HDFC Life Insurance Company Ltd. ನಿರ್ದೇಶಕರ ವರದಿ

Mar 31, 2025

Your Directors are pleased to present the 25^th Integrated Annual Report of HDFC Life Insurance Company Limited ("the Company"/ "HDFC Life"), together with the audited financial statements for the year ended March 31, 2025.

1. Standalone Financial Performance

Financial Performance

('in crore)
Particulars	Standalone (Audited)
Â	FY 2024-25	FY 2023-24
a. New business premium	33,365	29,631
(i) Regular premium	12,976	11,111
(ii) Single premium	20,389	18,521
b. Renewal premium	37,680	33,445
TOTAL PREMIUM	71,045	63,076
PROFIT AFTER TAX	1,802	1,569
Other key parameters	Â	('in crore)
Particulars	FY 2024-25	FY 2023-24
Individual APE	13,619	11,509
Group new business premium	16,479	14,948
Assets under management	3,36,282	2,92,220
Embedded value (ev)	55,423	47,468
Overall new business	25.6%	26.3%
margins (post overrun)	Â	Â
Note: EV reviewed by Milliman Advisors LLP

2. Business Review and Outlook

Industry Outlook

India continues to demonstrate resilience amidst global volatility, supported by steady domestic demand, improving rural sentiment and a strong services sector. While near-term risks such as geopolitical tensions and tariff wars loom large, India's stable macro-economic foundation offers a buffer. We remain watchful of how these factors may influence household savings and overall demand for long-term financial products.

Life insurance products in India are undergoing continuous transformation, evolving from being mere savings instruments to offering more comprehensive long-term solutions and a stronger financial safety net. Currently, India is the 10^th largest life insurance market in the world. According to a Swiss Re study, life insurance

premiums in India are projected to grow at a real rate of 9% annually, making it the 5^th largest market by 2032. The life insurance industry has demonstrated notable resilience despite multiple regulatory changes over the past few years. The sector's expansion will be driven by a host of factors, including strong economic growth, innovative offerings, favourable regulations, rising affluence, and increased awareness.

The life insurance industry demonstrated steady momentum, outperforming several other segments within Nifty50; a reflection of its inherent resilience and growing role as a trusted pillar of long-term financial planning.

For the year, the industry recorded new business premiums of ' 3,97,337 crore reflecting an increase of 5% vis-a-vis the previous year. The private sector grew by 15% and the overall industry grew by 10% in terms of individual weighted received premium (WRP). Strong demand for unit linked savings plans (ULIPs) and innovation across all product categories were the key drivers of growth. This was further supported by expansion in distribution, resulting in consolidation of market share of the private sector to 70.6% in terms of individual WRP. Bancassurance and Agency continue to be the largest distribution channels.

The medium to long-term growth prospects for the life insurance industry continue to be robust. The industry is well placed to tap into opportunities across protection, retirement, and long-term savings segments.

3. Company Performance

Sustained growth across segments

We continued to demonstrate consistent and comprehensive performance, maintaining our position amongst the top three private life Insurers in the industry. Total new business premium increased to ' 33,365 crore. Furthermore, we retained our leadership position in the group business segment during FY 2024-25, with a private industry market share of 25.2%. Total premium grew to ' 71,045 crore in FY 2024-25, within which renewal premium stood at ' 37,680 crore. We reported 18% growth in individual Annualised Premium Equivalent (APE), in line with our stated growth aspirations for the year. This growth was broad-based, driven in equal measure by an increase of 9% in policies written and increase of 9% in average ticket size.

In a year marked by significant regulatory changes, particularly the changes in surrender values payable on pre-mature exits, we outpaced industry growth based on individual WRP. Our market share expanded by 70 bps to 11.1% and by 30 bps to 15.7% of the overall industry and private sector, respectively. Notably, our number of policies grew faster than the overall industry and the private sector.

We continue to broaden our customer base and deepen our reach into new geographies by expanding our distribution network, both proprietary and corporate. Almost 75% of the customers we acquired in FY 2024-25 were firsttime buyers of life insurance, choosing HDFC Life as their entry point in life insurance — an encouraging sign of our deepening presence across Tier 1, 2, and 3 cities. In total, we insured nearly 50 million lives during the year, further cementing our role as a trusted financial partner across India.

Diversification and innovation being our key parameters

We continue to maintain a well-diversified distribution mix, enabling multiple customer touchpoints across geographies and enhancing convenience for our policyholders. Our expansive network includes over 650 branches across India, more than 2.4 lakh individual agents, and over 300 partnerships spanning banks, NBFCs, MFIs, SFBs, new-age ecosystem partners, besides our online platform. Moreover, we successfully on-boarded around 40 new partners during the year, including prominent names such as Sundaram Finance, Aditya Birla Finance, Home First, Northern Arc, Repco Home Finance, Manappuram, Mirae Asset Sharekhan and Peerless, amongst others. Our focus continues to remain on broad-basing our distribution footprint and finding newer and more efficient ways to reach and serve our customers.

During the year, all channels registered doubledigit growth. Our bancassurance channel, led by HDFC Bank, recorded a growth of over 18% in FY 2024-25, based on individual APE. We continue to prioritize enhancing the profitability of HDFC Bank channel through a multi-pronged approach encompassing product mix optimisation, heightened focus on cross-selling and upselling initiatives, strategic leveraging of the Bank's digital resources, and a commitment to superior customer experience.

Our Agency channel recorded a healthy growth of 15%. Term business within Agency channel registered an outstanding growth of over 50% as against previous year. We also ranked #1 in the private sector in terms of total agent count as of March 31, 2025, with over 29,000 new agents added on a net basis during the year. We continue to invest in building our Agency franchise, adding over 200 branches in the last 24 months, of which 117 branches were added in FY 2024-25.

We continue to be on the forefront of product innovation, with industry first launches such as Click 2 Achieve Par Advantage and Sanchay Aajeevan Guaranteed Advantage ("SAGA") in the pension space. SAGA combines dual guarantees, joint life benefits, liquidity options and tax advantages with a simplified issuance process. Retirement remains our core focus, aligning with our brand promise of "Sar Utha Ke Jiyo". We see this segment as a long-term structural opportunity, driven by increasing life expectancy, changing socio-economic dynamics and rising awareness around retirement planning. This strategic emphasis on innovation not only supported our growth in a challenging regulatory and competitive landscape but also laid a strong foundation for FY 2025-26.

Our product mix was well-balanced, with ULIPs accounting for 39%, non-par savings at 32%, participating products at 19%, retail term at 5% and annuity at 5%. Retail protection grew by 25%, based on individual APE, and we expect this positive momentum to continue in FY 2025-26 and beyond. Credit protect growth remained muted due to subdued disbursement trends, particularly in the MFI space. Despite that, we retained our market leadership in this segment with a well-diversified product segment and distribution base. Annuities grew faster than the industry during FY 2024-25. Annuity and Protection segments together contributed to 41% of the total new business premium. Retail sum assured grew by 18% year-on-year and by 32% on a two-year CAGR basis. We outpaced the industry on this metric over a two-year horizon and maintained our leadership in overall sum assured.

We continue to prioritise innovation while maintaining a disciplined and balanced approach to risk management. This is reflected in our focus on appropriate product pricing, sound underwriting practices, and robust hedging

strategies—foundational elements that support our ability to offer sustainable, customer-centric solutions across market cycles. This steadfast approach has allowed us to navigate regulatory changes, macroeconomic volatility and evolving customer needs, while consistently delivering growth ahead of the industry, with a strong emphasis on quality and stability.

Maintaining Profitable Growth

Value of new business (VNB) for FY 2024-25 stood at ' 3,962 crore, reflecting a 13% growth. New business margins for the year were at 25.6%. We successfully managed to contain the impact of the new surrender value regulations as well as continued preference for ULIP products. Our EV stood at ' 55,423 crore as on March 31, 2025, with an operating return on EV of 16.7% for FY 2024-25.

Profit after tax for FY 2024-25 stood at ' 1,802 crore, with a year-on-year increase of 15%, driven by strong growth of 18% in back-book profits. The Board recommended a final dividend of ' 2.10 per share, in line with our Dividend Distribution Policy, aggregating to a payout of ' 452 crore. We raised ' 2,000 crore of subordinated debt in two tranches in FY 2024-25, thus improving solvency by ~20% to 194%. Our assets under management (AUM) stood at ' 3,36,282 crore, up by 15% year-on-year.

We have consistently delivered positive and range-bound operating variances over the past nine years (excluding Covid period), underscoring prudent risk management, disciplined execution and strong fundamentals.

Renewal collections grew by 13% year-on-year to ' 37,680 crore. Persistency metrics strengthened further, with 13^th and 61^st month persistency at 87% and 63%, respectively. We saw consistent improvement in 13^th month persistency across customer cohorts and geographies, despite the expansion of our footprint into newer segments and markets. 61^st month persistency rose by over 1,000 basis points, aided by the positive impact of the long-term savings products that were introduced around FY 2019-20.

Business Outlook

In our 25^th year of operations, our aspiration remains against a backdrop of a stable regulatory regime, to consistently outpace sector topline growth, deliver VNB growth in line with APE growth

and stay on course to double key metrics every four to four and half years. While the evolving product mix may be margin-accretive, we remain focused on investing in distribution and technology to strengthen long-term capabilities. This strategic choice may result in margins remaining range-bound in the short-term, but we believe it positions us well for sustainable long-term growth.

4. Products

At HDFC Life, our customers remain at the heart of everything we do. We are committed for providing flexible, customer-centric solutions that seamlessly adapt to an individual's unique lifestyle and life stage. Our approach goes beyond financial security—we strive to empower individuals and families to achieve their aspirations, fulfil their dreams, and navigate life's uncertainties with confidence.

With a diverse portfolio comprising 45 individual products, 16 group offerings, and 13 riders, we cater to a wide spectrum of financial goals, ensuring that every customer finds a solution tailored to their needs. Whether it is securing a child's education, planning for retirement, or protecting loved ones, we design our offerings with the primary objective of enabling financial well-being and long-term stability for our policyholders.

At HDFC Life, we believe in being a lifelong financial partner—one that not only provides protection but also empowers individuals to build a legacy for future generations. Some of our product launches during FY 2024-25 are highlighted below:

HDFC Life Click 2 Achieve Par Advantage

It is a participating savings life insurance plan designed to help customers achieve their financial goals while ensuring life protection. The plan offers flexibility with multiple options, including additional life coverage for a spouse and guaranteed pay-outs during the policy term. One unique proposition in this product is the policy continuance benefit, which helps ensure financial security even in unforeseen circumstances. Additionally, premium offset features allow policyholders to manage their payments efficiently. Moreover, there are six embedded solutions which allows customers to tailor coverage to suit their financial needs.

HDFC Life Sampoorn Nivesh Plus

It is a unit-linked life insurance savings plan that offers multiple death benefit options including a comprehensive 4-in-1 protection (death benefit + income benefit + waiver of premium + fund value at maturity) with market-linked benefits. Customers can choose from multiple fund options to optimize returns, while enjoying loyalty additions and reduced premium allocation charges for higher premiums.

HDFC Life Click 2 Protect Ultimate

It is a non-participating, individual term protection plan that provides life cover with terminal illness benefits and 100% claim assurance. Customers can opt for a return of premium feature, allowing them to receive back all premiums paid upon survival till maturity. Additionally, the plan provides acceleration of death benefit on the diagnosis of specified terminal illnesses.

HDFC Life Sanchay Aajeevan Guaranteed Advantage (SAGA)

It is a first-of-its-kind, pension accumulation product with the option to lock in guaranteed future income rates at inception. Customers can also opt for the higher of, the locked-in guaranteed income rate and the prevailing market interest rate at maturity. It also offers a joint life option with an inbuilt waiver of premium on the first death of the primary life, ensuring continued benefits for loved ones. Its customizable death benefit option allows for legacy planning. Be it a steady retirement income or a secondary source of earnings, SAGA empowers customers to achieve their life goals with guaranteed corpus while ensuring guaranteed life-long income.

HDFC Life Daily Hospi Cash Benefit Rider

It is designed to enhance financial protection for members under group insurance plans by providing fixed daily cash allowance in the event of hospitalization.

5. Human Resource and People Development

At HDFC Life, we appreciate that the growth and success of our employees is essential to our success, and we are committed to providing them with opportunities to learn, develop, and thrive.

•    Building a Culture of Trust and Transparency

Just as we earn the trust of our customers, we have built a workplace culture based on trust and transparency. We keep employees informed about key developments that impact their careers and ensure they feel connected to the organization. Our promotion and reward policies are designed to be clear and fair, reflecting this commitment.

To maintain open communication, we host CEO, CXO and Chief Value Officers (CVO's) town halls along with many more local communication channels to enable employees at all levels to stay updated and engaged.

•    Employee Well-being at the Core

Caring for our employees goes beyond the workplace. Our wellness program offers access to fitness activities, medical consultations for employees and their families, and confidential helplines for those seeking mental or physical health support.

Recognizing the challenges employees face in balancing work and home life, we have introduced progressive policies such as:

•    Paternity leave for all genders;

•    Recognition of both primary and secondary caregivers ; and

•    Health benefits coverage for legally wedded or cohabiting partners of any gender.

Our Compassionate Leave Policy ensures that employees have the time and support they need to cope with personal loss. Additionally, our Compassionate Employment Program provides job opportunities to the family members of deceased employees.

•    Fostering Collaboration and Camaraderie

This year, we focused on creating a more collaborative and connected workplace. We introduced CoLabs where teams from different departments came together to solve problems as a unit rather than working in silos.

Beyond structured initiatives, we also encouraged team bonding through cricket matches, pot lucks, and other social events. These gatherings helped employees engage with each other outside of work, fostering a strong sense of unity. The idea was simple: bring people together —

both formally and informally — to strengthen team work and reinforce our "Win as One" theme for the year.

•    Fairness and Transparency in Career Growth

We believe in growing talent from within and provide employees with opportunities to advance their careers. Internal talent is always given priority for new roles, and we encourage cross-functional movements through internal Job Postings giving employees the chance to explore new career paths within the Company.

•    Our New Age and For-All Learning Culture

Our learning and development programs are designed to build future-ready talent through a mix of classroom training, online courses, bite-sized learning modules, and gamified self-paced programs. Our mobile learning app provides employees with personalized learning experiences, making it easier to develop skills anytime, anywhere.

This year, we also introduced an Al-powered coaching tool that helps employees refine their engagement with prospective customers through real-time feedback and practice sessions. Additionally, our sales simulation tool allows front line sales teams to practice logging in, improving accuracy and efficiency.

To ensure leadership continuity, we have implemented talent review and succession planning processes for middle and senior management. HIPO (high potential) programs at mid and senior management levels help us to have a strong talent bench that can fulfil our talent needs of tomorrow. These programs help managers perform at their best while preparing the next generation of leaders.

•    Fostering a Diverse and Inclusive Culture

We believe that diversity makes us stronger. Our goal is to build a workforce that reflects the richness of our society, creating opportunities for people from all backgrounds to contribute and succeed.

At HDFC Life, merit and performance matter more than background, education, or experience. At the same time, we are committed to supporting women and the LGBTQ+ community through inclusive policies such as the Maternity Transition Program, Second Careers Program,

LGBTQ+ Helpline and Gender Transition Policy. These initiatives ensure that employees receive the right support at different stages of their lives and careers. All our initiatives have helped us improve our gender ratio by almost 10% over the last ten years with current representation at 28%. Our Employee Resource Groups led by business leaders, help integrate our efforts across the organization.

•    Bringing in Fresh Talent and New Ideas

To keep our workforce dynamic, we actively partner with universities and academic institutions to train and recruit young talent. Our Jigyasa campus hiring program continues to bring in bright minds from leading business schools, ensuring a steady pipeline of future leaders.

•    Living the EPICC Life

At HDFC Life, our values define how we work. Our Chief Values Officers champion our EPICC (Excellence, People Engagement, Integrity, Customer Centricity, and Collaboration) philosophy across the Company.

These values, combined with strong leadership behaviors, enable employees to meet their responsibilities effectively. To ensure alignment, we use scientifically designed assessment tools in both hiring and career advancement processes.

•    Performance Management and Compensation

We are committed to building a high-performance culture where employees are recognized and rewarded for their contributions. Our performance management system follows the balanced scorecard approach, ensuring individual efforts align with business goals.

At the same time, we continuously benchmark our compensation structure with industry standards to remain a competitive and attractive employer. We believe in differentiating and rewarding high performance, ensuring that our best talent is recognized and retained.

•    Special Focus on Employee Retention

Reducing attrition at the front-line sales level through programs that enhance their ability to succeed and enable retention has been a key focus area. We have also invested in developing strong people managers by equipping them

with leadership skills. To recognize managers who go above and beyond in supporting their teams, we introduced the Best People Manager Award, celebrating those who truly embody our commitment to employee growth and wellbeing.

6. Investments

FY 2024-25 marked a turning point for most developed and emerging economies. The post-Covid rebound tapered off, while the impact of steep rate hikes by major central banks in preceding years began to weigh on growth and inflation. With inflation trending downward and expected to meet medium-term targets, central banks found room to initiate monetary easing.

Persistently high interest rates had started to dampen growth and employment prospects, prompting central banks to act pre-emptively to avoid a sharper slowdown. While a few developed market, central banks led the way, the U.S. Federal Reserve joined the rate cut cycle with a 50 bps reduction in September, followed by two additional 25 bps cuts. Other central banks followed suit, though to varying extents.

The Indian economy remained relatively resilient even as global peers grappled with growth concerns. While domestic GDP growth avoided a significant slowdown, headline CPI inflation remained elevated during the early part of FY 2024-25, driven largely by food price volatility. Prices began to moderate in the second half, supported by a healthy kharif harvest and improved post-monsoon supply of perishables. As inflationary pressures eased, the RBI initiated its rate cut cycle with a 25 bps reduction in the policy repo rate, alongside liquidity infusion measures.

Globally, FY 2024-25 was marked by a series of high-stakes elections in major economies. Domestically, the general elections resulted in the incumbent coalition retaining power, albeit with a reduced majority. While this initially buoyed market sentiment, the optimism was short-lived as macroeconomic headwinds— ranging from tight financial conditions to muted consumption and restrained government spending—dampened the outlook. GDP growth

slowed to 5.6% in Q2'FY25 before recovering in the latter half. Full-year growth is estimated at 6.5%, down from 9.2% in the previous year.

Internationally, the U.S. Presidential election was a key event, with Donald Trump securing a decisive victory. His campaign's economic agenda sparked expectations of fiscal stimulus, prompting strong capital inflows into the U.S. This led to a rally in U.S. equities and strengthening of the U.S. Dollar. These global capital movements contributed to outflows from Indian markets, adding pressure to domestic equities already impacted by growth concerns. The Indian Rupee depreciated to a low of ' 88/USD before recovering to ' 85.46/USD by year-end.

Equity markets experienced strong gains in the early part of the year, driven by momentum from FY 2023-24. However, concerns over growth, elevated valuations, and foreign portfolio investor outflows led to a sharp reversal in the second half. For the full year, large-cap indices rose ~5.5%, while mid-cap indices delivered ~7.5% gains.

On the fixed income side, yields softened steadily. Although the RBI remained cautious due to persistently high inflation during most of the year, the late-year rate cut and liquidity measures supported a rally in debt markets. The 10-year government bond yield declined from 7.05% to 6.58% by March, 2025.

In this backdrop, the Company managed its investment funds in line with its stated objectives and guiding policies—namely, the Investment Policy, Asset-Liability Management Policy, and individual fund mandates. These frameworks define asset allocation and risk appetite, especially for funds with embedded guarantees. Asset allocation was actively monitored and aligned with policy requirements throughout the year.

As of March 31, 2025, HDFC Life's total AUM stood at ' 3,36,282 crore, comprising ' 1,01,628 crore in unit-linked funds and ' 2,34,654 crore in conventional and shareholder funds—compared to ' 95,542 crore and ' 1,96,678 crore, respectively, in the previous year.

7. Information Technology and Digital Transformation

The insurance industry is undergoing significant disruption, led by rapid technological advancements. At HDFC Life, we are proactively embracing this change to unlock new opportunities, enhance agility, and future-proof our operations. Our focus is on becoming a truly customer-centric organisation—moving from policy-centric to customer-first thinking—while reimagining our systems and platforms to be scalable, agile, and digitally enabled.

We continue to leverage cutting-edge technologies such as Artificial Intelligence (AI), Blockchain and Cloud Computing across the value chain. These are helping IMPROVE customer and intermediary journeys, increase automation and operational efficiency, and strengthen our digital distribution ecosystem.

As part of our journey to build a future-ready InsureTech platform, we have successfully established key foundational components, including the Integration Platform, Testing Centre of Excellence (TCoE), and Unified Data Platform (UDP). These enablers support seamless onboarding via the Virtual Office (VO), policy issuance through Business Process Management (BPM), claims processing using the CRM platform, and real-time communication through the Centralised Communication Management (CCM) system.

The CCM platform streamlines outbound communications across channels such as email, SMS, print, and WhatsApp. It provides a centralized dashboard for delivery tracking, automated reconciliation, and template versioning. CCM is being used for issuing Certificates of Insurance (CoIs) across certain products, claim intimation and payout communication. Our TCoE, has significantly optimized product and process testing. With automation implemented across over 350 products and 650 journeys, testing timelines have reduced.

Our technology architecture is anchored by a robust integration platform and microservices-based framework. This infrastructure enables secure, cloud-agnostic operations through headless API integration, cloud-native microservices, and event-driven real-time processing. The various technologies deployed power a high-performance, scalable integration layer that significantly enhances agility, system reliability, and partner connectivity.

The CRM Claims Management Module, launched on December 30,    2024, has significantly

strengthened HDFC Life's claims ecosystem. It incorporates automated claim classification, digitized workflows, and real-time document validation. Features such as on-the-spot QC checks, immediate payouts, and end-to-end tracking ensure faster, more accurate settlements. Customers benefit from seamless and personalized support, while internal teams gain from reduced manual effort, better data accessibility, and improved collaboration.

As we transform our technology landscape, we continue to enhance our existing systems to align with current business needs and elevate customer experience.

We launched an Employee Portal for our partners in agency, equipping them with comprehensive self-service capabilities. The Insta PRL platform has been upgraded to streamline the onboarding lifecycle for our agency partners, significantly reducing turnaround times. Similarly, InstaQuote 2.0 now offers faster quote generation with the added ability to include family members— supporting broader household coverage.

The Integreat API portal simplifies integration for new business acquisition and servicing, and has already onboarded close to 100 partners. For our Group Annuity clients, the newly launched Annuity Assist Portal now enables policy issuance on the same day, significantly improving the customer experience.

We continue to innovate through offerings such as MyMixCombo, which features new product combinations tailored to customer needs, contributing to incremental new business.

Our digital servicing initiatives have also delivered strong results. Transactions on digital platforms rose by 26%, and the implementation of Gen AI improved customer interaction success rates to 86%. Under the Customer Connect program, tools like co-browsing, IVR/Web Chat OTP verification, and a robust BCP call centre have improved support and reduced call volumes by nearly 50%.

As the insurance industry continues to evolve, HDFC Life is well-positioned to address new opportunities and challenges by embracing technological advancements and innovating its products and services.

8. Subsidiary Companies

(i) HDFC Pension Fund Management Limited

HDFC Pension Fund Management Limited ("HDFC Pension") maintained its leadership position in the private pension fund management space, with a market share of 43% and AUM exceeding ' 1.15 lakh crore. Its consistent outperformance and rapid scale-up further reinforced our presence in the retirement solutions space, a segment we believe holds a long-term structural opportunity.

 

Key financial parameters have been highlighted below:

(' in crore)
Particulars	FY 2024-25	FY 2023-24 Growth
Revenue	75.9	50.3 51%
Profit after Tax (PAT)	5.4	1.8 200%
Assets under	1,15,627	76,955 -
Management (AUM)	Â	Â
Market share	43.2%	43.3% -

 

HDFC Pension has established itself as the largest PoP in terms of corporate relationships and corporate subscribers (excluding PoP employees). As of FY 2024-25, it proudly serves over 3,500 corporate clients and more than 4.5 lakh NPS customers — reflecting its growing leadership and unwavering commitment to helping India secure its retirement future.

(ii) HDFC International Life and Re Company Limited

HDFC International Life & Re Company Ltd. ("HDFC International") also retained its strong credit standing, with a 'BBB' Insurer Financial Strength Rating from S&P Global Ratings for the seventh consecutive year and 'B++' (Good) rating from AM Best Ratings.

In addition, to the DIFC headquarters of the Company, its overseas IFSC branch at GIFT City, which operates under the brand name "HDFC Life International" is fully operational and offers US dollar denominated life and health insurance products to both resident and non-resident Indians across the globe.

Key financial parameters have been highlighted below:

(USD in million)
Particulars	FY 2024-25	FY 2023-24 Growth
Revenue	34.1	24.4 40%
Profit after Tax (PAT)	0.4	0.3 22%

The Company has demonstrated steady growth since its inception, with its Gross Written Premium (GWP) reaching USD 34 million in FY 2024-25, registering an 40% year-on-year growth.

The Company does not have any Associate or Joint Venture Company as on March 31, 2025.

9. Awards & Accolades

During FY 2024-25, HDFC Life was recognised across a wide range of domains including corporate governance, financial reporting, innovation, digital transformation, human resources, and customer experience. These accolades underscore our commitment to excellence, innovation, and stakeholder trust. Some of the key recognitions received during the year include:

•    Named among    India's Top    25 Best

Workplaces in BFSI by Great Place to Work®

•    Secured the 'Next Leader' category in the

Indian Corporate    Governance    Scorecard

Assessment 2023, conducted by Institutional Investor Advisory Services    (Ii AS)    in

December 2024

•    Won the 'Best Innovation in CX' award at the 4^th Smart CX Summit & Awards 2024, organised by The Brainalytics

•    Featured among    India's Most    Respected

Companies by BW Businessworld

•    Certified as one of 'India's Best Companies to Work For' 2024 and 'Best in Industry - Life Insurance' by Great Place to Work®

•    Ranked 37^th among the Best Workplaces in Asia by Great Place to Work®

•    Our Business Responsibility and Sustainability Report for FY 2023-24 was recognised among the Top 5 Performers in the Financial Services and Insurance sector at India's Most Sustainable Companies by BW Businessworld

•    Recognised among India's Top 50 Best Workplaces for Women by Great Place to Work®

•    Named among the Best Companies for Women in 2024 by Avtar & Seramount

•    Our Integrated Annual Report received multiple accolades at the LACP 2023/24 Vision Awards:

•    Platinum Award in the Integrated Report category

•    37^th Rank among the Top 100 Reports globally

•    Gold Award in the Annual Report category

•    Technical Achievement Award

•    Recognised among the Best BFSI Brands at the ET Now Best BFSI Brands 2025

•    Honoured for 'Innovation in Insurance' at the Aegis Graham Bell Awards 2024

•    Ranked among the Top 50 Best Workplaces: Building a Culture of Innovation by All 2025 by Great Place to Work®

10. Regulatory Landscape

The year 2024 marked a significant shift in the regulatory environment for Insurers, shaped by IRDAI's long-term vision of "Insurance for All by 2047." While the overarching goal has been to enhance insurance penetration and improve customer outcomes, the year also saw several changes that had wide-ranging implications for Insurers' operations and governance.

A major development was the move toward principle-based regulation and the consolidation of existing regulatory requirements. The introduction of a unified regulation on Expenses of Management (EoM) in January, 2024 was a key milestone, replacing 34 earlier regulations with 6 revised and 2 new ones. For life Insurers, this translated into a shift in how expense limits are monitored—providing some operational leeway, but also requiring enhanced board-level oversight and cost discipline. In parallel, EoM caps at the overall company level were introduced for general and health Insurers, replacing the earlier segmental limits.

The revised regulations touch upon critical areas such as policyholder protection, social sector obligations, product guidelines, electronic marketplaces, foreign reinsurance branches, and corporate governance, among others. While these efforts aim to create a more cohesive and transparent framework, they also demand greater adaptability from Insurers, especially in aligning business models with evolving compliance standards.

Overall, the regulatory recalibration reflects the intent to simplify and modernize the insurance ecosystem. However, the transition requires sustained engagement and system readiness to navigate the new expectations effectively

Following are the key updates:

1.    Expenses of Management and Commission Regulations

IRDAI notified the IRDAI (Expenses of Management, including Commission, of Insurers) Regulations, 2024, repealing the 2023 norms. The revised norms consolidate existing provisions and encourage selfgovernance, offering Insurers greater discretion to:

•    Determine commission payable to intermediaries;

•    Manage overall expenses within a single cap, without product-level limits; and

•    Implement Board-approved policies on commission and expense management

2.    Policyholders' Protection and Allied Matters

The IRDAI (Protection of Policyholders' Interests, Operations, and Allied Matters of Insurers) Regulations, 2024, along with master circulars dated June 19, 2024 and September 05, 2024, repealed and consolidated the previous norms related to policyholder protection, advertisements, outsourcing, premium receipt, nomination and assignment and place of business.

These regulations shift toward self-regulation within IRDAI's oversight, mandating Insurer to adopt Board-approved policies on:

•    Protection of policyholders' interests;

•    Electronic issuance of policies (with physical issuance upon request);

•    Group underwriting practices;

•    Claim settlement timelines;

•    Grievance redressal;

•    Advertisement compliance; and

•    Outsourcing and place of business operations.

Notably, Insurers no longer need to file advertisements with IRDAI or submit compliance certificates. Instead, designated

Key Managerial Personnel (KMPs) or senior management members must oversee advertisement compliance by forming an "Advertisement Committee".

For outsourcing by Insurers, the revised norms update the list of activities prohibited from outsourcing, and expand the responsibilities of Insurers' internal Outsourcing Committee, requiring effective internal controls.

Additionally, Insurers are encouraged to adopt a "phygital" (physical + digital) presence for broader market outreach.

IRDAI has also introduced facility called the "Bima Applications Supported by Blocked Amount (Bima - ASBA)" transfer of money from the prospect to the Insurer happens only when insurance policy is issued. In this facility, Insurers can offer one-time mandate for blocking certain amount through Unified Payment Interface (UPI) in the bank account of the concerned prospect.

Amount towards insurance premium will be debited only after the Insurer decides to accept the proposal. In case the Insurer does not accept the proposal, the amount shall be unblocked and shall be released and shall be available at the disposal of the prospect.

3.    Insurance Products Regulations

The IRDAI (Insurance Products) Regulations, 2024, consolidate norms on product design for life, general, and health insurance. This principle-based approach mandates Insurers to establish a Board-approved Product Management Committee and policies covering:

•    Product design and pricing;

•    Underwriting and advertisement;

•    a "Customer Information Sheet" accompanying every Insurance policy, explaining the basic features; and

•    Overall product governance.

4.    Life Insurance Products

IRDAI (Insurance Products) Regulations, 2024 ("Product Regulations") merge six regulations into a unified framework aimed at enabling Insurers to swiftly respond to evolving market demands, enhancing the

ease of conducting business, and boosting insurance penetration. These regulations promote good governance in product design and pricing, including strengthening of the principles governing guaranteed surrender value & special surrender value along with disclosures thereof. It also ensures that the Insurers adopt sound management practices for effective oversight and due diligence. Additionally, the regulations encourage the development of innovative insurance products that cater to the requirements of different segments/ strata of the society and provide wider choices while also considering the interests of policyholders and maintaining regulatory compliance, thereby, fostering a competitive marketplace.

The Product Regulations now recognize "index-linked" life insurance products, where benefits are linked to publicly available indices. The master circular of June 12, 2024 introduces:

•    Minimum sum assured requirements based on age;

•    Revised surrender value computations;

•    New conditions for premium reduction; and

•    Mandatory loan facility for savings insurance policies.

5.    Corporate Governance for Insurers

IRDAI (Corporate Governance) Regulations, 2024 and Master Circular on Corporate Governance for Insurers, 2024 prescribes norms on Board    composition, KMP

appointments, auditor selection, conflict of interest, and    Board    committee

responsibilities.

6.    Reinsurance

The IRDAI (Registration and Operations of Foreign Reinsurers Branches & Lloyd's India) Regulations,    2024    consolidate

two regulations and aims to foster the systematic development of the reinsurance sector in India by promoting orderly growth and harmonizing the    existing    legal and

regulatory framework. These regulations seek to streamline the operations of entities engaged in reinsurance operations. By promoting transparency and stability, these regulations aim to create a conducive environment for the growth and expansion of

the reinsurance sector, ultimately benefiting

both Insurers and policyholders in India.

7. Other Key Developments

•    Insurers' Structural Changes: The IRDAI (Registration, Capital Structure, Transfer of Shares, and Amalgamation of Insurers) Regulations, 2024 and the accompanying master circular of May 15, 2024 consolidate the norms on registration, permissible capital structure, transfer of shares, listing of equity shares of Insurers on stock exchange, and amalgamation of Insurers.

•    Actuarial, Finance & Investment

Functions:    The IRDAI (Actuarial,

Finance, and Investment Functions of Insurers) Regulations, 2024 and the accompanying master circular of May 17, 2024 repeal and consolidate the norms in relation to an Insurer's appointed actuary, asset and liability valuation, solvency, investments, and financial reporting.

•    Rural, Social & Motor TP Obligations: The IRDAI (Rural, Social Sector, and Motor Third Party Obligations) Regulations, 2024 and the accompanying master circular of May 10, 2024 consolidate and repeal the norms in relation to Insurers' obligations towards rural and social sector and motor third party and outline minimum insurance business thresholds under the Insurance Act, 1938.

•    Registration of FRBs & Lloyd's India: The IRDAI (Registration and Operations of FRB and Lloyd's India) Regulations, 2024 to repeal and consolidate previous norms for their functioning.

•    Bima Sugam Insurance Marketplace: The IRDAI (Bima Sugam-Insurance Electronic Marketplace) Regulations, 2024, establish a non-profit insurance e-market place for policy sales, servicing, claims, and grievance redressal.

•    Submission of Returns: The IRDAI's "Master Circular on Submission of Returns" consolidates all regulatory filing requirements for Insurers and reinsurers.

•    Insurance Laws (Amendment) Bill, 2024:

The Finance Ministry released a draft "Insurance Laws (Amendment) Bill, 2024" proposing:

•    100% Foreign Direct Investment in Indian Insurance Companies.

•    Expanded scope of insurance business.

•    Perpetual licensing for intermediaries.

I RDAI also released several discussion papers/ draft guidelines on topical matters pertaining to the ordinary course of business and operations.

OTHER STATUTORY DISCLOSURES11.    Solvency

The IRDAI requires life Insurers to maintain a minimum Solvency Ratio of 150%. As compared to the minimum requirement of 150%, the Company's Solvency Ratio, as of March 31, 2025, was 194%.

12.    Dividend and Dividend Distribution Policy

The Board after assessing the performance, capital buffers, solvency, and liquidity levels of the Company has recommended a final dividend of ' 2.10/- per equity share of face value of ' 10/-each, subject to approval of the members of the Company. The dividend pay-out ratio for the year ended March 31, 2025 was 25%.

The Record Date fixed for determining entitlement of members to final dividend, if approved at the Annual General Meeting, is Friday, June 20, 2025.

The Company has formulated a 'Dividend Distribution Policy' which has been approved by the Board. In terms of Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements), 2015 ("SEBI Listing Regulations") the 'Dividend Distribution Policy' is hosted on the website of the Company which can be accessed by this link at https://www.hdfclife.com/about-us/Investor-Relations.

13.    Transfer to Reserves

The Company carried forward profit after tax of ' 1,802 crore, earned during the year ended March 31, 2025, to the Reserves. The accumulated profit of the Company is ' 9,630 crore as at March 31, 2025.

14.    Share Capital and Debentures

The issued, subscribed and paid-up share capital of the Company as at March 31, 2025, is ' 21,52,98,81,870 comprising 2,15,29,88,187 equity shares having face value of ' 10/- each.

During the year, the Company has allotted 20,44,060 equity shares pursuant to the exercise of Options by Options holders under its various Employee Stock Option Schemes ('ESOS'). The equity shares allotted under ESOS rank pari-passu with existing equity shares issued and allotted by the Company.

Debentures

At the beginning of FY 2024-25, the Company had 9,500 outstanding unsecured redeemable non-convertible debentures ("NCDs") each having a face value of ' 10,00,000 each for an aggregate nominal value of ' 950 crore (Rupees nine hundred and fifty crore only) issued in the nature of 'subordinated debt' in accordance with the applicable laws, rules and regulations.

During the year, the Company has issued 2,00,000 NCDs, each having a face value of ' 1,00,000 for an aggregate nominal value of ' 2,000 crore (Rupees two thousand crore only) issued in the nature of 'subordinated debt' in accordance with the applicable laws, rules and regulations.

As on March 31, 2025, the Company has outstanding NCDs of ' 2,950 crore. NCDs are listed on the wholesale debt market segment of the National Stock Exchange of India Limited.

The Company had paid annual interest to all the debenture holders on due date as mentioned below:

ISIN	Outstanding Interest		Due Date
Â	NCDs (in ')	Payment Date	Â
INE795G08027 350 crore		June 21, 2024	June 22, 2024
INE795G08019	600 crore	July 29, 2024	July 29, 2024

There was no unclaimed interest amount lying with the Company.

There was no deviation or variation in the utilisation of proceeds of NCDs issued.

Credit Rating

During the year, the rating agencies viz., ICRA Ltd., CRISIL Ltd. and CARE Ratings Ltd. have re-affirmed/ assigned the below allotted ratings in favor of NCDs issued by the Company:

"[ICRA] AAA" with "stable" outlook, by ICRA Ltd.,

"CRISIL AAA/ Stable", by CRISIL Ltd.; and

"CARE AAA/ Stable", by CARE Ratings Ltd.

15.    Transfer of unclaimed dividend and shares to Investor Education & Protection Fund (IEPF)

The details with respect to transfer of unclaimed dividend and/ or shares to the IEPF, forms part of the Corporate Governance Report, which is enclosed as 'Annexure 1' and forms part of this report.

16.    Directors and Key Managerial Personnel

The Company's Board is constituted in compliance with the Companies Act, 2013 ("the Act"), SEBI Listing Regulations and IRDAI Corporate Governance Regulations.

As on March 31, 2025, the Board comprises of ten (10) Directors viz., two (2) Non-Executive Directors, six (6) Independent Directors and two (2) Executive Directors. Further, there is an appropriate mix of Executive, Non-Executive and Independent Directors on the Board.

(a) Changes in Board Composition

•    Appointment/ Re-appointment of Director(s):

i.    Mr Keki M. Mistry

The Board at its meeting held on April 18, 2024, approved the appointment of Mr Keki M. Mistry (DIN: 00008886), NonExecutive Director as the Chairman of the Board with immediate effect. Further, IRDAI on May 7, 2024 accorded its approval for the appointment of Mr Keki M. Mistry as the Chairman of the Board.

ii.    Mr Venkatraman Srinivasan

The Board had appointed Mr Venkatraman Srinivasan (DIN: 00246012) as an Additional Director, categorized as Independent Director effective from April 18, 2024, for a term of 5 consecutive years, which was further approved by the members at the 24^th Annual General Meeting (AGM) held on July 15, 2024.

iii.    Mr Subodh Kumar Jaiswal

The Board had appointed Mr Subodh Kumar Jaiswal (DIN: 08195141) as an Additional Director, categorized as an Independent Director effective from May 30, 2024, for a term of 5 consecutive years effective from May 30, 2024, which was further approved by the members at the 24^th AGM held on July 15, 2024.

iv. Mr Vineet Arora

The Board at its meeting held on April 17, 2025, appointed Mr Vineet Arora (DIN: 07948010) as an Additional Director (categorized as the Whole-time Director, designated as Executive Director & Chief Business Officer) with effect from May 1, 2025, for a term of 3 consecutive years, subject to the approval of the members in the 25^th AGM to be held on July 16, 2025. His brief profile and other details as required under the provisions of the Act and SEBI Listing Regulations are provided in the Notice of the 25^th AGM and the explanatory statement under Section 102 of the Act, annexed to it.

Mr Arora has not been debarred from holding the office of Director by virtue of any order passed by SEBI or any other such authority.

•    Cessation/ Resignation of Director(s)

i.    Mr Deepak S. Parekh (DIN: 00009078) stepped down as the Non-Executive Chairman of the Board with effect from close of the business hours on April 1 8, 2024. According ly, he ceased to hold office as the Non-Executive Chairman with effect from the close of the business hours on April 18, 2024.

ii.    Mr Prasad Chandran (DIN: 00200379) and Mr VK Viswanathan (DIN: 01782934) ceased to hold office as Independent Directors pursuant to their completion of two consecutive terms of 5 years each on April 24, 2024.

iii.    Mr Suresh Badami (DIN: 08224871) resigned as Deputy Managing Director with effect from October 08, 2024. Mr Badami played an instrumental role in expanding and diversifying our distribution channels and also provided direction on various strategic initiatives that has helped build a strong and profitable business. Mr Badami also played a key role in acquisition of erstwhile Exide Life Insurance Company Limited and its subsequent integration.

The Board expressed its deep appreciation for the immense contributions made by Mr Badami during his association with the Company.

•    Retirement by Rotation

Section 152(6) of the Act provides that not less than two-thirds of the total number of

 

directors of a public company shall be liable to retire by rotation and that one-third of such directors are liable to retire by rotation at every AGM.

In accordance with the provisions of the Act, Ms Vibha Padalkar (DIN: 01682810), Managing Director & CEO, being longest in office since her last appointment, retires by rotation and being eligible, offers herself for re-appointment at the 25^th AGM. A resolution seeking members' approval for her re-appointment forms part of the Notice of the 25^th AGM.

(b)    Details of Board/ Committee meetings, constitution of various Committees

The details of meetings of the Board and Committees of the Board held during the year, attendance of Directors thereat and constitution of various Committees of the Board, forms part of the Corporate Governance Report, which is enclosed as 'Annexure 1' and forms part of this report.

(c)    Independent Director Declarations

The Company has received declarations from all the Independent Directors confirming that they meet the 'Criteria of Independence' as laid down under Section 149(6) of the Act and the Rules made thereunder and as laid down under Regulation 16(1) (b) of SEBI Listing Regulations. Also, all Independent Directors have confirmed that their names have been added in the data bank maintained by the Indian Institute of Corporate Affairs (IICA) for Independent Directors, in accordance with Rule 6(4) of the Companies (Appointment and Qualification of Directors) Rules, 2014 and that they have complied with the Code of Independent Directors prescribed in Schedule IV of the Act.

The Board is of the opinion that all the Independent Directors fulfill the conditions relating to their status as Independent Director as specified under Section 149 of the Act and the Rules made thereunder and applicable provisions of the SEBI Listing Regulations and are independent of the management.

(d)    Details of Key Managerial Personnel ("KMP")

In terms of the provisions of Sections 2(51) and 203 of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the following employees

were holding the position of KMP of the Company as on March 31, 2025:

Name of the KMP	Designation
Ms Vibha Padalkar	Managing Director & CEO
Mr Niraj Shah	Executive Director & CFO
Mr Narendra Gangan	General Counsel, Chief Compliance Officer & Company Secretary

In terms of the IRDAI Corporate Governance Regulations and IRDAI Master Circular on Corporate Governance for Insurers, 2024, the following senior management employees of the Company were holding positions of KMPs as on March 31, 2025:

Name of the KMP	Designation
Ms Vibha Padalkar	Managing Director & CEO
Mr Niraj Shah	Executive Director & CFO
Mr Vineet Arora	Chief Business Officer - Distribution, Data and Technology
Mr Prasun Gajri	Chief Investment Officer
Ms Eshwari Murugan	Appointed Actuary
Mr Narendra Gangan	General Counsel, Chief Compliance Officer & Company Secretary
Mr Vibhash Naik	Chief Human Resource Officer
Mr Sameer Yogishwar	Chief Operating Officer
Mr Khushru Sidhwa	Chief Risk Officer

(e) Performance Evaluation of the Directors, Chairman, the Board and its Committees

The Company, with the approval of its Nomination & Remuneration Committee, has put in place a framework for evaluation of the Directors, Chairman, the Board and its Committees.

Pursuant to the provisions of the Act, and the SEBI Listing Regulations, the Board has carried out the annual evaluation of its own performance, and that of its committees and individual Directors including the Chairman. Further, the Independent Directors met separately, without the attendance of non-Independent Directors and members of the Management, and inter alia reviewed the performance of non-independent directors, and Board as a whole and performance of the Chairman. They further assessed the quality, quantity and timeliness of the flow of information between the Company Management and the Board. The evaluation was conducted on broad parameters as per the SEBI Listing Regulations and the Guidance Note on Board Evaluation issued by the SEBI on January 5, 2017.

The evaluation criteria for the Directors was based on their participation, contribution and offering guidance to and understanding of the areas which were relevant to them in their capacity as members of the Board. The evaluation criteria for the Chairman of the Board, besides the general criteria adopted for assessment of all Directors, included leadership abilities, effective management of meetings and preservation of interest of stakeholders. The evaluation criteria for the Committees were based on effective discharge of its terms of reference and their contribution to the functioning of the Board.

Overall, the Independent Directors expressed their satisfaction on the performance and effectiveness of the Board, all the Committees, Non-Independent Board Members, and the Chairman and on the quality, quantity and timeliness of flow of information between the Company Management and the Board. The NRC also undertook an evaluation of individual Director's performance and expressed its satisfaction on performance of each Director.

There have been no material observations, consequent to such evaluation and review.

(f) Policy on remuneration of Directors ("Remuneration Policy")

The Remuneration Policy ('the Policy'), including the criteria for remuneration to directors, KMP and other employees is recommended by the NRC and duly approved by the Board. In terms of the provisions of Section 178 of the Act, Regulation 19 of the SEBI Listing Regulations and IRDAI (Corporate Governance for Insurers) Regulations, 2024 ("IRDAI Corporate Governance Regulations") the Company has formulated Remuneration Policy. The Policy lays down the criteria for identification of persons who are qualified and fit and proper to become Directors on the Board including criteria for determining qualifications, positive attributes and independence of a director.

The Policy is hosted on the website of the Company at https://www.hdfclife.com/about-us/Investor-Relations. The remuneration paid to the Directors is in line with the Policy and in compliance with IRDAI Corporate Governance Regulations. The Company has not granted stock options to any of its Non-executive Directors.

Further details about remuneration to Directors including Whole-time Directors are provided

under the report on Corporate Governance which is enclosed as 'Annexure 1' and forms part of this report.

(g)    'Fit and Proper' Criteria

In accordance with the applicable IRDAI Regulations, Directors of Insurers have to meet 'fit and proper' criteria prescribed by IRDAI. Accordingly, all the Directors of the Company have confirmed compliance with 'fit and proper' criteria/ norms.

Also, the Company had received declarations from the Directors in terms of Section 164 of the Act, confirming that they are not disqualified from being appointed as Director of any Company.

Further, based    on the disclosures and

confirmations received from the Directors, the Board is of the opinion that the Directors of the Company are eminent persons with integrity and have necessary expertise and experience to continue to discharge their responsibilities as the Director of the Company.

(h)    Directors & Officers (D&O) Liability Insurance

The Company has in place Directors and Officers Liability Insurance (d&o) for all its Directors (including Independent Directors) and senior management for such quantum and risks as determined by the Board in line with Regulation 25(10) of the SEBI Listing Regulations.

(i)    Succession Planning

The Company has a well-defined succession planning process to facilitate the development and career planning of high potential talent, mitigate the risk associated with critical vacancies due to attrition and ensure seamless business continuity. A structured framework is in place for identifying key roles and measuring the depth of leadership cover for each role by identifying successors who can move to the role either immediately or over a period, or by restructuring the role to mitigate vacancy risk and ensure business continuity, where successors are not immediately available to fill the vacancy.

The NRC oversees matters related to Company's succession planning. NRC has undertaken a comprehensive succession planning program over a period of time to ensure orderly and seamless leadership transition and with an

end-objective to build a Board which is diverse, future-ready and addresses the long-term requirements of the Company and the senior management.

17.    Particulars of Employees

The remuneration paid to the Directors, KMP and senior management is in line with the Section 197 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, including amendments thereof and in accordance with the 'Remuneration Policy' formulated in accordance with Section 178 of the the Act and Regulation 19 read with Schedule II of the the SEBI Listing Regulations and IRDAI Corporate Governance Regulations.

The details of the said remuneration are given under 'Annexure 4' and forms part of this report.

The statement showing particulars of employees pursuant to Section 197 of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this report.

In terms of the provisions of Section 136 of the Act, the Integrated Annual Report is being sent to the members, except the aforementioned information/ statement. The said information is available for inspection by the members up to the date of the 25^th AGM, on all working days, during business hours, at the Registered Office of the Company at 13^th Floor, Lodha Excelus, Apollo Mills Compound N.M. Joshi Marg, Mahalaxmi, Mumbai - 400011, Maharashtra. Members who are interested in obtaining the said particulars may please send an email at [email protected].

18.    Risk Management Framework

The Company acknowledges that risk is an integral part of its business and that managing and accepting risk is essential for generating and protecting shareholder value. To address this, the Company has established a comprehensive risk management strategy and risk framework, designed to identify, measure, monitor and mitigate various risks.

A Board approved Risk Management Policy, which is periodically reviewed, provides the foundation for the Company's risk management

systems and procedures. This policy ensures that all material risks faced by the Company are appropriately mitigated. Detailed information about the Company's risk management architecture can be found in the Risk Management section of the Integrated Annual Report.

19. Internal Audit Framework

The Company has a robust and comprehensive internal audit framework and independent review mechanism across all the processes and systems to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals and, compliance with applicable policies, procedures, laws and regulations.

The internal audit function works closely with other governance functions, considering relevant material inputs from the risk management framework, compliance reports and external auditor reports, etc. internal audits are conducted by in-house internal audit team and also by the independent co-sourced auditors (external chartered accountant firm) under the supervision of the Audit Committee. The internal audit function reports key findings and the follow up status on these findings to the Audit Committee on quarterly basis. An internal audit Charter and internal audit policy duly approved by the Audit Committee is in place, which provides guidance on the audit process, scope of work, accountability, reporting, responsibility, authority and periodic assessment of the internal audit framework. The internal audit function also facilitates management self-assessment of adequacy of internal financial controls and operating effectiveness of such controls as required under Sarbanes Oxley (SOX) Act and the Act.

Concurrent Audit of Investments

As required under the IRDAI Regulations, an Independent Chartered Accountant firm appointed by the Audit Committee carries out the concurrent audit of investment operations as per guidance note on internal/ Concurrent Audit of Investment functions of Insurance Companies, issued by the Institute of Chartered Accountants of India. Any significant findings in the concurrent audit are also presented to the Audit Committee and reviewed by the Investment Committee.

20.    Internal Financial Controls

The Company has a robust internal control mechanism across key processes and systems. The Company has put in place adequate policies and procedures to ensure that the system of internal financial control is commensurate with the size, scale and complexity of its operations. These systems provide a reasonable assurance in respect of providing financial and operational information, complying with the applicable statutes, safeguarding of assets, prevention and detection of frauds, accuracy and completeness of accounting records and ensuring compliance with corporate policies.

The internal audit, in addition to evaluating compliance to policies, regulations, processes etc., also test and report adequacy of internal financial controls with reference to the financial reporting/ statements.

21.    Vigil Mechanism/ Whistle Blower Policy

The Company encourages an open and transparent system of working and dealing with its stakeholders. In accordance with Section 177(9) of the Act and Regulation 22 of the SEBI Listing Regulations, the Company has established a vigil mechanism for Directors and employees to report genuine concerns.

The Whistle Blower Policy ("Policy") aims to provide a mechanism to ensure that concerns are appropriately raised, independently investigated and addressed. The purpose of the Policy is to encourage employees/ stakeholders to report matters without the risk of subsequent victimisation, discrimination or disadvantage. The Policy covers all employees, including Directors and other stakeholders. The Policy encourages any employee, stakeholder or Director to report any breach of any law, statute or regulation, issues related to accounting policies and procedures, acts resulting in financial loss or loss of reputation, misuse of office, suspected/ actual fraud, criminal offences, non-compliance to anti-bribery and anti-corruption policy, etc.

Besides, it also includes leakage of any unpublished price sensitive information (UPSI) pursuant to applicable SEBI Regulations or any such information prescribed under applicable regulations/laws, as amended from time to time. Such complaints are reported to the Audit Committee.

In terms of the Policy of the Company, no employee of the Company has been denied access to the Audit Committee.

Further details of the Policy are provided in the "Report on Corporate Governance" and forms part of this report. The Policy is hosted on the Company's website at https://www.hdfclife.com/ about-us/investor-relations.

22. Particulars regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo A. Conservation of Energy

In view of the nature of business activity of the Company, the information relating to the conservation of energy, as required under Section 134(3) of the Act and Rule 8(3) of Companies (Accounts) Rules, 2014, is not applicable to the Company.

