Housing and Urban Development Corporation Ltd.-இன் இயக்குநர் அறிக்கை

Mar 31, 2023

Your directors are pleased to present the 53^rd Annual Report on the business and operations of the Company along with Audited Standalone and Consolidated Financial Statements for the year ended March, 2023

1. FINANCIAL PERFORMANCE AND HIGHLIGHTS

The important financial highlights on standalone basis for the year ended 31^st March, 2023 are as under:

('' in crore)
Particulars	2022-23	2021-22
Revenue from Operations	7,049.46	6,954.08
Other Income	36.72	43.58
Total Income	7,086.18	6,997.66
Finance cost	4,507.08	4,532.53
Impairment on Financial instruments	(73.69)	(245.66)
Other Expenses including Employee Benefit Exp.	363.38	364.85
Total expenditure	4,796.77	4,651.72
Profit before tax	2,289.41	2,345.94
Less:
Current tax	435.00	419.00
Deferred tax	154.19	210.58
Adjustment of tax of earlier years (Net)	(1.40)	(0.24)
Profit after tax	1,701.62	1,716.60
Other Comprehensive Income	24.74	(1.92)
Total Comprehensive Income	1,726.36	1,714.68
Balance Surplus of previous year	2.97	0.63
Amount available for Appropriation	1,729.33	1,715.31
Less: Appropriation
Transfer to Special Reserve u/s 36(1)(viii) of Income Tax Act, 1961 and u/s 29C of NHB Act, 1987	500.00	500.00
Transfer to Debenture Redemption Reserve	280.63	331.51
Transfer to Reserve for Bad & Doubtful Debt	105.00	120.00
Interim Dividend	150.14	150.14
Transfer to Impairment Reserve	67.88	60.18
Net surplus after appropriations	625.68	553.48
Proposed final dividend	620.59	550.52
Surplus available after final dividend	5.09	2.96
EPS (Basic/Diluted) (in '')	8.50	8.57

During the period, your Company has maintained the pace of growth with moderate decline of 2.41% in Profit before Tax (PBT). Your Company has seen a growth of 6.75% in its net worth that has reached '' 15,445.25 crore in financial year 2022-23 from 14,468.32 crore in financial year 2021-22.

Consolidated Financial Statements

Pursuant to Section 129(3) of the Companies Act, 2013, the Company has prepared Consolidated Financial Statement (CFS) in respect of only one Joint Venture Company namely M/s Shristi Urban Infrastructure Development Limited and an appropriate

disclosure stating the reasons relating to non-consolidation of accounts of other three companies have been given in the CFS.

A Statement containing salient features of financial statements of Joint Venture and Associate Companies, has been given in the prescribed format AOC - 1 and is annexed as part of the financial statements.

There are no material changes and commitments, occurred subsequent to the close of financial year of the Company and the date of this Board''s report, affecting the financial position of the company and its state of affairs.

Pursuant to Section 136 of the Companies Act, 2013, the Audited Financial Statements and all other documents required to be attached with the financial statements are available on the company''s website at www.hudco.org.in and are also be available for inspection till the date of the ensuing Annual General Meeting during business hours on all working days at the Registered Office of the Company.

2. DIVIDEND

Your Company is consistently rewarding its shareholders by way of dividend payment. The Board of Directors of your Company had earlier approved payment of interim dividend @ 7.50 %, i.e., '' 0.75 per equity share having face value of '' 10/- each totalling to ?150.14 crore on the paid-up equity share capital of the Company in March, 2023 and the same has been paid.

Further, the Board of Directors, have also recommended payment of final Dividend @ 31.00 %, i.e., '' 3.10 per equity share having face value of '' 10/- each for the financial year 2022-23, subject to approval of the shareholders at the ensuing 53^rd Annual General Meeting.

In compliance with Regulation 43-A of Securities and Exchange Board of India (Listing Obligations and Disclosures Requirement) Regulations, 2015, your Company has formulated ‘Dividend Distribution Policy'' and the same is available on Company''s website at https://www.hudco.org.in//writereaddata/DDP.pdf

As per guidelines issued by Department of Investment and Public Asset Management (DIPAM), Government of India, Company is required to pay a minimum annual dividend of 30% of Profit After Tax (PAT) or 5% of the net-worth, whichever is higher. Further, HUDCO had sought exemption from payment of dividend as per available distributable profits in place of prescribed norms stated in OM dated 27^th May, 2016 issued by Ministry of Finance. DIPAM vide its OM no. 5/4/2016-Policy dated 13^th January, 2017, has conveyed that empowered Committee on Management of Government Investment in CPSEs in its meeting held on 9^th January, 2017, under the Chairmanship of Secretary, DIPAM, had observed that “Keeping in view the requirement to meet the statutory deductions out of the profit earned by the Company, the Committee noted that no exemption may be required by the Company under the guidelines”. After analysis various financial parameters, cash flow position and available distributable profits, the Board of Directors have paid/recommended total dividend of '' 3.85 per share (38.50%).

3. SHARE CAPITAL

As on 31^st March, 2023, the authorized share capital of the Company was '' 2,500 crore with issued, subscribed and paid-up equity share capital of '' 2,001.90 crore. The paid-up share capital comprises of promoter''s shareholding of 81.81% held by the President of India through the Ministry of Housing and Urban Affair (MoHUA) - 61.08% and Ministry of Rural Development (MoRD) - 20.73% respectively and the balance of 18.19% held by the Public. There is no change in the authorized, issued, subscribed and paid-up equity share capital of the Company during the year.

The Company has not issued any shares with differential voting right/ Sweat Equity Shares during the year under report. Listing of securities and payment of listing fee

The securities of the Company are listed at BSE Limited (BSE) and National Stock Exchange of India Limited (NSE) and the annual listing fee for the financial year 2023-24 has been paid to the Stock Exchanges.

Transfer of unclaimed Dividend and Shares to Investor Education & Protection Fund

HUDCO has become a listed company in May, 2017, consequent upon disinvestment made by President of India of its equity shareholding in the Company. In compliance of the provisions of Section 124 and 125 of the Companies Act, 2013, company is not required to transfer any amount of dividend remained unpaid or unclaimed to Investor Education & Protection Fund (IEPF), as a period of 7 years has not elapsed from the date it became due for payment. Accordingly, no shares and unclaimed dividend were transferred to IEPF account.

4. MEMORANDUM OF UNDERSTANDING (MoU)

HUDCO enters into an annual MoU with its Administrative Ministry, i.e., Ministry of Housing and Urban Affairs, Government of India, wherein, macro performance parameters, mainly financial and a few non-financial with annual targets are set by the Department of Public Enterprises (DPE). Your Company was rated ‘Good'' by DPE for its performance in terms of MoU

parameters for the financial year 2021-22. Despite being a COVID year, HUDCO exhibited resilience by striving hard and navigating through the multifarious business challenges that it faced and attained its potential performance

For the financial year 2022-23, there were 12 MoU parameters and the achievement on some key parameters is as presented below:-

Sl.No.	MoU Parameter	Achievement (Audited & Consolidated)
1.	Loan disbursed to Total Funds Available	92.89%
2.	Overdue Loans to Total loans(net)	3.71%
3.	Net NPA/Total loans(net)	0.52%
4.	Cost of raising funds through Bonds as compared to similarly rated CPSEs (Margin over Reuters) (in bps)	(-)4.05 bps

Based on the actual achievement against the targets set, DPE evaluates your Company. The MoU rating for financial year 2022-23 is still awaited.

5. LENDING ACTIVITIES

In the wake of the ongoing outbreak of the COVID-19 pandemic, the financial year 2022-23 witnessed gradual catching up in economic activities. Despite the alarming challenges posed by COVID-19 pandemic leading to slow economic growth, HUDCO, with its prudent business policies and proactive management, could register sanctions of '' 24,572 crore and disbursement of '' 8,466 crore against the previous year sanctions and release of '' 20,663 crore and '' 8,887 crore respectively.

HUDCO in its glorious journey of 53^rd years, since its inception in 1970, has cumulatively sanctioned a total of 17,335 housing and urban infrastructure projects with a total loan of '' 2,36,555 crore and disbursements of ''1,96,612 crore. Further, your Company has sanctioned financial assistance to more than 196.48 lakh housing units both in rural and urban areas in the Country, of which 187.27 lakh (95.31%) pertains to EWS / LIG categories.

In addition, under HUDCO Niwas, a retail lending window, your company has cumulatively sanctioned financial assistance of '' 6,871 crore to 3.86 lakh individuals and released an amount of '' 5,178 crore.

Housing Operations

Under Housing sector during the year under review, HUDCO has sanctioned 5 projects with a loan assistance of '' 3,466 crore, inclusive of '' 12 crore under HUDCO Niwas, thereby facilitating construction of 3,49,308 dwelling units. Loan release for an amount of '' 1,838 crore (inclusive of '' 9 crore under HUDCO Niwas) has been made during current year.

Urban Infrastructure Lending

Under the Urban Infrastructure portfolio, HUDCO has sanctioned 36 projects with a loan assistance of '' 21,106 crore covering various sectors like Water Supply, Smart City, Transport Nagar, Social Infrastructure, Commercial Infrastructure, Road & Transport, Power, etc. Further, a release of '' 6,628 crore was made during the year in various schemes.

HUDCO is actively participating in Government of India flagship program such as Smart City Mission, Atal Mission for Rejuvenation and Urban Transformation (AMRUT), Jal Jeevan Mission etc.

In the Financial Year 2022-23, major projects sanctioned under:

Housing - HUDCO supported the PMAY(U) flagship programme of GoI by providing viability gap funding towards State''s share in the state of Chhattisgarh. HUDCO provided financial assistance of ''2,385 crore for construction of 63,246 DUs under Affordable Housing Project (AHP) and 2,56,880 DUs under Beneficiary-Led-Construction (BLC) vertical totalling 3,20,126 DUs covering 28 districts and 169 ULBs. Besides the aforesaid mentioned scheme, HUDCO had also sanctioned a scheme for loan amount of ''1,000 crore to Telangana Housing Board (THB) to construct 28,979 DUs (22,772 DUs in Rural areas and 6,207 Units in Urban Areas under PMAY flagship programme of GoI in the State of Telangana. The units are proposed with a total plinth area of 560 sqft. with a provision for living room, two bed rooms, kitchen, toilets and wash area, etc.

Core Infrastructure - HUDCO is actively participating in Government of India prestigious flagship program of Smart City Mission and AMRUT. In the FY 2022-23, HUDCO has provided financial assistance of '' 170 crore for Implementation of Smart City Project at Kohima and '' 50 crore for Infrastructure Development work in Udaipur Smart City, Rajasthan. The other major project sanctioned in the financial year was water conservation schemes at various Districts of Maharashtra (Loan '' 3,500 crore) and Construction of various infrastructure development works in ULBs in Rajasthan (Loan '' 2,235 crore). HUDCO has also provided loan assistance for JP Ganga Path, Phase-2 in Bihar (Loan '' 541 crore), Infrastructure facilities for EWS Housing

units under PMAY-HFA (Urban), Phase-II, in the State of Andhra Pradesh (Loan '' 750 crore), Construction of 4 lane elevated corridor Patna, Bihar (Loan '' 275 crore), etc.

The Ganga Driveway Project popularly known as “J.P Ganga Path” (Digha to Didarganj) at Patna, Bihar is a landmark project to reshape the local transport network and improve its efficiency in the capital city of Bihar. The embankment road of 2.90 Km was proposed to be replaced with elevated structure alongwith strengthening of two approach road. This 4-lane expressway will reduce the travel time between Digha (Patna- West) to Didarganj (Patna-East) from 2 hours to just 25 minutes. The project is in advace stage of implementation.

The project, “Construction of various infrastructure development works in ULBs in Rajasthan” with financial assistance of '' 2,235 crore aims to improve the infrastructure facility and provide basic civic amenities across all ULBs in the State of Rajasthan by undertaking various infrastructure works such as road upgradation, sewerage, drainage works, construction of Faecal Sludge Treatment Plants, Town Halls, Bio-Methanation Bottling Plants, beautification works, etc.

Power & Transport Sector - HUDCO sanctioned Land Acquisition scheme for Jalna-Nanded Expressway Connector to Hindu Hriday Samrat Balasaheb Thackeray Samuruddhi Mahamarg to Maharashtra State Road Development Corporation (MSRDC) for a loan amount of '' 2,140 crore. The proposed road starts at Jalna on Samruddhi Expressway, traverses Southwest through Jalna, Parbhani & Nanded Districts and ends on Telangana - Nanded - Degloor National Highway No. 161 with overall project corridor length of 179.772 Km. The proposed alignment passes through 88 villages & 8 Talukas of 3 districts of Jalna, Parbhani & Nanded districts.

HUDCO has also sanctioned a scheme for improvement of power distribution network to TANGEDCO, with a loan amount of ''1,000 crore, which will reduce distribution losses, increased metering efficiency, etc., thereby improvement in revenues of TANGEDCO. The proposed scheme is comprising of procurement of Distribution Transformers of various capacity ranging from 63 KVA to 500 KVA and procurement of Three Phase static bi directional energy meters for Solar Net Metering Accurate Measurement of energy consumption.

Social Infrastructure - HUDCO had sanctioned '' 2,000 crore to Kerala Infrastructure Investment Fund Board (KIIFB) for improving the medical infrastructure in the State and out of which an amount of '' 1,000 crore has been released. The sanctioned project is for providing/improving the infrastructure facilities in 26 Govt. Hospitals scattered throughout the State. The project envisages construction of new hospital blocks, modernization of existing facilities and creation/upgradation of required infrastructure facilities. Out of the 26 projects, construction of new buildings & development of infrastructure facilities are proposed in 19 projects, a combination of construction of new buildings, extension/renovation and development of infrastructure facilities are proposed in 6 projects and only development of infrastructure facilities is proposed in one project.

HUDCO’s role in Government of India scheme(s) - for promoting Housing for All & Urban Development

HUDCO as the premier techno-financial institution assists the Ministry of Housing and Urban Affairs (MoHUA) in scrutiny and inspection of sample projects / DPRs under Pradhan Mantri Awas Yojana (PMAY) - (Urban) - Housing for All (HFA) prior to their consideration by the Ministry for sanction of central assistance.

As a Resource Institution for scrutiny and inspection of sample projects/ DPRs under Pradhan Mantri Awas Yojana (PMAY) (Urban) - Housing for All Mission, HUDCO for financial year 2022-23, carried out site and/or desk scrutiny of 40 projects for 1.00359 lakh dwelling units with project cost of '' 5717.37 crore & GoI assistance of '' 1504.26 crore covering 01 Affordable Housing in Partnership (AHP) project, 38 Beneficiary Led Construction (BLC) - New Construction/ Enhancement, 01 In-situ Slum Redevelopment (ISSR) project at various locations in 40 towns/ cities under 13 States/UTs. Cumulatively up to 31^st March, 2023, HUDCO has carried out site and/or desk scrutiny of 595 projects for 12.37 lakh DUs with project cost of '' 57,946.06 crore & GoI assistance of '' 18,271.88 crore covering 62

AHP projects, 511 BLC (New Construction/Enhancement) & 22 ISSR projects (inclusive of 1 ISSR - AHP project) at 431 towns/ cities under 34 States/UTs.

HUDCO, as a Central Nodal Agency (CNA), has executed Memorandum of Understanding with 91 Banks/Primary Lending Institutions (PLIs) for EWS/LIG and 87 Banks/PLIs for MIG-I and MIG-II categories.

During the financial year 2022-23, HUDCO has disbursed subsidy of '' 628.43 crore to 25718 beneficiaries under EWS/LIG category. Cumulatively, HUDCO has disbursed CLSS subsidy of '' 2635.32 crore to 1,11,955 beneficiaries, throughout country till 31^st March, 2023.Out of this, an amount of '' 2297.40 crore has been disbursed to 95,887 EWS/LIG beneficiaries while an amount of '' 337.92 crore has been disbursed to 16068 MIG category beneficiaries.

Sectorial Overview and Government Initiative

Support to Economically Weaker Sections - HUDCO has made concerted efforts to reach the unreached as well as support the flagship programmes of the Government of India. HUDCO continues to address the housing requirements of weaker Sections of the society by offering financial assistance/ loan to the Economically Weaker Sections (EWS) and Low-Income Groups (LIG) segment of the society at a comparatively lower rate of interest. Further, your Company has cumulatively sanctioned financial assistance to more than 196.48 lakh housing units both in rural and urban areas in the Country, of which 187.27 lakh (95.31%) pertains to EWS/ LIG categories.

HUDCO’s Support for projects in the North-Eastern Region - During the year, HUDCO has supported projects in the NorthEastern Region, and sanctioned 9 housing and urban infrastructure schemes with loan amount of '' 279.13 crore in the States of Assam, Tripura, and Nagaland.

Consultancy Initiatives

HUDCO provides consultancy services in the area(s) of Architectural Design & Development; Urban & Regional Planning; Appraisal, Scrutiny & Monitoring of Government Projects; and Environmental Engineering, for the housing and urban development sector, through a dedicated team of qualified and experienced professionals from diverse background such as Architects, Planners, Landscape Experts, Geographers, Engineers, Valuers, GIS Expert, and other allied professionals that form the core team. The Regional Offices of HUDCO, having their presence in all state capitals, add to HUDCO''s versatility and outreach of Consultancy works. HUDCO''s Construction and Consultancy Wing, along with the Regional Offices of HUDCO, not only generated fee-based income providing unique design concepts while remaining responsive to its client''s diverse requirements but also contributed towards branding HUDCO as a nationally recognized premier techno financial institution.

Post COVID -19 pandemic, works were restricted to a few niche areas, while work continued on the prestigious assignments having long gestation periods; which included providing consultancy services for the construction of a Housing Complex for Tripura Tribal Areas Autonomous District Council (TTAADC) at Tripura and the ‘Vertical Housing Colony: Shehjar Apartments at Bemina, Srinagar'', and the Integrated Master Plan for Rajgir Regional Planning Area and Nalanda Mahavihara World Heritage Site in the state of Bihar being prepared on the GIS platform. HUDCO Bangalore RO has undertaken consultancy assignment for obtaining Environment Clearance for the project ‘Construction of HAL staff quarters-Type A, B & C in Bangalore, while Chennai HUDCO RO, through Puducherry Development Office has been involved in preparation of DPR for ‘Comprehensive EWS Housing Layout at Kumaraguru Pallam - Puducherry'', Master Plan of Thirunallar Town Development Plan, Ph-II, Development of Queue Complex for Arulmighu Mariammam Temple Samayapuram, Spiritual Circuit in the UT of Puducherry, and, DPRs for: i) Identified three lakes at various locations in Puducherry; ii) Development of Arikamedu as tourism destination in Puducherry; and, iii) Residential school and Marriage hall.

HUDCO is an empanelled institution for Independent Appraisal of Integrated Management Plans (IMPs) under the National Plan for Conservation of Aquatic Ecosystems (NPCA), a centrally sponsored scheme being implemented by the Ministry of Environment Forest & Climate Change (MoEF&CC). During the financial year 2022-23, as part of Environment Engineering Consultancy, HUDCO carried out appraisal of Integrated Management Plans for five wetlands across India, namely; Gurudongmar Wetland Complex (Sikkim), Keetham Wetland (Agra, Uttar Pradesh), Patna Wetland (Etah, Uttar Pradesh), Saman Wetland (Mainpuri, Uttar Pradesh) and Sarsai Nawar Wetland (Etawah, Uttar Pradesh) with a total estimated project cost of about '' 21 crores. Further, three more IMPs from MoEF&CC, namely; Thol Wetland IMP(Gujarat), Sultanpur National Park IMP (Haryana), and Bhindawas Wildlife Sanctuary IMP (Haryana) for appraisal under NPCA, are under progress.

AWARDS: HUDCO Consultancy’s other Promotional Works

HUDCO''s consultancy plays a significant role in information dissemination, and, increasing awareness about HUDCO''s role in urban development and about GoI‘s flagship programs focusing on housing and sustainable urban development through Exhibitions and Awards instituted to encourage and appreciate the valuable contribution of the urban professionals towards sustainable habitats, and thereby, creating awareness on excellence in design, sustainable housing, and urban development.

