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Standard Life in India

19 November 2012

Standard Life in India | November 2012 2

This presentation may contain certain “forward-looking statements” with respect to certain of Standard Life's

plans and its current goals and expectations relating to its future financial condition, performance, results,

strategy and objectives. Statements containing the words “believes”, “intends”, “expects”, “plans”, “seeks”

and “anticipates”, and words of similar meaning, are forward-looking. By their nature, all forward-looking

statements involve risk and uncertainty because they relate to future events and circumstances which are

beyond Standard Life's control including among other things, UK domestic and global economic and

business conditions, market related risks such as fluctuations in interest rates and exchange rates, and the

performance of financial markets generally; the policies and actions of regulatory authorities, the impact of

competition, inflation, and deflation; experience in particular with regard to mortality and morbidity trends,

lapse rates and policy renewal rates; the timing, impact and other uncertainties of future acquisitions or

combinations within relevant industries; and the impact of changes in capital, solvency or accounting

standards, and tax and other legislation and regulations in the jurisdictions in which Standard Life and its

affiliates operate. This may for example result in changes to assumptions used for determining results of

operations or re-estimations of reserves for future policy benefits. As a result, Standard Life’s actual future

financial condition, performance and results may differ materially from the plans, goals, and expectations set

forth in the forward-looking statements. Standard Life undertakes no obligation to update the forward-

looking statements contained in this presentation or any other forward-looking statements it may make.

Welcome

Jackie Hunt

Chief Financial Officer


Welcome and agenda

• Welcome

Jackie Hunt (CFO, Standard Life)

• Asia and Emerging Markets overview

Nathan Parnaby (CEO, Asia and Emerging Markets, Standard Life)

• HDFC Life

Amitabh Chaudhry (MD and CEO, HDFC Life)

• HDFC Asset Management Company

James Aird (Director, HDFC AMC and Head of Strategic Development, Standard Life Investments)

• Questions and Answers

Asia and Emerging Markets

Nathan Parnaby

CEO, Asia and Emerging Markets


Asia and Emerging Markets

• International operations

• Hong Kong - Standard Life Asia Limited

• Standard Life International Limited

• Based in Dublin, primarily servicing UK offshore market

• Singapore branch now open for business

• Joint ventures

• HDFC Life

• Joint venture with Housing Development Finance Corporation (HDFC)

• 26% stake, maximum allowed by FDI rules

• Heng An Standard Life

• Joint venture with Tianjin Economic Technological Development Area (TEDA)

• 50% stake, maximum allowed by FDI rules

•Asset management

• HDFC AMC

• Joint venture with HDFC

• 40% stake, held and managed by Standard Life Investments


Maximising the value of our JV relationships

•Number 2 position in Indian individual private market with 17% share and more than 2m customers

• India now profitable and capital self-sufficient

•Growing distribution capability in China

Growing our business

Taking advantage of our offshore savings

capability

•Operations base in Dublin primarily servicing UK offshore

•16% market share and growing

• Increasing efficiency and building an internationally scalable business with c.£3bn assets

Leveraging the value of Standard Life and HDFC

brands in Asia

•Strong brands with both European ex-pats and non-resident Indian market

•Attractive affluent target customer base

•Existing experience in Hong Kong

•Opening of Singapore branch with further potential for growth in similar markets

Leveraging the asset management expertise

of Standard Life Investments and HDFC AMC

• Increased scope for distribution of Standard Life Investments and HDFC AMC investment products

• Expanding share of the value chain

•Number one mutual fund company in India by assets and 5m customers

HDFC Standard Life Insurance Company Limited

Amitabh Chaudhry

MD & CEO, HDFC Life


� Background & Parentage

� Growth Opportunities for HDFC Life

� Overview of Indian life insurance industry

� HDFC Life performance

About HDFC Life


HDFC Life : Strong parentage

Leading financial services corporation

known for its industry leading business performance and high governance standards

Leading long term savings and investments company operating internationally

1st private life insurer to start

operations in India

HDFC: Housing Development Finance CorporationShareholding Pattern as at 30th Sept 2012 : HDFC 72.4%; Standard Life 26.0%; Individuals / ESOP Trust 1.6%

72.4% 26.0%


� HDFC Limited was incorporated in 1977 as the first specialized mortgage company in India

� HDFC has financed 4.2 million housing units, has Rs 1551.3 Bn loans outstanding

� Mortgage loan growth at 22% CAGR, PAT at 21% CAGR

� Stable, experienced management – average tenure of senior management is 25+ years

� Today it is a financial conglomerate with interests beyond mortgages

HDFC Group : India’s leading financial services conglomerate

^ on a fully diluted basis






About HDFC Life


Indian consumers are positively disposed towards insurance purchase

Average Household Size

1981 1991 2001 2011

5.5 5.1 4.6 4.2

• Indian consumers are risk-averse and consider insurance to be a low risk, high return product

• Insurance penetration (premiums as a % of GDP) is higher than most emerging markets. With expected increase in per capita income, life insurance premiums should increase given the positive disposition of customers.

