HDFC Bank was established in 1994 as one of the first private sector banks in India. Over the years, it has expanded significantly through mergers and organic growth, and as of today has over 1400 branches across India. The document provides details on HDFC Bank's history, capital structure, products and services, and financial performance over the years.

1. BRIEF HISTORY OF HDFC BANK:
Housing Development Finance Corporation Limited, more popularly known as HDFC Bank Ltd,
was established in the year 1994, as a part of the liberalization of the Indian Banking Industry by
Reserve Bank of India (RBI). It was one of the first banks to receive an 'in principle' approval
from RBI, for setting up a bank in the private sector. The bank was incorporated with the name
'HDFC Bank Limited', with its registered office in Mumbai. The following year, it started its
operations as a Scheduled Commercial Bank. Today, the bank boasts of as many as 1412
branches and over 3275 ATMs across India.
Amalgamations
In 2002, HDFC Bank witnessed its merger with Times Bank Limited (a private sector bank
promoted by Bennett, Coleman & Co. / Times Group). With this, HDFC and Times became the
first two private banks in the New Generation Private Sector Banks to have gone through a
merger. In 2008, RBI approved the amalgamation of Centurion Bank of Punjab with HDFC
Bank. With this, the Deposits of the merged entity became Rs. 1,22,000 crore, while the
Advances were Rs. 89,000 crore and Balance Sheet size was Rs. 1,63,000 crore..
Tech-Savvy
HDFC Bank has always prided itself on a highly automated environment, be it in terms of
information technology or communication systems. All the braches of the bank boast of online
connectivity with the other, ensuring speedy funds transfer for the clients. At the same time, the
bank's branch network and Automated Teller Machines (ATMs) allow multi-branch access to
retail clients. The bank makes use of its up-to-date technology, along with market position and
expertise, to create a competitive advantage and build market share.
Capital Structure
At present, HDFC Bank boasts of an authorized capital of Rs 550 crore (Rs5.5 billion), of this
the paid-up amount is Rs 424.6 crore (Rs.4.2 billion). In terms of equity share, the HDFC Group
holds 19.4%. Foreign Institutional Investors (FIIs) have around 28% of the equity and about
17.6% is held by the ADS Depository (in respect of the bank's American Depository Shares
(ADS) Issue). The bank has about 570,000 shareholders. Its shares find a listing on the Stock
Exchange, Mumbai and National Stock Exchange, while its American Depository Shares are
listed on the New York Stock Exchange (NYSE), under the symbol 'HDB'.
Products & services:
Personal Banking:
Savings Accounts, Salary Accounts, Current Accounts, Fixed Deposits, Demat Account, Safe
Deposit Lockers, Loans, Credit Cards, Debit Cards, Prepaid Cards, Investments & Insurance,

2. Forex Services, Payment Services, Net Banking , Insta Alerts, Mobile Banking , Insta Query ,
ATM & Phone Banking.
NRI Banking
Rupee Current Accounts, Rupee Savings Accounts, Rupee Fixed Deposits ,Foreign Currency
Deposits, Accounts for Returning Indians, Quickremit (North America, UK, Europe, Southeast
Asia), IndiaLink (Middle East, Africa), Cheque LockBox, Telegraphic / Wire Transfer, Funds
Transfer through Cheques / DDs / TCs, Mutual Funds, Private Banking, Portfolio Investment
Schemes, Loans, Payment Services, Net Banking , Insta Alerts , Mobile, Banking, Insta Query ,
ATM ,Phone Banking.
SHAREHOLDING PATTERN AS ON 30TH SEPTEMBER 2009:
The shareholders are divided in to two categories :
shareholding of promoter and promoter group
public shareholding
Under the first category (shareholding of promoter and promoter group) we have subcategories
they are:
Indian
Foreign
Under Indian, the corporate bodies are the promoters(total no.of shareholders are four)who holds
82443000 shares which accounts to 19.29% of the total shares. There are no foreign promoters
in this company. There has not been any change in the total no of shares when compared with the
previous two quarters.
Under the second category (public shareholding) we have sub divisions they are :
Institutions
Non-institutions
Under the institutions , the foreign institutional investors(total no of shareholders are 522) holds
the major part i.e 120326279 shares which accounts to 28%.When compared with the previous
two quarters it has been increased by 3%.The next major shareholders are the insurance
companies(total no of shareholders are 27) that holds 33661939 shares which accounts to 7.88 %
and when compared with previous two quarters there has been a negligible increase. The
institutional shareholders sum up to 40.62%.
The non institutions are the other investors like the private corporate bodies who holds 39281016
shares which accounts to 9.18% of the total shares and the others hold 80595303 shares which
accounts to 18.86%.The shares with the general public is 45148741 which accounts to 10.565