HUDCO as in previous years, engaged with the young upcoming professionals/ students of Architecture and Planning, supporting activities of the National Association of Students of Architecture (NASA). HUDCO-NASA Design Trophy 2023 theme “Housing solution for Native Communities: Moving Towards a ‘Developmental Paradigm” in line with the GoI''s efforts to bring the tribal people into the mainstream of society, focused on housing solutions for the indigenous people, who have on account

of; rapid urbanization, increasing pressure placed on natural resources, focus on environmental conservation, etc., suffered grave injustices.

The HUDCO DESIGN AWARDS-2022-23, aimed at encouraging and appreciating the creative and innovative thinking put in by the professionals to make our cities sustainable and more liveable, and invited entries under five categories, viz; Cost Effective Rural/ Urban Housing Deploying Innovative/ Emerging and Disaster Resistant Technologies, New and Innovative Town Design Solutions/Eco-cities, Conservation of Heritage, Green Buildings and Landscape Planning & Design. All the winning entries for these two Awards, for wide dissemination, are brought out as e-publications.

6. FINANCIAL REVIEW(i) Accounting Policies

During the year under report, your company has not made any modification/ additions in the existing accounting policies.

(ii) Income from Operations and Profitability

Your Company has reported total income for the financial year 2022-23 at '' 7086.18 crore (previous year '' 6997.66 crore) inclusive of other income of '' 36.72 crore (previous year '' 43.58 crore), while the Profit Before Tax (PBT) for the year was ''2289.41 crore (previous year '' 2,345.94 crore) and Profit After Tax (PAT) was '' 1701.62 crore (previous year '' 1,716.60 crore). Total comprehensive income for the year was reported at '' 1726.36 crore (previous year '' 1,714.68 crore).

(iii) Non-Performing Assets

The Default and NPA position of your Company is regularly monitored to keep a check on any fresh addition to NPAs, for resolution of old and chronic defaults and in compliance with the prudential guidelines for Non-Performing Assets (NPAs) under the Housing Finance Companies (NHB) Directions, 2010, as amended from time to time. The default and NPA position of all Regional Offices is regularly monitored by regional level Default Monitoring & Review Committee and Default Monitoring & Default Resolution (DMDR) Wing at Head Office. DMDR Wing at Head Office also undertakes joint review of Regional Offices along with Operations & Law Wing through Video Conferences. In addition, the overall default & NPA position is reviewed by Default Monitoring & Resolution Committee (DMRC), Committee for Review of NPAs (a Board level Committee) and Board of Directors.

As at the end of the financial year ended 31^st March, 2023, HUDCO reported Gross NPA of '' 2,759.17 crore, which constitutes 3.42% of total loan portfolio. The Net NPA as on 31^st March 2023 is '' 407.25 crore which constitutes 0.52% to Net loan outstanding as against MoU target of 0.35%. During the year 2022-23, an amount of '' 145.58 crore was recovered from the accounts which were in NPA as on 31.03.2022. As on 31^st March 2023, Loan Overdue to Net Loan Assets ratio is 3.71% as against MoU target of 6.50%.

As on 31^st March, 2023, out of HUDCO''s total loan book pertaining to Project loans of '' 80,503.60 crore, Government Agencies constitute 97.03% of the above loan, i.e., '' 78,113.25 crore while Private Sector constitutes 2.97%, i.e. '' 2,390.35 crore. In the case of loans to Government Sector (Project loans), the Gross NPA is '' 630.56 crore against loan portfolio of '' 78,113.25 crore and provision of '' 239.85 crore has been made towards NPA, whereas, in Private Sector (Project loans), the Gross NPA is '' 2,110.84 crore against loan portfolio of '' 2,390.35 crore and a provision of '' 2,094.30 crore has been made towards NPA. Further, HUDCO is not making any fresh sanctions to the private sector, since March, 2013. In respect of Project Loans, the Company has made a total provision on loans (Impairment) of '' 2,413.13 crore as per ECL Approach. Out of the above, the provision on account of loans (Impairment) against NPA (Stage - III) loans is '' 2,334.15 crore.

(iv) Resource Mobilization

During the year, the Company constantly diversified its borrowing portfolio to meet its operational requirements and optimize cost of funds. During the financial year 2022-23, the Company mobilized resources aggregating to '' 16,161 crore from domestic markets, which included ''3,970 crore mobilized through issue of Unsecured, Taxable, Non-Convertible Debentures (NCDs) on private placement basis, ''10,421.50 crore by way of rupee term loans from banks and ''1,769.50 crore by way of short-term loan from banks. The Company''s borrowing is planned taking into consideration ALM gaps, interest mismatches and the prevailing market conditions.

The Company has been identified as a ‘Large Corporate'' in terms of the SEBI Regulations and accordingly has ensured that 25% of its incremental borrowings during the year was by way of issuance of debt securities. Further, the issue proceeds of non-convertible debt securities have been fully utilized for the purpose(s)/ objects stated in the offer

document / Information memorandum.

Further, for maintaining adequate liquidity and meeting interim operational/ contingency requirements, credit lines of ?11,500 crore were available as on 31^st March, 2023 from various scheduled commercial banks. The said facilities, for short-term funding, were available with the company, without any commitment charges towards unutilized amounts.

As a part of prudent policy, the short-term resources are suitably replaced at an opportune time with longer tenor alternate resources depending upon prevalent market conditions, internal liquidity position and actual operational requirements. The Company also reviews the fund position on daily basis and parks surplus funds in fixed deposits with scheduled commercial banks as per the board approved policy with an objective of reducing the negative carry to the extent possible.

RBI has prescribed Liquidity Coverage Ratio (LCR) framework for HFCs. These guidelines aim for maintenance of a liquidity buffer in terms of LCR by ensuring that HFCs have sufficient High Quality Liquid Asset (HQLA) to survive any acute liquidity stress scenario lasting for next 30 days. The Company has been complying with the said directions by maintaining sufficient liquidity buffer in the form of HQLA, as prescribed.

HUDCO has a diversified funding profile with sources including tax-free bonds, taxable bonds, refinance from NHB, bank loans, commercial papers, and foreign currency borrowings. As on 31^st March, 2023, HUDCO''s overall borrowings stood at '' 62,905.08 crore, which comprised of long-term borrowings of '' 61,135.58 crore and short-term borrowings of '' 1,769.50 crore. Further, as on 31^st March, 2023, the long-term borrowings to Net worth, stood at 3.96 times, as against 4.09 times as on 31^st March, 2022. The composition of outstanding borrowings as on 31^st March, 2023 vis-a-vis 31^st March, 2022 are as under:

(v) Domestic and International Credit Rating Domestic

During the financial year 2022-23, the Company''s long-term domestic borrowing programme was awarded the highest credit rating of ‘IND AAA/Stable'', ‘[ICRA] AAA (Stable)'' and ‘CARE AAA [Triple A]; Stable'' by M/s India Ratings & Research (IRRPL), M/s ICRA and M/s CARE Ratings, respectively. The Company also got its short-term borrowing programme rated, obtaining the highest rating of “IND A1 '', ‘[ICRA] A1 '''' and ‘CARE A1 [A One Plus]'', by the above-mentioned Credit Rating Agencies.

International

As on 31^st March, 2023, HUDCO for its International Borrowing Programme continued to enjoy International Credit Rating of ‘Baa3'' with Stable outlook and ‘BBB-'' with Stable outlook, respectively, from Moody''s and FITCH, International Credit Rating Agencies. Both the assigned ratings are of investment grade and are at the Sovereign ceiling and equivalent as that of our Country.

(vi) Cost of Borrowings

The overall weighted average cost of resources raised during the year was 7.46% p.a. and for borrowings outstanding as on 31^st March, 2023 is 7.71% p.a. (7.43% p.a. as on 31^st March, 2022). The weighted average incremental cost of borrowing through taxable bonds/ debentures, worked out to 4.05 bps lower than the Reuters Benchmark Yield of ‘AAA'' Rated CPSEs of equivalent tenor prevailing at different points of time when the borrowings were made during the course of the year, thereby enabling achievement of Excellent category MoU target for cost of borrowings. As a result, the Company was able to deliver debt financing for various Housing & Infrastructure projects, spread across the Country, at competitive rates.

The Company was able to achieve this feat through constant monitoring of the markets, proper timing of its borrowings and appropriate selection of instruments.

(vii) Redemption of debt securities and repayment of loans (excluding the borrowings availed and repaid during the same financial year)

The Directors are pleased to report that during the year under review, the Company successfully redeemed bonds/ debentures and discharged its other debt obligations amounting to 14,769.40 crore in an efficient manner, without a single instance of delay or default in debt servicing. These included Bonds/ Debentures valued at 10,236.19 crore, Term Loans/ Short-Term loans from Banks and financial institutions worth ?4,464.04 crore, foreign currency loans availed from Multilateral Agencies aggregating to ?66.98 crore and public deposits of ?2.19 crore. The Company is set to honour scheduled obligations towards redemption of Bonds and other long term debt obligations amounting to around ''9,113 crore during the next fiscal.

The Company''s internal generations are adequate to meet the repayment/ redemption obligations. Surplus funds, if any, after meeting the repayment obligations are invested prudently in the form of fixed deposits with banks.

The Company continues to maintain its impeccable track record of servicing its debt in time and there has never been a single instance of default.

(viii) Unclaimed amount under HUDCO Bonds

An amount of ? 13,37,29,791 (inclusive of interest amount of ? 9,42,19,791) in respect of 3351 bondholders has remained unpaid as on 31^st March 2023 as the same has not been yet claimed by the bondholders.

The details of amount remaining unclaimed are as under:

Financial	Principal			Interest			Total Amount
year	Amount	No. of	No. of	Amount	No. of	No. of NCDs	(?)
		holders	NCDs		holders
	(?)			(?)
2022-23	3,95,10,000	141	37,035	9,42,19,791	3351	11,24,904	13,37,29,791
2021-22	26,00,000	4	26	10,19,44,131	3572	11,04,516	10,45,44,131

In respect of the above unclaimed Bonds, the bond holder(s) have been requested from time to time through email/ letter, etc., for submission of requisite documents for claiming the amount of Principal/ Interest, as may be due in their respective case(s).

In respect of Bonds, the company in terms of SEBI (Listing Obligations and Disclosure Requirements) (Fifth Amendments) Regulations 2021 dated 7^th September, 2021, is presently transferring principal and/or interest, or both (if any) which remains unclaimed for 7 years from the date of payment to Investor Education and Protection Fund (IEPF) constituted in terms of Section 125 of the Companies Act, 2013.

During the Financial year 2022-2023, an amount of ''1,87,14,668/- has been transferred to IEPF on account of Bonds, as per the provisions of SEBI (Listing Obligations and Disclosure Requirements) (Fifth Amendments) Regulations 2021 dated 7^th September, 2021.

(ix) Dematerialization of Bonds

During the financial year 2022-23, HUDCO has issued Unsecured, Taxable Bonds/ Debentures in dematerialized form only. With this, all Taxable Bonds/ Debentures, issued by the Company and outstanding as on 31^st March, 2023 are in dematerialized form only. The Company has made necessary arrangement with NSDL and CDSL for issue of bonds in

dematerialized form. The company has also appointed Registrar & Transfer Agents (RTA) for maintaining the continuous electronic connectivity with NSDL/CDSL and investors.

Investors can deal in these Bonds/ Debentures as per the provisions of Depository Act, 1996, as amended and such deals are cleared & settled in recognised Stock Exchanges subject to conditions specified by SEBI.

(x) HUDCO Public Deposit Scheme

HUDCO, being a Housing Finance Company registered with National Housing Bank (NHB) is governed by the provisions of Housing Finance Companies Directions (NHB/RBI), relating to Public Deposits.

HUDCO had discontinued accepting / renewing Public Deposit under the Public Deposit Scheme w.e.f. 1^st July, 2019, accordingly, during the financial year 2022-23, no fresh deposits were accepted/renewed by HUDCO. Deposits of ?2.19 crore were matured/paid to 115 depositors in the financial year 2022-23. The total amount outstanding under HUDCO Public Deposit Scheme was ''1.71 crore from 53 depositors as on 31^st March, 2023

(xi) Unclaimed amount under HUDCO Public Deposit Scheme

As on 31^st March, 2023, deposit(s) amounting to '' 19,22,752/- (inclusive of Principal and Interest) from 17 depositors remains unclaimed.

In respect of unclaimed Deposits, the Deposit holder(s) have been requested from time to time through email/ letters, etc., for submission of requisite documents for claiming the unclaimed amount.

During the financial year 2022-23, an amount of '' 1,12,548/- remained unclaimed for more than seven years from the date of maturity and was transferred to the ‘Investor Education and Protection Fund'' (IEPF), as per the provisions of the Companies Act, 2013 and rules made thereunder.

(xii) Deployment of Resources at the close of the year

At the close of the financial year 2022-23, the total resources of your Company stood at '' 80,970.96 crore. Out of this, Equity Share Capital amounted to '' 2,001.90 crore, Reserves & Surplus stood at '' 13,443.35 crore, Loans from Financial Institutions, Commercial Banks, Multilateral Institutions, Public Deposits and Market Borrowings through Bonds accounted for '' 62,905.08 crore, Deferred Tax Liabilities (Net) amounted to '' 1006.12 crore and other liabilities & provisions stood at '' 1,614.51 crore. These funds were deployed as Long/Short Term Loan & Advances of '' 79,236.97 crore, Fixed Assets (net of depreciation) of '' 109.36 crore (including capital work-in-progress, Intangible Assets under development and Intangible Assets), Investments of '' 631.37 crore, Cash & Bank Balances of '' 68.85 crore and other assets of '' 924.41 crore.

. RISK MANAGEMENT IN HUDCO

In compliance with the directions given by National Housing Bank, HUDCO has in place Risk Management Policy and Operating Manual through which it reviews and assess significant risks on a regular basis to ensure that there is a robust system of risk controls and mitigation. Major risks identified for your company, being in lending operations, are credit risk, operational risk, liquidity risk, market risk, interest rate risk and foreign currency risk, etc. Your Company has a well-structured robust Risk Management Policy and Operating Manual in line with its objectives to address the various risks.

In compliance with the SEBI (LODR) Regulations, 2015, your Company has in place a Board level Committee under the nomenclature ‘Risk Management Committee'' (RMC) headed by a Non-Executive Director, which reviews various decisions/ recommendations of the three sub-committees namely: -

- Assets & Liabilities Management Committee (ALCO);

- Credit Risk Management Committee (CRMC); and

- Operational Risk Management Committee (ORMC)

Assets and Liabilities Management (ALCO) Committee reviews the liquidity risks and ensures management of Assets and Liabilities mismatches through liquidity gap analysis, interest rate sensitivity analysis. The Assets Liabilities mismatch, if any, are being managed through the committed Bank lines, within the permissible limits as per NHB guidelines. During the year, 17 meetings of ALCO were held.

Credit Risk Management Committee (CRMC) oversees and ensures that the credit policies are put in place and are consistently applied while appraising the proposal for sanction of loan and for ascertaining the credit worthiness of the applicant/ borrowing agency. During the year, 4 meetings of the CRMC were held.

Operational Risk Management Committee (ORMC) oversees and ensures the mitigation of operational risk both internal as well as external, like Technology risk, Employee risk, Customer risk, Capital Asset risk and External risk, etc., to which your company is susceptible by establishing & strengthening internal control systems and procedures and by providing adequate training to the employees. During the year, 3 meetings of the ORMC were held.

With the prudent policies and professional approach of the management, HUDCO has been successful in mitigating various risks, briefly described as under: -

a) Operational Risk: To manage the operational risks both internal as well as external associated with the operations of the Company like technology risk, employee risk, capital asset risk, external risk, compliance risks viz. external fraud, legal risk, etc., your Company has established a strong reporting and monitoring mechanism. The requisite information on the Operational risk is obtained through quarterly reports of ‘Operational Risk Factors and Key Risk Indicators (KRIs) from Regional Offices/ departments which are further reviewed and analyzed for mitigation of operational risk.

b) Credit Risk: To manage credit risks associated with business, your Company has in place a strong and effective credit appraisal mechanism containing comprehensive appraisal techniques/ guidelines ensuring timely repayments of principal & interest amount.

c) Liquidity Risk: For management of liquidity risk, your Company has effective Asset Liability Management System. The liquidity risk is being monitored with the help of liquidity gap analysis. Further, the funds are mobilized at competitive rates through various strategies viz. bonds, term loans, etc., and the mismatch in the Asset and Liabilities, if any, are managed through the committed Bank lines.

d) Market Risk: The various market risks arising from fluctuations in interest rates and foreign currency exchange rates are periodically reviewed by the Company. Further, based on cost of funds and market scenario, the lending rates are determined. The interest rate risk is being monitored with the help of interest rate sensitivity analysis under the Asset Liability Management System.

e) Foreign Currency Risk: The Company has a Foreign Currency Risk Management policy for mitigation of risks associated with Foreign Currency fluctuations. To cover the risks associated with exchange rate and interest rate, your Company has entered into hedging transactions. As on 31^st March, 2023, the total foreign currency liabilities are USD 10.75 million (INR 74.96 crore) and JPY 24.678 million (INR 1.53 crore) and 20.30% of the foreign currency exchange rate risk is covered through hedging instruments.

8. JOINT VENTURE, ASSOCIATE AND SUBSIDIARY COMPANY

As on 31^st March, 2023, HUDCO has three Joint Venture(s) Companies, namely, Pragati Social Infrastructure & Development Limited (PSIDL), Shristi Urban Infrastructure Development Limited (SUIDL), Signa Infrastructure India Limited (SIIL) and Associate namely Ind Bank Housing Limited (IBHL). Further HUDCO does not have any subsidiary.

HUDCO had invested '' 2.14 crore in the Joint venture Companies {PSIDL - '' 0.13 crore (26%), SUIDL- '' 2.00 crore (40%) and SIIL- '' 0.01 crore (26%)}. HUDCO has decided to exit from joint venture companies by invoking the exit clauses, as the performance of these joint ventures was not found to be satisfactory. The Company is in the process of exiting from these joint ventures, for which necessary steps are being taken. The investment in respect of PSIDL and SIIL is being shown as '' 1/- in HUDCO books while accounts of SUIDL are being consolidated with HUDCO accounts.

In the case of IBHL, an associate Company, HUDCO has investment of '' 2.50 crore which constitutes 25% of paid-up capital in Ind Bank Housing Limited. As per regulatory guidelines, HUDCO has to bring down its stake below 15%. HUDCO is striving to bring its stake within prescribed norms. Presently HUDCO is valuing its stake in Ind Bank Housing Limited at '' 1 only. Indian Bank along with strategic investors is proposing to infuse further capital in Ind Bank Housing Finance to revive its operations which would dilute HUDCO stake.

9. INTERNAL FINANCIAL CONTROL POLICY AND INTERNAL AUDIT

Your company has adequate Internal Financial Controls (IFC) system for ensuring, the orderly and efficient conduct of its business, adherence with the laid down policies and procedures, safeguard of assets of the Company, prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information commensurate with the operations of the Company. The system also includes Risk Control Matrices and Process Flow Charts to depict the process to initiate, authorize, process, record, and report transactions; the points within the process at which misstatements could occur; and control activities that are designed to prevent or detect such misstatements including providing greater transparency to segregation of duties.

The Chartered Accountant firms appointed for carrying out Risk Based Internal Audit are also reviewing and testing the operating efficiency of existing Internal Financial Controls and found them working satisfactory and effectively during the year. Being a continuous process, appropriate steps have been taken for further strengthening the Internal Financial Control Systems.

Internal Audit

Your Company has a separate Internal Audit Department and Head Internal Audit directly reports to the Chairman & Managing Director. In order to strengthen and streamline all the auditable activities, Internal Audit of your Company is being carried out based on Risk Based Internal Audit Framework.

