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HDFC Life Insurance Company Ltd.

BSE: 540777 | NSE: HDFCLIFE |

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Series: EQ | ISIN: INE795G01014 | SECTOR: Miscellaneous

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Annual Report

For Year :
2019 2018

Director’s Report

The Directors are pleased to present the 19th 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)


FY 2019 (Audited)

FY 2018 (Audited)

Individual business:

a. New business premium



(i) Regular premium



(ii) Single premium



b. Renewal premium









Other key parameters

(Rs. Crs)


FY 2019

FY 2018

Individual APE



Group new business premium



Assets Under Management



Embedded value



Overall new business margins (post overrun)



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 13th month persistency based on total premium including individual and group business was stable at 87%. The 61st 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.


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


Category of Products






Par Life




Non Par Life






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.


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.


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


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 19th 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

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

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


Aggregate number of shareholders and the outstanding shares lying unclaimed as on April 1, 2018




Number of shareholders who approached listed entity for transfer of shares from suspense account during the year




Number of shareholders to whom shares were transferred from suspense account during the year




Aggregate Number of shareholders and the outstanding shares lying unclaimed as on March 31, 2019



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 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.


As on March 31, 2019 (in Crs)


Number of WTD/ CEO/ MD having received a variable remuneration award during the financial year



Number and total amount of sign on awards made during the financial year



Details of guaranteed bonus, if any, paid as joining/ sign on bonus



Total amount of outstanding deferred remuneration, split into cash, shares and share linked instruments and other form



Total amount of deferred remuneration paid out in the financial year



Breakup of amount of remuneration awarded for the financial year to show fixed and variable, deferred and nondeferred








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.


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 19th 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 14th 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 19th 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 19th 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 19th Annual General Meeting. The relevant disclosures for continuation of his appointment forms part of the Notice of the 19th 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


September 8, 2018

Ms Vibha Padalkar Managing Director and Chief Executive Officer

Change in designation**

September 12, 2018

Mr Suresh Badami Executive Director


September 17, 2018

Mr Niraj Shah Chief Financial Officer


March 1, 2019

Mr Narendra Gangan Executive Vice President, Company Secretary and Head - Compliance and Legal

No change


* 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)


FY 2019

FY 2018

Gross Income

Total Expenses

Profit/ (Loss) before Tax

Provision for Tax

Profit/ (Loss) after Tax











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 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

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.


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 19th Annual General Meeting (“AGM”) and 21st 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 24th 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.


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

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


Mumbai Deepak S Parekh

April 26, 2019 Chairman

Director’s Report