Mumbai, Maharashtra, India, Wednesday, July 14, 2010 -- (Business Wire India)



Dear shareholders,

Good afternoon and on behalf of the board of directors, I welcome you all to the 33rd Annual General Meeting of your corporation.

I have been informed that the requisite quorum is present. I accordingly call this meeting to order.

I have been informed that the corporation has received proxies from 789 shareholders in respect of 14,84,66,585 equity shares of Rs. 10 each, representing 51.03% of the total paid-up equity share capital and one corporate representation in respect of 74,61,557 equity shares of Rs. 10 each, representing 2.56% of the total paid-up equity share capital.

The annual report and the notice convening the annual general meeting have been sent to you well in advance. So with your permission may I please take the notice as read?

***** Yes, notice may be taken as read *****

I now request our company secretary to read the auditors' report.

***** Mr. Girish V. Koliyote to read the auditors’ report *****

I am sure all of you have read the annual report and assessed the performance of your corporation during the last financial year. Let me highlight some of the major developments during the last year and during the current financial year.

Review of corporate performance in FY 2009-10

Loan Approvals and Disbursements

Last year, your corporation approved loans amounting to Rs. 60,611 crores as compared to Rs. 49,166 crores in the year 2008-09, representing a growth of 23% and disbursed loans amounting to Rs. 50,413 crores as against Rs. 39,650 crores during 2008-09, representing a growth of 27%.

As at March 31, 2010, cumulative loan approvals were Rs. 2,98,061 crores and cumulative loan disbursements stood at Rs. 2,42,219 crores in respect of over 3.5 million housing units.

The demand for individual home loans picked up significantly in the second half of FY 2009-10, reflecting rising consumer confidence and overall improvement of economic conditions. The average size of individual home loans stood at Rs. 16.90 lacs.

Recoveries

The recovery performance of the corporation continued to be very good. Gross non-performing loans, defined as loans where installments are outstanding for more than 90 days as at March 31, 2010 stood at Rs. 782.85 crores. This is equivalent to 0.79% of the loan portfolio as compared to 0.81% of the loan portfolio during the previous year. This was the 21st consecutive quarter end at which the non-performing loans were lower than the corresponding quarter in the previous year.

As per the prudential norms prescribed by the national housing bank, the corporation is required to carry a provision of Rs. 325.29 crores in respect of non-performing assets and general provision on outstanding standard non-housing loans. The balance in the provision for contingencies account as at March 31, 2010 stood at Rs. 655.57 crores, which is equivalent to 0.66% of the loan portfolio.

Capital Adequacy Ratio

As at March 31, 2010, your corporation’s capital adequacy ratio stood at 14.6% of the risk weighted assets as against a minimum requirement of 12%. Tier I capital stood at 12.8% as against a minimum requirement of 6.0%.

Financials

The profit before tax for the year ended March 31, 2010 stood at Rs. 3,915.99 crores as compared to Rs. 3,219.04 crores in the previous year, representing an increase of 22%. After providing Rs. 1,089.50 crores for taxes, the profit after tax for the year ended march 31, 2010 increased by 24% to Rs. 2,826.49 crores as compared to Rs. 2,282.54 crores in the previous year.

For the year ended March 31, 2010, the spread on loans over the cost of borrowing stood at 2.31% per annum as compared to 2.21% in the previous year. Your corporation’s cost to income ratio stood at 7.9% for the year ended March 31, 2010 as against 8.8% in the previous year and continues to be amongst the lowest in the financial sector in Asia.

The board of directors of your corporation has recommended a dividend of Rs. 36 per equity share of Rs. 10 each. The payment of dividend if approved, will commence from tomorrow. The dividend for the last year was Rs. 30 per equity share of Rs. 10 each.

Current Year’s Performance

Individual business for the quarter ended June 30, 2010 was robust with individual approvals growing at 56% and disbursements growing by 62% as compared to the corresponding quarter in the previous year.

The financial results of your corporation for the quarter ended June 30, 2010, which has been subject to limited review by the auditors, were approved by the board at its meeting held earlier today.

For the quarter ended June 30, 2010, your corporation reported a profit before tax of Rs. 966.59 crores as compared to Rs. 779.92 crores in the corresponding quarter of the previous year - an increase of 24%.

After providing Rs. 272 crores for tax, the profit after tax for the quarter amounted to Rs. 694.59 crores, as compared to Rs. 564.92 crores in the corresponding quarter of the previous year – an increase of 23%.

New Initiatives

The corporation is keen to develop sustainable business models in the education space. Toward this initiative, the corporation now holds a 51% stake in Credila Financial Services Private Limited, which is a company that exclusively focuses on providing education loans. Thus Credila is now a subsidiary of the corporation.

Sub-Division of Shares

With the objective of increasing retail participation in the equity shares of the corporation and considering the requests received from many individual shareholders, the board of directors at its meeting held on May 3, 2010, approved the proposal to sub-divide the nominal face value of equity shares of the corporation from Rs. 10 per share to Rs. 2 per share.

Subject to receipt of your approval for the sub-division of shares at this agm, the record date for the same would be fixed by the committee of directors as appointed by the board for this purpose. The details of the record date will be intimated to the stock exchanges, published in leading financial dailies across india and uploaded on the website of the corporation, in accordance with the listing agreement.

Annual Report of Subsidiary Companies

The cost of printing the Annual Report for FY 2009-10 was Rs. 24.54 per copy as against Rs. 25.03 in the previous year.

The Annual Report of the corporation does not contain the annual accounts of its subsidiary companies in terms of the exemption granted by the central government under section 212(8) of the companies act, 1956.

The said exemption was sought only to save on printing and postage cost. However, the corporation has made arrangements to dispatch the annual report of subsidiary companies to shareholders on request.

Payment of Dividend

Pursuant to your approval, the posting of dividend warrants for the financial year 2009-10 will commence tomorrow.

Shareholders having their bank account with hdfc bank limited will receive dividend through the direct credit system tomorrow.

Shareholders who have given the mandate to receive dividend through the national electronic clearing service should receive credit of their dividend in their bank account by July 16, 2010.

Shareholders’ Special Offer on Deposits

As a special gesture, the corporation is once again offering an attractive deposit product exclusively for the benefit of individual shareholders.

Under this offer, the interest payable on the deposits will carry an additional rate of 0.50% p.a. over the prevailing interest rates.

The forms are available at the deposit counter at the entrance of the hall. You may collect the forms after the meeting. We do hope you will participate in the special offer.

Kindly note this special offer is valid till August 31, 2010.

Conclusion

Before I conclude, I wish to place on record our appreciation to all our shareholders, customers, depositors, lenders and regulatory authorities for having reposed their confidence in the corporation and to our employees for their hard work and sincerity.

I now wish to propose the following resolution:

“Resolved that the audited accounts of housing development finance corporation limited for the financial year ended March 31, 2010 and the reports of the directors and the auditors thereon be and are hereby approved and adopted.”

Can I have a seconder please?

Thank you.

Before the resolution is put to vote, I would like to invite questions, if any, from the shareholders.

May I request you to kindly be brief and restrict your questions to the accounts and operations of your corporation for the financial year 2009-10.

To view the photograph, please click on the link given below:

Mr. Deepak Parekh, Chairman, Housing Development Finance Corporation Limited at the Annual General Meeting