3. and when compared with the previous two quarters there has been a slight decrease. The total no
of shares are 427348828 and all the percentages sum up to 100.
PERCENTAGE OF
PARTICULARS SHARES
PROMOTER GROUP 19.2913
MUTUAL FUNDS/UTI 4.5877
OTHERS 0.0903
INSURANCE COMPANIES 7.788
FOREIGN INSTITUTIONAL
INVESTORS 28.1559
BODIES CORPORATE 9.1916
INDIVIDUALS- UPTO 1 LAKH 8.0176
INDIVIDUALS- ABOVE 1 LAKH 2.5471
NON RESIDENTS 1.4718
DEPOSITORY RECIEPTS 18.859
PERCENTAGE OF SHARES
NON DEPOSITORY PROMOTER
RESIDENTS RECIEPTS GROUP
1% 19% 19%
MUTUAL
INDIVIDUALS- FUNDS/UTI
ABOVE 1 LAKH 5%
3% OTHERS
INDIVIDUALS- 0%
INSURANCE
UPTO 1 LAKH
COMPANIES
8%
8%
BODIES
CORPORATE
9% FOREIGN
INSTITUTIONAL
INVESTORS
28%

4. PROMOTER:
HDFC is India's premier housing finance company and enjoys an impeccable track record in
India as well as in international markets. Since its inception in 1977, the Corporation has
maintained a consistent and healthy growth in its operations to remain the market leader in
mortgages. Its outstanding loan portfolio covers well over a million dwelling units. HDFC has
developed significant expertise in retail mortgage loans to different market segments and also
has a large corporate client base for its housing related credit facilities. With its experience in the
financial markets, a strong market reputation, large shareholder base and unique consumer
franchise, HDFC was ideally positioned to promote a bank in the Indian environment.
CONTENTS OF THE ANNUAL REPORT-
Director’s report-
Service quality initiatives include the audit of services and improvement on the areas identified on the
basis of customer feedback on experiences at various touch-points. New elements were added and
renewed improvement schemes were installed using technology to ensure customer convenience, security
of transactions and reduce transaction cost.
Risk Management & Portfolio Quality-
The Bank in the course of its business is exposed to various risks, of which the most important are credit
risk, market risk (including liquidity risk and price risk) and operational risk. The identification,
measurement, monitoring and control of risks remain key aspects of the Bank’s risk management system.
Sound risk management supported by a balanced risk-reward trade-off is critical to achieving the Bank’s
business strategy for business and revenue growth. The Bank has distinct policies and processes in place
for the retail and wholesale businesses. The
INTERNAL AUDIT & COMPLIANCE-
The Bank has Internal Audit & Compliance functions which are responsible for independently evaluating
the adequacy of all internal controls and ensuring operating and business units adhere to internal
processes and procedures as well as to regulatory and legal requirements. The audit function also
proactively recommends improvements in operational processes and service quality. To ensure
independence, the Audit department has a reporting line to the Chairman of the Board of Directors and
the Audit & Compliance Committee of the Board and only indirectly to the Managing Director.
CORPORATE SOCIAL RESPONSIBILITY-
As its operations have grown your bank has retained its focus onvarious areas of corporate sustainability
that impact the socio economic ecosystem that we are part of. HDFC Bank’s focus in the area of
corporate sustainability includes social sustainability & social welfare and financial inclusion.

