HB PORTFOLIO LEASING LIMITED
Excerpts from the specch of the chairman Shri H.C. Bhasin at the 8th annual
general meeting held on 30th November, 1994.
Ladies and Gentlemen.
I have great pleasure in welcoming you all to the 8th Annual General
Meeting of your Company and am thankful for your being with us this
During the last year, there have been practically no major policy changes.
However the process of reforms is being continued. Reforms relating to
trade and industry are yet to be fully implemented. The only real progress
has been in the tariff rationalisation and easing of qualitative
restriction on imports, Financial reforms have still not been properly
articulated. However, the opening of the infrastructure and core sector for
the private sector is an indication of the sustained policy of government
In the Banking sector a rationalised accounting system for the commercial
banks has been made by subjecting few services to value added tax. Capital
account convertibility is also expected in a year or so. Despite
constraints, fundamental factors point a sustained economic revival.
THE FINANCIAL SERVICES SECTOR
The Financial Services industry has acquired the status of one of the
largest industries in the world. The national economies are now being
transformed into global economies. The liberalisation and deregulation has
also assumed a global phenomena. India is also working towards a goal of
integrating its economy with the rest of the world. The financial sector
reforms initiated by the Government are essential in stabilizing,
restructuring and growth of the Indian economy.
Capital Market has witnessed several changes. Badla System has been
abolished. Portfolio investments have increased and dilution of Government
quity holdings in the Public Sector Undertakings have begun in a big way.
The OTCEI and the National Stock Exchange have become fully functional now,
which will bring a revolutionary change in the functioning of the Capital
Market in the country.
THE YEAR IN RETROSPECT
In 1993-94 I am glad to inform you that the performance of your Company has
Gross profit for the year under review stood at Rs. 2165.18 lacs as
compared to Rs. 782.55 lacs in the previous financial year thereby showing a growth of 176.68%.
Profit after tax for the year increased to Rs. 2003.92 lacs from Rs. 633.38
lacs in the previous year, thereby showing a growth of 216.39%.
Networth of your Company at the close of the year under review aggregated
to Rs. 7416.93 lacs as compared to Rs. 3549.46 lacs at the close of the
Earning per share on the basis of weighted average capital employed works
out to be Rs. 12.58 as against Rs. 11.85 at the close of the previous year.
Your Board of Directors have recommended payment of enhanced dividend @ 28%
on equity shares in respect of year ended 31st May, 1994 on expanded
Merchant Banking operations of your company have registered significant
growth during the year under review. Your company managed/marketed 23
issues of over Rs. 974.67 crores successfully and has now been ranked 2nd
in North India and 9th amonst the Private Sector Merchant Bankers in the
country in terms of volume of business. The current assignments in hand
include more than 20 issues amounting to over Rs. 800 crores.
FOCUS ON BUSINESS STRATEGIES
Your company has always been carrying out innovative business plans and
strategies. The TeamHB has been able to draw strength from the core
competencies and has established several milestones, undisputed leadership
and innovative concepts and practices. The background and expertise your
company has will provide synergistic natural advantages to render the
business plans a mark.
Your company has transferred its OTCEI Membership to its 100% Subsidiary HB
Prima Capital Ltd. The new company is organizing the infrastructure to
begin the operations early.
Your Company had obtained membership of the National Stock Exchange both in
Equity as well as in Debt Market segments. The same has been transferred to
another 100% Subsidiary, HB Securities Ltd.
As you are aware necessary approval to launch a domestic Mutual Fund had
been received by your company. Securities and Exchange Board of India has
now granted registration to HB Mutual Fund. The assessment of the needs
for better Investor Services Marketing and evaluation of various scheme-
proposals is in the process of finalisation. The Scheme of HB Mutual Fund
is expected to be launched shortly, soon after the infrastructure is ready.
Housing has until now been considered as a welfare function. The
investment in housing and allied services is merely 1% of GDP in India as
compared to 18% in some of the developed economies. This area has been
identified by your company as a key area and a company HB Housing and
Development Corporation Ltd. has been formed to organise relevant
activities in due course.
Your company is contemplating diversification into overseas operations in
various financial services. The innovative proposals are being analysed
and structured for timely implementation.
The Corporate Finance functions including Merchant Banking and Advisory
Services will continue to remain a major part of your company's portfolio.
The achievements of your Company in these activities have been reckoned
very significantly and a long term relationship with several corporate
houses has been a valued asset of your company.
In the Capital Issue Management your company has plans to enter into Bought
Out Issues which will enable the company to be among the forerunners in the
Your company has plans on its anvil to expand into High Ticket Leasing in a
big way. The Size of the global leasing industry has grown rapidly and is
estimated to be around US $ 350 billion. As a result of liberalisation the
economic growth is poised to gain a momentum. Leasing industry will have
major opportunities in the days to come.
Your Company has been innovative in pioneering the concept of Bought Out
Leasing in India and, thrust in these operations would place us in a
In terms of approval given by you in the Extra Ordinary General Meeting
held in June 1994, the Board of Directors has finalised issue of
1,04,00,000 - 14% Unsecured Fully Convertible Debentures (FCDs of Rs. 65/-
each convertible after 9 months into one Equity Share of Rs. 10/- each at a
premium of Rs. 55 per share to public by Prospectus coupled with the issue
of 1, 74,02,424 FCDs on right basis to the existing shareholders of the
company in the ratio of one FCD for each Equity share held by you.
Each FCD has one Optional Detachable Tradeable Warrant attached to it which
will entitle the holder thereof of apply for one Equity Share between 3 to
36 months from the date of allotment of Debenture as may be determined by
the Board of Directors. The price of one equity share of the face value of
Rs. 10/- each will be determined on the basis of 75% of the Average (of
daily closing) Market Price of the Equity shares for the two previous
calender months (with reference to the date determined by the Board)at
Delhi Stock Exchange. The price so ascertained shall be rounded off to the nearest Rupee, and be subject to a maximum of Rs. 100/-
The confidence of Financial Institutions, Banks and Mutual Funds in the
company is evident from the fact that they have taken up on firm allotment
basis 33,13,460 FCDs amounting to Rs. 2153.75 Lacs. The participants
include Punjab and Sind Bank, Allahabad Bank. The Industrial Finance
Corporation of India Ltd., The Federal Bank Ltd., The Catholic Syrian Bank
Ltd., State Bank of Patiala, Canara Bank, Bank of Madura Ltd., The United
Western Bank Ltd., Taurus, Mutual Fund, PNB Mutual Fund and Indbank Mutual
The public issue is scheduled to open on 19th December 1994 and the right
issue open on 22nd December 1994. You will receive your right forms and
letter of offer soon.
The above capital inflow will be able to fund your company's massive
diversification programmes in order to enable to acquire ths status of one
of the forerunners in the Financial Services Industry in the Country.
BOARD OF DIRECTORS
I feel privileged in informing you that Mr. Gopi Krishna Arora, a renowned
personality, has joined the Board of Director of your Company recently. He
is a retired Civil Servant and was Special Secretary in the Office of the
Prime Minister and Secretary, in the Ministry of Finance, Government of
India. He is the Chairman Indian Advisory Board, ANZ Grindlays Bank. His
presence on the Board will give further strength, guidence & professional
On behalf of the Board of Directors and on my own behalf, I convey my
sincere thanks to the clients, banks, financial institutions and
shareholders for excellent support and cooperation extended by them.
I also take this opportunity to place on record my sincere appreciation of
the excellent work done by the employees of the Company and valuable
assistance rendered by my colleagues on the Board in directing the affairs
of the Company.
Place : New Delhi
Date : 30th November, 1994