• Increase in average life expectancy would fuel need for pension and health products. Emergence of nuclear families has resulted in reduction in average household size and would increase need for protection products.

4444

3333

2222

2222 55553333 4444

Risk

Return

Mutual Funds

Bonds

Life Insurance

Bank Savings Account

Source: McKinsey PFS Survey, 2011

Indian consumer perceives life insurance as a low risk, high return

product

4444

3333

2222

2222 55553333 4444

Risk

Return

Mutual Funds

Bonds

Life Insurance

Bank Savings Account

Source: McKinsey PFS Survey, 2011

Indian consumer perceives life insurance as a low risk, high return

product


Product suite has significant headroom to expand and increase penetration and profitability

� Current product mix is largely oriented around investment & savings products. HDFC Life has developed multiple ‘vehicles of protection’.

� Click2Protect - term insurance plan on individual platform

� Credit Protect - loan cover plan on group platform

� The increased emphasis on risk protection would help to diversify the product mix

� Increasing opportunities for bundling insurance with banking products as financial inclusion increases across the country

Risk Protection

LIFEEARNING ABILITY

LIFESTYLE ADJUSTMENT

FUTURE NEEDS

Premium Protection

Future CoverIllnessFunctional Impairment

Combination Retrenchment

Physical Impairment

Occupational Disability

Death

Accidental Death Benefit

Final Expense Benefit

Health

and

Wellbeing

Death

and

Bereavement

Emergencies

Work

Counselling

Legal

Savings


� Share of agency channel (2.4 million agents) continues to shrink

� Bancassurance contributes nearly 1/3rd of NB premiums for private life insurers

� Top 3 private life insurers have banking partners within the financial group

� LIC continues to be agency driven

Source : Public Disclosures of 20 Private Insurers in India, IRDA Annual Report & HDFC Life Analysis

Banks continue to gain share of distribution as they expand and penetrate new markets

Distribution Mix of Private Life Insurers

64%

45%

18%

37%

10% 8%

1% 5%8% 5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

FY06 FY12

Individual agents Corporate Agents‐‐‐‐Banks Corporate Agents ‐‐‐‐Others

Brokers Direct Business


We are well positioned to leverage this trend due to our strong partnership with HDFC Bank

� “HDFC Bank – HDFC Life” operate the single largest bancassurance partnership in terms of new business premiums garnered

� The bank’s share of saving deposits across Indian banks is estimated at nearly 5%

� Fees and remuneration earned through bancassurancewas 11% of the bank’s net profits in FY’12

� In FY’12 the bank contributed � 68% of new business premiums to HDFC Life in

FY’12� 20-22% of all new business premiums collected

by banks

� The Best Bancassurance Award at the 11th International Excellence in Retail Financial Services Awards Program

� As of March 31, 2012 HDFC Bank had� 2,544 branches across 1,399 cities with 75%

branches outside the top 9 cities� Customer base of 26 million

� The branch network has grown at a CAGR of 22% from March 2009 to March 2012

Source : HDFC Life estimates, Public Disclosures, HDFC Bank Annual Report, RBI Data






About HDFC Life


Entry of Private Life Insurers

Start of Equity Bull Market

Post-Lehman World

Riding the wave (ULIPs1)1st wave of private

insurers 2nd wave of entrants

Increase in Regulatory

change, 3rd wave

BSE SENSEX

Source : BSE Sensex Performance Jan 1, 2000 – Nov.5,2012, Google Finance, HDFC Life Analysis.

Graph not as per scale

� Life Insurance in India has seen 3 distinct phases post the year 2000 – the market has 24 life insurers present today

The development of life insurance industry in India

1 Unit Linked Insurance Plans are products where the investor bears the investment risk

13

Number of private life insurance entrants

7 3


Industry new business premium movement in last decade since entry of private players

The Life Insurance journey (2001–2012): New Business Premia

Source: IRDA data, HDFC Life Analysis

1 GBP = 87.0706 INR (as per Reuters 13 Nov 2012)

� Private sector grew at a CAGR of 192% between 00-01 and 08-09 (8 times the pace of LIC)

� LIC grew at a 15% CAGR between 08-09 and 11-12 while the private sector remained flat in this period resulting in a slide in the private sector’s market share in the last 3 years

� Private sector growth slowdown post increase in regulatory change(3rd phase of industry development). Primary reason for the flat growth was the charge cap regulations introduced by the regulator on ULIP products.