B. Technology Absorption
Sr. No.	Particulars	Remarks
Technology absorption, adoption and innovation		Â
1.	Efforts made towards technology adoption	1.    End-to-end digital transformation of the grievance redressal process with same-day initiation, decisioning and resolution. 2.    Al-driven model to anticipate potential customer complaints and enable proactive resolution through specialized handling. 3.    Advanced Transformer based chatbot delivering 24/7 customer support by resolving policy-related queries with high accuracy. 4.    In-house developed Gen Al platform which: a.    Auto-generates personalized sales scripts, emails, and messages to warm leads, prep for meetings, and follow up effectively. b.    Captures and summarizes new customer information into a single document for risk profiling. c.    Transcribes and summarizes inbound customer service calls to reduce repeat interactions, capture escalations/ complaints, and analyze customer sentiment. d.    Enterprise GPT style document search for pdf documents and compliance guidelines. 5.    iEarn Application drives channel sales goals through smart, data-driven nudges and action-oriented tasks—boosting efficiency and focus—while offering customizable views by region, segment and more. 6.    Developed an integrated health score engine to assist underwriters in making informed decisions during the new business onboarding. 7.    Smart analytical triggers have been implemented to investigate high-risk cases, resulting in savings of approximately ' 100 crore in claim payouts. 8.    Implemented early warning indicators to minimise mis-sale complaints for HDFC Bank.

 

C. Foreign Exchange Earnings and Outgo	Â
(' in	crore)
Foreign Exchange Earnings	185.1
Foreign Exchange Outgo	165.4

Sr. No.	Particulars	Remarks
2.	Benefits derived as a result of the above efforts (e.g. product improvement, cost reduction, product development, import substitution and so on)	•    With digital transformation of the grievance redressal process achieved T-Day case start for 90% complaints and escalated requests received, same-day decisions for mis-sale (Broca & HDFC Bank) complaints and escalated requests. •    Complaints predictor impacting as early warning indicator for potential policy servicing complaints and empowering specialized desk to handle more cases. •    GenAI based pre-claims assistant enabled agents to handle more cases for risk investigation. •    Transformer based chatbot delivers stronger performance with ~25% improvement in accuracy and ~4% reduction in customer repeat rate, indicating higher first-contact resolution via chatbot. •    ~80% of life certificates are generated digitally without any human performance. •    14% YoY growth in 1 day policy issuance using iEarn nudges for one of the channel. •    The implementation of smart analytical triggers has resulted in a reduction of fraudulent claims amounting to ~100 crore.
3.	In case of imported technology (imported during the last three years reckoned from the beginning of the financial year) - i.    The details of technology imported; ii.    The year of import; iii.    Whether the technology been fully absorbed; iv.    If not fully absorbed, areas where absorption has not taken place, and the reasons thereof	NA
4.	Expenditure incurred on Research and Development	NA

23. Consolidated Financial Statements

In accordance with Section 129(3) of the Act and Regulation 34 of the SEBI Listing Regulations, consolidated financial statements of the Company along with its wholly-owned subsidiaries i.e. HDFC Pension and HDFC International, have been prepared in accordance with the applicable Accounting Standards issued by Institute of Chartered Accountants of India ("the ICAI") and forms part of financial statements.

24.    Statement containing salient features of the financial statements of Subsidiaries

Pursuant to Section 129(3) of the Act, a statement containing salient features of the financial statements of the subsidiaries in the prescribed Form AOC-1 forms part of the financial statements.

25.    Swabhimaan - Corporate Social Responsibility & ESG

The Company is committed to making a tangible difference to society through its CSR initiatives under the banner of 'Swabhimaan'. Aligned with the UN Sustainable Development goals and India's National Development Agenda, the focus areas include education, livelihood, healthcare, sanitation, and environmental sustainability.

27.    Related Party Transactions

Pursuant to Section 177 read with Section 188 of the Act, the Audit Committee reviews the related party transactions (RPTs) on a quarterly basis. All the RPTs entered during the year under review were in the ordinary course of business and on an arm's length basis, there by not requiring a separate Board/ members' approval. Further, members' approval was taken as per the requirement of SEBI Listing Regulations in the 24^th AGM of the Company held on July 15, 2024, for material RPTs with HDFC Bank Limited and HDB Financial Services Limited, which were in the ordinary course of business and on an arm's length basis.

RPT Policy ensures timely approvals and reporting of the concerned transactions between the Company and its related parties to the concerned authorities. The RPT Policy is hosted on the Company's website at: https://www.hdfclife. com/aboutus/lnvestor-Relations.

M/s B.K. Khare & Co., Chartered Accountants, have reviewed the RPTs for FY 2024-25, and their report(s) were placed before the Audit Committee, along with details of such transactions.

During the year, there were no material transactions with related parties, which were not in the ordinary course of business and not at arm's length basis. Accordingly, no disclosure is made in respect of related party transaction in Form AOC-2 in terms of Section 134 of the Act and Rules framed thereunder.

As per the requirements of the Accounting Standards (as) - 18 issued by the ICAI on 'Related Party Disclosures', the details of RPTs entered into by the Company are covered under the 'Notes forming part of the financial statements'.

28.    Ind AS Roadmap

As advised by IRDAI, the Company was identified under phase 1 to implement IND AS for insurance companies from April 1, 2027, onwards. Accordingly, the Company has identified technology system partner and key accounting/ actuarial knowledge partners to assist on the IND AS project implementation. The Company is in the final stages of on-boarding of partners. The Company's Steering Committee for

 

Over the years, as a responsible corporate citizen, HDFC Life has contributed to nation building as enshrined in Section 135 of the Act. Driven by the ethos of 'Sar Utha Ke Jiyo', the Company empowers individuals to live with pride, ensuring the interventions that uplift communities and foster sustainable change. Through strategic partnerships and direct projects, HDFC Life maximise the impact on target beneficiaries, adhering to the highest standards of corporate responsibility.

The CSR Policy lays down the guidelines for undertaking CSR initiatives in accordance with the Companies (Corporate Social Responsibility Policy), Rules, 2014, as amended from time to time.

Embracing the spirit of collective action, the 'Swabhimaan Agent of Good' program encourages employees to volunteer with family, friends or colleagues, amplifying the Company's impact and fostering a culture of giving back.

The CSR Policy and details of projects/ programs undertaken are available on the Company's website at: https://www.hdfclife.com/about-us#CsrRedirect.

The 'Swabhimaan' interventions are in line with Schedule VII of the Act, and the projects/ programs are identified and assessed by the Head of CSR with the CSR Monitoring and Evaluation team, and post their due diligence is recommended to the CSR & ESG Board Committee for directions and approvals.

The detailed annual report on CSR activities is enclosed as "Annexure 2" and forms part of this report.

26. Annual Return

Pursuant to Section 134(3)(a) and Section 92(3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014 the draft of the Annual Return for the financial year ended March 31, 2025, is hosted on the website of the Company at https://www.hdfclife.com/ aboutus/lnvestor-Relations with the information available up to the date of this report, and the final return shall be updated upon submission with the Registrar of Companies (ROC), within 60 days from the date of the 25^th AGM.

implementation of Ind AS is closely monitoring the progress of implementation and working towards achieving timelines set by IRDAI. The Audit Committee and the Board are regularly updated on the implementation timelines and status.

IRDAI has set expectation to provide proforma Ind AS financials for FY 2024, with a limited review by Independent audit and actuarial firms. The Company is in the process of preparing proforma financials and then getting it reviewed by independent audit/ actuarial firms.

29.    Statutory Auditors and Statutory Auditor's Report

M/s G.M. Kapadia & Co., Chartered Accountants (Firm Registration No. 104767W) and M/s BSR & Co., LLP Chartered Accountants (Firm Registration No. 101248W/W-100022), are the Joint Statutory Auditors of the Company. The report of the Joint Statutory Auditors forms part of this report. The said report does not contain any qualification, reservation, adverse remark or disclaimer for the period under review.

Audit observations, if any, and corrective actions taken by the Management are required to be presented to the Audit Committee from time to time.

30.    Secretarial Auditor and Secretarial Audit Report

Pursuant to the requirements of Section 204 of the Act, and Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s NL Bhatia & Associates, Practising Company Secretaries (Firm Registration No. P1996MH055800), as Secretarial Auditor for conducting the Secretarial Audit for the financial year FY 2024-25.

The Secretarial Audit Report for FY 2024-25 issued by M/s NL Bhatia & Associates, Practising Company Secretaries is enclosed as 'Annexure 3' and forms part of this report.

There are no qualifications, reservations, adverse remarks or disclaimers made by the Secretarial Auditor in their report.

Change of Secretarial Auditor

Pursuant to Regulation 24A of the Listing Regulations, the Board has appointed M/s Mehta & Mehta, Company Secretaries, (Firm's Registration no.: P1996MH007500) as Secretarial

Auditors of the Company for a period of five (5) consecutive financial years starting from FY 2025-26, subject to the approval of the members' in the 25^th AGM.

The resolution proposing the appointment of M/s Mehta & Mehta, Company Secretaries as Secretarial Auditors for the above-mentioned period, alongwith their brief profile have been included in the notice of the 25^th AGM.

31.    Reporting of frauds by Auditors

During the year, there have been no instances of fraud reported by the Auditors to the Audit Committee, pursuant to Section 143(12) of the Act and the Rules made thereunder.

32.    Legal Update

There are no significant and material orders passed by the regulators, courts or tribunals that impacted the going concern of the Company, or which can potentially impact the Company's future operations.

33.    Material changes and commitments affecting the financial position

There have been no material changes and commitments, affecting the financial position of your Company, which have occurred between the end of the financial year to which the financial statement relates and the date of this report.

34.    Secretarial Standards

Your Company has complied with Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) issued by the Institute of Company Secretaries of India.

35.    Maintenance of Cost Records

Being an insurance Company, your Company is not required to maintain cost records.

36.    Change in the nature of business

During the year, there has been no change in the nature of business of the Company.

37.    Deposits

Your Company has not accepted any deposits under Chapter V of the Act, during the year under review FY 2024-25 hence provisions of the Act, relating to acceptance of Public Deposits are not applicable to the Company.

38.    Loans, Guarantees or Investments

The provisions of Section 186 of the Act except sub-section (l) relating to loans, guarantees and investments are not applicable to the Company.

39.    Employee Stock Option Schemes

Your Company has formulated various Employee Stock Option Scheme(s) ("ESOP schemes") which helps retain and attract right talent and in administering the issue of stock options to its eligible employees including that of its subsidiary companies. The NRC administers ESOP Schemes formulated by the Company. There has been no material variation in the terms of the options granted under any of the ESOP schemes and all the ESOP schemes are in compliance with SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SBEB Regulations") and any amendment thereof.

The Annual Certificate on compliance with SBEB Regulations, issued by the Secretarial Auditors is being made available for inspection at the forthcoming AGM.

During the year, there were no instances of loan granted by the Company to its employees for purchasing/ subscribing its equity shares.

The statutory disclosures as mandated under the SBEB Regulations, have been hosted on the website of the Company at https://www.hdfclife. com/about-us/lnvestor-Relations.

40.    Disclosure under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("PRSH Act")

Prevention and Redressal of Sexual Harassment (PRSH) Policy and Awareness:

The Company has zero tolerance towards sexual harassment and is committed to provide a safe environment for all. Organization's PRSH Policy is inclusive irrespective of gender or sexual orientation of an individual. It also includes situations around work from home scenarios.

To create awareness on this sensitive and important topic, PRSH awareness campaign was driven for all employees for deeper understanding around the nuances of PRSH through a series

of small caselets. Channel-wise leaders were equipped with accurate and insightful PRSH data, in order to empower them to lead discussions and initiatives that promote a respectful and safe workplace atmosphere. Through dedicated forums, such as team meetings, workshops, or training sessions, channel-wise leaders acted as ambassadors engaging their teams in constructive dialogues around PRSH. They highlighted key statistics and best practices to raise awareness and encouraged open communication ensuring that every team member understands their rights and responsibilities regarding sexual harassment prevention. PRSH awareness session was also conducted for PAN India HR Team. All employees were encouraged to complete the mandatory PRSH training module on the Company's selflearning application (MLearn).

Pursuant to the said PRSH Act, please find below details on number of complaints received, disposed and pending during the financial year 2024-25:

Particulars	Numbers
Complaints pending at the beginning of the financial year	15
Complaints received during the financial year	65
Complaints disposed during the financial year	64
Complaints pending as at the end of the financial year1	16

Note:

¹Â The said complaints were resolved within defined TAT. Internal Committee (IC):

The Company has instituted an Apex Committee and four zonal Internal Committees (ICs) for redressal and timely management of sexual harassment complaints. The Central Apex Committee is chaired by a senior woman leader of the Company. The Committee also has two external senior representative members who are subject matter experts. All zonal ICs have minimum of 50% women representatives, and their functioning is overseen by the central Apex Committee. The Risk Management Committee is periodically updated on matters arising out of the PRSH Policy/ Framework as well as on certain incidents, if any.

41.    Management Discussion and Analysis Report ("MD&A"), Report on Corporate Governance and Business Responsibility and Sustainability Report ("BRSR")

Pursuant to Regulation 34 of the SEBI Listing Regulations, MD&A and BRSR Reports are presented in separate sections of the Annual Report and forms part of this report.

In compliance with SEBI Listing Regulations, a report on the Corporate Governance framework of the Company, with certifications as required under applicable Regulations (including IRDAI Corporate Governance Regulations) is annexed hereto as 'Annexure 1' and forms part of this report.

42.    Proceeding under Insolvency and Bankruptcy Code, 2016

The Company has not filed any application or no proceeding is pending against the Company under the Insolvency and Bankruptcy Code, 2016, during FY 2024-25.

43.    Details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the banks or financial institutions along with the reasons thereof The Company has not made any one-time settlement with the banks or financial institutions therefore, the same is not applicable.

44.    Integrated Reporting

Your Company has prepared Integrated Annual Report for FY 2024-25.

The said report encompasses both financial and non-financial information to enable various stakeholders to have a more holistic understanding of the Company's long-term perspective.

45.    Other information

(i) Data incident

During FY 2024-25 the Company had received communication from an unknown source, who had certain data fields of our customers with mala fide intent. Accordingly, the Company had conducted a detailed investigation and had engaged leading information security experts to conduct a comprehensive information

 

security assessment into the data theft incident, along with a compromise assessment of the Company's IT systems. The assessments were completed, revealing that the unauthorized exploitation was confined to a specific, identified issue. This issue was promptly addressed and remediated. The Company had also implemented enhanced security protocols, to further strengthen its IT infrastructure and safeguard customer data. Based on the assessment, it is to be noted that the incident had not resulted in any material adverse impact.

The Company is fully committed to maintain the highest standards of cyber security and data protection and has instituted several measures that will help strengthen the same.

(ii) IRDAI Order/ Penalty

During the year, IRDAI issued an Order dated August 1, 2024, levying a penalty in aggregate of ' 2 crore on the Company for violation of provisions of applicable IRDAI Regulations. A penalty of ' 1 crore with respect to certain aspects pertaining to protection of policyholders' interest and a penalty of ' 1 crore with respect to certain aspects of outsourcing of services undertaken by the Company and payment of commission or remuneration or reward for solicitation of insurance business.

46. Directors' Responsibility Statement

I n accordance with the requirements of Section 134 of the Act, the Board of Directors state that:

i.    In the preparation of the annual accounts, the applicable accounting standards have been followed, along with proper explanation relating to material departures (if any);

ii.    Such accounting policies have been selected and applied consistently, and judgments and estimates made that are reasonable and prudent, so as to give a true and fair view of the Company's state of affairs, as on March 31, 2025, and of the Company's profit for the year ended on that date;

iii.    Proper and sufficient care has been taken for the maintenance of adequate accounting records, in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv.    The annual accounts have been prepared on a going concern basis;

v.    Internal financial controls have been laid down to be followed by the Company and such internal financial controls are adequate and operating effectively; and

vi.    Proper systems have been devised to ensure compliance with the provisions of all applicable laws, and such systems were adequate and operating effectively.

47. Appreciation and Acknowledgement

Your Directors place on records their gratitude for all the policyholders, members, customers, distributors, and business associates for reposing their trust and confidence in the Company. Your Directors would also take this opportunity to express their appreciation for dedicated efforts put in by the employees and for their untiring commitment; and the senior management for continuing success of the business in difficult times.

Your Directors further take this opportunity to record their gratitude towards HDFC Bank Limited, Promoter of the Company for their continued support and guidance and also to Insurance Regulatory and Development Authority of India ('IRDAI'), Securities and Exchange Board of India ('SEBI'), Ministry of Corporate Affairs ('MCA'), Reserve Bank of India ('RBI'), Pension Fund Regulatory and Development Authority ('PFRDA'), Life Insurance Council, Stock Exchanges, Depositories, Debenture Trustees and other governmental and regulatory authorities for their continued support and co-operation.

---

Mar 31, 2024

Your Directors are pleased to present the 24^th Annual Report of HDFC Life Insurance Company Limited ("the Company"/"HDFC Life"), together with the audited financial statements for the year ended March 31, 2024.

1. Standalone Financial Performance, Business Review and Outlook Financial Performance:

('' in crore)

Particulars	Standalone (Audited)
	FY 2023-24	FY 2022-23
a. New business premium	29,631	29,085
(i) Regular premium	11,111	11,324
(ii) Single premium	18,521	17,761
b. Renewal premium	33,445	28,448
TOTAL PREMIUM	63,076	57,533
PROFIT AFTER TAX	1,569	1,360

Other key parameters:

Particulars	FY 2023-24	FY 2022-23
Individual APE	11,509	11,401
Group new business premium	14,948	14,243
Assets under management	2,92,220	2,38,782
Embedded value (EV)	47,468	39,527
Overall new business margins (post overrun)	26.3%	27.6%

Note: EV reviewed by Milliman Advisors LLP

2. Business Review and Outlook Industry Outlook

Life insurance products in India are continually evolving, moving beyond a simple savings tool for providing longer term propositions and an enhanced safety net. As per a Swiss Re study, total insurance premiums in India is expected to grow by 7.1% in real terms over the next five years, well above the average for global (2.4%), emerging (5.1%) and advanced (1.7%) markets. Despite the recent budget changes, the life insurance industry has demonstrated remarkable resilience. A powerful combination of economic growth, a burgeoning middle class, innovative products and supportive regulations will fuel expansion of life insurance market.

During FY 2023-24, the life insurance industry collected '' 3,77,960 crore of new business premiums and grew by 2% vis-a-vis previous year. Further, the private players grew by 8% and overall industry (including LIC) grew by 5% in terms of individual

weighted received premium (WRP). Strong demand for unit linked savings plan products, increase in number of policies sold and product innovation across all product categories were the key drivers of growth. This was further supported by expansion in distribution, resulting in consolidation of market share of the private sector to 67.8% of individual WRP. Within the private sector, the top 10 insurers accounted for close to 90% of the market (in terms of individual WRP) in FY 2023-24. Bancassurance and agency continue to be the dominant distribution channels.

The medium to long-term growth opportunity for life insurance sector remains intact. We believe that the life insurance industry is well positioned to address the opportunities in the protection, retirement and long-term savings segments.

3. Company Performance

Sustained growth across segments

We continued to deliver consistent all-round performance and be ranked amongst the top three private life insurers in the industry. Total new business premium increased to '' 29,631 crore. In addition, we maintained our leadership position within the group business in FY 2023-24, with a private industry market share of 23.9%. Total premium grew to '' 63,076 crore in FY 2023-24, while renewal premium grew to '' 33,445 crore.

Despite the budget changes, pertaining to taxation of maturity proceeds of policies with more than '' 5 lakh premium, impacting high ticket size business, we delivered a healthy growth. Our stated aspiration of a double-digit growth for the full year was achieved with us clocking 11% growth for FY 2023-24, on a normalised basis (i.e. after adjusting for the one-off business of '' 1,000 crore in March 2023). We achieved individual APE growth of 1% on an unadjusted basis. Despite the unique circumstances of fiscal year FY 2022-23, overall APE and Value of New Business grew by 12% and 14%, respectively on a 2-year CAGR basis. Further, positive momentum continued across ticket sizes up to '' 5 lakh with robust growth of 19%. In a tough environment, marked by intense competition and disruption in business due to FY 2022-23 budget announcement, we witnessed minimal decline in new business margins versus peers, while also outpacing overall industry growth in FY 2023-24 based on individual WRP on a normalized basis. We continued to broaden our customer base and deepen our reach in new markets by expanding our distribution, both proprietary and corporate.

More than 70% of individual customers on-boarded in FY 2023-24 were new to HDFC Life and almost half of these were below the age of 35 years. Tier 2 and 3 markets recorded a growth of 13%. Further, we covered 66 million lives in FY 2023-24 and growth in number of policies was strong at 11%.

Diversification and innovation being our key parameters

We continue to have a diversified distribution mix, which aids in providing multiple touch-points across geographies for the convenience of our customers. Our 500 pan-India branches, 2 lakh individual agents, over 300 partnerships with banks, NBFCs, MFIs, SFBs, brokers, new-ecosystem partners and our online platform aids in widening our presence. Our bancassurance channel, led by HDFC Bank, grew by over 17% in FY 2023-24, based on individual APE. We are witnessing robust growth across our partnerships. We consistently innovate on our product offerings, enhance our service quality and invest in our technological capabilities to meet the needs of our partners'' diverse customer segments.

While growth in our Agency channel was slower due to a high base last year, it has shown a robust growth of 14% on a 2-year CAGR basis. We are steadfast in our efforts to build capacity for future growth. Our objective is to broaden our footprint and enhance our reach through a multi-faceted approach, which includes strategically adding branches, attracting high-performing distributors and continually investing in technology and capability enhancement.

FY 2023-24 was a landmark year for product launches fuelled by relentless product innovation (Click 2 Achieve, Smart Protect, Sanchay Legacy, amongst others). We are committed to delivering products which are relevant and tailored to meet our customers'' evolving requirements. This strategic focus was one more reason that enabled us to deliver growth in the prevailing environment, while laying the building blocks for FY 2024-25. We maintained a healthy balance in terms of product mix with ULIP at 35%, non-par savings at 30%, participating products at 23%, retail term at 5% and annuity at 6%. Share of protection products in our total new business premium (NBP) increased from 29% in FY 2022-23 to 32% in FY 2023-24. Retail protection grew by 27% based on individual APE and we believe that the growth momentum will sustain going forward given the opportunity. Further, annuity and

protection put together contributed to nearly half of our NBP in FY 2023-24. We are enthused about the growth potential of annuity and protection segments in India, as these segments remain underpenetrated. While we observed aggressive pricing strategies by certain peers, we will continue to pursue a balanced approach to growth through product innovation while maintaining pricing and underwriting discipline.

Maintain profitable growth

Renewal premiums were '' 33,445 crore with 13^th month persistency for limited and regular pay policies at 87%. Our 61^st month persistency ended at 53%, up from 52% in the previous year. Our new business margins are 26.3% compared to 27.6% previous year. The drop was primarily due to operating leverage gap caused by the one-time '' 1,000 crore additional APE received in FY 2022-23, post the budget changes and higher ULIP proportion on account of buoyant equity markets. Sale of longer tenure products and higher attachment of protection helped in mitigating the impact of product mix to some degree. Our embedded value (EV) stood at '' 47,468 crore as on March 31, 2024, with an operating return on EV of 17.5% for FY 2023-24. Profit after tax for FY 2023-24 stood at '' 1,569 crore, a Y-o-Y increase of 15%. Solvency as on March 31, 2024, stood at 187%. Our assets under management (AUM) stood at '' 2,92,220 crore, up by 22%, with a debt-equity proportion of 67:33 as on March 31, 2024.

The current business mix sets a strong platform for us to continue delivering robust top line and VNB growth in FY 2024-25 and beyond. Our business objectives entail further enhancing our presence across geographies and customer segments and realizing the potential of our distribution channels. In line with this long-term strategy, we will continue to invest in people, technology and infrastructure.

Update on Subsidiaries

HDFC Pension Management Company Limited ("HDFC Pension") achieved a milestone by crossing '' 75,000 crore of AUM, showcasing robust growth of 70%, aided by buoyant equity markets. HDFC Pension maintained its leadership with a market share of 43%.

We are enthused to share that HDFC International Life and Re Company Limited commenced operations at GIFT City branch, where we are catering to NRIs and the Indian diaspora with a need for dollar denominated products across different segments.

Business Outlook

The vast unmet need for protection and retirement products in our country are compelling opportunities. We aim to be at the forefront of developing innovative solutions to bridge this gap. To capitalize on these long-term opportunities, we are focusing on key drivers such as product innovation by identifying whitespaces, scaling up our proprietary business led by the Agency channel, consolidating our counter share at HDFC Bank and continued focus on new distribution tie-ups. We have delivered consistent, predictable and sustained performance by doubling key metrics over multiple blocks of 4 to 5 years. We will continue to move ahead with this aspiration while prioritizing VNB growth to build a profitable business in the long run.

4. Products

We, at HDFC Life, understand the importance of providing customers the flexibility to choose from multiple options as per one''s lifestyle and life stage. We believe in offering solutions that not only provide financial security but also support to fulfill one''s dreams and goals. The Company has 65 Individual and 18 Group products and 13 riders in its portfolio.

HDFC Life Smart Protect Plan

In May 2023, we launched HDFC Life Smart Protect Plan, a unit linked life insurance plan that addresses long-term savings needs with life protection benefits. The plan provides flexibility to customize benefits with multiple plan options. Further, this plan rewards the customers with loyalty additions and maturity boosters.

HDFC Life Click 2 Protect Elite

In September 2023, we launched HDFC Life Click 2 Protect Elite, a non-linked, non-participating, Individual, pure risk premium life insurance plan. It is a simple protection plan designed for high net-worth individuals.

HDFC Life Sanchay Legacy

In September 2023, we launched HDFC Life Sanchay Legacy, a non-linked, non-participating, individual, pure risk premium/ savings life insurance plan. Sanchay Legacy is a term plan that helps build a legacy corpus for the family in a tax efficient manner. The plan provides flexibility to the customer to choose life protection or life protection with ROP benefits for the whole of life. Life cover continues to increase at a pre-defined rate till the end of policy term. Further, the plan provides 100% acceleration of death benefit on diagnosis of the 19 critical illnesses, anytime during the policy term. The plan also provides

the option to decrease premium up to 50% of the original annualized premium after 5 completed policy years, thereby ensuring that customers continue to remain protected even in uncertain financial times.

HDFC Life Health Plus Rider

In September 2023, we also launched HDFC Life Health Plus Rider, an individual, pure risk premium, health insurance rider. It offers comprehensive coverage against 60 critical illnesses, where a lumpsum payout is provided on diagnosis of any of the covered critical illness. The customer can also choose protection against cancer, where the rider provides lumpsum payout on diagnosis of early stage / major stage of cancer. Additionally, this rider provides an option of increasing rider sum assured where cover continues to increase every year.

HDFC Life Group Future Secure Plan

In September 2023, we launched HDFC Life Group Future Secure Plan, a non-participating group unit linked insurance plan which enables companiestobuild a corpus to fund their employee benefit schemes like superannuation, gratuity, leave encashment, PRMS and other benefit schemes (including benevolent schemes). It also provides the option of securing the invested capital with the capital guarantee benefit option.

HDFC Life Click 2 Achieve

In December 2023, we launched HDFC Life Click 2 Achieve, a non-linked, non-participating, individual, savings life insurance plan that offers flexibility to customize the benefits as per customer needs. This product offers 2 plan options - Smart Student and Dream Achiever. Under the Smart Student option, stable income is payable for 3 to 5 years commencing from age of 16 or 18 years. It also provides outstanding achievement award on meeting specific criteria. Under the Dream Achiever option, the customer can choose to receive immediate income, periodic income, money back or lump sum benefits as per the need while staying protected with life cover across the policy term.

HDFC Life Waiver of Premium Rider

In February 2024, we launched the new HDFC Life Waiver of Premium Rider, which waives off all future premiums, including premiums for riders brought at inception in the unfortunate event of death, disability or critical illness of the policyholder. This ensures continuity of benefits under the base policy, without the burden of premium payment and to secure financial future of the beneficiaries.

We will continue our focus on developing innovative product propositions that focuses on addressing customer needs at every stage of life.

5. Human Resource and People Development

At HDFC Life, our people are the cornerstone of our Company''s success, and we continually offer them unique platforms to grow and become the best version of what they can be.

Our Diverse and Inclusive Culture

Our constant endeavor is to have a workforce that represents uniqueness of our society. We mindfully create opportunities to bring this diversity on board and celebrate them the way they are. Diversity, Equity and Inclusion (DEI) is a way of doing business and not just a people agenda.

As an equal opportunity employer, our meritocratic and performance driven culture hails everyone irrespective of their backgrounds, education, and experience. At the same time, we strive to create an equitable environment for women and LGBTQ community through our inclusive offerings. Our policies such as Maternity Transition Program, Second Careers Program, LGBTQ helpline, gender transition policy stand testimony to company''s sensitivity towards life stages of a woman and LGBTQ and resultant support mechanisms.

Our Employee Resource Groups led by business leaders are our ways of making inclusion an organization agenda and not just the HR prerogative.

Employee Care and Wellbeing at the Core

To foster the spirit of care, we have mindfully built a supportive ecosystem of momentous practices, processes and policies.

Employee wellness and care continues to be at the core of all that we do. Our all-encompassing wellness program gives employees opportunities to participate in several fitness regimes or consult doctors for self and families. Confidential help lines have also been set up to create a psychologically safe ecosystem for employees dealing with physical or mental health issues.

Keeping in mind the multitude of challenges employees face while playing different roles at work or home we have designed several policies that include paternity leave irrespective of the gender, recognition as primary and secondary care-giver, coverage of legally wedded ''partner'' or cohabiting partner of any gender, under the Group Health Benefits program, etc.

Our compassionate leave policy and compassionate employment allows employees to bereave the loss of their loved ones and also offers employment to the family of the deceased employee.

Fairness and Transparency in Career & Development Processes

To meet our ever-evolving business needs, we have invested in building our homegrown robust talent pipeline. Our internal talent is given priority for career opportunities in the organization. We encourage our employees to opt for cross-functional movements through career progression and Internal Job Postings (IJPs), thereby broadening their professional exposure. Our internal job portal application matches the contemporary job posting experience and allows everyone to apply for jobs they want to explore.

On the learning and development front, our mission is to meet the organization''s strategic needs by facilitating enterprise-wide capability development for employees and distributors. We have been enabling this by adopting a contemporary and progressive learning ecosystem which includes classroom training, bite-sized courses, online courses and self-paced gamified learning. Our mobile learning application replicates the feature of most contemporary hyper-personalized apps available to employees while availing other services.

We have designed and implemented various talent review and succession planning processes at our middleandseniormanagementlevels.Throughseveral development initiatives, these managers are equipped to perform better in their current roles and build a strong pipeline of future ready talent.

Maintaining flow of external talent to infuse new ideas

Over the years, we have developed alliances with universities and academia to train and hire a model for our frontline sales roles. For managerial levels, our campus hiring program ''Jigyasa'' continues to induct fresh minds from coveted business schools across the country.

Living the EPICC Life

We believe that values are the most critical elements that reflect the conduct of an organization. Five members of the Executive Committee have been appointed as Chief Values Officers who spearhead the EPICC (Excellence, People Engagement, Integrity, Customer Centricity and Collaboration) cascade and its assimilation into the organization DNA.

In conjunction with clearly identified leadership behaviours, our organization''s values enable employees across levels to deliver on their responsibilities towards internal and external customers effectively. Various scientifically designed assessment tools in external hiring and internal career advancement processes ensure that employees are aligned to these values.

Performance Management and Compensation Philosophy

We are committed to creating and sustaining a high-performance culture across the organization. Therefore, our performance management system is deeply entrenched in the principles of the balanced scorecard. At the same time, our compensation philosophy ensures we benchmark ourselves with the external market to stay attractive as potential employer. We ensure that we differentiate and reward high performers.

Particulars of Employees

The remuneration paid to the Directors, Key Managerial Personnel and Senior Management are in line with the Section 197 of the Companies Act, 2013 ("Act") read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 including amendments thereof and in accordance with the ''Remuneration Policy'' duly formulated by the Board in accordance with Section 178 of the Act and Regulation 19 read with Schedule II of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations") and Guidelines on Remuneration of Directors and Key Managerial Persons of Insurers issued by IRDAI.

The details of said remuneration are given under ''Annexure 4'' and forms part of this report.

The statement showing particulars of employees pursuant to Section 197 of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this report.

In terms of the provisions of Section 136 of the Act, the Integrated Annual Report is being sent to the shareholders, excluding the aforementioned information/ statement. The said information is available for inspection by the members up to the date of this Annual General Meeting, on all working days, during business hours, at the Registered Office of the Company situated at Lodha Excelus, 13^th Floor, Apollo

Mills Compound N.M. Joshi Marg, Mahalaxmi, Mumbai City, Mumbai, Maharashtra, 400011. Members who are interested in obtaining the said particulars may please write to the Company Secretary or send an email at [email protected]

6. Investments

FY 2023-24 saw a consolidation across most developed and emerging economies, after the post-Covid pent-up demand led surge in growth and inflation in the previous year. The pick-up in growth and inflation had led to steep rate hikes by most central banks in the previous year. FY 202324 saw culmination of these rate hike cycles across economies. The US Fed had led the world by raising policy interest rates by a cumulative 525 bps in a span of a little more than a year. Most other central banks followed suit, though to varying degrees. The Reserve Bank of India (RBI) raised policy interest rates by a cumulative 250 bps in about the same time period. The rate hikes did have the intended effect of lowering inflation. Inflation in the US which had peaked above 9%, eased closer to 3% by the end of the year, though the path to achieving the target of 2% inflation is still uncertain. Similarly, domestic inflation too eased from the peak of 7.9% to the average level of 5.4% for FY 2023-24.

The sharp rate hikes, however, had a lower than feared impact on economic growth, with the US economy ending calendar year 2023 with a 3.4% growth, and a strong labour market that added an average of about 225,000 jobs every month in 2023. The robust economy, despite the sharp rate hikes, disrupted the widely held expectations of a sharp weakening and recession in the US economy, the expected ''hard landing'', and led to a re-set of expectations of the timing and extent of rate cuts by the US Fed.

The change in expectations for US rate cuts has led to a change in expectations for rate cuts from the RBI as well. Domestic inflation is forecast to ease to 4.5% for FY 2024-25, from the 5.4% in the previous year, though the RBI remains cautious over the path of food inflation. Similar to the US, domestic growth has held up well despite the rate hikes over the past two years, with GDP growth estimated at 7.6% for FY 2023-24 and forecasted to be 7% for FY 2024-25. The strength in the domestic economy is led by strong gains in domestic capital expenditure by the public sector and Government, as also increasing focus on domestic manufacturing.

The favourable economic setup of benign inflation and robust growth were reflected in the asset

markets. Equity markets saw sharp gains during the year, with the themes of domestic manufacturing, capex, infrastructure, among others leading the gains. Public sector financials, too, saw impressive gains as the benefits of improved asset quality were factored into their valuations. The significant portion of the companies benefiting from these themes were spread across the mid-cap and small-cap space, leading to sharp differences in returns across the market capitalization range. Over FY 2023-24, the Nifty-50 index gained almost 29%, while the Midcap-100 index gained about 60% in the same period.

The debt markets, however, had a largely range-bound year, as expectations of rate cuts from the RBI were subdued. The markets'' pricing of rate cuts from the RBI showed expectations of a shallow rate cut cycle, commencing around the second half of FY 2024-25. The 10-year benchmark government bond yield moved about 23 bps through the year, as it ended FY 2023-24 at 7.05%, down from 7.28% at the end of the previous year.

The investment funds of the Company were managed as per the stated objectives laid down in the Investment Policy, Asset-Liability Management Policy (''ALM Policy''), and respective funds'' objectives. These policies lay down the asset allocation and risk appetite guidelines for different funds, some of which have in-built guarantees. Fund allocation is tracked on a regular basis and is backed with suitable assets. During the year, the asset allocation in the Company''s conventional and shareholder funds was in line with the ALM policy.

Company''s total AUM as on March 31, 2024 was '' 2,92,220 crore. This comprised assets of '' 95,542 crore held under the unit-linked funds and '' 1,96,678 crore held under the conventional funds and shareholders'' funds. The corresponding numbers for the previous year were '' 79,201 crore and '' 1,59,581 crore, respectively.

7. Information Technology

Technology continues to disrupt all the businesses with GenAI and related technology taking centre stage. During the previous year, GenAI has seen a major set of offerings with multiple language models (LLMs) being launched by all the big tech companies. Apart from GenAI, the broader technology industry is also making strides towards AI integrated process enablement, both in front end and back end processes.

Today, the base cloud engineering has evolved to multi cloud architecture supported by large data platforms. HDFC Life is continually upgrading its technology to be ahead of the curve. As part of Project Inspire, we will have a multi cloud infrastructure supported by newly proposed data platforms and a next generation technology stack.

As a part of our journey of continuous improvement, we performed major upgrades in our key systems. This enabled near zero down time in major systems, particularly during peak periods. Some of the initiatives are listed below:

• Upgrades to our enterprise technology stacks throughout the year to make them compatible to the growing business needs;

• Infosec issues have been addressed to comply with different regulations;

• Zero downtime achieved on critical systems;

• Introducing a fully automated process for policy issuance;

• Digital video check integrated within our underwriting process to improve claim experience;

• Aadhaar consent automation and Income Tax database access provisioned; and

• Major upgrade for connecting business partners through APIs for credit protect business.

In addition to this, we launched multiple AI applications across different customer and partner focussed assets. A few initiatives have been highlighted below:

• New early claims model for full/ limited underwriting;

• NLP based platformtoassist front line sales teams in answering customer queries, understanding products, tracking their incentives;

• Deep learning based automated underwriting model with higher straight through processing (STP) rate across savings products;

• GenAI based galaxy platform for all current and future applications.

Also, we initiated Project Inspire, a digital transformation program. The key work streams within the Project Inspire are as follows:

Work Stream	Description
Unified Data Platform	Creating a definitive source of data truth, while implementing a Testing CoE and hierarchy management modules for process optimization
Product Configurator	Platform to configure new products with the ability to manage complexity with significantly faster speed to market
Customer Relationship Management	To improve customer experience, streamline operations and improve competitiveness
Hierarchy Management	To manage distributor and employee hierarchies along with audit logs of changes
Incentive and commission management	To seamlessly support our current state processes while introducing enhanced capabilities
Business Process Management	Build a robust solution in a headless architecture to drive operational efficiency, enhance customer experience, derive data driven insights with scalable solutions for expanding business needs
Communication Management	Single replacement of multiple existing communication platforms enabling a 360 degree view of customer and partner interactions
Testing centre of Excellence (TCoE)	A build, operate and transfer model to cater to software testing requirements through a robust testing framework
Virtual Office	A single unified front end application for employees, customers, vendors, agents, partners with micro-service capabilities to enable a modular architecture

8. Awards & Accolades

Your Company received various awards and accolades during the year under review across diverse areas including corporate governance, financial disclosures, technology, digital solutions, products, human resources, marketing, etc. Some of the key ones are as follows:

• Won ''Golden Peacock Award'' for Excellence in Corporate Governance 2023'' by Institute of Directors, India

• Secured the ''Leadership'' category in Indian Corporate Governance Scorecard Assessment 2023 undertaken as on December 31, 2023, by the Institutional Investor Advisory Services (IiAS)

• Featured in ''Best Workplaces Asia 2023'' by Great Place To Work

• Featured in ''India''s Best Workplaces for Millennials 2023'' by Great Place To Work

• Recognised amongst ''India''s Top 50 Best Workplaces for Women 2023'' (large category) by Great Place To Work

• Ranked amongst the ''100 Best Company for Women in India 2023'' by Avtar and Seramount

• Featured amongst the top 75 Valuable Indian Brands at the Kantar BrandZ 2023 List, with an improvement in rank from #43 to #41

• Recognised for ''Excellence in CX'' at The Economic Times CX Summit 2023

• Winner in the ''Best Customer Oriented Company in India'' category at the 4^th Emerging Asia Conclave and Awards

• Bagged Guinness World Record title for its ''Insure India'' campaign

• Won the highest Gold Trophy in 37^th QCFI Quality Convention

• Winner in the ''Overall Achievement in Life Insurance'' category at the 15^th ASSOCHAM Global Insurance Summit & Awards

• Winner in the Best Innovation category at the Banking Frontiers InsureNext Conclave & Awards 2024

• Recognised as India''s leading life insurance company at the Dun & Bradstreet BFSI & Fintech Summit 2024

• The Integrated Annual Report of the Company was awarded with platinum for FY 2022-23 and ranked 47^th among Top 100 reports worldwide at the LACP Vision Awards 2022-23

9. Regulatory Landscape

The Insurance Regulatory and Development Authority of India ("IRDAI"/ "Authority") issued several principle-based regulations following a comprehensive review of the regulatory framework. These regulations encompass pivotal domains such as safeguarding of policyholders'' interests, rural and social sector responsibilities, electronic insurance marketplace, insurance products, operation of foreign reinsurance branches, as well as aspects of registration, actuarial, finance, investment and corporate governance. This comes after the notification of the regulation on Expenses of Management of insurers in January, 2024.

Some of the key regulations/ guidelines issued by the IRDAI during the year under review are highlighted below:

In March 2023, the IRDAI notified the IRDAI (Payment of Commission) Regulations 2023 and IRDAI (Expenses of Management of Insurers transacting Life insurance business) Regulations 2023, which repealed the previous regulations. Subsequently, in January 2024, the IRDAI notified the IRDAI (Expenses of Management, including commission of Insurers) Regulations, 2024, which consolidated and repealed the previous regulations issued in 2023. These regulations continue to specify the maximum limit of expenses that can be incurred by an insurer at an overarching level rather than per line of insurance business and continue to permit insurers to pay commission to agents and intermediaries within these limits.

IRDAI, with an objective to specify minimum rural, social sector, and third-party motor insurance business that insurers are required to underwrite under the Insurance Act, 1938, issued IRDAI (Rural, Social Sector, and Motor Third Party Obligations) Regulations, 2024. The compliance and measurement of these statutory obligations has been revised where the unit of measurement under the rural obligations will now be Gram Panchayat and the scope of social sector has been extended to cover cardholders and beneficiaries under various schemes.

With an objective to empower and protect the interests of policyholders, to increase the penetration of insurance in India and enhance accessibility by allowing the establishment of a digital public infrastructure, IRDAI issued IRDAI (Bima Sugam -Insurance Electronic Marketplace) Regulations, 2024. This marketplace serves as a one stop solution for all insurance stakeholders, including customers, insurers, intermediaries, and agents, thereby, promoting transparency, efficiency and collaboration across the entire insurance value chain.

Further, in order to promote growth of insurance sector by simplifying the process of registration of insurers, transfer of shareholding, other forms of capital, an amalgamation of insurers, listing of shares of insurers on stock exchange and to promote ease of doing business, the IRDAI (Registration, Capital Structure, Transfer of Shares & Amalgamation Insurers) Regulations, 2024 were notified. By streamlining these procedures, the regulations seek to enhance the ease of doing business within the insurance industry, facilitating smoother operations and promoting overall sectoral growth.

The IRDAI also notified the IRDAI (Corporate Governance for Insurers) Regulations, 2024, with the objective to provide a framework for insurers to adopt sound and prudent principles and practices of their governance structure as well as to establish a framework for the roles and responsibilities of the Board and the management of insurers. This is for the first time that the governance aspects under the existing guidelines are notified in the form of regulations, which highlights the importance of governance in the functioning of an insurance company.

In order to protect policyholders'' interest and to facilitate insurers to respond faster to emerging market needs and also to design innovative products the Authority issued IRDAI (Insurance Products) Regulations, 2024. These regulations aim to promote good governance in product design and pricing, including strengthening of the principles governing guaranteed surrender value and special surrender value along with disclosures thereof. It also ensures that the insurers adopt sound management practices for effective oversight and due diligence. Additionally, the regulations encourage the development of innovative insurance products that cater to the requirements of different segments/ strata of the society and provide wider choices while also considering the interests of policyholders and maintaining regulatory compliance, thereby, fostering a competitive marketplace.

IRDAI also notified the IRDAI (Protection of Policyholders'' Interests and Allied Matters of Insurers) Regulations, 2024, which consolidates eight regulations into a unified structure, focusing on several key objectives aimed at ensuring fair treatment of prospects during solicitation and sale of insurance policies and protecting the interests of policyholders throughout their engagement with insurers and distribution channels. These regulations emphasize the adoption of standard procedures and

best practices by insurers and distribution channels to fulfill their obligations towards policyholders, including grievance redressal and policyholder-centric governance. Additionally, the regulations aim to promote prudent practices in risk management related to outsourcing activities by insurers. Furthermore, the regulations ensure that the opening or closing of places of business by insurers, both domestically and internationally, is conducted in a manner that prioritizes the interests of the policyholders.

IRDAI also released several discussion papers/ draft guidelines on topical matters pertaining to the ordinary course of business and operations.

10. Rural and Social Sector Obligations

HDFC Life maintains dedicated focus on undertaking rural business, and endeavors to tailor its products and processes to support these businesses, considering customer needs.

As part of its overall business, the Company has achieved prescribed regulatory targets of social and rural business, as follows:

	Prescribed	Achieved
Rural Business	20% of overall	23.66% of overall
	business	business
Social Business	34,42,632 social	74,86,026 social
	lives insured	lives insured

13. Transfer to Reserves

The Company carried forward profit after tax of '' 1,568.86 crore, earned during the year ended March 31, 2024 to the Reserves. The accumulated profit of the Company is '' 8,258.58 crore as at March 31, 2024.

14. Share Capital and Debentures

The issued, subscribed and paid-up share capital of the Company as at March 31, 2024, is '' 21,50,94,41,270 comprising 2,15,09,44,127 equity shares of face value of '' 10/- each.

During the year, the Company has allotted 15,47,995 equity shares pursuant to the exercise of options by options holders under its various Employee Stock Option Schemes (''ESOS''). The equity shares allotted under ESOS rank pari-passu with existing equity shares issued and allotted by the Company.

Debentures

As on March 31, 2024, the Company has 9,500 outstanding Non-Convertible Debentures ("NCDs") having a face value of '' 10 lakh each. NCDs are listed on the wholesale debt market segment of the National Stock Exchange of India Limited.

The Company had paid annual interest to all the debenture holders on due date as mentioned below:

11. Solvency

The Solvency Ratio is calculated as specified in the IRDAI (Assets, Liabilities, and Solvency Margin of Insurers) Regulations, 2016.

	As at
	March 31, 2024
IRDAI prescribed minimum Solvency Ratio	150%
Company''s Solvency Ratio	187%

12. Dividend and Dividend Distribution Policy

The Board after assessing the performance, capital buffers, solvency, and liquidity levels of the Company has recommended a final dividend of '' 2/- per equity share of face value of '' 10/- each, subject to approval of the members of the Company. The dividend pay-out ratio for the year ended March 31, 2024 is 27%.

The Company has formulated a ''Dividend Distribution Policy'' which has been approved by the Board. In terms of Regulation 43A of SEBI Listing Regulations the ''Dividend Distribution Policy'' is hosted on the website of the Company which can be accessed by this link at https:// www.hdfclife.com/about-us/Investor-Relations.

ISIN	Outstanding Interest		Due Date
	NCDs (in '')	Payment Date
INE795G08027	350 crore	June 22, 2023	June 22, 2023
INE795G08019	600 crore	luly 28, 2023	July 29, 2023

There was no unclaimed interest amount lying with the Company.

Credit Rating

During the year, the rating agencies viz., ICRA Ltd. and CRISIL Ltd., have re-affirmed the below allotted ratings in favor of NCDs issued by the Company:

ICRA Ltd. "[ICRA] AAA" with "stable" outlook CRISIlltd. "CRISII AAA/ Stable"

15. Transfer of unclaimed dividend and shares to Investor Education & Protection Fund (IEPF)

The details with respect to transfer of unclaimed dividend and shares to IEPF forms part of the Corporate Governance Report.

16. Update on Holding Company / Promoters

(a) HDFC Limited/ HDFC Bank Limited

During the year, Housing Development Finance Corporation Limited ("HDFC Limited"), erstwhile Promoters of the Company had acquired 37,582,123 equity shares of the Company representing 1.75% of the total issued and paid-up share capital from the secondary market. Post the said acquisition, HDFC Limited held 50.40% of the total share capital of the Company. Accordingly, the Company had become a subsidiary of HDFC Limited w.e.f. June 30, 2023.

Further, pursuant to the effectiveness of the Composite Scheme of Amalgamation HDFC Limited, has been amalgamated into HDFC Bank Limited w.e.f. July 1, 2023. Accordingly, HDFC Bank Limited has become the holding and promoter Company of HDFC Life, in place of HDFC Limited.

(b) abrdn (Mauritius Holdings) 2006 Limited

abrdn (Mauritius Holdings) 2006 Limited ("abrdn"), one of the erstwhile promoters of the Company sold its stake in the Company in various tranches. Consequent to the sale of stake held by abrdn and post obtaining the requisite approvals from the stock exchanges, abrdn was reclassified from "Promoter" to "Public" category with effect from December 12, 2023, in accordance with Regulation 31A of the SEBI Listing Regulations.

Consequent to the above, HDFC Bank Limited has become the sole Promoter of the Company.

17. Subsidiary and Associate Companies (Including Joint Venture)

(i) HDFC Pension Management Company Limited ("HDFC Pension") ["Wholly-owned Subsidiary"]

HDFC Pension, a wholly-owned subsidiary of HDFC Life, started its operations in August 2013. It is the fastest growing Pension Fund Manager (PFM) under the NPS architecture (y-o-y growth of 69.5% in AUM) with an AUM of '' 76,955 crore as on March 31, 2024. In FY 2019-20, HDFC Pension started its operation as a Point of Presence (POP) in both retail and corporate NPS segments. As of end of FY 2023-24, HDFC Pension had over 2,500 Corporate and over 3.2 lakh NPS customers.

A synopsis of financial performance is shown in below table:

Particulars	FY 2023-24	FY 2022-23
Gross Income	5,032	3,378
Total Expenses	4,790	2,722
Profit/ (Loss) before Tax	242	655
Provision for Tax	61	165
Profit/ (Loss) after Tax	181	490

(ii) HDFC International Life and Re Company Limited ("HDFC International") ["Wholly-owned Subsidiary"]

HDFC International was set up with the primary objective ofoffering lifeand health (re)insurancein the Middle East and North Africa (MENA) region and other markets of strategic importance. HDFC International has its office in the Dubai International Financial Centre (DIFC), Dubai.

HDFC International''s focus remains to diversify, derisk and dominate the niche position by building a stable and sustainable revenue model, while ensuring the business remains predictable and profitable. It continues to grow, scale and expand by optimizing available resources, thereby catering to select ceding insurers. During FY 2023-24, the international subsidiary commenced it commercial operation of HDFC International Life and Re, IFSC Branch (''''HDFC Life International"), its first overseas branch located at Gujarat International Finance Tec (GIFT City) - IFSC, India. Since its launch, an array of innovative life and health insurance plans have been introduced to address the needs of global Indians.

For FY 2023-24, HDFC International generated gross written premiums (GWP) of USD 24.4 million registering a 42% y-o-y growth including, business effecting from both reinsurance and direct insurance lines of business. For the period under review, HDFC International reported a net profit of USD 0.33 million on a consolidated basis.

Further, S&P Global ratings assigned its "BBB" insurer financial strength rating on HDFC International for the sixth consecutive year.

(iii) The Company does not have any Associate or Joint Venture companies as on March 31, 2024.

18. Directors and Key Managerial Personnel

The Company''s Board is constituted in compliance with the Act, SEBI Listing Regulations and IRDAI Corporate Governance Guidelines.

As of close of the business hours on April 18, 2024, the Board comprises of twelve (12) Directors viz., two (2) Non-Executive Directors, seven (7) Independent Directors and three (3) Executive Directors. Further, there is an appropriate mix of Executive, Non-Executive and Independent Directors on the Board.

