HDFC Limited: Chairman’s Speech for 39th Annual General Meeting


Mumbai, Maharashtra, India

Dear Shareholders,

“Good afternoon. On behalf of the Board of Directors, I welcome you all to the 39th Annual General Meeting of your Corporation.

It is three o’clock and I have been informed that the requisite quorum is present. I accordingly call this meeting to order.”

Before I begin, I would like to apologise on behalf of our Chairman, Deepak Parekh. Mr. Parekh has a very bad viral infection and could not come today. He told me that this was the 1st AGM of HDFC that he would miss in 38 years.

On behalf of the entire Board, I would also like to express grief and deep sorrow at the sad demise of Dr. Ram Tarneja, Director of the Corporation, who expired on August 7, 2015. Your Corporation has gained immensely due to Dr. Tarneja’s philosophy of adopting a practical, professional and a socially responsible approach of doing business. On behalf of the Corporation, I would like to condole the demise of Dr. Ram Tarneja and we remain grateful for the guidance, advise, and valuable services rendered by him during his association with the Corporation.

“I have been informed that the Corporation has received proxies from 9 shareholders in respect of 6,94,15,703 equity shares of Rs. 2 each, representing 4.39% of the total issued and paid-up share capital of the Corporation.

“The proxy register is open for inspection by the members. As required under the Companies Act, 2013, as also the Secretarial Standards and SEBI Regulations, the register and other documents are placed before the meeting.”

“I will now proceed with the agenda for the meeting.”

“With your consent may I take the notice convening this Annual General Meeting, which has already been sent to you as read.”

“Since there are no qualifications, observations or comments on financial transactions or matters which have any adverse effect on the functioning of the Corporation in the Auditors’ Report and Secretarial Auditors’ Report, with your permission, may I take the same as read.”

I am sure all of you have read the annual report and have assessed both, the standalone and consolidated financials of your Corporation during the last financial year. Let me highlight some of the major developments during the last year and the current financial year.

Review of Standalone performance during FY 2016

Let me first start with the financials for the year ended March 31, 2016.

The demand for home loans continued to remain healthy, with growth largely coming from the outskirts of big cities as well as Tier 2 and Tier 3 cities. The improved affordability is on account of rising incomes and continued fiscal benefits available on home loans.

The average size of individual loans stood at Rs. 25 lacs as against Rs. 23.3 lacs in the previous year.

As at March 31, 2016, the loan book stood at Rs. 2,59,224 crores as against Rs. 2,28,181 crores in the previous year. Loans sold during the preceding twelve months amounted to Rs. 12,773 crores as compared to Rs. 8,249 crores in the previous year.

The growth in the individual loan book, after adding back loans sold was 24%; while it was 16% net of loans sold. The growth in the total loan book after adding back loans sold was 19%.


The recovery performance of your Corporation continued to be good. Gross non-performing loans, as at March 31, 2016 stood at Rs. 1,833 crores. This is equivalent to 0.70% of the loan portfolio as compared to 0.67% 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. 1,959 crores.

The actual balance in the Provision for Contingencies Account as at March 31, 2016 stood at Rs. 2,695 crores, of which Rs. 566 crores is on account of non-performing loans and Rs. 2,129 crores is in respect of standard assets. The balance in the provision for contingencies is equivalent to 1.03% of the loan portfolio. The Corporation also made a special provision of Rs. 450 crores over and above the regulatory requirements with the objective of further strengthening its Balance Sheet.


For the year ended March 31, 2016, the Profit before Tax stood at Rs. 10,108 crores as against Rs. 8,624 crores in the previous year – an increase of 17%.

After providing Rs. 2,636 crores for taxes and Rs. 379 crores for Deferred Tax Liability on Special Reserve, the Profit After Tax for the year ended March 31, 2016 stood at Rs. 7,093 crores, representing a growth of 18%.

The spread on loans over the cost of borrowings for the year ended March 31, 2016, stood at ­2.29% per annum.

Your Corporation’s cost income ratio stood at 7.6% for the year ended March 31, 2016. This was the same as in the previous year and it continues to be amongst the lowest in the financial sector in Asia.

The Board of Directors of your Corporation has recommended a final dividend of Rs. 14 per equity share of face value of Rs. 2 each in addition to an interim dividend of Rs. 3 per equity share that was paid in April 2016.

The total dividend for the year is Rs. 17 per equity share as against Rs. 15 per equity share in the previous year.

The payment of final dividend will commence tomorrow, subject to the passing of the resolution today.

Current year’s performance: Standalone and Consolidated

Let me now talk about our performance during the first quarter of the current year.

The standalone and consolidated financial results of your Corporation for the quarter ended June 30, 2016, which have been subjected to a limited review by the Auditors, were approved by the Board at its Meeting held earlier today.

Your Corporation has continued to see healthy growth in the demand for housing loans. Disbursements to individual borrowers grew by 26% during the quarter compared to the first quarter of the previous year.

On a standalone basis, the Profit After Tax for the quarter ended June 30, 2016, stood at Rs. 1,871 crores as compared to Rs. 1,361 crores, representing an increase of 37%.

For the quarter ended June 30, 2016, the Consolidated Profit after Tax stood at Rs. 2,797 crores as compared to Rs. 2,204 crores in the corresponding quarter last year.

During the quarter, your Corporation became the first Indian public company to issue rupee denominated bonds in the overseas market. The Corporation raised Rs. 3,000 crores through issue of bonds earlier during this month. The bonds are listed on the London Stock Exchange.

Annual Report

The cost of printing the annual report for FY 2016 was Rs. 44 per copy as against Rs. 46 per copy in the previous year.

In terms of the Companies Act, 2013 and rules made thereunder, the Corporation has sent the Annual Report for FY 2016 and the Notice convening this AGM by e-mail to those shareholders who had registered their e-mail addresses either with their respective depository participants or with the Corporation. This has resulted in considerable savings towards printing and postage charges. Physical copies have been sent to those shareholders whose e-mail address was not available or who have specifically asked for the report.


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 dedication.