5. Social Sustainability & Social Welfare-
The bank has initiated a number of programs to encourage economic, social and educational development
within the communities that it operates; while at the same time contributing to several grass root level
development programs across these geographies.
.
STATUTORY DISCLOSURES
The information required under Section 217(2A) of the Companies Act, 1956. and the rules made
thereunder, are given in the annexure appended hereto and forms part of this report.
DIRECTORS
Mr. Vineet Jain resigned as a Director of the Bank with effect from December 27, 2008.
Mr. Arvind Pande and Mr. Ashim Samanta retire by rotation atthe ensuing Annual General Meeting and
being eligible offer themselves for re-appointment.
AUDITORS-
The Auditors M/s. Haribhakti & Co., Chartered Accountants will retire at the conclusion of the
forthcoming Annual General Meeting and are eligible for re-appointment.
AUDITOR’S REPORT
The attached Balance Sheet of HDFC Bank Limited audited (“the Bank”) as at 31 March 2009 and also
the Profit and Loss Account of the Bank and the Cash Flow statement. We conducted our audit in
accordance with auditing
standards generally accepted in India.The An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
INFORMATION OF ACCOUNTS OF THE COMPANY-
Balance sheet on date 2008-09(In thousands)
ITEMS 2009 2008
Capital 4,253,841 3,544,329
Equity share warrents 4,009,158 -
Reseves and surplus 142,209,460 111,428,076
Total Assests 1,832,707, 1,331,766,032

6. Current assests 135,272,112 125,531,766
Fixed assests 17,067,290 11,750,917
The current year capital shows an increment with that of previous year by 16.67%
About the deviation of equity share can’t be predicted du to insufficient data.the company showsa high
amount of reserves and surplus which may due to the high percentage of general reseve and
amalgamation reserve.
INFORMATION ABOUT THE P&L ACCOUNT OF THE COMPANY(In thousands)
ITEMS 2009 2008
INCOME 196,228,646 123,981,512
EXPENDITURE 173,779,254 108,079,582
PROFIT 48,195,737 35,222,327
APPROPRIATIONS 48,195,737 35,222,327
EARNINGS PER EQUITY 52.85 46.22
SHARE
(Face value Rs. 10 per share)
A) Basic
The income increased by 36.817% may be due to high operating income ratio.There is an considerable
increase inexpendeture in current year by 37.806% compared to last year.The company has also mainted a
good profit increment for the current year which is almost 27%.
INFORAMAION ABOUT THE CASH FLOW ACTIVITY OF THE COMPANY(In thousands)
ITEMS 2009 2008
Net cash flow from / (used in) (17,361,421) 27,231,256
operating activities
Net cash generated from 29,646,633 36,283,464
financing activities
Net cash used in investing (6,637,774) (6,197,812)
The net cash flow in the current year shows a considerable increase by 56.88%.
The financing activity ratio also increased by2256%.
About the balance sheet-
The company has Authoristed shares 55,00,00,000 ( 31 March, 2008 : 55,00,00,000) Equity Shares of
Rs. 10/- each, out of which 42,53,84,109 (31 March, 2008 : 35,44,32,920) Equity Shares of Rs. 10/-
eachare issued.
The company comprises of following type of reseves-
Types 2009 2008
Statutory Reserve 22,987,291 15,193,539
General Reserve 7,360,523 5,115,584