During the year under review, Risk Based Internal Audit of all the Regional Offices and various departments of Corporate Office were outsourced and carried out by Chartered Accountant Firms in close coordination with Internal Audit Department and by in-house internal audit team. Comprehensive Internal Audit at Regional Offices have been carried out by the Chartered Accountant firms. The significant Internal Audit observations are put up for consideration of the Audit Committee. Necessary action as per the directions of the Audit Committee is taken by the Internal Audit Department. Directions have also been issued to all concerned for adherence to the policies, guidelines, and procedures and for timely compliance of the Audit Observations.

10. INFORMATION TECHNOLOGY

HUDCO is known for its technology support apart from its financing support. HUDCO has taken many new initiatives and progressive reforms to be in the segment of market leaders. HUDCO has been very keen to use power of digital technology not only for rising in its business operations but also in secured environment maintaining transparency in line with national agenda. The initiatives already taken by HUDCO like implementation of ERP, Information Storage & Security Systems and e-office will definitely enhance its operational and financial efficiency.

11. HUDCO - AN ISO 9001:2015 CERTIFIED COMPANY

HUDCO is an ISO 9001:2015 certified Company from National Accreditation Board for Certification Bodies (NABCB)/ United Accreditation Service (UKAS) through M/s United Registrar of Systems (URS) Certification Limited. The certification is valid for its major business processes covering Project and Retail Financing Services, Resource Mobilisation for funding, Consultancy Services through the Head Office and all Regional Offices. Human Settlement Management Institute (HSMI) is also certified for Training Research & Networking. HUDCO is recertified as ISO 9001:2015 company for Quality Management System (QMS) from NABCB/UKAS through URS for these activities and the certification is valid up to 13^th September, 2024.

Significant changes for improvement have been introduced in HUDCO''s QMS with increased emphasis on seeking opportunities for improvement through Customer Satisfaction and Stakeholder Consultation. The organization periodically identifies and assesses risks and eliminates weakness & threats, and challenges for opening new opportunities of business with optimum allocation of its resources. QMS Auditor awareness cum audit training is being provided to officers at various Regional Offices, Corporate Office and HSMI through Internal Auditor training.

12. HUMAN SETTLEMENT MANAGEMENT INSTITUTE

HUDCO''s Human Settlement Management Institute (HSMI) is involved in both Research & Training activities in urban sector. The Quality Management System of HSMI complies with ISO 9001:2015. HUDCO''S HSMI has benefitted about 54,764 officials through 1808 training programmes from 1985-2023 and continues to provide, training support for professionals and a forum for interaction of administrators, professionals, researchers, and others engaged with the issues of human settlement development. It has provided training sponsored by Ministry of External Affairs to more than 1170 overseas participants through 51 ITEC and 6 e-ITEC training programmes.

Training Activities

As part of capacity building, HUDCO''s HSMI has conducted 19 training programs during the year, imparting training to 1138 participants which included HUDCO officials and participants from ULBs & other stakeholders. The programme for HUDCO officials included Webinars on diverse subjects like ‘Only One Earth - Living Sustainably in Harmony with Nature'', ‘Analysis of State Budgets and Generation of Business through Innovative Project Financing'', Strategies for increasing HUDCO''s Consultancy income, ‘Stress and Anger Free Living & lifestyle'', and ‘Chair Yoga'' were organized for the benefit of employees including Webinar on ‘Procurement through GeM'' being priority of Government.

Online training programmes on ‘Valuation of Real Estate'' and ‘Indian Accounting Standards (Ind-AS)'' were conducted during the year 2022-23. ‘RBI Regulatory Framework & Compliances for NBFCs'' - Implications for HUDCO being very important in changing environment was also covered through Webinar. Few Webinars were also conducted for HUDCO and ULB Officials on ‘Environmental Sustainability,'' ‘Neighbourhood Accessibility Planning and Pedestrianisation in Future Cities'' and ‘Urban Waste Management'' during the year 2022-23.

HSMI has also conducted two e-ITEC programmes sponsored by MEA benefitting 23 overseas professionals - firstly on ‘Housing for Sustainable Habitats-Policy Planning, Design and Technologies'' from 10^th to 12^th October 2022 for 11 professionals and next on ‘Making Cities Future Ready Smart and Carbon Neutral'' from 7^th to 11^th November 2022 for 12 professionals.

HSMI organized the 50^th International Training Programme on ‘Realizing the Right to Adequate Housing in the context of Habitat III New Urban Agenda - Policies, Planning and Practices” sponsored by the Ministry of External Affairs (MEA), GoI under its ITEC Programme during January 9^th - February 17^th, 2023. This Programme was attended by 24 delegates from 20 developing countries. Subsequently, the 51^st ITEC training programme on “Formal solutions to Informal Settlements” was organized from 20^th March to 14^th April, 2023. This Programme was attended by 25 delegates representing 19 countries.

HSMI also organized CITYNET two-day on-line Training Programme for Senior and mid-level officials of Urban Local Bodies (ULBs), and HUDCO officers on ‘Balancing the Budgets of ULBs - Resource Mobilisation v/s Responsibilities'' from 7^th to 8^th February 2023. The programme was attended by 80 participants.

Publications

SHELTER is a publication of HUDCO''s HSMI, having ISSN No.2347-4912 and published twice in a year, i.e., April and October. The April, 2022 issue of Shelter was “Inclusive Housing” which was released by Shri Hardeep Singh Puri, Hon''ble Minister of Housing & Urban Affairs during the Annual day celebrations of HUDCO on 25^th April, 2022. The October 2022 issue of ‘Shelter'' was on “Mind the gap: leave no one and no place behind” and was also released by Shri Hardeep Singh Puri, Hon''ble Minister of Housing & Urban Affairs during the World Habitat Day celebrations on 3^rd October 2022, as an e-magazine.

13. HUMAN RESOURCES

HUDCO recognises the value of Human Resources in delivering accelerated performance and contributing to the growth of the organization. It considers Human dimension as the key to Organization''s success. Several initiatives for development of Human Resource to meet new challenges in the competitive business environment have gained momentum. Your Company has a team of professionals from various disciplines like Finance, Projects, HR, Law, IT, etc. HUDCO has been a front runner in the area of human resource management. The guiding principle of HUDCO''s Human Resource Management Policy is to ensure availability of competent, motivated, and effective workforce to facilitate achievement of its full potential at all times to achieve organizational goals.

As on 31^st March, 2023, HUDCO has a workforce of 673 employees which includes 214 women employees, constituting 31.79% of its total strength. Women representations have gone across various hierarchical levels.

HUDCO has been complying with all the directives and guidelines issued by the Government of India regarding reservation for SC/ST/OBC/PwD/ Ex-Servicemen/ EWS.

14. VIGILANCE

As per CVC''s circular, as a pre-cursor to Vigilance Awareness Week 2022, during campaign period from 16^th August to 15^th November, 2022, various housekeeping activities viz. record management, property management, disposal of complaints, management of assets, up-dation of guidelines, circular, etc., and technological initiatives were carried out. Vigilance Awareness Week was observed by the Company from 31^st October to 6^th November, 2022 in the Head Office as well as at all the Reginal Offices. During the week, various programmes were organized at Corporate Office and at the premises of 21 Regional Offices throughout the country. The programmes were the theme centric, declared by the CVC, i.e., ‘Corruption Free India for a Developed Nation''. During the year, routine and specific inspections of some Regional Offices were carried out.

15. OFFICIAL LANGUAGE

During the year, your Company has taken various initiatives for the progressive use of Hindi in official work of HUDCO. Implementing the Official Language Policy, HUDCO celebrated ‘Rajbhasha Fortnight’ in the month of September, 2022 in its Corporate Office and Regional Offices spread throughout the country. Rajbhasha Fortnight programme began with the inaugural function of All India Rajbhasha Conference organized at Surat on 14^th September, 2022. This inaugural function and two days All India Rajbhasha Conference was attended by Director (Corporate Planning) and officials from Head Office and Ahmedabad Regional Office. During the Rajbhasha Fortnight programme, various competitions and workshops were organized.

During the period under review, third sub-committee of Committee of Parliament on Official Language inspected HUDCO’s Dehradun, NCR, Bengaluru, and Thiruvananthapuram Regional Offices. It is also referential to mention that the Parliamentary Committee found the satisfactory implementation of Official Language Policy in the

Regional Offices. During the said period, HUDCO participated in the meeting of Hindi Consultative Committee of the Ministry of Housing and Urban Affairs, organized at Ooty on 26^th August, 2022. Further HUDCO did not receive any adverse comments from the Ministry for the progressive use of Official Language in the Corporation.

16. COMPLIANCES OF VARIOUS ACTS/ GUIDELINES

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

An Internal Complaints Committee to examine the cases related to sexual harassment has in place in HUDCO. This Committee is headed by a senior woman officer of the Company for redressal of complaints, if any, related to sexual harassment as per Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Sexual Harassment in any form is a misconduct under HUDCO (Conduct, Discipline and Appeal) Rules.

There is no complaint pending at the beginning of the year and no complaint related to sexual harassment was received during the year.

Public Grievance Redressal Mechanism of HUDCO

HUDCO has an appropriate grievance redressal mechanism and escalation matrix for receiving, registering and disposal of grievances. HUDCO has been resolving grievances in a time bound manner. The systemic improvement has been strengthened including qualitative and quantitative improvements. The grievance system has been digitized for timely submission and disposal of grievances.

Public Grievance Redressal Mechanism of HUDCO is being followed as per the directions issued by the Government of India for Centralized Public Grievance Redress and Monitoring System (CPGRMS) portal and Grievance Registration & Information Database System (GRIDS) portal by Regulators National Housing Bank/ Reserve Bank of India respectively.

Implementation of Micro, Small & Medium Enterprises (MSME) Policy

As per Ministry of Micro, Small & Medium Enterprises (MSME), Government of India, directions, every Central Ministry/ Departments/CPSEs are require to procure 25% of its overall procurement annually through MSME. Out of 25% target, 4% is earmarked for SC/ST and 3% for Women Entrepreneurs. During the financial year 2022-23, HUDCO has made total procurement of '' 15.78 crores.

In compliance of the Public Procurement Policy for Micro and Small Enterprises, issued by Government of India vide Micro and Small Enterprise (MSEs) Order, 2012, during the financial year 2022-23, HUDCO has made the procurement as per details given as under:

Sl. No.	Parameter	Procurement from MSME (out of total procurement of '' 15.78 crs.)	Target	Achieved
1.	Procurement of goods or services as % through MSEs	10.57	25.00%	66.99%
2.	Procurement of goods or services as % through SC/ST	0.5078	4.00%	4.80%
3.	Procurement of goods or services as % through Women Entrepreneurs	0.6718	3.00%	6.35%

Further, HUDCO has made all the payments due to MSMEs within the stipulated time period and there has been no delay. Right to Information Act

HUDCO has been functioning in all its areas in true letter and spirit of Right to Information Act, 2005. An appropriate mechanism is in place with a dedicated centralized RTI Cell to achieve the objective of maintaining transparency in HUDCO.

During the period under report, there has not been any instance of penalties or strictures by any authority on HUDCO and HUDCO has achieved a score of 94.96% for transparency audit during the financial year 2021-22.

17. DIRECTORS’ RESPONSIBILITY STATEMENT

As per requirements of Section 134(5) of the Companies Act, 2013, your Directors confirm that:

a) in preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same;

b) such accounting policies have been selected and applied them consistently and made judgments and estimates that are reasonable and prudent to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review;

c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with provisions of Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the annual accounts have been prepared on a ‘Going Concern'' basis;

e) the Company has laid down Internal Financial Controls to be followed and such Internal Financial Controls are adequate and were operating effectively; and

f) proper systems have been devised to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.

18. MANAGEMENT DISCUSSION & ANALYSIS REPORT

The Management Discussions & Analysis Report, stipulated in terms of the SEBI (LODR) Regulations, 2015 and DPE guidelines, for the year ended 31^st March, 2023, is annexed and forms part to the Directors'' Report.

19. CORPORATE GOVERNANCE

The Corporate Governance Report as stipulated under Regulation 34(3) of the SEBI (LODR) Regulations, 2015 and DPE guidelines, together with a certificate from M/s Malhotra Arora & Associates, Company Secretaries in Practice, on compliance with the Corporate Governance norms is annexed and forms part to the Directors'' Report.

20. BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT

The Business Responsibility & Sustainability Report, as stipulated under SEBI (LODR) Regulations, 2015, is annexed and forms part to the Directors'' Report.

21. DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year under report, following changes took place in the composition of the Board of Directors:

Chairman & Managing Director

Ministry of Housing and Urban Affairs (MoHUA), Government of India, vide order dated 22^nd October, 2020 had assigned additional charge of the post of Chairman & Managing Director, HUDCO to Shri Kamran Rizvi, I.A.S., Additional Secretary, MoHUA, GoI for a period of 6 months, which has been further extended vide order(s) dated 1^st July, 2021 (w.e.f. 22^nd April,2021), 6^th December, 2021 (w.e.f. 22^nd October, 2021) and 10^th May, 2022 (w.e.f. 22^nd April, 2022) for a period of 6 months each or till appointment of a regular incumbent to the post, or until further orders, whichever is the earliest. Accordingly, he ceased to be Chairman & Managing Director, HUDCO with effect from 22^nd October, 2022.

Further, the MoHUA vide its order dated 27^th March, 2023 has assigned the additional charge of the post of Chairman & Managing Director, HUDCO to Shri Kuldip Narayan, Joint Secretary (HFA), MoHUA, for a period of 6 months with effect from the date of his assumption of charge of the post, or till a regular incumbent join the post, or until further orders, whichever is the earliest. Shri Narayan has assumed the charge of the post of CMD, HUDCO with effect from 27^th March, 2023 (F/N).

Part-time Official (Government) Director MoHUA, Government of India:

a) vide order dated 6^th October, 2022 has conveyed cessation of Shri Shyam S. Dubey as Part-time Official Director on the Board of HUDCO, w.e.f., 4^th August, 2022, however, the same is effective from 12^th October, 2022, being the date of approval by the Board of Directors of HUDCO;

b) vide order dated 18^th November, 2022 has appointed Shri Ashish Upadhyaya, Special Secretary & Financial Adviser, Ministry of Power as Part-time Official Director, on the Board of Directors of HUDCO, in his capacity as Link Officer of Financial Advisor, MoHUA with effect from 18^th November, 2022; and

c) vide order dated 21^st December, 2022 has appointed Shri Sanjeet, Joint Secretary & Financial Adviser, MoHUA as Part-time Official Director, on the Board of Directors of HUDCO in place of Shri Ashish Upadhyaya with effect from 21^st December, 2022. The appointment of Shri Sanjeet as Part-time Official Director, on the Board of Directors of HUDCO is effective from 22^nd December, 2022 being the date of allotment of DIN by Ministry of Corporate Affairs, Government of India.

In compliance with the provisions of the Companies Act, 2013 and SEBI(LODR) Regulations, 2015, approval of the shareholders regarding appointment of Shri Sanjeet, Part-time Official Director (liable to retire by rotation), as Director has been obtained through postal ballot process on 29^th January, 2023.

As per requirements of Section 152 of the Companies Act, 2013 [including any statutory modification(s) or re-enactment(s) thereof, for time being in force, read with the applicable rules, as amended] and Articles of Association of the Company, Shri Muniappa Nagaraj (DIN: 05184848), Director (Corporate Planning) being longest in office among the Directors since their last appointment, is liable to retire by rotation and being eligible, offers himself for reappointment at the ensuing Annual General Meeting.

After the closure of the financial year, MoHUA, GoI vide order dated 24^th April, 2023 has appointed Shri Satinder Pal Singh, Additional Secretary, MoHUA, as part-time Official Director, on the Board of Directors of HUDCO in place of Shri Kuldip Narayan with immediate effect until further orders.

The Board recommends reappointment of Shri Muniappa Nagaraj, Director (Corporate Planning) and appointment of Shri Satinder Pal Singh, as Part-time Official Director for approval of the members at the 53^rd Annual General Meeting, on the same terms and conditions as earlier approved by the President of India.

The Board placed on record its appreciation for the valuable services rendered by Shri Kamran Rizvi, as Chairman & Managing Director, Shri Shyam S. Dubey and Shri Ashish Upadhyaya, as Part-time Official Directors during their tenure with the Company and extended a warm welcome to Shri Sanjeet and Shri Satinder Pal Singh, newly appointed Part-time Official Directors and Shri Kuldip Narayan, as CMD, HUDCO.

During the year, all the Independent Directors have met the requirements as to their Independence, as stipulated under Section 149(6) of the Companies Act and Regulation 16(1)(b) of the SEBI (LODR) Regulations, 2015 and declaration in this respect has been received from them.

KEY MANAGERIAL PERSONNEL

The details of Key Managerial Personnel including changes occurred during the year and thereafter are as under:

Sl. No.	Name of Key Managerial Personnel	Designation
1.	Shri Kamran Rizvi	Chairman & Managing Director (Additional Charge) upto 21.10.2022
2.	Shri Kuldip Narayan	Chairman & Managing Director (Additional Charge) w.e.f. 27.03.2023
3.	Shri Muniappa Nagaraj	Director - Corporate Planning
4.	Shri D. Guhan	Director - Finance & Chief Financial Officer
5.	Shri Harish Kumar Sharma	Company Secretary & Compliance Officer

22. SECRETARIAL AUDITORS & AUDIT REPORT

In compliance of the provisions of Section 204 of the Companies Act, 2013, M/s Malhotra Arora & Associates, Company Secretaries in Practice, Secretarial Auditors have conducted Secretarial Audit for financial year 2022-23 and have in their report confirms that the Company has complied with the provisions of the Act, Rules, Regulations and Guidelines applicable to the Company and there were no qualifications, reservations, or adverse remarks except certain observations, which are self-

explanatory. The Secretarial Audit Report is annexed and forms part to the Directors'' Report.

23. AUDITORS & AUDITOR’S REPORT

As per Section 139(5) of the Companies Act, 2013, the Statutory Auditors of your Company is appointed by Comptroller and Auditor General of India (CAG). M/s APRA & Associates, LLP, (regd. no. DE2438), Chartered Accountants, New Delhi has been appointed as Statutory Auditors of your Company for the financial year 2022-23 by the CAG.

M/s APRA & Associates LLP, Chartered Accountants (FRN-011078N/N500064), New Delhi, the Statutory Auditors had conducted the audit of the financial statements (both standalone and consolidated) for the financial year 2022-23 and submitted their report thereon. The comments of the Statutory Auditors on the financial statements along with management reply thereon are annexed and forms part of the report. Notes on financial statement referred to in the Auditors Report are self-explanatory.

Comments of Comptroller and Auditor General of India (CAG)

CAG vide their letter dated 4^th August, 2023 has given ‘NIL comments'' on the audited financial statements (both standalone and consolidated) for the financial year 2022-23 under Section 143 of the Companies Act, 2013 and the same have been annexed and forms part of this report. However, they have given 3 (three) comments on the Auditors Report on Standalone Financial Statements in their report, which are self-explanatory and management has no comments to offer thereon.

24. STATUTORY DISCLOSURES

(i) Corporate Social Responsibility Committee

In accordance with the provisions of Companies Act 2013, HUDCO Board of Directors had constituted Corporate Social Responsibility Committee. As on 31^st March 2023, the Committee consists of 6 members comprising of Shri M Nagaraj, as Chairman of the Committee and Shri Kuldip Narayan, Dr. Ravindra Kumar Ray, Dr. Siyaram Singh, Smt. Sabitha Bojan and Shri Banshi Lal Gujar as members of the Committee.

The extant Corporate Social Responsibility Policy of the Company is available on Company''s website at the following link: https://www.hudco.org/writereaddata/csrpolicv.pdf

The Annual Report on CSR activities for financial year

2022-23 indicating details of expenditure to be incurred and expenditure incurred on CSR activities during the financial year along with the reasons for not spending the entire amount allocated for CSR activities along with other information is attached with the Directors'' Report.