(a) Changes in Board Composition

Changes in the Board composition during FY 2023-24 and up to the date of this report along with the proposed changes, are given below:

• Appointment/ Re-appointment of Director(s)

i. Dr. Bhaskar Ghosh, Independent Director

The Board in its meeting held on April 26, 2023 appointed Dr. Bhaskar Ghosh (DIN: 06656458) as an Additional Director, categorized as an Independent Director for a term of five (5) consecutive years with immediate effect. At its said meeting, the Board also appointed Mr. Niraj Shah (DIN: 09516010) as an Additional Director, categorized as Whole-time Director (Designated as Executive Director & Chief Financial Officer) for a period of three (3) years with effect from April 26, 2023. The said appointments were further approved by the shareholders at the 23^rd Annual General Meeting (AGM) held on July 21, 2023.

ii. Ms. Bharti Gupta Ramola, Independent Director

The Board in its meeting held on October 13, 2023, re-appointed Ms. Bharti Gupta Ramola (DIN: 00356188) as an Independent Director, for a second term of five (5) consecutive years with effect from February 12, 2024 and the same was approved by the shareholders vide postal ballot on January 17, 2024.

iii. Mr. Kaizad Bharucha, Non-Executive, Nominee Director

Pursuant to the nomination letter received from HDFC Bank Limited, Promoter/ Holding Company, Mr. Kaizad Bharucha (DIN: 02490648) was appointed as an Additional Director, categorized as Non-Executive, Nominee Director with effect from November 28, 2023. The shareholders approved the said appointment, vide postal ballot on January 17, 2024.

iv. Mr. Venkatraman Srinivasan, Independent Director

The Board in its meeting held on April 18, 2024, appointed Mr. Venkatraman Srinivasan (DIN: 00246012) as an Additional Director, categorized as Independent Director with effect from April 18, 2024, for a term of five (5) consecutive years subject to the approval of the shareholders'' in the 24^th Annual General Meeting (AGM). His brief profile and other details as required under the provisions of the Act and SEBI Listing Regulations is provided in the Notice of the 24^th AGM and the explanatory statement under Section 102 of the Act, annexed to it.

Mr Venkatraman has not been debarred from holding the office of Director by virtue of any order passed by SEBI or any other such authority.

v. Mr. Keki M. Mistry, Non-Executive Director and Chairman of the Board

The Board in its meeting held on April 18, 2024, approved the appointment of Mr. Keki M. Mistry (DIN: 00008886), Non-Executive Director as the

Chairman of the Board with immediate effect subject to approval of Insurance Regulatory and Development Authority (IRDAI). IRDAI on May 7, 2024, accorded its approval for the appointment of Mr. Keki M. Mistry as the Chairman of the Board.

• Retirement/ Cessation of Director(s)

i. Ms. Renu Sud Karnad, Non-Executive Director

Ms. Renu Sud Karnad (DIN: 00008064) ceased to hold office as Non-Executive Director, with effect from the close of the business hours on July 21, 2023, consequent to her retirement from the Board.

The Board expressed its deep appreciation for the immense contributions made by

Ms. Karnad during her association with the Company.

ii. Mr. VK Viswanathan and Mr. Prasad Chandran

Mr. VK Viswanathan (DIN: 01782934) and Mr. Prasad Chandran (DIN: 00200379) shall cease to be Independent Directors of the Company, upon completion of their two (2) consecutive terms of five (5) years each on April 24, 2024.

The Board placed on record its deep appreciation for the immense contributions made by

Mr. VK Viswanathan and Mr. Prasad Chandran during their association with the Company.

• Retirement by Rotation

Section 152(6) of the Act provides that not less than two-thirds of the total number of directors of a public company shall be liable to retire by rotation, and that one-third of such directors as are liable to retire by rotation shall retire from office at every AGM.

In accordance with the provisions of the Act, Mr. Keki M. Mistry (DIN: 00008886), Non-Executive Director, being longest in office since his last appointment, retires by rotation and being eligible, offers himself for re-appointment at the 24^th AGM. A resolution seeking members approval for his re-appointment forms part of the Notice of 24^th AGM of the Company.

• Chairman of the Board/ Company

Mr. Deepak S. Parekh (DIN: 00009078) has decided to step down as the Chairman and Non-Executive Director with effect from close of the business hours on April 18, 2024. Accordingly, he ceased to hold office as the Non-Executive Chairman of the Company with effect from the close of the business hours on April 18, 2024.

Being the founder Chairman, Mr. Parekh has played a pivotal role in building one of the largest, listed private sector life insurance companies in India. Under his leadership, the Company has stood its ground through various challenges and intense competition, consistently doubling its topline, Value of New Business (VNB) and Embedded Value over multiple blocks of 4 year cohorts.

Consequent to the resignation of Mr. Deepak S. Parekh, the Board unanimously appointed Mr. Keki M. Mistry (DIN: 00008886) as the Non-Executive Chairman of the Board with immediate effect.

Mr. Keki M. Mistry has been associated with the Company since December 2000. He is also a Director on the Boards of several other prominent companies.

(b) Meetings of the Board and its Committees, attendance and constitution of various Committees

The details of meetings of the Board and its Committees held during the year, attendance of Directors thereat and constitution of various Committees of the Board, forms part of the Corporate Governance Report, which is enclosed as ''Annexure 1'' and forms part of this report.

(c) Independent Director Declarations

Your Company has received declarations from all the Independent Directors confirming that they meet the ''Criteria of Independence'' as laid down under Section 149(6) of the Act and the Rules under Regulation 16(1) (b) of SEBI Listing Regulations. Also, all Independent Directors have confirmed that their names have been added in the data bank maintained by the Indian Institute of Corporate Affairs (IICA) for independent Directors, in accordance with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014 and that they have complied with the Code of Independent Directors prescribed in Schedule IV of the Act.

In terms of regulatory requirement, Independent Directors are required to undertake online proficiency self-assessment test conducted by IICA within a period of two years from the date of inclusion of their names in the Databank. The online proficiency self-assessment test was completed by all the Independent Directors who were required to undergo the same.

The Board is of the opinion that all the Independent Directors fulfill the conditions relating to their status as Independent Director as specified under Section 149 of the Act and the Rules made thereunder

and applicable provisions of the SEBI Listing Regulations and are independent of the management.

(d) Key Managerial Personnel (KMPs) and changes, if any

In terms of the provisions of Sections 2(51) and 203 of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the following employees were holding the position of KMPs of the Company as on March 31, 2024:

Sr. No.	Name	Designation
1	Ms. Vibha Padalkar	Managing Director & CEO
2	Mr. Suresh Badami	Deputy Managing Director
3	Mr. Niraj Shah	Executive Director & CFO
4	Mr. Narendra Gangan	General Counsel, Chief Compliance Officer & Company Secretary

In terms of the guidelines/ regulations on the Corporate Governance issued by IRDAI, the following employees of the Company were holding positions of KMPs as on March 31, 2024:

Sr. No.	Name	Designation
1	Ms. Vibha Padalkar	Managing Director & CEO
2	Mr. Suresh Badami	Deputy Managing Director
3	Mr. Niraj Shah	Executive Director & CFO
4	Mr. Prasun Gajri	Chief Investment Officer
5	Mr. Narendra Gangan	General Counsel, Chief Compliance Officer & Company Secretary
6	Mr. Vibhash Naik	Chief Human Resource Officer
7	Mr. Vineet Arora	Chief Operating Officer
8	Mr. Rangarajan B N	Chief Risk Officer
9	Ms. Eshwari Murugan	Appointed Actuary

(e) Performance Evaluation of the Board and its Committees

In line with the approval of Nomination & Remuneration Committee (''''NRC''''), the Company has put in place a framework for evaluation of the Directors, Chairman, the Board and its Committees.

Pursuant to the provisions of the Act, and the SEBI Listing Regulations, the Board has carried out the annual evaluation of its own performance, and that of its Committees and individual Directors including the Chairman. Further, the Independent Directors met separately, without the attendance of non-Independent Directors and members of

the Management, and inter alia reviewed the performance of Non-Independent directors, and Board as a whole; and performance of the Chairman. They further assessed the quality, quantity and timeliness of the flow of information between the Company Management and the Board. The evaluation was conducted on broad parameters as per the SEBI Listing Regulations and the Guidance Note on Board Evaluation issued by the SEBI.

The evaluation criteria for the Directors was based on their participation, contribution and offering guidance and understanding of the areas which were relevant to them in their capacity as members of the Board. The evaluation criteria for the Chairman of the Board, besides the general criteria adopted for assessment of all Directors, included leadership abilities, effective management of meetings and preservation of interest of stakeholders. The evaluation criteria for the Committees were based on effective discharge of its terms of reference and their contribution to the functioning of the Board.

The Independent Directors expressed their satisfaction on the performance and effectiveness of the Board, all the Committees, Non-Independent Board Members, and the Chairman, and on the quality, quantity and timeliness of flow of information between the Company Management and the Board. The NRC also undertook an evaluation of individual Director''s performance and expressed its satisfaction on performance of each Director.

There have been no material observations, consequent to such evaluation and review.

(f) Policy on appointment and remuneration of Directors (''Remuneration Policy'')

The Remuneration Policy (''the Policy''), including the criteria for remuneration to directors, key managerial personnel and other employees is recommended by the NRC and duly approved by the Board. Pursuant to the provisions of Section 178 of the Act, Regulation 19 of the SEBI Listing Regulations and IRDAI Guidelines on Remuneration of Directors /KMPs the Company has formulated the Policy. The policy lays down the criteria for identification of persons who are qualified and fit and proper to become Directors on the Board including criteria for determining qualifications, positive attributes and independence of a Director.

The Policy is hosted on the website of the Company at https://www.hdfclife.com/about-us/Investor-Relations. The remuneration paid to the Directors is in line with the Policy and in compliance with IRDAI Guidelines

on Remuneration of Directors and Key Managerial Persons of Insurers. The Company has not granted stock options to any of its Non-executive Directors.

Further details about remuneration to Directors including Whole-time Directors are provided under the report on Corporate Governance which is enclosed as ''Annexure 1'' and forms part of this report.

(g) ''Fit and Proper'' Criteria for investors and continuous monitoring requirement

In accordance with the guidelines for Corporate Governance issued by IRDAI, Directors of Insurers have to meet ''fit and proper'' criteria prescribed by IRDAI. Accordingly, all the Directors of the Company have confirmed compliance with ''fit and proper'' criteria/ norms, prescribed under the guidelines on Corporate Governance issued by IRDAI.

Your Company had received declarations from the Directors in terms of Section 164 of the Act, confirming that they are not disqualified from being appointed as director of any company.

Further, based on the disclosures and confirmations received from the Directors, the Board is of the opinion that the Directors of the Company are eminent persons with integrity and have necessary expertise and experience to continue to discharge their responsibilities as the Director of the Company.

(h) Directors & Officers (D&O) Liability Insurance

The Company has in place D&O Liability Insurance for all its Directors (including Independent Directors) and Members of the Senior Management team for such quantum and risks as determined by the Board in line with Regulation 25(10) of the SEBI Listing Regulations.

(i) Succession Planning

The Company has a well-defined succession planning process to facilitate the development and career planning of high potential talent, mitigate vacancy risk arising from attrition and ensure business continuity. A framework is in place for identifying key roles and measuring the depth of leadership cover for each role by identifying successors who can move to the role either immediately or over a period, or by restructuring the role to mitigate vacancy risk and ensure business continuity, where successors are not immediately available to fill the vacancy.

The NRC oversees matters related to succession planning of the Company. NRC has undertaken a

comprehensive succession planning program over a period and has carried out a rigorous review for an orderly succession to the Board with an end-objective of having a Board which is diverse, future-ready and addresses the long-term requirements of the Company and the Senior Management.

19. Risk Management Framework

The Company recognises that risk is an integral element of the business and the managed acceptance of risk is essential for generating shareholder value.

The Company has a well defined Risk Management Strategy and a Risk Framework that is designed to identify, measure, monitor and mitigate various risks.

A Board approved Risk Management Policy has been put in place, which is reviewed periodically, to establish appropriate systems/procedures to mitigate all material risks faced by the Company. The risk management architecture of the Company has been detailed under the Enterprise Risk Management section of the Annual Report.

20. Internal Audit Framework

The Company has a robust and comprehensive internal audit framework and independent review mechanism across all the processes and systems to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals and, compliance with applicable policies, procedures, laws, and regulations.

The Internal audit function at HDFC Life works closely with other governance functions, considering relevant material inputs from the risk management framework, compliance reports and external auditor reports, etc. The internal audit function also carries out management self-assessment of adequacy of Internal financial controls and operating effectiveness of such controls in terms of Sarbanes Oxley (SOX) Act and the Act.

Internal audits are conducted by in-house internal audit team and also by the independent cosourced auditors under the supervision of the Audit Committee.

The Internal audit function reports key findings and the follow up status on these findings to the Audit Committee on quarterly basis.

An Internal Audit Charter duly approved by the Audit Committee is in place, which covers scope of work, accountability, reporting, responsibility, authority and periodic assessment of the internal audit framework.

Concurrent Audit of Investments

As required under the IRDAI (Investment) Regulations, an independent chartered accountant firm appointed by the Audit Committee carries out the concurrent audit of investment operations as per IRDAI investment regulations/ guidelines and guidance note on Internal/ Concurrent Audit of Investment functions of Insurance Companies, issued by the Institute of Chartered Accountants of India. Any significant findings in the concurrent audit are presented to the Audit Committee and reviewed by the Investment Committee.

21. Internal Financial Controls

The Company has a robust internal control mechanism across key processes and systems. The Company has put in place adequate policies and procedures to ensure that the system of internal financial control is commensurate with the size, scale and complexity of its operations. These systems provide a reasonable assurance in respect of providing financial and operational information, complying with applicable statutes, safeguarding of assets of the Company, prevention and detection of frauds, accuracy and completeness of accounting records and ensuring compliance with corporate policies.

The internal audit, in addition to evaluating compliance to policies, regulations, processes etc., also test and report adequacy of internal financial controls with reference to financial reporting/ statements.

22. Vigil Mechanism/ Whistle Blower Policy

The Company encourages an open and transparent system of working and dealing amongst its stakeholders. In accordance with Section 177(9) of the Act and Regulation 22 of SEBI Listing Regulations, the Company is required to establish a Vigil Mechanism for Directors and employees to report their genuine concerns.

The Whistle Blower Policy aims to provide a mechanism to ensure that concerns are appropriately raised, independently investigated and addressed. The purpose of the policy is to encourage employees/ stakeholders to report matters without the risk of subsequent victimisation, discrimination or disadvantage. The Whistle Blower policy covers all employees, including Directors of the Company and other stakeholders. The policy encourages any employee, stakeholder or Director to report any breach of any law, statute or regulation, issues related to accounting policies and procedures, acts resulting in financial loss or loss of reputation, misuse of office,

suspected/actual fraud and criminal offences, noncompliance to anti-bribery and anticorruption policy etc.

Besides, it also includes leak of any unpublished price sensitive information (UPSI) pursuant to SEBI Regulations or any such information prescribed pursuant to any regulations/laws, as amended from time to time. Such complaints are reported to the Audit Committee of the Board.

In terms of the Whistle Blower Policy of the Company, no employee of the Company has been denied access to the Audit Committee of the Board.

Further details of the Whistle Blower Policy of the Company are provided in the Report on Corporate

Governance and forms part of this report. The Whistle Blower Policy is hosted on the Company''s website at https://www.hdfclife.com/aboutus/Investor-Relations

23. Particulars regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

A. Conservation of Energy

In view of the nature of business activity of the Company, the information relating to the conservation of energy, as required under Section 134(3) of the Act and Rule 8(3) of Companies (Accounts) Rules, 2014, is not applicable to the Company.

B. Technology Absorption

Sr. No.	Particulars	Remarks
Research and Development (R&D)
1.	Specific areas, in which R&D is carried out by the Company	NA
2.	Benefits derived as a result of the above R&D	NA
3.	Future plan of action	• Micro-services driven approach to identify, enrich and upload customer acquisition documents • Upgraded platform to offer riders at all touch points of policyholder journey • Promoting ''zero touch'' policy issuance by integrating publicly available ecosystem services and a unified data layer as single customer data source • Multiple enhancements at points of sales and servicing journeys to smoothen partners processes • Integration of Gen AI capabilities on our own language models for journeys across policy lifecycle • New portals for partners, sales teams planned over the year • AI capabilities to be harnessed for upfront risk assessment • Blockchain driven integration with partners to create real time secure contracts and communication threads • Multi cloud strategy to be rolled out to aid technology upgrade plans
4.	Expenditure on R&D a) Capital b) Recurring c) Total d) Total R&D expenditure as a percentage of total turnover	NA

Sr. No.	Particulars	Remarks
Technology absorption, adoption and innovation
1.	Efforts made towards technology adoption	• Electronic data and document integration with major TPAs • Policy demat facility rolled out • New underwriting model built for improved risk management • More seamless document collection, eligibility verification through InstaCheck • Integrated Account Aggregator (AA) to facilitate efficient bank statement collection • Maturity payout simplification through automated maturity payout process for all touch points • Faster application submissions and improved user journeys through LOCO platform • Whatsapp as a channel of choice for customers and sales teams for collecting policy onboarding documents
2.	Benefits derived as a result of the above efforts (e.g. product improvement, cost reduction, product development, import substitution and so on)	• TPA integrations have made medical documents available real time for faster policy issuance • New underwriting model combines with the updated underwriting process to filter out suspect cases which otherwise pass through the system • Instacheck enables Sales to communicate eligible coverage at quote stage • AA enables secure, consent-based data sharing making it easy for customers to share information with single OTP • Timely and convenient maturity payouts through digital mode • DigiVPC process enabled digital processing of over 3,000 cases • Instant closure of documentation on WhatsApp
3.	In case of imported technology (imported during the last three years reckoned from the beginning of the financial year) - i. The details of technology imported; ii. The year of import; iii. Whether the technology been fully absorbed; iv. If not fully absorbed, areas where absorption has not taken place, and the reasons thereof	NA
4.	Expenditure incurred on Research and Development	NA

C. Foreign Exchange Earnings and Outgo

Details of foreign exchange earnings and outgo during FY 2023-24 are as follows:

Foreign Exchange Earnings	96.6
Foreign Exchange Outgo	145.6

24. Consolidated Financial Statements

In accordance with Section 129(3) of the Act and SEBI Listing Regulations, consolidated financial statements of the Company along with its wholly-

owned subsidiaries i.e. HDFC Pension Management Company Limited and HDFC International Life and Re Company, have been prepared in accordance with the applicable Accounting Standards issued by Institute of Chartered Accountant of India ("the ICAI") and forms part of this report.

25. Statement containing salient features of the financial statements of Subsidiaries

Pursuant to Section 129(3) of the Act, a statement containing salient features of the financial statements of the subsidiaries in the prescribed Form AOC-1 forms part of the financial statements.

26. Swabhimaan - Corporate Social Responsibility (CSR) & Environmental, Social, and Governance (ESG)

HDFC Life is committed to making a tangible difference to society through its CSR initiatives under the banner of ''Swabhimaan''. Aligned with the UN Sustainable Development Goals and India''s National Development Agenda, the focus areas include Education, Livelihood, Healthcare, Sanitation, and Environmental Sustainability.

Over the years, as a responsible corporate citizen, HDFC Life has contributed to nation building as enshrined in Section 135 of The Act. Driven by the ethos of ''Sar Utha KeJiyo'', the Company empowers individuals to live with pride, ensuring the interventions uplift communities and foster sustainable change. Through strategic partnerships and direct projects, HDFC Life maximises the impact on target beneficiaries, adhering to the highest standards of corporate responsibility.

The CSR & ESG Policy lays down the guidelines for undertaking CSR initiatives in accordance with the Companies (Corporate Social Responsibility Policy), Rules, 2014, as amended from time to time.

Embracing the spirit of collective action, the ''Swabhimaan Agent of Good'' program encourages employees to volunteer with family, friends or colleagues, amplifying the Company''s impact and fostering a culture of giving back.

The CSR & ESG Policy and details of projects/ programs undertaken are available on the Company''s website at: https://www.hdfclife.com/about-us#CsrRedirect

The ''Swabhimaan'' interventions are in line with Schedule VII of the Act, and the projects/ programs are identified and assessed by the Head of CSR with the CSR Monitoring and Evaluation team, and post their due diligence is recommended to the CSR & ESG Board Committee for directions and approvals.

The detailed annual report on CSR activities is enclosed as "Annexure 2" and forms part of this report.

27. Annual Return

Pursuant to Section 134(3)(a) and Section 92(3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014 notified by MCA, the draft of the Annual Return of the Company for the financial year ended March 31, 2024, is hosted on the website of the Company at https://www.hdfclife.com/ aboutus/Investor-Relations with the information

available up to the date of this report, and the final return shall be updated upon submission with the RegistrarofCompanies,within60daysfromthedateofthe 24^th AGM of the Company.

28. Related Party Transactions

Pursuant to Section 177 read with Section 188 of the Act, the Audit Committee approves the related party transactions on a quarterly basis. All the related party transactions entered during the year under review were in the ordinary course of business and on an arm''s length basis, thereby not requiring a separate Board/ Shareholders'' approval except for transactions in the ordinary course of business and on arm''s length basis with HDFC Bank which were considered as material transactions, for which Shareholders'' approval was taken as per the requirement of SEBI Listing Regulations in the 23^rd AGM of the Company held on July 21, 2023.

The Related Party Transactions Policy of the Company ensures timely approvals and reporting of the concerned transactions between the Company and its related parties to the concerned authorities. The Policy on Related Party Transactions is hosted on the Company''s website at the under mentioned link. https://www.hdfclife.com/aboutus/Investor-Relations

During the year, there were no material transactions with related parties, which were not in the ordinary course of business and not at arm''s length basis. Accordingly, no disclosure is made in respect of related party transaction in Form AOC-2 in terms of Section 134 of the Act and Rules framed thereunder.

M/s B.K. Khare & Co., Chartered Accountants, have reviewed the related party transactions for FY 2023-24 and their reports were placed before the Audit Committee for review, along with details of such transactions.

As per the requirements of the Accounting Standards (AS) - 18 issued by the ICAI on ''Related Party Disclosures'', the details of related party transactions entered into by the Company are covered under Notes forming part of the financial statements.

29. Ind AS Roadmap

IRDAI vide its circular dated January 21, 2020 notified that the effective date of implementation of Ind AS shall be decided after the finalisation of IFRS 17, ''Insurance contracts'', by the International Accounting Standard Board ("IASB"). The IASB has issued the new standard IFRS 17, Insurance Contracts, with effective date on or after January 1, 2023.

While IRDAI has formed an expert committee on implementation of Ind AS in the insurance sector, the effective date for Implementation of Ind AS standard for insurance companies is yet to be notified.

As per directions issued by IRDAI, vide its letter dated July 14, 2022, the Company has set up a steering committee comprising members from finance, actuarial and technology teams. The steering committee has been meeting at regular intervals to initiate implementation of Ind AS standards. The Company had appointed an external partner to perform an initial impact assessment. During the year, the outcome of the initial impact assessment was submitted to the IRDAI within the stipulated time lines. The Company is in the process of evaluating a technology partner. The Audit Committee and Board of Directors have been updated regularly about the progress of Ind AS Implementation.

30. Statutory Auditors and their Report

M/s G.M. Kapadia & Co., Chartered Accountants (Firm Registration No. 104767W) and M/s Price Waterhouse Chartered Accountants LLP (Firm Registration No. 012754N/ N500016), are the Joint Statutory Auditors of the Company. The report of the Joint Statutory Auditors forms part of this report. The said report does not contain any qualifications, reservations, adverse remarks or disclaimers for the period under review.

Audit observations, if any, and corrective actions taken by the Management are presented to the Audit Committee of the Board from time to time.

Change in one of the Joint Statutory Auditors

The Board in its meeting held on January 12, 2024, approved the appointment of M/s BSR & Co LLP, Chartered Accountants, (Firm Registration No. 101248W/W-100022) as one of the Joint Statutory Auditors of the Company, effective from conclusion of the 24^th AGM, pursuant to the completion of term of M/s Price Waterhouse Chartered Accountants LLP at the ensuing 24^th AGM, subject to approval of the Shareholders''.

The resolution for the appointment of M/s BSR & Co LLP, Chartered Accountants along with their brief profile have been included in the Notice of the 24^th AGM.

31. Secretarial Auditor and their report

Pursuant to the requirements of Section 204 of the Act, and Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s NL Bhatia & Associates, Practicing Company Secretaries (Firm Registration No. P1996MH055800), for conducting the Secretarial

Audit for the financial year ended March 31, 2024.

The Secretarial Audit Report for FY 2023-24 issued by M/s NL Bhatia & Associates, Practicing Company Secretaries is enclosed as ''Annexure 3'' and forms part of this report.

There are no qualifications, reservations, adverse remarks or disclaimers made by the Secretarial Auditors in their report.

32. Reporting of frauds by Auditors

During the year under review, there have been no instances of fraud reported by the Auditors to the Audit Committee of the Board, pursuant to Section 143(12) of the Act and the Rules made thereunder.

33. Legal Update

There are no significant and material orders passed by the regulators, courts or tribunals that impacted the going concern status of the Company, or which can potentially impact the Company''s future operations.

34. Material changes and commitments affecting the financial position

There have been no material changes and commitments, affecting the financial position of your Company, which have occurred between the end of the financial year to which the financial statement relates and the date of this report.

35. Secretarial Standards

Your Company has complied with Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) issued by the Institute of Company Secretaries of India ("ICSI").

36. Maintenance of Cost Records

Being an Insurance Company, your Company is not required to maintain cost records.

37. Change in the nature of business

During the year under review, there has been no change in the nature of business of the Company.

38. Deposits

Your Company has not accepted any deposits under Chapter V of the Act, during the year under review and hence provisions of the Act, relating to acceptance of Public Deposits are not applicable to the Company.

39. Loans, Guarantees or Investments

The provisions of Section 186 of the Act except sub-section (1) relating to loans, guarantees and investments are not applicable to the Company.

40. Employee Stock Option Schemes

Your Company has formulated various Employee Stock Option Scheme(s) ("ESOP schemes") which helps it to retain and attract right talent and in administering the issue of Stock Options to its eligible Employees including that of its subsidiary companies. The NRC administers the Company''s ESOP schemes. There has been no material variation in the terms of the options granted under any of the ESOP schemes and all the ESOP schemes are in compliance with SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SBEB Regulations").

The Annual Certificate on compliance with SBEB Regulations, issued by the Secretarial Auditors of the Company is being made available for inspection at the forthcoming AGM.

During the year under review, there were no instances of loan granted by the Company to its employees for purchasing/ subscribing its shares.

The statutory disclosures as mandated under the SBEB Regulations, have been hosted on the website of the Company at https://www.hdfclife.com/about-us/Investor-Relation

41. Prevention and Redressal of Sexual Harassment Policy, and disclosure under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Prevention and Redressal of Sexual Harassment (PRSH) Policy and Awareness:

The Company has zero tolerance towards sexual harassment and is committed to provide a safe environment for all. Organization''s PRSH policy is inclusive irrespective of gender or sexual orientation of an individual. It also includes situations around work from home scenarios.

To create awareness on this sensitive and important topic, PRSH awareness campaign was driven for all employees for deeper understanding around the nuances of PRSH through a series of small case. Channel-wise leaders were equipped with accurate and insightful PRSH data, in order to empower them to lead discussions and initiatives that promote a respectful and safe workplace atmosphere. Through dedicated forums, such as team meetings, workshops, or training sessions, channel-wise leaders'' acted as ambassadors engaging their teams in constructive dialogues around PRSH. They highlighted key statistics and best practices to raise awareness

and encouraged open communication ensuring that every team member understands their rights and responsibilities regarding sexual harassment prevention. PRSH awareness session was also conducted for PAN India HR Team. Enhancements were made to the E- Learning module of PRSH in response to current complaint trends. All employees were encouraged to complete the mandatory PRSH training module on the Company''s self learning application (MLearn).

Pursuant to the said Act, the details regarding number of complaints received, disposed, and pending during the FY 2023-24 are as follows:

Particulars	Numbers
Number of complaints pending at the beginning of the financial year	141
Number of complaints received during the financial year	61
Number of complaints disposed during the financial year	60
Number of complaints pending as at the end of the financial year	15

Note: 1. The said complaints were resolved within defined TAT.

Internal Committee (IC):

The Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company has instituted an Apex Committee and four Zonal Internal Committees (ICs) for redressal and timely management of sexual harassment complaints. The central Apex Committee is chaired by a senior woman leader of the Company. The Committee also has an external senior representative member who is a subject matter expert. All zonal ICs have minimum of 50% women representatives, and their functioning is overseen by the central Apex Committee. The Risk Management Committee of the Board is periodically updated on matters arising out of the PRSH Policy/ Framework, as well as on certain incidents, if any.

42. Certification from a Practicing Company Secretary

A Certificate has been obtained from M/s. NL Bhatia & Associates, Practicing Company Secretaries (Firm Registration No. P1996MH055800), regarding compliance of conditions of Corporate Governance as stipulated in SEBI Listing Regulations. The said Certificate forms part of the Report on Corporate Governance annexed hereto as ''Annexure 1''.

Further, the Company has obtained a Certificate from M/s NL Bhatia & Associates, Practicing Company Secretaries (Firm Registration No. P1996MH055800), confirming that none of the Directors of the Company are debarred or disqualified from being appointed or continuing as Director on the Board by the Securities and Exchange Board of India, Ministry of Corporate Affairs or any other Regulatory Authorities.

43. Management Discussion and Analysis Report, Report on the Corporate Governance and Business Responsibility and Sustainability Report

Pursuant to Regulation 34 of the SEBI Listing Regulations, Management Discussion and Analysis (''MD&A'') Report and Business Responsibility & Sustainability Report ("BRSR") is presented in separate sections of the Annual Report and forms part of this report.

In compliance with SEBI Listing Regulations, a Report on the Corporate Governance framework of the Company, with certifications as required under applicable Regulations (including guidelines/ regulations on Corporate Governance issued by IRDAI) is annexed hereto as Annexure 1'' and forms part of this report.

44. Proceeding under Insolvency and Bankruptcy Code, 2016

The Company has not filed any application or no proceeding is pending against the Company under the Insolvency and Bankruptcy Code, 2016, during FY 2023-24.

45. Details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the banks or financial institutions along with the reasons thereof

The Company has not made any one-time settlement with the banks or financial institutions, therefore, the same is not applicable.

46. Integrated Reporting

Your Company has prepared Integrated Annual Report for FY 2023-24.

The said report encompasses both financial and nonfinancial information to enable various stakeholders to have a more holistic understanding of the Company''s long-term perspective.

47. Directors'' Responsibility Statement

In accordance with the requirements of Section 134 of the Act, the Board of Directors state that:

i. In the preparation of the annual accounts, the applicable accounting standards have been

followed, along with proper explanation relating to material departures (if any);

ii. Such accounting policies have been selected and applied consistently, and judgments and estimates made that are reasonable and prudent, so as to give a true and fair view of the Company''s state of affairs, as on March 31, 2024, and of the Company''s profit for the year ended on that date;

iii. Proper and sufficient care has been taken for the maintenance of adequate accounting records, in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. The annual accounts have been prepared on a going concern basis;

v. Internal financial controls have been laid down to be followed by the Company and such internal financial controls are adequate and operating effectively; and

vi. Proper systems have been devised to ensure compliance with the provisions of all applicable laws, and such systems were adequate and operating effectively.

48. Appreciation and Acknowledgement

Your Directors place on record their gratitude for all the policyholders, shareholders, customers, distributors, and business associates for reposing their trust and confidence in the Company. Your Directors would also take this opportunity to express their appreciation for hard work and dedicated efforts put in by the employees and for their untiring commitment; and the senior management for continuing success of the business in difficult times.

Your Directors further take this opportunity to record their gratitude to HDFC Bank Limited, Promoter of the Company for their invaluable and continued support and guidance and also to Insurance Regulatory and Development Authority of India (''IRDAI''), Securities and Exchange Board of India (''SEBI''), Ministry of Corporate Affairs (''MCA''), Reserve Bank of India (''RBI''), Pension Fund Regulatory and Development Authority (''PFRDA''), Life Insurance Council, Stock Exchanges, Depositories, Debenture Trustees and other governmental and regulatory authorities for their support, guidance and co-operation from time to time.

On behalf of the Board of Directors

Sd/-

Deepak S. Parekh

Place: Mumbai Chairman

Date: April 18, 2024 (DIN: 00009078)

---

Mar 31, 2023

Your Directors are pleased to present the 23^rd Annual Report of HDFC Life Insurance Company Limited ("the Company"/"HDFC Life"), together with the audited financial statements for the year ended March 31, 2023.

1. Standalone Financial Performance, Business Review and Outlook

Financial Performance:

(''in crore)
Particulars	Standalone (Audited)
	FY 2022-23	FY 2021-22
a. New business premium	29,085	24,155
(i) Regular premium	11,324	8,054
(ii) Single premium	17,761	16,100
b. Renewal premium	28,448	21,808
TOTAL PREMIUM	57,533	45,963
PROFIT AFTER TAX	1,360	1,208
Other key parameters:		(''in crore)
Particulars	FY 2022-23	FY 2021-22
Individual APE	11,401	8,168
Group new business premium	14,243	12,515
Assets under Management	2,38,782	2,04,170
Embedded Value (EV)	39,526	30,048
Overall New Business Margins (post overrun)	27.6%	27.4%
Note: HDFC Life EV was reviewed by Milliman Advisors LLP

2. Business Review and Outlook Industry Update

The life insurance industry saw robust growth in FY 2022-23, led by private insurers. The fourth quarter saw budget announcements with respect to changes in tax regulations, effective April 1, 2023, where investment gains from nonunit linked policies with annual premium above '' 5 lakh would be taxed, which led to an increase in APE across most players in March, especially in the high ticket and nonpar segment.

During FY 2022-23, life insurance industry collected '' 3,70,543 crore of new business premiums and grew by 18% vis-a-vis previous year. Further, the private players grew by 24% and overall industry (including LIC) grew by 19% in terms of Individual weighted received premium (WRP). Growth in non-par guaranteed savings segment, increase in average ticket size and product innovation were the key drivers, enabled by expansion in distribution, resulting in further consolidation of market share of the private sector to

66% of the individual WRP. Within the private sector, the top 10 insurers accounted for close to 90% of the market (in terms of individual WRP) in FY 2022-23. Bancassurance continued to be the largest channel on the back of increasing reach of banks, with proprietary emerging as the second largest distribution channel.

Looking ahead, the medium to long-term growth opportunity for our sector remains intact. The longterm guaranteed savings product proposition is unique and the returns offered are best in class, even after the recent tax changes. The opportunity has only widened with the tax changes for certain other asset classes. Moreover, protection and annuity remain areas that are exclusive to life insurers.

The acquisition of Exide Life Insurance Company Limited (Exide Life) - the first M&A transaction in the life insurance industry was completed on October 14, 2022, post receipt of the final approval from Insurance Regulatory and Development Authority of India (IRDAI). This entire transaction - from announcement in September 2021, followed by the acquisition in January 2022 and the eventual merger - was completed in less than 14 months.

3. Company Performance Sustained growth across segments

HDFC Life maintained an upward trajectory on new business margins while outpacing both private and overall industry growth in FY 2022-23. We clocked a growth of 27% in individual WRP with a market share of 16.5% and 10.8% in the private and overall sector respectively. We continue to deliver consistent all-round performance and be ranked amongst the top three private life insurers in the industry. Total new business premium increased to '' 29,085 crore. We maintained our leadership position within the group segment, registering growth of 13%, with a private market share of 27.2%. Total premium grew to '' 57,533 crore in FY 2022-23, while renewal premium grew to '' 28,448 crore. We covered 68 million lives in FY 2022-23, out of which 1 million lives were covered through individual policies and the rest under the group platform.

Diversification and Innovation being the key themes across our business

All our channels recorded healthy growth and we continued to have a diversified distribution mix, which aided in providing multiple touch-points for the convenience of our customers. Our 498 branches are present pan-India bolstered by around 300 partnerships with banks, NBFCs, MFIs, SFBs, brokers, new-ecosystem partners, 1,79,435 individual agents and online platform access to our customers. Further, we continue to add to our distribution franchise with renowned names such as AU Small Finance Bank, India Post Payments Bank, amongst others. We aim to expand our reach to a wider customer base through these partners.

Our bancassurance channel grew by over 25% in FY 2022-23 based on individual APE. We are witnessing robust growth in all our partnerships. RBI has permitted HDFC Bank or HDFC Ltd. to increase their shareholding in HDFC Life to more than 50% prior to the effective date of their merger. Our collaboration with HDFC Bank remains strong as we strive to enhance insurance accessibility to the bank''s customer base.

Our agency channel grew by more than two times Company level growth in terms of individual APE. It has grown at a 5 year CAGR of 34%, almost doubling its share from 11% in FY 2017-18 to 20% in FY 2022-23 aided by a strong performance in the market place as well as by inorganic growth. Our focus remains on enhancing activation and productivity of our financial consultants, and we aim to drive growth by expanding our presence in new territories and reaching out to a wider range of customers.

Our overall product mix remains balanced. Amongst the savings products, non-par savings was at 45%, participating products at 27% and ULIP at 19% of individual APE.

There has been an increase in protection share in total NBP from 24% in FY 2021-22 to 29% in FY 2022-23. Our overall protection APE grew by over 20% in FY 2022-23. This was led by our market leadership in credit life, delivering strong growth of 46%. Retail protection trends remain encouraging with sequential growth of 51% and Y-o-Y growth of over 40% in Q4''FY23. Our FY 2023-24 outlook for retail protection is positive on the back of the growth trends experienced across channels.

On the retirement front, we have steadily gained market share in the annuity business. Our annuity business in FY 2022-23 grew by 18% on received premium basis compared to a 2% growth for the industry. APE growth was 59% due to launch of our regular premium annuity product - Systematic Retirement Plan during the year.

Maintaining Profitable Growth

Our renewal premiums were at '' 28,448 crore with our 13^th month persistency for limited and regular pay policies ending at 87%, which is the same as the previous year. Our 61^st month persistency ended at 52%, down from 54% in the previous year.

Our new business margin for the year was 27.6% thereby delivering value of new business of '' 3,674 crore, which resulted in VNB growth of 37%. Margin neutrality, after considering the acquired business, was achieved ahead of target timelines. The full year margin factors in an investment of '' 50 crore that was made towards our technology transformation project ''Project Inspire''. We expect to continue our VNB expansion in FY 2023-24, through faster

than industry APE growth, whilst maintaining close to FY 2022-23 margins. Our embedded value (''EV'') stood at '' 39,526 crore as on March 31, 2023, with an operating return on EV of 19.7% for FY 2022-23. Profit after tax for FY 2022-23 stood at '' 1,360 crore, a Y-o-Y increase of 13% despite the increased new business strain arising from higher growth in Q4. Solvency as on March 31, 2023, stood at 203%, post successfully raising '' 2,000 crore equity share capital in the current fiscal year.

Our assets under management (AUM) stood at '' 2,38,782 crore, with a debt-equity proportion of 70:30 as on March 31, 2023, up from '' 2,04,170 crore in the previous year.

Update on Subsidiaries

As on March 31, 2023, the AUM of HDFC Pension Management Company (HDFC Pension) stood at '' 45,397 crore and has a market share of 41.2%. It is the largest and fastest growing pension fund manager in both Retail and Corporate NPS AUM segments. HDFC International Life and Re Company Limited received the final approval from the concerned regulatory authority, enabling us to establish a branch in GIFT City. We are excited about the new opportunities it presents for us to address the needs of global Indians as we target to commence operations in Q1''FY24.

Business Outlook

We have consistently doubled on key metrics including new business premium, renewal premium, value of new business, embedded value, amongst others, across multiple blocks of 4 years due to our focus on delivering growth, profitability, business quality along with risk management. Hence, we believe that the recent changes, whether on taxation, business models or regulations, would require some short term adjustments, but the long - term opportunity for the sector remains intact.

IRDAI is proposing several changes that would enhance penetration, facilitate sustainable growth and ease the operating environment. There are several draft regulations under discussion from the conceptualization of online marketplace to granting of composite licenses, enabling distribution of other financial products by insurers and setting-up an insurtech subsidiary. The regulator also expanded open architecture and introduced use and file regime for faster product launches. IRDAI also revised the Expenses of Management (''EoM'') and Commission guidelines to provide more operating freedom to insurers to manage their costs, encourage development of long-term products and promote higher persistency, thus creating long-term value for customers. Through these reforms, the regulator aims to achieve the vision of insurance for all by 2047.

Our focus remains to provide a wide range of insurance products that cater to the diverse needs of our customers, thereby ensuring their financial security. Furthermore, we are dedicated to leveraging technology and digital advancements to create a smooth and convenient customer experience. We are optimistic about the growth prospects of the industry and are committed to driving a significant increase in insurance penetration in line with the regulator''s vision.

4. Products

We, at HDFC Life, understand the importance of providing customers flexibility to choose from multiple options as per one''s lifestyle and life stage. We believe in offering solutions that not only provide financial security but also financial support to fulfill one''s dreams and goals. The Company has 63 individual and 17 group products in its portfolio, along with 11 rider benefits.

In April 2022, we launched HDFC Life Systematic Pension Plan, a participating pension plan that helps customers build a corpus to meet post retirement goals. The plan provides an assured benefit on vesting and accumulation through bonuses. Customers can opt for additional protection through riders and also choose their policy and premium payment terms.

In June 2022, we introduced Click2Protect Optima Secure and Click2Protect Corona Shield. Click2Protect Optima Secure offers life and health cover to stay protected against rising medical costs. Click2Protect Corona Shield offers comprehensive protection with 3 plan options and special protection against COVID and co-morbidities along with treatment of COVID. It also covers home care treatment cost and medical expenses under COVID hospitalization in any AYUSH hospital.

In September 2022, we launched Click2Protect Super, a flexible term plan with 3 options and benefits like smart exit, acceleration of death benefit on diagnosis of specified terminal illnesses, additional amount in case of accidental death and option to receive death benefit in installments, among others.

In January 2023, we introduced HDFC Life Smart Pension Plus and Group Traditional Secure Plan. HDFC Life Smart Pension Plus provides lifelong annuity by paying premiums regularly or on a one time basis. It has 4 plan options and also allows deferment of annuity payouts, liquidity option, among others. HDFC Life Group Traditional Secure Plan offers guaranteed returns to an employer/trust over a specified period with interest credited at the end of each financial year and on policy maturity. Withdrawals from the policy are permitted under defined circumstances.

We will continue to develop innovative product propositions that focus on addressing customer needs at various life stages.

5. Human Resource and People Development

At HDFC Life, our people are the driving force behind the Company''s success. We believe in providing them with exceptional opportunities to grow and unleash their full potential. As an employer committed to equal opportunities, we hold meritocracy in high regard and foster a culture driven by outstanding performance. Cultivating and sustaining a high-performance environment remains our utmost priority. Our performance management system is firmly rooted in the balanced scorecard principles, allowing us to effectively measure and acknowledge exceptional achievements. Moreover, our compensation philosophy ensures that we remain competitive in the external market, attracting and rewarding the finest talents.

To address the ever-evolving demands of our business, we have made substantial investments in cultivating an internal talent pipeline. We accord top priority to our internal talents when it comes to career opportunities, encouraging cross-functional mobility through career progression and Internal Job Postings (IJPs). This empowers our employees to broaden their professional horizons. This year, we have introduced a groundbreaking careers App that grants employees the ability to express their career preferences. The App proactively notifies them about available internal job openings. Additionally, we organize internal career fairs to provide our employees with comprehensive information about the diverse career paths available within our organization.

When it comes to learning and development, our mission is to meet the strategic needs of our organization by fostering enterprise-wide capability development for our esteemed employees and distributors. We embrace a contemporary and progressive learning ecosystem that facilitates continuous growth and skill enhancement. Our innovative gamified programs, such as Step Up and Skill Up, empower employees to take ownership of their learning journey, rewarding them with career points. These programs seamlessly connect learning intentions with career growth, making the pursuit of knowledge truly aspirational. Through our cutting-edge M Learn App, we offer personalized courses enriched with captivating content presented in unique formats such as toons, comics, and games.

Comprehensive talent reviews and succession planning processes have been implemented for our middle and senior management levels. Through various developmental initiatives, we equip these leaders to excel in their current roles and cultivate a pipeline of talent that is ready to tackle future challenges.

In pursuit of building a workforce that reflects the rich diversity of our society, we wholeheartedly embrace Diversity, Equity, and Inclusion (DEI) as an integral part of our business philosophy, not merely an item on our agenda. Our unwavering dedication to creating an equitable environment for women and the LGBTQ community is exemplified by the inclusive programs we offer, such as the Maternity Transition Program, Second Careers Program, LGBTQ helpline and gender transition policy. This year, we proudly launched three Employee Resource Groups (ERGs), each led by business leaders. These ERGs are focused on fostering an inclusive workplace for Women, LGBTQ , Veterans, PwD, and other forms of diversity.

We understand that our employees face unique challenges in both their personal and professional lives. In order to support them, we have meticulously crafted a supportive ecosystem comprising of practices, processes, and policies. This includes providing parental leave to all genders, recognizing and supporting both primary and secondary caregivers, and extending group health benefits coverage to legally wedded or cohabiting partners of any gender. Employee wellness and care lies at the very core of our endeavors. Our comprehensive wellness program offers employees opportunities to partake in various fitness regimes and seek medical consultations for themselves and their families. Moreover, we have established confidential helplines to create a safe space for employees dealing with physical or mental health concerns. Our programs, such as the Fit by Bit Challenge and Mindful Morning Movement, invite employees to prioritize their health while fostering a sense of camaraderie.

We have forged partnerships with universities and academic institutions to train and recruit talent for our frontline sales roles. For managerial positions, our esteemed campus hiring program, ''Jigyasa,'' continues to attract fresh minds from prestigious business schools across the nation. Recognizing the significance of digitalization, our ''Graduate Trainee Program'' emphasizes the development of cutting-edge technological skills, laying a strong foundation for the future.

Our inclusive and caring culture is deeply embedded in our core values, which serve as guiding principles at every step of our journey. Aligned with our clearly defined leadership behaviors, these values inspire employees at all levels to fulfill their responsibilities to internal and external customers. Scientifically designed assessment tools implemented in our hiring and career advancement processes ensure that our employees embody these values.

The fiscal year 2023 marked a significant milestone as HDFC Life completed its industry-first acquisition. We meticulously orchestrated a seamless and inclusive

onboarding experience for our new colleagues from Exide Life. Providing them with an employee dossier and conducting multiple town halls and induction programs centered around our core values of Trust, Care and Inclusion, we ensured that they felt supported, welcomed, and embraced during the integration process. To further enhance their experience, we assigned HDFC Life buddies to assist in their roles, nurturing a sense of support and camaraderie.

Particulars of Employees

The details of remuneration of Directors and Employees as required under Section 197(12) of the Companies Act, 2013 (''the Act'') read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 including amendments thereof, are given under ''Annexure 4'' and forms part of this report.

The statement showing particulars of employees pursuant to Section 197 of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this report.

In terms of the provisions of Section 136 of the Act, the Integrated Annual Report is being sent to the shareholders, excluding the aforementioned information/statement. The said information is available for inspection by the members up to the date of this Annual General Meeting, on all working days, during business hours, at the Registered Office of the Company. Members who are interested in obtaining the said particulars may please write to the Company at [email protected].

6. Investments

FY 2022-23 saw the restoration of normalcy in economic activity after about two years of COVID-19 induced restrictions. The opening up of economies around the world saw a strong surge in pent up consumer demand. In case of the large developed economies, the demand was also fueled by the generous fiscal stimulus during the pandemic period. The supply side response was, however, slow in responding to the surge in demand, as the supply and logistics chains, that stretched across the world, were hampered by the asynchronous relaxations of the COVID-19 curbs. The resultant supply-demand imbalance led to a sharp rise in inflation, across almost all economies. The US saw peak CPI inflation at 9.1%, while inflation in the European countries tipped into double digits.

The response to the sharp rise in inflation was also quite swift. Central banks raised interest rates at a rapid clip. The US Fed led the world in raising rates by 475 bps in a span of about a year. Other central banks, too, followed suit, though the extent of the rate hikes was lower.

Emerging economies, too, faced the surge in inflation, though, to a lower extent. Emerging economies had received far less fiscal stimulus during the pandemic, and the subsequent surge in inflation, post re-opening, was also quite modest. CPI inflation in India peaked at 7.9% in April 2022. However, EM central banks, too, followed the US Fed in raising rates, to fight inflation as well as to stabilize their respective currencies. In India, RBI raised policy interest rates by 250 bps over the last 12 months.

Domestic activity levels also saw a recovery over the year, led by the full re-opening of the economy. The GDP is forecast to grow at 7% in FY 2022-23. However, the forecast for the next year, i.e. FY 2023-24 is expected around 6.5%, as per RBI projections, as the impact of the rate hikes work their way into the economy.

Equity markets had a subdued year, as the sharp gains over the previous years had factored in the strong recovery from the pandemic, and the markets were increasingly pricing in the impact of the rate hikes around the world. Moreover, the sharp rise in inflation also squeezed margins for a number of industries, as the impact of the rise in input costs was passed on to final prices with a lag. The equity markets were also buffeted by large outflows by FPIs, as the rapid monetary tightening in the developed economies led to lower global liquidity and a fall in risk appetite for global capital. The large cap Nifty index was almost flat at -0.6% returns for the year. However, despite the subdued returns the domestic equity markets out-performed the MSCI World index, which saw a deeper correction.

The domestic fixed income market also factored in the sharp hike in policy rate hikes, as the benchmark 10-year Government Security yield rose to a high of 7.61% in the initial part of the year, but cooled down to 7.28% by the end of the year, compared to 6.84% at the end of the previous financial year. The change in the 10-year benchmark, however, masks the change in the shape of the yield curve, where the shorter end of the curve saw a greater amount of rise in yields. The 1-year T-Bill yielded 7.28% at the last auction for FY 2022-23, versus 4.57% at the last auction for the previous year. The sharp rise in policy interest rates around the world led to a flattening, and in some cases, an inversion, of the yield curves, as the shorter end yields saw a larger rise than the longer end.

The investment funds of the Company were managed as per the stated objectives laid down in the Investment Policy, Asset-Liability Management Policy (''ALM Policy''), and respective Funds'' objectives. These policies lay down the asset allocation and risk appetite guidelines for different funds, some of which have in-built guarantees. Fund allocation is tracked on a regular basis and is backed with suitable assets. During the year, the asset allocation

in the Company''s conventional and shareholder funds was in line with the ALM policy.

Your Company''s total AUM as on March 31, 2023 was '' 2,38,782 crore. This comprised assets of '' 79,201 crore held under the unit-linked funds and '' 1,58,581 crore held under the conventional funds and shareholders'' funds. The corresponding numbers for the previous year were '' 80,622 crore and '' 1,23,548 crore, respectively.

7. Information Technology

Technology today is evolving and disrupting businesses at a pace never seen before. In the last one year we have witnessed a remarkable acceleration in the speed of technology transformation across industries. HDFC Life continues to evolve and adapt to address the new opportunities and challenges presented by this fast-evolving digital landscape. The rise of digital natives and tech aggregator platforms has disrupted how traditional industries conduct businesses. This has led to changing expectations on customer experience and enabled businesses, consumers and intermediaries to connect in ways that were previously impossible, creating opportunities for growth and innovation.

Our effort towards continuous experimentation and investment in new and emerging technological trends and ideas has enabled us to remain competitive. During the year, a few noteworthy initiatives we have undertaken include upgrading our core retail platform that powers sales & servicing. Key components of this platform such as lead management, sales & underwriting processing and customer servicing were enhanced with minimum disruption to the business. This upgrade allowed us to process the highest ever sales applications in March, 2023. The refactoring of our group platform has also enabled us to achieve the highest group policy conversions in March, 2023.

In addition to this, to improve our claims process, we have developed an end-to-end automated workflow for payouts of unclaimed amounts. We have implemented straight through processing (''STP'') across multiple business processes involving payments to speed up our service delivery by reducing any manual interventions. A few initiatives have been highlighted below:

• STP for free look-in cancellation pay-outs

• Quick links for NEFT update and document collection from customers for maturity payouts and automation for processing payments

• Integration of liveliness video link to update life certificate details and automated workflow for pension maturity policies

• Enhanced over the counter processing of death claims with same day approval of claims

• Implementation of payment middleware platform to enable quick onboarding new payment options.

Digital transformation through technology resilience

We have been enabled in our digital transformation journey by our technology resilience and mindset to be agile and innovative. Cloud adoption has helped manage business spikes without disruptions. Both auto-scaling and manual monitoring modes were deployed to manage workloads. A dedicated task-force was formed to monitor, resolve and govern the production eco-system.

Project Inspire - We started this multi-year project that aims to achieve digital transformation of HDFC Life''s business by transforming 10 key elements:

• Business Transformation and Re-imagined Experience Standards- An initiative to transform the as-is business to create a future ready business model which fundamentally improves the experience standard of all stakeholders, including customers, employees, intermediaries and regulators

• IT Governance & Agile Operational Model - IT capability maturity assessment and definition of target agile IT operational model

• Application Architecture - Identification of application portfolio optimization opportunities to define app modernization roadmaps

• Cloud Strategy and Roadmap - Application wise cloud migration suitability analysis and cloud cost optimization

• Culture and Change Management - Organization wide change management process to smoothen the transition to new technologies

• On-Premise Infrastructure - Assessment of onpremise infrastructure and definition of target IT infrastructure architecture and infra. related best practices

• Integration Architecture - Define API ecosystem mgmt. strategy, modernize legacy integrations and integrate design patterns assessment

• Cyber & Info Sec - Assess and analyze the Information security governance to recommend strategy for data leakage prevention and user authentication management

• Data Architecture - Strategy for data lake consolidation and data lifecycle management. to define target data architecture

• Regulatory Reporting - Adherence to minimum information required for scrutiny regulations, 2020 and recommendations of control reports across the lifecycle

At HDFC Life, we strive to maintain ourselves as a Tech First insurance company. We continue to invest and partner with start-ups to explore alternative solutions to traditional processes and business models to deliver enhanced experiences to all our stakeholders and achieve healthy business outcomes.

