promoted and facilitated the implementation of

this scheme due to which many families that had not owned a pucca house

could see the dream of home ownership, materialise. During the year ended

March 31, 2018, credit linked subsidy amounting to Rs. 455 crore has been

credited to the account of 20,794 borrowers.

HDFC has also supported and funded social initiative projects like premises

for educational purpose, hostel blocks and senior citizen housing. Senior

·--­---- ~1-:t----•-

citizen projects provide an opportunity to people aged 60 and above to live with dignity in their own

home, in a community of like-minded people and are provided with all amenities and medical support.

In May 2017, 131 employees of HDFC & HDFC Sales voluntered for 'Shramdaan' in 2 drought prone

villages in Maharashtra. The employees dug and ploughed using pickaxes and spades to create water

pits, formed a human chain and carried large amounts of soil and stone to repair check dams.

A blood donation drive was conducted at its head office during the last year where employees

participated wholeheartedly to support the noble cause.

Principle IE'II BUSINESSES SHOULD RESPECT AND PROMOTE HUMAN RIGHTS

1. Does the policy of the Corporation on human rights cover only the company or extend to the

group/joint ventures/suppliers/contractors/NGOs/others?

HDFC upholds the principles of being an organisation that respects human rights, is non-discriminatory

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amongst employees and provides for a redressal mechanism to the key constituents that it deals with.

HDFC's Code of Conduct respects and promotes human rights.

HDFC complies and adheres to all the human rights laws and guidelines of the Constitution of India,

national laws and policies and treats all its stakeholders and customers with dignity, respect and due

understanding. HDFC strives to be just, patient and understanding while dealing with delinquent

customers who have availed housing loans. HDFC has also put in place an internal culture and work

ethics where delinquent customers are treated with fairness.

While the key subsidiary and associate companies of the Corporation have their own independent

policies, they all respect and promote human rights.

2. How many stakeholder complaints have been received in the past financial year and what percent was satisfactorily resolved by the management?

During the year under review, the Corporation did not receive any complaint in the nature of human

rights violation from any stakeholder.

Principle IEI BUSINESSES SHOULD RESPECT, PROTECT, AND MAKE EFFORTS TO RESTORE THE ENVIRONMENT

1. Does the policy related to Principle 6 cover only the company or extends to the group/joint

ventures/suppliers/contractors/NGOs/others?

HDFC promotes ecological sustainability and green initiatives such as recycling paper and other waste

material by having eco-recycle bins for electronic waste. Besides adopting energy saving mechanisms,

employees are sensitised towards making efforts to reduce the carbon foot print of the Corporation.

Employees are encouraged to use electronic medium of communication as far as possible to

reduce usage of paper. During the year, HDFC employees w •~~-V~~LiJ .. _n. 7iiF~tlfi participated in a tree plantation drive, upholding the spirit that

everyone's footprint matters and everyone can help and play their

part in protecting the environment.

While the key subsidiary and associate companies of the

Corporation have their own independent policies, they all respect,

protect, and make efforts to restore the environment.

J.--- --.:ll;Siiiii .... _ ... -L _ ... ~,,. .,"·,."'--IC'"" :is:c... :,g- ... •• _ ........ 2. Does the company have strategies/ initiatives to address -•"'•"- 1111

global environmental issues such as climate change, global

warming, etc? Yes/No. If yes, please give hyperlink for webpage etc.

HDFC recognises the risks arising from climate change such as c::.,.....::.:c..::;- t...:.c.......s=ICI'!!~ ..-!!!!

extreme weather conditions and its impact on housing and therefore the ability of borrowers to service

the loans.

Further, on rural housing, HDFC does not allow use of asbestos sheets and encourages usage of

corrugated galvanised iron sheets. For low cost housing, HDFC encourages the NGOs to procure

environment friendly building materials from the local building centres. HDFC as a policy, finances only

self-contained tenements which provide for toilets/sanitation within the housing unit. This leads to a

cleaner environment and reduces health hazards in the villages.