Note: New Business Premium numbers are based on first year premium including single premium

97

196160 173

207

285

562600

532

715

864815

353

0 3 10 2456

103

194

337 342384 394

327

1161%6%

12%

21%

26%

26%

36%

39%

35%

31%29%

25%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0

100

200

300

400

500

600

700

800

900

1000

2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 H1 2012-13

Pri

va

te M

ark

et

Sh

are

%

Ne

w B

usi

ne

ss P

rem

ium

in R

s. B

n

LIC Private Players Private Market Share

State Owned Life Insurance Corporation (LIC) of India vs. Private Players


The industry had to reinvent to stay relevant to customers and distributors due to the pace & magnitude of change

Unprecedented shift in regulation post Sept. 2010

Households allocated less to financial assets

Source : Nomura

Source : Mckinsey

� Lower margins for insurers and distributors post the shift in regulation on ULIP products

� High inflation resulted in a reduction in household savings rates – impact on financial savings (insurance, mutual funds, deposits,etc.) higher than that on physical savings (gold, real estate, etc.)

� Central bank policy sustained high interest rates on bank deposits making life insurance and equity linked investments unattractive in the short term.


The transition is near completion and we expect the industry to revert to growth in the next 3-4 quarters

� Government looking at reforms to stimulate the life insurance industry

� Short term pain but customer friendly in the long term – transition in its last leg

� Distributors aligned to the new normal; large distributors commanding a premium

� Improvement in operating efficiencies and expense management

� Increased focus on customer service and brand building

� Industry leaders selling a balanced product mix

� Norms for traditional products near finalization

� Increasing demand for protection products






About HDFC Life


Revenue

Total Premium FY 09-10 FY 11-12 CAGR

HDFC Life 70 102 21%

Top 7 620 626 0.5%

Costs

FY 09-10 FY 11-12 CAGR

HDFC Life 208 323 25%

Top 7 1,801 2,462 17%

AUM

Capital Efficiency

FY 09-10 FY 11-12 CAGR

HDFC Life 3.6 4.7 15%

Top 7 3.8 3.7 -2%

Others

13th month persistency FY 09-10 FY 11-12

HDFC Life 57% 82%

Top 7* 63% 71%

Conservation ratio FY 09-10 FY 11-12

HDFC Life 72% 77%

Top 7* 67% 69%

Surrenders & Withdrawals

/ Renewal Premia

FY 09-10 FY 11-12

HDFC Life 34% 43%

Top 7 39% 63%

Note: Top 7 comprise of I-Pru, HDFC Life, SBI Life, Bajaj Allianz Life insurance, Birla Life Insurance, Max Life and Reliance Life

* Numbers are simple average of the respective company’s ratio

Source: IRDA, Public disclosure of respective companies

Individual WRP FY 09-10 FY 11-12 CAGR

HDFC Life 25 27 4%

Top 7 218 127 -23%

Total Private 288 175 -22%

Mkt share -

Individual WRP

FY 09-10 FY 11-12 Change

HDFC Life 8.7% 15.5% 680 bps

Top 7 75.6% 72.7% -290 bps

Ranking - HDFC Life 5 2

Opex / Total

premium Ratio

FY 09-10 FY 11-12 (Inc)/

Dec

HDFC Life 19.6% 11.5% 8.2%

Top 7 17.1% 14.0% 3.2%

Opex / Individual

WRP

FY 09-10 FY 11-12 (Inc)/

Dec

HDFC Life 55% 43% 11.6%

Top 7 49% 69% -19.8%

Capital Efficiency = Total Premium / Capital

Conservation ratio = Ratio of current year renewal premiums to previous year’s renewal

premium and first year premium.

In the last two years HDFC Life has outperformed its competitorsacross many metrics

Bn Rupees


8.7%

12.9%

15.5%

17.0%

4.6%

5.9% 5.7% 5.5%

FY10 FY11 FY12 H1 FY13

Private Sector Market Share Total Industry Market Share

Consistent growth in market share

• Ranked #2 in H1 FY13 amongst private insurance companies (Individual & Overall business)

• During the last 2 years, private industry has ceded 19% market share to LIC

(LIC market share increased from 49% in H1 FY11 to 68% in H1 FY13)

Source: IRDA

Steady in

crease in

private se

ctor marke

t share


31%19% 17%

1%

4% 7%

65%73% 71%

3% 4% 5%

FY11 FY12 H1 FY13

Tied Agency Broker Bancassurance Direct

86%

56% 56%

14%

44% 44%

FY11 FY12 H1 FY13

ULIP Conventional

• Efforts to diversifying distribution mix have started to yield results with new channels i.e. Broker & Direct increasing their share of APE

• Tied Agency continues to struggle in line with industry

• Operates out of 461 offices across the country serving over 945 cities in India & a liaison office in Dubai

• Share of Conventional business has increased after regulatory changes of Sep 2010

Distribution Mix Product Mix

• The percentages are with reference to APE for individual business. ULIP stands for Unit Linked Insurance Plan.