8. Awards & Accolades

Your Company received various awards and accolades during the year under review across diverse areas including corporate governance, financial disclosures, technology, digital solutions, products, human resources, marketing, etc. Some of the key ones are as follows:

• Featured in the ''Leadership'' list of the Indian Corporate Governance Scorecard 2022 published by IiAS

• Won the ''Superbrand'' title for the 9^th time

• Awarded the ''ICAI Silver Shield'' for the Integrated Annual Report FY 2021-22

• Recognised amongst ''India''s 100 Best Companies to Work For 2022'' by Great Place to Work

• Awarded the elets BFSI Tech Innovation Award 2023 for the category ''Outstanding Product Innovation''

• Won the ''Best Innovative CSR Project'' at the 6^th CSR Summit and Awards 2022 for the City Forest Project

• Recognised amongst India''s Best Workplaces for Women 2022 (Top 100) by Great Place to Work

• Awarded the esteemed ''QCI D. L. Shah Quality Award 2021 Silver'' for achieving Industry-leading Persistency

• Won the ''Gold Award'' at 2022 Brandon Hall Excellence Awards for best use of Mobile learning

• Won our 4^th consecutive Platinum at the coveted LACP 2021/22 Vision Award, ranked 29^th amongst the Top 100 Reports Worldwide and certified as the Best Report Cover Worldwide

• Won the ''DMA Thomas Assessment National Award'' for Excellence in Talent Management 2022

• Won the prestigious ''Finnoviti 2022 Award'' for innovation using Vision AI

9. Regulatory Landscape (IRDAI)

Insurance Regulatory and Development Authority of India ("IRDAI"/"Authority") issued several regulatory notifications applicable for life insurers during FY 2022-23, with an objective to create a progressive, supportive and a forward-looking regulatory architecture to foster a conducive environment leading to wider choice, accessibility and affordability to policyholders.

During the year under review, some of the key regulations/ guidelines etc., issued by the IRDAI include the following:

• IRDAI (Expenses of Management of Insurers transacting Life insurance business) Regulations, 2023: to enable and give flexibility to insurers to manage their expenses within overall limits to optimally utilize their resources for enhancing benefits to policyholders.

• IRDAI (Payment of Commission) Regulations, 2023: to enhance responsiveness of regulations to market innovation and to facilitate development of new business models, products and enable compliance.

• Master Guidelines on Anti-Money Laundering/ Counter Financing of Terrorism (AML/CFT), 2022: to comply with the obligation to establish an anti-money laundering program.

• The Authority also issued a Circular which provides guidance on the participation of Indian Insurers and Insurance Repositories (i.e. NSDL, CDSL, Karvy and CAMS) in the RBI''s account aggregator framework.

• The Ministry of Finance (''MOF'') also revised the taxation rules for non-unit linked policies. As per the revised rules, receipts arising from life insurance policies issued on or after April 1, 2023, shall be considered as income from other sources if the premium paid exceeds '' 5 lakh in a year. The exemption for receipts in the event of the death of the insured person shall remain unchanged.

• I RDAI also released several discussion papers/draft guidelines on key aspects of business and operations.

10. Rural and Social Sector Obligations

HDFC Life maintains dedicated focus on undertaking rural business, and endeavors to tailor its products and processes to support these businesses, considering customer needs.

As part of its overall business, the Company has achieved prescribed regulatory targets of social and rural business, as follows:

• Rural Business - Achieved 30.44% versus prescribed requirement of 20% of overall business

• Social Business - Insured 79,80,871 social lives versus the prescribed 27,04,594

11. Solvency

The IRDAI requires life insurers to maintain a minimum Solvency Ratio of 150%. The Solvency Ratio is calculated as specified in the IRDA (Assets, Liabilities, and Solvency Margin of Insurers) Regulations, 2016. As compared to the minimum requirement of 150%, the Company''s Solvency Ratio, as at March 31, 2023, was 203%.

12. Dividend & Reserves

The Board after assessing the performance, capital position and liquidity levels of the Company, has recommended a final dividend of '' 1.90 per equity share of face value of '' 10/-each, subject to approval of the members of the Company at the ensuing Annual General Meeting. The dividend pay-out ratio for the year ended March 31, 2023 is 30%.

The Company has formulated a ''Dividend Distribution Policy'' which has been approved by the Board of Directors. In terms of Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (''SEBI Listing Regulations'') the ''Dividend Distribution Policy'' is hosted on the website of the Company at https://www.hdfclife.com/ about-us/Investor-Relations.

The Company carried forward profit after tax '' 1,360 crore, earned during the year ended March 31, 2023 to the Reserves. The accumulated profit of the Company is '' 7,098 crore as at March 31, 2023.

13. Share Capital and Debentures

The issued, subscribed and paid-up share capital of the Company as at March 31, 2023, is '' 21,49,39,61,320 comprising 2,14,93,96,132 equity shares of face value of '' 10/- each.

During the year, the Company has allotted 9,82,147 equity shares pursuant to exercise of option by option holders under its various Employee Stock Option Schemes (''ESOS''). The equity shares allotted under ESOS rank pari-passu with existing equity shares issued and allotted by the Company.

Further, the Company in order to support its growth objectives and to further augment its capital position, allotted 3,57,94,824 equity shares aggregating to 2,000 crore (Rupees two thousand crore only) to Housing Development Finance Corporation Limited ("HDFC Ltd"), one of the promoters of the Company on a preferential basis on September 9, 2022.

Post the aforesaid allotment, HDFC Ltd. holds 48.65% of the paid-up share capital of the Company as on March 31, 2023.

Debentures

At the beginning of FY 2022-23, the Company had 6,000 outstanding unsecured redeemable non-convertible debentures ("NCDs") each having a face value of '' 10,00,000 for an aggregate nominal value of '' 600 crore (Rupees six hundred crore only) issued in the nature of ''subordinated debt'' in accordance with Insurance Regulatory and Development Authority of India (Other Forms of Capital) Regulations, 2015 and other applicable laws, rules and regulations.

During the year, the Company allotted 3,500 NCDs each having a face value of '' 10,00,000 for an aggregate nominal value of '' 350 crore (Rupees three hundred and fifty crore only) issued in the nature of ''subordinated debt'' in accordance with Insurance Regulatory and Development Authority of India (Other Forms of Capital) Regulations, 2015 and other applicable laws/rules and regulations.

As on March 31, 2023, the Company has 9,500 outstanding NCDs having a face value of '' 10,00,000 each. NCDs are listed on the wholesale debt market segment of the National Stock Exchange of India Limited.

On July 29, 2022, the Company had paid annual interest to all the debenture holders holding NCDs of '' 600 crore. There is no unclaimed interest amount lying with the Company in respect of NCDs.

Credit Rating

During the year, the rating agencies viz., ICRA Ltd. and CRISIL Ltd., have re-affirmed the below allotted ratings in favor of NCDs issued by the Company:

• ICRA AAA/Stable

• CRISIL AAA/Stable

14. Directors and Key Managerial Personnel

As on date of this report, the Company''s Board comprises twelve (12) Directors viz., three (3) NonExecutive Directors, six (6) Independent Directors and three (3) Executive Directors.

(a) Changes in Board Composition

Changes in the Board composition during FY 2022-23 and up to the date of this report along with the proposed changes, are given below:

• Appointment of Director(s)

(a) The Board in its meeting held on April 26, 2023, appointed Dr. Bhaskar Ghosh (DIN: 06656458) as an Additional Director, categorized as an Independent Director, with effect from April 26, 2023, subject to approval of the members of the Company.

(b) The Board in its meeting held on April 26, 2023 appointed Mr. Niraj Shah (DIN: 09516010) as an Additional Director, categorized as Wholetime Director (Designated as Executive Director and Chief Financial Officer) with effect from April 26, 2023, subject to approval of IRDAI and the members of the Company.

The necessary resolutions for the appointment of the aforesaid Directors along with their brief profile have been included in the Notice of the 23^rd AGM.

The Company has obtained a Certificate from M/s N. L. Bhatia & Associates, Practicing Company Secretaries (Firm Registration No. P1996MH055800), confirming that none of the Directors of the Company are debarred or disqualified from being appointed or continuing as Director on the Board by the Securities and Exchange Board of India, Ministry of Corporate Affairs or any other Regulatory Authority.

• Retirement by Rotation

Section 152(6) of the Act provides that not less than two-thirds of the total number of directors of a public company shall be liable to retire by rotation, and that one-third of such directors as are liable to retire by rotation shall retire from office at every AGM.

Accordingly, Ms. Renu Sud Karnad (DIN: 00008064), Non-Executive Director, being longest in office since her last appointment, was liable to retire by rotation at the 23^rd AGM. However, she has expressed her unwillingness to continue and did not seek re-appointment.

Necessary proposal to not fill up the vacancy caused by retirement of Ms. Renu Sud Karnad has been placed for approval of the members at the ensuing AGM.

The Board places on record its sincere appreciation for the valuable contribution and services rendered by Ms. Renu Sud Karnad during her tenure as Director on the Board of the Company.

• Change in designation

During the year, Mr. Suresh Badami (DIN: 08224871), Executive Director was elevated to Deputy Managing Director with effect from October 21, 2022.

(b) Independent Directors

Your Company has received declarations from all the Independent Directors confirming that they meet the ''Criteria of Independence'' as laid down under Section 149(6) of the Act and the Rules made thereunder.

The Board is of the opinion that all the Independent Directors fulfill the conditions relating to their status as Independent Directors as specified under Section 149 of the Act and the Rules made thereunder and applicable provisions of the SEBI Listing Regulations and are independent of the management.

In terms of regulatory requirement, Independent Directors are required to undertake an online proficiency self-assessment test to be conducted by the Indian Institute of Corporate Affairs, Manesar (''IICA'') within a period of two years from the date of inclusion of their names in the Databank. The online proficiency self-assessment test was completed by all the Independent Directors who were required to undergo the same.

(c) Key Managerial Personnel and changes, if any

In terms of the provisions of Sections 2(51) and 203 of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the following employees were holding the position of Key Managerial Personnel (''KMPs'') of the Company as on March 31, 2023:

Sr. No	Name of the KMP	Designation
1	Ms. Vibha Padalkar	Managing Director & CEO
2	Mr. Suresh Badami	Deputy Managing Director
3	Mr. Niraj Shah	Executive Director & CFO
4	Mr. Narendra Gangan	General Counsel, Chief Compliance Officer & Company Secretary
In terms of the guidelines on Corporate Governance
issued by IRDAI, the following senior management
employees of the Company were holding positions of
KMPs as on March 31, 2023:
Sr. No	Name of the KMP		Designation
1	Ms. Vibha Padalkar		Managing Director & CEO
2	Mr. Suresh Badami		Deputy Managing Director
3	Mr. Niraj Shah		Executive Director & CFO
4	Mr. Prasun Gajri		Chief Investment Officer
5	Mr. Narendra Gangan		General Counsel, Chief Compliance Officer & Company Secretary
6	Mr. Vibhash Naik		Chief Human Resource Officer
7	Mr. Vineet Arora		Chief Operating Officer
8	Mr. Rangarajan BN		Chief Risk Officer
9	Ms. Eshwari Murugan		Appointed Actuary

(d) Performance Evaluation of the Board and its Committees

Pursuant to the provisions of the Act, and the SEBI Listing Regulations, the Board has carried out the annual evaluation of its own performance, and that of its Committees and individual Directors. Further, the Independent Directors met separately, without the attendance of non-Independent

Directors and members of the Management, and inter alia reviewed the performance of non-independent directors, the Board as a whole and performance of the Chairman. They further assessed the quality, quantity and timeliness of the flow of information between the Company Management and the Board.

Overall, the Independent Directors expressed their satisfaction on the performance and effectiveness of the Board, all the Committees, Non-Independent Board Members, and the Chairman, and on the quality, quantity and timeliness of flow of information between the Company''s Management and the Board. The Nomination & Remuneration Committee (NRC) also undertook a performance evaluation of individual Directors and expressed its satisfaction on the performance of each Director.

There have been no material observations, consequent to such evaluation and review.

(e) Policy on appointment and remuneration to Directors (''Remuneration Policy'')

The Remuneration Policy, including the criteria for remuneration to Non-Executive Directors is recommended by the NRC and duly approved by the Board. Pursuant to the provisions of Section 178 of the Act and Regulation 19 of the SEBI Listing Regulations, the Company has formulated Remuneration Policy. The said Policy provides the criteria for identification of persons who are qualified and fit and proper to become Directors on the Board.

The Remuneration Policy is hosted on the website of the Company at https://www.hdfclife.com/about-us/Investor-Relations. The remuneration paid to the Directors is in line with the said Policy and in compliance with guidelines issued by IRDAI. The Company has not granted stock options to any of its Non-Executive Directors.

Further details about remuneration to Directors including Whole-time Directors are provided under report on Corporate Governance which is enclosed as ''Annexure 1'' and forms part of this report.

(f) ''Fit and Proper'' Criteria

In accordance with the guidelines for Corporate Governance issued by IRDAI, Directors of Insurers have to meet ''fit and proper'' criteria prescribed by IRDAI. Accordingly, all Directors of the Company have confirmed compliance with ''fit and proper'' criteria/ norms.

The Company had received declarations from all the Directors in terms of Section 164 of the Act, confirming that they are not disqualified being appointed as director of the other companies.

(g) Meetings of the Board and its Committees, attendance and constitution of various Committees

The details of meetings of the Board and Committees of the Board held during the year, attendance of Directors thereat and constitution of various Committees of the Board, forms part of the Corporate Governance Report, which is enclosed as ''Annexure 1'' to this report.

(h) Directors & Officers (D&O) Liability Insurance

The Company has in place Directors and Officers Liability Insurance (D&O) for all its Directors (including Independent Directors) and members of the Senior Management team for such quantum and risks as determined by the Board in line with Regulation 25(10) of the SEBI Listing Regulations.

(i) Succession Planning

The NRC oversees matters related to succession planning of Directors, Senior Management and other Key executives of the Company. The NRC has undertaken a structured and comprehensive succession planning program over a period and has carried out a rigorous review for an orderly succession to the Board with an end-objective of having a Board which is diverse, future-ready and addresses the long-term requirements of the Company and the senior management.

15. Management Discussion and Analysis Report, Report on the Corporate Governance and Business Responsibility and Sustainability Report

Pursuant to Regulation 34 of the SEBI Listing Regulations, Management Discussion and Analysis (''MD&A'') Report and Business Responsibility and Sustainability Report ("BRSR") is presented in separate sections, forms part of this report.

In compliance with SEBI Listing Regulations, a Report on the Corporate Governance framework of the Company, with certifications as required under applicable Regulations (including guidelines on Corporate Governance issued by IRDAI) in annexed hereto as ''Annexure 1'' and forms part of this report.

16. Risk Management Framework

The Company has a defined Risk Management Strategy and a Risk Framework that is designed to identify, measure, monitor and mitigate various risks.

A Board approved Risk Management Policy has been put in place, which is reviewed periodically, to establish appropriate systems or procedures to mitigate all material risks faced by the Company. The risk management architecture of the Company has been detailed under the Enterprise Risk Management section of the Annual Report.

17. Internal Audit Framework

The Company has institutionalized a robust and comprehensive internal audit framework across key processes and systems to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals and, compliance with applicable policies, procedures, laws, and regulations.

The Internal Audit function at HDFC Life works closely with other governance functions, considering relevant material inputs from the risk management framework, compliance reports and external auditor reports, etc. The Internal Audit function also tests and reports compliance to Internal Controls over Financial Reporting (''ICOFR'').

Internal audits are conducted by the in-house Internal Audit team and independent co-sourced auditors appointed by and reporting to the Audit Committee. The function also undertakes follow-up on engagement findings and recommendations, in line with the approved framework.

The Internal Audit function reports key findings and the follow up status on these findings to the Audit Committee on a quarterly basis.

Concurrent Audit of Investments

As required under the Insurance Regulatory and Development Authority of India (Investment) Regulations, an independent Chartered Accountant firm appointed by the Audit Committee carries out the concurrent audit of investment operations as per IRDAI investment regulations/guidelines and guidance note on Internal/Concurrent Audit of Investment functions of Insurance Companies, issued by the Institute of Chartered Accountants of India. Any significant findings in the concurrent audit are presented to the Audit Committee and reviewed by the Investment Committee.

Internal Financial Controls

The Company has institutionalized a robust and comprehensive internal control mechanism across all the key processes. The Company has put in place adequate policies and procedures to ensure that the system of internal financial control is commensurate with the size, scale and complexity of its operations.

These systems provide a reasonable assurance in respect of providing financial and operational information, complying with applicable statutes, safeguarding of assets of the Company, prevention and detection of frauds, accuracy and completeness of accounting records and ensuring compliance with corporate policies.

The internal audit, in addition to ensuring compliance to policies, regulations and processes, etc., also tests and reports adequacy of ICOFR.

Vigil Mechanism/Whistle Blower Policy

The Company encourages an open and transparent system of working and dealing amongst its stakeholders. In accordance with Section 177(9) of the Act and Regulation 22 of SEBI Listing Regulations, the Company is required to establish a Vigil Mechanism for Directors and employees to report genuine concerns.

The Company has a Policy for Prevention, Detection and Investigation of Frauds and Protection of Whistle Blowers ("the Whistleblower Policy"), which also encourages its employees and various stakeholders to bring to its notice any issue involving compromise/ violation of ethical norms, legal or regulatory provisions, actual or suspected fraud etc., without any fear of reprisal, discrimination, harassment or victimization of any kind. The details of Whistle Blower complaints/concerns received, if any, and subsequent actions taken and the functioning of the Whistle Blower Mechanism is reviewed periodically by the Audit Committee and Risk Management Committee of the Board.

Further details of the Whistle Blower Policy of the Company are provided in the Report on Corporate Governance, forming part of this report. The Whistle Blower Policy is hosted on the Company''s website at https://www.hdfclife.com/about-us/investor-relations

18. Particulars regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo A. Conservation of Energy

In view of the nature of business activity of the Company, the information relating to the conservation of energy, as required under Section 134(3) of the Act and Rule 8(3) of Companies (Accounts) Rules, 2014, is not applicable to the Company.

B. Technology Absorption
Sr. No.	Particulars	Remarks
Research and Development (R&D)
1.	Specific areas, in which R&D is carried out by the Company	NA
2.	Benefits derived as a result of the above R&D	NA
3.	Future plan of action	• Technology & Architecture transformation • Enhancing digital buying journeys leveraging low code • Improve process automation using cognitive bots & AI for greater efficiencies • Assessing the role of Augmented Reality (AR) and Virtual Reality (VR) in customer education and immersive policy exploration experiences • Newer Machine Learning (ML) models with alternate data for underwriting, persistency and claims • Improve Natural Language Processing (NLP) engine using generative pretrained transformer • Enhancing data analytics capabilities for predictive and prescriptive insights, supporting informed decision-making • Invest in newer technologies to boost capabilities around cloud, voice/face recognition, cyber security

Sr. No.	Particulars	Remarks
4.	Expenditure on R&D a) Capital b) Recurring c) Total d) Total R&D expenditure as a percentage of total turnover	NA
Technology absorption, adoption and innovation
1.	Efforts made towards technology adoption	• InstaCheck advances the document collection and eligibility verification process to the quote level, minimizing rework and customer interactions • Integrated Account Aggregator facilitates efficient bank statement collection • Maturity Payout Simplification automates maturity payout process for all touchpoints • LOCO platform enables sales team with simple and effective user journeys for quick application submissions • Added new capabilities in DigiVPC new business DigiKYC processing • Offline Aadhaar journey in case of UIDAI server failure cases • Automatic closures of pending requirements through TeBT integrations • Improved user experience for annuitants and assistance in completing life certificate process • Improved the customer portal by automatically re-directing customers to the nearest branch through geo location identification and rerouting • Improvements done on clickCheck Facesense model
2.	Benefits derived as a result of the above efforts (e.g. product improvement, cost reduction, product development, import substitution and so on)	• Instacheck accelerates and simplifies financial decision-making & document collection • AA enables secure, consent-based data sharing, boosting financial intelligence and agility • Maturity payout provides an effortless, efficient journey for customers, ensuring timely and convenient maturity payouts • Through the improved DigiVPC process 3095 more customers were processed in digital Mode • With the improved LC portal powered with geo location, 492 more customers redirected to the nearest branch
3.	In case of imported technology (imported during the last three years reckoned from the beginning of the financial year) - i. The details of technology imported; ii. The year of import; iii. Whether the technology been fully absorbed; iv. If not fully absorbed, areas where absorption has not taken place, and the reasons thereof	NA
4.	Expenditure incurred on Research and Development	NA

C. Foreign Exchange Earnings and Outgo

Details of foreign exchange earnings and outgo during FY 2022-23 are as follows:

(''in crore)
Particulars
Foreign exchange earnings	192.7
Foreign exchange outgo	136.5

19. Subsidiary Companies

(i) HDFC Pension Management Company Limited ("HDFC Pension")

HDFC Pension continues to be the number one privately owned pension fund manager ("PFM") in India in terms of assets under management ("AUM") and is also one of the fastest growing private sector PFM under the NPS architecture.

HDFC Pension''s AUM as on March 31, 2023 stood at ''45,397 crore, registering a growth of approximately 59.8% over previous year. The cumulative market share of the Company as a Pension Fund Manager grew from 36.9% to 41.2% over the previous year.

HDFC Pension has 15.1 lakh subscribers as on March 31, 2023, out of which 9.8 lakh subscribers are in the retail segment and 5.3 lakh subscribers are in the corporate segment. The Company stands #1 in corporate segment subscribers and #2 in retail segment subscribers amongst all the private PFMs.

A synopsis of financial performance is shown below:

('' in crore)
Particulars	FY 2022-23	FY 2021-22
Gross Income	3,378	2,309
Total Expenses	2,722	1,858
Profit/(Loss) before Tax	655	452
Provision for Tax	165	97
Profit/(Loss) after Tax	490	354

(ii) HDFC International Life and Re Company Limited ("HDFC International")

HDFC International has its office in the Dubai International Financial Centre (DIFC), Dubai. HDFC International was set up with a primary objective of offering life reinsurance capacity in the UAE and other GCC nations.

HDFC International has successfully completed seven (7) years of operations and is steadily building experience in the GCC and broader MENA region. It continues to focus on the need for creation of a stable and sustainable revenue model, while ensuring the business remains predictable and profitable.

HDFC International has been working with ceding insurers to provide reinsurance support for individual and group reinsurance programs. It aims to partner with insurers and help them realise their potential through reinsurance solutions which enables them to innovate and optimise across their product and market segments.

During FY 2022-23, HDFC International generated Gross Written Premiums (GWP) of $ 17.22 million, registering a 10% Y-o-Y growth, while general and administrative expenses stood at $ 1.49 million. For the period under review, HDFC International reported a profit after tax of $ 0.41 million.

During the year, HDFC International has established IFSC Branch, its first overseas branch located at Gujarat International Finance Tec (GIFT City) - IFSC, India to provide US Dollar denominated insurance solutions to Indians globally. IFSC Branch has received its Certificate of Registration from the International Finance Services Centre Authority (''''IFSCA'''') and Certificate for establishment of place of business in India from Ministry of Corporate Affairs, Government of India.

(iii) Erstwhile Exide Life Insurance Company Ltd. ("Exide Life")

On January 1, 2022, HDFC Life had acquired 100% of the equity share capital of Exide Life from Exide Industries Limited. Accordingly, Exide Life became a wholly-owned subsidiary of the Company.

The Board of Directors in its meeting held on January 21, 2022, approved the scheme of amalgamation of Exide Life into and with the HDFC Life and their respective shareholders and creditors under Sections 230 to 232 and other applicable provisions of the Act.

The aforesaid scheme was sanctioned by Hon''ble National Company Law Tribunal, Mumbai Bench vide hearing convened on September 16, 2022 and it was further approved by the IRDAI on October 13, 2022. Accordingly, the Scheme was effective from end of day on October 14, 2022.

20. Consolidated Financial Statements

In accordance with Section 129(3) of the Act and SEBI Listing Regulations, consolidated financial statements of the Company along with its wholly-owned Subsidiaries, HDFC Pension and HDFC International, have been prepared in accordance with the applicable Accounting Standards issued by Institute of Chartered Accountant of India ("the ICAI") and forming part of this report.

21. Statement containing salient features of the financial statements of Subsidiaries

Pursuant to Section 129(3) of the Act, a statement containing salient features of the financial statements of the subsidiaries in the prescribed Form AOC-1 forms part of the financial statements.

22. Swabhimaan - Corporate Social Responsibility (CSR)

HDFC Life is committed to making a positive impact to society. Under its social umbrella of ''Swabhimaan'', the Company focuses in areas such as education and livelihood, healthcare, sanitation and environmental sustainability, etc.

Over the years, as a responsible corporate citizen, HDFC Life has contributed to nation building as enshrined in Section 135 of the Act. All CSR interventions are conceived and implemented through a focused approach towards target beneficiaries for generating maximum impact. The CSR initiatives of the Company are carried out either in partnership with credible implementing agencies or directly through projects executed by project management teams.

The CSR Policy of HDFC Life lays down the guidelines for undertaking CSR initiatives in accordance with the Companies (Corporate Social Responsibility Policy), Rules, 2014 as amended from time to time.

The ''Swabhimaan'' interventions are in line with Schedule VII of the Act and aligned with the UN Sustainable Development Goals (SDGs). The CSR interventions blend with the brand''s core emotion that revolves around ''Pride'' or ''Sar Utha Ke Jiyo'', representing the philosophy of enabling individuals to live with their head held high.

We strongly believe that employees and people in their circle of influence can make a difference to society. The ''Swabhimaan Agent of Good'' employee volunteering program is designed to enable all to act as change-makers. Every employee, along with family and friends, are encouraged to volunteer.

The CSR Policy and details of projects/programs undertaken are available on the Company''s website at https://www.hdfclife.com/about-us#CsrRedirect.

The ''Swabhimaan'' projects/programs are identified and assessed by the CSR Monitoring and Evaluation team, and post their due diligence is recommended to the CSR & ESG Committee for approvals.

The annual report on CSR activities is enclosed as ''Annexure 2''and forms part of this report.

23. Annual Return

Pursuant to Section 134(3)(a) and Section 92(3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the draft of the Annual Return of the Company for the financial year ended March 31, 2023, is hosted on the website of the Company at https://www.hdfclife.com/about-us/investor-relations

24. Related Party Transactions

Pursuant to Section 177 read with Section 188 of the Act, the Audit Committee approves the related party transactions of the Company on a quarterly basis. All the related party transactions entered during the year under review were in the ordinary course of business and on an arm''s length basis, there by not requiring a separate Board/Shareholders'' approval except for transactions in the ordinary course of business and on arm''s length basis with two related parties - HDFC Limited and HDFC Bank which were considered as material transactions, for which Shareholders'' approval was taken as per the requirement of SEBI Listing regulations

The Related Party Transactions Policy of the Company ensures timely approvals and reporting of the concerned transactions between the Company and its related parties to the concerned authorities. The said Policy is hosted on the Company''s website at https://www.hdfclife.com/aboutus/Investor-Relations.

During the year, there were no material transactions with related parties, which were not in the ordinary course of business and not on an arm''s length basis.

M/s B.K. Khare & Co., Chartered Accountants, have reviewed the related party transactions for FY 202223 and their reports were placed before the Audit Committee for review, along with details of such transactions.

As per the requirements of the Accounting Standards (AS) - 18 issued by the ICAI on ''Related Party Disclosures'', the details of related party transactions entered into by the Company are covered under Notes forming part of the financial statements.

25. Ind AS Roadmap

IRDAI vide its circular dated January 21, 2020 notified that the effective date of implementation of Ind AS shall be decided after the finalisation of IFRS 17, ''Insurance contracts'', by the International Accounting Standard Board (IASB). The IASB has issued the new standard IFRS 17 - Insurance Contracts, with effective date on or after January 1, 2023.

In view of the recent amendments to IFRS, and in order to keep the Ind AS converged with IFRS, the Ministry of Corporate Affairs (MCA), issued certain amendments to Ind AS vide a notification dated March 23, 2022 which are effective from April 1, 2022.

The IRDAI has formed an expert committee on implementation of Ind AS to address the implementation issues of Ind AS in the insurance sector.

As per the directions from IRDAI, the Company has set up a steering committee comprising members from areas such as finance, actuarial and technology. The steering committee meets at regular intervals to understand requirements of the Ind AS standards, evaluate technology and knowledge partners and determine the implementation plan. The Board of Directors have been updated periodically. Post required deliberations, the Company has appointed an external partner to perform an initial impact assessment. The IRDAI has also shared a road map for implementation of Ind AS for life insurance companies. The Company is in the process of aligning its implementation plan with IRDAI''s road map.

While ICAI continues to amend Ind AS 117 to converge with the final IFRS 17 and the IRDAI is taking steps for implementation of Ind AS, the IRDAI is yet to announce the final date of Ind AS implementation for the insurance sector.

26. Integrated Reporting

Your Company has prepared an Integrated Annual Report for FY 2022-23.

The said report encompasses both financial and nonfinancial information to enable various stakeholders to have a more holistic understanding of the Company''s long-term perspective.

27. Statutory Auditors

M/s G.M. Kapadia & Co., Chartered Accountants (Firm Registration No. 104767W) and M/s Price Waterhouse Chartered Accountants LLP (Firm Registration No. 012754N/N500016), are the Joint Statutory Auditors of the Company. The report of the Joint Statutory Auditors forms part of this report. The said report does not contain any qualification, reservation, adverse remark or disclaimer.audit observations, if any, and corrective actions taken by the Management are presented to the Audit Committee of the Board from time to time.

28. Reporting of frauds by Auditors

During the year under review, there have been no instances of fraud reported by the Auditors to the Audit Committee/ Board, pursuant to Section 143(12) of the Act and the Rules made thereunder.

29. Legal Update

There are no significant and material orders were passed by the regulators, courts or tribunals that impacted the going concern status of the Company, or which can potentially impact the Company''s future operations.

30. Material changes and commitments affecting the financial position

There have been no material changes and commitments, affecting the financial position of your Company, which have occurred between the end of the financial year of the Company to which the Balance Sheet relates and the date of this report.

31. Secretarial Audit Report

Pursuant to the requirements of Section 204 of the Act, and Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s N. L. Bhatia & Associates, Practising Company Secretaries (Firm Registration No. P1996MH055800), for conducting the Secretarial Audit for the financial year ended March 31, 2023.

The Secretarial Audit Report for FY 2022-23 issued by M/s N. L. Bhatia & Associates, Practising Company Secretaries is enclosed as ''Annexure 3'' and forms part of this report.

There are no qualifications, reservations or adverse remarks made by the Secretarial Auditors in their report.

32. Secretarial Standards

Your Company has complied with Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) issued by the Institute of Company Secretaries of India ("ICSI").

33. Maintenance of Cost Records

Being anInsuranceCompany,yourCompanyisnotrequired to maintain cost records.

34. Change in the nature of business

During the year under review, there has been no change in the nature of business of the Company.

35. Deposits

Your Company has not accepted any deposits during the year under review and hence provisions of the Act, relating to acceptance of Public Deposits are not applicable to the Company.

36. Loans, Guarantees or Investments

In line with the clarification given by the MCA under the Removal of Difficulty Order dated February 13, 2015, the provisions of Section 186 of the Act relating to loans, guarantees and investments are not applicable to the Company.

37. Employee Stock Option Schemes

Your Company has formulated various Employee Stock Option Scheme(s) ("ESOP schemes") which helps it to retain and attract the right talent and in administering the issue of Stock Options to its eligible Employees including that of its subsidiary companies. The NRC administers the Company''s ESOP schemes. There has been no material variation in the terms of the options granted under any of the ESOP schemes and the said schemes are in compliance with SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SBEB Regulations").

A Certificate on compliance with SBEB Regulations, issued by Secretarial Auditors of the Company is being made available for inspection at the forthcoming AGM.

During the year under review, there were no instances of loan granted by the Company to its employees for purchasing/subscribing its shares.

The statutory disclosures as mandated under the SBEB Regulations, have been hosted on the website of the Company at https://www.hdfclife.com/about-us/Investor-Relations

38. Sale of shares by abrdn (Mauritius Holdings) 2006 Limited

During the year, abrdn (Mauritius Holdings) 2006 Limited (abrdn), one of the promoters of the Company sold certain equity shares of the Company. The details of the same are furnished below:

Date of transaction Number of shares sold

September 13, 2022_4,30,00,000

The above sale of shares by abrdn has resulted in dilution of their shareholding from 3.72% as on March 31, 2022 to 1.66% as on March 31, 2023.

39. Update on merger of HDFC Ltd. with HDFC Bank

The Board of Directors of HDFC Bank ("Transferee Company") and HDFC Ltd. ("Transferor Company"), one of the promoters of the Company, have approved a composite Scheme of Amalgamation (''Scheme'') at their respective meetings held on April 4, 2022, for amalgamation of: (i) HDFC Investments Limited and HDFC Holdings Limited, wholly-owned subsidiaries of HDFC Ltd., with and into HDFC Ltd. and (ii) HDFC Ltd. with and into HDFC Bank and matters related thereto.

Upon the amalgamation of HDFC Ltd. with and into HDFC Bank becoming effective, HDFC Ltd. along with all its assets, liabilities, contracts, employees, licenses, records and approvals being their respective integral parts shall stand transferred to and vest in or shall be deemed to have been transferred to and vested in HDFC Bank as a going concern. Accordingly, post implementation of the Scheme HDFC Bank shall be promoters of the Company in place of HDFC Ltd., subject to approval of IRDAI.

40. Prevention and Redressal of Sexual Harassment Policy, and disclosure under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Internal Committee (IC):

The Company has instituted an Apex Committee and four Zonal Internal Committees (ICs) for redressal and timely management of sexual harassment complaints. The central Apex Committee is chaired by a senior woman leader of the Company. The Committee also has an external senior representative member who is a subject matter expert. All zonal ICs have minimum of 50% women representatives, and their functioning is overseen by the central Apex Committee. The Risk Management Committee of the Board is periodically

updated on matters arising out of the Policy/ Framework, as well as on certain incidents, if any.

Prevention and Redressal of Sexual Harassment (PRSH) Policy and Awareness:

The Company has zero tolerance towards sexual harassment and is committed to provide a safe environment for all. The organizations PRSH policy is inclusive irrespective of gender or sexual orientation of an individual.

To create awareness on this sensitive and important topic, various informative and interactive workshops were conducted for manager and above grade of employees at different locations. A PRSH awareness session was also conducted for the pan India HR Team. All employees were encouraged to complete the mandatory PRSH training module on the Company''s self learning application (MLearn).

Pursuant to the said Act, the details regarding number of complaints received, disposed, and pending during the financial year 2022-23 are as follows:

Particulars	Numbers
Number of complaints pending at the beginning of the financial year	61
Number of complaints received during the financial year	60
Number of complaints disposed during the financial year	52
Number of complaints pending as at the end of the financial year	14
Note:
1. The said complaints were resolved within defined TAT.

41. Directors'' Responsibility Statement

In accordance with the requirements of Section 134 of

the Act, the Board of Directors state that:

i. I n the preparation of the annual accounts, the applicable accounting standards have been followed, along with proper explanation relating to material departures (if any);

ii. Such accounting policies have been selected and applied consistently, and judgments and estimates made that are reasonable and prudent, so as to give a true and fair view of the Company''s state of affairs, as on March 31, 2023, and of the Company''s profit for the year ended on that date;

iii. Proper and sufficient care has been taken for the maintenance of adequate accounting records, in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. The annual accounts have been prepared on a going concern basis;

v. I nternal financial controls have been laid down to be followed by the Company and such internal financial controls are adequate and operating effectively; and

vi. Proper systems have been devised to ensure compliance with the provisions of all applicable laws, and such systems were adequate and operating effectively.

42. Appreciation and Acknowledgement

Your Directors place on record their gratitude for all the policyholders, shareholders, customers, distributors, and business associates for reposing their trust and confidence in the Company. Your Directors would also take this opportunity to express their appreciation for hard work and dedicated efforts put in by the employees and for their untiring commitment; and the senior management for continuing success of the business in difficult times.

Your Directors further take this opportunity to record their gratitude to HDFC Ltd. and abrdn, Promoters of the Company for their invaluable and continued support and guidance and also to Insurance Regulatory and Development Authority of India (''IRDAI''), Securities and Exchange Board of India (''SEBI''), Ministry of Corporate Affairs (''MCA''), Reserve Bank of India (''RBI''), Pension Fund Regulatory and Development Authority (''PFRDA''), Life Insurance Council, Stock Exchanges, Depositories, Debenture Trustees and other governmental and regulatory authorities for their support, guidance and co-operation from time to time.

On behalf of the Board of Directors

Sd/-

Deepak S. Parekh

Place: Mumbai Chairman

Date: April 26, 2023 (DIN: 00009078)

---

Mar 31, 2021

To,

THE MEMBERS

HDFC LIFE INSURANCE COMPANY LIMITED

Your Directors are pleased to present the 21^st Annual Report of HDFC Life Insurance Company Limited ("the Company"/ "HDFC Life"), together with the audited financial statements for the year ended March 31, 2021.

1. Standalone Financial Performance, Review and Outlook Financial Performance:		Business
		(''in crore)
Particulars	Standalone (Audited)
	FY 2020-21	FY 2019-20
a. New business premium	20,107	17,238
(i) Regular premium	6,858	6,044
(ii) Single Premium	13,248	11,194
b. Renewal premium	18,477	15,469
Total Premium	38,583	32,707
Profit After Tax	1,360	1,295
Other Key Parameters:		(''in crore)
Particulars	FY 2020-21	FY 2019-20
Individual APE	7,121	6,145
Group new business premium	10,031	8,775
Assets under Management	1,73,839	1,27,226
Embedded Value	26,617	20,650
Overall new business margins (post overrun)	26.1%	25.9%
Note: Embedded Value and Overall new business margins for FY 2020-21 and FY2019-20 are based on external review; Numbers may not add up due to rounding off effect.

2. Business Review and Outlook Macro Economic Scenario

FY 2020-21 started with a stringent lockdown aimed at controlling the spread of the COVID-19 pandemic. Post the initial 2-3 months, restrictions were progressively eased during the rest of the year. However, towards the end of the year, the number of infections started rising again, giving indications of a possible second wave. Globally, too, most countries went through a similar trajectory of initial lockdowns, subsequent easing followed by a second wave of infections. Monetary and fiscal authorities, around the world, unveiled various stimulus measures to cushion the economic blow from the pandemic and help their respective economies recover.

In India, most economic parameters bore signs of the effect of the pandemic. Fiscal deficit for the year was revised to 9.5% from the budgeted level of 3.5% of GDP. Government revenues were severely dented with no relief on expenditure as the Government needed to take measures to support the affected sections of the economy. The Reserve Bank of India (RBI) also took multiple measures, including cutting interest rates to increase liquidity, allowing banks to provide moratoriums and restructure loans to affected borrowers, amongst others.

The Government''s fiscal policy supported the economy through various measures - from providing food and income support to the most vulnerable sections, to providing investment incentives to industries to push up capital expenditure and consequently improve employment. The Government also increased infrastructure spending to attract private investment and trigger second order effects that would sustain growth. The Government committed to gradually ease fiscal deficit to 4.5% over the next 5 years.

The medium term outlook for the economy is more sanguine as the Government is expected to respond with less stringent and more localised responses to the second wave, while the increase in vaccinations is expected to help reduce further spread in infections.

Industry Update

The pandemic has impacted lives across the world. For organisations it has been a test of resilience and agility to adapt to the situation. The year began with companies prioritising safety of employees, enabling digital servicing of customers and continued engagement with distributors. Continued investments in technology, along with increased adoption and streamlining of digital assets for customer servicing and generating new business, helped the life insurance industry showcase strong growth recovery.

During FY 2020-21, the life insurance industry grew by 7% and garnered '' 2,783 billion of new business premium against '' 2,589 billion in the previous financial year. The private players grew by 8% and overall industry (including LIC) grew by 3% in terms of Individual weighted received premium (WRP). Development of alternate channels of distribution and product innovation were the key drivers resulting in further consolidation of private player''s market share to 60% of the individual WRP business. Within the private sector, the top 10 insurers accounted for 88% of the market (in terms of individual WRP) in FY 2020-21, compared to 85% in FY 2016-17. Bancassurance sourced business continues to dominate the channel mix on the back of increasing reach of banks. The share of direct

channels including the online channel, has also increased, while share of agency has been constant in the last few years.

Product mix continued to shift towards traditional products with higher focus on non-par savings. The share of ULIPs continued to decline in current financial year. While demand for individual protection saw an initial surge, growth normalised as the year progressed due to difficulty in completing medical underwriting requirements in pandemic conditions. Group protection business linked to loan products (credit life) reflected lower disbursements by lenders, especially in the initial part of the year.

COVID-19 Update

India witnessed a second wave of COVID-19 by the end of FY 2020-21 and the second wave appeared to be far steeper than the first wave. There is a downside risk to GDP growth in the wake of rising number of COVID-19 cases and localised lockdowns in major cities throughout the country. However, on a positive note, the expectation is that once the second wave subsides and a larger proportion of the population is vaccinated, pent-up services demand could push GDP growth during the later part of the year.

In this environment of the ''new normal'', we maintained business continuity by executing our core strategy of maintaining a balanced product mix, a diversified distribution, continuous product innovation and reimagining the insurance landscape through effective use of technology.

Our past investments in technology helped us navigate through the period of uncertainty and we have seen sustained utilisation of our digital assets by our customers, distributors and partners.

3. Company Performance Sustained growth across segments

HDFC Life continued on its trajectory of delivering consistent and predictable performance in FY 2020-21, while outpacing industry growth. Our full year market share amongst private insurers based on individual WRP increased by 130 bps to 15.5% (PY: 14.2%) on the back of 17% growth. Our total new business premium increased by 17% to '' 20,107 crore. We maintained our leadership position within the group segment, recording growth of 14% to end at '' 10,031 crore. Total premium grew by 18% to '' 38,583 crore in FY 2020-21, compared to '' 32,707 crore in FY 2019-20 on account of new business growth of 17% and 19% growth in renewal premium.

Despite a difficult operating environment in FY 2020-21, we covered around 4 crore lives and paid over 2.9 lakh death claims, with a payout value of over '' 3,000 crore.

Diversification and innovation being the key themes across our business

We have a diversified distribution mix and we offer multiple touch-points for the convenience of our customers. We have pan India presence with 390 branches, partnerships with 300 banks, NBFCs, MFIs, SFBs, brokers, new-ecosystem partners, over 1,00,000 individual agents and online access to our customers. We continue to expand our distribution by adding marquee names such as YES Bank and SBICAP Securities Ltd in retail business, ONGC, GSK in group annuity business and Indian Oil, Siemens in fund business.

We have grown well across all our key distribution channels, with bancassurance channel registering growth of 29% in FY 2020-21 and accounting for 61% of individual annualised premium equivalent (APE) for FY 2020-21. Agency, direct and broker channels contributed 13%, 19% and 7%, respectively. Protection remains a key focus area within the group segment, contributing 34% of our group business. All the channels continue to be profitable and generate healthy new business margins.

We believe in maintaining a balanced product mix with a focus on increasing the share of protection and retirement products. This is in line with the evolving customer demand for long-term savings products, flexible protection products to provide financial security to their dependants and long-term income products including annuities to get post retirement income. Continuous product innovation across all product categories has been key in this journey. We focus on ensuring that we have a relevant product suite that is able to address customer needs and gaps in current market offerings. Participating savings, non-participating savings, ULIPs, protection and annuity accounted for 34%, 31%, 24%, 7% and 5% of Individual APE, respectively. Protection and annuity segments contributed to around 13% and 5% of total APE.

The current pandemic led to higher awareness about the need for protection and the inadequacy of the current insurance coverage. We remain confident about the medium to long term prospects of protection in India, on the back of the under-penetration, higher awareness, rising affluence and increasing levels of consumer credit. We aim to address the opportunity in a calibrated manner, as we penetrate deeper and wider into the Indian market through appropriate pricing and underwriting.

Another area of opportunity is the retirement segment. We are optimistic on the growth potential of the retiral business opportunity given the changing demographics, increase in life expectancy and no social security. In addition to annuity being an important focus area, we are also focused on addressing the long-term income needs through our product offerings like HDFC Life Sanchay Plus and HDFC Life Sanchay Par Advantage. Our constant endeavour is to identify sources or means to grow our annuity business, including empanelling corporate clients and introducing new product variants while ensuring appropriate pricing and risk management.

Maintaining Profitable Growth

Our embedded value was '' 26,617 crore as on March 31, 2021, with a healthy operating return on embedded value (EVOP/ Opening Embedded Value) of 18.5% versus 18.1% last year. While we have had an overall positive operating variance during the year, we experienced a negative mortality variance. This was largely absorbed by the COVID reserve of '' 41 crore created by us at the start of FY 2020-21. Based on our actual experience in FY 2020-21 and after factoring in aspects such as latest mortality trends across business and customer segments and geographic spread of COVID 2.0, we have provided for a COVID reserve of '' 165 crore for FY 2021-22. We will continue to review the adequacy of this reserve through the course of FY 2021-22. With this approach, we remain confident of our ability to absorb the impact of shocks from one-off events and deliver steady returns with minimal variances through a realistic and disciplined assumption setting approach.

We continue to sustain healthy new business margin of 26.1% versus 25.9% for last year, as a result of profitable product mix and control on costs. Our profit after tax (PAT) grew by 5% over last year to '' 1,360 crore in FY 2020-21.

Operating expenses (Opex) to total premium ratio reduced to 12.0% during FY 2020-21 from 13.1% for the previous year, largely on account of healthy growth in revenue and cost control measures taken during the year. We shall continue to invest in strengthening our distribution and enhancing our technological capabilities while calibrating our costs at an overall level.

Our assets under management (AUM) stood at '' 1,73,839 crore, with a debt-equity proportion of 64:36 as on March 31, 2021, thereby clocking a 37% growth over the previous year.

Business Outlook

We remain sensitive about the health impact and loss of lives due to the current pandemic and continue to prioritise employee, customer and partner safety. We have been able to demonstrate resilient performance in FY 2020-21

inspite of the challenging environment. However, given the resurgence of COVID, we continue to maintain a cautiously optimistic stance for FY 2021-22 and will evaluate our approach on a dynamic basis. We will strive to achieve sustainable new business growth and maintain an upward trajectory on new business margins, whilst adhering to a robust risk management approach.

The current pandemic has led to higher awareness around the need for protection and the inadequacy of current insurance coverage at a household level. Life insurance has emerged as a prominent theme to protect one''s family whilst securing long-term financial goals.

We believe that life insurance in India is a structural longterm growth opportunity given the under-penetration. In addition, pandemic-induced awareness, shift in consumer behaviour and robust demographic trends indicate that we are well placed to capture these multi decade opportunities. We have built a track record of resilient performance across business cycles, and are confident of delivering value to customers, profitable growth to our shareholders consistently. Our agility and timely identification of emerging opportunities across products, services, distribution and technology, while adapting to changing consumer preferences, has enabled us to create value for all our stakeholders.

4. Products

The prevailing uncertainty has made it necessary for one to secure the future for themselves and their families. Our product offerings span across retirement, savings and investments, child, term, health plans and provide options to our customers to provide financial protection for their families. The Company has 36 individual and 12 group products in its portfolio, along with 7 rider benefits.

Economic slowdown and financial distress can easily create uncertainties derailing short-term and long-term plans of the household. To protect against the burden of loans, it is imperative to have to ensure the right provisions are made which can secure one''s lifestyle.

In September 2020, we introduced HDFC Life Group Poorna Suraksha, a group term product which has a suite of benefits such as easier on-boarding, long-term coverage, portability and customised underwriting and pricing. This product is available to employees, customers, members of financial institutions, retail chains, educational institutions, government agencies, amongst others. The product also enables members to continue with the insurance coverage after their exit from their current organisation. The product offers the benefits and features of a retail term product on a group platform.

As the world adjusts to a new normal, we introduced Click 2 Protect Corona Kavach that offers the dual protection of life cover as well as medical expenses incurred on COVID-19 treatment. This plan provides comprehensive coverage with 9 plan options for whole life, accidental disabilities, critical illnesses and COVID-19 related co-morbidities while also covering expenses for hospital, home care and Ayurveda, Yoga and Naturopathy, Unani, Siddha and Homoeopathy (AYUSH) treatment.

In January 2021, we introduced HDFC Life Click 2 Protect Life, an innovative term plan that ensures financial protection as per one''s changing lifestyle and life stage. The plan offers benefits such as income payouts, whole life cover, premium waiver and rebalancing of death and critical illness benefits with age. Additionally, this plan also provides special premium rates for female lives and non-tobacco users.

Customer needs remain central to our product strategy and we will continue to develop innovative product propositions that addresses their needs at every stage of life.

Human Resource and People Development

At HDFC Life, we believe people are the driving force behind our success. We have institutionalised robust frameworks to attract, train, develop and engage our talent for higher productivity. Digitisation continues to remain at the heart of all our people processes.

It is also our constant endeavor to have a workforce which is representative of our social and customer demographics. Principles of diversity and inclusion are deeply rooted in our way of doing business. As an equal opportunity employer, our culture is one of meritocracy and performance based recognition for our employees, who hail from diverse backgrounds, education and experience. In addition to these, we have certain initiatives meant exclusively for our women employees, such as the ''Women''s mentoring circle'', where women employees are mentored and coached by senior women leaders in the organisation. We have also been sensitising our workforce on the LGBTQ cohort representation and inclusion.

Our practices, processes and policies have been designed keeping in mind challenges employees face whilst managing their responsibilities at work and at home. Some of these include flexible shift timings, availability of creche facilities, hiring of second career women, a special maternity transition program to assist expectant mothers along with flexible work arrangements, post maternity and paternity leave, sabbaticals, coverage of legally wedded ''partner'' or cohabiting partner of any gender under the

Group Health Benefits program, as well as coverage of gender transition surgery, availability of an exclusive helpline for the LGBTQ community and their allies, etc.

To meet our ever-evolving business needs, we have been focusing on creating a robust talent pipeline in-house. For career opportunities that arise in the organisation, our internal talent is given the first priority. Through career progression and Internal Job Postings (IJPs), we encourage our employees to opt for cross-functional movements, thereby broadening their professional exposure. Over the years, we have developed alliances with universities and academia for a ''train and hire'' model for our frontline sales roles. For managerial levels, our campus hiring programme ''Jigyasa'' continues to induct fresh minds from coveted business schools across the country. With digitisation being at the core of our business, our ''Graduate Trainee Programme'' has been developed to build a strong new-age technology skill set in the organisation.

We believe that values are the most critical elements that reflect the conduct of an organisation. Our organisation values, in conjunction with clearly identified leadership traits, enable employees to deliver on their responsibilities towards customers, both internal and external, in an effective way. Various scientifically designed assessment tools in external hiring as well as internal career advancement processes ensure that employees are aligned to these values.

At our middle and senior management levels, we have designed and implemented various talent review and succession planning processes. These have enabled us in developing people for higher productivity in their current roles and in building a strong pipeline of future-ready talent.

We are committed to creating and sustaining a high performance culture across the organisation. Our performance management system is deeply entrenched in the principles of balanced scorecard. At the same time, our compensation philosophy ensures that we benchmark ourselves with the external market in order to stay attractive as a potential employer. We ensure that we differentiate and reward high performance.

On the learning and development front, our mission is to meet the organisation''s strategic needs by facilitating enterprise-wide capability development for employees and distributors. We have been enabling this through adoption of a contemporary and progressive learning ecosystem.

Particulars of Employees

The statement showing particulars of employees pursuant to Section 197 of the Companies Act, 2013 ("the Act") read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this report. However, the above mentioned statement is not being sent to the members along with this Annual Report in accordance with the provisions of Section 136 of the Act.

The aforesaid information is available for inspection by the members upto the date of this Annual General Meeting (AGM), on all working days, during business hours, at the registered office of the Company, subject to restrictions, if any, that may be imposed by the local authorities on account of the pandemic. Members who are interested in obtaining the said particulars may please write to the Company Secretary.

The details of remuneration of Directors and Employees as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 including amendments thereof, are given as an Annexure 4'' and forms part of this report.

Investments

Asset markets across the world had a tumultuous journey over the course of the year. The initial period saw sharp sell-offs across equity and commodity markets. Equity markets in most jurisdictions, tumbled into bear territory i.e. corrected more than 20% from their recent tops. Commodity prices, also, saw sharp corrections.