7. Amalgamation Reserve 10,635,564 145,218
Capital Reserve 956,510 17,850
Investment Reserve 276,250 414,800
Account
The company has a propose divedend 27,206,229 for the year 2009(figs are in thousands)
Also it has a bill payable 29224,076 for the current year as current libillites.
Next, the current assest i.e if u see the cash in hand for te current year is 15,861,868
Gross block for the current year is 7,160,665, which is a 26.76% increment then the previous year.
Net block for the current year is 11,311,063 and previous 7,322,171 which is a 9.352% increased
percentage.
Fixed assets are stated at cost less accumulated depreciation as adjusted for impairment, if any. Cost
includes cost of purchase and all expenditure like site preparation, installation costs and professional fees
incurred on the asset before it is ready to use. Subsequent expenditure incurred on assets put to use is
capitalized only when it increases the future benefit/functioning capability from/of such assets.
Depreciation is charged over the estimated useful life of the fixed asset on a straight-line basis. Income
tax comprises the current tax provision, the net change in the deferred tax asset or liability in the year and
fringe benefit tax.
Deferred tax assets and liabilities are recognised for the future tax consequences of timing differences
between the carrying values of assets and liabilities and their respective tax bases, and operating loss
carry forwards.
.
Statement pursuant to Section 212 of the Companies Act, 1956, relating to subsidiary
Companies
Name of the subsidiary HDFC Securities Ltd. HDB Financial Services Ltd.
Capital 1,500 10,501
Reserves and Surplus 8,025 (1,288)
Total Assets 20,599 19,588
Total Liabilities 11,074 10,375
Investments _ _
Turnover 12,466 2,354
Profit / (Loss) Before Taxation 2,809 (919)
Provision for Taxation (1,152) (9)
Profit / (Loss) After Taxation 1,657 (928)
Proposed Dividend including tax 35 _
The New Capital Adequacy Framework is applicable to HDFC Bank Limited (hereinafter referred to as
the Bank)
and its two subsidiaries (HDFC Securities Ltd. and HDB Financial Services Private Ltd.) which together
constitutes the group in line with.
CAPITAL STRUCTURE-
Capital funds are classified into Tier I and Tier II capital under the capital adequacy framework. Tier I
capital includes paid-up equity capital, statutory reserves, other disclosed free reserves, capital reserves

8. and innovative perpetual debt instruments . Elements of Tier II capital include revaluation reserve, if any,
general provision for standard assets,
CAPITAL ADEQECY-
The Bank has a process for assessing its overall Capital ,Adequacy in relation to their risk profile and a
strategy for maintaining their capital level. The process provides an assurance that the Bank has adequate
capital to support all risk in its business and an appropriate capital buffer based on its business profile.
The Bank has a structured management framework in the internal capital adequacy assessment process for
the identification and evaluation of the significance of all risks that the Bank faces, which may have an
adverse material impact on its financial position. The Bank considers the following risks as material risks
Credit Risk
�Market Risk
�Interest Rate Risk in the Banking Book
�Liquidity Risk
�Credit Concentration Risk
�Business Risk
�Strategic Risk
�Compliance Risk
�Reputation Risk�Operational Risk
Credit Risk-
Credit Risk is defined as the possibility of losses associated with diminution in the credit quality of
borrowers or
counterparties. In a bank’s portfolio, losses stem from outright default due to inability or unwillingness of
a
customer or counterparty to meet commitments in relation to lending, trading, settlement and other
financial
transactions.