Developing broker distribution while maintaining highly profitable bancassurance focus


Organization agenda continues to be driven through five strategic themes

Leader in providing long term insurance solutions

Fortify & Diversify distribution channel mix

Own select customer segments and product categories

Deliver unique customer experience

Cost leadership across the delivery chain

Set the industry standards by driving changes that encourage long term behaviour by all stakeholders & yield sustainable benefits

Set the industry standards by driving changes that encourage long term behaviour by all stakeholders & yield sustainable benefits

Retain and grow existing distribution partners and win new relationships to de-risk business in the face of increasing competitive intensity

Retain and grow existing distribution partners and win new relationships to de-risk business in the face of increasing competitive intensity

Select attractive customer segments, develop products based on needs of the segments and drive efforts & investments to these segments

Select attractive customer segments, develop products based on needs of the segments and drive efforts & investments to these segments

Improve customer experience & loyalty through offering best-in-class service standards across touch points

Improve customer experience & loyalty through offering best-in-class service standards across touch points

Run a profitable business through driving cost & productivity efficiencies across the value chain

Run a profitable business through driving cost & productivity efficiencies across the value chain


Leader in providing long term insurance solutions

Acquire new customers

Enhance policy termBalanced product

mixRetain customers for the long term

Number of policies grew by 26% in H1’13 vs. H1’12

Number of policies grew by 26% in H1’13 vs. H1’12

Policy term enhanced to 13.2 years in H1’13 vs. 11.5 years in H1’12

Policy term enhanced to 13.2 years in H1’13 vs. 11.5 years in H1’12

Conventional products contributed 44% in H1’13 vs. 35% in H1’12 to individual premium

Conventional products contributed 44% in H1’13 vs. 35% in H1’12 to individual premium

Maintained high quality business amidst tough regulatory conditions, Conservation ratio at 77% in H1’13

Maintained high quality business amidst tough regulatory conditions, Conservation ratio at 77% in H1’13

Improvement in key indicators on the journey to becoming a leader in providing long term insurance solutions


Fortify & Diversify Channel Mix

Fortify existing channels

Diversify Channel Mix

Segregated management structures

Win new relationships

Growth in bancassurance channel in H1’13

Agency stays flat in difficult business conditions

Better than industry performance

Growth in bancassurance channel in H1’13

Agency stays flat in difficult business conditions

Better than industry performance

Direct sales & broker contribution in individual business increased to 11.5% in H1’13 vs. 6.5% in H1’12

Direct sales & broker contribution in individual business increased to 11.5% in H1’13 vs. 6.5% in H1’12

Dedicated sales team structures for channels & verticals under channels

Interventions to improve knowledge, skills and relationships

Dedicated sales team structures for channels & verticals under channels

Interventions to improve knowledge, skills and relationships

Plug-and-Play toolkit for new partner acquisitions

Ongoing program to attract new financial consultants

Plug-and-Play toolkit for new partner acquisitions

Ongoing program to attract new financial consultants

Efforts to fortify and diversify channel mix that started in FY’11 beginning to yield results


Own select customer segments and product categories

Product development aligned to customer segments

Sales of online term product Click2Protect continue to grow

Smart woman campaign launched to attract more women customers

Invest wise plan launched for the wisdom investor

Sales of online term product Click2Protect continue to grow

Smart woman campaign launched to attract more women customers

Invest wise plan launched for the wisdom investor

Integrated & faster NPD process

New Product Development driven through an integrated Research, Product & Marketing structure to improve speed-to-market from concept to launch has been deployed

Positioned to manage any product changes that may be rolled out in H2’13 by regulator

New Product Development driven through an integrated Research, Product & Marketing structure to improve speed-to-market from concept to launch has been deployed

Positioned to manage any product changes that may be rolled out in H2’13 by regulator

Products launched in identified customer segments and steps taken to improve speed to market


Deliver unique customer experience

Faster Policy Issuance

Right Advice & Need based selling

Improve Customer Loyalty

Continuous Improvement

Point-of-Sale underwriting engine -Click2Buy extended across channels

Emphasis on straight-through-processing based on LEAN principles

Point-of-Sale underwriting engine -Click2Buy extended across channels

Emphasis on straight-through-processing based on LEAN principles

Mobility devices tested

Aim to ensure standardization of communication

Need based analysis –financial planning tool

Mobility devices tested

Aim to ensure standardization of communication

Need based analysis –financial planning tool

Dedicated loyalty channel �Tele-sales�Feet-on-street�Branch Sales

Growth surpassing traditional sales channels

Dedicated loyalty channel �Tele-sales�Feet-on-street�Branch Sales

Growth surpassing traditional sales channels

‘Servesresht’ program based on Lean Six Sigma methodology

Governance driven through Service Excellence Council

‘Servesresht’ program based on Lean Six Sigma methodology

Governance driven through Service Excellence Council

Processes & teams aligned to offer a unique customer experience


Cost leadership across the delivery chain

Higher profitability Optimize CapitalTechnology enabled

business transformation

NBM – 17.5% (H1’13) vs 15.6% (H1’12)