Huge amounts of liquidity poured in from multiple governments and central banks'' stimulus measures helped the asset markets recover from their lows. Liquidity flow into equity markets and development of vaccines against COVID-19 led to sharp recovery in the markets which more than offset losses triggered by the advent of the pandemic.

In India, large-cap equity indices had seen correction of about 25% during the previous year. Equity indices bottomed out in the early part of the year and subsequently rallied through the year, with intermittent bouts of correction. The initial period of recovery was triggered by liquidity flows. Subsequently, as the lockdown restrictions were progressively relaxed, industrial/ manufacturing activities picked up and businesses recovered. The trying period of COVID-19 related restrictions induced companies to improve efficiency and reduce debt which helped them post higher profit margins as economic activity recovered. These margin improvements were seen to be sustainable. Moreover, certain sectors benefited from the changes in business and life-styles due to the pandemic. A brighter outlook led to multiple upgrades on earnings growth estimates for companies which propelled equity indices

higher and set new all-time highs. The capital inflows, due to the huge liquidity surplus, globally, added to the positive momentum in the markets. Over the course of the year the large cap equity indices gained about 70% while the mid-cap indices gained 90-100%. This was the best annual gain, in more than a decade, for the equity markets. Foreign investor inflows topped '' 2.76 trillion over the course of the year.

The fixed income markets, however, had a mixed year. The large easing measures taken by RBI in the initial part of the year, led to lower bond yields. In addition to the policy measures, RBI supported the bond markets through active intervention by purchasing bonds which reduced bond yields further. The COVID-19 pandemic severely affected the government''s revenues and a large increase in market borrowing was required to keep up its spending to support the economy. This additional borrowing was absorbed by the market with minimal impact on yields, due to RBI''s support. However, as the economy recovered from the slowdown, the bond market outlook started factoring in higher future interest rates. Bond yields hardened across the yield curve, though the 10-year benchmark saw limited movement as RBI focused on this segment to temper the rise in bond yields. The 10-year benchmark GSec yield ended the year at 6.18%, up from the low level of 5.76% set during the year, though only slightly higher than 6.12% at the end of the previous year.

Investment funds of the Company were managed as per the stated objectives laid down in the Investment Policy, Asset-Liability Management Policy (ALM Policy'') and respective fund''s objectives. These policies lay down the asset allocation and risk appetite guidelines for different funds, some of which have in-built guarantees. Fund allocation is tracked on a regular basis and is backed with suitable assets. During the year, the asset allocation in the Company''s conventional and shareholder funds was in line with the ALM policy.

The Company''s total AUM as on March 31, 2021 was '' 1,73,839 crore. This comprised assets of '' 74,759 crore held under the unit-linked funds and '' 99,080 crore held under the conventional and shareholders'' funds. The corresponding numbers for the previous year were '' 54,182 crore and '' 73,044 crore, respectively.

Information Technology

HDFC Life continues on the journey of leveraging technology to transform its business. The Company has invested in technological platforms and systems for better customer lifecycle management and to improve user experience for its customers and distributors. HDFC Life''s operating model has evolved from a traditional distribution and product play model to a customer centric matrix of platforms, digital channels, ecosystems and traditional avenues led by technology and analytics.

Our digital ecosystem is supported by tie-ups with multiple partners, proprietary platforms and growth engines. These engines translate into five building blocks viz., journey simplification, partner integration, data led ecosystems, service simplification and platforms. These blocks are powered by four engines - Futurance (our structured program to work with start ups in identified areas), architecture resilience, workforce resilience and cyber resilience, that enable operating in a volatile environment.

The Company continues to develop applications for a simplified and frictionless customer on-boarding experience, like Mobile Sales Diary (MSD), InstaGO, InstaMix, LifeEasy, InstaSIP, PoSP, InstaVerify, Chat PCVC, Electronic Consent, Video/Voice Integrated Sales Enabler -WISE, Video and Tele Underwriting.

For our partners, distributors and online aggregators, we offer application programming interface (API''s) and journey design that embed seamlessly into their insurance selling process giving straight-through experience for their customers. We have digital enablers like InstaInsure, HelloSelfie, InstaPlan, InstaPRL, Partner Portal and Corporate Portal to enhance partner engagement. LifeNext is integrated with the leading telecom, fintech, insuretech etc. issuing real-time policy issuance.

In addition to the on-boarding process, the Company constantly strives to enable real-time and convenient ways to serve the customer through multiple applications like InstaServ, VServ, Click2Upload, TrackNow, InstaReceipt, InstaRevival, Life Certificate, Quick Register apart from enhancing Customer MyAccount Portal and App. We have leveraged artificial intelligence, robotics and NLP in areas of customer servicing through Etty (WhatsApp service bot), Elle (chat bot), SPOK (email bot), Elsa (Alexa bot), Zoey (digital Avatar) and Twitter bot.

While in person interaction is important, technology has been an enabler in all aspects of our business. Being cognizant of the current environment and the increasing comfort of our customers to connect with us virtually, we had launched ''WISE''- our video based sales enablement tool in June 2020. This tool enables our sales teams to connect with customers via video and complete the entire sales process, thereby providing a near face-to-face experience. We have seen good adoption of this tool in tier 2 and 3 towns as well.

We have now extended the hybrid model of digital human interaction to servicing via our tool ''VServ''. Vserv is an industry''s first video based ''Phy-gital'' mode of servicing. It allows our branch staff to service customers remotely and solve their queries and requests via virtual interactions.

Our chat based customer verification process has seen increasing adoption, with over 50% of verifications being carried out through this mode, thereby reducing dependency on sales persons or our call centre. We have seen increasing trends in online payments by customers whereby about 95% of the policies are being renewed digitally, accounting for 87% of renewal premium being done via digital modes.

In order to identify new opportunities of additional revenue, risk reduction and process optimisation, the Company has taken initiatives to leverage data along with technology and specialised manpower. These have led to capabilities such around vision AI (FaceSense), speech AI (TrueCue), machine learning and predictive models for early claims, persistency, customer propensity, financial consultant engagement, cognitive bots, AI based virtual assistant (Insta).

Through our Futurance program, the Company continues to engage with start-ups and experiment with emerging technologies.

HDFC Life has taken up initiatives to achieve architectural resilience through use of cloud services, middle-ware services, data lake, API platform, low code platforms and workforce resilience through hybrid work model using collaboration platforms, digital re-skilling for employees, improving employee morale and productivity initiatives and launch of Click2Wellness digital platform.

Cyber resilience continues to be the focus area of the Company with appropriate controls and tools implemented for risk mitigation especially while putting in place a new operating model due to the pandemic. As part of the ISO 27001:2013 and ISMS assessment program, independent auditors audit and verify the implementation.

We, at HDFC Life continue in our pursuit for excellence in technology and have been recognised with multiple awards in the space of technology innovation and cyber security initiatives throughout the year.

Persistency

Our persistency ratios continue to be steady across various cohorts. The 13^th month persistency for individual business has improved from 88% in FY 2019-20 to 90% in FY 2020-21. The 61^st month persistency remained stable at 53%.

Awards & Accolades

The Company received various awards and accolades during the year under review in areas of financial disclosures, customer service, technology, digital solutions, products, human resources, marketing, etc.

Some of the key ones are:

• Great Place to Work certification for the 11^th time; India''s Top 30 Best Workplaces in BFSI 2021 by Great Place to Work®

• Awarded the ''Most Innovative Insurer'' in the Life category at the FICCI Insurance Industry Awards 2020

• Ranked as the 27^th most valuable brand amongst the Top 75 Most Valuable Indian Brands 2020 in the BrandZ report published by WPP and Kantar

• Recognised as Superbrand for the 8^th time

• Won the Best Innovation Award in the insurance segment at the ETBFSI Excellence Awards, 2020

• Won Best Security Practices in the Insurance Sector at the DSCI Excellence Awards 2020

• IMC RBNQA Trust - MQH Best Practices award for ''Creating differentiated engagement & improving performance using SEO (Search Engine Optimisation)''

• Frost & Sullivan Project Evaluation and Recognition Program Award 2020 in the Customer Value Leadership Category, Service Sector for the Branch Digitisation project

The complete list of all the awards is mentioned in the Awards & Accolades section of this report.

Regulatory Landscape

During the year under review, the IRDAI issued various regulations and guidelines to facilitate the insurance industry to tide over uncertain times due to the COVID-19 pandemic and to further aid the growth of industry. Some of the key regulations/ guidelines, etc. have been provided hereunder:

Products covering COVID-19

Insurers were allowed to offer COVID-19 related shortterm health insurance policies until March 2021. Later in July 2020, General and Health insurers were directed to mandatorily offer standardised individual health insurance products covering COVID-19, namely "Corona Rakshak" and "Corona Kavach". The IRDAI also issued various norms on portability of group health insurance policies issued to account holders of various banks, and specific norms for such products.

Group Credit Life policies

Insurers were allowed to suitably modify the term and sum assured under group credit life insurance schemes. The modification was to be done with the objective of aligning the cover available under such schemes with the revised

loan repayment schedule for members who had availed the facility of moratorium announced by the RBI (in the wake of the COVID-19 pandemic).

Relaxation in timelines

Following IRDAI''s instructions on relaxation of timelines for applicable grace period, collection of premium, filing of quarterly, half-yearly, and annual returns by insurers and insurance intermediaries, the IRDAI further relaxed various timelines including for submission of hard copies of regulatory returns, public disclosures on websites, and compliance with revised standards and benchmarks for hospitals.

Higher FDI limits

The Insurance (Amendment) Act, 2021 has been notified with effect from March 25, 2021 allowing the foreign investment limit in Indian Insurance companies up to 74% from the earlier 49%, omission of restrictions pertaining to Indian owned and controlled and revision in conditions and manner of foreign investments.

Rural and Social Sector obligations

HDFC Life maintains dedicated focus on undertaking rural business and endeavors to tailor its products and processes to support customer needs in this segment.

As part of its overall business, the Company has achieved prescribed regulatory targets of social and rural business, as follows:

• Rural Business - Achieved 21.70% versus prescribed requirement of 20% of overall business

• Social Business - Insured 94,00,794 social lives versus prescribed 30,62,325 social lives

Solvency

The IRDAI requires life insurers to maintain a minimum Solvency Ratio of 150%. The Solvency Ratio is calculated as specified in the IRDA (Assets, Liabilities, and Solvency Margin of Insurers) Regulations, 2016. As compared to the minimum requirement of 150%, the Company''s Solvency Ratio, as at March 31, 2021, was 201%.

Dividend & Reserves

In cognizance of the IRDAI Circular No. IRDA/F&A/CIR/ MISC/099/04/2020 dated April 24, 2020, the Company did not declare dividend for FY 2020-21. Subsequently, IRDAI had issued Circular Ref. No. IRDA/F&A/CIR/ MISC/032/02/2021 dated February 25, 2021 withdrawing applicability of its earlier Circular dated April 24, 2020. However, IRDAI had advised Insurers to take a view on dividend declaration for FY 2020-21 considering their capital, solvency and liquidity positions.

The Board of Directors of the Company recommended a final dividend of '' 2.02 per equity share of face value of '' 10/-each, subject to approval of the members of the Company. This translates into a dividend pay-out ratio of 30%.

The Company has formulated a ''Dividend Distribution Policy'', which has been approved by the Board of Directors. In terms of Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (''SEBI Listing Regulations'') the ''Dividend Distribution Policy'' is hosted on the website of the Company at https://www.hdfclife.com/ about-us/Investor-Relations.

The Company has carried forward profit amounting to '' 1,360.10 crore, earned during the year to the reserves. The Company had accumulated profits of '' 5,929.40 crore as at March 31, 2021.

Capital, Shares and Debentures

The issued, subscribed and paid-up share capital of the Company as at March 31, 2021 is '' 20,20,94,39,660 comprising 2,02,09,43,966 equity shares of face value of '' 10/- each.

During the year under review, the Company has allotted 21,45,567 equity shares pursuant to exercise of options by option holders under its various Employee Stock Option Schemes (''ESOS'').The equity shares allotted under ESOS rank pari-passu with existing equity shares issued and allotted by the Company.

Issue of Non-Convertible Debentures (NCDs)

During the year under review, the Company has issued and allotted 6,000 unsecured, redeemable, nonconvertible debentures ("NCDs") each having a face value of '' 10,00,000/- for an aggregate nominal value of '' 600,00,00,000/- (Rupees six hundred crore only) in the nature ''subordinated debt'' in accordance with Insurance Regulatory and Development Authority of India (Other Forms of Capital) Regulations, 2015 and other applicable laws/ rules and regulations. NCDs are listed on the wholesale debt market segment of the National Stock Exchange of India Limited.

Credit Rating

During the year under review, the rating agencies viz., ICRA Ltd. and CRISIL Ltd., had allotted below given ratings in favor of NCDs issued by the Company:

"[ICRA] AAA" with "stable" outlook, by ICRA Ltd., and "CRISIL AAA/ Stable", by CRISIL Ltd.

Policy on remuneration to Non-Executive Directors

The Remuneration Policy ("the Policy"), including the criteria for remuneration to Non-Executive Directors is recommended by the Nomination & Remuneration

Committee ("NRC") and duly approved by the Board. The key objective of the Policy is to ensure that it is aligned with the overall performance of the Company. The Policy ensures that it is fair and reasonable to attract and retain necessary talent. The Policy is placed on the website of the Company at https://www.hdfclife.com/about-us/Investor-Relations. The remuneration paid to the Directors is in line with the Policy of the Company and in compliance with guidelines issued by IRDAI. No Stock Options were granted to Non-Executive Directors.

Further details about remuneration to Directors including Whole-time Directors are provided under report on Corporate Governance, which is enclosed as ''Annexure 1'' and forms part of this report.

Directors and Key Managerial Personnel

As on date of this report, the Company''s Board comprises of eleven (11) Directors viz., three (3) Non-Executive Directors, six (6) Independent Directors, two (2) Executive Directors including Managing Director & CEO.

(a) Changes in Board Composition

Changes in the Board Composition during FY 2020-21 along with the proposed changes, are furnished below:

• Appointment/ Re-appointment of Director(s)

The Board of Directors, based on the recommendations of the Nomination and Remuneration Committee of the Board ("NRC"), has in its meeting held on March 17, 2021, considered and approved re-appointment of Ms. Vibha Padalkar (DIN: 01682810) as Managing Director & CEO of the Company, and Mr. Suresh Badami (DIN: 08224871) as Executive Director of the Company for a period of five (5) years with effect from September 12, 2021 and September 18, 2021, respectively, subject to the approval of IRDAI and the members at the 21^st AGM of the Company.

The Board of Directors, based on the recommendations of NRC, has in its meeting held on April 26, 2021, considered and approved reappointment of Mr. Sumit Bose (DIN: 03340616) as Independent Director of the Company for a second term of five (5) consecutive years with effect from July 19, 2021, subject to the approval of the members at the 21^st AGM of the Company, by way of a special resolution. Further, the first term of Mr. Ranjan Mathai, Independent Director of the Company expires on July 21, 2021.

• IndependentDirectors

The Company has received declarations from all the Independent Directors confirming that they meet the ''Criteria of Independence'' as laid down under Section 149(6) of the Act and the Rules made thereunder.

The Board is of the opinion that all the Independent Directors fulfill the conditions relating to their status as Independent Director as specified under Section 149 of the Act and the Rules made thereunder and applicable provisions of the SEBI Listing Regulations and are independent of the management.

The Company has undertaken the requisite steps for inclusion of the names of all Independent Directors in the databank maintained with the Indian Institute of Corporate Affairs, Manesar (''IICA''). Accordingly, all the Independent Directors of the Company have registered themselves with IICA for the said purpose. In terms of Section 150 of the Act read with Rule 6(4) of the Companies (Appointment & Qualification of Directors) Rules, 2014 (including any amendments thereunder), Independent Directors are required to undertake online proficiency self-assessment test to be conducted by IICA within a period of two years from the date of inclusion of their names in the Databank. The online proficiency self-assessment test was completed by all the Independent Directors who were required to undergo the same.

(b) Key Managerial Personnel (KMP''s) and changes, if any

In terms of the provisions of Sections 2(51) and 203 of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the following employees were holding the position of Key Managerial Personnel (KMP) of the Company as on March 31, 2021:

The necessary resolutions for re-appointment of the Directors along with their brief profile have been included in the Notice of the 21^st AGM of the Company, for approval of the members.

• Cessation of Director(s)

Ms. Stephanie Bruce (DIN: 08594969) ceased to hold office as Non-Executive Nominee Director of the Company, with effect from the close of business hours on January 13, 2021, pursuant to withdrawal of her nomination by Standard Life (Mauritius Holdings) 2006 Limited. Accordingly, Mr. Rushad Abadan (DIN: 08035538) who was appointed as Alternate Director to Ms. Stephanie Bruce also ceased to hold office as Alternate Director with effect from January 13, 2021.

• RetirementbyRotation

Section 152(6) of the Act provides that not less than two-thirds of the total number of directors of a public company shall be liable to retire by rotation, and that one-third of such directors as are liable to retire by rotation shall retire from office at every AGM of the Company.

In accordance with the provisions of the Act, Mr. Deepak S. Parekh (DIN: 00009078), NonExecutive Chairman, being longest in office since his last appointment, retires by rotation, and being eligible, offers himself for re-appointment at the 21^st AGM of the Company.

As required under Regulation 36(3) of the SEBI Listing Regulations, particulars of Directors seeking appointment/ re-appointment/ liable to retire by rotation at this AGM are given in the Annexure to the Explanatory Statement enclosed to the AGM Notice.

None of the Directors are disqualified from being appointed as ''Director'', pursuant to Section 164 of the Act or under any other applicable law.

The Company has obtained a Certificate from M/s. N. L. Bhatia & Associates, practising Company Secretaries (Firm''s Registration No. P1996MH055800) confirming that none of the Directors on the Board of the Company are debarred or disqualified from being appointed or continuing as Director on the Board by the Securities and Exchange Board of India, Ministry of Corporate Affairs or any other Regulatory Authority.

Sr No	Name of the KMP	Designation
1	Ms. Vibha Padalkar	Managing Director & CEO
2	Mr. Niraj Shah	Chief Financial Officer
3	Mr. Narendra Gangan	General Counsel, Chief
		Compliance Officer &
		Company Secretary

In terms of the guidelines on Corporate Governance issued by IRDAI, the following senior management employees of the Company were holding positions of KMPs as on March 31, 2021:

Sr. No.	Name of the KMP	Designation
1	Ms. Vibha Padalkar	Managing Director & CEO
2	Mr. Suresh Badami	Executive Director
3	Mr. Niraj Shah	Chief Financial Officer
4	Mr. Parvez Mulla	Chief Operating Officer
5	Mr. Prasun Gajri	Chief Investment Officer
6	Mr. Srinivasan Parthasarathy	Chief Actuary
7	Mr. Pankaj Gupta	Group Head - Distribution Strategy and Alliances
8	Mr. Sanjay Vij	Group Head - Bancassurance
9	Mr. Vibhash Naik	Chief Human Resource Officer
10	Mr. Narendra Gangan	General Counsel, Chief Compliance Officer & Company Secretary
11	Mr. Khushru Sidhwa	Head - Audit and Risk Management

There were no changes in the KMPs during the year.

Performance Evaluation of the Board and its Committees

Pursuant to the provisions of the Act, and the SEBI Listing Regulations, the Board has carried out the annual evaluation of its own performance, and that of its Committees and individual Directors. Further, the Independent Directors met separately, without the attendance of non-Independent Directors and members of the Management, and inter alia reviewed the performance of non-independent directors, and Board as a whole; and performance of the Chairman. They further assessed the quality, quantity and timeliness of the flow of information between the Company Management and the Board.

Overall, the independent directors expressed their satisfaction on the performance and effectiveness of the Board, all the committees, non-independent board members, and the Chairman, and on the quality, quantity and timeliness of flow of information between the Company management and the Board. The NRC also undertook a performance evaluation of individual directors and expressed its satisfaction on performance of each director.

There have been no material observations or suggestions, consequent to such evaluation and review.

''Fit and Proper'' criteria

In accordance with the guidelines for Corporate Governance issued by IRDAI, directors of insurers have to meet ''fit and proper'' criteria prescribed by IRDAI. Accordingly, all Directors of the Company have confirmed compliance with ''fit and proper'' criteria/ norms, prescribed under the guidelines on Corporate Governance issued by IRDAI.

The Company had received declarations from all the Directors in terms of Section 164 of the Act, confirming that they are not disqualified being appointed as director of the other companies.

Directors & Officers (D&O) Liability Insurance

The Company has in place Directors and Officers Liability Insurance (D&O) for all its Directors (including Independent Directors) and Members of the Senior Management Team for such quantum and risks as determined by the Board in line with Regulation 25(10) of the SEBI Listing Regulations.

Succession Planning

The Nomination & Remuneration Committee of the Board oversees matters related to succession planning of Directors, Senior Management and other key executives of the Company.

Meetings of the Board and its Committees, attendance and constitution of various Committees

The details of meetings of the Board and Committees of the Board held during the year, attendance of Directors thereat and constitution of various Committees of the Board, forms part of the Corporate Governance Report, which is enclosed as ''Annexure 1'' to this report.

Management Discussion and Analysis Report, Report on the Corporate Governance and Business Responsibility Report

Pursuant to Regulation 34 of the SEBI Listing Regulations, Management Discussion and Analysis (MD&A) Report and Business Responsibility Report (BRR) is presented in separate sections and forms part of this report.

In compliance with SEBI Listing Regulations, a Report on the Corporate Governance framework of the Company, with certifications as required under

applicable Regulations (including guidelines on Corporate Governance issued by IRDAI) in annexed hereto as ''Annexure 1'' and forms part of this report.

Risk Management Framework

The Company has a defined risk management strategy and a framework that is designed to identify measure, monitor and mitigate various risks. With the outbreak of COVID-19 pandemic, the Company was able to manage risks arising out of the pandemic through timely execution of the Business Continuity Management (BCM) framework as well as safeguards for the IT infrastructure and systems as part of the work from home environment.

The Company has received the coveted RIMS® 2020 Global ERM Award of Distinction, Honorable Mention for Innovation during the year. The award recognises outstanding integration of ERM with governance and strategy to achieve sustainable, long-term value across organisation.

A Board approved Risk Management Policy has been put in place, which is reviewed periodically, to establish appropriate systems or procedures to mitigate all material risks faced by the Company. The risk management architecture of the Company has been detailed under the Enterprise Risk Management section of the Annual Report.

Internal Audit Framework

The Company has institutionalised a robust and comprehensive internal audit framework/mechanism across all the processes, to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals and, compliance with applicable policies, procedures, laws, and regulations.

The Internal Audit function at HDFC Life works closely with other verticals in the ARM (Audit and Risk Management) Group and other assurance functions, considering relevant material inputs from risk registers, compliance reports and external auditor reports etc. The function also tests and reports compliance to Internal Financial Controls over Financial Reporting.

Internal audits are conducted by in-house Internal Audit team and co-sourced auditors. The function also undertakes follow-up on engagement findings and recommendations, in line with the approved framework.

The Internal Audit function reports its findings and follows up status on these findings to the Audit Committee on quarterly basis.

Internal Financial Controls

The Company has institutionalised a robust and comprehensive internal control mechanism across all the major processes. The Company has put in place adequate policies and procedures to ensure that the system of internal financial control is commensurate with the size, scale and complexity of its operations. These systems provide a reasonable assurance in respect of providing financial and operational information, complying with applicable statutes, safeguarding of assets of the Company, prevention and detection of frauds, accuracy and completeness of accounting records and ensuring compliance with corporate policies.

The internal audit, in addition to ensuring compliance to policies, regulations, processes etc., also test and report adequacy of internal financial controls with reference to financial reporting/ statements.

Vigil Mechanism/ Whistle Blower Policy

The Company encourages an open and transparent system of working and dealing amongst its stakeholders. In accordance with Section 177(9) of the Act and Regulation 22 of SEBI Listing Regulations, the Company is required to establish a Vigil Mechanism for Directors and employees to report genuine concerns. The Company has a Policy for Prevention, Detection and Investigation of Frauds and Protection of Whistle Blowers ("the Whistleblower Policy"), which also encourages its employees and various stakeholders to bring to its notice any issue involving compromise/ violation of ethical norms, legal or regulatory provisions, actual or suspected fraud etc., without any fear of reprisal, discrimination, harassment or victimisation of any kind. The details of Whistle Blower complaints/ concerns received, if any, and subsequent actions taken and the functioning of the Whistle Blower Mechanism is reviewed periodically by the Audit Committee and Risk Management Committee of the Board.

Further details of the Vigil Mechanism and Whistle Blower Policy of the Company are provided in the Report on Corporate Governance, which forms part of this report. The Whistle Blower Policy is also available on the Company''s website at https://www.hdfclife. com/aboutus/Investor-Relations

A. Conservation of Energy

In view of the nature of business activity of the Company, the information relating to the conservation of energy, as required under Section 134(3) and Rule 8(3) of Companies (Accounts) Rules, 2014, is not applicable to the Company.

B. Technology Absorption
Sr. No.	Particulars	Remarks
Research and Development (R&D)
1.	Specific areas, in which R&D is carried out by the Company	NA
2.	Benefits derived as a result of the above R&D	NA
3.	Future plan of action	Improved automation using Robotic Process Automation/ Artificial Intelligence including Cognitive, Face Recognition, Voice Analytics/ Cloud Computing/ Cyber Security/ Machine Learning, Enhanced/ simplified digital journeys.
4.	Expenditure on R&D a) Capital b) Recurring c) Total d) Total R&D expenditure as a percentage of total turnover	NA
Technology absorption, adoption and innovation
1.	Efforts made towards technology absorption	Major initiatives undertaken/ completed are: • Upgrade and add capabilities to InstaSuite of applications to reduce the friction in the customer journey. • Seamless API-based partner integration. Suite of tech offerings, which enable frictionless customer journeys such as Hello Selfie, Credit Mart & other widgets • Cloud migration to ensure high availability and scalable architecture • Big Data and analytics models across several business areas and built a range of AI based capabilities • Robotic Process Automation • Customer Service further augmented on Mobile Apps • Quick Claim process - Life Easy, an analytics-driven investigation process
2.	Benefits derived as a result of the above efforts (eg product improvement, cost reduction, product development, import substitution and soon)	• Cloud migration helped increase application availability by reducing downtimes, ability to scale on demand with optimal performance • InstA has 1400 queries for partners, customers and employees and is responding with 99% accuracy over 24 lakh queries/month • By the use of RPA, the organisation has achieved reduction in TAT''s upto 90%, improvement in accuracy upto 25% with reduced risk

Sr. No.	Particulars	Remarks
		• Customer servicing touch-points enabled seamless experience during pandemic times • Microsoft Teams collaboration platform configured for employees and third party to collaborate and work effectively as part of WFH • ML and predictive analytics initiatives like early claims/ risk models help align new business with our risk appetite, persistency models on probability of customers paying next premium, financial consultant (FC) engagement model to predict FC activity levels • Easy claims enabled 3-click journey for 99% of noninvestigative claims settled within 24 hours
3.	In case of imported technology (imported during the last three years reckoned from the beginning of the financial year) - i. The details of technology imported; ii. The year of import; iii. Whether the technology been fully absorbed; iv. If not fully absorbed, areas where absorption has not taken place, and the reasons thereof	NA
4.	Expenditure incurred on Research and Development	NA

Details of foreign exchange earnings and outgo during FY 2020-21 are as follows:

('' in crore)
Foreign Exchange Earnings	252.1
Foreign Exchange Outgo	242.5

5. Subsidiary Companies (i) HDFC Pension Management Company Limited ("HDFC Pension")

HDFC Pension closed FY 2020-21 with assets under management of '' 16,384 crore. HDFC Pension is now the largest pension fund manager in India in the retail and corporate NPS category. It continues to be the fastest growing Pension Fund Manager (PFM) registering a Y-o-Y growth of 98%. Market share of the company grew from 31% to 34% over the year.

HDFC Pension was formed with a strategic rationale of being a significant source of annuity business of HDFC Life and we remain enthused about the strong potential of this business. HDFC Pension has 7.61 lakh customers as on March 31, 2021 out of which 5.09 lakh are in the retail segment and 2.52 lakh are in the corporate segment. HDFC Pension ranks #1 in the corporate segment and #2 in the retail segment amongst all PFMs.

Effective April 1, 2019, central government employees were allowed to choose amongst private owned PFMs and hence this has opened up a big opportunity for HDFC Pension. As on March 31, 2021, HDFC PFM market share is 42% in this category.

Additionally, HDFC Pension started operations as a point of presence (POP) in both retail and corporate NPS segments and has positioned itself strongly in this segment as well. HDFC Pension is ranked #1 POP in terms of new corporate registrations and new corporate subscriber registrations in FY 2020-21 and #8 in new retail subscriber registrations amongst 90 plus POPs.

Financials and Business Outlook A synopsis of financial performance is shown below: ('' in lakh)
Particulars	FY 2020-21	FY 2019-20
Gross Income	550.0	349.9
Total Expenses	539.8	430.7
Profit/ (Loss) before Tax	10.2	(80.8)
Provision for Tax	1.6	-
Profit/ (Loss) after Tax	8.6	(80.8)

(ii) HDFC International Life and Re Company Limited ("HDFC International")

HDFC International is as a wholly-owned subsidiary of HDFC Life, having its office in the Dubai International Financial Centre (DIFC).

Financials and Business Outlook

HDFC International has successfully completed five years of operations and is steadily building experience in the GCC Life reinsurance market. It continues to focus on the need for creation of stable and diversified revenue lines while accelerating revenue and profit growth. HDFC International has been working with ceding insurers to provide reinsurance support for long-term individual life policies and also collaborate on facultative arrangement on group programmes.

During FY 2020-21, HDFC International earned a Gross Income of US$ 13.3 million while its expenses stood at US$ 1 million. The period under review ended with the Company declaring its third successive annual profit, with the figure standing at US$ 0.04 million.

HDFC International''s aim is to partner with insurers and help them realise their potential through reinsurance solutions which enable them to innovate and optimise as per the needs of their market segments.

6. Consolidated Financial Statements

In accordance with Section 129(3) of the Act and SEBI Listing Regulations, Consolidated Financial Statements of the Company along with its wholly-owned Subsidiaries viz., HDFC Pension and HDFC International, have been prepared in accordance with the applicable Accounting Standards issued by Institute of Chartered Accountant of India ("the ICAI") and forms part of this report.

7. Statement containing salient features of the financial statements of Subsidiaries

Pursuant to Section 129(3) of the Act, a statement containing salient features of the financial statements of the subsidiaries in the prescribed Form AOC-1 forms part of the financial statements.

8. Swabhimaan - CorporateSocial Responsibility

As part of its initiatives under Corporate Social Responsibility ("CSR"), the Company has undertaken projects in various areas including education, livelihood, health, environmental sustainability,

COVID-19 response, sanitation, etc. The CSR Policy is framed based on the activities permitted under Schedule VII of the Act.

Consistent with the requirements of Section 135 of the Act and applicable CSR Rules, the Company has setup a Board-level CSR Committee to look after the CSR initiatives. The Committee is headed by Mr. Deepak S. Parekh, as the Chairman, and Mr. Ranjan Mathai and Ms. Vibha Padalkar as Members. The composition of the CSR Committee is in accordance with Section 135 of the Act.

The Ministry of Corporate Affairs ("MCA") has notified the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 on January 22, 2021. The said rules strive to increase the transparency and accountability towards CSR activities by the Companies. In accordance with the requirements of the said Rules, the Company has suitably amended the existing Corporate Social Responsibility Policy ("CSR Policy") and put in place the annual action plan for FY 2021-22. The CSR Initiatives/ Projects undertaken by the Company are in accordance with Schedule VII of the Act.

The annual report on CSR activities is enclosed as ''Annexure 2'' and forms part of this report. The updated CSR Policy of the Company as approved by the Board had been hosted on the Company''s website at https:// www.hdfclife.com/about-us/csr

As prescribed under Section 135 of the Act, certain Companies are required to spend at least 2% of their average net profits made during the three immediately preceding financial years, in pursuance of their CSR Policy. Accordingly, the Company had spent '' 20 crore towards various CSR activities specified in Schedule VII of the Act, during FY 2020-21.

9. Annual Return

Pursuant to the amendments to Section 134(3)(a) and Section 92(3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return (Form MGT-7) for the financial year ended March 31, 2021, is hosted on the website of the Company at https://www.hdfclife.com/ aboutus/Investor-Relations

10. Related Party Transactions

Pursuant to Section 177 read with Section 188 of the Act, the Audit Committee approves the related party transactions of the Company on a quarterly basis. All

the related party transactions entered during the year under review were in the ordinary course of business and on an arm''s length basis, thereby not requiring a separate Board/ Shareholders'' approval.

The Related Party Transactions Policy of the Company ensures timely approvals and reporting of the concerned transactions between the Company and its related parties to the concerned authorities. The Policy on Related Party Transactions is placed on the Company''s website at the under mentioned link: https://www.hdfclife.com/aboutus/Investor-Relations

During the year, there were no material transactions with related parties, which were not in the ordinary course of business and not on an arm''s length basis.

M/s. B.K. Khare & Co., Chartered Accountants, have reviewed the related party transactions for FY 2020-21 and their reports were placed before the Audit Committee for review, along with details of such transactions.

As per the requirements of the Accounting Standards (AS) - 18 issued by the ICAI on ''Related Party Disclosures'', the details of related party transactions entered into by the Company are covered under Notes forming part of the financial statements.

11. Ind AS Roadmap

IRDAI had issued a circular dated June 28, 2017, deferring the implementation date for Ind AS 117, Insurance Contracts, for insurance sector in India for a period of two years to be effective from FY 2020-21. This circular was withdrawn later through IRDAI circular dated January 21, 2020 notifying that effective date of implementation shall be decided after finalisation of IFRS 17 by the International Accounting Standard Board (IASB).

The IASB had issued the new standard IFRS 17, Insurance Contracts, initially with effective date on or after January 1, 2021 which was further deferred from March 2020 to period beginning on or after January 1, 2023. Further, in June 2020, the IASB amended IFRS 17 to address concerns and implementation challenges that were identified after publication of IFRS 17.

In order to remain converged with IFRS amended standards, in December 2020, the ICAI issued an exposure draft of Amendments to Ind AS 117, for comments from public, including in the exposure draft an effective date of implementation to be annual reporting periods beginning on or after April 1, 2023.

The final date of Ind AS implementation is yet to be announced by IRDAI.

12. Statutory Auditors

M/s. G.M. Kapadia & Co., Chartered Accountants (Firm Registration No. 104767W) and M/s. Price Waterhouse Chartered Accountants LLP (Firm Registration No. 012754N/N500016), are the Joint Statutory Auditors of the Company.

The Joint Statutory Auditors have not made any qualification/ reservation/ adverse remarks or disclaimer in their report for FY 2020-21.

As per the IRDAI Regulations, a Statutory Auditor can conduct audit of insurance company for a maximum period of 5 years at a time. Further, as per the Act, an audit firm can be appointed as Statutory Auditor for not more than two terms of five (5) consecutive years.

Members may note that appointment of M/s. G.M. Kapadia & Co., Chartered Accountants was approved by the members in the 16^th AGM of the Company held on July 14, 2016, for a period of five (5) consecutive years

i.e. until the conclusion of the 21^st AGM. Appointment of M/s. Price Waterhouse Chartered Accountants LLP, Chartered Accountants was approved by the members in the 19^th AGM held on July 23, 2019, for a second term of five (5) consecutive years, i.e. up to the conclusion of the 24^th AGM.

As per the provisions of the Act, read with rules made thereunder, the current term of M/s. G.M. Kapadia & Co., Chartered Accountants, ends at the conclusion of the 21^st AGM of the Company. The Board of Directors, based on the recommendation of the Audit Committee has recommended re-appointment of M/s. G.M. Kapadia & Co., Chartered Accountants, for second term of five (5) consecutive years from the conclusion of 21^st AGM until the conclusion of the 26^th AGM of the Company.

The resolution seeking revision in remuneration payable to Joint Statutory Auditors in connection with the audit of the accounts of the Company for the FY 2021-22 and the re-appointment of M/s. G.M. Kapadia & Co., Chartered Accountants for the second term of five (5) consecutive years has been included in the Notice of the 21^st AGM for approval of members.

13. Independent Auditors'' Report

M/s. Price Waterhouse Chartered Accountants LLP, and M/s. G.M. Kapadia & Co., Chartered Accountants, Joint Statutory Auditors of the Company, have audited the

financial statements of the Company for FY 2020-21 and their Report is enclosed and forms part of this Report.

Audit observations, if any, and corrective actions taken by the Management are presented to the Audit Committee of the Board from time to time.

There are no qualifications, reservations or adverse remarks made in the Auditors'' Report.

14. Reporting of frauds by Auditors

During the year under review, there have been no instances of fraud reported by the Auditors to the Audit Committee of the Board, pursuant to Section 143(12) of the Act and the Rules made thereunder.

15. Legal Update

There are no significant and material orders were passed by the regulators, courts or tribunals that impacted the going concern status of the Company, or which can potentially impact the Company''s future operations.

16. Material changes and commitments affecting the financial position

There have been no material changes and commitments, affecting the financial position of the Company, which have occurred between the end of the financial year of the Company to which the Balance Sheet relates and the date of this report.

17. Secretarial Audit Report

Pursuant to the requirements of Section 204 of the Act, and Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. N. L. Bhatia & Associates, Practising Company Secretaries (Firm Registration No. P1996MH055800), for conducting the Secretarial Audit for the financial year ended March 31, 2021. The Secretarial Audit Report for FY 2020-21 issued by M/s. N. L. Bhatia & Associates, Practising Company Secretaries is enclosed as Annexure 3'' and forms part of this report.

18. Secretarial Standards

The Company has complied with Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) issued by the Institute of Company Secretaries of India (ICSI).

19. Maintenance of Cost Records

Being insurance company, the Company is not required to maintain cost records.

HDFC Limited
Date of transaction	Number of shares sold	% to total paid-up capital*
June 3, 2020	2,60,00,000	1.29
November 13, 2020#	25,48,750	0.13
Total	2,85,48,750

* % to total paid capital refers to paid up capital as on date of transaction mentioned above.

#Pursuant to the directions of the Reserve Bank of India and National Housing Bank''s Circular No. NHB (ND)/DRS/Policy Circular No. 71/2014-15 dated April 22, 2015, HDFC Limited had reduced its stake to 50% on November13,2020. Hence, as per Section 19 of the Act, the Company has ceased to be a subsidiary of HDFC Limited with effect from November13,2020.

Standard Life
Date of transaction	Number of shares sold	% to total paid-up capital*
June 4, 2020	4,00,00,000	1.98
December 3, 2020	2,77,72,684	1.38
Total	6,77,72,684
* % to total paid capital refers to paid up capital as on date of transaction mentioned above.

20. Change in the nature of business

During the year under review, there has been no change in the nature of business of the Company.

21. Deposits

The Company has not accepted any deposits during the year under review and hence provisions of the Act relating to acceptance of Public Deposits are not applicable to the Company.

22. Loans, Guarantees or Investments

In line with the clarification given by the Ministry of Corporate Affairs under the Removal of Difficulty Order dated February 13, 2015, the provisions of Section 186 of the Act relating to loans, guarantees and investments not applicable to the Company.

23. Employee Stock Option Schemes

The Company has formulated various Employee Stock Option Scheme(s) ("ESOP schemes") which helps it to retain and attract right talent and in administering the issue of Stock Options to its eligible Employees including that of its subsidiary companies. The NRC administers the Company''s ESOP schemes. There has been no material variation in the terms of the options granted under any of the ESOP schemes and all the ESOP schemes are in compliance with the SEBI (Share Based Employee Benefits) Regulations, 2014 ("SBEB Regulations").

The Annual Certificate on compliance with SBEB Regulations, issued by Statutory Auditors of the Company is being made available for inspection at the forthcoming AGM of the Company.

During the year under review, there were no instances of loan granted by the Company to its employees for purchasing/ subscribing its shares.

The statutory disclosures as mandated under the SBEB Regulations, have been hosted on the website of the Company at https://www.hdfclife.com/about-us/Investor-Relations

24. Sale of shares by Promoters

During the year, Housing Development Finance Corporation Limited ("HDFC Limited") and Standard Life (Mauritius Holdings) 2006 Limited ("Standard Life"), Promoters of the Company sold certain equity shares of the Company. The details of which are furnished below:

The sale of shares by HDFC Ltd had resulted in dilution of their shareholding from 51.44% as on March 31, 2020 to 49.97% as on March 31, 2021.

Further, the sale of shares by Standard Life resulted in dilution in its shareholding in the Company from 12.25% as on March 31, 2020 to 8.88% as on March 31, 2021.

25. Appointed Actuary''s Certificate

The Appointed Actuary has provided certificate on valuation and actuarial assumptions.

26. Prevention and Redressal of Sexual Harassment Policy, and disclosure under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Internal Complaints Committee (ICC):

The Company has instituted an Apex Committee and four zonal Internal Complaints Committees (ICCs) for redressal and timely management of sexual harassment complaints. The central Apex Committee is chaired by a senior woman leader of the Company. The Committee also has an external senior representative member who is a subject matter expert. All zonal ICCs have minimum of 50% women representatives, and

safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. The annual accounts have been prepared on a going concern basis;

v. I nternal financial controls have been laid down to be followed by the Company and such internal financial controls are adequate and operating effectively; and

vi. Proper systems have been devised to ensure compliance with the provisions of all applicable laws, and such systems were adequate and operating effectively.

28. Appreciation and Acknowledgement

The Directors place on record their gratitude for all the policyholders, shareholders, customers, distributors, and business associates for reposing their trust and confidence in the Company. Directors would also take this opportunity to express their appreciation for the hard work and dedication of the employees and for their untiring commitment; and the senior management for continuing success of the business in difficult times.

The Directors further take this opportunity to record their gratitude to Housing Development Finance Corporation Limited and Standard Life (Mauritius Holdings) 2006 Limited, Promoters of the Company for their invaluable and continued support and guidance and also to Insurance Regulatory and Development Authority of India (''IRDAI''), Securities and Exchange Board of India (''SEBI''), Ministry of Corporate Affairs (''MCA''), Reserve Bank of India (''RBI''), Pension Fund Regulatory and Development Authority (''PFRDA''), Life Insurance Council, Stock Exchanges, Depositories, Debenture Trustees and other governmental and regulatory authorities for their support, guidance and co-operation from time to time.

their functioning is overseen by the central Apex Committee. The Risk Management Committee of the Board is periodically updated on matters arising out of the Policy/Framework, as well as on certain incidents, if any.

Prevention and Redressal of Sexual Harassment (PRSH) Policy and Awareness:

The Company has zero tolerance towards sexual harassment and is committed to provide a safe environment for all. Organisation''s PRSH policy is inclusive irrespective of gender or sexual orientation of an individual. It also includes situations around work from home scenarios.

To create awareness on this sensitive and important topic, an informative campaign was driven for all the employees. Also, the Prevention and Redressal of Sexual Harassment (PRSH) module on the Company''s self learning application (MLearn) has been revised and made mandatory for all the employees.

Pursuant to the said Act, the details regarding number of complaints received, disposed, and pending during FY 2020-21, pertaining to incidents under the above framework/ law are as follows:

Particulars Numbers

Number of complaints filed during the 35

financial year

Number of complaints closed during the 27

financial year

Number of complaints pending as on 8

March 31, 2021_

27. Directors'' Responsibility Statement

In accordance with the requirements of Section 134 of the Act, the Board of Directors state that:

i. I n the preparation of the annual accounts, the applicable accounting standards have been followed, along with proper explanation relating to material departures (if any);

ii. Such accounting policies have been selected and applied consistently, and judgments and estimates made that are reasonable and prudent, so as to give a true and fair view of the Company''s state of affairs, as on March 31, 2021, and of the Company''s profit for the year ended on that date;

iii. Proper and sufficient care has been taken for the maintenance of adequate accounting records, in accordance with the provisions of the Act for

On behalf of the Board of Directors Sd/- Deepak S. Parekh Place: Mumbai Chairman Date: April 26, 2021 (DIN: 00009078)

---

Mar 31, 2019

The Directors are pleased to present the 19^th Annual Report of HDFC Life Insurance Company Limited (“Company” / “HDFC Life”), together with the Audited Financial Statements of the Company, for the year ended March 31, 2019 (“FY 2019”).

Standalone Financial Performance, Business Review and Outlook Financial Performance

(Rs. Crs)

Particulars	FY 2019 (Audited)	FY 2018 (Audited)
Individual business:
a. New business premium	14,971	11,349
(i) Regular premium	5,058	4,738
(ii) Single premium	9,913	6,611
b. Renewal premium	14,215	12,215
TOTAL PREMIUM	29,186	23,564
PROFIT AFTER TAX	1,277	1,109

Other key parameters

(Rs. Crs)

Particulars	FY 2019	FY 2018
Individual APE	5,204	4,887
Group new business premium	7,327	5,406
Assets Under Management	1,25,552	1,06,603
Embedded value	18,301	15,216
Overall new business margins (post overrun)	24.6%	23.2%

Note: Embedded Value and New business margins for FY 2019 and FY 2018 based on external review

Business Review and Outlook Industry Outlook

India’s rapid rate of economic growth over the past decade is expected to continue. The outlook for the Indian economy is positive, with a growth projection of 7.3% in 2019 and 7.5% in 2020, according to the International Monetory Fund (IMF). This is expected to be supported by the continued recovery of investments and robust consumption, thus retaining India’s place as the fastest growing major economy in the world. The life insurance industry should continue to grow well on the back of robust macros, favourable demographics, emerging trend of financialisation of savings, newer product segments, recent regulatory developments that shall help the industry to develop innovative products, amongst other factors.

In FY 2019, the life insurance industry showcased healthy growth in terms of total premiums, despite tepidness in capital market and slowdown in Non Banking Finance Companies (NBFCs). Within the life insurance industry, private players continued to grow at a faster rate compared to Life Insurance Corporation of India (LIC) across both the individual and group segments. This is evidenced by the fact that private players market share has continued to increase in FY 2019 as well. The private players saw a 22% growth in overall new business received premium as against total industry growth of 11% during FY 2019.

Bancassurance continued to be the primary mode of distribution. However, the channel saw some contraction on account of increasing focus by the private players on proprietary channels, with 57% of total individual reported new business being sourced through this channel during the nine months ended December 31, 2018. (Source: Public disclosures)

In terms of products, private players have increased their focus on the under-penetrated protection segment on retail as well as on group front. While Unit Linked Insurance Products (ULIPs) continue to account for a large share of private players product suite, there was a decline in its share amongst other products in FY 2019, primarily due to tepid capital markets in the latter half of the year. Growth in other lines of business continued to be healthy as compared to previous year.

Company Performance Player of Scale

We continue to be the market leaders with regards to total new business premium. The total new business premium increased to Rs. 14,971 Crs, showcasing a growth of 32% over previous year (PY: Rs. 11,349 Crs), while group new business premium showcased strong growth of 36% to end at Rs. 7,327 Crs in FY 2019.

Our total premium during FY 2019 was Rs. 29,186 Crs compared to Rs. 23,564 Crs during FY 2018, registering a sustainable growth of 24%, primarily due to healthy new business growth of 32% and growth of 16% in renewal premium.

The Company continues to focus on its stated long term strategy as described below:

Driving balance across the business:

HDFC Life continued to expand its distribution reach, via several new tie-ups and partnerships comprising 227 bancassurance partners across NBFCs, Micro Finance Institutions (MFIs), Small Finance Bank (SFBs), etc. and 39 partnerships within the non-traditional ecosystems as on March 31, 2019. Last year the Company had 266 partnerships across the two sub categories, reiterating our focus on ensuring balance in distribution and enhancing penetration through such partnerships.

HDFC Life has always tried to maintain a well diversified distribution mix, with bancassurance channel accounting for 26% of its total new business premium for FY 2019, 7% contribution by Agency Channel, 16% by Direct Channel, 2% by Broker Channel and Group business contributing 49%. Within the group segment, protection continued to be a major contributor and formed 51% of the Company’s group new business. All the channels continue to be independently profitable based on post overrun new business margins during FY 2019.

Innovation in the product space continues to be one of HDFC Life’s key differentiators, with the intent of maintaining a customer centric, balanced and profitable product suite. This is reflected in the product mix for FY 2019, with ULIPs and conventional products accounting for 55% and 45% respectively of the Individual Annual Premium Equivalent (APE). The Company also continued its focus on protection business, wherein its contribution to individual new business APE increased to 7%, up from 5% in the previous year. In terms of total new business received premium, the protection segment contributed 27% in FY 2019, compared to 26% in the previous year. Annuity has emerged as a strong product segment, accounting for 17% of total new business premium and 5% of Individual APE for FY 2019. Several new products like Classic One, Sanchay Plus, amongst others, were launched this year.

The new business sum assured increased to Rs. 6,05,820 Crs (from Rs. 4,73,445 Crs previous year), showcasing healthy growth of 28%, thus outlining the Company’s focus on the protection business. Underlying number of lives insured by the Company during the year increased by 55% from 3.3 Crs lives to 5.1 Crs lives.

Re-imagining life insurance business, leveraging technology, and catering to continuously evolving customer preferences:

As the customer is becoming increasingly tech savvy, their needs are also changing rapidly. Strong technological focus acts as a key differentiator in today’s dynamic environment. HDFC Life aims to be theleadingdigital insurer, as evidenced by its sustained investment in technology over the years, thus enabling the Company to produce a unique customer service model. A number of initiatives were undertaken to provide the customer a cashless and paperless policy buying experience. Today, the Company’s customers have 24*7 access to premium receipts and policy statements on the self-service bots on e-mail, twitter and chat. More than 3 lac queries are handled on these channels on a monthly basis. Moreover, 90% of all requests are now serviced in less than 8 hours with more than 75% serviced in less than four hours.

The Company has also continued to take steps towards providing a seamless buying experience to the end customer, both directly and by deploying seamless insurance journeys within the partner core transactions. Some examples are enhancements in the consumer journey on mobile app, content management system enabling faster rollout of new business rules and e-Insurance account integrations for dematerialisation of insurance policies. Our online channel continues to be our fastest growing channel accounting for 9% of our individual APE in FY 2019.

HDFC Life has a technologically advanced and user friendly corporate website. During FY 2019, 99.9% of its new business was initiated through digital platforms. 78.9% of the renewal payment came through online modes. 54 internal processes were automated with the help of robotics and 57.5% of post sales verification calls were completed through InstaVerify (video based authentication mobile app).

The dynamic environment means that the number of distribution touch points across both the traditional and non-traditional ecosystems is on the rise. To diversify the distribution mix further, the Company has tied up with several new-age non-traditional partners like Uber, Paytm and ET Money.

Persistency ratios continue to be steady across various cohorts. The 13^th month persistency based on total premium including individual and group business was stable at 87%. The 61^st month persistency improved from 51% in previous year to 52% during FY 2019.

Maintaining profitable growth

The Embedded Value (IEV methodology) was Rs. 18,301 as on March 31, 2019 with Operating return on Embedded Value (EVOP/Opening Embedded value) of 20.1% during FY 2019 versus 21.5% for previous year.

HDFC Life continues to maintain healthy post overrun new business margin (based on actual expenses) of 24.6% versus 23.2% for previous year.

The profit after tax for HDFC Life stood at Rs. 1,277 Crs in FY 2019, versus Rs. 1,109 Crs in FY 2018, showcasing a growth of 15%. The Company ended FY 2019 with an accumulated profit of Rs. 3,274 Crs, post payment of dividend of Rs. 396 Crs (including dividend distribution tax (DDT)). The Company declared dividend for the sixth consecutive year, 21% higher than previous year.

The Operating expenses (Opex) to total premium ratio moved to 13.2% as compared to 13.5% in FY 2018, reflecting continued investment in growth opportunities and innovation.

The Assets Under Management (AUM) of the Company stood at Rs. 1,25,552 Crs as on March 31, 2019 versus Rs. 1,06,603 Crs, as on March 31, 2018, registering a stable growth of 18%. This was driven primarily by healthy business performance and strong persistency. HDFC Life maintained a debt-equity proportion of 62:38 as on March 31, 2019.

HDFC Life remains focused on the protection and retirement spaces in order to harness the opportunity offered in terms of the large protection gap and increasing longevity. The Company continued to deliver consistent performance across all key metrics. We believe that our investment in technology coupled with our focus on innovation would enable us to sustain our performance across market cycles. In line with our stated strategy, we will continue to enhance our stakeholders experience, while delivering profitable growth to our shareholders.

Risk management is an integral part of the overall business strategy and planning for HDFC Life and is used to proactively manage risks and create value for our stakeholders. The Enterprise Risk Management (ERM) framework within the Company operates as a feed-in system to various internal and external stakeholders, management, and the Board of Directors. It encompasses a comprehensive set of practices, which has been integrated at a grass root level within all functions serving the core business as well as shared services.