During the financial year 2022-23, an amount of '' 44,98,12,667/- was to be incurred on CSR activities, out of which CSR assistance amounting to '' 26,67,94,463/- for 19 proposals has been approved. However, no expenditure from the proposals approved during the year has been incurred as the agencies were in process of completion of documentation, etc., and accordingly, the unspent amount has been transferred to the Unspent CSR Account opened in a scheduled bank and shall be spend as per provision of CSR amended rules of Companies Act, 2003. Further, in addition to this, during the financial year 2022-23, the company has spent a total amount of '' 3,20,72,843/- for the ongoing projects sanctioned prior to 31^st March, 2021.

As on 31^st March, 2023, an amount of 18,30,18,204/- being the unspent CSR amount other than the ongoing CSR activities from the CSR amount allocated for the financial year 2022-23, shall be transferred to one of the funds specified in Schedule VII of the Companies Act, 2013 within the stipulated time period, i.e., on or before 30^th September, 2023.

Further, an amount of '' 25,87,90,596/- being the unspent CSR amount other than ongoing CSR activities as on 31^st March, 2022 (16,99,00,000/- is the unspent CSR budget of financial year 2021-22 and '' 8,88,90,596/- up to 2020-21) was transferred to ‘Swachh Bharat Kosh'', a fund specified in Schedule VII of the Companies Act, 2013 on 30^th September, 2022 in accordance with details mentioned in the annual report on CSR activities for financial year 2021-22;

(ii) Board and its Committees

The details as to the composition of the Board and its various Committees, scope & terms of reference, number of meetings held and attended by directors/members during the year along with other particulars are given in the Corporate Governance Report, and the same is annexed and forms part of this report;

(iii) Particulars of Loans, Guarantee, or Investments

The necessary disclosures with respect to loan made, guarantee given or securities provided by the Company in its ordinary course of business have not been given, since, provisions of Section 186 of the Companies Act, 2013, are not applicable to your Company, being a Housing Finance Company. The detail with respect to investments made by the Company forms part of the financial statements for the year 2022-23;

(iv) Annual Return

Pursuant to Section 92(3) and Section 134(3)(a) of the Companies Act, 2013, the Annual Return as at 31^st March, 2023 will be available on the website of the Company on the following link: https://hudco.org.in//Site/ FormTemplete/frmTemp1PLargeTC1C P.aspx?MnId=463&ParentID=391;

(v) HUDCO being a Government Company, the provisions of Section 164(2) of the Act in respect of disqualification of directors are not applicable to the company in terms of notification no. G.S.R.463(E) dated 5^th June, 2015 issued by Ministry of Corporate Affairs, Government of India;

(vi) HUDCO, being a Government Company is exempted from the provisions of Section 197 of the Companies Act, 2013 and Rules made thereunder relating to managerial remuneration, hence, no disclosure is required to be made;

(vii) As per the statutory provisions, a listed company is required to disclose in its Board''s Report, a statement indicating the manner in which formal annual evaluation of the performance of the Board, its committees and individual Directors has been made and the criteria for performance evaluation of its Independent Directors, as laid down by the Nomination & Remuneration Committee.

The Ministry of Corporate Affairs, Government of India vide notification dated 5^th June, 2015 has, inter-alia, exempted Government companies from the above requirement, in case the Directors are evaluated by the Ministry or Department of the Central Government which is administratively in charge of the company, as per its own evaluation methodology. Further, MCA vide notification dated July 5, 2017, also prescribed that the provisions relating to review of performance of Independent Directors and evaluation mechanism prescribed in Schedule IV of the Companies Act, 2013, is not applicable to Government companies.

Accordingly, HUDCO, being a Government company, is exempted in terms of the above notifications, as the evaluation of performance of all members of the Board of the Company is being done by the Administrative Ministry, i.e., the Ministry of Housing and Urban Affairs, GoI;

(viii) The Company is compliant with the applicable Secretarial Standards issued by Institute of Company Secretaries of India (ICSI);

(ix) In compliance of the SEBI(LODR) Regulations, 2015, and DPE Guidelines on Corporate Governance, based on the affirmation received from Board Members and Senior Management Personnel, declaration regarding compliance of Code of Conduct made by the Chairman & Managing Director is annexed and forms part to the Directors'' Report. A copy of the Code is available on the website of the Company at www.hudco.org.in;

(x) In compliance with Regulation 25(10) of the SEBI (LODR) Regulations, 2015, your company has obtained Directors and Officers Liability Insurance Policy, ensuring adequate insurance coverage, covering all the directors of the Company including Independent Directors, Key Managerial Personnel, and Senior Officers against the risk of financial loss including the expenses pertaining to defence cost and legal representation expenses arising in the normal course of business;

(xi) Energy Conservation, Technology Absorption and Foreign Exchange Earnings & Outgo.Energy Conservation and Technology Absorption

As HUDCO does not own any manufacturing unit/facility, there are no specific application relating to conservation of energy and technology absorption. However, HUDCO, being an energy conscious organization has taken various initiatives in the direction of energy conservation on a continuous basis.

Foreign Exchange Earnings and Outgo

During the financial year 2022-23, foreign exchange inflows was '' 0.06 crore (previous year '' 0.27 crore) and foreign currency outflow was '' 2.51 crore (previous year '' 1.46 crore);

(xii) There is no change in the nature of business of the Company during the year;

(xiii) There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and operations of your company in future;

(xiv) The Central Government has not prescribed the maintenance of cost records for the products/services of the Company under the Companies (Cost Records and Audit) Amendment Rules, 2014 prescribed by the Central Government under

Section 148 of the Companies Act, 2013. Accordingly, cost accounts and records are not required to be maintained by the Company;

(xv) HUDCO has not made any application under the Insolvency and Bankruptcy Code, 2016 (31 of 2016), directly on standalone basis during the year;

(xvi) The Company has not entered into one time settlement with Banks or Financial Institutions during the year, hence, details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions is not given; and

(xvii) During the year under review, the statutory auditor, has not reported any material case of fraud committed against by its officers or employees under Section 143(12) of the Companies Act, 2013, hence, no disclosure is made.

25. FUTURE OUTLOOK - MEDIUM AND LONG-TERM STRATEGIES

The massive reach of COVID-19 pandemic has de-accelerated the economy of the World at large, to which India is no omission.

HUDCO operations have been impacted post COVID-19 pandemic due to this slowdown. The future outlook, both medium and

long-term strategies are summarized hereunder:

a. Demand for housing across India continued to show resilience. As per NHB RESIDEX - Composite price index for 50 cities, the prices in 50 major cities in India has been steadily on the increasing trend. This signifies the growing demand for housing in the country, particularly in affordable housing segment. Given the scenario it is expected that there will be good demand for Housing finance in the country;

b. The enhanced allocation for Pradhan Mantri Awaas Yojana (Urban & Rural) by 66%, '' 79,590 crore during 2023-24 in the union budget will have rippling effect on the housing activities in the country. Thus, it is expected that viability gap funding requirements from the state governments would gather momentum by mid of the financial year 2023-24. HUDCO being a major partner in many such housing schemes by the various State Governments would garner this opportunity with right pricing of loan;

c. HUDCO has a vigorous plan to proactively assist State Governments in implementation of Government of India program relating to urban development in a mission mode;

d. HUDCO is making all out efforts to tap potential business for viability gap funding in Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and Smart City projects;

e. AMRUT, launched in June 2015 in selected 500 cities, seeks to focus on developing basic infrastructure related to several services such as water supply, sewerage, and non-motorised urban transport. AMRUT 2.0 was launched in October 2021 for five years (2021-22 to 2025-26). AMRUT 2.0 seeks to provide water supply to households and in 2023-24, it has been allocated '' 8,000 crore under the budget;

f. The Smart Cities Mission, launched in June 2015 for five years, seeks to promote 100 smart cities that provide core infrastructure. In 2023-24 budget, the Mission has been allocated '' 8,000 crore;

g. Swachh Bharat Mission (U) has been allocated '' 5,000 crore in 2023-24. HUDCO Regional Offices are assisting and handholding with State Government Parastatal and Nodal Agencies of this program for providing financial assistance/ Viability Gap Funding;

h. Under Jal Jeevan Mission-Har Ghar, Nal Se Jal allocation of '' 60,000 crore to cover 3.8 crore households in 2022-23, HUDCO will make all out efforts to tap potential business for viability gap funding;

i. Health infrastructure needed a major attention during COVID 19, the pandemic posed lot of challenges to administration all over the country, which necessitates establishing modern and state of the art health care facilities all over country. HUDCO would continue to fund Social Infrastructure Projects like Health Centres, Government Hospitals, Medical Colleges, etc., being a priority sector lending for HUDCO, as the State Governments would be requiring huge funds to expand their Health Care Infrastructure;

j. HUDCO would also give priority for funding Urban Metro Rail projects of all major cities, as the Government is keen to expand the metro network in different cities and is looking for external participation for such projects; and

k. HUDCO needs to enlarge its operation in rural areas also so as to cover infrastructure development in both urban and rural areas, without any distinction.

26. STATUTORY AND OTHER INFORMATION REQUIREMENT

The particulars of annexure(s) forming part to the Directors'' Report are as under:

Particulars	Annexure
Management Discussion & Analysis Report	1
Corporate Governance Report	2
Business Responsibility & Sustainability Report	3

27. ACKNOWLEDGEMENT

Particulars	Annexure
Secretarial Audit Report	4
Annual Report on CSR Activities	5
Declaration of the Code of Conduct	6
Management Reply to comments of Statutory Auditors on financial statements	7
Comments of the Comptroller and Auditors General of India	8

The Board of Directors of your Company acknowledge its deep sense of appreciation for the continuous support, guidance and cooperation extended by the Government of India, especially the Ministry of Housing and Urban Affairs, Ministry of Rural Development, Ministry of Finance, Reserve Bank of India, National Housing Bank, Ministry of Corporate Affairs, Department of Public Enterprises, Regulatory/Statutory Authorities and various other departments of the Central/State Governments, Stock Exchanges, Depositories, Credit Rating Agencies, Registrar & Transfer Agents, Debenture Trustee(s) and other agencies.

The Board of Directors also conveys its gratitude for the unstinting support and cooperation given by the shareholders, bondholders, public deposit holders, Bankers, Financial Institutions, Housing Boards, Development Authorities, Municipal/ Local Bodies and other stakeholders associated with the company.

The Board of Directors also acknowledges the valuable suggestions and guidance extended by Comptroller & Auditor General of India, Statutory Auditors, Secretarial Auditors, and other professionals associated with the Company.

The Board of Directors also take this opportunity to acknowledge and appreciate the hard work and efforts put in by HUDCO employees at all levels towards achievement of the all-round growth of the company.

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Mar 31, 2022

The Board of Directors are pleased to present to you the 52^nd Directors Report on the business and operations of your company along with Audited Financial Statements (both standalone and consolidated) for the financial year ended on 31^st March, 2022.

1. FINANCIAL PERFORMANCE AND HIGHLIGHTS

The important financial highlights on standalone basis for the year ended 31^st March, 2022 are as under:

('' in crore]
Particulars	2021-22	2020-21
Revenue from Operations	6,954.08	7,234.58
Other Income	43.58	43.15
Total Income	6,997.66	7,277.73
Finance cost	4,532.53	4,764.82
Impairment on Financial instruments	(245.66)	(73.63)
Other Expenses including Employee Benefit Exp.	364.85	357.90
Total expenditure	4,651.72	5,049.09
Profit before tax	2,345.94	2,228.64
Less:
Current Tax	419.00	427.50
Deferred tax	210.58	226.64
Adjustment of tax of earlier years (Net)	(0.24)	(4.08)
Profit after tax	1,716.60	1,578.58
Other Comprehensive Income	(1.92)	(19.37)
Total Comprehensive Income	1,714.68	1,559.21
Balance Surplus of previous year	0.63	7.46
Amount available for Appropriation	1,715.31	1,566.67
Less: Appropriation
Transfer to Special Reserve u/s 36(1)(viii) of Income Tax Act, 1961 and u/s 29C of NHB Act, 1987	500.00	440.00
Transfer to Debenture Redemption Reserve	331.51	439.83
Transfer to Reserve for Bad & Doubtful Debt	120.00	89.00
Interim Dividend	150.14	150.14
Transfer to Impairment Reserve	60.18	161.81
Net surplus after appropriations	553.48	285.90
Proposed final dividend	550.52	285.27
Surplus available after final dividend	2.96	0.63
EPS (Basic/Diluted) (in '')	8.57	7.89

During the period, your Company has performed very well by witnessing a growth of 5.26% in Profit Before Tax (PBT). Your Company has seen a growth of 9.70% in its Net worth that has reached '' 14,468.32 crore in financial year 2021-22 from '' 13,189.05 crore in financial year 2020-21.

Our Country has experienced waves of COVID-19 pandemic following the discovery of new mutant variants. Temporary localised regional lockdowns were imposed, which were subsequently lifted. Improved coverage of vaccination programme

and growing immunity against the disease has resulted in witnessing recovery of demand. As HUDCO operates in the space of providing financial assistance for Housing and Urban development projects of Government and Government agencies, the Company has strong credit profile with stable assets class, smooth liquidity access and availability of contingency buffers. The Company has no reason to believe that COVID-19 crisis will have any significant impact on its operations including the going concern assessment. However, the impact will continue to depend on uncertain future developments of further variants and their severity.

Consolidated Financial Statements

Pursuant to Section 129(3) of the Companies Act, 2013, the Company has prepared Consolidated Financial Statement (CFS) in respect of only one Joint Venture Company namely M/s Shristi Urban Infrastructure Development Limited and an appropriate disclosure stating the reasons relating to non-consolidation of accounts of other three companies have been given in the CFS.

A Statement containing salient features of financial statements of Joint Venture and Associate Companies, has been given in the prescribed format AOC - 1 and is annexed as part of the financial statements.

There are no material changes and commitments, occurred subsequent to the close of financial year of the Company and the date of this Board''s report, affecting the financial position of the company and its state of affairs.

Pursuant to Section 136 of the Companies Act, 2013, the Audited Financial Statements and all other documents required to be attached with the financial statements are available on the company''s website at www.hudco.org.in and are also be available for inspection till the date of the ensuing Annual General Meeting during business hours on all working days at the Registered Office of the Company.

2. DIVIDEND

Your Company is consistently rewarding its shareholders by way of dividend payment. The Board of Directors of your Company had earlier approved payment of interim dividend @ 7.50 %, i.e., '' 0.75 per equity share having face value of '' 10/- each totalling to '' 150.14 crore on the paid-up equity share capital of the Company in March, 2022 and the same has been paid.

Further, the Board of Directors, have also recommended payment of Final Dividend @ 27.50 %, i.e., '' 2.75 per equity share having face value of '' 10/- each for the financial year 2021-22, subject to approval of the shareholders at the ensuing 52^nd Annual General Meeting.

In compliance with regulation 43-A of Securities and Exchange Board of India (Listing Obligations and Disclosures Requirement) Regulations, 2015, your Company has formulated ‘Dividend Distribution Policy'' and the same is available on Company''s website at https://www.hudco.org.in//writereaddata/DDP.pdf

As per guidelines issued by Department of Investment and Public Asset Management (DIPAM), Government of India, Company is required to pay a minimum annual dividend of 30% of Profit after Tax (PAT) or 5% of the net-worth, whichever is higher. After analysis various financial parameters, cash flow position and available distributable profits, the Board of Directors have paid/ recommended lower dividend for the financial year than as prescribed under DIPAM guidelines.

3. SHARE CAPITAL

During the year under report, President of India, being the promoter has further divested 8% of its equity shareholding in HUDCO comprising of 16,01,63,774 equity shares of face value of '' 10/- each through Ministry of Housing and Urban Affairs (MoHUA), Government of India in the month of July/August, 2021.

As on 31^st March, 2022, the authorized share capital of the Company was '' 2,500 crore with issued, subscribed and paid-up equity share capital of '' 2,001.90 crore, comprises of Promoters Shareholding of 81.81% held by the President of India, [through the Ministry of Housing and Urban Affairs (MoHUA) - 61.08% and Ministry of Rural Development (MoRD) - 20.73% respectively] and the balance of 18.19% with the Public.

There is no change in the authorized, issued, subscribed and paid-up equity share capital of the Company during the year. Further, the Company has not issued any shares with differential voting right/ Sweat Equity Shares during the year under report.

Listing of shares and payment of listing fee

The Company has paid annual listing fee for the financial year 2022-23 in respect of its equity shares listed at BSE Limited (BSE) and National Stock Exchange of India Limited (NSE).

Transfer of unclaimed Dividend and Shares to Investor Education & Protection Fund

As equity shares of the Company were got listed in May, 2017, therefore, in compliance of the provisions of Section 124 and 125 of the Companies Act, 2013, Company is not required to transfer any amount of dividend remained unpaid or unclaimed to Investor Education & Protection Fund (IEPF), as a period of 7 years has not elapsed from the date it became due for payment. Accordingly, no shares were required to be transferred to IEPF account.

4. MEMORANDUM OF UNDERSTANDING (MoU)

Your Company was rated ‘Very Good'' by the Department of Public Enterprises for its performance in terms of Memorandum of Understanding (MoU) parameters for the financial year 2020-21.

Further, your Company had entered into MoU with its Administrative Ministry, i.e., Ministry of Housing and Urban Affairs for the financial year 2021-22, containing the targets to be achieved for the key performance parameters. The year that passed by, witnessed the devastating second COVID wave, whereby human lives were at threat and business across the economy took a backseat as India was battling to save lives. However, despite the impediments posed by COVID, your Company ensured that its performance was optimal by putting in timely and consistent efforts to trouble-shoot the problems in hand and navigate through the tough conditions in the economy. The Company once again emerged as a contributor to the nation building efforts.

5. LENDING ACTIVITIES

Financial year 2021-22 was an unprecedented year with COVID-19 pandemic. COVID -19 took the entire world by surprise. With serious health concerns, governments across the States, implemented measures like lockdown and reduced economic activity to curb the virus spread. During the year, State Govt. Agencies have taken up very few projects resulting in limited business opportunity for HUDCO.

Inspite of all these challenges and tremendous pressure, HUDCO with its prudent business policies and proactive management approach, could register sanctions of '' 20,663 crore and disbursement of '' 8,887 crore against the previous year sanctions and release of '' 9,202 crore and '' 8,323 crore respectively.

HUDCO in its glorious journey of 52 years, since its inception in 1970, has cumulatively sanctioned a total of 17,326 housing and urban infrastructure projects with a total loan of '' 2,24,607 crore and disbursements of ''1,88,404 crore. Further, your Company has sanctioned financial assistance to more than 193.17 lakh housing units both in rural and urban areas in the Country, of which 183.96 lakh (95.23%) pertains to EWS / LIG categories. In addition, under HUDCO Niwas, a retail lending window, your company has cumulatively sanctioned financial assistance of '' 6,858 crore to 3.86 lakh individuals and released an amount of '' 5,170 crore.

Housing Operations

Under Housing sector during the year under report, HUDCO has sanctioned projects with a loan assistance of '' 1,759 crore, inclusive of '' 13 crore under HUDCO Niwas, thereby facilitating construction of 88,523 dwelling units. Loan release for an amount of '' 1,279 crore (inclusive of '' 10 crore under HUDCO Niwas) has been made during current year.

Urban Infrastructure Lending

Under the Urban Infrastructure portfolio, HUDCO has sanctioned 32 projects with a loan assistance of '' 18,904 crore covering various sectors like Water Supply, Sewerage System, Social Infrastructure, Commercial Infrastructure, Road & Transport, Metro, Power, etc. Further, a release of '' 7,607 crore was made during the year in various schemes.

HUDCO is actively participating in Government of India flagship programs such as Smart City Mission, Atal Mission for Rejuvenation and Urban Transformation (AMRUT), Jal Jeevan Mission, etc. In the financial year 2021-22, HUDCO supported the flagship programs by extending financial assistance of '' 600 crore to Rajasthan Urban Drinking Water Sewerage & Infrastructure Corporation (RUDSICO). The sanctioned amount will be utilized for benefitting Ajmer & Jaipur Smart Cities and AMRUT scheme in 20 ULBs of Rajasthan. HUDCO has also provided viability gap funding of '' 4,000 crore to Rajasthan Water Supply and Sewerage Corporation, towards state share for implementation of Jal Jeevan Mission in the State.