9. Wal-Mart
PARTICULARS 2006 2005 % CHANGE
SALES 312427 285222 9.538184292
OPERATING INCOME/OPERATING PROFIT 18530 17091 8.419636066
INTEREST 1172 986 18.86409736
NET INCOME/ NET PROFIT 11231 10267 9.389305542
OPERATING EXPENSES 56733 51248 10.7028567
SHARE HOLDERS EQUITY 53171 49396 7.642319216
TOTAL ASSETS 138187 120154 15.00823943
COST OF GOODS SOLD 240391 219793 9.371545045
GROSS PROFIT= SALES- COST OF GOODS SOLD 72036 65429 10.09796879
PRETAXPROFIT=OPERATING PROFIT-INTEREST 17358 16105 7.780192487
Profitability Ratios
PARTICULARS 2006 2005 % CHANGE
GROSS PROFIT RATIO=(GROSSPROFIT/SALES)*100 23.05690609 22.93967506 0.511040513
NET INCOME RATIO=(NETPROFIT/SALES)*100 3.594759736 3.599652201 -0.135914933
OPERATING PROFIT RATIO= (OPERATING
PROFIT/SALES)*100 5.930985478 5.992174517 -1.021149139
PRETAX PROFIT RATIO=(PRETAXPROFIT/SALES)*100 5.555857848 5.646478883 -1.604912311
OPERATING EXPENSE RATIO=(OPERATING
EXPENSES/SALES)*100 18.1588019 17.96775845 1.063256994
FINANCIAL EXPENSES RATIO=(INTEREST/SALES)*100 0.37512763 0.345695634 8.513846684
RETURN ON SALES=(NETINCOME/SALES)*100 3.594759736 3.599652201 -0.135914933
RETURN ON ASSETS=(NETINCOME/ ASSETS)*100 8.127392591 8.54486742 -4.885679419
RETURN ON EQUITY=(NET INCOME/SH.HLDRS
EQUITY)*100 21.12241635 20.78508381 1.622954929
PROFITABILITY=(NETINCOME/SALES)*100 3.594759736 3.599652201 -0.135914933
EFFICIENCY=(SALES/ASSETS) 2.260900085 2.373803619 -4.756228912
LEVERAGE=(ASSETS/SHAREHOLDERS EQUITY) 2.598916703 2.432464167 6.842959408
DUPONT ANALYSIS 21.12241635 20.78508381 1.622954929

10. Profitability Ratios Interpretation:

11. PARTICULARS 2006 2005 % CHANGE
INVENTORY(AVG) 32191 29762 8.161413883
COST OF GOODS SOLD 240391 219793 9.371545045
NET CREDIT SALES( NET SALES) 312427 285222 9.538184292
AVERAGE DEBTORS( RECIEVABLES) 2662 1715 55.21865889
CASH AND CASH EQUIVALENTS 6414 5488 16.87317784
CURRENT LIABILITIES 48826 43182 13.07026076
TOTAL ASSETS 138187 120154 15.00823943
CURRENT ASSETS 43824 38854 12.79147578
AVERAGE CREDITORS(PAYABLES) 25373 21987 15.4000091
OPENING STOCK 29762 0
CLOSING STOCK 32191 29762 8.161413883
FIXED ASSETS = TOTAL ASSETS-CURRENT ASSETS 94363 81300 16.06765068
PURCHASES= COST OF GOODS SOLD- OPENING
STOCK+ CLOSING STOCK 242820 249555 -2.698803871
NETWORKING CAPITAL= CURRENT ASSETS-
CURRENT LIABILITIES -5002 -4328 15.57301294
Asset Utilization Ratios
PARTICULARS 2006 2005 % CHANGE
STOCK TURNOVER RATIO= COST OF GOODS SOLD/AVG INVENTORY 7.467646237 7.385021168 1.118819658
NUMBER OF DAYS TO INVENTORY=365/STOCK TURNOVER RATIO 48.87751621 49.42436747 -1.106440584
DEBTORS TURNOVER RATIO= NET CREDIT SALES/ AVG DEBTORS 117.3655147 166.3102041 -29.4297573
AVERAGE COLLECTION PERIOD= 365/DEBTORS TURNOVER RATIO 3.109942483 2.194693958 41.70278602
CREDITOR TURNOVER RATIO= NET CREDIT PURCHASES/AVG
CREDITORS 9.570015371 11.35011598 -15.68354553
AVG PAYMENT PERIOD=365/ CREDITOR TURNOVER PERIOD 38.13995964 32.15826171 18.60081241
CASH TURNOVER RATIO=SALES/CASH AND CASH EQUIVALENTS 48.71016526 51.97193878 -6.276028158
CURRENT LIABILITIES TURNOVER RATIO=SALES/CURRENT
LIABILITIES 6.398783435 6.605113242 -3.123789086
WORKING CAPITAL TURNOVER RATIO= SALES/ NET WORKING
CAPITAL -62.46041583 -65.90157116 -5.221659014
TOTAL ASSETS TURNOVER RATIO=SALES/TOTAL ASSETS 2.260900085 2.373803619 -4.756228912
FIXED ASSETS TURNOVER RATIO=SALES/FIXED ASSETS 3.310905758 3.508265683 -5.625569525