Products

HDFC Life has always been committed to provide the best customer experience, in terms of the products that meet their life stage needs and enable fulfillment of their longterm financial goals. It is this commitment that has served as a constant motivation to innovate and offer value to our customers.

HDFC Life has a wide range of products including Protection, Pension, Savings, Investment and Health products for individuals as well as homogenous groups. The Company’s product portfolio has strengthened further over the last financial year with the addition of new and innovative products. With a view to cater to the evolving customer needs, the Company launched a guaranteed income product as well as enhanced a new age ULIP The performance of these new products is testimony of getting the right solution to the market.

During FY 2019, HDFC Life launched following key products:

1. HDFC Life Classic One: This is one of its kind product which offers joint life cover on second death basis, thereby reducing the cost of insurance for higher investment return. This product is an ideal legacy creation tool where the nominee gets the insurance benefit in case of death of the two lives covered in this policy. The owner of the policy enjoys the investment benefit through the tenure of the policy.

2. Click 2 Wealth: This is a ULIP that incentivizes every premium during first 5 years and also returns the mortality charges at maturity. This product has multiple options to suit various needs ranging from insurance cum investment for kids or spouse, retirement planning or just saving for key financial milestones.

3. HDFC Life Sanchay Plus: This has multiple options to cater to customers across different walks of life. This works excellently well for young parents and people nearing retirement to secure a guaranteed income for defined period. This product is unique in terms of the duration for which guaranteed income is provided, which can be from 10 years to 30 years or even up to age 99, offering best in class returns compared to similar products in the industry today.

At the end of FY 2019, HDFC Life had 38 Individual and 11 Group products, with 8 Riders available for its customers.

Category of Products	Numbers	Category of Products	Numbers
ULIP Life	12	Protection	7
Par Life	7	Group	11
Non Par Life	4	Riders	8
Pension/Annuity	8

Human Resource and People Development

The Company’s goal is to stay invested in employee’s career growth, provide them with development opportunities, recognize their efforts and enable them to imbibe our value system.

Hence, our core focus areas are right hiring, developing people for higher productivity and creating an engaged talent force. Digitization continues to remain at the heart of all our people processes.

With front line sales comprising a large portion of our employee base, we focus on creating a robust pipeline through alliances with universities and academia for a train and hire model. Our campus hiring program “Jigyasa” continues to induct fresh minds from coveted B-schools for Managerial roles.

Our talent management philosophy focuses on developing people for higher productivity in their current role and building a strong pipeline of future ready talent. Over the years, we have successfully institutionalized talent review and development processes across middle and senior management levels.

For career opportunities that arise in the organization, our internal talent is given the first opportunity to apply through the Internal Job Posting process. We encourage employees to opt for cross functional movements, thereby broadening their professional exposure.

On the learning and development front, we have adopted a contemporary and progressive learning ecosystem to engage the workforce of today and this includes web enabled, micro size learning hoisted on various platforms such as M-Learn and M-Connect.

At HDFC Life, we are committed to creating and sustaining a high performance culture across the organization. Therefore, our performance management system is deeply entrenched in the principles of balanced scorecard. At the same time, our compensation philosophy ensures we benchmark ourselves constantly with the external market in order to stay attractive as a potential employer. We ensure that we differentiate and reward high performance internally.

Particulars of Employees

The statement containing particulars of employees as required under Section 197 of the Companies Act, 2013 (“the Act”) read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as ‘Annexure 5’ to the Directors’ Report.

In accordance with the provisions of Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and particulars of the top ten employees in terms of remuneration drawn are set out in the Annexure to this report. In terms of the provisions of Section 136(1) of the Act read with the rules thereunder, the Directors’ Report is being sent to all shareholders of the Company excluding the said annexure. Any shareholder interested in obtaining a copy of the annexure may write to the Company.

Investments

FY 2019 started on an optimistic note as the large global economies benefited from a synchronized pick-up in growth that had been underway for a few quarters. The US economy saw a marked acceleration as the fiscal stimulus provided by tax cuts, at the beginning of the year, took effect. Other large economies, too, saw an improvement in their growth indicators. Commodity prices, notably oil prices, appreciated in response to the improvement in growth prospects and inflation readings in the developed countries picked up. Along with the pick-up in growth, oil prices were also supported by production cuts by the Organisation of the Petroleum Exporting Countries (OPEC) and non-OPEC countries. Oil prices rose significantly during the September quarter.

The year was also characterized by an escalation in the ‘Trade War’ between China and the US, as the US imposed tariffs on a large number of imports from China, and China retaliated in same measure. Protectionist rhetoric picked up in trade between the US and other countries as well, and global trade volumes slowed down over the latter half of the year.

The slowdown in global trade coincided with a slowing down of economic activity in major developed economies and large emerging economies, as well. Oil prices retreated as rapidly as they had risen in the previous quarters. Monetary policies saw a marked shift from a tightening bias to an easing bias, in a bid to support growth.

The domestic economy, too, followed the gyrations of the global economy as Gross Domestic Product (GDP) growth clocked a rapid 8% growth in the first quarter of the year and slowed to an estimated 6.6% by the last quarter of the year. Domestic inflation stayed low and consistently undershot RBI projections. RBI raised policy interest rates twice in the first half of the year, only to reverse stance and cut interest rates in the second half. Bond yields followed suit, as they rose in the initial half of the year and eased thereafter, as RBI switched the interest rate cycle.

Earnings growth for listed companies saw greater traction, led by financials, as the cycle of non-performing asset recognition and provisions tapered down. The differences in sector performances were quite stark during the year, as also the differences in performances between the larger companies versus the smaller ones. The large cap indices out-performed the mid and small cap indices over the year.

The investment funds of the Company were managed as per the stated objectives laid down in the Investment Policy, Asset-Liability Management Policy (‘ALM Policy’), and respective Funds’ objectives. These policies lay down the asset allocation and risk appetite guidelines for different funds, some of which have in-built guarantees. Fund allocation is tracked on a regular basis and is backed with suitable assets. During FY 2019, the asset allocation in the Company’s conventional and shareholder funds was in line with the ALM policy.

HDFC Life’s total AUM as on March 31, 2019, was Rs. 125,552 Crs. This comprised assets of Rs. 63,378 Crs held under the unit-linked funds and Rs. 62,174 Crs held under the conventional funds and shareholders’ funds. The corresponding numbers for the previous year were Rs. 57,185 Crs and Rs. 49,418 Crs respectively.

Information Technology

The Company continued on its journey of leveraging technology to transform the business.

The first wave primarily involved API based integrations with partners systems to enable seamless journeys for partners’ customers. The second wave was to integrate with the partner systems thereby enabling their employees to work in their own platforms and yet have all of HDFC Life capabilities available to them. The number of STP integrations with partner systems has been increasing every year and this capability to embed HDFC Life capabilities into the partner eco-systems provides us a competitive advantage.

Mobility for sales is now the de-facto platform for all sales activities. The adoption of all the tools is close to 85% and apps are being used by partners as well. The instaverify app has helped in substantial cost savings and productivity gains. The next phase of mobility is now unification & simplification. HDFC Life has now embarked on unifying all of its apps into a single simple user experience.

HDFC Life has created a concept of pre approved sum assured (PASA) which is a combination of business rules and data science. This involves creating a customer proposition by the data sciences team of both companies. This will be implemented with a few partners shortly and discussions are on with many others.

The next generation online platform was also rolled out with a view to providing a fresh new experience for the online customers. The online team continues to strengthen its technical capabilities and align to the specific demands of the online customers, be it product offering or journey simplification.

In continuing to be the leader onto cloud adoption, HDFC Life has embarked on migrating a major part of the data center into the cloud. This provides a tremendous benefit both in terms of cost, operational efficiencies and the ability to scale on demand. Some of the new systems are being built using a server less architecture which is the next level in cloud adoption. The data lake which was created on the cloud is continually being enhanced which is leading to newer capabilities being built on the same.

Our digital transformation team has been engaging with all our sales partners to design and build simplified sales journey and have also created a number of digital capabilities which enable us to stitch up customer journey as per the needs of the partner.

This year, the Company created a dedicated team named Datalabs focused on data sciences to harness the power of data. This team primarily consists of data scientists whose focus is on running advanced analytics and building AI/ ML models to achieve the benefits of data driven decision making.

The Datalabs team, in partnership with reinsurers, has used machine language capabilities to build models that would help HDFC Life to identify low risk life segments with high precision. This has enabled us to onboard a larger set of customers, rather than rejecting requests basis broad risk indicators like negative pincodes, low education levels, etc. The team has also developed facial recognition models that can factor in ageing related changes to correctly identify customers. This would help us to authenticate branch walk-in customers & avert instances of payout related frauds. Apart from this, a number of propensity models were deployed to predict customer behaviour and optimize our internal efforts to retain customers and present new value propositions to the customer.

Information security and cyber security is a focus area by the HDFC Life management team. As part of the ISO 27001:2013 assessment program, independent auditors validated and certified the controls implemented by HDFC Life. The second phase of cyber security controls was also implemented. These included key initiatives such as next generation security operations center, setting up an elastic search based platform for threat hunting and domain name security as part of the advanced network security initiative. An advanced threat protection control was also implemented.

In line with the company’s constant quest for excellence, the technology team at HDFC Life continues to receive recognition and has received 7 awards for various initiatives and achievements throughout the year.

Awards

The Company received various awards and accolades during the year under review across financial disclosures, customer service, technology, digital solutions, products, human resources, marketing, etc. The Company was recognised as one of the ‘The Top 20 Best Places to work for in BFSI Sector-2019 by Great Place To Work’ during FY 2019. The Company also received Gold award at the LACP Vision Awards 2017/18 for the fourth consecutive year and award for Excellence in Financial Reporting for the Annual Report FY 2018 from ICAI (The Institute of Chartered Accountants of India).

At the Dun & Bradstreet BFSI Awards & Summit 2019, the Company was awarded with India’s Leading Life Insurance Company in the Private Category and was adjudged as one of the 100 best companies to work for at the 2018 Working Mother and AVTAR Best Companies for Women in India. Money Wealth Creator Awards 2018 awarded the Company ‘Most Promising Debut in the Big League’ for launching a successful IPO. Brand Z recognised the Company as one of the top 75 most valuable Indian Brands.

Regulatory Landscape

During the year under review, the Insurance Regulatory and Development Authority of India (“IRDAI” / “Authority”) issued various regulations/ guidelines to further aid the growth of industry. Some of the key regulations/ guidelines etc., as notified include:

- Re-insurance Regulations were notified in November 2018 replacing the erstwhile Regulations. The new Regulations focuses on transaction with Indian Re-insurers transacting Re-insurance business, other Re-insurers, Foreign Reinsurers, International

Financial Services Centre (IFSC) Insurance Office (IIO), and Cross Border Reinsurers. It obligates insurers to maintain minimum retention to safeguard itself towards the risk that it assumes for its own accounts, elaborates the procedures to be followed for reinsurance placements, reinsurance arrangements etc.

- Pursuant to the judgement of the Hon’ble Supreme Court in the Aadhaar matter whereby the relevant portions of the Prevention of Money Laundering (Maintenance of Records) Rules, 2005 were struck down, the mandatory linking of Aadhaar number of the customers is no longer a requirement.

Rural and Social Sector Obligations

HDFC Life maintains dedicated focus on undertaking rural business, and endeavors to tailor its products and processes to support these businesses, considering customer needs.

As part of its overall business, the Company has achieved prescribed regulatory targets of social and rural business, as follows:

- Rural business - Achieved - 20.10% versus prescribed requirement of 20% of overall business

- Social business - Insured - 13,329,331 social lives versus prescribed 1,660,984 social lives

Solvency

The IRDAI requires life insurers to maintain a minimum Solvency Ratio of 150%. The Solvency Ratio is calculated as specified in the IRDA (Assets, Liabilities, and Solvency Margin of Insurers) Regulations, 2016. As compared to the minimum requirement of 150%, the Company’s Solvency Ratio, as at March 31, 2019, was 188%.

Dividend & Reserves

During FY 2019, HDFC Life declared an interim dividend of Rs. 1.63 per equity share (face value of Rs. 10/- each) as compared to Rs. 1.36 per equity share (face value of Rs. 10/each) for FY 2018. The interim dividend was paid to the Shareholders in March 2019. The Board has recommended the same to be confirmed as the Final Dividend for FY 2019. Necessary resolution is being proposed for the purpose at the ensuing 19^th Annual General Meeting (“AGM”).

The dividend declared is in accordance with the principles and criteria as set out in the Dividend Distribution Policy which has been approved by the Board of Directors of the Company. In terms of Regulation 43A of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations”) the Dividend Distribution Policy of the Company is disclosed on the website at https://www.hdfclife.com/about-us/Investor-Relations.

The Company has carried forward a total of Rs. 880.4 Crs to its Reserves. The Company had accumulated profits of Rs. 3,274 Crs on March 31, 2019.

Capital & Shares

The Company’s paid up equity share capital increased marginally from Rs. 20,117,400,430 as on March 31, 2018 to Rs. 20,173,811,570 as on March 31, 2019 pursuant to allotment of 2,546,354 equity shares upon exercise of Options under Employees Stock Option Scheme 2014; allotment of 2,312,790 equity shares upon exercise of Options under Employees Stock Option Scheme 2015 and allotment of 781,970 equity shares upon exercise of Options under Employees Stock Option Scheme 2016.

The Shareholding Pattern is provided as a part of Form No. MGT-9 which is annexed as ‘Annexure 3’ to the Directors’ Report and also available on the website of the Company at https://www.hdfclife.com/about-us/Investor-Relations.

Change of Name of the Company

During the year, the corporate name of the Company was changed from “HDFC Standard Life Insurance Company Limited” to “HDFC Life Insurance Company Limited”, pursuant to receipt of fresh Certificate of Incorporation dated January 17, 2019, issued by the office of Registrar of Companies, Mumbai. The name of the Company was changed to align the corporate name with its brand name.

Unclaimed Suspense Account

Pursuant to Regulation 39 read with Part F of schedule V of SEBI Listing Obligations details of unclaimed suspense account are given below:

Sr. No.	Category/Name of the Shareholder	No. of Shareholders	No. of Shares
1	Aggregate number of shareholders and the outstanding shares lying unclaimed as on April 1, 2018	91	8,750
2	Number of shareholders who approached listed entity for transfer of shares from suspense account during the year	90	8,700
3	Number of shareholders to whom shares were transferred from suspense account during the year	90	8,700
4	Aggregate Number of shareholders and the outstanding shares lying unclaimed as on March 31, 2019	1	50

In terms of the said Regulation, voting rights on the equity shares lying in the said Unclaimed Suspense Account shall remain frozen till the rightful owner claims such shares.

Remuneration Policy

The remuneration policy, including the criteria for remuneration of Non-Executive Directors is recommended by the Nomination & Remuneration Committee and approved by the Board. The key objective of the remuneration policy is to ensure that it is aligned to the overall performance of the Company. The policy ensures that it is fair and reasonable to attract and retain necessary talent, linked to attaining performance benchmarks and involves a judicious balance of fixed and variable components. The remuneration policy is placed on the website of the Company at https://www.hdfclife.com/ about-us/Investor-Relations. The remuneration paid to the Directors is in line with the remuneration policy of the Company and in compliance with guidelines issued by the IRDAI.

Remuneration of Directors

1. Non-Executive Directors

The remuneration of Non-Executive Directors consists of sitting fees and remuneration of Independent Directors consists of sitting fees and commission. The fees payable to the Non-Executive Directors including Independent Directors for attending a Meeting of the Board or Committee thereof is decided by the Board of Directors from time to time and is within the limits prescribed under the provisions of the Act.

The Board after considering performance of NonExecutive Directors has approved the proposal for payment of profit related commission for a period of five years effective from April 1, 2017 to each NonExecutive Independent Director of the Company. The members of the Company at the AGM held on July 20, 2018 have also approved the payment of profit related commission every year to each NonExecutive Independent Director of the Company. The payments would be subject to the regulatory provisions applicable to the Company and availability of net profits at the end of each financial year. Sitting fees paid to Non-Executive Independent Directors are outside the purview of the above limits.

Details of the remuneration of Non-Executive Directors including Independent Directors are provided in Form No. MGT-9, which forms part of this Report.

2. Executive Directors

The Nomination & Remuneration Committee determines and recommends to the Board the amount of remuneration, including performance bonus and perquisites, payable to the Executive Directors subject to the approval of members of the Company and approval of IRDAI. The annual increments of the Executive Directors are linked to their performance and are decided by the Nomination & Remuneration Committee.

Details of the remuneration of Executive Directors including Independent Directors are provided in Form No. MGT-9, which forms part of this Report.

3. Disclosures pursuant to IRDAI Guidelines

IRDAI guidelines on Remuneration of Non-executive Directors and Managing Director/Chief Executive Officer/Whole Time Directors of Insurers (IRDAI Guidelines) issued vide reference no. IRDA/F&A/GDL/ LSTD/155/08/2016 dated August 5, 2016 requires the Company to make following disclosures on remuneration on an annual basis in their Annual Report:

A. Qualitative Disclosures

i. I nformation relating to the design and structure of remuneration processes and the key features and objectives of remuneration policy.

Information relating to the design and structure of remuneration processes

The Nomination & Remuneration Committee (“the Committee”) is the body which oversees the remuneration aspects. The functions of the Committee include reviewing and approving, on an annual basis, the corporate goals and objectives with respect to the compensation for the Chief Executive Officer/ Whole Time Director/s. The Committee also evaluates at least once in a year the Chief Executive Officer’s/ Whole Time Director’s performance in light of the established goals and objectives and based upon these evaluations, set their annual compensation, including salary, bonus, equity and non-equity incentive compensations. The compensation structure is within the overall limits as laid down by the members of the Company, and further subject to statutory and regulatory approvals including that of the IRDAI or such other body or authority as may be applicable.

The Company has under the guidance of the Board and the Committee, followed compensation practices intended to drive meritocracy and fairness. The Committee has oversight over compensation and defines Contribution Management System (CMS) and Variable Pay for Performance (VPP) philosophy for Executive Directors and the organizational performance norms for VPP based on the financial and strategic plan approved by the Board. The Committee assesses organisational performance as well as the individual performance for Executive Directors. Based on its assessment, it makes recommendations to the Board regarding compensation for Executive Directors and employees, including senior management and key management personnel.

Objectives of remuneration policy

The purpose of the remuneration policy is to put in place a framework for remuneration of Directors, Key Managerial Personnel and other employees, keeping in view various regulatory and other requirements. This policy is guided by the set of principles and objectives as particularly envisaged under Section 178 of the Act, which inter alia includes principles pertaining to determining the qualifications, positive attributes, integrity and independence of Director etc.

Key features of remuneration policy Attract and retain: Remuneration packages shall be designed to attract high caliber executives in a competitive global market and remunerate executives fairly and responsibly. The remuneration shall be competitive and based on the individual responsibilities and performance.

Motivate and reward: Remuneration is designed to motivate delivery of the Company’s key business strategies, create a strong performance orientated environment and reward achievement of meaningful targets over the short and long-term.

Non-monetary benefits: The Executives will be entitled to customary non-monetary benefits such as company cars and company health care, telephone etc. In addition thereto, in individual cases company housing and other benefits may also be offered.

ii. Description of the ways in which current and future risks are taken into account in the remuneration process

HDFC Life ensures the effectual positioning of the compensation in line with the overall risk framework of the organisation. Different aspects of remuneration have been designed to ensure their applicability over a timeframe and cover the associated risks.

- The total compensation is aligned to the pre-defined balanced scorecard covering the people, financial, customer, and operational indicators of performance.

- The compensation payouts are regulated by compliant guidelines of the Malpractice matrix under the enterprise risk management framework of the Company. Deferred payouts are guided and controlled by the framework in cases of integrity or any such related parameter.

- Significant component of the remuneration are spread across the time horizon risk in the form of Short Term and Long Term Incentive Plans.

iii. Description of the ways in which the insurer seeks to link performance during a performance measurement period with levels of remuneration

HDFC Life follows a compensation philosophy of pay for performance and meritocratic growth in the organisation. There is linkage between pay and performance. In line with Company’s pay for performance philosophy the compensation is designed to ensure that every employee will have at least a part of the total Compensation which will be linked to individual and/or Company performance. For senior management, the variable payouts depend upon the individual contribution and overall performance of the organisation. The performance is assessed on predefined balanced scorecard and the payout rate varies with the level of performance where significant merit increase and variable payouts are awarded to top performers. The organisation strives for higher variable pay at senior levels thereby ensuring more focus on performance driven payouts.

B. Quantitative Disclosures

The following table sets forth, for the period indicated, the details of quantitative disclosure for remuneration of Executive Directors:

Sr. No.	Particular	As on March 31, 2019 (in Crs)
1	Number of WTD/ CEO/ MD having received a variable remuneration award during the financial year	2
2	Number and total amount of sign on awards made during the financial year	-
3	Details of guaranteed bonus, if any, paid as joining/ sign on bonus	-
4	Total amount of outstanding deferred remuneration, split into cash, shares and share linked instruments and other form	-
5	Total amount of deferred remuneration paid out in the financial year	-
6	Breakup of amount of remuneration awarded for the financial year to show fixed and variable, deferred and nondeferred
	Fixed	5.65
	Variable:
	Deferred	-
	Non-Deferred	3.77
	Share Linked Instrument	-

Evaluation of performance of the Board

SEBI had issued a guidance note on board evaluation to be carried out by listed companies, which inter alia contained the process of evaluation, including the criteria to be adopted for evaluation, action plan, disclosures to stakeholders, frequency of evaluation and responsibilities.

The Company has assessed the methodology and criteria to evaluate the performance of the Board as a whole and its committees as well as the performance of each Director individually, including the Chairman and aligned the template with the criteria laid in the said guidance note. The said criteria inter alia includes various parameters like involvement, quest for improvement, teamwork, governance, knowledge & competency, understanding & fulfillment of functions, initiatives, availability & attendance, commitment, contribution in board meetings and integrity.

Pursuant to and in line with the requirements prescribed under the Act and the SEBI guidance note, the Board of Directors carried out an annual evaluation of its performance, and that of its Committees and Individual Directors. Further, the Independent Directors met separately, without the attendance of non-Independent Directors and Members of the Management, and inter alia reviewed the performance of non-independent directors, and Board as a whole; and performance of the Chairman. They further assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board.

Overall, the Independent Directors expressed their satisfaction on the performance and effectiveness of the Board, all the Committees, Individual non-Independent Board Members, and the Chairman, and on the quality, quantity and timeliness of flow of information between the Company Management and the Board. The Independent Directors expressed their satisfaction with the conduct and efficiency of the Board and Board Committees’

The Nomination & Remuneration Committee also undertook an evaluation of Individual Director’s performance and expressed its satisfaction on performance of each Director.

There has been no material adverse observation or conclusion, consequent to such evaluation and review.

Directors

As on the date of this Report, the Company’s Board comprises of 16 Directors, including two Alternate Directors. There are 14 Non-Executive Directors (including 7 Independent Directors, and 2 Alternate Directors) and 2 Executive Directors. The Company’s Board also has 3 women Directors, which includes an independent woman director.

Changes during the year under review

Mr. AKT Chari resigned from the Directorship of the Company w.e.f. March 30, 2019 due to his personal commitments. The Board of Directors places on record, their appreciation for the contributions made by Mr. AKT Chari during his tenure with the Company.

The Board of Company was further strengthened during the year with the induction of Ms. Bharti Gupta Ramola as Additional Director w.e.f. February 12, 2019, designated as Independent Director. The Company has received a notice under Section 160 of the Act, from a member signifying his intention to propose the candidature of Ms. Bharti Gupta Ramola to the office of Director.

In line with the provisions of the Act, the appointment of Ms. Bharti Gupta Ramola is proposed to be regularised at the forthcoming Annual General Meeting for a period of 5 years from the date of her initial appointment i.e. February 12, 2019, and the relevant disclosures for her appointment forms part of the Notice of the 19^th Annual General Meeting.

During the year under review, in line with the applicable provisions under the Act, Mr. Rushad Abadan and Mr. James Aird had vacated office as Alternate Directors to Sir Gerry Grimstone and Mr. Norman Keith Skeoch respectively, at such times when Sir Gerry Grimstone and Mr. Norman Keith Skeoch had visited India to attend Board Meetings; and they were re-appointed as Alternate Director to Sir Gerry Grimstone and Mr. Norman Keith Skeoch with the Board’s approval, following the date of the relevant Board Meetings.

Independent Directors

The Company has seven Independent Directors on the Board viz Dr. JJ Irani, Mr. VK Viswanathan, Mr. Prasad Chandran, Mr. Sumit Bose, Mr. Ranjan Mathai, Mr. Ketan Dalal and Ms. Bharti Gupta Ramola. In accordance with the provisions of the Act, the Independent Directors are not liable to retire by rotation.

Pursuant to the provisions of the Act, members of the Company in the 14^th Annual General Meeting held on June 24, 2014 had appointed Mr. VK Viswanathan and Mr Prasad Chandran as Independent Directors to hold office for five consecutive years for a term up to April 24, 2019 and Mr. VK Viswanathan and Mr. Prasad Chandran are eligible for re-appointment as Independent Directors for another term of five consecutive years. Consequent to expiry of their first term of appointment on April 24, 2019 and based on the recommendation of the Nomination and Remuneration Committee, Mr. VK Viswanathan and Mr. Prasad Chandran have been appointed as Additional Directors (categorised as Independent Directors). The Board thereby recommends for the approval of the Members through a Special Resolution at the ensuing AGM, re-appointment of Mr. VK Viswanathan and Mr. Prasad Chandran as an Independent Directors for second term of five consecutive years from April 25, 2019 upto April 24, 2024.

Declaration by Independent Directors

All Independent Directors have provided declarations that they meet the criteria of independence as laid down under Section 149 of the Act, and Regulation 16 of the SEBI Listing Regulations. The said declaration was noted by the Board of Directors at its Meeting held on April 26, 2019.

Directors retiring by rotation (being Directors other than Independent Directors)

In accordance with the provisions of the Act, read with the Articles of Association of the Company, Sir Gerry Grimstone and Mr. Keki Mistry, being Non-Independent Directors, are liable to retire by rotation at the ensuing 19^th Annual General Meeting of the Company.

Sir Gerry Grimstone is not seeking re-appointment at the ensuing AGM. The Board places on record its sincere appreciation and recognition for the valuable contribution and services rendered by Sir Gerry Grimstone during his tenure as a Director on the Board of the Company.

Mr. Keki Mistry retires by rotation and being eligible, offers himself for re-appointment. A resolution seeking Members approval for his re-appointment forms part of the 19^th AGM Notice.

Continuation of Directorship

In accordance with the SEBI Listing Regulations, no listed company shall appoint or continue the Directorship of a Non-Executive Director who has attained the age of 75 years, unless a special resolution is passed to that effect. Mr. Deepak Parekh, Chairman of the Company would attain the age of seventy five years on October 18, 2019. It is proposed to continue the Directorship of Mr. Deepak Parekh. Accordingly, resolution for the purpose of continuation of Mr. Deepak Parekh is being proposed at the 19^th Annual General Meeting. The relevant disclosures for continuation of his appointment forms part of the Notice of the 19^th Annual General Meeting.

‘Fit and Proper’ criteria

In accordance with Guidelines for Corporate Governance issued by IRDAI, the Directors of insurers have to meet the ‘fit and proper’ criteria. Accordingly, all the Directors of the Company have confirmed compliance with the ‘fit and proper’ criteria, prescribed under the Corporate Governance Guidelines issued by the IRDAI.

The Company has also received declarations from all its Directors as per Section 164 of the Act, confirming that they are not disqualified from being appointed as Directors of the Company.

The details of the Board and Committee meetings, and the attendance of Directors thereat, forms part of the Corporate Governance Report, which is annexed as Annexure 1 to this Directors’ Report.

Management Discussion and Analysis Report, Report on Corporate Governance and Business Responsibility Report

In accordance with the SEBI Listing Regulations, the Management Discussion and Analysis Report and Business Responsibility Report forms part of this report.

A report on the Corporate Governance framework within the Company, with certification as required under the IRDAI Regulations is annexed hereto as Annexure 1 and forms part of this report.

Legal Update

During the FY 2019, no significant and material orders were passed by the regulators, courts or tribunals, that impacted the going concern status of the Company, or which can potentially impact the Company’s future operations.

Secretarial Standards

During the FY 2019, the Company is in compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India with respect to board and general meetings.

Key Managerial Personnel Changes in the Key Managerial Personnel (KMP) during the year

Name of KMP*	Appointment / Resignation/ Change in Designation / No change	With effect from
Mr Amitabh Chaudhry Managing Director and Chief Executive Officer	Resignation	September 8, 2018
Ms Vibha Padalkar Managing Director and Chief Executive Officer	Change in designation**	September 12, 2018
Mr Suresh Badami Executive Director	Appointment	September 17, 2018
Mr Niraj Shah Chief Financial Officer	Appointment	March 1, 2019
Mr Narendra Gangan Executive Vice President, Company Secretary and Head - Compliance and Legal	No change	NA

* Designated as the “Key Managerial Personnel” of the Company as per the Act.

** Ms Vibha Padalkar was Executive Director & Chief Financial Officer of the Company till September 11,2018. She was appointed as Managing Director & Chief Executive Officer for a period of 3 (three) years w.e.f. September 12, 2018. Ms Vibha Padalkar also continued as Chief Financial Officer for interim period till appointment of new Chief Financial Officer i.e. up to February28,2019.

Risk Management Policy

The Company has a defined Risk Management Strategy and a Framework which is designed to identify, measure, monitor and mitigate various risks. A Board approved Risk Management Policy has been put in place to establish appropriate systems or procedures to mitigate all material risks faced by the Company. The said Policy is reviewed periodically by the Risk Management Committee of the Board.

The risk management architecture of the Company has been detailed under the Enterprise Risk Management section of the Annual Report.

Internal Audit Framework

The Company has institutionalised a robust and comprehensive internal audit framework/mechanism across all the processes, to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals and, compliance with applicable policies, procedures, laws, and regulations.

The Internal Audit function at HDFC Life works closely with other verticals in the ARM (Audit and Risk Management) Group and other assurance functions, considering relevant material inputs from risk registers, compliance reports and external auditor reports etc. The function also tests and reports compliance to Internal Financial Controls over Financial Reporting.

Internal audits are conducted by in-house Internal Audit team and co-sourced auditors. The function also undertakes follow-up on engagement findings and recommendations, in line with the approved framework.

The Internal Audit function reports its findings and follow-up status on these findings to the Audit Committee on quarterly basis.

Internal Financial Controls

The Company has institutionalised a robust and comprehensive internal control mechanism across all the major processes. The Company has put in place adequate policies and procedures to ensure that the system of internal financial control is commensurate with the size, scale and complexity of its operations. These systems provide a reasonable assurance in respect of providing financial and operational information, complying with applicable statutes, safeguarding of assets of the Company, prevention and detection of frauds, accuracy and completeness of accounting records and ensuring compliance with corporate policies.

The internal audit, in addition to ensuring compliance to policies, regulations, processes etc., also test and report adequacy of internal financial controls with reference to financial reporting/ statements.

Risk management is an integral part of the overall business strategy and planning for HDFC Life and is used to proactively manage risks and create value for our stakeholders. The Enterprise Risk Management (ERM) framework within the Company operates as a feed-in system to various internal and external stakeholders, management, and the Board of Directors. It encompasses a comprehensive set of practices, which has been integrated at a grass root level within all functions serving the core business as well as shared services.

Vigil mechanism

The Company has put in place a Whistleblower Policy and Framework. More details are provided in the Corporate Governance Report, which is annexed as Annexure 1 to this Directors’ Report.

Particulars regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Section 134 of the Act, read with the Companies (Accounts) Rules, 2014, requires disclosure of certain specified information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo in the Directors’ Report.

The disclosure relating to conservation of energy does not apply to companies in the Life insurance sector and hence, the Company is exempted therefrom. Disclosure in respect of technology absorption, and foreign exchange earnings and outgo is given below:

Foreign Exchange Earnings and Outgo

The details of foreign exchange earnings and outgo during the FY 2019 are as follows:

- Earnings Rs. 160.9 Crs

- Outgo Rs. 189.7 Crs

Subsidiary Companies

1. HDFC Pension Management Company Limited (“HDFC Pension”)

HDFC Pension, a wholly-owned subsidiary of the Company, started its operations in August 2013. With around 3.6 lacs Customers and AUM of Rs. 5,165 Crs as on March 31, 2019. HDFC Pension is the fastest growing Pension Fund Manager under the National Pension System (NPS) architecture.

Financials and Business Outlook A synopsis of financial performance as of FY 2019 HDFC Pension is as below:

(Rs. lacs)

Particulars	FY 2019	FY 2018
Gross Income Total Expenses Profit/ (Loss) before Tax Provision for Tax Profit/ (Loss) after Tax	274.2 308.9 (34.7) - (34.7)	255.3 267.4 (12.1) - (12.1)

HDFC Pension continued to be the largest Private Pension Fund Manager in terms of AUM. Amongst all the Pension Fund Managers, HDFC Pension ranked first in Corporate base and Corporate Subscribers’ base and ranked second in Retail Subscriber base and AUM as on March 31, 2019.

During the year, HDFC Pension was granted Certificate of Registration dated February 13, 2019 (Registration code: POP246022019) by the PFRDA for acting as Point of Presence under Nation Pension System, to provide PoP - NPS - Distribution and Servicing services for public at large.

2. HDFC International Life and Re Company Limited (“HDFC International”)

In the year 2016, HDFC International was established as a Wholly Owned Subsidiary, in Dubai International Financial Centre (DIFC). HDFC International was set up with the primary objective of offering life reinsurance capacity in the UAE and other GCC nations.

HDFC International is regulated by the Dubai Financial Services Authority (“DFSA”) and is licensed to undertake life reinsurance business. It operates in and from the DIFC and currently offering reinsurance solutions to ceding insurers based in the Gulf Cooperation Council (“GCC”) and Middle East & North Africa (“MENA”) regions. It provides risk-transfer solutions, prudent underwriting solutions and value added services, among others, across individual life, group life and group credit life lines of business.

In December 2018, HDFC International has been assigned a long-term insurer financial strength rating of “BBB” with a stable outlook by S&P Global Ratings.

Financials and Business Outlook During the FY 2019, HDFC International earned a Gross Income of US$ 4,261,825 while its expenses stood at US$ 659,277. The period under review ended with a major milestone, with the company declaring its maiden annual profit of US$ 210,108.

HDFC International has successfully completed three financial years of operations and is steadily building experience in the GCC Life Reinsurance market. It has expeditiously accelerated with revenue growth that is two times of the previous year’s revenues and has focused on the need for creation of stable and diversified revenue lines. Working closely with clients is the central focus of the strategy and HDFC International looks to establish meaningful and long term business associations which are mutually win-win. HDFC International has been working with ceding insurers to provide reinsurance support for long term individual life policies and also collaborate on facultative arrangement on group programs.

HDFC International’s aim is to become partners in the journey of the insurers to help them realise their potential through reinsurance solutions which enable and empower them to innovate and optimise as per the needs of their market segments.

The Company has complied with the provisions of Foreign Exchange Management Act with regard to its downstream investment.

Swabhimaan / Corporate Social Responsibility

As part of its initiativesunderCorporateSocial Responsibility (“CSR”), the Company has undertaken projects in various areas including Education, Livelihood, Health, and Rural Development. These Projects are undertaken in line with the CSR Policy and are in accordance with Schedule VII of the Act, read with the Rules framed under the Act.

A more detailed write-up including details of the CSR projects undertaken, their monitoring, details on the implementing agencies, amounts spent and the requisite Responsibility Statement are given in Annexure 2 of this Report, and forms part of this Directors’ Report.

Annual Return

As per the provisions of the Act, an extract of the Annual Return of the Company in the prescribed Form No. MGT - 9 has been annexed as Annexure - 3 to the Directors’ Report, and is also available on the website of the Company at https://www.hdfclife.com/about-us/ Investor-Relations.

Related Party Transactions

Pursuant to Section 177, read with Section 188 of the Act, the Audit Committee of the Board of Directors approves the related party transactions of the Company on a quarterly basis. Related party transactions entered during the year under review were in the ordinary course of business and on an arm’s length basis, thus not requiring Board/ Shareholders’ approval.

The Related Party Transactions policy of the Company ensures proper approval and reporting of the concerned transactions between the Company and related parties. The policy on Related Party Transactions is placed on the Company’s website at https://www.hdfclife.com/about-us/Investor-Relations.

During the year, there were no material individual transactions with related parties, which were not in the ordinary course of business and on an arm’s length basis.

M/s G.M. Kapadia & Co, Chartered Accountants, reviewed the related party transactions for each quarter, and their report was placed at the meetings of the Audit Committee, along with details of such transactions.

As per Accounting Standard (AS) 18 on ‘Related Party Disclosures’, the details of related party transactions entered into by the Company are also included in the Notes to Accounts.

Ind AS Roadmap

The Ministry of Corporate Affairs (MCA) had earlier laid down the roadmap for implementation of Ind AS for the insurance sector through its press release on January 18, 2016, requiring insurance companies to prepare Ind AS based financial statements for accounting periods beginning from April 1, 2018 onwards with one year comparatives.

During FY 2018, the International Accounting Standard Board (IASB) issued the new standard IFRS 17- Insurance Contracts on May 18, 2017 with effective date of annual periods beginning on or after January 1, 2021.

Consequently, the IRDAI issued a circular dated June 28, 2017, deferring the implementation of Ind AS for insurance sector in India for a period of two years to be effective from FY 2021. The said circular however required the submission of proforma Ind AS financial statements on a quarterly basis. The Company has submitted the proforma Ind AS financial statements to the Authority on a quarterly basis in FY 2019.

During FY 2018, the IRDAI constituted a working group on new standard on Insurance contracts (equivalent to IFRS 17 Insurance Contracts) to review the new standard and to identify relevant areas/aspects which require suitable adoption in the Indian context and to identify changes arising out of new standard to be carried out in regulations/ guidelines.

During FY 2019, the working group on the new standard submitted its report to the Authority with its recommendations and proposed draft regulations based on IFRS 17 and Exposure draft of Ind AS 117 issued by ‘The Institute of Chartered Accountants of India (ICAI) on February 12, 2018.

Internationally, the IASB proposed to defer the effective date of IFRS 17 to annual periods beginning on or after January 1, 2022. The Authority is also evaluating such deferral of implementation of Ind AS in India jointly with MCA, however further direction from the Authority is awaited.

Secretarial Audit Report

The Secretarial Audit as required under the Act, was undertaken by M/s NL Bhatia & Associates, Practising Company Secretaries. The Auditor has not made any qualification, reservation or adverse remark or disclaimer in his Report for FY 2019.

The Secretarial Audit Report for the FY 2019 is annexed as Annexure 4 and forms part of this Report.

Auditors

M/s Price Waterhouse Chartered Accountants LLP (Firm Registration No. 012754N/N500016), and M/s G.M. Kapadia & Co, Chartered Accountants (Firm Registration No. 104767W), are the Joint Statutory Auditors of the Company.

The Joint Statutory Auditors have not made any qualification, reservation, adverse remark or disclaimer in their report for FY 2019. Further, during the FY 2019, the Joint Statutory Auditors have not come across any reportable incident of fraud to the Audit Committee or Board of Directors.

As per the IRDAI Regulations, a Statutory Auditor can conduct audit of an insurance Company for a maximum period of 5 years at a time. Further, as per the Act, an audit firm can be appointed as Statutory Auditor for not more than two terms of five consecutive years.

M/s Price Waterhouse Chartered Accountants LLP, and M/s G.M. Kapadia & Co, Chartered Accountants hold office as joint statutory auditors until the conclusion of 19^th Annual General Meeting (“AGM”) and 21^st AGM respectively.

As per the provisions of the Act, read with rules made thereunder, the first term of M/s Price Waterhouse Chartered Accountants LLP, expires at the conclusion of this AGM. The Board of Directors based on the recommendation of the Audit Committee have recommended re-appointment of M/s Price Waterhouse Chartered Accountants LLP, Chartered Accountants, for second term of five (5) consecutive years from the conclusion of this AGM till the conclusion of Twenty Fourth AGM of the Company, along with existing Joint Statutory Auditor viz., M/s G.M. Kapadia & Co, Chartered Accountants.

The Company has received a confirmation from M/s Price Waterhouse Chartered Accountants LLP, to the effect that their appointment, if approved, at the ensuing AGM, would be in terms of Sections 139 and 141 of the Act, and rules made thereunder.

The Ministry of Corporate Affairs (MCA) vide notification dated May 7, 2018 has done away with the requirement of ratification of appointment of Statutory Auditors at every AGM, as per the first proviso of Section 139 of the Act, and the Companies (Audit and Auditors) Amendment Rules, 2018. Accordingly, ratification of the appointment of M/s GM Kapadia & Co, Chartered Accountants, at the ensuing AGM is not required. However, M/s GM Kapadia & Co, Chartered Accountants, have confirmed their eligibility to act as the Auditors of the Company in terms of Sections 139 and 141 of the Act, and rules made thereunder.

Accordingly, in view of the provisions of the Act, and IRDAI Regulations, the Shareholders are requested to approve the proposal for re-appointment of M/s Price Waterhouse Chartered Accountants LLP, to hold office as Joint Statutory Auditors until the conclusion of 24^th AGM of the Company. The Resolution seeking re-appointment and remuneration payable to Joint Statutory Auditors in connection with the audit of the accounts of the Company for the financial year 2019-20 has been included in the Notice of the ensuing AGM.

Deposits

The Company has not accepted any deposits during the year under review.

Loans, guarantees or investments

In terms of the provisions of sub-Section 11 of Section 186 of the Act, read with the clarification given by the Ministry of Corporate Affairs under the Removal of Difficulty Order dated February 13, 2015, the provisions of Section 186 of the Act relating to loans, guarantees and investments do not apply to the Company.

Employees Stock Option Scheme

In line with the practice of incentivizing the employees through issue of stock options, the Company has in the past granted stock options and continues to grant stock options to its eligible employees (including employees of its subsidiary companies) under the various employee stock option schemes formulated from time to time.

During the year under review, there were no instances of loan granted by the Company to its employees for purchasing/ subscribing its shares.

In line with the requirements under the Act, the Company has formulated various Employee Stock Option Scheme(s) for the purpose of administering the issue of Stock Options to its eligible Employees including that of its subsidiary companies. There has been no material variation in the terms of the options granted under any of these schemes and all the schemes are in compliance with the SEBI (Share Based Employee Benefits) Regulations, 2014. The disclosures as required under the said Regulations have been placed on the website of the Company at https://www.hdfclife.com/about-us/Investor-Relations.

During FY 2019, the members of the Company at its AGM had approved the issuance of 31,00,000 stock options representing 31,00,000 equity shares of Rs. 10 each under Employee Stock Option Scheme-2018. Subsequently, the Nomination & Remuneration Committee of Directors of the Company at its Meeting held on October 1, 2018 had approved the grant of 18,89,126 stock options under Employee Stock Option Scheme-2018.

Material changes and Comments affecting the financial position

There have been no material changes and commitments, affecting the financial position of the Company, which have occurred between the end of the financial year of the Company to which the Balance Sheet relates and the date of this report.

Directors’ Responsibility Statement

In accordance with the requirements of Section 134 of the Act, the Board of Directors state that:

i. In the preparation of the annual accounts, the applicable accounting standards have been followed, along with proper explanation relating to material departures (ifany);

ii. Such accounting policies have been selected and applied consistently, and judgments and estimates made that are reasonable and prudent, so as to give a true and fair view of the Company’s state of affairs, as on March 31, 2019, and of the Company’s profit for the year ended on that date;

iii. Proper and sufficient care has been taken for the maintenance of adequate accounting records, in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. The annual accounts have been prepared on a going concern basis;

v. Internal financial controls have been laid down to be followed by the Company and such internal financial controls are adequate and operating effectively; and

vi. Proper systems have been devised to ensure compliance with the provisions of all applicable laws, and such systems were adequate and operating effectively,

Appreciation and Acknowledgement

The Directors thank the policyholders, shareholders, customers, distributors, and business associates for reposing their trust in the Company. The Directors also thank the Company’s employees for their continued hard work, dedication and commitment; and the Management for continuing success of the business.

The Directors further take this opportunity to thank Housing Development Finance Corporation Limited and Standard Life for their invaluable and continued support and guidance. The Directors also thank the Insurance Regulatory and Development Authority of India, Securities and Exchange Board of India, Ministry of Corporate Affairs, Reserve Bank of India, Pension Fund Regulatory and Development Authority, Life Insurance Council, National Stock Exchange of India Limited, BSE Limited, depositories and other governmental and other bodies and authorities for their support, advice and direction provided from time to time.

On behalf of the Board of Directors

Sd/-

Mumbai Deepak S Parekh

April 26, 2019 Chairman

---

Mar 31, 2018

Directors'' Report

TO, THE MEMBERS HDFC STANDARD LIFE INSURANCE COMPANY LIMITED

The Directors are pleased to present the 18^th Annual Report of HDFC Standard Life Insurance Company Limited ("Company" / "HDFC Life"), together with the Audited Financial Statements of the Company, for the year ended March 31, 2018 ("FY 2018").

Standalone Financial Performance, Business Review and Outlook Financial Performance

(Rs, Crs)
Particulars	FY 2018	FY 2017
	(Audited)	(Audited)
Individual business:
a. New business premium	11,350	8,621
(i) Regular premium	4,739	3,657
(ii) Single premium	6,611	4,964
b. Renewal premium	12,215	10,824
TOTAL PREMIUM	23,564	19,445
PROFIT AFTER TAX	1,109	892
Other key parameters
Particulars	FY 2018	FY 2017
Individual APE	4,887	3,739
Group new business premium	5,406	4,420
Assets Under Management	1,06,603	91,742
Embedded value	15,216	12,471
Overall new business margins	23.2%	22.0%
(post overrun)

Note: Embedded Value and New business margins for FY 2018 and FY 2017 based on external review

Business Review and Outlook Industry Outlook

The growth trajectory in life insurance business continued post demonetisation drive, in FY 2018, aided by the macroeconomic factors and demographic profile.

Within the life insurance industry, private life insurers maintained faster growth momentum and consolidated their market share in Individual segment while Life Insurance Corporation of India ("LIC") continues to dominate the Group segment.

Improving macro trends in emerging markets and India, increase in financialisation of savings and robust equity markets was reflected in 24% growth in Individual New Business Weighted Received Premia (WRP) and 4% growth in Group premia for the private players, during FY 2018. At an industry level, the sector witnessed growth of 19% in Individual New Business WRP and 5% in Group premia during FY 2018.

There has been a steady increase in the proportion of business generated through Bancassurance contributing 54% of total individual reported new business during nine months ended December 31, 2017 across all private players (Source: Public disclosures). On the product front, capital market performance and transparent product structures have helped increase the pull for Unit Linked Insurance Products ("ULIP"). With an objective to boost profitability, private players have also been focusing on protection (Term) business in last few years.

Company Performance Business Performance

The total new business premium during FY 2018 increased by 32%, to Rs, 11,350 Crs versus Rs, 8,621 Crs for last year. Of this, our individual Annual Premium Equivalent ("APE") grew by 31% to Rs, 4,887 Crs and group new business premium showcased strong growth of 22%.

Our total premium during FY 2018 was Rs, 23,564 Crs compared to Rs, 19,445 Crs during FY 2017, registering a robust growth of 21% driven by strong new business growth and 13% growth in our total renewal premium, from Rs, 10,824 Crs, to Rs, 12,215 Crs.

The Company continues to focus on its stated long term strategy as described below:

Driving balance across the business:

HDFC Life continued to widen its presence and distribution touch-points, through several new tie-ups and partnerships comprising 149 Bancassurance partners across NBFCs (Non-Banking Financial Company), MFIs (Micro Finance Institutions), SFBs (Small Finance Bank), etc. and 22 partnerships within non-traditional ecosystems as on March 31, 2018. Last year Company had 126 partnerships across the two sub categories, reiterating our focus on ensuring balance in distribution and enhancing penetration through such partnerships.

HDFC Life has a diversified distribution mix, with Bancassurance channel accounting for 33% of its total new business premium for FY 2018, 7% contribution by Agency Channel, 10% by Direct Channel, 2% by Broker Channel and Group business contributing 48%. Within group segment, protection continued to be a key focus area and formed 50% of the Company’s group new business. During FY 2018, all the channels delivered healthy double digit growth over last year and continued to be independently profitable, based on post overrun new business margins.

HDFC Life strives to maintain a balanced product mix with ULIPs contributing 57% and Conventional products forming 43% of the Individual APE. The Company also continued its focus on protection business, wherein its contribution to individual new business APE increased to 5%, up from 4% in the last year. Contribution of the Protection segment to total new business received premium increased from 22% in FY 2017 to 26% during FY 2018.

The new business sum assured increased by 22% to Rs, 473,445 Crs (from Rs, 388,757 Crs last year), clearly demonstrating the focus on protection driven business. Underlying number of lives insured by the Company during the year increased from 2.1 Cr lives last year to 3.3 Cr lives.

Re-imagining life insurance business, leveraging technology, and catering to continuously evolving customer preferences:

With the increasing digital footprint and adaptation of technology across financial services sector, the Company continues to focus on identifying niche areas to leverage technology and reimagining the life insurance journey. In order to remain competitive, while improving ease of customer on-boarding and servicing, the Company continued to invest in innovation across business operations which are reflected in the new distribution partnership tie ups and new products being sold by the Company.

HDFC Life has been a pioneer in introducing niche products catering to untapped protection and pension needs in India. During FY 2018, the Company continued to drive product innovation, launching new products like Cardiac Care, Group Health, Pension Guarantee Plan etc., targeting varied customer needs.

Digitisation remained a key theme for the Company to migrate customers online, both directly and through deep integration with the partners. These are reflected across enhancements in consumer journey on mobile app, content management system enabling faster rollout of new business rules and e-Insurance account integrations for dematerialisation of insurance policies amongst other things.

HDFC Life continued to focus on mobility driven solutions, which are augmented through asset light operations, paperless customer journey, straight through processing and mobile enabled sales and service approach.

HDFC Life has a technologically advanced and mobile friendly corporate website. During FY 2018, 99.9% of its new business was initiated through digital platforms. 74% of the Renewal payment came through online modes. HDFC Life leverages automation and robotics thereby automating 88 internal processes. About 96% of the front line sales force is active on digital platforms and 54% of post sales verification calls were completed through InstaVerify (video based authentication mobile app). More than 44,000 queries and transactions were processed through policy servicing mobile app InstaServ.

The persistency ratios continue to trend strongly across various cohorts. The 13^th month persistency based on total premium including individual and group business increased to 87% versus 84% last year, however 61^st month persistency was at 51% compared to 59% last year. This reduction was primarily due to the impact of specific cohorts of business written in FY 2013.

Maintain profitable growth

In FY 2018, HDFC Life earned Profit after tax (PAT) of Rs, 1,109 Crs, versus Rs, 892 Crs in FY 2017, i.e. an increase of 24%. The Company ended FY 2018 with an accumulated profit of Rs, 2,394 Crs, post payment of dividend (including dividend distribution tax (DDT)) of Rs, 329 Crs.

The Embedded Value (IEV methodology) was Rs, 15,216 Crs as on March 31, 2018 with robust Operating return on Embedded Value (EVOP/Opening Embedded value) of 21.5% during FY 2018 versus 21.7% for last year.

HDFC Life continues to maintain healthy post overrun new business margin (based on actual expenses) of 23.2% versus 22.0% for last year.

The Operating expenses (Opex) to total premium ratio was at 13.5%, which reflects continued investment in growth opportunities i.e. strengthening our distribution and technology.

The Assets under Management (AUM) of the Company crossed the milestone of Rs,1 trillion mark during FY 2018 which reflected a growth of 16% to Rs, 106,603 Crs as on March 31, 2018 versus Rs, 91,742 Crs, as on March 31, 2017 backed by healthy business performance and persistency, HDFC Life maintained a steady debt-equity proportion of 61:39 as on March 31, 2018.

HDFC Life continues to harness the long term growth potential of the sector, with specific focus on protection. The Company had a robust year with strong growth and continued to deliver consistent performance across all metrics. The balanced product mix, diversified distribution network and customer centric approach has helped deliver profitable growth and shareholder value. In line with the stated strategy, the Company will continue to work hard and invest in leveraging technology and re-imagine the life insurance business.

Policyholder and Customer Service

Customer Centricity is a core value at HDFC Life and the Company is constantly working towards empowering the customer to realise all policy specific needs instantly and effortlessly. With this vision, several initiatives spanning departments and policy stages were undertaken during FY

2018 including the following:

1. I mproved customer onboarding with faster issuance by deployment of an automated underwriting tool which processes 88% of the applications. 60% customers are now verified through the Instaverify app making it a seamless process, and the Company expect this to grow with additional features of offline mode verification and vernacular capabilities. Issuance of policies in Demat mode took off in a big way during FY 2018, with more than 1 lac policies issued.