Besides the aforementioned schemes, HUDCO also sanctioned, financial assistance to mega projects of Public Health Department, Government of Maharashtra, Bihar State Road Development Corporation Limited and Maharashtra State Road Development Corporation Limited, Bihar Rajya Pul Nirman Nigam Limited, Tamil Nadu Water Supply and Drainage Board, Kerala Infrastructure Investment Fund Board (KIIFB), etc.

The Ganga Driveway project, popularly known as JP Ganga Path (Digha to Didarganj) at Patna, Bihar is a landmark project of the Government of Bihar to reshape the local transport network and improve its efficiency in the capital city. HUDCO has partnered in this project by sanctioning a loan of '' 2000 crore.

HUDCO’S role in Government of India scheme(s) - for promoting Housing for All & Urban Development

HUDCO plays a major role in Government of India scheme - for promoting Housing for All & Urban Development. As a Resource Institution for scrutiny and inspection of sample projects/ DPRs under Pradhan Mantri Awas Yojana (PMAY) (Urban)-Housing for All Mission, before consideration of sanction of central assistance for the projects by the Ministry, HUDCO during the year, carried out site and/or desk scrutiny of 66 projects for 1.52 lakh Dwelling Units (DUs) with project cost of '' 5475.84 crore & GoI assistance of '' 2260.94 crore covering 16 Affordable Housing in Partnership (AHP) projects, 49 Beneficiary Led Construction (BLC)- (New Construction/Enhancement), 1 In-situ Slum Redevelopment (ISSR) project at various locations in 62 towns/ cities under 16 States/UTs.

Cumulatively up to 31^st March, 2022, HUDCO has carried out site and/or desk scrutiny of 555 projects for 11.37 lakh DUs with project cost of '' 52,228.69 crore & GoI Assistance of '' 16,767.62 crore Covering 61 AHP projects, 473 BLC (New Construction/ Enhancement) & 21 ISSR projects (inclusive of 1 ISSR - AHP project) at 406 towns/ cities under 34 States/UTs.

HUDCO is also one of the nominated Central Nodal Agencies (CNA) for Government of India for disbursing the central subsidy to beneficiaries under credit-linked subsidy scheme (CLSS).

HUDCO, as Central Nodal Agency (CNA) has executed MoU with 91 Banks/ Prime Lending Institutions (PLIs) for EWS/LIG category which includes 2 Public Sector Banks, 5 Private Sector Banks, 1 NBFC-MFI, 1 Small Finance Bank, 13 Grameen Banks and 69 Cooperative Banks. Further, for MIG-I and MIG-II categories, HUDCO has also executed MoU with 79 Banks/ PLIs which includes 2 Public Sector Bank, 5 Private Sector Bank, 1 NBFC, 13 Grameen Bank and 58 Co-Operative Banks.

Since the launch of CLSS in 2015-16 (as on 31^st March 2022), HUDCO has disbursed subsidy of '' 2006.95 crore to 86,358 households through 91 PLIs/Banks with whom, MoU has been executed for implementation of PMAU(U) - CLSS.

During 2021-22, the total subsidy amount of '' 915.95 crore was disbursed to 37,229 households which includes '' 906.32 crore disbursed to 36,772 EWS/LIG households and '' 9.62 crore to 457 MIG households.

Sectorial overview and government initiative

Support to Economically Weaker Sections - HUDCO has made concerted efforts to reach the unreached as well as support the flagship programmes of the Government of India. HUDCO continues to address the housing requirements of weaker sections of the society by offering financial assistance/ loan to the Economically Weaker Sections (EWS) and Low-Income groups (LIG) segment of the society at a comparatively lower rate of interest. Further, your Company has cumulatively sanctioned financial assistance to more than 193.16 lakh housing units both in rural and urban areas in the Country, of which 183.96 lakh (95.23%) pertains to EWS / LIG categories.

HUDCO’s Support for projects in the North-Eastern Region - During the year, HUDCO has supported projects in the NorthEastern Region, and sanctioned 23 housing and urban infrastructure schemes with loan amount of '' 510.21 crore in the States of Arunachal Pradesh, Meghalaya, Manipur and Nagaland.

Consultancy Initiatives

HUDCO provides consultancy services in the area(s) of Architectural Design & Development, Urban & Regional Planning, Appraisal Scrutiny & Monitoring of Government Projects, and, Environmental Engineering Projects pertaining to the housing and urban development sector.

During 2021-22, despite the pandemic COVID -19 putting a spanner in the works, HUDCO''s Construction and Consultancy Wing worked on design concepts remaining responsive to clients'' diverse requirements. Some new assignments, while continuing work on other ongoing prestigious assignments, include providing consultancy services for the construction of Housing Complex for Tripura Tribal Areas Autonomous District Council at Tripura. HUDCO completed the preparation of the Housing for All plan of action under PMAY (U) of 61 towns for the State of Karnataka, and, the Design Consultancy services for Construction of Officers'' Quarters with Allied Services (Phase-III) for M/s Hindustan Aeronautics Limited, Bangalore, designed for GRIHA rating is on the verge of completion. Besides, HUDCO is engaged in extending technical support to the Local Bodies in the State of Kerala, and is participating as an advisory to AIILSG in Master Plan Consultancy project in Karnataka pertaining to Environmental aspects for ecologically sensitive Karwar region.

The projects having long gestation period carried forth during the year, includes Urban and Regional Plans being prepared on the GIS platform, namely; the Integrated Master Plan for Rajgir Regional Planning Area and Nalanda Mahavihara World Heritage site in the State of Bihar, and, Development Plans for Khargone and Jhabua in Madhya Pradesh. Under Architectural Design services projects include Phase II of ‘Vertical Housing Colony: Shehjar Apartments at Bemina, Srinagar'', preparation of DPR for ‘Comprehensive EWS Housing Layout at Kumaragurupallam-Puducherry'', Master Plan of Thirunallar Town Development Plan Ph-II, Development of Queue Complex for Arulmighu Mariammam Temple Samayapuram, Spiritual Circuit

in the UT of Puducherry, and, DPRs for i) Identified 3 lakes at various locations in Puducherry ii) Development of Arikamedu as Tourism Destination in Puducherry, and, iii) Residential School and Marriage Hall.

As part of environmental engineering consultancy, during 2021-22, HUDCO undertook appraisal of 8 Integrated Management Plans under National Plan of Conservation of Aquatic Eco-systems (NPCA) namely 2 each in Mizoram, Chandotal Wetland in Basti- U.P, East Kolkata Wetlands- WB, and, Jagatpur Gam Talav Wetland-Bihar.

Awards: Hudco Consultancy’s Other Promotional Works

HUDCO as in previous years continued to promote and encourage excellence in design, sustainable housing and urban development engaging the young upcoming professionals/students of Architecture and Planning, supporting activities of the National Association of Students of Architecture (NASA) and National Organisation of Students of Planning (NoS Plan).

As part of the HUDCO-NASA Design Trophy, HUDCO in the wake of the climate change crisis, recognising that vernacular architecture has a lot to say with respect to use of materials in sustainable development, and that the green building is not limited to the products of modern society, floated the theme “Vernacular Habitats: Rethinking Vernacular to Combat Climate Change” for HUDCO NASA DESIGN TROPHY 2022.

The HUDCO DESIGN AWARDS -2022 aimed at encouraging and appreciating the creative and innovative thinking put in by the professionals to make our cities sustainable and more liveable, and invited entries under five categories, viz; Cost Effective Rural / Urban Housing deploying Innovative / Emerging and Disaster Resistant technologies, New and Innovative Town Design Solutions / Eco-cities, Conservation of Heritage, Green Buildings, and, Landscape Planning and Design. All the winning entries for these two Awards are further compiled as e-publications.

6. FINANCIAL REVIEW

(i) Accounting Policies

During the year under report, your Company has not made any modification/ additions in the existing accounting policies.

(ii) Income from Operations and Profitability

Your Company has reported total income for the financial year 2021-22 at '' 6,997.66 crore (previous year '' 7,277.73 crore) inclusive of other income of '' 43.58 crore (previous year '' 43.15 crore), while the Profit before Tax (PBT) for the year was '' 2,345.94 crore (previous year '' 2,228.64 crore) and Profit after Tax (PAT) was '' 1,716.60 crore (previous year '' 1,578.58 crore). Total comprehensive income for the year was reported at '' 1,714.68 crore (previous year '' 1,559.21 crore).

(iii) Non-Performing Assets

The Default and NPA position of your Company is regularly monitored to keep a check on any fresh addition to NPAs and for resolution of old and chronic defaults and in compliance with the prudential guidelines for Non-Performing Assets (NPAs) under the Housing Finance Companies (NHB) Directions, 2010, as amended from time to time. The Default and NPA position of all Regional Offices is regularly monitored by the regional level Default Monitoring & Review Committee and Default Monitoring & Default Resolution (DMDR) Wing at Head Office. DMDR Wing at Head Office also undertakes joint review of Regional Offices alongwith Operations & Law Wing through video conferences. In addition, the overall default & NPA position is reviewed by Default Monitoring & Resolution Committee (DMRC), Committee for Review of NPAs (a Board level Committee) and Board of Directors.

At the end of the financial year ended 31^st March, 2022, HUDCO reported gross NPA of '' 2,809.20 crore, which constitutes 3.58% of total loan portfolio. The net NPA as on 31^st March, 2022 is '' 387.79 crore which constitutes 0.51% to net loan outstanding against MoU target of 0.35%. During the year 2021-22, an amount of '' 239.39 crore was recovered from NPA accounts. As on 31^st March, 2022, Loan Overdue amounts to '' 8,250.04 crore and percentage of loan overdue to Net Loan Assets is 10.84% against MoU target of 6.50%.

The Company has made a total provision on loans (Impairment) as per ECL approach of '' 2,504.23 crore. Out of the above, the provision on account of loans (Impairment) against NPA (Stage - III) loans is '' 2421.40 crore.

As on 31^st March, 2022, out of HUDCO''s total loan book pertaining to project loans of '' 78,256.33 crore, government agencies constitute 96.82% of the above loan while private sector constitutes 3.18%. In the case of loans to government sector (project loans), the gross NPA is '' 597.23 crore against loan portfolio of '' 75,770.39 crore and provision of '' 226.16 crore has been made towards NPA. Whereas, in private sector (project loans), the gross NPA is '' 2,194.29 crore against loan portfolio of '' 2,485.94 crore and a provision of '' 2,177.56 crore has been made towards NPA. Further, HUDCO is not making any fresh sanctions to the private sector, since March 2013.

(iv) Resource Mobilization

During the year, the Company constantly diversified its borrowing portfolio to meet its operational requirements, at the most competitive rates and terms. During the financial year 2021-22, the Company mobilized resources aggregating to '' 7,082.50 crore from domestic markets, which included '' 2,500 crore mobilized through issue of unsecured, Taxable, Non-Convertible Debentures (NCDs) on private placement basis, '' 2,000 crore by way of rupee term loans from banks and '' 2,582.50 crore by way of short-term loan from banks. The Company''s borrowing is planned taking into consideration ALM gaps, interest mismatches and the prevailing market conditions.

The Company has been identified as a ‘Large Corporate'' in terms of the SEBI Regulations and accordingly has ensured that 25% of its incremental borrowings during the year was by way of issuance of debt securities. Further, the issue proceeds of non-convertible debt securities have been fully utilized for the purpose(s)/objects stated in the offer document/Information memorandum.

Further, for maintaining adequate liquidity and meeting interim operational/ contingency requirements, credit lines of '' 11,500 crore were available as on 31^st March, 2022 from various scheduled commercial banks. The said facilities, for short-term funding, were available with the Company, without any commitment charges towards unutilized amounts.

As a part of prudent policy, the short-term resources are suitably replaced at an opportune time with longer tenor alternate resources depending upon prevalent market conditions, internal liquidity position and actual operational requirements. The Company also reviews the fund position on daily basis and parks surplus funds in fixed deposits with scheduled commercial banks as per the Board approved policy with an objective of reducing the negative carry to the extent possible.

As on 31^st March, 2022, HUDCO''s overall borrowings stood at '' 61,503.04 crore, which comprised of long-term borrowings of '' 58,920.47 crore and short-term borrowings of '' 2,582.57 crore. Further, as on 31^st March, 2022, the long-term borrowings to Net worth, stood at 4.09 times, as against 4.51 times as on 31^st March, 2021.

(v) Domestic and International Credit Rating Domestic

During the financial year 2021-22, your Company continued to enjoy the highest ratings from three domestic Credit Rating Agencies, namely, M/s India Ratings & Research (IRRPL), M/s ICRA and M/s CARE Rating, in respect of its long-term and short-term domestic borrowing programme (including bank loans), the details of which are as under:

|Sl. No.	Rating Agency	Long Term Rating	Short Term Rating
1	IRRPL	IND AAA/Stable	IND A1
2	ICRA	[ICRA] AAA (Stable)	[ICRA] A1
3	CARE	CARE AAA [Triple A]; Stable	CARE A1 [A One Plus]

International

As on 31^st March, 2022, HUDCO for its International Borrowing Programme continued to enjoy International Credit Rating of ‘Baa3'' with stable outlook and ‘BBB-‘with negative outlook, respectively from Moody''s and FITCH, International Credit Rating Agencies.

Further, FITCH Ratings, vide its press release dated 20^th June, 2022 has revised the outlook of HUDCO ‘BBB-‘rating to ‘Stable'' from ‘Negative''. The rating action follows the change in the outlook on Government of India''s rating to ‘Stable'' from ‘Negative'' on 10^th June, 2022.

(vi) Cost of Borrowings

The overall weighted average cost of resources raised during the financial year 2021-22 was at record low level of 4.83% p.a. and for borrowings outstanding as on 31^st March, 2022 is 7.43% p.a. (as compared to 7.68% p.a. as on 31^st March, 2021). The weighted average incremental cost of borrowing through taxable bonds/ debentures, worked out to 3.50 bps lower than the Benchmark Yield of ‘AAA'' Rated CPSEs of equivalent tenor prevailing at different points of time when the borrowings were made during the course of the year, thereby enabling achievement of Excellent category MoU target for cost of borrowings. As a result, the Company was able to deliver debt financing for various Housing & Infrastructure projects, spread across the Country, at competitive rates.

The Company was able to achieve this feat through constant monitoring of the markets, proper timing of its borrowings and appropriate selection of instruments.

(vii) Redemption of debt securities and repayment of loans (excluding the borrowings availed and repaid during the same financial year)

During the year under review, the Company successfully redeemed bonds/ debentures and discharged its other debt obligations amounting to '' 6,566.05 crore in an efficient manner, without a single instance of delay or default in debt servicing. These included Bonds/Debentures valued at '' 4,617.63 crore, Term Loans / Short-Term loans from Banks and financial institutions worth '' 333.36 crore, foreign currency loans availed from Multilateral Agencies aggregating to '' 96.18 crore, Commercial Paper(s) of '' 1,500 crore and public deposits of '' 18.88 crore. The Company is set to honour scheduled obligations towards redemption of Bonds and other long term debt obligations amounting to around '' 12,167 crore during the next fiscal.

The Company''s internal generations are adequate to meet the repayment/ redemption obligations. Surplus funds, if any, after meeting the repayment obligations are invested prudently in the form of fixed deposits with banks.

The Company continues to maintain its impeccable track record of servicing its debt in time and there has never been a single instance of default.

(viii) Unclaimed amount under HUDCO Bonds

An amount of '' 10,45,44,131 (inclusive of interest amount of '' 10,19,44,131) in respect of 3572 bond holder(s) has remained unpaid as on 31^st March, 2022 as the same has not been yet claimed by the bond holder(s).

The details of amount remaining unclaimed are as under:

Financial	Principal			Interest			Total Amount
year	Amount	No. of	No. of	Amount	No. of	No. of	(?)
	(?)	holders	NCDs	(?)	holders	NCDs
2020-21	50,00,000	4	5	9,50,75,224	3212	10,27,836	10,00,75,224
2021-22	26,00,000	4	26	10,19,44,131	3572	11,04,516	10,45,44,131

In respect of the above unclaimed bonds, the bond holder(s) have been requested from time to time through email/ letters, etc., for submission of requisite documents for claiming the amount of principal/ interest, as may be due in their respective case(s).

In respect of Bonds, the Company in terms of Section 125 of the Companies Act read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 notified on 5^th September, 2016 is presently transferring unclaimed principal and/or interest, or both (if any), after 7 years from the maturity date of the Bonds to Investor Education and Protection Fund (IEPF).

During the financial year 2021-22, an amount of '' 2,00,000/- has been transferred to IEPF on account of bonds, as per the provisions of Companies Act, 2013.

(ix) Dematerialization of Bonds

During the financial year 2021-22, HUDCO has issued Unsecured, Taxable Bonds/ Debentures in dematerialized form only. With this, all Taxable Bonds/ Debentures, issued by the Company and outstanding as on 31^st March, 2022 are in dematerialized form only. The Company has made necessary arrangement with NSDL and CDSL for issue of bonds in dematerialized form. The Company has also appointed Registrar & Transfer Agents (RTA) for maintaining the continuous electronic connectivity with NSDL/CDSL and investors.

Investors can deal in these Bonds/ Debentures as per the provisions of Depository Act, 1996, as amended and such deals are cleared & settled in recognised Stock Exchanges subject to conditions specified by SEBI.

(x) HUDCO Public Deposit Scheme

HUDCO, being a Housing Finance Company registered with National Housing Bank (NHB) is governed by provisions of Housing Finance Companies (NHB/RBI) Directions, relating to Public Deposits.

HUDCO had discontinued accepting/renewing Public Deposit under the Public Deposit Scheme with effect from 1^st July, 2019, accordingly, during the financial year 2021-22, no fresh deposits were accepted/renewed by HUDCO. Deposits of '' 18.88 crore were matured/paid to 355 depositors in the financial year 2021-22. The total amount outstanding under HUDCO Public Deposit Scheme was '' 3.90 crore from 168 depositors as on 31^st March, 2022.

(xi) Unclaimed amount under HUDCO Public Deposit Scheme

As on 31^st March, 2022, deposit(s) amounting to '' 21,33,510/- (inclusive of Principal and Interest) from 17 depositors remains unclaimed.

In respect of unclaimed Deposits, the deposit holder(s) have been requested from time to time through email/ letter, etc., for submission of requisite documents for claiming the unclaimed amount.

During the financial year 2021-22, an amount of '' 75,501/- remained unclaimed for more than seven years from the date of maturity and was transferred to the ‘Investor Education and Protection Fund'' (IEPF), as per the provisions of the Companies Act, 2013 and rules made thereunder.

(xii) Deployment of Resources at the close of the year

At the close of the financial year 2021-22, the total resources of your Company stood at '' 78,895.17 crore. Out of this, Equity Share Capital amounted to '' 2,001.90 crore, Reserves & Surplus stood at '' 12,466.42 crore, Loans from Financial Institutions, Commercial Banks, Multilateral Institutions, Public Deposits and Market Borrowings through Bonds and Commercial paper accounted for '' 61,503.03 crore, Deferred Tax Liabilities (Net) amounted to '' 843.61 crore and other liabilities & provisions stood at '' 2,080.21 crore. These funds were deployed as Long/Short Term Loan & Advances of '' 76,989.92 crore, Fixed Assets (net of depreciation) of '' 118.51 crore (including capital work-inprogress, Intangible Assets under development and Intangible Assets), Investments of '' 258.71 crore, Cash & Bank Balances of '' 643.93 crore and other assets of '' 884.10 crore.

7. RISK MANAGEMENT IN HUDCO

HUDCO has implemented an integrated risk management approach through which it reviews and assesses significant risks on a regular basis to ensure that there is a robust system of risk controls and mitigation. HUDCO has a well-structured Risk Management Policy and Operating Manual in line with its objectives to address the various risks.