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3. Does the company identify and assess potential environmental risks? Yes/No

Yes.

4. Does the company have any project related to Clean Development Mechanism? If so, provide

details thereof. Also, if Yes, whether any environmental compliance report is filed?

Although the Corporate is cognizant of environmental related issues, it does not have any direct project

related to clean development mechanism.

5. Has the company undertaken any other initiatives on - clean technology, energy efficiency, renewable energy, etc.?

In line with the corporate strategy of conservation of the valuable resources and green initiatives, HDFC

has made an effort to support developers undertaking energy efficient real estate projects. Till date,

HDFC has financed around 50 real estate projects that have secured green ratings from Indian Green

Building Council, United States Green Building Council and Leadership in Energy and Environmental

Design.

HDFC has extended finance to gated community projects that promote the walk-to-work concept and

help to achieve work-life balance for the residents.

6. Are the emissions/waste generated by the company within the permissible limits given by

CPCB/SPCB for the financial year being reported?

The Corporation complies with requisite environmental regulations in respect of its premises and

operations.

7. Number of show cause/ legal notices received from CPCB/SPCB which are pending (i.e. not

resolved to satisfaction) as on end of Financial Year.

There were no show cause/ legal notices received during the financial year 2017-18.

Principle 111!11 BUSINESSES WHEN ENGAGED IN INFLUENCING PUBLIC AND Ill REGULATORY POLICY, SHOULD DO SO IN A RESPONSIBLE MANNER

1. Whether the company is a member of any trade and chamber or association? If Yes, name only the major ones that the business deals with:

HDFC is a member of inter alia the following chambers and associations:

• Bombay Chambers of Commerce and Industry

• Confederation of Indian Industry

• Federation of Indian Chambers of Commerce and Industry

• Bombay Management Association

• lndo-German Chamber of Commerce

• US-India Investors' Forum

• Indian Merchants' Chamber

• International Union for Housing Finance

• National Real Estate Development Council

Representatives of HDFC are members of the committees of these industry bodies. HDFC regularly

offers its inputs to these associations for the advancement and improvement of housing finance in India.

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HDFC will continue to support and advocate for the further development of housing industry, as its

primary objective is to enhance residential housing stock in the country.

2. Has the Company advocated/lobbied through above associations for the advancement or

improvement of public good? Yes/No; if yes specify the broad areas (drop box: Governance and

Administration, Economic Reforms, Inclusive Development Policies, Energy security, Water, Food

Security, Sustainable Business Principles, Others)

HDFC executives have, over the years, played a key role in formulating national housing policies and

strategies at a national level. Recognising HDFC's expertise, regulators, industrial bodies and

governments have invited HDFC's executives to join a number of committees and task forces related to

financial sector reforms, housing finance, infrastructure development, capital markets and corporate

governance. Members of the senior management of HDFC are associated with various committees

constituted by the government, regulators and industry bodies from time to time.

The above, however, has been in the nature of using expertise to help shape public policy, primarily in

the areas of corporate governance, economic reforms and inclusive development and in the area of

housing. As such, the Corporation does not take part in any lobbying.

HDFC makes various recommendations/representations before regulators and associations regarding

the new enactments that impact the housing finance industry and other related areas.

Principle IIEJI BUSINESSES SHOULD SUPPORT INCLUSIVE GROWTH AND EQUITABLE DEVELOPMENT

1. Does the company have specified programmes/initiatives/projects in pursuit of the policy related

to Principle 8? If yes, provide details thereof.

Yes. HDFC undertakes a number of projects that are focused on

social development. In financial year 2017-18, the Corporation

promoted inclusive growth by focussing primarily on three social

sector areas, namely (i) Healthcare, (ii) Skilling & Livelihoods and

(iii) Education. In Healthcare, the key thematic areas supported

were (a) safe & clean drinking water, (b) prevention, diagnosis &

treatment of diseases, (c) addressing malnutrition amongst

children and (d) transformational surgeries. In Skilling &

Livelihoods, HDFC supported projects that focussed on (a)

empowerment of women, (b) rural livelihoods, (c) skilling of

construction workers and (d) skilling of persons with disabilities.