Opex/Total Premium –13.3% (H1’13) vs. 12.1% (H1’12)

NBM – 17.5% (H1’13) vs 15.6% (H1’12)

Opex/Total Premium –13.3% (H1’13) vs. 12.1% (H1’12)

No capital draw-down needed in the last 6 quarters

Company can now declare dividend

No capital draw-down needed in the last 6 quarters

Company can now declare dividend

System Integrator selected for end-to-end technology transformation

Customer impacting projects prioritized

System Integrator selected for end-to-end technology transformation

Customer impacting projects prioritized

Improvement in cost ratios in a difficult business environment


HDFC Life is well positioned to align and take advantage of the potential changes expected in the near future

Market

Customer

Channel

Product

Process & Technology

People

Polarization of market share in favour of large players with access to existing distribution

Polarization of market share in favour of large players with access to existing distribution

Higher alignment to brands that evoke trustHigher alignment to brands that evoke trust

Bancassurance guidelines expected in Q3’13Bancassurance guidelines expected in Q3’13

Revised product guidelines are expected in Q3’13 and speed to market would be critical in the short term

Revised product guidelines are expected in Q3’13 and speed to market would be critical in the short term

Key differentiator to improve productivity & reduce cost across the value chain given anticipated business environment challenges

Key differentiator to improve productivity & reduce cost across the value chain given anticipated business environment challenges

Ability to attract talent likely to be restricted to select few insurers who deliver profitable, sustainable growth

Ability to attract talent likely to be restricted to select few insurers who deliver profitable, sustainable growth


Summary

� HDFC Life has a strong parentage and enjoys the trust of all stakeholders

� Established market outperformance consistently over the past 2 years

� The Indian life insurance industry in poised for long term growth

� HDFC Life is best positioned to take advantage of the market opportunity


Thank You

HDFC Asset Management Company

James Aird

Director, HDFC AMC

Head of Strategic Development, Standard Life Investments


The largest mutual fund company in India

• Context

• Joint venture established in 2000 between SLI (40%) and Housing Development Finance Corporation (HDFC) 60%

• Major driver in reaching current position has been organic growth

• Bolt-on acquisition of Zurich AM in India in 2003 added equity team and increased retail presence

• Has licenses for Mutual Funds and Portfolio Management Services

• Number one in mutual funds market by assets both overall and in equities with over 5m customer accounts

• Strategic priorities

• Further strengthen position in retail segment

� Focus on investment performance

� Widening distribution

� Maintaining market leadership

• Build business from overseas markets

� Standard Life Investments distribution

HDFC brand strengthConsistent and quality

investment performance

Broad based distribution

franchise


Market leading position and growing market share

September 2008 September 2012

Equity 10.4% 19.8%

Debt 10.7% 13.0%

Liquidity 7.0% 8.6%

Other 0% 4.8%

Total 9.9% 13.9%

• Over 5m customer accounts - market leader in Indian mutual funds, growth through global financial crisis

• Overall market share has grown from under 10% to nearly 14% by AUM over the past four years

• Significant growth in higher margin equity class with assets more than doubling to 406bn rupees vs. industry

growth of around 25%

HDFC AMC market share by AUM

0

200

400

600

800

1000

1200

2004 2008 2012

0

1

2

3

4

5

6

Assets Accounts

HDFC AMC assets and accounts

Accounts (million)

Assets (billion Rupees)

Number one in equity market and overall mutual funds market by assets1

1. As at 30 September 2012


Retail equity propositions driving growth

• Strong growth in higher margin equity segment outpacing market shift

• Retail (£7.2bn1)

� Main investors in equity funds

� Growing use of ‘pound cost averaging’ with Systematic Investment Plan (SIP) / Systematic Transfer Plan (STP) products

� Average holding period has extended to almost 3 years

� Product focus still very much on domestic funds

� Market leader in SIP, with over 1.5m customers investing on a monthly basis

• Institutional (£4.2bn1)

� Primarily institutions parking surplus liquidity in short term debt funds (yield pick up c/w overnight rates)

� Flows can be volatile around quarter ends

• Portfolio Management Services (£0.6bn1)