In compliance with the SEBI (LODR) Regulations, 2015, HUDCO has in place a Board level Committee under the nomenclature ‘Risk Management Committee'' (RMC) headed by a Government Nominee Director and comprises of one independent and two functional directors as its members. The RMC is responsible for evaluating and monitoring the integrated risk management system of the Company including liquidity risk. The RMC reviews the decisions/ recommendations of its three sub-committees namely: Assets & Liabilities Management Committee (ALCO), Credit Risk Management Committee (CRMC), and Operational Risk Management Committee (ORMC).

Assets & Liabilities Management Committee (ALCO) is responsible for ensuring adherence to the liquidity risk tolerance/ limits set out in the board approved Asset Liability Management (ALM) policy. The role of the ALCO with respect to liquidity risk includes, inter alia, decision on desired maturity profile for assets & liabilities, responsibilities and controls for managing liquidity risk, and overseeing the liquidity position of the company. The ALM Policy is reviewed periodically to realign the same pursuant to any regulatory changes/ changes in the economic landscape or business needs and tabled to the Board for approval.

Management regularly reviews the position of cash and cash equivalents by aligning the same with the projected maturity of financial assets and financial liabilities, economic environment, liquidity position in the financial market, anticipated pipeline of future borrowing & future liabilities and threshold of minimum liquidity defined in the ALM policy with additional liquidity buffers as management overlay. During the year, 16 meetings of ALCO were held.

Credit Risk Management Committee (CRMC) oversees and ensures that the credit policies are put in place and are consistently applied while appraising the proposal for sanction of loan and for ascertaining the credit worthiness of the applicant/ borrowing agency. During the year, 4 meetings of the CRMC were held.

Operational Risk Management Committee (ORMC) oversees and ensures the mitigation of operational risk both internal as well as external, like Technology risk, Employee risk, Customer risk, Capital Asset risk and External risk, etc., to which your Company is susceptible by establishing & strengthening internal control systems and procedures and by providing adequate training to the employees. During the year, 2 meetings of the ORMC were held.

With the prudent policies and professional approach of the management, HUDCO has been successful in mitigating various risks, briefly described as under: -

a) Credit Risk: To manage credit risks associated with business, your Company has in place a strong and effective credit appraisal mechanism containing comprehensive appraisal techniques/ guidelines ensuring timely repayments of principal & interest amount.

b) Operational Risk: To manage the operational risks both internal as well as external associated with the operations of the Company like technology risk, employee risk, capital asset risk, external risk, compliance risks viz. external fraud, legal risk, etc., your Company has established a strong reporting and monitoring mechanism. The requisite information on the Operational risk is obtained through quarterly reports of ‘Operational Risk Factors and Key Risk Indicators (KRIs) from Regional Offices/ departments which are further reviewed and analyzed for mitigation of operational risk.

c) Liquidity Risk: For management of liquidity risk, your Company has effective Asset Liability Management System. The liquidity risk is being monitored with the help of liquidity gap analysis. Further, the funds are mobilized at competitive rates through various strategies viz. bonds, term loans, etc., and the mismatch in the Asset and Liabilities, if any, are managed through the committed Bank lines.

d) Market Risk: The various market risks arising from fluctuations in interest rates and foreign currency exchange rates are periodically reviewed by the Company. Further, based on cost of funds and market scenario, the lending rates are determined. The interest rate risk is being monitored with the help of interest rate sensitivity analysis under the Asset Liability Management System.

e) Foreign Currency Risk: The Company has a Foreign Currency Risk Management policy for mitigation of risks associated with Foreign Currency fluctuations. To cover the risks associated with exchange rate and interest rate, your Company has entered into hedging transactions. As on 31^st March, 2022, the total foreign currency liabilities (as per IND-AS) are USD 16.53 million (INR 113.93 cr.) and JPY 447.604 million (INR 27.18 cr.) and 37.61 % of the foreign currency exchange rate risk is covered through hedging instruments.

8. JOINT VENTURE, ASSOCIATE AND SUBSIDIARY COMPANY

As on 31^st March, 2022, HUDCO has three Joint Venture(s) Companies namely Pragati Social Infrastructure & Development Limited (PSIDL); Shristi Urban Infrastructure Development Limited (SUIDL); Signa Infrastructure India Limited (SIIL), one Associate namely; Ind Bank Housing Limited (IBHL) and do not have any subsidiary company.

HUDCO had invested '' 2.14 crore in the Joint Venture Companies {PSIDL- '' 0.13 crore (26%), SUIDL- '' 2.00 crore (40%), and SIIL- '' 0.01 crore (26%)}. HUDCO has decided to exit from these Joint Ventures, by invoking the exit clauses, as the performance of these Joint Ventures was not found to be satisfactory. The Company is in the process of exiting from these Joint Ventures, for which necessary steps are being taken. The investment in respect of PSIDL and SIIL is being shown as '' 1/- in HUDCO books while accounts of SUIDL are being consolidated with HUDCO accounts.

In the case of IBHL, an associate Company, HUDCO has invested '' 2.50 crore, being 25% of its paid-up equity share capital and HUDCO is also exploring possibility to dilute its stake. The investment in HUDCO books is appearing at '' 1 only.

9. INTERNAL FINANCIAL CONTROL POLICY AND INTERNAL AUDIT

Your Company has adequate Internal Financial Controls (IFC) system for ensuring, the orderly and efficient conduct of its business, adherence with the laid down policies and procedures, safeguard of assets of the Company, prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information commensurate with the operations of the Company. The system also includes Risk Control Matrices and Process Flow Charts to depict the process to initiate, authorise, process, record and report transactions; the points within the process at which misstatements could occur; and control activities that are designed to prevent or detect such misstatements, including providing greater transparency to segregation of duties.

The Chartered Accountant firm appointed for carrying out Risk based Internal Audit are also reviewing and testing the operating efficiency of existing Internal Financial Controls have tested the overall controls and found them satisfactory and working effectively during the year. Being a continuous process, appropriate steps have been taken for further strengthening the Internal Financial Control Systems.

Internal Audit

Your Company has a separate Internal Audit Department and head Internal Audit directly reports to the Chairman & Managing Director. In order to strengthen and streamline all the auditable activities, Internal Audit Department of your Company has implemented Risk Based Internal Audit framework in line with the RBI''s guidelines on Risk Based Internal Audit System.

During the year under review, Risk Based Internal Audit of all the Regional Offices and various departments of Corporate Office were outsourced and carried out by Chartered Accountant firms in close coordination with Internal Audit Department and by in-house internal audit team. Comprehensive Internal Audit at Regional Offices have been carried out by the Chartered Accountant firms. The significant Internal Audit observations are put up for consideration of the Audit Committee. Necessary action as per the directions of the Audit Committee is taken by the Internal Audit Department. Directions have also been issued to all concerned for adherence to the policies, guidelines and procedures and for timely compliance of the Audit Observations.

10. INFORMATION TECHNOLOGY

HUDCO is implementing Enterprise Resource Planning (ERP) System with required Network upgradation and IT security for enabling faster decision making in its various segments like Accounting, Human Resources, Lending, Business Intelligent and beyond, in a secured data environment. All the layer(s) required for implementation of ERP system have been made broadly operational. Implementation of certain modules along with Data migration activities and other related activities are under process of implementation.

To support the ‘Green Initiatives'' of Government of India and to make HUDCO, a paperless organization, HUDCO has implemented e-Office File Management System across the HUDCO offices in India.

11. HUDCO - AN ISO 9001:2015 CERTIFIED COMPANY

HUDCO is an ISO 9001:2015 certified company from National Accreditation Board for Certification Bodies (NABCB)/United Accreditation Service (UKAS) through M/s United Registrar of Systems (URS) Certification Ltd. The certification is valid for its major business processes covering Project and Retail Financing Services, Resource Mobilisation for funding, Consultancy Services through the Head Office and all Regional/ Development Offices. Human Settlement Management Institute (HSMI) is also certified for Training, Research & Networking. HUDCO is recertified as ISO 9001:2015 for Quality Management System from (NABCB)/ UKAS through M/s URS for these activities and the certification is valid up-to 13^th September, 2024.

The revised framework of Quality Management System under ISO 9001:2015 in HUDCO has gained momentum for optimization of organizational effectiveness by introducing elements of robust risk framework and policy in its appraisal process. Customer focus for continual improvement of system and processes is the key for achieving corporate goals and objectives. QMS awareness cum audit training is being provided to officers at various Regional Offices, Corporate Office and HSMI through webinar and regional level workshops.

12. HUMAN SETTLEMENT MANAGEMENT INSTITUTE

Human Settlement Management Institute (HSMI), has benefited about 53,600 officials through 1789 training programmes from 1985-2022 and continues to provide training support for professionals and a forum for interaction of administrators, professionals, researchers and other engaged with the issue of human settlement development. It has provided training sponsored by Ministry of External Affairs to more than 1000 overseas participants through 47 ITEC training programmes. While strengthening the borrowing agencies through training, HUDCO''s HSMI helps in generating viable projects to improve HUDCO''s lending operations directly as well as indirectly. This gives the Institute a rare twin character of a Research & Training wing for capacity building, while also operating as a sector specialist Institute. The Quality Management System of HSMI complies with ISO 9001:2015.

HUDCO''s HSMI publishes its magazine twice in a year with a nomenclature ‘SHELTER''. October, 2021 edition of the ‘SHELTER'' magazine with a theme of ‘Accelerating Urban Action for a Carbon Free World'' and ‘The Compendium of Award for Best Practices to improve the Living Environment'' were released by Shri Hardeep Singh Puri, Hon''ble Minister of Housing & Urban Affairs on World Habitat Day - 11^th October 2021.

During the year, HSMI has conducted various online Webinars/ Training programmes covering 1450 professionals/ HUDCO officials with the following details:

a) 7 online webinars on the topics like Yoga for Holistic and Healthy lifestyle with emphasis on COVID-19'', ‘RBI regulatory framework for Non-Banking Financial Companies (NBFC)- implications for HUDCO'' ‘Preparation for Retirement life'', ‘Reservation Policy and Preparation of Roster'', ‘Statutory Compliance in engagement of contract labour'', etc., covering 739 professionals- including 582 HUDCO officials and 157 other stakeholders;

b) 7 online training programmes on the topics like ‘IND- AS'', ‘Project Management, Monitoring and Project financing'', ‘Project Finance and Recovery mechanism- legal issues involved with emphasis on recent development in IBC, RTI and KYC'', ‘Conduct of Disciplinary Proceedings'', etc., covering 351 HUDCO employees;

c) 2 online training programmes for Urban Local Bodies, State Agencies, Development Authorities on the topics like - ‘Financial Strengthening of Urban Local Bodies'', ‘Sustainable Development Goals mapping for Swachh Bharat Mission'' covering 132 professionals;

d) 3 elTEC program sponsored by Ministry of External Affairs, Government of India covering 144 overseas professionals from developing countries in Asia- Pacific, Africa and Latin America on the topics - ‘Housing for Sustainable Habitats: Policy, Planning, Design and Technologies'', ‘Futuristic Cities Smart and Resilient'', and ‘Planning & Management of Sustainable Urban Infrastructure''; and

e) In collaboration with Citynet, 2 online training programs were conducted on the topics ‘Sustainable Infrastructure Development Management for Urban Local Bodies and other Stakeholders'' and ‘Disaster Risk Reduction and Resilience in Cities'' covering 84 professionals.

13. HUMAN RESOURCES

HUDCO has a workforce of professionals from various disciplines like Project, Finance, Law, IT, HR, etc., with a vision ‘to be leading Techno-Financial Institution promoting sustainable Habitat Development for transforming the lives of people’.

The focus is on the holistic growth of the employees and also enabling them with continuous learning and development of new skills.

Your Company has women in important and critical functional areas. Women representations have gone across hierarchical levels. To promote women empowerment, HUDCO instituted ‘Nari Shakti Award'' for women employees who have made notable contribution in taking HUDCO towards growth and development or have demonstrated any inherent talent. HUDCO also celebrates ‘Women''s Day'' on 8^th March, every year. At present, there are 218 women employees working in HUDCO which constitute approx. 31% of its workforce.

HUDCO has been complying with all the directives and guidelines issued by the Government of India regarding reservation for SC/ST/OBC/PwD/ Ex-Servicemen. As on 31^st March, 2022, HUDCO has a workforce of 703 employees (comprising of 592 Executives and 111 Non-Executives). The category wise detail along with the percentage of employees are as under:

Total Employees	General	SC	ST	OBC	PwD	Ex-Serv.
703	429	122	51	85	15	1
Percentage	61.02	17.35	7.25	12.09	2.13	0.14

14. VIGILANCE

In compliance of the directions of Central Vigilance Commission (CVC) from time to time, the Corporate Vigilance Department (CVD) endeavoured for improving the systems and procedures to ensure proactive actions and advising corrective measures in the probable areas prone to corruption/financial irregularities. As a part of preventive vigilance, Corporate Vigilance Department ensured e-procurements through GEM; e-payments; creating general awareness amongst the officials through training and workshops; adoption of Integrity Pact wherever applicable; digitalization of system/process to avoid manual intervention, routine/specific inspections, etc.

Further, as per CVC''s notification, Vigilance Awareness Week was observed by the Corporation from 26^th October to 1^st November, 2021 in the Head Office as well as at all the Regional Offices. During the week, various programmes were

organized at Corporate Office and also at the premises of 21 Regional Offices throughout the country. The programmes were the theme centric, declared by the CVC, i.e., ‘Independent India @ 75: Self Reliance with Integrity''. During the year, one-day on-line training programme on ‘Conduct of Disciplinary Proceedings” was organized on 24^th February, 2022 for the officials of HUDCO. During the year, routine and specific inspection of some Regional Offices was carried out with a view to conduct a random check of different activities of Regional Office and specific examination of certain issues earmarked during critical investigation as a follow-up of complaint management handled by the Department.

15. OFFICIAL LANGUAGE

As per the directions given through Annual Programme, issued by the Department of Official Language, Ministry of Home Affairs, Govt. of India, the Official Language Department of the Company continued to strive for the progressive use of Rajbhasha Hindi in official work of HUDCO. The Corporate Office and the Regional Offices spread throughout the country celebrated ‘Rajbhasha Fortnight'' in the month of September, 2021. During the period, various competitions and workshops were organized and the prizes were awarded to the winners of these competitions and to the winners of the HUDCO''s Hindi promotional scheme Rajbhasha Utkarsh Yojna.

It is also referential to mention that our Thiruvananthapuram, Guwahati and Hyderabad Regional Office(s) won first prize and Bhopal Regional Office won second prize from their concerned Town Official Language Implementation Committees (TOLIC/Narakas) for the best execution of Official Language policy in these offices. Further, the Regional Offices situated at Chandigarh, Lucknow, Mumbai and NCR were inspected during the year and the position of official language in these offices was ascertained.

During the year, Town Official Language implementation Committee (TOLIC/Narakas), Delhi Upkrm 2 organized various Hindi progressive programmes like Narakas Sammelan, Hindi technical training programmes/ seminar, workshops, Hindi competitions and half yearly meetings for the implementation of Hindi in 50 member offices (PSU''s) located at Delhi.

Shri Kamran Rizvi, CMD, HUDCO/Chairman, TOLIC-2 PSU has received “Rajbhasha kirti Puraskaar” (second prize) at National Level for the year 2020-21 at Vigyan Bhawan, New Delhi on 14^th September, 2021 in the auspicious presence of Shri Amit Shah, Honourable Union Minister for Home Affairs, Government of India. In the series of Awards, further, Shri M. Nagaraj, Director (Corporate Planning), HUDCO has received third prize at regional level for the year 2019-20 at Kanpur, Uttar Pradesh on 27^th November, 2021 in connection with the commendable performance under TOLIC -2 PSU in implementing the Official Language Policy of the Union in 50-member public sector offices located at Delhi.

16. COMPLIANCES OF VARIOUS ACTS/ GUIDELINESDisclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

HUDCO has constituted the ‘Internal Complaint Committee'' which is headed by a senior woman officer of the Company for redressal of complaints, if any, related to sexual harassment as per Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Sexual Harassment in any form is a misconduct under HUDCO (Conduct, Discipline and Appeal) Rules.

There was no complaint pending at the beginning of the year and no complaint related to sexual harassment was received during the year.

Public Grievance Redressal Mechanism of HUDCO

HUDCO has robust Public Grievance mechanism and machinery which caters to the grievances in emanating from various sources, i.e., Centralized Public Grievance Redress and Monitoring System (CPGRAMS), Grievance Registration & Information Database System (GRIDS) portal and by email/ post. The entire system has been digitized for timely submission and disposal of grievances. During the year, strengthening of the grievance mechanism was further enhanced through establishment of a framework of Escalation Matrix wherein first level of public grievance is tackled in various Departments and Regional Offices and thereafter disposed of at Corporate Office in a time bound manner.

Implementation of Micro, Small & Medium Enterprises (MSME) Policy

The Government of India, Ministry of Micro, Small & Medium Enterprises (MSME), has advised Central Ministry/Department/ CPSEs that 25% of overall annual procurement, be procured through MSMEs. Out of annual target of 25% to be procured from MSME, 4% is earmarked for MSEs, owned SC/ST and 3% for women entrepreneurs. During the financial year 2021-22, HUDCO has made total procurement of '' 9.10 crore.

In compliance of the Public Procurement Policy for Micro and Small Enterprises, issued by Government of India vide Micro and Small Enterprise (MSEs) Order, 2012, during the financial year 2021-22, HUDCO has made procurement amounting to '' 5.40 crore from MSEs, constituting 59.37% of its total annual procurement inclusive of 4.10% from MSEs owned by SC/ST entrepreneurs amounting to '' 0.3733 crore and 3.54% from Women Entrepreneurs constituting '' 0.3221 crore. HUDCO has also made all payments due to MSMEs within the stipulated period, i.e., within 45 days and there has been no delay.

Right to Information Act

RTI Cell in HUDCO has complied with Section 4(1)(b) of the Right to Information Act, 2005 that defines obligation of Public Authorities. HUDCO has achieved a score of 99.49% by a third-party audit for the previous year, i.e., 2020-21 and the audit of financial year 2021-22 is under process. There has been a 100% compliance of the RTI Act, 2005 during the period under review and there was not a single instance of penalty, strictures or adverse remark with regard to RTI on HUDCO by any Statutory Authority.

17. DIRECTORS’ RESPONSIBILITY STATEMENT

As per requirements of section 134(5) of the Companies Act, 2013, your Directors confirm that:

a) in preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same;

b) such accounting policies have been selected and applied them consistently and made judgments and estimates that are reasonable and prudent to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review;

c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with provisions of Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the annual accounts have been prepared on a ‘going concern'' basis;

e) the Company has laid down Internal Financial Controls to be followed and such Internal Financial Controls are adequate and were operating effectively; and

f) proper systems have been devised to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.

18. MANAGEMENT DISCUSSION & ANALYSIS REPORT

The Management Discussions & Analysis Report, as required in terms of the SEBI (LODR) Regulations, 2015 and DPE guidelines, for the year ended 31^st March, 2022, is annexed and forms part to this report.

19. CORPORATE GOVERNANCE

As per regulation 34(3) of the SEBI (LODR) Regulations, 2015 and DPE guidelines, a separate section on Corporate Governance practices followed by your Company together with a certificate from Malhotra Arora & Associates, Company Secretaries in Practice, on compliance with the Corporate Governance norms is annexed and forms part to this report.

20. BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report, as stipulated under Regulation 34(2) of the SEBI (LODR) Regulations, 2015, is annexed and forms part to this report.

21. DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year under report, following changes took place in the composition of the Board of Directors:

Chairman & Managing Director

Ministry of Housing and Urban Affairs (MoHUA), Government of India, vide order dated 22^nd October, 2020 has assigned additional charge of the post of Chairman & Managing Director, HUDCO to Shri Kamran Rizvi, I.A.S., Additional Secretary, MoHUA, GoI for a period of 6 months, which has been further extended vide order(s) dated 1^st July, 2021 (w.e.f. 22^nd April, 2021) and 6^th December, 2021 (w.e.f. 22^nd October, 2021) for a period of 6 months each or till appointment of a regular incumbent to the post, or until further orders, whichever is earliest.