In Education, the focus was on (a) institutional support, (b)

holistic development of students and (c) teacher training &

development.

The Corporation also supported various programmes pertaining

to the welfare of the differently abled and also supported community based, holistic sanitation projects.

2. Are the programmes/projects undertaken through in-house team/own foundation/external

NGO/government structures/any other organisation?

HDFC undertakes a large part of its social welfare activities through the H T Parekh Foundation (a CSR

initiative of HDFC) which partners with exemplary NGOs.

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3. Has the company done any impact assessment of its initiative?

Yes. The Corporation supports social sector projects that bring about transformative impact on the lives

of beneficiaries. The number of beneficiaries who have benefitted, specific case studies and assessment

results are analysed in-depth for the Corporation's social initiatives.

4. What is the company's direct contribution to community development projects- Amount in INR

and the details of the projects undertaken?

Please refer to the Corporation's Annual Report on Corporate Social Responsibility Activities 2017-18

and the Social Initiatives Report.

In Financial Year 2017-18, HDFC's community development initiatives focussed on organisations and

programmes that addressed the core needs of rural communities and strived to bring about holistic

development of villages. Some of HDFC's key rural development projects were the training of villagers

from water deficient districts in effective watershed management techniques, supporting initiatives in

providing safe drinking water and non-agricultural based livelihoods. HDFC also supported sanitation

programmes with the community involvement in demand, construction and maintenance of toilets.

HDFC also supported organisations that brought about behavioural change amongst the communities.

5. Has the company taken steps to ensure that this community development initiative is successfully

adopted by the community?

Yes. Community development projects are regularly monitored which includes regular follow-up with

the partnering organisation, site visits to monitor the programme, feedback from the community and

progress reports that include a description of the activities undertaken by the project. Regular

interaction with the partnering organisation and the community has helped in ensuring that best

practices are adopted and also in addressing any challenges for the successful implementation of such

initiatives.

Principle IEI BUSINESSES SHOULD ENGAGE WITH AND PROVIDE VALUE TO THEIR CUSTOMERS AND CONSUMERS IN A RESPONSIBLE MANNER

1. What percentage of customer complaints/consumer cases are pending as at the end of the financial year?

The Corporation has resolved 99.2% of complaints received from customers and 100% of investor

complaints received during the year.

2. Does the company display product information on the product label, over and above what is mandated as per local laws? Yes/No/N.A./Remarks

HDFC has always believed in being transparent with its customers by providing all the relevant details.

HDFC also has documents such as 'Most Important Terms and Conditions' which are displayed

prominently in each office with information on service charges, interest rates, product information,

service standards for various transactions and grievance redressal mechanisms.

3. Is there any case filed by any stakeholder against the company regarding unfair trade practices, irresponsible advertising and/or anti-competitive behaviour during the last five years and pending as on end of financial year? If so, provide details thereof.

Nil

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4. Did the company carry out any consumer survey/ consumer satisfaction trends?

HDFC is committed to providing effective and prompt service to its customers. The Corporation has in

place, a software called CREAMS to record and redress the grievances/ feedback from the customers

which helps in ensuring standard operating procedure and maintaining high service standards.

HDFC also provides for a feedback mechanism on its website to allow stakeholders to leave their

comments/queries. Similarly, a response mechanism has been put in place for prompt response to the

queries, complaints and service requests of customers received through the social media platforms.

HDFC had also sought the feedback of the shareholders on various aspects relating to investor services

through a form, which was sent along with the Annual Report 2016-17. The said feedback form was also

available on HDFC's website for ease of the investors. Few shareholders participated in the said survey

and most of them have ranked the services provided by the Corporation as excellent.

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-i HDFC WITH YOU, RIGHT THROUGH

Housing Development Finance Corporation Limited