12. Asset Utilization Ratios Interpretation:

13. PARTICULARS 2006 2005 % CHANGE
TOTAL ASSETS 138187 120154 15.0082394
SH.HLDRS EQUITY 53171 49396 7.64231922
TOTAL LIABILITIES 85016 70758 20.1503717
EBIT 18530 17091 8.41963607
INTEREST 1172 986 18.8640974
EBT=EBIT-INTEREST 17358 16105 7.78019249
Leverage ratios
PARTICULARS 2006 2005 % CHANGE
ASSETS TO EQUITY RATIO= ASSETS/EQUITY 2.598917 2.432464 6.84295941
DEBT RATIO= TOTAL LIABILITIES/TOTAL ASSETS 0.615224 0.588894 4.47109902
DEBT EQUITY RATIO= TOTAL LIABILITIES/ EQUITY 1.598917 1.432464 11.6200139
INTERESTCOVERAGE RATIO= EBIT/ INTEREST 15.81058 17.33367 -8.7868932
FINANCIAL LEVERAGE=EBIT/EBT 1.067519 1.061223 0.59328487
Leverage ratios interpretation:

14. PARTICULARS 2006 2005 % CHANGE
CURRENT ASSETS 43824 38854 12.7914758
CURRENT LIABILITIES 48826 43182 13.0702608
QUICK ASSETS(CA-STOCK-PREPAID EXPENSES) 9076 7203 26.0030543
LIQUID ASSETS(CASH,BAN,MARKETABLE SECURITIES) 6414 5488 16.8731778
Liquidity Ratios
PARTICULARS 2006 2005 % CHANGE
CURRENT RATIO=CURRENT ASSETS/CURRENT LIABILITIES 0.897555 0.899773 -0.2465591
QUICK RATIO= QUICK ASSETS/CURRENT LIABILITIES 0.185885 0.166806 11.4378382
ABSOLUTE LIQUID RATIO= LIQUID ASSETS/CURRENT
LIABILTIES 0.131364 0.12709 3.36332212
Liquidity Ratios Interpretation:

15. Strength and Weakness of Wal-mart
To conclude about the overall impression of the wal-mart’s performance over this period we
can say that the it is maintaining a good profitability and efficiency as we can observe that
gross profit ,net profit has increased over this period and even company has reduced its
operating expenses to get more operating profits in the 2004 it has ability to reduce operating
expenses . The company is able to generate the good net income over the sales and even the
ROE of the company is above 15 during years 2005 and 2006 so that we can say that company
is in very good position which also shows the company is able to generate the good income
out of the shares holders equity .THE ROE is mainly increased due to the assets to equity which
is observed by the investors. This ROE very importantly is considered by many investors to take
decision in investing in a company rather than considering the EPS as it misguides the investors.
Asset utilization is not that much good but it is not too bad .here it has used the fixed assets
very well in the 2005 to generate more sales and the inventory is replenished very well in this
year only. Then coming to collection period it is really good and even the they were able
convince the creditors very well in having credit sales in the 2005.the company is also able to
acquire more assets with the available equity in the year 2006.it has also increased its shares
holders equity from 2005 to 2006.It is able to attract the investors
But the company has to improve a lot in its liquidity position
because it has been far below the ideal situation if it has to meet any short obligations it very
much unable. The very important problem the company facing is that it not able to maintain
the balance between the liquidity and the profitability. It is much concentrating on the
profitability and not at all bothered about the liquidity where it has to be careful. Even it has to
improve in the inventory management .it has to give more assurance to the creditors in
interest payment .the company also has to be watchful in reducing financial leverage aspect so
that more risk is not provided to the share holders .the company has to reduce the operating
expenses to get more net margins.
Finally as a whole it is having good profitability efficiency and good ROE which is
good sigh for investors. So I advice fund manager to invest in this company