� Main segment is Indian HNWI

� Growing international sales efforts, but small at present

� SLI promote India strategy through their distribution channels

� SLI provides product wrappers e.g. SICAV, Mauritian OEIC

1. R87/£1 used

HDFC AMC channel mix

Retail 60%Institutional

35%

Portfolio

Management

Services 5%

HDFC AMC product mix

Equity 40%

Debt 46%

Liquidity 12%

Other 2%


Diversified distribution network

• India is an ‘open architecture’ distribution environment

• HDFC AMC has 115 branches / investor service centres and has 37,000 certified distributors

• HDFC AMC has well diversified distribution through banks, nationals (non-bank financial services providers), IFA’s and Direct

� Largest Distributor is HDFC Bank with 9% of total sales

� Five largest distributors just 24.2% and no other distributor accounts for more than 5% of sales

� Direct at 11% of AUM, continues to grow steadily (Walk ins and online)

• Top 15 cities account for 82% of AUM - ongoing initiatives to grow distribution in second and third tier cities

HDFC AMC distribution

Banks 23%

Nationals 33%

IFA’s 33%

Direct 11%


Demand driven by brand and fund performance

Past performance is not indicative of future results. Past performance may not necessarily provide a basis for comparison with other investments. Source: Bloomberg as of Jun 29, 2012 (1) Fund performance is for the Growth Option in USD. Performance is reported net of management fees and other standard operating fees (excluding any sales and commissions) . Reporting currency is in INR. Returns are absolute annualized returns unless otherwise stated. Inception date is January 1, 1995. Since inception returns are based on CompoundedAnnualized Returns. (2) S&P CNX 500 index is the Fund’s benchmark index. Benchmarks are used solely for the purposes of comparison and the comparison does not mean that there will necessarily be a correlation between the returns described herein and the benchmarks. There are limitations in using financial indices for comparison purposes because, among other reasons, such indices may have different volatility, diversification, credit and other material characteristics (such as number or type of instrument or security).

Delivering outperformance

• Team members have an average of 14 years experience in the Indian markets

• HDFC Equity Fund – Growth Option has outperformed its benchmark in 15 out of 17 years since 1995, delivering significant alpha

• HDFC CMF Treasury Advantage Plan and HDFC Liquid Fund – our two largest Fixed Income funds, representing over £4bn assets outperformed benchmark net of fees over 1, 3 and 5 years

12.2%

10.1%8.6%

29.9%

13.0%

3.7%

1.5%

20.4%

1 year 3 year 5 year 10 year

HDFC Equity Fund - Growth Option S&P CNX 500(2)(1)

HDFC Equity Fund – Historical Performance (in USD %)

HDFC brand recognition continuing to drive retail flows


Delivering growth in profitability

• Growth in profitability – CAGR from 2008 to 2011 of 32%

• Growing strength in higher margin equities driving increasing profitability

• EBIT margin of over 50%

6.2

13.0

9.3

14.1

7.0

2008 2009 2010 2011 H1 2012

HDFC AMC normalised underlying profit contribution to Standard Life Investments1 (£m)

1. Underlying profit contribution defined as profit to Standard Life Investments less any material movement in provisions and accounting policy changes

Continuing contribution to the profitability of Standard Life Investments


Attractive opportunities for future growth

Market

• Strong economic growth, leading to increased financial prosperity

• Demographic profile supports asset accumulation

• Cash savings growing strongly

• Mutual funds penetration remains low (8% of GDP)

• Increased investor education, should underpin greater take up of mutual funds, and the introduction of more sophisticated products over time

Opportunity to leverage Standard Life Investments

• Sale of HDFC AMC funds via SL wrappers (IOSI)

• Ability to use SLI and its global reach to secure mandates for the JV

• Opportunity to sell SLI global products into India as the market becomes more sophisticated.

HDFC brand strengthConsistent and quality

investment performance

Broad based distribution

franchise

Appendix


10.3 11.4

3.4 3.8

26.9 28.1

1.1

0.5

H1 FY12 H1 FY13

41.743.8

16%

88%

38%

70%

-26%

5%

-53%

4%

12%

11%

Premium Income

• Growth of 13% in total premium at 102.0 billion rupees led by renewal premium & group premium in FY12

• Positive growth in first year regular (11%), group (12%) & renewal (8%) premium leading to overall growth of 7% in H1 FY13

• Continue to grow in new business since Q3 of FY12 beating the private market

(Q3 FY12: 3%, Q4 FY12: 15%, Q1 FY13: 17%, Q2 FY13: 7%)

First Year Regular Premium (Individual)

Total Premium Single Premium (Individual) Reported Renewal Premium (Individual)

Group Premium

H1 Performance

{7%}

{8%}

Note: 1) Since Q1 FY13, we stopped making an accrual for premium due but not received on unit-linked policies, based on directive from the regulator. Figures in bracket represent growth numbers had this change been done for previous years. 2) After adjusting for change in accounting policy for unit-linked business, total reported premium growth would be 13% (PY FY12), 29% (PY FY 11), 7% (H1 FY13) and 17% (H1 FY12).