Part-time Official (Government) Director

MoHUA, GoI, vide order dated 2^nd November, 2021 has appointed Shri Kuldip Narayan, Joint Secretary, HFA, MoHUA, GoI, as Part-time Official (Government) Director in place of Shri Amrit Abhijat with effect from 2^nd November, 2021.

Non-Official (Independent) Director

a) MoHUA, GoI, vide orders dated 22^nd November, 2021 has appointed Dr. Ravindra Kumar Ray, Dr. Siyaram Singh and Smt. Sabitha Bojan, as Non-Official (Independent) Directors on the Board of HUDCO for a period of three years; and

b) Further, MoHUA, GoI, vide order dated 7^th January, 2022 has appointed Shri Banshi Lal Gujar as Non-Official (Independent) Director for a period of three years. The appointment of Shri Gujar is effective from 9^th January, 2022 being the date of allotment of DIN by Ministry of Corporate Affairs, Government of India.

In compliance with the provisions of the Companies Act, 2013 and SEBI(LODR) Regulations, 2015, approval of the shareholders regarding appointment of Shri Kuldip Narayan, Part-time Official (Government) Director (liable to retire by rotation), Dr. Ravindra Kumar Ray, Dr. Siyaram Singh, Smt. Sabitha Bojan and Shri Banshi Lal Gujar, Non-official (Independent) Directors, (not liable to retire by rotation) as Directors has been obtained through postal ballot process on 30^th March, 2022.

As per requirements of section 152 of the Companies Act, 2013 [including any statutory modification(s) or reenactments) thereof, for time being in force, read with the applicable rules, as amended] and Articles of Association of the Company, Shri Shyam Sunder Dubey (DIN: 06601151), Part-time Official (Government) Director and Shri D. Guhan (DIN: 06757569), Director (Finance) being longest in office among the Directors since their last appointment, are liable to retire by rotation and being eligible, offer themselves for reappointment at the ensuing Annual General Meeting.

The Board recommends reappointment of Shri Shyam Sunder Dubey, Part-time Official (Government) Director and Shri D. Guhan, Director (Finance) for approval of the members at the 52^nd Annual General Meeting, on the same terms and conditions as earlier approved by the President of India.

After the closure of the financial year, MoHUA, GoI vide order dated 10^th May, 2022 has extended the additional charge for the post of Chairman & Managing Director, HUDCO assigned to Shri Kamran Rizvi, Additional Secretary, MoHUA, Government of India, for a further period of 6 months with effect from 22^nd April, 2022 or till a regular incumbent joins the post, or until further orders, whichever is the earliest.

The Board wishes to place on record its appreciation for the valuable services rendered by Shri Amrit Abhijat during his association/tenure with the Company and extended a warm welcome to Shri Kuldip Narayan, Dr. Ravindra Kumar Ray, Dr. Siyaram Singh, Smt. Sabitha Bojan and Shri Banshi Lal Gujar, newly appointed directors on the HUDCO''s Board.

All the Non-official (Independent) Directors have given declaration as to their Independence, as prescribed under Section 149(6) of the Companies Act and Regulation 16(1)(b) of the SEBI (LODR) Regulations, 2015.

Based on the confirmation received from Directors, none of them are disqualified for being appointed/ reappointed as directors in terms of Section 164 of the Companies Act, 2013 and other applicable laws, if any and are not related to each other.

KEY MANAGERIAL PERSONNEL

The details of Key Managerial Personnel are as under:

Sl. No.	Name of Key Managerial Personnel	Designation
1.	Shri Kamran Rizvi	Chairman & Managing Director (Additional Charge)
2.	Shri Muniappa Nagaraj	Director - Corporate Planning
3.	Shri D. Guhan	Director - Finance & Chief Financial Officer
4.	Shri Harish Kumar Sharma	Company Secretary

22. SECRETARIAL AUDITORS & AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act, 2013, M/s Malhotra Arora & Associates, Company Secretaries in Practice were appointed as Secretarial Auditors of your Company to conduct a Secretarial Audit for financial year 2021-22.

Secretarial Audit report given by the auditors confirms that the Company has complied with the provisions of the Act, Rules, Regulations and Guidelines applicable to the Company and there were no qualifications, reservations or adverse remarks made by the Secretarial Auditors in their report except the composition of the Board of Directors, its various committees, quorum, etc., due to non-appointment of requisite number of Independent Directors during the financial year 2021-22 as prescribed

under the SEBI(LODR) Regulations, 2015. As on 31^st March, 2022, HUDCO is short of one Independent Director, for which, MoHUA, GoI, being the administrative ministry and appointing authority has already been requested, for appointment of one more Independent Director to make the composition of the Board in compliant with SEBI Regulations. Secretarial Auditors in their report as annexed with this report, have referred to certain other observations, which are self-explanatory.

23. AUDITORS & AUDITORS REPORT

As per Section 139(5) of the Companies Act, 2013, the Statutory Auditors of your Company is appointed by Comptroller and Auditor General of India (C&AG). M/s A P R A & Associates LLP, (regd. no. DE2438), Chartered Accountants, New Delhi has been appointed as Statutory Auditors of your Company for the financial year 2021-22 by the C&AG.

M/s A P R A & Associates LLP, Chartered Accountants (FRN-011078N/N500064), New Delhi, the Statutory Auditors had conducted the audit of the financial statements (both standalone and consolidated) for the financial year 2021-22 and submitted their report thereon. The comments of the Statutory Auditors on the financial statements along with management reply thereon are annexed and forms part of the report. Notes on financial statement referred to in the Auditors Report are self-explanatory. There is no qualification in the Statutory Auditors Reports on the financial statements of the Company for the financial year 2021-22.

Comments of Comptroller and Auditor General of India (C&AG)

C&AG vide their letter(s) dated 17^th August, 2022, has given ‘NIL comments'' on the audited financial statements (both standalone and consolidated) for the financial year 2021-22 under section 143 of the Companies Act, 2013 and the same have been annexed and forms part of this report.

24. STATUTORY DISCLOSURES

(i) Corporate Social Responsibility Committee

As on 31^st March, 2022, the composition of ‘Corporate Social Responsibility'' Committee of the Board, consists of six members namely: Shri M. Nagaraj, Director (Corporate Planning) as Chairman, Shri Kuldip Narayan, Part-time Official (Government) Director, Dr. Ravinder Kumar Ray, Dr. Siyaram Singh, Shri Banshi Lal Gujar and Smt. Sabitha Bojan, Independent Directors, as members.

The Annual Report on CSR activities for the financial year 2021-22 giving the requisite information as required under Section 135 of the Companies Act, 2013 read with Rule 8(1) of the Companies (Corporate Social Responsibility Policy) Rules, 2014 including reasons as to non-spending of entire amount earmarked for CSR activities is annexed and forms part of the Directors'' Report.

The extant Corporate Social Responsibility Policy (CSR Policy) of the Company is available on Company''s website at the following link: https://www.hudco.org/writereaddata/csrpolicy.pdf

In compliance with the Ministry of Corporate Affairs, Government of India notification dated 22^nd January, 2021:

a) During the year 2021-22, the Company has spent a total amount of '' 29,47,06,496/- on CSR activities comprising of '' 25 crore towards the ‘PM CARES FUND'', out of the CSR budget allocated for the year 2021-22, and '' 4,47,06,496/- spent for the projects sanctioned prior to 31^st March, 2021; and

b) As of 31^st March, 2022, an amount of '' 25,87,90,596/- is the unspent CSR amount other than ongoing CSR activities (i.e., '' 16,99,00,000/- for 2021-22 and '' 8,88,90,596/- upto 2020-21) which shall be transferred to Government fund specified in Schedule VII of the Companies Act, 2013, within the stipulated time period, i.e., on or before 30^th September, 2022.

(ii) Board and its Committees

The details as to the composition of the Board and its various Committees, scope & terms of reference, number of meetings held and attended by directors/members during the year along with other particulars are annexed in the Corporate Governance Report, forming part to this report;

(iii) Particulars of Loans, Guarantee or Investments

The necessary disclosures with respect to loan made, guarantee given or securities provided by the Company in its ordinary course of business have not been given, since, provisions of section 186 of the Companies Act, 2013, are not applicable to your Company, being a Housing Finance Company. The detail with respect to investments made by the Company forms part of the financial statements for the year 2021-22;

(iv) Annual Return

Pursuant to section 92(3) and section 134(3)(a) of the Companies Act, 2013, the Annual Return as at 31^st March, 2022 will be available on the website of the Company on the following link:

https://hudco.org.in//Site/FormTemplete/frmTemp1PLargeTC1C P.aspx?MnId=463&ParentID=391

(v) Energy Conservation, Technology Absorption and Foreign Exchange Earning & Outgo Energy Conservation and Technology Absorption

There are no significant particulars, relating to conservation of energy and technology absorption as your Company does not own any manufacturing unit/ facility, however, HUDCO being an energy conscious organization, has taken various initiatives in the direction of energy conservation on a continuous basis. Further, the Company has neither absorbed any technology indigenous/ imported, during the year, nor imported any technology during the last three years.

Foreign Exchange Earnings and Outgo

During the financial year 2021-22, foreign exchange inflows was '' 0.27 crore (previous year '' 1.18 crore) and foreign currency outflow was '' 1.46 crore (previous year '' 3.30 crore);

(vi) Your Company, being a Government Company is exempted from the provisions of Section 197 of the Companies Act, 2013 and Rules made thereunder relating to managerial remuneration, hence, no disclosure is required to be made;

(vii) During the financial year, no material significant related party transaction(s) was made, having potential conflict with the interest of the Company at large. The details as to related party transactions have been appropriately disclosed in point no. 34 of Note- 40 of the standalone and consolidated financial statements respectively. All related party transactions made/ entered during the year by the Company were on an arm''s length basis and in the ordinary course of its business. Further, the Company has not entered into any contract or arrangement as listed under section 188 of the Companies Act, 2013;

(viii) The Company is compliant with the applicable Secretarial Standards issued by Institute of Company Secretaries of India (ICSI);

(ix) There is no change in the nature of business of the Company during the year;

(x) There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and operations of your Company in future;

(xi) Your Company being a Government Company is exempted from the provisions of section 178((2), (3) and (4) of the Companies Act, 2013 with respect to matters pertaining to evaluation of Directors performance, criteria for determining qualifications, positive attributes, independence of a director, Company''s policy on directors'' appointment and remuneration including and other matters provided therein;

(xii) During the year under review, neither the statutory auditor nor the secretarial auditor, have reported any material case of fraud committed by the Company or against it by its officers or employees under Section 143(12) of the Companies Act, 2013, hence, no disclosure is made;

(xiii) In compliance of the SEBI(LODR) Regulations, 2015, and DPE Guidelines on Corporate Governance, based on the affirmation received from Board Members and Senior Management Personnel, declaration regarding compliance of Code of Conduct made by the Chairman & Managing Director is annexed and forms part of the Directors Report. A copy of the Code is available on the website of the Company at www.hudco.org.in: and

(xiv) In compliance with regulation 25(10) of the SEBI (LODR) Regulations, 2015, your Company has obtained Directors and Officer Liability Insurance Policy, ensuring adequate insurance coverage, covering all the directors of the Company including independent directors, Key Managerial Personnel and senior officers against the risk of financial loss including the expenses pertaining to defence cost and legal representation expenses arising in the normal course of business.

25. FUTURE OUTLOOK - MEDIUM AND LONG-TERM STRATEGIES

The massive spread of COVID-19 pandemic has de-accelerated the economy of the World at large, to which India is no exception. HUDCO operations have been impacted post COVID-19 pandemic due to this slowdown. The future outlook, both medium and long-term strategies are summarized hereunder:

1. Under Jal Jeevan Mission- Har Ghar, Nal Se Jal allocation of '' 60,000 crore to cover 3.8 crore households in 2022-23. HUDCO will make all out efforts to tap potential business for viability gap funding;

2. The Government of India has launched ‘Swachh Bharat Mission-2.0'' (SBM-2) with an allocation of '' 1.41 lakh crore for five years from 2021 till 2026, to focus on safe sanitation, water harvesting and recycling. HUDCO has not funded any project under this mission and State Governments will be approached for financing such projects;

3. HUDCO will make all out efforts to tap potential business for viability gap funding in Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and Smart City projects;

4. Health infrastructure needed a major attention during COVID 19, the pandemic posed lot of challenges to administration all over the country, which necessitates establishing modern and state of the art health care facilities all over country. HUDCO would continue to fund Social Infrastructure Projects like Health Centers, Government Hospitals, Medical Colleges, etc., being a priority sector lending for HUDCO, as the State Governments would be requiring huge funds to expand their Health Care Infrastructure;

5. HUDCO would also give priority for funding Urban Metro Rail projects of all major cities, as the Government is keen to expand the metro network in different cities and is looking for external participation for such projects;

6. Our Company is poised for greater growth as it is converting from HFC to NBFC-IFC. HUDCO has already submitted application for registration as NBFC-Infrastructure Finance Company (IFC) on 29^th March, 2022 to Reserve Bank of India (RBI). The new framework of operation of HUDCO will be driven by the new status accorded by RBI; and

7. HUDCO needs to enlarge its operation in rural areas also so as to cover infrastructure development in both urban and rural areas, without any distinction.

26. STATUTORY AND OTHER INFORMATION REQUIREMENT

The information, required to be furnished as part of the Directors'' Report as per provisions of the Companies Act, 2013,

SEBI(LODR) Regulations, 2015 and DPE guidelines on Corporate Governance and other applicable statutory laws/ rules/

regulations, etc., are annexed to this report as follows:

Particulars	Annexure
Management Discussion & Analysis Report	1
Corporate Governance Report	2
Business Responsibility Report	3
Secretarial Audit Report	4
Annual Report on CSR Activities	5
Declaration of the Code of Conduct	6
Management Reply to the comments of the Statutory Auditors on the financial statements	7
Comments of the Comptroller and Auditors General of India	8

27. ACKNOWLEDGEMENT

The Board of Directors of your Company take this opportunity to place on record its deep appreciation for the valuable support, continued patronage, and trust reposed, by the Shareholders, Bondholders, Public Deposit Holders, Bankers, Financial Institutions, Central and State Governments, Housing Boards, Development Authorities, Municipal/Local Bodies and other stakeholders associated with the Company.

The Board of Directors sincerely acknowledges with appreciation consistent support, guidance, cooperation received from the Government of India, especially the Ministry of Housing and Urban Affairs, Ministry of Rural Development, Ministry of Finance, Reserve Bank of India, National Housing Bank, Ministry of Corporate Affairs, Department of Public Enterprises, Regulatory/ Statutory Authorities and various other departments of the Central/State Governments. The Board also appreciates the cooperation and support extended by BSE Limited, National Stock Exchange of India Limited, National Securities Depository Limited, Central Depository Services Limited, Credit Rating Agencies, Registrar & Transfer Agents and other agencies.

The Board also places on record its appreciation for the cooperation and guidance extended by Comptroller & Auditor General of India, Statutory Auditors, Secretarial Auditors and other professionals associated with the Company.

The Board of Directors wishes to place on record its appreciation for commitment, untiring efforts made by employees at all levels towards the growth of the Company and look forward for their continued support, contribution in achieving the future goals.

For and on behalf of the Board of DirectorsSd/-

Kamran Rizvi

Pl_ace : N_ew D_elhi Chairman & Managing Director

Date : 24^th August, 2022 ^{DIN: 01653503}

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Mar 31, 2018

Dear Members,

The Board of Directors of your Company takes pleasure in presenting the audited financial statements both standalone and consolidated for the financial year ended 31^st March, 2018.

1. FINANCIAL HIGHLIGHTS

The financial performance, for the year ended 31^st March, 2018 is summarized as under:

(Rs. in crore)

Particulars	2017-18	2016-17
Revenue from Operations	4075.42	3498.85
Other Income	97.42	85.99
Total Revenue	4172.84	3584.84
Finance cost	2267.68	1986.32
Other expenses	246.05	175.43
Provision and contingencies (Net)	569.29	297.33
Total expenditure	3083.02	2459.08
Profit before exceptional items and tax	1089.82	1125.76
Exceptional items	0.00	0.26
Prior period adjustments	0.68	48.98
Profit before tax	1090.50	1175.00
Less :
Current Tax	441.15	389.80
Deferred tax	(149.17)	(60.41)
Prior period tax adjustments	(0.54)	3.80
Profit after tax	799.06	841.81
Add : Balance from previous year	12.14	18.50
: Transfer from General Reserve	95.00	-
Less : Final Dividend for 2016-17	10.01	-
Less : Dividend Tax for 2016-17	2.04	-
Total amount available for appropriation	894.15	860.31
Less: Appropriation
Interim Dividend	110.10	100.01
Tax on Interim dividend	22.42	20.36
Transfer to Special Reserve u/s 36(1)(viii) of Income Tax Act, 1961 and u/s 29C of NHB Act, 1987	321.64	284.50
Transfer to Debenture Redemption Reserve	439.84	439.83
Transfer to Welfare Reserve	-	3.47
Surplus carried forward to next year	0.15	12.14
Proposed dividend on equity shares	-	10.01
Tax on Proposed dividend	-	2.04
Surplus available after proposed Dividend of the current year	0.15	0.09
EPS (Basic/Diluted) (in Rs.)	3.99	4.21

During the period under review, despite of extremely challenging and competitive market scenario and fulfilling its social commitment towards providing affordable Housing for All in line with various flagship programmes of the Government of India, Your Company, with the prudent policies of the Management, has been able to maintain its profitability almost at the same level as that of the previous year. During the year, your Company posted profit before and after tax of Rs.1090.50 crore and Rs.799.06 crore respectively (previous year Rs.1175 crore and Rs.841.81 crore).

In accordance with the provisions of Section 136 of the Companies Act, 2013, the audited standalone & consolidated financial statements and all other documents required to be attached thereto are available on the company’s website namely www.hudco. org. These documents shall also be available for inspection till the date of the ensuing Annual General Meeting during business hours on all working days at the Registered Office of the Company.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY AFTER CLOSE OF FINANCIAL YEAR 2017-18

There are no material changes and commitments, occurred after the close of financial year and the date of this Board’s report, affecting the financial position of the company and its state of affairs except as disclosed in this Report. The major material events occurred after the close of the financial year and the date of this Board’s report are as under:

a) In the matter of one of an old NPA account namely Maharaji Educational Trust (MET), from whom an amount of Rs.469.38 crore was recoverable by the company as on 31^st March, 2018, your Company, after prolonged litigation has been able to recover an amount of Rs.317 crore on 25^th May, 2018. All efforts are being made to recover the balance amount due from the borrower as early as possible.

b) In the matter of another NPA account namely Electrosteel Steels Limited, the Hon’ble National Company Law Appellate Tribunal (NCLAT), New Delhi vide its order dated 30^th May, 2018 in Company Appeal (AT) (Insolvency) No. 175 of 2018 under the Insolvency and Bankruptcy Code, 2016 (IBC), permitted Vedanta Limited to implement the Resolution Plan dated 29^th March, 2018 as approved by the Hon’ble National Company Law Tribunal (NCLT), Kolkata vide order dated 17^th April, 2018 subject to final orders of NCLAT in the appeal. Accordingly, as per Resolution Plan, as approved by NCLT, HUDCO, against its admitted claim of Rs.383.20 crore, has received an amount of Rs.160.28 crore on 21^st June, 2018 towards the sustainable debt, which has been paid upfront and has also been allotted 44,58,406 number of equity shares of Electrosteel Steels Limited of face value of Rs.10/- each towards its pro-rata shares of unsustainable debt;

c) National Housing Bank vide circular no. NHB(ND)/DRS/Policy89/2017-18 dated 14^th June, 2018 reiterated that Housing Finance Companies (HFCs) are required to comply with the provisions of Ind-AS, as notified by the Ministry of Corporate Affairs (MCA), Government of India from time to time, including the date of implementation notified by the MCA vide notification no. G.S.R. 365(E) dated 30^th March, 2016. HFCs are expected to adopt sound methodologies, systems/ procedures commensurate with the size, complexity, risk profile, etc., specific to them while implementing Ind-AS.