2. The Company''s digital service platforms are aligned to changing customer expectations and enabled with a range of self serve capabilities. The customer service portal - My Account - was revamped this year with new services such as profile updates, nominee changes etc. More than 85% ULIP transactions are now processed through My Account. Our customer mobile app has registered more than 36,000 users and is continuously being enhanced with launch of additional features such as renewals, revivals, policy preview etc.

3. SPOK, the Company''s email bot fulfils premium statements and unit statements requests instantly and has catered to thousands of requests. Neo, our bot for Twitter, fulfill requests such as fund value and premium due date etc for customers on the social platform. These automated service options are also available on the Company''s online Webchat platform including option of agent assistance. Focusing on availability of service through a customer preferred touch-point the Company leveraged its partner network by integrating with HDFC Bank Netbanking portal for payments and access to policy details. InstaServe, the Company''s platform for providing digitally enabled servicing to the customer at branches also saw significant adoption.

Products

ULIP Life (10)		Par Life (7)	Non Par Life (2)
?		?	?
- HDFC SL Crest	-	HDFC Life ClassicAssure Plus	- HDFC Life Sanchay
- HDFC SL ProGrowth Super II	-	HDFC Life Super Savings Plan	- HDFC SL Sarvgrameen Bachat Yojana
- HDFC SL ProGrowth Maximizer	-	HDFC Life Super Income Plan
- HDFC SL Young Star Super Premium	-	HDFC Life YoungStar Udaan
- HDFC SL ProGrowth Flexi	-	HDFC Life Sampoorn Samridhi
- HDFC SL ProGrowth Plus		Plus
- HDFC Life Smart Woman	-	HDFC Life Uday
- HDFC Life Click 2 Invest - ULIP	-	HDFC Life Pragati
- HDFC Life Sampoorn Nivesh
- HDFC Life Capital Shield

	Pension/Annuity (8)		Protection (7)	Group (11)		Rider (8)
	?		?	?		?
-	HDFC Life Pension Super	-	HDFC Life Click2 Protect	- HDFC Group Term	-	HDFC Life Income Benefit
	Plus		Plus	Insurance		on Accidental Disability
-	HDFC Life Single Premium	-	HDFC Life CSC Suraksha	- HDFC Life Group Credit		Rider
	Pension Super		Plan	Protect	-	HDFC Life Critical Illness
-	HDFC Life Click 2 Retire	-	HDFC Life Click 2 Protect	- HDFC Life Group Pension		Plus Rider
-	HDFC Life Assured		3D Plus	Plan	-	Total and Partial
	Pension Plan	-	Click 2 Protect Health	- HDFC Life Group Unit		Permanent Disability
-	HDFC Life New Immediate	-	HDFC Life Cancer Care	Linked Pension Plan		Benefit
	Annuity Plan	-	HDFC Life Easy Health	- HDFC Life New Group	-	Accidental Death Benefit
-	HDFC Life Personal	-	HDFC Life Cardiac Care	Unit Linked Plan	-	Critical Illness Benefit
	Pension Plus			- HDFC Life Group Variable	-	Total Permanent Disability
-	HDFC Life Guaranteed			Employee Benefit Plan		Benefit
	Pension Plan			- HDFC Life Group Credit	-	HDFC Life Critical Illness
-	HDFC Life Pension			Protect Plus		Plus Rider
	Guaranteed Plan			- HDFC Life Pradhan Mantri Jeevan Jyoti Bima Yojana - HDFC Life Group Jeevan Suraksha - HDFC Life Group Credit Suraksha - HDFC Life Group Health Shield		Accident Death Benefit

4. Newer payment options for renewal are witnessing significant adoption. eSI and SI-on-cards was enabled on QuickPay and MyAccount. Standing instructions can now be registered online without needing the customer to go through burdensome paperwork. Renewals for NRI customers have also been made easier by providing options for payment through international cards. Customer touch points are now supported by a robust backend Customer Servicing & Policy Servicing ("CSPS") platform. It has enabled real time resolution or hourly Turnaround Time ("TAT") with more than 90% transaction closure in 24 hours and with better service quality. CSPS also provides a synchronised view of transactions and communications, which is available across touch-points, providing a unified view.

HDFC Life''s product portfolio comprises of solutions catering to the varied individual customer needs across Protection, Pension, Savings, Investment and Health category. HDFC Life also offers different products for varying needs of employers, ranging from term insurance plans for pure protection to voluntary plans such as superannuation and leave encashment.

HDFC Life has continuously focused on creating differentiators to meet customer needs and expectations. The Company has proactively identified and owned niche customer segments and product categories, to drive innovation in the industry. The Company aspires to attain leadership position in select identified segments, by delivering unique sales, products and service experience.

During FY 2018, HDFC Life launched an innovative deferred pension single premium annuity plan known as HDFC Life Pension Guaranteed Plan. This is the only annuity product that can be bought up to 10 years before the planned retirement age with an income guaranteed today that will start at the planned retirement date.

HDFC Life has also introduced HDFC Life Click2Protect 3D plus, which is first of it''s kind in the Indian life insurance industry and provides comprehensive cover against death, terminal illnesses and disability, along with competitive premium prices and flexible features such as whole life coverage, various income options and top-up option that increases coverage against the inflation rate.

A niche health product known as HDFC Life Cardiac Care plan was also launched which provides financial support against 18 cardiac ailments.

Given the low penetration of health insurance in India, the Company further explored opportunities in this space in order to increase the spectrum of coverage by introducing HDFC Life Group Health Shield and Click 2 Protect Health.

HDFC Life is the first life insurer to introduce a comprehensive health product under group platform covering Critical Illness, Surgeries, Daily Hospital Cash, Cancer Cover, Cardiac cover and Personal Accident.

Click2Protech Health is a Combi offering wherein the customers can purchase a HDFC Life''s Click2Protect 3D plus along with Apollo Munich''s Optima Restore as one product at a discounted price. These two products combined into one offer the benefit of comprehensive protection and health indemnity benefits at an affordable cost.

At the end of FY 2018, HDFC Life had 34 Individual and 11 Group products, with 8 Riders available for it''s customers.

Human Resource and People Development

What makes HDFC Life a ''Great Place to Work'' year on year? This question never ceases to monopolise our thought processes. And not surprisingly, the consistent and vehement answer to this is always found to be inextricably linked to the quality of people that make us who we are.

To preserve this valuable strength, HDFC Life is resolutely working towards making the Company, not just a happy place to work, but the happiest and best place to work! This is being attempted through five key levers that form the bedrock of our people strategy:

A. Our guiding light - HDFC Life Values:

Despite rapid growth in the last few years, the Company continues to cherish its roots and the principles that have enabled this momentum. Being front runners in the industry that secures people''s life and money, it is of utmost criticality that the Company''s business rules and people processes are designed with the right set of principles reflecting the customer at the center of all our dealings. HDFC Life Values define the way of work at HDFC Life. Right from bringing the right person on board, to promotions, career development and all other business and people initiatives at HDFC Life, Values remain our guiding light. The Company strives to hire the best talent from the market, each of whom is most synergistic with HDFC Life''s culture and competence requirements. As an added filter the Company has also institutionalized tests and tools at all the above stages of employee life cycle to weed out those who may potentially not live by organizational requirements.

B. Competence driven people development and growth:

Talent management works on the philosophy of having the most skilled and engaged employees discharging their current roles, while developing a strong bench of ready talent. HDFC Life continued with its robust talent review and development processes, which assessed potential and developmental needs of talent across the board. Output of these reviews aggregated into structured learning interventions that were executed by top institutions like ISB, INSEAD and the IIMs.

Internal talent was given ample opportunities to take up managerial roles, through a transparent, fair and scientific Internal Job Posting (IJP) process. Cross functional movements of talent were encouraged and enabled through talent review and assessment process to provide holistic understanding of business to employees. Testimony to the robustness of the process is the fact that the Company was able to fulfill 71% of the vacancies at leadership level through internal talent.

The Company’s Learning & Development ("L & D") framework boasts of specialized, talented and experienced resources who ensure that interventions get customised to specific and special training needs, thereby maximizing impact and efficacy. During the course of the year, the core focus area has been implementation of the digital learning solution - Mlearn, our mobile learning app which instantly enhanced the learner reach and flexibly.

C. Fostering happiness at work:

To understand the pulse of employee satisfaction at work, HDFC Life undertakes employee engagement surveys. The overall Employee Index Score for the FY 2018 continues to be higher than the IBM 75th Percentile Benchmark, standing testimony to the fact that we keep our employees engaged. HDFC Life''s employee connect program, Sparsh is an established platform for employee recognition and connect. This platform also ensures transparency and open dialogue among management and employees. Various awards like Employee of the Year, Employee of the Quarter, Best Values Ambassador etc, reward not just performance, but also alignment to HDFC Values.

D. Performance driven compensation and rewards schemes:

Our employees are our most valuable assets and indispensable for our continued success. HDFC Life expects to continue investing in hiring talent and to provide competitive compensation programs to our employees. As of March 31, 2018, HDFC Life had 17,601 full-time employees. Competition for qualified personnel in our industry is intense, so our compensation and rewards philosophy has been designed to be competitive with bias for high performance. This helps us in two ways - employees strive to earn more and thus perform and the Company tends to attract high performers from the market who are ready to walk an extra mile with us.

E. Technology for people:

Aligning to our vision to be the "Digital Insurer" in the country, the Company has set up ecosystems and sales enablement processes for customer convenience. Replicating the same for employees, the Company''s journey is being built on the twin substratum’s of technology and innovation. The resultant first state of the art output offering, the HR mobile application, has built an enviable mobility platform that is rapidly transforming employee workforce productivity across the length and breadth of the organization.

F. Particulars of Employees

The statement containing particulars of employees as required under Section 197 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, annexed as ''Annexure 5'' to the Directors'' Report.

In accordance with the provisions of Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and particulars of the top ten employees in terms of remuneration drawn and of the aforesaid employees are set out in the Annexure to this report. In terms of the provisions of Section 136(1) of the Companies Act, 2013 read with the rule, the Directors'' Report is being sent to all shareholders of the Company excluding the said annexure. Any shareholder interested in obtaining a copy of the annexure may write to the Company.

Investments

During FY 2018, there was significant improvement in economic activity across the world. The outlook for the US economy improved markedly as US President unveiled a sharp reduction in domestic corporate tax rates. Other large economies in Europe saw a revival in activity aided by the easy monetary policy maintained by their respective Central Banks. The revival in growth also led to a pick-up in commodity prices and helped the commodity exporting countries to improve their macroeconomic parameters.

Meanwhile, India witnessed a momentous change in its economy over the last year, with the introduction of the Goods and Services Tax (GST). The GST replaced a raft of different State and Central indirect taxes with uniform taxation rates across the country. The GST is expected to improve the efficiency of economic activity as well as help drive the economy to greater formalization, as businesses that had largely stayed outside the formal reporting framework, join in under the GST regime.

The initial two quarters of the year witnessed a slowdown in economic growth as businesses adjusted inventory and output around the time of the GST introduction. However, the subsequent quarters have seen a rebound in activity. The synchronous growth in global economy and an improvement in the rural economy after a near normal monsoon season has helped sustain the revival in growth.

Earnings growth for listed companies picked up during the year as the revival in growth helped companies report higher revenues and profits. The equity markets had another stellar year supported by an increase in domestic financial savings into equities. The positive momentum of the markets was interrupted in the last two months of the year, as risk appetite, globally, took a hit on fears of aggressive rate hikes in the US.

Bond markets, however, had a year of modest gains as bond yields firmed up sharply during the second half of the year. The concerns over a slippage in the fiscal deficit for the Government along with a hardening of global bond yields pushed domestic yields higher.

The investment funds of the Company are managed as per the stated objectives laid down in the Investment Policy, Asset-Liability Management Policy (''ALM''), and respective Funds'' objectives. These policies lay down the asset allocation and risk appetite guidelines for different funds, some of which have in-built guarantees. Fund allocation is tracked on a regular basis and is backed with suitable assets. During FY 2018, the asset allocation in the Company''s conventional and shareholder funds was in line with the ALM policy.

HDFC Life''s total AUM as on March 31, 2018, was Rs, 1,06,603 Crs. This comprised assets of Rs, 57,185 Crs held under the unit-linked funds and Rs, 49,418 Crs held under the conventional funds and shareholdersRs, funds. The corresponding numbers for the previous year were Rs, 53,800 Crs and Rs, 37,942 Crs respectively.

Information Technology

HDFC Life intends to be the leading digital insurer in the country. This aspiration has been embedded into the business and operating model of the Company and all new or existing processes are being made digital ready. All business functions within the organisation are aligned to this objective. The objective of the technology department is to cater to these growing needs by leveraging technology to deliver revenue generating experiences that win, serve, retain customers and grow the business while keeping operational costs low. Technology is applied in areas that add value to distributors, customers & employees:

A. Sales and Distribution

The objective here is to provide distributors a seamless customer onboarding process which integrates with their primary business, avoids redundant data entry, is accessible anywhere, anytime and drives fast processing. The Technology Enabled Business Transformation (TEBT) program has, over the last 24 months, created a service driven architecture that has enabled the Company to be a preferred partner on technology capabilities. The Company has been working with its Bancassurance relationships and integrating with the bank CRM systems. STP (Straight

Through Process) which was implemented for one of the partner banks has now been extended to multiple partners enabling a frictionless customer onboarding process.

HDFC Life continues to use mobility across its business very effectively and new capabilities have been introduced in the current year with a focus on sales productivity. The features include India stack integration with auto form filling (e.g. with Aadhaar including IRIS authentication, and UPI), credit bureau integration, geo-location capabilities, auto financial planning, pre approved offers, expert on call, virtual sales assistant bot among others. The Company has also built an industry first "Uber model" for lead management and fulfillment. This allows the sales person to grab a lead that is geographically nearest to him and reach the customer in the shortest possible time.

HDFC Life has built a high performance platform for its group business especially group credit protect and group health business lines which in addition to allowing seamless integration capabilities to the distribution partners, is capable of processing very high volumes in an extremely short time.

The online business of HDFC Life continues to grow and the Company is cognizant of the need to be constantly more agile and responsive in this space. The Company has therefore embarked on the journey to build the next generation online platform which will allow for a better user experience and deeper partner integration.

B. Customers

The objective here was to provide instant, consistent and predictable service and increase the self service capabilities available to the customer.

Customer Servicing and Policy Servicing module (CSPS) was developed on the digital platform in line with this objective. More than 90% of customer request are now processed over the counter and more than 50% are closed within 10 minutes.

For service requests received via email, the Company has deployed NLP based artificial intelligence capability and on twitter the Company has deployed chats bots which respond to customer request which are objective in nature thereby providing instant response and can manage scale at a very low cost. The Company has developed a virtual service assistant which enables the customer service executive at any touch point to respond to customer queries on any product/process, since inception of the Company, instantaneously. The customer portal, mobile applications (customer app and sales app) have been enhanced with additional servicing capabilities thereby aligning to the objective of self service.

C. Employees

The last two years have seen a rapid adoption of Robotics Process Automation (RPA) with over 50 Bots running within the Organisation across multiple functions. This has led to productivity gains among the workforce and has provided the capability to cater to the higher growth aspirations of the organisation in a cost efficient manner. Our revamped employee mobile app enables our employee to do multiple activities such as geo based attendance tracking, leave management, learning modules, complaints management, mediclaim etc. Our learning app is designed with self learning nuggets which are short videos/training which can enhance the knowledge of our employees on the go.

D. Technology Update

HDFC Life has established a new technology vertical to focus on the ecosystem partners. This vertical has employees who have started their careers with technologies available on the cloud and hence they are able to connect with their counterparts in the ecosystems which are mostly companies born in the cloud. HDFC Life has partnered with Amazon and is also working with Google to build various capabilities on the cloud which also is powered by infrastructure which can scale on demand. The Company is the first in the Indian financial services industry to create a data lake on the cloud. This data lake is the foundation for our data monetisation strategy and key to our plans with our ecosystem partners. The Company will be experimenting with data science and machine learning based solutions in the coming year. The Company has a strategy to build key capabilities in house and also partner with new age system integrators.

HDFC Life was instrumental in setting up an informal life insurance industry blockchain consortium which was supported by Ernst Young. This consortium identified multiple use cases and created proof of concept for couple of them. The consortium will continue to work to identify and implement some of the use cases in the coming year.

The Information Security Group continues to align with the National Institute of Standards and Technology (NIST) and Federal Financial Institutions Examination Council (FFIEC) for cyber security risk assessment which categorises the risk and provides visibility on the maturity level of the Organisation. A slew of cyber security initiatives have been implemented this year based on the roadmap presented to the Board. The Company has implemented security controls such as Next-Gen Firewall, Advance Persistent Threat Protection, Security Incident and Event Management, Brand Reputation & Anti-Phishing Management, DMARC for Email Security, Cyber Insurance.

HDFC Life has been recertified on ISO 27001:2013. The technology team received 13 industry recognitions this year for achieving excellence in Strategic Enterprise IT deployments including the Celent Model Insurer Asia and Data Center Summit Award.

Awards

The Company received various awards and accolades during the year under review across financial disclosures, customer service, technology, digital solutions, products, human resources, marketing, etc. The Company received the ''Economic Times Great Place to Work'' award during FY 2018. The Company also received Gold award at the LACP Vision Awards 2016/17 for the third consecutive year and award for Excellence in Financial Reporting for their Annual Report FY 2017 from ICAI (The Institute of Chartered Accountants of India).

Regulatory Landscape

During FY 2018, the Insurance Regulatory and Development Authority of India ("IRDAI" / "Authority") issued various regulations/ guidelines to further aid the growth of industry. Some of the key regulations/ guidelines etc., as notified include:

- Guidelines on Information and Cyber Security for Insurers to ensure that adequate systems and procedures are in place for ensuring that there is no leakage of information and information is shared only on need-to-know basis. Guidelines further prescribed that uniform framework for information and cyber security should be implemented for insurers and an in-built governance mechanism should be put in place.

- IRDAI (Insurance Web Aggregators) Regulations, 2017 notified in April 2017 laid down new provisions for payment of remuneration for direct online sales and allowed selling of existing products through web aggregators including for those products where the web aggregator is not mentioned as a distribution channel in the File & Use document. The web aggregators are now permitted to undertake outsourcing activities through tele-marketing and distance mode.

- A new set of Outsourcing Regulations came into force replacing the erstwhile guidelines on the same providing better clarity and definition of Outsourcing thereby helping in identifying activities to be considered/ excluded from the purview of Outsourcing further bringing clarity in regulatory reporting of such activities.

- Protection of Policyholders Regulations 2017 were notified in June 2017 replacing the earlier regulations. The new regulations introduced the requirement to have a Board approved policy emphasising on various governance and control mechanisms to ensure that the insurer safeguards the policyholder''s interests throughout the policy term and beyond, at the claims stage as well.

- Brokers Regulations were notified in January 2018 replacing the earlier regulations. The said regulation emphasises on business conduct both at the broker and insurer''s end. New provisions have been introduced which require filing of regulatory returns to ensure compliance with the obligations mentioned under the said regulations.

- A Master Circular on Unclaimed amounts was notified which broadly consolidates various directives issued by IRDAI on the matter earlier and brings in clarity over time-periods and operational procedures for treating amount due to the policyholder but not yet paid by the insurer for various operational reasons.

Rural and Social Sector Obligations

HDFC Life maintains dedicated focus on undertaking rural business, and endeavors to tailor its products and processes to support these businesses, considering customer needs.

As part of its overall business, the Company has achieved prescribed regulatory targets of social and rural business, as follows:

- Rural business - Achieved - 20.71% versus prescribed requirement of 20% of overall business

- Social business - Insured - 65,29,691 social lives versus prescribed 10,42,822 social lives

Solvency

The IRDAI requires life insurers to maintain a minimum Solvency Ratio of 150%. The Solvency Ratio is calculated as specified in the IRDA (Assets, Liabilities, and Solvency Margin of Insurers) Regulations, 2016. As compared to the minimum requirement of 150%, the Company''s Solvency Ratio, as at March 31, 2018, was 192%.

Dividend & Reserves

During FY 2018, HDFC Life declared an interim dividend of Rs, 1.36 per equity share (face value of Rs, 10/- each) as compared to Rs, 1.10 per equity share (face value of Rs, 10/- each) for FY 2017. The interim dividend was paid to the Shareholders in December 2017. The Board has recommended the same to be confirmed as the Final Dividend for FY 2018. Necessary resolution is being proposed for the purpose at the ensuing 18^th Annual General Meeting ("AGM").

The dividend declared is in accordance with the principles and criteria as set out in the Dividend Distribution Policy which has been approved by the Board of Directors of the Company. In terms of Regulation 43A of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations") the Dividend Distribution Policy of the Company is disclosed on the website at https://www.hdfclife.com/about-us/Investor-Relations

The Company has carried forward a total of Rs, 780.2 Crs to its Reserves. The Company had accumulated profits of Rs, 2,393.7 Crs on March 31, 2018.

Capital & Shares

The Company''s paid up equity share capital increased marginally from '' 19,984,752,830 as on March 31, 2017 to '' 20,117,400,430 as on March 31, 2018 pursuant to allotment of 7,524,475 equity shares upon exercise of Options under Employees Stock Option Scheme 2014; allotment of 4,755,460 equity shares upon exercise of Options under Employees Stock Option Scheme 2015 and allotment of 984,825 equity shares upon exercise of Options under Employees Stock Option Scheme 2016. The said allotments were made post requisite approval from the Authority.

The Shareholding Pattern is provided as a part of Form No. MGT-9 which is annexed as ''Annexure 3'' to the Directors'' Report.

Update on Merger Proposal and Initial Public Offering

On August 8, 2016, the Board of Directors of HDFC Life, Max Life Insurance Company Limited ("Max Life"), Max Financial Services Limited ("Max Financial") and Max India Limited ("Max India") at their respective board meetings, approved entering into definitive agreements for the amalgamation of the businesses between the above entities through a composite Scheme of Arrangement. This transaction was mutually terminated on July 31, 2017 since the parties did not receive the requisite regulatory approvals.

Subsequently, the Company completed its Initial Public Offer by way of an offer for sale up to 299,827,818 equity shares of face value of '' 10 each of the Company, by promoters of the Company i.e. Housing Development Finance Corporation Limited and Standard Life (Mauritius Holding) 2006 Limited. The Shares of the Company were listed on National Stock Exchange of India Limited (NSE) and BSE Limited (BSE) on November 17, 2017.

Remuneration Policy

Unclaimed Suspense Accounts

Pursuant to Regulation 39 read with Part F of schedule V of SEBI Listing Regulations, 2015 details of unclaimed suspense accounts provided by our Registrar and Transfer Agent i.e. Karvy Computershare Private Limited are given below:

Sr. No.	Category/Name of the Shareholder	No. of Shareholders	No. of Shares
1	Aggregate number of shareholders and the outstanding shares lying unclaimed as on April 1, 2017	Nil	Nil
2	Aggregate number of shareholders and the outstanding shares lying unclaimed on the date of transfer of shares to unclaimed suspense account i.e. as on November 15, 2017 (the shares were allotted pursuant to offer for sale under IPO)	824	92,664
3	Number of shareholders who approached listed entity for transfer of shares from suspense account during the year	733	83,914
4	Number of shareholders to whom shares were transferred from suspense account during the year	733	83,914
5	Aggregate Number of shareholders and the outstanding shares lying unclaimed as on March 31, 2018	91	8,750

In terms of the said Regulation, voting rights on the equity shares lying in the said Unclaimed Suspense Account shall remain frozen till the rightful owner claims such shares.

The remuneration policy, including the criteria for remunerating Non-Executive Directors is recommended by the Nomination & Remuneration Committee and approved by the Board. The key objective of the remuneration policy is to ensure that it is aligned to the overall performance of the Company. The policy ensures that it is fair and reasonable to attract and retain necessary talent, linked to attaining performance benchmarks and involves a judicious balance of fixed and variable components. The remuneration policy is placed on the website of the Company at https://www.hdfclife.com/about-us/Investor-Relations. The remuneration paid to the Directors is in line with the remuneration policy of the Company and in compliance with guidelines issued by the Insurance Regulatory and Development Authority of India.

Remuneration of Directors Non-Executive Directors

The remuneration for Non-Executive Directors consists of sitting fees and remuneration for Independent Directors consists of sitting fees and commission. The fees payable to the Non-Executive Directors including Independent Directors for attending a Meeting of the Board or Committee thereof is decided by the Board of Directors from time to time within the limits prescribed under the provisions of the Companies Act, 2013.

The Board after considering performance of Non-Executive Directors and subject to the approval of members of the Company at the ensuing Annual General Meeting, has approved the proposal for payment of profit related commission for a period of five years effective from FY 2018 to each Non-Executive Independent Director of the Company. The payments would be subject to the regulatory provisions applicable to the Company and availability of net profits at the end of each financial year. Sitting fees paid to Non-Executive Independent Directors are outside the purview of the above limits.

Details of the remuneration of Non-Executive Directors including Independent Directors are provided in Form No. MGT-9 which is annexed to this report.

Executive Directors

The Nomination & Remuneration Committee determines and recommends to the Board the amount of remuneration, including performance bonus and perquisites, payable to the Executive Directors subject to approval of members of the Company and approval of the Insurance Regulatory and Development Authority of India. The annual increments of the Executive Directors are linked to their performance and are decided by the Nomination & Remuneration Committee.

Details of the remuneration of Executive Directors are provided in Form No. MGT-9 which is annexed as ''Annexure 3'' to the Directors'' Report.

Disclosures pursuant to IRDAI Guidelines

IRDAI guidelines on Remuneration of Non-executive Directors and Managing Director/Chief Executive Officer/ Whole Time Directors of Insurers (IRDAI Guidelines) issued vide reference no. IRDA/F&A/GDL/LSTD/155/08/2016 dated August 5, 2016 requires the Company to make following disclosures on remuneration on an annual basis in their Annual Report:

A. Qualitative Disclosures

i. Information relating to the design and structure of remuneration processes and the key features and objectives of remuneration policy.

Information relating to the design and structure of remuneration processes The Nomination & Remuneration Committee ("the Committee") is the body which oversees the remuneration aspects. The functions of the Committee include reviewing and approving, on an annual basis, the corporate goals and objectives with respect to the compensation for the Chief Executive Officer/ Whole Time Director/s. The Committee also evaluates at least once a year the Chief Executive Officer''s/ Whole Time Director''s performance in light of the established goals and objectives and based upon these evaluations, set their annual compensation, including salary, bonus and equity and non-equity incentive compensations. The compensation structure is within the overall limits as laid down by the members of the Company, and further subject to statutory and regulatory approvals including that of the Insurance Regulatory and Development Authority or such other body or authority as may be applicable.

The Company has under the guidance of the Board and the Committee, followed compensation practices intended to drive meritocracy and fairness. The Committee has oversight over compensation and defines Contribution Management System (CMS) and Variable Pay for Performance (VPP) philosophy for Executive Directors and the organizational performance norms for VPP based on the financial and strategic plan approved by the Board. The Committee assesses organizational performance as well as the individual performance for Executive Directors. Based on its assessment, it makes recommendations to the Board regarding compensation for Executive Directors and VPP for employees, including senior management and key management personnel.

Objectives of remuneration policy

The purpose of the remuneration policy is to put in place a framework for remuneration of Directors, Key Managerial Personnel and other employees, keeping in view various regulatory and other requirements. This policy is guided by the set of principles and objectives as particularly envisaged under Section 178 of the Companies Act 2013, which inter alia include principles pertaining to determining the qualifications, positive attributes, integrity and independence of Director etc.

Key features of remuneration policy Attract and retain: Remuneration packages shall be designed to attract high caliber executives in a competitive global market and remunerate executives fairly and responsibly. The remuneration shall be competitive and based on the individual responsibilities and performance.

Motivate and reward: Remuneration shall be designed to motivate delivery of the Company''s key business strategies, create a strong performance-orientated environment and reward achievement of meaningful targets over the short and long-term.

Non-monetary benefits: The Executives will be entitled to customary non-monetary benefits such as company cars and company health care, telephone etc. In addition thereto, in individual cases company housing and other benefits may also be offered.

ii. Description of the ways in which current and future risks are taken into account in the remuneration process

HDFC Life ensures the effectual positioning of the compensation in line with the overall risk framework of the organization. Different aspects of remuneration have been designed to ensure their applicability over a timeframe and cover the associated risks.

- The total compensation is aligned to the predefined balanced scorecard covering the people, financial, customer, and operational indicators of performance.

- The compensation payouts are regulated by compliant guidelines of the Malpractice matrix under the enterprise risk management framework of the organization. Deferred payouts are guided and controlled by the framework in cases of integrity or any such related parameter.

- Significant component of the remuneration are spread across the time horizon risk in the form of Short Term and Long Term Incentive Plans.

iii. Description of the ways in which the insurer seeks to link performance during a performance measurement period with levels of remuneration

HDFC Life follows a compensation philosophy of pay for performance and meritocratic growth in the organization. There is linkage between pay and performance. In line with Company''s pay for performance philosophy the compensation is designed to ensure that every employee will have at least a part of the total Compensation which will be linked to individual and/or Company performance. For senior management, the variable payouts depend upon the individual contribution and overall performance of the organization. The performance is assessed on predefined balanced scorecard and the payout rate varies with the level of performance where significant merit increase and variable payouts are awarded to top performers. The organization strives for higher variabalisation at senior levels thereby ensuring more focus on performance driven payouts.

B. Quantitative Disclosures

The following table sets forth, for the period indicated, the details of quantitative disclosure for remuneration of Executive Directors:

(Rs, Crs)

Sr. No.	Particular	As on March 31, 2018
1	Number of WTD/ CEO/ MD having received a variable remuneration award during the financial year	2
2	Number and total amount of sign on awards made during the financial year	Nil
3	Details of guaranteed bonus, if any, paid as joining/ sign on bonus	Nil
4	Total amount of outstanding deferred remuneration, split into cash, shares and share linked instruments and other form	Nil
5	Total amount of deferred remuneration paid out in the financial year	Nil
6	Breakup of amount of remuneration awarded for the financial year to show fixed and variable, deferred and nondeferred
	Fixed	6.31
	Variable:
	Deferred	Nil
	Non-Deferred	4.18
	Share Linked Instrument	Nil

Evaluation of performance of the Board

SEBI had issued a guidance note on board evaluation to be carried by listed companies, which inter alia contained the process of evaluation, including the criteria to be adopted for evaluation, action plan, disclosures to stakeholders, frequency of evaluation and responsibilities.

Pursuant to listing of equity shares of the Company on Stock Exchanges, the Company has assessed the methodology and criteria to evaluate the performance of the Board as a whole and its Committees as well as the performance of each Director individually, including the Chairman and aligned the template with the criteria laid in the said guidance note. The said criteria inter alia includes various parameters like involvement, quest for improvement, teamwork, governance, knowledge & competency, understanding & fulfillment of functions, initiatives, availability & attendance, commitment, contribution in board meetings and integrity.

Pursuant to and in line with the requirements prescribed under the Act and guidance note, the Board of Directors carried out an annual evaluation of its performance, and that of its Committees and Individual Directors. Further, the Independent Directors met separately, without the attendance of Non-Independent Directors and Members of the Management, and inter alia reviewed the performance of Non-Independent Directors, and Board as a whole; and performance of the Chairman. They further assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board.

Overall, the Independent Directors expressed their satisfaction on the performance and effectiveness of the Board, all the Committees, Individual Non-Independent Board Members, and the Chairman, and on the quality, quantity and timeliness of flow of information between the Company Management and the Board. The Independent Directors opined that the Company''s Board was a benchmark Board and expressed their satisfaction with the conduct and efficiency of the Board and Board Committees''.

The Nomination & Remuneration Committee also undertook an evaluation of Individual Director''s performance and expressed its satisfaction on performance of each Director.

There has been no material adverse observation or conclusion, consequent to such evaluation and review.

Directors

As on the date of this Report, the Company''s Board comprises of 15 Directors, including one Alternate Director. There are 13 Non-Executive Directors (including 7 Independent Directors, and 1 Alternate Director) and2 Executive Directors. The Company''s Board also has 2 women Directors, which includes its Executive Director & Chief Financial Officer.

Changes during the year under review

Mr Ravi Narain and Dr Surendra Dave resigned from the Directorship of the Company wef August 1, 2017 and August 10, 2017 respectively.

The Board of Company was further strengthened during the year with the induction of Mr Ketan Dalal, Mr AKT Chari and Dr JJ Irani as Additional Directors wef July 17, 2017, August 4, 2017 and August 11, 2017 respectively, designated as Independent Directors. This has also added diversity to the Board, resulting in enhanced Board independence.

A brief profile of newly appointed Independent Directors is given below:

1. Mr. Ketan Dalal is an Independent Director of the Company. He has been on the Board since July 17,

2017. He is a fellow member of the Institute of Chartered Accountants of India, having qualified in 1981. In 1997, he (along with 3 other professionals) founded RSM, an Indian Tax practice, which merged into PwC in April 2007. In 2017, he founded a boutique structuring and tax firm, Katalyst Advisors LLP. He was a member of the ''Working Group on Non-resident taxation'' formed by Ministry of Finance in 2003. He is a member of the Managing Committee and the Chairman of the Direct Tax Committee of IMC. He has been a member of several SEBI Committees including SEBI''s High Powered Advisory Committee on consent orders and compounding and Group of experts to advise SEBI on matters relating to Financial Sector Legislative Reforms Commission.

2. Mr. AKT Chari is an Independent Director of the Company. He has been on the Board since August 4, 2017. He holds a bachelor’s degree in electrical engineering from Madras University in 1962. He previously held the position of Chief General Manager/ Adviser in Industrial Development Bank of India, where he handled project finance activities of the institution in various industrial and infrastructure sectors. Later he worked as Chief Operations Officer/ Head project finance in IDFC Limited, where he was engaged in financing infrastructure projects, in multiple sectors.

3. Dr. Jamshed J Irani is an Independent Director of the Company. He has been on the Board since August 11, 2017. He holds a Master''s degree in science from Nagpur University and Master''s in Metallurgy from University of Sheffield, United Kingdom. Further, he also holds a Doctorate from University of Sheffield, United Kingdom. He received the Padma Bhushan from the President of India in 2007 for his services to trade and industry in India. Additionally, he was conferred the honorary Knighthood (KBE) for contribution to Indo-British Trade and Cooperation. Dr. Irani has been a Director of the Housing Development Finance Corporation Limited (HDFC) since 2008. Currently, Dr. Irani is an Independent Director of HDFC Ltd. and Repro India Limited.

In line with the provisions of the Act, the appointment of Mr. Ketan Dalal, Mr AKT Chari and Dr JJ Irani, are proposed to be regularised at the forthcoming Annual General Meeting for a period of 5 years from the date of their initial respective appointments, and the relevant disclosures for their appointment forms a part of the Notice of the 18^th Annual General Meeting.

During the year under review, in line with the applicable provisions under the Act, Mr Luke Savage and Mr James Aird had vacated office as Alternate Directors to Sir Gerry Grimstone and Mr. Norman Keith Skeoch respectively, at such times when Sir Gerry Grimstone and Mr. Norman Keith Skeoch had visited India to attend Board Meetings; and they were re-appointed as Alternate Director to Sir Gerry Grimstone and Mr. Norman Keith Skeoch with the Board''s approval, following the date of the relevant Board Meetings. Further, Mr Rushad Abadan was appointed as Alternate Director to Sir Gerry Grimstone with effect from February 2, 2018 in place of Mr Luke Savage.

Independent Directors

The Company has seven Independent Directors on the Board i.e. Dr. JJ Irani, Mr. AKT Chari, Mr. VK Viswanathan, Mr. Prasad Chandran, Mr. Sumit Bose, Mr. Ranjan Mathai and Mr. Ketan Dalal. In accordance with the provisions of the Act, the Independent Directors are not liable to retire by rotation, and have been appointed for a term of 5 years.

Declaration by Independent Directors All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149 of the Companies Act, 2013 and Regulation 16 of the SEBI Listing Regulations. The said declaration was noted by the Board of Directors at its Meeting held on April 18, 2018.

Directors retiring by rotation (being Directors other than Independent Directors)

In accordance with the provisions of the Act read with the Articles of Association of the Company, Mr. Deepak Parekh and Ms. Vibha Padalkar, being Non-Independent Directors, are liable to retire by rotation at the ensuing 18th Annual General Meeting of the Company. They are eligible for re-appointment. Resolutions for the purpose of their reappointments are being proposed at the 18th Annual General Meeting. Profiles of these Directors are included in the Notice of the 18^th Annual General Meeting.

''Fit and Proper'' criteria

In accordance with Guidelines for Corporate Governance issued by IRDAI, the Directors of insurers have to meet the ''fit and proper'' criteria. Accordingly, all the Directors of the Company have confirmed compliance with the ''fit and proper'' criteria, prescribed under the Corporate Governance Guidelines issued by the IRDAI.

The Company has also received declarations from all its Directors as per Section 164 of the Act, confirming they are not disqualified from being appointed as Directors of the Company.

The details of the Board and Committee meetings, and the attendance of Directors thereat, forms part of the Corporate Governance Report, which is annexed as Annexure 1 to this Directors'' Report.

Management Discussion and Analysis Report, Report of the Directors on Corporate Governance and Business Responsibility Report

In accordance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis Report forms part of this report.

A report on the Corporate Governance framework within the Company, with required certification as required under the IRDAI Regulations and SEBI Listing Regulations, is annexed hereto as Annexure 1 and forms part of this report.

In accordance with the SEBI Listing Regulations, the Business Responsibility Report (BRR) forms part of this report.

Legal Update

During the FY 2018, no significant and material orders were passed by the regulators, courts or tribunals, that impacted the going concern status of the Company, or which can potentially impact the Company''s future operations.

Secretarial Standards

During the FY 2018, the Company is in compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India with respect to board and general meetings.

Key Managerial Personnel

Changes in the Key Managerial Personnel (KMP) during the year.

Name of KMP*	Appointment / Resignation/ No change	With effect from
Mr. Amitabh Chaudhry Managing Director and Chief Executive Officer	No change	NA
Ms. Vibha Padalkar Executive Director and Chief Financial Officer	No change	NA
Mr. Manish Ghiya Executive Vice President, Company Secretary and Head - Compliance and Legal	Resignation	July 17, 2017 (close of the day)
Mr. Narendra Gangan Executive Vice President, Company Secretary and Head - Compliance and Legal	Appointment	July 18, 2017

* Designated as the "Key Managerial Personnel" of the Company as per Companies Act, 2013.

Risk Management Policy

The Company has a defined Risk Management Strategy and a Framework which is designed to identify, measure, monitor and mitigate various risks. A Board approved Risk Management Policy has been put in place to establish appropriate systems or procedures to mitigate all material risks faced by the Company. The said Policy is reviewed periodically by the Risk Management Committee of the Board.

The risk management architecture of the Company has been detailed under the Enterprise Risk Management section of the Annual Report.

Internal Audit Framework

The Company has institutionalized a robust and comprehensive internal audit framework/mechanism across all the processes, to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals and, compliance with applicable policies, procedures, laws, and regulations.

The Internal Audit function at HDFC Life works closely with other verticals in the ARM (Audit and Risk Management) Group and other assurance functions, considering relevant material inputs from risk registers, compliance reports and external auditor reports etc. The function also tests and reports compliance to Internal Financial Controls over Financial Reporting.

Internal audits are conducted by in-house Internal Audit team and co-sourced auditors. The function also undertakes follow-up on engagement findings and recommendations, in line with the approved framework.

The Internal Audit function reports its findings and follow-up status on these findings to the Audit Committee on quarterly basis.

Internal Financial Controls

The Company has institutionalized a robust and comprehensive internal control mechanism across all the major processes. The Company has put in place adequate policies and procedures to ensure that the system of internal financial control is commensurate with the size, scale and complexity of its operations. These systems provide a reasonable assurance in respect of providing financial and operational information, complying with applicable statutes, safeguarding of assets of the Company, prevention and detection of frauds, accuracy and completeness of accounting records and ensuring compliance with corporate policies.

The internal audit, in addition to ensuring compliance to policies, regulations, processes etc., also test and report adequacy of internal financial controls with reference to financial reporting/ statements.

Vigil Mechanism

The Company has put in place a Whistleblower Policy and Framework. More details are provided in the Corporate Governance Report, which is annexed as Annexure 1 to this report.

Particulars regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Section 134 of the Act, read with the Companies (Accounts) Rules, 2014, requires disclosure of certain specified information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo in the Directors’ Report.

The disclosure relating to conservation of energy does not apply to companies in the Life insurance sector and hence, the Company is exempted there from. Disclosure in respect of technology absorption, and foreign exchange earnings and outgo is given below.

Technology Absorption

Specific areas, in which R&D is carried out by the Company	Not applicable
Benefits derived as a result of the above R&D	Not applicable
Future plan of action	Block chain / Robotic Process Automation / Artificial Intelligence and Cognitive Computing / Cyber Security/ Machine Learning
Expenditure on R&D	Not applicable
a) Capital b) Recurring c) Total d) Total R&D expenditure as a percentage of total turnover
Technology absorption, adoption and innovation
1. Efforts made towards technology absorption	Major Initiatives Undertaken/ Completed are: - Revamped customer servicing portal - Expansion of straight through processing for multiple partners - Reengineered processes for customer and policy servicing - Robotics process automation for payouts, actuarial, medicals and group business processes - Optical Character Recognition (OCR) for medical reports - ISO 27001:2013 Recertification - Geo based tracking and lead allocation for sales
2. Benefits derived as a result of the above efforts (eg product improvement, cost reduction, product development, import substitution and so on)	Benefits derived in terms of process / product improvement / cost reduction include: - More than 90% of transactions are processed over the counter - 50% of PS transactions closed within 10 minutes - 85% of Payouts processed within 8 calendar days - Audit trail with 360 degree view of customer interaction history - Online customer authentication - Integration with Aadhaar for address updation - Enhanced productivity with improved AHT’s - Elimination of manual trackers and dependency on multiple systems - Robotic process automation improves productivity and TAT''s within departments eg. customer payout process have a reduced TAT of T 1 down from T 8. - OCR now converts data on the medical reports into value which are stored in the system and also highlights values which are not within normal range which improves underwriter productivity.
In case of imported technology (imported during the last three years reckoned from the beginning of the financial year) - i. The details of technology imported; ii. The year of import; iii. Whether the technology been fully absorbed; iv. If not fully absorbed, areas where absorption has not taken place, and the reasons thereof	Nil
Expenditure incurred on Research and Development	Nil

Foreign Exchange Earnings and Outgo

The details of foreign exchange earnings and outgo during the FY 2018 are as follows:

- Earnings	Rs, 114.4 Crs
- Outgo	Rs, 170.5 Crs

Subsidiary Companies 1. HDFC Pension Management Company Limited ("HDFC Pension")

Financials and Business Outlook A synopsis of financial performance of HDFC Pension during FY 2018 is as below:

Particulars	FY 2018	FY 2017
Gross Income	255.3	243.6
Total Expenses	267.4	274.2
Profit/ (Loss) before Tax	(12.1)	(30.6)
Provision for Tax	0	0
Profit/ (Loss) after Tax	(12.1)	(30.6)

During the FY 2018, the general business environment had been good for Pension Funds with the industry keeping up the momentum in line with the previous financial year.

The overall Assets Under Management (''AUM'') of all the Pension Funds combined, i.e. corporate and retail sector, grew from Rs, 7,017.7 Crs as on March 31, 2017 to Rs, 11,965.8 Crs as on March 31, 2018, registering a growth of approximately 69%. The overall subscriber base of corporate sector grew by nearly 38%, with approximately 1,000 new Corporate joining the National Pension System (''NPS'') architecture. The retail sector grew by almost 58%, with 6,91,578 subscribers as on March 31, 2018, in comparison to 4,37,088 subscribers as on March 31, 2017.

During the FY 2018, HDFC Pension registered an AUM growth of approximately 120%, crossing the milestone of Rs, 2,500 Crs and also registered itself as the number one player amongst Private Pension Fund Managers in terms of AUM. As on March 31, 2018, HDFC Pension''s AUM stood at Rs, 2,560.3 Crs as compared to Rs, 1,163.0 Crs as at the end of previous financial year. In the Corporate sector NPS, HDFC Pension sourced 525 new corporate in FY 2018 commanding more than 45% market share in that particular space. The Company consolidated itself in the retail sector as well by registering a subscriber growth of 93%.

Legal matter

In 2014, the Pension Fund Regulatory & Development Authority ("PFRDA") issued a Request for Proposal ("RFP") inviting bids from Sponsors to select new pension fund managers. The bid submitted by HDFC Life as a sponsor to HDFC Pension was rejected by the PFRDA on the ground that it did not meet certain eligibility criteria under the RFP. The Hon''ble Delhi High Court, however, set aside the rejection, directing the PFRDA to grant a Letter of Appointment to HDFC Life thereby allowing the Company to continue its business. While the PFRDA issued a letter of appointment to HDFC Life, it also challenged the Hon''ble High Court''s decision before the Hon''ble Supreme Court of India by way of a Special Leave Petition ("SLP"). The Hon''ble Supreme Court, by its order dated July 31, 2017, has dismissed the PFRDA''s SLP and refused to interfere with the Hon''ble High Court''s decision. Accordingly, the Letter of Appointment issued to HDFC Life stands unqualified, with the appointment of HDFC Pension as a pension fund manager being confirmed.

2. HDFC International Life and Re Company Limited ("HDFC International Life & Re")

In FY 2016, HDFC Life established HDFC International Life and Re Company Limited ("HDFC International Life & Re"), a Wholly Owned Subsidiary, in the Dubai International Financial Centre (DIFC). HDFC International Life & Re was established with the primary objective of offering life reinsurance capacity in the UAE and other GCC nations.

HDFC International Life & Re is regulated by the Dubai Financial Services Authority ("DFSA") and is licensed to undertake life reinsurance business in the UAE. It operates in the DIFC, offering reinsurance capacity to ceding insurers. It provides bespoke risk-transfer solutions, prudent underwriting solutions and value added services among others, across individual life, group life and group credit life lines of business. HDFC International Life & Re currently offers reinsurance capacity in UAE, Oman and Bahrain and is working towards expanding its footprint across the GCC (Gulf Cooperation Council) and MENA (Middle East & North Africa) regions.

HDFC International Life & Re''s vision is to go deep into the processes of ceding insurers and see how it can impact the overall value chain and life cycle, as a very involved, informed and innovative reinsurer. This will be achieved on the back of technology initiatives and solutions that they intend to bring into the market.

Financials and Business Outlook

During the FY 2018, HDFC International Life & Re earned a Gross Income of US$ 1,929,588 while its expenses stood at US$ 512,866. The period under review ended with a loss of US$ 260,599.

HDFC International Life & Re continues to operate with technical profit, which is testimony to the strength of its underlying underwriting and risk assessment processes.

HDFC International Life & Re has successfully completed two financial years of operations and is steadily building experience in the GCC Life Reinsurance market. HDFC International Life & Re has expeditiously accelerated with revenue growth of 10 times of the previous year''s revenues and has focused on the need for creation of stable and diversified revenue lines. Working closely with clients is the central focus of the strategy and HDFC International Life & Re looks to establish meaningful and long term business associations which are mutually win-win. HDFC International Life & Re has been working with ceding insurers to provide reinsurance support for long term individual life policies and also collaborate on facultative arrangement on group programs.

As HDFC International Life & Re get into the third year of operation, their aim is to continue building compelling reinsurance propositions which enable its clients to either break into new segments, expand market share or offer truly unique customer benefits. They are building technology enabled models which allow for differentiation from existing processes and propositions and look to deliver capital efficiencies by means of bespoke reinsurance and risk solutions.

HDFC International Life & Re''s aim is to become partners in the journey of the insurers to help them realize their potential through reinsurance solutions which enable and empower them to innovate and optimize as per the needs of their market segments.

Swabhimaan / Corporate Social Responsibility

As part of its initiatives under Corporate Social Responsibility ("CSR"), the Company has undertaken projects in various areas including Education, Livelihood, Health, and Rural Development. These Projects are undertaken in line with the CSR Policy and are in accordance with Schedule VII of the Act, read with the Rules framed under the said Act.

A more detailed write-up including details of the CSR projects undertaken, their monitoring, details on the implementing agencies, amounts spent and the requisite

Responsibility Statement are given in Annexure 2 of this Report, and forms part of this Directors'' Report.

Annual Return

As per the provisions of the Act, an extract of the Annual Return of the Company (in the prescribed Form No. MGT.9) has been annexed as Annexure 3 to the Directors'' Report, and forms part of this report.

Related Party Transactions

As per Section 177, read with Section 188 of the Act, the Audit Committee of the Board of Directors approves the related party transactions of the Company on a quarterly basis. Related party transactions entered during the year under review were in the ordinary course of business and on an arm''s length basis, thus not requiring Board/ Shareholders'' approval.

The Related Party Transactions policy of the Company ensures proper approval and reporting of the concerned transactions between the Company and related parties. The policy on Related Party Transactions is placed on the Company''s website at https://www.hdfclife.com/about-us/Investor-Relations.

During the year, there were no material individual transactions with related parties, which were not in the ordinary course of business and on an arm''s length basis.

M/s GM Kapadia & Co, Chartered Accountants, reviewed the related party transactions for each quarter, and their report was placed at the meetings of the Audit Committee, along with details of such transactions.

As per Accounting Standard (AS) 18 on ''Related Party Disclosures'', the details of related party transactions entered into by the Company are also included in the Notes to Accounts.

Ind AS Roadmap

The Ministry of Corporate Affairs (MCA) issued a press release on January 18, 2016, announcing the Indian Accounting Standards (Ind AS) roadmap for banking, insurance and Nonbanking Financial Companies (NBFCs), requiring companies to prepare Ind AS based standalone and consolidated financial statements for FY 2019 with comparatives of FY 2018. Consequently, IRDAI issued a circular dated March 1, 2016, to guide and facilitate insurance companies towards Ind AS implementation. In compliance with the above circular, the Company has formed a Steering Committee headed by Executive Director and Chief Financial Officer, along with members from cross-functional areas to initiate

Ind AS implementation process in the Company. The Company has also nominated the nodal officer to IRDAI, to facilitate smooth implementation of Ind AS.

In accordance with the above referred circular dated March 1, 2016, the Company started submitting the preformed Ind AS financial statements from quarter ended December 31, 2016 to IRDAI.

During the FY 2018, the International Accounting Standards Board on May 18, 2017, issued the much awaited IFRS 17 Insurance Contracts which replaces IFRS 4, which was brought in as an interim Standard. The developments around release of IFRS 17 have resulted in the IRDAI reviewing the position in the matter of Implementation of Ind AS in the insurance sector in India.

Consequently, IRDAI issued a circular dated June 28, 2016, approving the Regulatory override whereby the implementation of Ind AS in the Insurance Sector in India has been deferred for a period of two years till 2020-21 and required insurance companies to continue with the quarterly submission of proforma Ind AS financial statements to the IRDAI till the revised implementation date.

Secretarial Audit Report

The Secretarial Audit as required under the Act, was undertaken by M/s NL Bhatia & Associates, Practising Company Secretary. The Auditor has not made any qualification, reservation or adverse remark or disclaimer in his Report for FY 2018.

The Secretarial Audit Report for the FY 2018 is annexed as Annexure 4 and forms part of this Report.

Auditors

M/s Price Waterhouse Chartered Accountants LLP (Firm Registration No. 012754N/N500016), and M/s GM Kapadia & Co, Chartered Accountants (Firm Registration No. 104767W), are the Joint Statutory Auditors of the Company.

The Joint Statutory Auditors have not made any qualification, reservation, adverse remark or disclaimer in their report for FY 2018. Further, during the FY 2018, the Joint Statutory Auditors have not come across any reportable incident of fraud to the Audit Committee or Board of Directors.

As per the IRDAI Regulations, a Statutory Auditor can conduct audit of an insurance Company for a maximum period of 5 years at a time. Further, as per the Act, an audit firm can be appointed as Statutory Auditor for not more than two terms of five consecutive years.

M/s Price Waterhouse Chartered Accountants LLP, and M/s GM Kapadia & Co, Chartered Accountants hold office as joint statutory auditors until the conclusion of 19th Annual General Meeting ("AGM") and 21st AGM respectively, subject to ratification of their appointment by the Members at every AGM.

The Company has received a confirmation from M/s Price Waterhouse Chartered Accountants LLP, and M/s GM Kapadia & Co, Chartered Accountants to the effect that their appointment, if ratified, at the ensuing AGM would be in terms of Sections 139 and 141 of the Companies Act, 2013 and rules made there under. The board proposes to the members to ratify the said appointments of M/s Price Waterhouse Chartered Accountants LLP, and M/s GM Kapadia & Co, Chartered Accountants.