29.0 26.9

5.9 9.5

49.2

63.4

5.9

2.1

FY11 FY12

90.0

102.0

29%

120%

36%

-5%

17%

13%

-65%

29%

61%

-7%

PY (12 M) Performance


14.4

11.7

16.0%

11.5%

-50.0%

-40.0%

-30.0%

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

(3.0)

2.0

7.0

12.0

17.0

22.0

FY11 FY12

4.9 5.8

11.9% 13.3%

-50.0%

-40.0%

-30.0%

-20.0%

-10.0%

0.0%

10.0%

20.0%

-

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

H1 FY12 H1 FY13

Operating Expenses

- After adjusting for change in accounting policy for unit-linked business, operating expenses/total reported premium ratio for previous years would be 11.7% (PY FY12), 16.3% (PY FY 11) and

12.1% (H1 FY12)- Operating expenses exclude service tax

• In H1 FY13, Operating expenses ratio has increased vs. last year due to higher incentive support for

new channels & conscious decision to invest in new channels, technology, branch refurbishments and

international business

H1 PerformancePY (12 M) Performance

{12.1%}

Bn Rupees


(0.0)

0.6

1.1

1.9

0.2

0.2

(1.0)

(0.5)

-

0.5

1.0

1.5

2.0

2.5

3.0

H1 FY12 H1 FY13

1.2

2.8

(1.7)

1.1

0.4

2.5

(1.4)

0.2

(4.0)

(3.0)

(2.0)

(1.0)

-

1.0

2.0

3.0

4.0

FY11 FY12

(2.7)

3.8

Indian GAAP Results

• Policyholder A/C Surplus amounting to 1.9 bn rupees transferred to Shareholder Account in H1 FY13

• Deficit as of 31st March 2012 of 0.6 bn rupees has been completely off-set by the surplus generated in the

Policyholder A/C in the current year

H1 PerformancePY (12 M) Performance

Shareholder A/C surplus Policyholder A/C surplus Deficit (created)/reversed in Rev A/c

Bn Rupees


24 26

-16

19

H1 FY 12 H1 FY 13

Fund flow Market Movements

265 273

323

367

31st March 2011

30th Sept 2011

31st March 2012

30th Sept 2012

Robust growth in Assets Under Management

45Inflows vs. Market

8

AUM Movements

248

273

367 20,069

16,454

18,763

14,000

16,000

18,000

20,000

22,000

24,000

26,000

150

200

250

300

350

400

30th Sept 2010 30th Sept 2011 30th Sept 2012

AUM in Rs bn Sensex

34.5%50.6%

10.1%

Growth in AUM vs LY

42% 46% 50%

58% 54% 50%

30th Sept 2010 30th Sept 2011 30th Sept 2012

Debt Equity

Bn Rupees


* FY11 had first 5 months of margins under product portfolio that existed in the pre charge cap regime

H1 FY12 H1 FY13 FY11 FY12

New business profits1,2 1.7 2.1 5.4 4.8

New business APE2 10.6 11.8 28.6 27.9

New business margin1,2 15.6% 17.5% 18.8%* 17.2%

1 Based on loaded acquisition expenses2 Margins and APE are shown for individual business only

New business margin (after impact of

acquisition expenses overrun) 210.5%14.2%

New Business Profits

Bn Rupees


CIO 100 Award for Enterprise Excellence

Underwriting initiative of the year award by Asian Leadership Awards

For more details about our Awards & Accolades, kindly refer our website at www.hdfclife.com

FAME – Fabulous Achievement in Marketing Excellence

BestPrax Benchmark Award for Leadership Governance

Brand Slam Leadership Awardby CMO Asia

‘Best Private Life Insurer’ at CNBC TV18 Best Bank and Financial

Institution Awards 2012

Awards and Accolades


Best Product Innovation Award 2012 for second consecutive year

Best Companies to Work for 3rd consecutive year.