Accordingly, in view of the provisions of the Act, and IRDAI Regulations, the members are requested to ratify the proposal for appointment of M/s Price Waterhouse Chartered Accountants LLP, and M/s GM Kapadia & Co, Chartered Accountants for FY 2019. The Resolution seeking ratification of their appointment is included in the Notice of the ensuing AGM.

Deposits

The Company has not accepted any deposits during the year under review.

Loans, guarantees or investments

In terms of the provisions of sub-Section 11 of Section 186 of the Act, read with the clarification given by the Ministry of Corporate Affairs under the Removal of Difficulty Order dated February 13, 2015, the provisions of Section 186 of the Act relating to loans, guarantees and investments do not apply to the Company.

Employees Stock Option Scheme

In line with the practice of incentivizing the employees through issue of stock options, the Company has in the past granted stock options and continues to grant stock options to its eligible employees (including employees of its subsidiary companies) under the various employee stock option schemes formulated from time to time.

During the year under review, there were no instances of loan granted by the Company to its employees for purchasing/ subscribing its shares.

In line with the requirements under the Act, the Company has formulated Employee Stock Option Scheme(s) 2014, 2015 and 2016 for the purpose of administering the issue of Stock Options to its eligible Employees including that of its subsidiary companies. There has been no material variation in the terms of the options granted under any of these schemes and all the schemes are in compliance with the SEBI (Share Based Employee Benefits) Regulations, 2014. However, the above Schemes, formulated prior to Initial Public Offering by the Company, were aligned with SEBI (Share Based Employee Benefits) Regulations,

2014 ("Regulations"). The disclosures as required under the Regulations have been placed on the website of the Company at https://www.hdfclife.com/about-us/ Investor-Relations.

During FY 2018, the members of the Company approved the issuance of 45,00,000 stock options representing 45,00,000 equity shares of '' 10 each under Employee Stock Option Scheme-2017 and 5,36,394 stock options representing 5,36,394 equity shares of '' 10 each under Employee Stock Option (Trust) Scheme-2017 through a postal ballot. The Nomination & Remuneration Committee of Directors of the Company at its Meeting held on March 14, 2018 had approved the grant of 31,65,606 stock options under Employee Stock Option Scheme-2017 and 5,36,394 stock options under Employee Stock Option (Trust) Scheme-2017.

Material changes and Comments affecting the financial position

There have been no material changes and commitments, affecting the financial position of the Company, which have occurred between the end of the financial year of the Company to which the Balance Sheet relates and the date of this report.

Directors'' Responsibility Statement

In accordance with the requirements of Section 134 of the Act, the Board of Directors state that:

i. In the preparation of the annual accounts, the applicable accounting standards have been followed, along with proper explanation relating to material departures (if any);

ii. Such accounting policies have been selected and applied consistently, and judgments and estimates made that are reasonable and prudent, so as to give a true and fair view of the Company''s state of affairs, as on March 31, 2018, and of the Company''s profit for the year ended on that date;

iii. Proper and sufficient care has been taken for the maintenance of adequate accounting records, in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. The annual accounts have been prepared on a going concern basis;

v. Internal financial controls have been laid down to be followed by the Company and such internal financial controls are adequate and operating effectively; and

vi. Proper systems have been devised to ensure compliance with the provisions of all applicable laws, and such systems were adequate and operating effectively.

Appreciation and Acknowledgement

The Directors thank the policyholders, shareholders, customers, distributors, and business associates for reposing their trust in the Company. The Directors also thank the Company''s employees for their continued hard work, dedication and commitment; and the Management for continuing success of the business.

The Directors further take this opportunity to thank Housing Development Finance Corporation Limited and Standard Life Aberdeen for their invaluable and continued support and guidance. The Directors also thank the Insurance Regulatory and Development Authority of India, Securities and Exchange Board of India, Ministry of Corporate Affairs, Reserve Bank of India, Pension Fund Regulatory and Development Authority, Life Insurance Council, National Stock Exchange of India Limited, BSE Limited, depositories and other governmental and other bodies and authorities for their support, advice and direction provided from time to time.

On behalf of the Board of Directors

sd/-

Mumbai Deepak S. Parekh

April 18, 2018 Chairman

---

Mar 31, 2017

Directors'' Report

TO, THE MEMBERS OF HDFC STANDARD LIFE INSURANCE COMPANY LTD.

The Directors are pleased to present the 17^th Annual Report of HDFC Standard Life Insurance Company Ltd. ("Company" / "HDFC Life"), together with the Audited Financial Statements of the Company, for the FY 2017.

Standalone Financial Performance and Business Review Financial Performance

(Rs, Crs)

Particulars	FY 2017 (Audited)	FY 2016 (Audited)
Individual business:
a. New business premium	4,201	3,657
(i) Regular premium	3,573	3,296
(ii) Single premium	628	361
b. Renewal premium	10,749	9,826
Group premium	4,495	2,830
TOTAL PREMIUM	19,445	16,313
PROFIT AFTER TAX	892	818
Assets Under Management	91,742	74,247

Other key parameters

Particulars	FY 2017	FY 2016
Embedded value	12,389	10,233
Overall New Business Margins (post overrun)	21.6%	19.9%

Note: Embedded Value for FY2016 based on external review and FY2017 no. based on Management estimate

Business Review and Outlook Industry Outlook

The FY 2017 was a critical year for life insurance industry in India. The macro-economic factors and demographic profile continue to support growth for financial services. Players continue to adapt to the changing macro landscape, while competing to hold their turf,

Within the life insurance industry, private life insurers continued to grow at relatively faster rate and gained higher market share within Individual segment. Even under the Group segment, private players continue to gain traction and have delivered healthy growth.

Improving macro trends with India outperforming other emerging markets, increasing traction in equity markets and higher focus on financial inclusion and penetration to increase the financial savings was reflected in 26% growth in Individual New Business Weighted Received Premia (WRP) and 20% growth in Group premia for the private players during FY 2017. At an industry level, the sector witnessed growth of 21% in Individual New Business WRP and 21% in Group premia during the year.

Demonetisation drive launched by Government of India in November 2016 also triggered growth for select players in individual segment, leveraging the spurt in the bank deposits which is reflected in above industry trends.

There also has been steady increase in proportion of business generated through corporate agents comprising banks and other financial services players amongst private players during past 5 years. This channel contributed 52% of total individual reported new business in 9M FY 2017 across all private players (Source: Public disclosures)

On the product segments, reduced allowable charges to distributors'' within ULIP segment and higher expense structures led many players to move towards traditional products. However, since 2014 market performance and transparent product structures have helped increase pull for ULIP products. There is increasing demand for protection products and its implicit higher new business margins (NBMs) has resulted in recent focus on the term segment across players.

Company Performance Individual Business Performance

HDFC Life ranked #3 among private players in terms of Individual WRP with a market share of 12.7% in FY 2017, versus 14.7% in FY 2016. During the year under review, the Company issued 10.82 lac policies in the Individual segment. The Company continues to offer diversified product suite across Linked, Participating and Non Participating segments.

The Company also continued its focus on pure protection segment including mortality and morbidity coverage, reflected through increase in overall new business sum assured by 43%. Overall, traditional Non Participating products contributed 13% of Individual APE, versus 14% in FY 2016 and Participating products contributed 35% versus 30% in FY 2016. The Linked business continued to dominate the product portfolio of the Company contributing 52% versus 56% last year.

In line with its strategy, the Company has been working to ensure diversification and strengthening its distribution mix across Corporate agents, Individual agents, Brokers and Direct channels, including Online. Digital remains a key thrust area and the Company has built a robust technology platform for its distributors and customers to leverage its digital capabilities.

The Company has an efficient technology platform, which ensures ease of purchase for consumers, while enabling rapid integration with distributors. Digital procurement, fulfillment and customer servicing continue to be the key focus areas. In FY 2017, over 98% of the proposal forms were submitted through digital medium and 70% of renewal business was received through online modes. The Company has various process and system controls, delivery assurance and internal and concurrent audits, that leads to lower dependency risks, scalability and ability to anticipate any issues or concerns.

Group Business Performance

Within Group business segment, the Company maintained its #1 rank amongst private players, with market share of 24.3% in FY 2017, versus 18.3% in FY 2016 (rank #1) based on new business received premium. The Company focused on selling protection oriented products, even within this segment, through multiple partners. The New Business sum assured under the Group category increased from Rs, 165,655 Crs in FY 2016 to Rs, 285,454 Crs, covering 1.98 Crs lives during FY 2017.

Overall Business Performance and Financial Review

The Company continued to deliver strong operating and financial performance during the year under review. In line with the identified strategy, high focus was maintained on profitable growth and customer satisfaction.

The total premium grew by 19% in FY 2017, with 15% growth in Individual new business premium and 59% in Group premium.

The Company''s continued focus on better quality of business sourcing, customer retention, and persistent efforts in customer education has resulted in an increase in renewal premium by 9% in FY 2017 to Rs, 10,749 Crs. The 13^th month persistency ratio improved from 79% in FY 2016 to 81% in FY 2017 and 61^st month persistency improved from 50% in FY 2016 to 57% in FY 2017 (based on original premium method).

For FY 2017, the Company earned IGAAP profits of Rs, 892 Crs, versus Rs, 818 Crs in FY 2016, i.e. an increase of 9%. The Company ended the year under review with an accumulated profit of Rs, 1,613 Crs, post payment of interim dividend of Rs, 264 Crs including dividend distribution tax (DDT).

Backed by healthy business performance and persistency, the Assets under Management (AUM) for the Company crossed the milestone of Rs, 90,000 Crs mark during the year under review and saw a growth of 24% to Rs, 91,742 Crs as on March 31, 2017 versus Rs, 74,247 Crs, as on March 31, 2016. Balanced debt-equity mix of AUM was ensured, with debt-equity proportion of 59:41 as on March 31, 2017.

The Company increased its presence across the country, with several new tie-ups and partnerships across traditional and non-traditional partners including NBFCs, MFIs, SFBs, etc. Total branch presence of the Company increased to 414 branches during the year under review across 819 cities.

During the year, the Company has increased its exposure and presence in pension segment and re-insurance market in UAE, through its two wholly owned subsidiaries - HDFC Pension Management Company Limited (''HDFC Pension'') and HDFC International Life and Re Company Limited (''HDFC International'').

The Company is committed to its positioning as the most preferred life insurance company in India, delivering value for all its stakeholders. Improving business quality, ensuring seamless customer journey and delivering healthy returns continue to be the key focus areas for the Company. Digital ecosystems and leveraging technology will be an important driver in this journey and area of investment, along with new distribution avenues to achieve above objective.

Policyholder and Customer Service

HDFC Life is committed to provide seamless services to the customers and the claimants in the shortest possible turnaround time across the life cycle of the policy with minimum documentation and data requests.

Various initiatives have been implemented by the Company during last year, including:

1) Adopting Tele-underwriting capability

2) Medical underwriting based on customer''s executive health reports.

3) Financial risk assessment through use of credit bureau reports

4) Deployment of OCR into the workflow interface

5) Deployment of robotics

6) Adoption of ''Claims Assist'' for speedier completion of the policy documentation

7) Facility to the customers for submission of maturity/ money back/ pension/ annuity documents through Whats app;

8) Differential process for HNI claimants

9) Lean cell for taking care of claims of Defence personnel.

Specialized underwriters are in place for the overall underwriting and related process, including dedicated people for online and group customers.

The above initiatives have helped us improve customer experience and enabled reducing processing time.

During the year under review, the Company had achieved the below milestones:

1) The Company stands amongst the best in the industry on overall Claims Settlement Ratio of 99.2% in FY 2017

Products

	ULIP Life (10) 1	Par Life (7)	Non Par Life (2)
	?	?	?
-	HDFC SL Crest	HDFC Life ClassicAssure Plus	- HDFC Life Sanchay
-	HDFC SL ProGrowth Super II	HDFC Life Super Savings Plan	- HDFC SL Sarvgrameen Bachat
-	HDFC SL ProGrowth Maximizer	HDFC Life Super Income Plan	Yojana
-	HDFC SL Young Star Super Premium	HDFC Life YoungStar Udaan
-	HDFC SL ProGrowth Flexi	HDFC Life Sampoorn Samridhi
-	HDFC SL ProGrowth Plus	Plus
-	HDFC Life Smart Woman	HDFC Life Uday
-	HDFC Life Click 2 Invest - ULIP	HDFC Life Pragati
-	HDFC Life Sampoorn Nivesh
-	HDFC Life Capital Shield

2) The Company''s turnaround time for non investigated claims improved to ''within 3 days'' from ''7 days'' in FY 2017;

3) In the Micro Finance Business, 100% of the claims processing is completed within 2 days of document submission;

4) Approximately 98% of the Money Back payouts, and 99% of the Annuity Payments are done on the due date.

For renewals, around 78% of the customers paid premium via alternative payment methods such as auto debits (55.5%) and online payments (21.7%), which comprises 70% of the Company''s total collections, versus 61% last year. The Company strengthened its previous year initiative of last mile connectivity with the lapsed and paid-up customers by educating them on importance of revivals.

Even prior to the Central Government''s focus to move towards ''Cashless'' economy, the Company had stopped accepting cash payment for renewals at HDFC Life branches in phases, with a pan-India phasing out made effective from July 1, 2016. The Company continues to offer multiple options to its customers for easy renewal payment, including online payment through Credit Card, Debit Card and multiple payment wallets, payment through Inbound IVR, MSwipe, NEFT/ eCMS, and offline facility to pay the premium at HDFC Life branches and numerous other partner branches including HDFC Bank, Axis Bank, cheque drop boxes etc.

HDFC Life has continuously focused on creating differentiators to meet customer needs and expectations. The Company has proactively identified and owned niche customer segments and product categories, to drive appropriate actions. The Company aspires to attain leadership position in select identified segments, by delivering unique sales, products and service experience.

Pension/Annuity (7)	Protection (2) 1	Group (10)	1 Health (2)/Rider (8)
?	?	?	?
- HDFC Life Pension	- HDFC Life Click 2	HDFC Group Term	- HDFC Life Cancer Care
Super Plus	Protect Plus	Insurance	- HDFC Life Easy Health
- HDFC Life Single	- HDFC Life CSC Suraksha	HDFC Life Group Credit	- HDFC Life Income
Premium	Plan	Protect Insurance Plan	Benefit on Accidental
Pension Super Plan		HDFC Life Group	Disability Rider
- HDFC Life Click 2		Pension Plan	- HDFC Life Critical Illness
Retire-ULIP		HDFC Life Group Unit	Plus Rider
- HDFC Life Assured		Linked Pension Plan	- Total and Partial
Pension Plan		HDFC Life New Group	Permanent Disability
- HDFC Life New		Unit Linked Plan	Benefit
Immediate Annuity Plan		HDFC Life Group	- Accident Death Benefit
- HDFC Life Personal		Variable Employee	(Group)
Pension Plus		Benefit Plan	- HDFC Life Group Critical
- HDFC Life Guaranteed		HDFC Life Group Credit	Illness plus
Pension Plan		Protect Plus HDFC Life Pradhan Mantri Jeevan Jyoti Bima Yojana HDFC Life Group Jeevan Suraksha HDFC Life Group Credit Suraksa	- Total Permanent Disability Benefit - Critical Illness Benefit - Accident Death Benefit (Individual)

HDFC Life''s product portfolio comprises of solutions catering to the varied individual customer needs across Protection, Pension, Savings, Investment and Health category. HDFC Life also offers different products for varying needs of employers, ranging from term insurance plans for pure protection to voluntary plans such as superannuation and leave encashment.

During the year under review, with an objective to further insurance penetration and financially secure Indian households, the Company forayed into the micro-insurance segment by launching two products, HDFC Life Group Jeevan Suraksha and HDFC Life Group Credit Suraksha.

The Company also launched individual participating savings product, HDFC Life Pragati, with features and benefits suitable for low to middle income individuals, which have not been reached so for due to affordability factor. This product has a potential to cater to the untapped Indian households within lower income bracket.

Further, the Company expanded within the Health category, by launching HDFC Life Easy Health that provides hassle free comprehensive protection against critical illness, surgical procedures and hospitalization expenses under one plan without any medical underwriting.

The Company also added HDFC Life Capital Shield product in the Unit Linked category, to cater to the needs of the investors looking to tap the potential upside of the financial markets while having an assurance of Capital Guarantee.

At the end of the year under review, HDFC Life has 30 Individual and 10 Group products, with 8 Riders available for its customers.

Human Resource and People Development

HDFC Life gives paramount importance to employee satisfaction and overall development of over 14,800 employees that constitute its workforce. The Company earnestly strives to distinguish itself from the peers and aspires to be counted amongst the best places to work across various sectors.

During the year under review, the Company has undertaken various initiatives to support business through organizational efficiency, and various employee engagement programmes, which have enabled achievement of higher productivity levels. The Company continued to focus on developing leadership as well as technical and functional capabilities of employees in order to meet future talent requirement.

Philosophies that drive talent management included having the most skilled and engaged employees discharging their current roles, while developing a strong bench of ready talent. We continued with our robust talent review and development processes across the board, which assessed potential and developmental needs of talent. Output of these reviews aggregated into structured learning interventions that were executed by top institutions like ISB and the IIM A.

Internal talent was given ample opportunities to take up managerial roles through a transparent, fair and scientific Internal Job Posting (IJP) process. Cross functional movements of talent were encouraged and enabled through talent review and assessment process to provide holistic understanding of business to employees.

Company''s L&D framework boasts of talented and experienced resources who ensure that interventions get customized to specific and special training needs, thereby maximizing impact and efficacy. In course of the year, the core focus area has been towards implementation of digital learning solutions like a Mobile learning app, thereby enhancing the learner reach, in addition to Just-in-Time access to learning content, which is critical for efficiency on job delivery.

The HR journey continued to be built on the bedrock of technology and innovation, with state of the art offerings like HR mobile application to build an enviable mobility platform that is rapidly transforming employee workforce productivity,

Investments

During the year under review, the global equity markets have seen significant gains, as global concerns on growth and anxiety over the fate of commodity economies faded. The pick-up in commodity prices further helped pull the price indices in the developed economies away from the deflation zone. On back of above developments, respective Central Banks regained confidence to initiate steps for rolling back the extreme accommodation provided by their respective monetary policies.

In the domestic market, the recovery in the corporate earnings has been relatively slow. Withdrawal of high denomination currency notes by the Government further impacted the corporate earning profile. However, the improvement in risk appetite globally and strong flows from domestic investors helped the equity markets overcome the concerns over earnings and post strong gains for the year.

During the same period, bond yields saw substantial softening on the back of easing inflation. The Reserve Bank of India (''RBI'') cut rates lower during the year, but the extent of the rate cuts were lower than expected. Consequently, bond yields retraced from the low levels seen during the year.

HDFC Life''s equity funds performed well during the year, with all the key equity funds performing in line with the respective benchmarks and the peers. The Company''s bond funds have been managed dynamically to calibrate the positions appropriately, based on the risk levels in the portfolio. The fund returns have out-performed their respective benchmarks and have also performed well against peer funds.

The investment funds of the Company are managed as per the stated objectives laid down in the Investment Policy, Asset-Liability Management Policy (''ALM''), and respective Funds'' objectives. These policies lay down the asset allocation and risk appetite guidelines for different funds, some of which have in-built guarantees. Fund allocation is tracked on a regular basis and is backed with suitable assets. During FY 2017, the asset allocation in the Company''s conventional and shareholder funds was in line with the ALM policy.

HDFC Life total AUM as on March 31, 2017, was Rs, 91,742 Crs. This comprised assets of Rs, 53,800 Crs held under the unit-linked funds and Rs, 37,942 Crs held under the conventional funds and shareholders'' funds. The corresponding numbers for the previous year were Rs, 45,727 Crs and Rs, 28,520 Crs respectively.

Information Technology

FY 2017 has seen the adoption of many cutting edge technologies such as Blockchain, Internet of Things (IOT), Robotics Process Automation (RPA), Chatbots, among insurance providers globally. Further, there is an emergence of a new breed of Insuretech start-ups looking to disrupt the insurance value chain.

HDFC Life intends to be the leading digital insurer in the country. The Technology Enabled Business Transformation (TEBT) programme has, over the last 24 months, created a service driven platform that makes it easier for the distribution partners to integrate with HDFC Life. This has helped in building an agile and multi-distribution model that fits into the strategic objectives of the Company.

During FY 2017, the Company undertook an initiative to set up the entire sales cycle on the mobile platform. This initiative, termed Mobility 1.0, significantly reduced customer acquisition cycle time, increased sales productivity and reduced paper trail throughout the Company. In addition to the productivity improvements, this allowed sales team to work independent of the branch infrastructure. This also resulted in reducing cost for sales hubs. The new and improved individual portal for Financial consultants, was also launched during the FY 2017 as part of TEBT program.

To further improve the Digital Ecosystem, Mobility 2.0 was introduced during FY 2017, to leverage and build on the capabilities created in Mobility 1.0. The modules include:

i. geo-capabilities that help in lead allocation, partner visit tracking, and customer heat maps;

ii. India stack integration-integration with Aadhar, including IRIS authentication, e-sign and UPI;

iii. sales force management with daily task sheet and audio huddles;

iv. sales aids such as auto financial planning tool, auto filling of forms, pre-approved offers, expert on call;

v. customer servicing capabilities;

vi. virtual sales assistant; and

vii. mobile learning.

Besides, the Company has been working with its Bancassurance relationships and integrating with the bank CRM systems. This has led to STP (straight through processing) process for issuance of policies and a unique digital experience for customers of select Bank partners.

The Company has continued with its efforts to tighten controls and prevent customer complaints. A completely automated and sophisticated control mechanism has been implemented during FY 2017. The resulting capability has enabled proactive identification of anomalies in critical areas like compliance to file and use requirements and payout computations.

The Company also conducted a Hackathon with a focus on three broad based themes - Design, Data Science and Mobility.

The Company has been re-certified on ISO 27001:2013 for its data centre and operations. Several cyber security initiatives have also been implemented during the year such as Next-Gen Firewall, Intrusion Prevention System, Security Incident and Event Management and DDOS services.

Awards

The Company received more than 40 awards and accolades during the year under review across financial disclosures, customer service, technology, digital solutions, products, human resources, marketing, etc. The Company received the National Quality Excellence Award 2017 for being the most innovative Company. The Company also received Golden Shield award for Excellence in Financial Reporting for their Annual Report FY 2016 from ICAI (The Institute of Chartered Accountants of India).

Regulatory Landscape

During the year under review, some of the key regulations / guidelines etc., issued by the Insurance Regulatory and Development Authority of India ("IRDAI" / "Authority") include:

- Circular on Implementation of Indian Accounting Standards ("Ind AS") for insurance sector. The Ind AS implementation will have impact on financial reporting systems and processes significantly. The Company is taking necessary steps for implementation as per timelines notified by the Authority, to achieve transition to Ind AS by FY 2018. Representatives from the Company are also part of Steering Committee set up by the IRDAI, which is overseeing implementation of Ind AS in the industry.

- The Authority revised the Guidelines on Corporate Governance for insurers in India (''Guidelines''), which includes revised provisions on certain Corporate Governance practices, appointment of Managing Director/ Chief Executive Officer/ Whole Time Director and other Key Management Persons as well as the appointment of statutory auditors of insurers. These are applicable from FY 2017 onwards, and have been implemented as required.

- With a view to further promote digital ecosystem and in policy holder interest, the Authority has required insurers to compulsorily issue policies in electronic form, beyond a certain sum assured threshold. It has also permitted use of electronic proposal form. These will promote efficient processes and speed up policy issuance.

- Revised Health Insurance regulations were issued by the Authority allowing life insurers to offer long term Individual Health Insurance products for term of 5 years or more, with premium uniformity for blocks of 3 years. Importantly, the Authority has barred life insurers from offering indemnity based products. In view of this, the Company had to withdraw its indemnity based health product, impacting business in this segment.

- The revised Investment regulations have prescribed several new provisions, including restrictions on investing in fixed deposits and corporate deposits of promoter group companies, Chief Risk Officer to be part of the Investment Committee and custodian not to be part of the promoter group, etc. The Regulation also requires Statutory auditors to confirm compliance with implementation of Investment Policy by Investment Committee, and quarterly Board review of the fund wise and product-wise parameters.

- The Authority notified new regulations effective April 1, 2017 on Payment of Commission to insurance agents and intermediaries. The underlying approach proposed uniformity across business segments vis-a-vis the expenses of management, commissions and manner of computation of solvency. Regulations also provides for a Board approved policy on the subject.

IRDAI also released several discussion papers/draft guidelines on key aspects of business and operations, including Listing of Indian Insurance Companies; exposure drafts on proposed revision in financial statements regulations; Protection of Policyholders'' Interests and Outsourcing of activities etc.

Rural and Social Sector Obligations

The Company maintains dedicated focus on undertaking rural business, and endeavors to tailor its products and processes to support these businesses, considering customer needs.

As part of its overall business, the Company has achieved prescribed regulatory targets of social and rural business, as follows:

- Rural business - Achieved - 21% versus prescribed requirement of 20% of overall business

- Social business - Insured - 8,04,612 social lives versus prescribed 7,68,851 social lives

Solvency

The IRDAI requires life insurers to maintain a minimum Solvency Ratio of 150%. The Solvency Ratio is calculated as specified in the IRDA (Assets, Liabilities, and Solvency Margin of Insurers) Regulations, 2016. As compared to the minimum requirement of 150%, the Company''s Solvency Ratio, as at March 31, 2017, was 192%.

Dividend & Reserves

During the year under review, an interim dividend @ Rs, 1.10 per equity share (face value of Rs, 10/- each) was declared by the Board of Directors and paid to the Shareholders. The Board has recommended the same to be confirmed as the Final Dividend for FY 2017. Necessary resolution is being proposed for the purpose at the ensuing 17^th Annual General Meeting ("AGM").

The Company has carried forward a total of Rs, 627.7 Crs to its Reserves. The Company had accumulated profits of Rs, 1,613.5 Crs on March 31, 2017.

Capital & Shares

The Company''s paid up equity share capital increased marginally from Rs, 19,952,881,380 as on March 31, 2016 to Rs, 19,984,752,830 as on March 31, 2017 pursuant to allotment of 2,772,995 equity shares upon exercise of Options under Employees Stock Option Scheme 2014; and allotment of 414,150 equity shares upon exercise of Options under Employees Stock Option Scheme 2015. The said allotments were made post requisite approval from the Authority.

The Shareholding Pattern is given elsewhere in this Annual Report.

Initial Public Offering and Merger Proposal

During the year under review, the Board of Directors of the Company approved taking steps to initiate the process for an Initial Public Offering (IPO) of the Company by way of an offer for sale by Housing Development Finance Corporation

Limited, the Company''s Indian Promoter Company, upto 10% of the Company''s paid-up and issued equity share capital. This was subject to relevant regulatory and other approvals, as applicable.

On August 8, 2016, the Board of Directors of HDFC Life, Max Life Insurance Company Limited ("Max Life"), Max Financial Services Limited ("Max Financial") and Max India Limited ("Max India") at their respective board meetings, approved entering into definitive agreements for the amalgamation of the businesses between the above entities through a composite Scheme of Arrangement ("Scheme"), in a manner, as below:

Step 1: Max Life Insurance Company Limited will be merged into Max Financial Services Limited

Step 2: The life insurance undertaking will be demerged from Max Financial Services Limited into HDFC Life

Step 3: The residual business of Max Financial Services Limited would be merged into Max India Limited

Step 4: HDFC Life would become a listed Company

The proposed transaction will create a large company with differentiated scale and portfolio, with wider reach to expand in a growing life insurance sector. While the transaction will deliver attractive value proposition for HDFC Life and Max Group shareholders, it will also benefit the Policyholders by providing them with enhanced product portfolio and touch points. Employees of both the entities will reap benefits out of the transaction, in terms of greater opportunities across functions and geographies.

Subsequent to the approval by the Board of Directors of respective Companies, a joint application was filed with the IRDAI by the Company and Max Life seeking its in principle approval on the Scheme on September 21, 2016. The IRDAI had expressed certain reservation on the merger transaction structure, post which the Company has given suitable clarification, supported with legal views and analysis.

The Company is presently awaiting / will require regulatory approvals from the Insurance Regulatory and Development Authority of India, Competition Commission of India, the Securities and Exchange Board of India, Stock Exchanges and Hon''ble Courts / National Company Law Tribunal (NCLT) amongst others. As part of NCLT approval process, the Company will also seek approval of its Members, as may be directed by the NCLT.

Policy on Directors'' appointment and remuneration

The remuneration and compensation for Directors, Key Managerial Personnel and other Employees is guided by the requisite Policy. More details are included in the Corporate Governance Report, forming part of this Directors'' Report.

Evaluation of performance of the Board

Pursuant to and in line with the requirements prescribed under the Companies Act, 2013 (''Act''), the Board of Directors carried out an annual evaluation of its performance, and that of its Committees and Individual Directors. Further, the Independent Directors met separately, without the attendance of non-Independent Directors and Members of the Management, and inter alia reviewed the performance of non-independent directors, and Board as a whole; and performance of the Chairman. They further assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board.

Overall, the Independent Directors expressed their satisfaction on the performance and effectiveness of the Board, all the Committees, Individual non-Independent Board Members, and the Chairman, and on the quality, quantity and timeliness of flow of information between the Company Management and the Board. The Independent Directors shared additional suggestions on certain aspects to further improve the process. The Independent Directors opined that the Company''s Board was a benchmark Board and expressed their satisfaction with the conduct and efficiency of the Board and Board Committees.

The Nomination & Remuneration Committee also undertook an evaluation of Individual Director''s performance and expressed its satisfaction on performance of each Director.

The Board conducted the review of each Director''s performance, Board as a whole and performance of Committees of the Board, and expressed its satisfaction.

There has been no material adverse observation or conclusion, consequent to such evaluation and review.

Directors

The Company''s Board comprises of 15 Directors, including two Alternate Directors. There are 13 non-executive directors (including 6 Independent Directors, and 2 Alternate Directors) and two Managing/Executive Directors. The Company''s Board includes 2 women Directors, including its Executive Director & Chief Financial Officer.

Changes during the year under review

The Board of the Company was further strengthened during the year with the induction of Mr. Sumit Bose and Mr. Ranjan Mathai as Additional Directors wef July 19, 2016 and July 22, 2016 respectively, designated as Independent Directors. This has also added diversity to the Board, resulting in enhanced Board independence.

Mr. Bose is former Union Finance Secretary (as Secretary, Department of Revenue). He joined the Indian Administrative Service in 1976, and has served as Secretary (Expenditure) and Secretary (Disinvestment) as well as Secretary in the Thirteenth Finance Commission, and in the Ministry of Finance, GOI since August 2007 till superannuation.

Mr. Mathai is former Foreign Secretary of India. He has held several key positions in the Ministry of External Affairs of the Government of India, including as Joint Secretary, heading the Division responsible for India''s relations with Bangladesh, Myanmar, Sri Lanka, and the Maldives (1995-1998).

In line with the provisions of the Act, the appointments of Mr. Sumit Bose and Mr. Ranjan Mathai are proposed to be regularized at the ensuing AGM for a period of 5 years from the date of their initial respective appointments, and the relevant disclosures for their appointment forms a part of the Notice of the 17^th Annual General Meeting.

During the year under review, in line with the applicable provisions under the Act, Mr. Luke Savage and Mr. James Aird had vacated office as Alternate Director to Sir Gerry Grimstone and Mr. Norman Keith Skeoch respectively, at such times when Sir Gerry Grimstone and Mr. Norman Keith Skeoch had visited India to attend the Board Meetings; and they were re-appointed as Alternate Director to Sir Gerry Grimstone and Mr. Norman Keith Skeoch with the Board''s approval, following the date of the relevant Board Meetings.

Independent Directors

The Company has six Independent Directors on the Board i.e. Dr. SA Dave, Mr. Ravi Narain, Mr. VK Viswanathan, Mr. Prasad Chandran, Mr. Sumit Bose and Mr. Ranjan Mathai. In accordance with the provisions of the Act, the Independent Directors are not liable to retire by rotation, and have been appointed for a term of 5 years from their respective appointment dates.

The Members may note that amongst the Independent Directors, Dr. Dave has been nominated by HDFC Limited, Holding Company of the Company, in line with the provisions of Regulation 24 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, which requires a listed company to nominate at least one of its Independent Directors on the Board of its material unlisted Indian subsidiary.

Re-appointment of Ms. Vibha Padalkar The Members may note that Ms. Vibha Padalkar, Executive Director & Chief Financial Officer, was appointed on August 14, 2012 by the Shareholders of the Company, and as approved by the IRDAI, for a period of 5 years. Accordingly, her term as Executive Director & Chief Financial Officer expires on August 13, 2017. The proposal for her re-appointment has been recommended by the Nomination & Remuneration Committee, and approved by the Board of Directors. The said proposal is being proposed for Shareholders'' approval at the ensuing 17^th Annual General Meeting and the relevant disclosures with regards to her re-appointment as Executive Director & Chief Financial Officer have been included as part of the Notice of the 17^th Annual General Meeting. The said re-appointment is also subject to IRDAI''s approval.

Declaration by Independent Directors The Independent Directors of the Company have confirmed that they satisfy the criteria of prescribed for Independent Director as stipulated in Section 149(6) of the Act.

Directors retiring by rotation (being Directors other than Independent Directors)

In accordance with the provisions of the Act read with the Articles of Association of the Company, Ms. Renu Sud Karnad and Mr. Norman Keith Skeoch, being nonIndependent Directors, are liable to retire by rotation at the ensuing 17^th Annual General Meeting of the Company. They are eligible for re-appointment. Resolutions for the purpose of their re-appointments are being proposed at the 17^th Annual General Meeting. Profiles of these Directors are included in the Notice of the 17^th Annual General Meeting.

''Fit and Proper'' criteria

All the Directors have confirmed compliance with the ''fit and proper'' criteria, prescribed under the Corporate Governance Guidelines issued by the IRDAI.

The Company has also received declarations from all its Directors as per Section 164 of the Act, confirming they are not disqualified from being appointed as Directors of the Company.

The details of the Board and Committee meetings, and the attendance of Directors thereat, forms part of the Corporate Governance Report, which is attached as Annexure 1 to this Directors'' Report.

Corporate Governance

A report on the Corporate Governance framework within the Company, with required certification as required under the IRDAI Regulations, is enclosed hereto as Annexure 1 and forms part of this Report.

Legal Update

During the FY 2017, no significant and material orders were passed by the regulators, courts or tribunals, that impacted the going concern status of the Company, or which can potentially impact the Company''s future operations.

Key Managerial Personnel

Mr. Amitabh Chaudhry, Managing Director and Chief Executive Officer; Ms. Vibha Padalkar, Executive Director and Chief Financial Officer; and Mr. Manish Ghiya, EVP, Company Secretary and Head - Compliance and Legal, are designated as the "Key Managerial Personnel" of the Company, under the provisions of the Act.

There were no changes in the Key Managerial Personnel during FY 2017.

Risk Management Policy

The Company has a defined Risk Management Strategy and a Framework which is designed to identify, measure, monitor and mitigate various risks. A Board approved Risk Management Policy has been put in place to establish appropriate systems or procedures to mitigate all material risks faced by the Company. The said Policy is reviewed periodically by the Risk Management Committee of the Board.

The risk management architecture of the Company has been detailed under the Enterprise Risk Management section of the Annual Report.

Internal Audit Framework

The Company has institutionalized a robust and comprehensive internal audit framework/mechanism across all the processes, to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals and, compliance with applicable policies, procedures, laws, and regulations.

The Internal Audit function at HDFC Life works closely with other verticals in the ARM (Audit and Risk Management) Group and other assurance functions, considering relevant material inputs from risk registers, compliance reports and external auditor reports etc. The function also tests and reports compliance to Internal Financial Controls over Financial Reporting.

Internal audits are conducted by in-house Internal Audit team and co-sourced auditors. The function also undertakes follow-up on engagement findings and recommendations, in line with the approved framework.

The Internal Audit function reports its findings and follow-up status on these findings to the Audit Committee on quarterly basis.

Internal Financial Controls

The Company has institutionalized a robust and comprehensive internal control mechanism across all the major processes.

The Internal Audit, in addition to ensuring compliance to policies, regulations, processes etc., also test and report on adequacy of internal financial controls with reference to financial reporting/statements.

Vigil mechanism

The Company has put in place a Whistleblower Policy and Framework. More details are provided in the Corporate Governance Report, which is attached as Annexure 1 to this Directors'' Report.

Particulars regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Section 134 of the Act, read with the Companies (Accounts) Rules, 2014, requires disclosure of certain specified information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo in the Directors'' Report.

The disclosure relating to conservation of energy does not apply to companies in the Life insurance sector and hence, the Company is exempted there from. Disclosure in respect of technology absorption, and foreign exchange earnings and outgo is given below.

Technology Absorption

Specific areas, in which R&D is carried out by the Company	Not applicable
Benefits derived as a result of the above R&D	Not applicable
Future plan of action	Block chain / Robotic process automation / Cognitive computing / Cyber security
Expenditure on R&D a) Capital b) Recurring c) Total d) Total R&D expenditure as a percentage of total turnover	Not applicable
Technology absorption, adoption and innovation
1. Efforts made towards technology absorption	Major Initiatives Undertaken/Completed are: - Revamped the Corporate Website and Customer Mobile Application - Straight through processing for New Business processes - Re-engineered processes for Customer and policy servicing - Robotics Process Automation for payouts, actuarial, medicals and group business processes - Optical Character Recognition (OCR) - ISO 27001:2013 Re-certification - Launched mobile version of online learning modules for employees - 84 processes are being pursued for robotic process automation
2. Benefits derived as a result of the above efforts (eg product improvement, cost reduction, product development, import substitution and so on)	Benefits derived in terms of process / product improvement / cost reduction include: - Approximately 65% of the total New Business proposals are being submitted through mobile applications - Approximately 80% of Customer initiated payouts are being processed through Robotics Process Automation and have resulted in cutting Turn-Around-Time for over 50% cases to less than 5 days - Response time cut by 50% for Customer Email communications - 9 Retail products and 2 Group products were delivered this year, adding to the revenue - Roll out of Customer Consent Document in New Business process resulted in reducing 15 pages of information requirements to a single page - Straight through Processing has significantly reduced manual intervention required for document scrutiny
In case of imported technology (imported during the last three years reckoned from the beginning of the financial year) - i. The details of technology imported; ii. The year of import; iii. Whether the technology been fully absorbed; iv. If not fully absorbed, areas where absorption has not taken place, and the reasons thereof	Nil
Expenditure incurred on Research and Development	Nil

Foreign Exchange Earnings and Outgo

The details of foreign exchange earnings and outgo during the FY 2017 are as follows:

- Earnings	Rs, 70 Crs
- Outgo	Rs, 139 Crs

Subsidiary Companies 1. HDFC Pension Management Company Limited ("HDFC Pension")

Financials and Business Outlook

A synopsis of financial performance of HDFC Pension during FY 2017 is as below:

(Rs, Lacs)

Particulars	FY 2017	FY 2016
Gross Income	243.6	239.6
Total Expenses	274.2	238.1
Profit before Tax	(30.6)	1.5
Provision for Tax	0	0.3
Profit after Tax	(30.6)	1.2

During the year under review, AUM of the corporate and retail sector across all Pension Funds in the NPS architecture grew by 98%, from Rs, 3,563.9 Crs to Rs, 7,017.7 Crs, which included funds of PSU Banks'' employees where the Fund Manager was either of three Government Sector PFMs.

HDFC Pension''s AUM as on March 31, 2017 stood at Rs, 1,163.0 Crs i.e. a growth of 209%. HDFC Pension sourced 535 new Corporate in FY 2017. The Subscriber base under ''Corporate'' sector category stood at 51,920 in FY 2017 (i.e. a growth of 85% over FY 2016), whereas the Subscriber base under retail sector stood at 78,847 in FY 2017 (i.e. a growth of 140% over FY 2016).

Legal matter

In January 2014, a fresh Request for Proposal (''RFP'') was floated by the PFRDA seeking bids from Sponsors for selection of pension fund managers afresh to manage the pension funds. In response to the RFP, HDFC Standard Life Insurance Company Limited (''HDFC Life'' / ''the Sponsor'') had submitted its technical and commercial bid. The technical bid made under RFP was opened in April 2014 and the bid submitted by the Sponsor was not accepted by the PFRDA on technical grounds of not having profitability for a period of 3

years. The Sponsor, therefore, filed a Writ Petition before the Hon''ble High Court of Delhi, challenging the said rejection. The Hon''ble High Court of Delhi by its Order dated May 15, 2014 quashed and set aside the PFRDA''s rejection of the Sponsor''s bid and directed the PFRDA to evaluate the bid in accordance with the steps set out in the RFP While the PFRDA cleared the Sponsor''s technical and commercial bid and the Sponsor even agreed to match the lowest commercial bid, the PFRDA declined to grant the Sponsor a ''Letter of Appointment''. The Sponsor therefore filed another Writ Petition before the Hon''ble High Court of Delhi against the rejection. Vide its Order dated December 18, 2014 the Hon''ble High Court of Delhi quashed and set aside the PFRDA''s rejection of the Sponsor''s bid and directed the PFRDA to grant HDFC Life a ''Letter of Appointment'' to act as a Sponsor. Subsequently, the PFRDA has filed a Special Leave Petition before the Hon''ble Supreme Court of India challenging the above said Order dated December 18, 2014. The Hon''ble Supreme Court, by its Order dated March 9, 2015, refused to grant the PFRDA any ad-interim relief and the matter is presently pending hearing. On March 27, 2015, complying with the High Court order, the PFRDA had issued a ''Letter of Appointment'' in favour of the Company, stating inter alia that such appointment is subject to the outcome of the above proceedings filed before the Hon''ble Supreme Court.

It may be noted that the PFRDA (Pension Fund) Regulations, 2015 were notified in May 2015, pursuant to which re-registration of all pension funds was sought by the PFRDA. HDFC Pension has submitted its application for the same, and a response from the PFRDA is awaited. However, vide a letter dated June 24, 2016, the PFRDA, while acknowledging our submission of Annual Fees, had granted an extension to continue as a Pension Fund until the selection of Pension Funds in terms of process specified under PFRDA (Pension Fund) Regulations, 2015. This extension was subject to the Order of the Supreme Court of India on the appeal filed by PFRDA against the Order of the High Court of Delhi described above.

During the year under review, the PFRDA issued a fresh Request For Proposal (''RFP'') for selection of Pension Funds for private sector, pursuant to which the Sponsor had submitted a Technical and Commercial bid. On November 29, 2016 the PFRDA issued a notice that the Commercial Bid

would be opened on November 30, 2016 wherein the name of HDFC Life was included which implies that the Technical Bid of HDFC Life as a Sponsor has been accepted. HDFC Life is also given to understand that the Commercial Bid submitted by HDFC Pension has also been accepted by the PFRDA and formal issuance of letters of appointment is awaited by all Companies.

2. HDFC International Life and Re Company Limited ("HDFC International")

In FY 2016, HDFC Life established HDFC International Life and Re Company Limited (''HDFC International''), a Wholly Owned Subsidiary, in the Dubai International Financial Centre (DIFC), to capitalize on emerging business opportunities, in view of the significant NRI population residing in the region.

HDFC International was established with the primary objective of offering life reinsurance capacity in the UAE and other GCC nations. The license granted to HDFC International allows "Effecting Contracts of Insurance and Carrying out Contracts of Insurance", in respect of life insurance classes.

During the year under review, HDFC International has commenced business operations and inked two individual life reinsurance treaties in the UAE. HDFC International has also started offering reinsurance capacity for Group Life and Credit Life arrangements across the GCC region.

Financials and Business Outlook

During the first Financial year, HDFC International earned a Gross Income of US$ 354,192 while its expenses stood at US$ 1,327,218. The period under review ended with a loss of US$ 973,027. The financial performance numbers are for the period from January 10, 2016 to March 31, 2017.

During the period under review, HDFC International signed reinsurance treaties for two distinct lines of individual life business, with one of the largest local insurers in the UAE. It also offered reinsurance capacity for two group life schemes, also with the same ceding insurer.

HDFC International also returned a modest Underwriting Income (Technical Profit), which is testimony to the strength of its underlying underwriting and risk assessment processes.

In the years to come, HDFC International intends to expand its footprints by offering reinsurance capacity to ceding life insurers in other markets. By combining an aggressive outreach into other markets with its ever improving underwriting experience, it expects to significantly improve its revenue streams in FY 2018.

Swabhimaan / Corporate Social Responsibility

As part of its initiatives under Corporate Social Responsibility ("CSR"), the Company has undertaken projects in various areas including Education, Livelihood, Health, and Rural Development. These Projects are undertaken in line with the CSR Policy and are in accordance with Schedule VII of the Act, read with the Rules framed under the said Act.

A more detailed write-up including details of the CSR projects undertaken, their monitoring, details on the implementing agencies, amounts spent and the requisite Responsibility Statement are given in Annexure 2 of this Report, and forms part of this Directors'' Report.

Annual Return

As per the provisions of the Act, an extract of the Annual Return of the Company (in the prescribed Form MGT.9) has been attached as Annexure 3 to the Directors'' Report, and forms part of this report.

Related Party Transactions

As per Section 177, read with Section 188 of the Act, the Audit Committee of the Board of Directors approves the related party transactions of the Company on a quarterly basis. Related party transactions entered during the year under review were in the ordinary course of business and on an arm''s length basis, thus not requiring Board/ Shareholders'' approval.

M/s GM Kapadia & Co, Chartered Accountants, reviewed the related party transactions for each quarter, and their report is placed at the meeting of the Audit Committee, along with details of such transactions.

As per Accounting Standard (AS) 18 on ''Related Party Disclosures'', the details of related party transactions entered into by the Company are also included in the Notes to Accounts.

Ind AS Roadmap

The Ministry of Corporate Affairs (MCA) issued a press release on January 18, 2016, announcing the Indian Accounting Standards (Ind AS) roadmap for banking, insurance and Non-Banking Financial Companies (NBFCs), requiring companies to prepare Ind AS based standalone and consolidated financial statements for FY 2019 with comparatives of FY 2018. Consequently, IRDAI issued a circular dated March 1, 2016, to guide and facilitate insurance companies towards Ind AS implementation. In compliance with the above circular, the Company has formed a Steering Committee headed by Executive Director and Chief Financial Officer, along with members from cross-functional areas to initiate Ind AS implementation process in the Company. The Company has also nominated the nodal officer to IRDAI, to facilitate smooth implementation of Ind AS.

During the year, in accordance with IRDAI''s direction to few shortlisted insurance companies, the Company performed a test run to carry out an impact study and identify issues in the preparation of the proforma financial statements as per Ind AS and submitted our results with key recommendations to IRDAI. In accordance with the above referred circular dated March 1, 2016, the Company started submitting the proforma Ind AS financial statements from quarter ended December 31, 2016 to IRDAI. During the year, IRDAI issued Exposure Draft of IRDAI (Preparation of Financial Statements of Insurers) Regulations, 2017 based on the report of the ''Implementation Group on Ind AS'' formed by IRDAI. In accordance with the requirement, the Company submitted its comments/suggestions to IRDAI on the said exposure draft. The final regulations from IRDAI are awaited.

The Company has prepared a broad roadmap for Ind AS implementation covering the aspects related to evaluation of Ind AS technical requirements, systems and processes, business and people impact and project management. The Audit Committee of the Board is overseeing the progress of the Ind AS implementation process and reports to the Board at quarterly intervals.

Secretarial Audit Report

The Secretarial Audit as required under the Act, was undertaken by M/s NL Bhatia & Associates, Practising Company Secretary. The Auditor has not made any qualification, reservation or adverse remark or disclaimer in his Reports for FY 2017.

The Secretarial Audit Report for the FY 2017 is enclosed hereto as Annexure 4 and forms part of this Report

Auditors

M/s Price Waterhouse Chartered Accountants LLP, and M/s GM Kapadia & Co, Chartered Accountants, are the Joint Statutory Auditors of the Company.

The Joint Statutory Auditors have not made any qualification, reservation or adverse remark in their report for FY 2017.

As per the IRDAI Regulations, a Statutory Auditor can conduct audit of an insurance Company for a maximum period of 5 years at a time. Further, as per the Act, an audit firm can be appointed as Statutory Auditor for not more than two terms of five consecutive years.

Thus, in accordance with the IRDAI Regulations read with the provisions of the Act, the appointment of M/s Price Waterhouse Chartered Accountants LLP was ratified, and subject to annual ratifications is valid up to the conclusion of the 19^th AGM, at the last AGM. This was in view of M/s Price Waterhouse Chartered Accountants LLP having already completed 2 years of office at the time of appointment at the last AGM held on July 14, 2016. Further, M/s GM Kapadia & Co, Chartered Accountants, were newly appointed for a term of 5 years, i.e. upto the conclusion of the 21^st AGM, at the preceding AGM.

Accordingly, in view of the provisions of the Act, and IRDAI Regulations, the Shareholders are requested to ratify the appointments of M/s Price Waterhouse Chartered Accountants LLP, and M/s GM Kapadia & Co, Chartered Accountants for FY 2017.

The Joint Statutory Auditors, being M/s Price Waterhouse Chartered Accountants LLP and M/s GM Kapadia & Co, Chartered Accountants, have confirmed their eligibility to act as Statutors Auditors. The Resolution for ratification of their appointments is included in the Notice of the ensuing Annual General Meeting.

Deposits

The Company has not accepted any deposits during the year under review.

Loans, guarantees or investments

In terms of the provisions of sub-Section 11 of Section 186 of the Act, read with the clarification given by the Ministry of Corporate Affairs under the Removal of Difficulty Order dated February 13, 2015, the provisions of Section 186 of the Act relating to loans, guarantees and investments do not apply to the Company.

Employees Stock Option Scheme

In line with the practice of incentivizing the employees through issue of stock options, the Company has in the past granted stock options and continues to grant stock options to its eligible employees (including employees of its subsidiary companies) under the various employee stock option schemes formulated from time to time.

Details of Options	Employees Stock Option Scheme 2014 (granted in FY 2015)	Employees Stock Option Scheme 2015 (granted in FY 2016)	Employees Stock Option Scheme 2016 (granted in FY 2017)
Number of Options granted	15,034,250	9,733,300	3,836,850
Number of Options vested	8,244,720	2,851,590	-
Number of Options exercised	3,181,037	414,150	-
The total number of shares arising as a result of exercise of Options	3,181,037	414,150	-
Options lapsed	847,232	313,200	4,000
Exercise Price	'' 90/- per share	'' 95/- per share	'' 190/- per share
Variation of Terms of Options	-	-
Money realised by exercise of options	286,293,330	39,344,250	-
Total number of Options in force	11,005,981	9,005,950	3,832,850
Employee wise details of Options granted to
a. Key Managerial Personnel			Please refer to Annexure 3 - MGT.9 for Options granted during the FY 2017
b. Any other employee who receives a grant of options in any one year of options amounting to five percent or more of options granted during that year.
c. Identified employees who were granted options, during any one year, equal to or exceeding one percent of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant.

During the year under review, there were no instances of loan granted by the Company to its employees for purchasing/ subscribing its shares.

In line with the requirements under the Act, the Company has formulated Employee Stock Option Scheme(s) 2014, 2015 and 2016 for the purpose of administering the issue of Stock Options to the eligible Employees as mentioned above. In line with the disclosure requirements under the Act, the various components of the Scheme, including Options granted during the FY 2017 as on March 31, 2017, are as below:

Material changes and Commitments affecting the financial position

There have been no material changes and commitments, affecting the financial position of the Company, which have occurred between the end of the financial year of the Company to which the Balance Sheet relates and the date of this report.

Directors'' Responsibility Statement

In accordance with the requirements of Section 134 of the Act, the Board of Directors state that:

i. In the preparation of the annual accounts, the applicable accounting standards have been followed, along with proper explanation relating to material departures (if any);

ii. Such accounting policies have been selected and applied consistently, and judgments and estimates made that are reasonable and prudent, so as to give a true and fair view of the Company''s state of affairs, as on March 31, 2017, and of the Company''s profit for the year ended on that date;

iii. Proper and sufficient care has been taken for the maintenance of adequate accounting records, in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. The annual accounts have been prepared on a going concern basis; and

v. Proper systems have been devised to ensure compliance with the provisions of all applicable laws, and such systems were adequate and operating effectively.

Appreciation and Acknowledgement

The Directors thank the policyholders, customers, distributors, and business associates for reposing their trust in the Company. The Directors also thank the Company''s employees for their continued hard work, dedication and commitment; and the Management for continuing success of the business.

The Directors further take this opportunity to thank Housing Development Finance Corporation Limited and Standard Life for their invaluable and continued support and guidance. The Directors also thank the Insurance Regulatory and Development Authority of India, Reserve Bank of India, Pension Fund Regulatory and Development Authority, Life Insurance Council and other governmental and other bodies and authorities for their support, advice and direction provided from time to time.

On behalf of the Board of Directors

sd/-

Mumbai Deepak S. Parekh

May 3, 2017 Chairman