CISO –Best Information Security practices

World HRD Congress – Thought Leader Award 2012

Porter Prize for Strategy & Product Innovation

Award for CEO with HR orientation & Talent Management

For more details about our Awards & Accolades, kindly refer our website at www.hdfclife.com

Awards and Accolades


Mutual fund industry AUM and growth rate

0000

1,0001,0001,0001,000

2,0002,0002,0002,000

3,0003,0003,0003,000

4,0004,0004,0004,000

5,0005,0005,0005,000

6,0006,0006,0006,000

7,0007,0007,0007,000

'03'03'03'03 '04'04'04'04 '05'05'05'05 '06'06'06'06 '07'07'07'07 '08'08'08'08 '09'09'09'09 '10'10'10'10 '11'11'11'11 '12'12'12'12

Source: AMFI, AUM amounts in Rupees billions as at end March (end of FY)

• JV grew initially in 00-03 period when falling bond yields attracted strong growth in core fixed income product

• 03, acquired Zurich’s Indian AMC, which strengthened JV equity proposition

• 03-08, major equity bull market, JV becomes leading equity franchise in India

• Since financial crisis, become leader in SIP


2012

AUM Market Share %

HDFC 978 13.1

Reliance 863 11.6

ICICI Prudential 764 10.2

Birla 729 9.8

UTI 708 9.5

SBI 510 6.8

Franklin Templeton 390 5.2

DSP 302 4.0

IDFC 280 3.8

Kotak 303 4.0

Total Market 6,928 78.0

Source: AMFI, Based on Average AUM for July – Sept Periods in Rupee Bn’s

New Entrants

Invesco (Bought 49% of Religare)

Schroders (Bought 25% of Axis)

Nippon Life (Bought 26% of Reliance)

Exit

Fidelity (Sold to L&T AMC (Indian AMC))

Other Foreign Participants (Market Share)

AIG (0.1%)

BP Paribas (0.7%),

Daiwa (0.1%),

Goldman Sachs (0.6%),

Mirae (0.1%),

Pramerica (0.3%)

Top ten mutual fund houses in India


Simplified structure chart

Standard Life plc

Standard Life

Employee Services

Limited

Heng-An Standard

Life Insurance

Company Limited

Standard Life

(Mauritius Holdings)

2006 Limited

Standard Life

Overseas Holdings

Limited

Standard Life

Investments

(Holdings) Limited

Standard Life

Assurance Limited

Standard Life

Savings Limited

Standard Life

Investment Funds

Limited

The Standard Life

Assurance Company

of Canada

Standard Life

Financial Inc

HDFC Standard Life

Insurance Company

Limited

Standard Life

Investments Limited

HDFC Asset

Management

Company Limited

The Standard Life

Assurance Company

2006

Standard Life

Savings Nominees

Limited

Standard Life

Trustee Company

Limited

Standard Life

International Limited

Standard Life

Pension Funds

Limited

Standard Life Client

Management

Limited

Standard Life Asia

Limited


Heng An Standard Life

GUANDONG

HENAN

JIANGSU

SHANDONG

BEIJINGTIANJIN

LIAONING

SICHUAN

• Joint venture with TEDA (TianjinEconomic – Technological Development Area )

• Standard Life holding: 50%

• Based in Tianjin: one of 4 Chinese direct-controlled municipalities

• Ranked 8 (2011: 9) of 25 foreign JVs

• Presence in 36 (2011: 32) cities across 8 provinces

• New general manager and management team driving business growth

• Working closely with TEDA on developing the business

• Opportunities for growth particularly in individual and bancassurance


Standard Life Asia (Hong Kong)

• Relationship with 315 brokers firms and No. 2 position in IFA channel

• Broad range of propositions:

• Aspire, Wealth Amplifier, Harvest 101, Harvest Supreme, LifeMaster, Pro-Investor (exclusive product), Peaceful Life and Perpetual Protector

• New propositions recently launched including Harvest Wealth to cater to the needs of internationally mobile clients and Smart Wealth, our first Renminbi denominated product

• leveraging existing Standard Life technology

• Use of mobile technology to attract and engage target customers

• Wholly owned operation based in Hong Kong

• Fast growing business with significant future potential

• No. 6 position in market (H1 2008: 18)

• Market position stable despite overall market being down year-on-year

• Scalable operation and contributing to Group IFRS profit

SL Asia assets under administration, HK$ m

528

1,053

1,604

2,407

0

500

1,000

1,500

2,000

2,500

FY 2009 FY 2010 FY 2011 Q3 2012


Standard Life International Limited

• Open to business in 2006 – grown quickly vs. very established competitors

• Around £3bn in UK assets of which over £1bn on Wrap

• Branch of SLIL recently launched in Singapore targeting high net worth clients

• Singapore offers exposure to high growth, high value Asian markets and presents a growth opportunity reusing existing infrastructure

• Wholly owned offshore business based in Ireland

• In the UK Offshore Bond market:

• Top 3 player over last 18 months

• Around 15% market share

• Leader in core IFA segment and developing newer bank and wealth manager channels

• Fully RDR compliant ahead of deadlines

• See strong growth in this market as product becomes mainstream

SLIL assets under administration, GBP m

1,159

1,769

2,360

2,876

0

500

1,000

1,500

2,000

2,500

3,000

FY 2009 FY 2010 FY 2011 Q3 2012

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