Accordingly, as per MCA notification, Indian Accounting Standards (Ind-AS) have become applicable in your Company from 1^st April, 2018 and adequate steps towards its smooth implementation in HUDCO from the financial year 2018-19 onwards have been taken.

d) National Housing Bank vide circular no. NHB(ND)/DRS/SUP/3911/2018 dated 2^nd April, 2018, had inter alia advised HUDCO on credit concentration/ exposure norms for Government/Public Agencies to be restricted to 50% for Government/Public Agencies for individual exposures and upto 100% for State Government under Group Exposure. Based on HUDCO request, for restoration of exposure norms, permitted to the Company, prior to the revisions advised in its April, 2, 2018 letter, the NHB after reviewing its decision has informed vide its letter no. NHB(ND)/DRS/Policy89/2017-18 dated July 13, 2018 that ‘it has been decided to allow HUDCO to continue its disbursals as per the schedule in relation to the existing sanctions made upto May 31, 2018. However, HUDCO shall be required to take suitable steps to bring down the exposure to Government/Public Agencies and State Governments (under group exposure) in the above cases also to 50% and 100% respectively by March, 2023’.

‘NHB further clarified that the exposure limit of upto 50% for Government/ Public Agencies (inclusive of the exposure limit of upto 30% for infrastructure/ non-housing related activities) and upto 100% for State Governments (under group exposure) will continue to be applicable in all other cases. The condition relating to compliance by the concerned State with the FRBM limit shall continue.’

e) In view of the competitive environment, your Company has decided to discontinue accepting/renewing Public Deposit under the Public Deposit Scheme w.e.f. 1^st July, 2019. The maximum period for which deposits shall be accepted upto 30^th June, 2019 has also been curtailed to 5 years as against maximum deposit acceptance period of 7 years available earlier. However, redemption of deposits already taken shall be made on due dates.

f) Bihar State Power Generation Company Limited (BSPGCL), on transfer of 2X250 MW Barauni Power Plant on 30 years lease basis to NTPC, has pre-paid the loan outstanding amounting to Rs.742.01 crore in the month of June/July, 2018, which includes principal outstanding, IDCP, Pre-payment charges and GST.

g) Your company has obtained approval of the shareholders by way of special resolution(s) on 20^th May, 2018 through the process of postal ballot for borrowing funds not exceeding Rs.40,000 crore by way of bonds/ debentures on private placement basis, etc.; increase in the borrowing limits to Rs.1,00,000 crore; and for insertion of new clause 34A, in the Articles of Association of the Company regarding consolidation & re-issue of debt securities, the details of the same are available under the ‘Report on Corporate Governance.’

2. DIVIDEND

Your Company has formulated a Dividend Distribution Policy in compliance with Regulation 43 A of Securities and Exchange Board of India (Listing Obligations and Disclosures Requirement) Regulations, 2015, which inter-alia specifies the external and internal factors including financial parameters that shall be considered while declaring dividend and the circumstances under which the shareholders of the Company may or may not expect dividend.

In terms of Dividend Distribution Policy and DPE Guidelines, your Company has paid an interim dividend of Rs.0.55 per equity share having face value of Rs.10/- each totalling to Rs.110.10 crore (excluding dividend distribution tax of Rs.22.42 crore) for the financial year 2017-18, which has been approved by the Board of Directors in its meeting held on 28^th February, 2018 and the same was paid to the shareholders on 14^th March, 2018.

As there being no surplus available after the payment of interim dividend and after appropriations, your Directors have not recommended any final dividend for the financial year ended 31^st March, 2018; hence, the interim dividend of Rs.110.10 crore excluding dividend distribution tax of Rs.22.42 crore paid during the year 2017-18, shall be the total payout on account of dividend. The Dividend Distribution Policy of the Company is available at https://www.hudco.org//writereaddata/DDP.pdf

3. SHARE CAPITAL

During the financial year under review, there has been no change in the authorized, issued, subscribed and paid up equity share capital of the Company. The Authorized share Capital of the Company as at 31^st March, 2018 stands at Rs.2500 crore divided into 2,500,000,000 number of equity shares of Rs.10/- each. The issued, subscribed and paid up equity share capital of the Company as at 31^st March, 2018 was Rs.2001.90 crore divided into 2,001,900,000 numbers of equity shares of Rs.10/- each.

During the year under review, President of India through the then Ministry of Housing and Urban Poverty Alleviation has divested 20,40,58,747 number of equity shares of face value of Rs.10/- each constituting 10.19% of the total paid up equity share capital of the Company through an Initial Public Offer. After divestment, the shareholding of President of India has been reduced from 100% to 89.81% which is now held through the Ministry of Housing and Urban Affairs (MoHUA) - 69.08% and Ministry of Rural Development (MoRD) - 20.73% respectively.

Your Company has neither issued any shares with differential voting rights nor any Sweat Equity Shares during the year under review.

4. INITIAL PUBLIC OFFER

During the year under review, under the divestment programme of the Government of India, your Company came with Initial Public Offer (IPO) of 20,40,58,747 number of equity shares of face value of Rs.10/-, in the month of May, 2017. The IPO received overwhelming response from investors, as the issue received over 20 lakh applications in number and was over-subscribed to the extent of 79.60 times.

As the offer for sale of 20,40,58,747 number of Equity Shares was by the President of India acting through the then Ministry of Housing and Urban Poverty Alleviation (i.e. Selling Shareholder), hence, the entire proceeds of Rs.1209.78 crore collected in the offer went directly to the Selling Shareholder i.e. the then MoHUPA, as such the Company did not received any proceeds from the offer.

On divestment by the President of India through the then Ministry of Housing and Urban Poverty Alleviation, Equity Shares of your Company got listed on BSE Limited and National Stock Exchange of India Limited on 19^th May, 2017.

Unclaimed Shares

Due to non-matching of investors detail(s) and accordingly, failure of Corporate Action at the time of transfer of shares to the account of successful allottees in the Initial Public Offer of the Company, 3000 number of shares of 15 shareholders were transferred to Suspense Account on 18^th May, 2017, the status of the same as on 31^st March, 2018 was as under:

Particulars	Records/ No. of Shareholders	Shares
Opening balance as on 1st April, 2017	0	0
Add : shares transferred to suspense account	15	3000
Less : claims received and shares transferred	15	3000
Closing Balance as on 31st March, 2018	0	0

As on 31^st March, 2018, there were no shares, which remained unclaimed.

LISTING OF SHARES AND PAYMENT OF LISTING FEE

The Equity Shares of your Company continue to remain listed on BSE Limited and National Stock Exchange of India Limited. Further, the Company has paid the listing fee as payable to the Stock Exchanges for the financial year 2018-19 on time.

INSERTION OF ARTICLE NO. 34A IN THE ARTICLES OF ASSOCIATION

During the year under review, in order to comply with the provisions of SEBI circular dated June 30, 2017 and pursuant to and in terms of the provisions of Section 14 of the Companies Act, 2013, the Members of the Company vide Special Resolution passed by means of Postal Ballot on 20^th May, 2018 approved insertion of Article No. 34A in the Articles of Association of the Company for enabling consolidation and re-issuance of securities including debentures, bonds or any other debt instruments subject to the provisions of the Companies Act, 2013 and the applicable SEBI Regulations.

5. MEMORANDUM OF UNDERSTANDING (MoU)

As in the past, your Company, in terms of applicable DPE guidelines, signed a Memorandum of Understanding (MoU) with the Administrative Ministry i.e. Ministry of Housing and Urban Affairs (MoHUA) for the financial year 2017-18 and we are pleased to inform you that your Company is likely to be accorded ‘Excellent’ Rating’ by the Department of Public Enterprises (DPE) for seventh year in a row, for its performance on the MoU parameters.

The Company’s successive ‘Excellent’ MoU ratings are an outcome of conscientious efforts put in terms of proactive and timely monitoring, right interventions by and guidance of the Management. The relentless and timely support provided by MoHUA from time to time aided the Company to tide over challenges faced during the year and achieve its targets and tread to a higher growth path.

6. LENDING ACTIVITIES

i) During the financial year 2017-18, HUDCO has once again demonstrated its ability to mould its efforts and activities in line with emerging market challenges and trends and registering an excellent performance consistently. During the year 2017-18, HUDCO has achieved the highest ever annual loan sanctions since inception i.e. Rs.38,648 crore and the highest ever annual disbursement in its chequered history of 48 years i.e. Rs.16,565 crore. Since its inception in April, 1970 and till March 2018, HUDCO has sanctioned a total of 17,168 number of housing and urban infrastructure projects with a total loan component of Rs.1,91,905 crore and has made a cumulative disbursement of Rs.1,35,233 crore. HUDCO has sanctioned more than 18.02 million houses in the country in both rural and urban areas so far.

a) Housing Operations

HUDCO has sanctioned a total loan assistance of Rs.15,770 crore for the housing sector. This included 24 numbers of housing projects in various States, in addition to loans to 215 numbers individuals under its retail lending portfolio of HUDCO Niwas. Some of the major housing projects sanctioned by HUDCO to various State Governments/Agencies are:

1) 6.25 lakh EWS Housing units under PMAY (Gramin) in Uttar Pradesh taken up by UP Rural Housing Board (UPRHB);

2) 2 lakh EWS housing units under PMAY(Urban) as part of Affordable Housing in Partnership component in Andhra Pradesh taken up by Andhra Pradesh Township & Infrastructure Development Corporation Limited;

3) 4 lakh EWS Houses under the NTR Rural Housing Programme in Andhra Pradesh taken up by the Andhra Pradesh State Housing Corporation;

4) 62,500 number of EWS housing units under the State’s 2 BHK housing Phase-II programme in Telangana State taken up by Telangana State Housing Corporation Limited (TSHCL); and

5) Housing scheme for Resettlement and Rehabilitation of HEC displaced persons (400 families) at Ranchi taken up by Building Construction Department, Government of Jharkhand.

HUDCO is one of the nominated Central Nodal Agencies of the Government of India for routing the central subsidy to beneficiaries under the Credit Linked Subsidy Scheme (CLSS) component of PMAY (Urban). During the year 2017-18, HUDCO has disbursed a total subsidy amount of Rs.50.74 crore to 2605 number of beneficiaries of EWS, LIG and MIG categories.

b) Urban Infrastructure Lending

During the year 2017-18, HUDCO has sanctioned a total loan assistance of Rs.22,878 crore for 92 urban infrastructure projects in various States. This included 15 for water supply, 22 for roads and bridges, 32 for social infrastructure, 5 for sewerage, 1 for drainage development, 11 for commercial projects and 6 energy sector projects.

c) Social Orientation in HUDCO’s Housing Operations

A significant emphasis is laid in HUDCO operations on addressing the housing requirements of weaker sections of the society. HUDCO offers loan assistance to the State Government/State Government Agencies for fulfilling housing needs of Economically Weaker Sections (EWS) and Low Income groups (LIG) at a comparatively lower rate of interest. Such loans are offered for a longer duration as well. During the year 2017-18, of the total 15,48,387 number of housing units were sanctioned by HUDCO as part of project lending operations (excluding individual loans), about 99.94% has been for EWS and LIG category households.

During the first quarter ended 30^th June, 2018 of the financial year 2018-19, your Company has sanctioned a total loan of Rs.4072 crore and disbursed an amount of Rs.1305 crore.

(ii) Consultancy Business Initiatives

HUDCO has a large pool of technically qualified professionals who consistently contribute to the growth of the organization in terms of showcasing various facets of consultancy services, thereby contributing to the overall image building of HUDCO. Long experience and expertise in the fields of Architecture and Planning has given a much needed impetus to the fee based consultancy.

At present, HUDCO as part of the consultancy operations is working on various projects. Keeping in view the propagation of Government of India programmes, HUDCO has been entrusted with a prestigious project - Preparation of Detailed Project Report for Housing Project under Atal Ashray Yojna (a derivative of PMAY) at Girgaon, Gwalior, Madhya Pradesh. The work on the same is going on in full swing. HUDCO is also working on projects such as preparation of a Detailed Project Report (DPR) for Vertical Housing Colony - Shehjar Apartments at Bemina, Srinagar from SDA and providing consultancy services for construction of Office Building for ASI at Tilak Marg, New Delhi, which is nearing completion.

As a part of business development initiatives, a comprehensive presentation was made to UD&HD, Government of Bihar on consultancy operations of HUDCO with specific reference to Urban and Regional Planning fields. As a result, Government of Bihar has offered a prestigious assignment of preparing ‘Integrated Master Plan for Rajgir Regional Planning Area including World Heritage Site - Nalanda Mahavihara, on GIS Platform’ which covers an area of 517 sq, km in the Nalanda district of Bihar. The project would give a boost to the fee based consultancy to the tune of Rs.1.16 crore. Apart from this, some of the recent assignments also include Development Plans for Khargone and Jhabua in Madhya Pradesh, Jaigaon in West Bengal.

(iii) HUDCO Design Awards 2017

HUDCO instituted HUDCO Design Awards in 2012 to give recognition and felicitate innovative ideas and initiatives that contribute to make our cities inclusive, liveable and environmentally sustainable. In keeping with the tradition HUDCO Design Awards 2017 was announced in the month of September, 2017 which received enthusiastic participation from the professionals. The Jury Committee comprising of eminent professionals in the fields of Architecture and Planning, selected the winners who were felicitated on HUDCO Annual Day Function. A compilation of all the winning entries in the form of a publication was also released for wider dissemination, scalability and replicability.

(iv) HUDCO NASA Design Trophy 2018

HUDCO NASA Design Trophy is a unique initiative of HUDCO to engage with students of Architecture and sensitize them about the contemporary challenges of urban development by organizing design competition on relevant topic in collaboration with National Association of the Students of Architecture (NASA). The topic selected for this year’s competition was ‘Affordable Housing using Green and Emerging Technology’.

(v) HUDCO Build Tech 2017

HUDCO organized HUDCO Build Tech 2017 - an exposition on cost effective and environmentally friendly building materials and technologies as a part of India International Trade Fair held from 14^th to 27^th November 2017 at Pragati Maidan, New Delhi. The exhibition was inaugurated by Shri Hardeep S Puri Ji, the Hon’ble Union Minister of Housing and Urban Affairs, Government of India. A display was put up for visitors in around 200 Sqm area in Hall No.12, Pragati Maidan, showcasing various HUDCO activities and areas of operation. The event received much appreciation from the Hon’ble Minister and the general public at large.

(vi) Support to Government of India’s Flagship Programmes

HUDCO has been integrally involved with Government of India Mission programmes. Housing for All (HFA) Cell, HUDCO being a technical arm of the Ministry of Housing and Urban Affairs is assisting the Ministry in scrutiny of PMAY-HFA (Urban) projects. Pradhan Mantri Awas Yojna - Housing For All (Urban) i.e. PMAY-HFA(Urban) comprises of 4 verticals viz. In-situ Slum Redevelopment (ISSR) (using land as a resource), Affordable Housing in Partnership (AHP), Beneficiary Led Construction(BLC) - New Construction & Enhancement Projects and Credit Linked Subsidy Scheme(CLSS). HUDCO is conducting desk & site Scrutiny of sample projects/DPRs in respect of 3 verticals except CLSS as and when required by the Ministry, as the projects are being sanctioned at the State Government level.

During 2017-18, HUDCO has undertaken site and DPR scrutiny of 136 number of projects with a total Project Cost of Rs.18252.17 crore and Central Share of Rs.4550.37 crore for construction of 3.09 lakh Dwelling Units in 27 States/ Union Territories. The above 136 projects undertaken include 4 AHP projects, 36 BLC (New Construction/ Enhancement) projects and 2 ISSR projects. This activity has resulted in generating a fee-based income of Rs.2.26 crore during financial year 2017-18.

Further, PMAY also offers business opportunity to HUDCO in the form of viability-gap funding wherein HUDCO offers loan assistance to State Governments/State Implementing Institutions/Urban Local Bodies to meet the share of the State/ULB in the total project cost, where ever sought. During 2017-18, HUDCO has sanctioned viability-gap funds to 4 number of PMAY (Urban) projects with project cost of Rs.14008.80 crore in the States of Uttar Pradesh, Telangana and Uttarakhand offering a total loan of Rs.4,219.50 crore for construction of 2.63 lakh housing units.

HUDCO upto 31^st March, 2018 has conducted site inspections of 547 number of Night Shelters under Shelter for Urban Homeless(SUH) component of Deendayal Antyodaya Yojna - National Urban Livelihood Mission (DAY - NULM) in respect of 20 States/UTs across the country.

Further, as part of fee based consultancy initiatives, HFA Cell has undertaken Third Party Inspection monitoring in respect of 10 Delhi Police projects out of the 18 Delhi Police Projects awarded.

(vii) HUDCO’s role in Government of India Scheme - for promoting Housing for All & Urban Development

The Credit Linked Subsidy Scheme (CLSS) component of the Pradhan Mantri Awas Yojna (PMAY-Urban) envisages expanding institutional credit flow to the housing needs of the Urban Poor, as a demand side intervention. HUDCO has been designated as one of the Central Nodal Agencies (CNA) under CLSS to channelize the subsidy. Till March, 2018, HUDCO has signed 80 number of MoU for EWS/LIG and 74 number of MoU’s for MIG category with Primary Lending Institutions (PLIs).During the Financial Year 2017-18, a total of Rs.50.74 crore of subsidy has been disbursed to 2605 number of beneficiaries for EWS/LIG/ MIG category.

HUDCO is making all out efforts for increased level of disbursement of subsidy for a larger number of beneficiaries under the CLSS programme and subsidy of Rs.39.97 crore to 1939 number of beneficiaries have been disbursed by HUDCO (as a CNA) during the period from 1^st April, 2018 to 30^th June, 2018.

7. FINANCIAL REVIEW

(i) Accounting Policies

During the year 2017-18, your company has added one new accounting policy on ‘Use of Estimates’ which is clarificatory with no financial impact and has made changes in 9 accounting policies out of which 2 accounting policies (Sr. No. 3(a) and 6(a) of point no. 43(j) of Note 26 of the financial statements) resulted in financial impact of Rs.0.01 crore and Rs.7.10 crore respectively (refer no. 26 point no. 43(j) of the financial statements).

(ii) Income from Operations and Profitability

The total operating income of your Company for the financial year 2017-18 was reported at Rs.4075.42 crore. While the overall Profit before Tax (PBT) for the year was Rs.1090.50 crore, the Profit before tax (excluding other income, prior period adjustment, extraordinary and exceptional items) was Rs.992.40 crore. The Profit after Tax(PAT) was Rs.799.06 crore (Rs.841.81 crore in the previous year).

(iii) Non-Performing Assets

In order to comply with the prudential guidelines for Non-Performing Assets (NPA) under the Housing Finance Companies (NHB) Directions, 2010, as amended from time to time, your Company has taken various precautionary measures like regular monitoring of Default and NPA position by the management and its review by the Default Monitoring Resolution Committee (DMRC) both at Head Office and Regional Office level/ Committee of Board and Board of Directors periodically. The DMRC and Committee for Review of NPAs met for 11 and 6 times respectively during the financial year 2017-18. During meetings of Committee to Review of NPA, Regional Chief from 10 Regional Offices were invited for giving detailed presentation with respect to default/ NPA cases of their respective regions and necessary remedial steps/ actions, wherever required, are taken for resolution of default/ NPA cases.

As at the end of the financial year ended 31^st March, 2018, HUDCO reported Gross NPA and Net NPA of Rs.3127.47 crore and Rs.674.63 crore, which constituted 6.28% to total loan portfolio and 1.42% to net loan outstanding respectively.

Further, in terms of Hon’ble Madras High Court orders, account of M/s RKM Powergen Private Limited with total outstanding amount of Rs.482.57 crore has not been considered as NPA. The Company did not recognize any income on above account in its books of accounts during the financial year and the necessary provisioning as required under the NHB Directions has been created.

Total provisioning made towards NPA as on 31^st March, 2018 stands at Rs.2692.87 crore which includes Rs.284 crore made as an additional provisioning to meet unforeseen contingencies (in which an amount of Rs.193.03 crore has been earmarked with respect to RKM).

As on 31^st March, 2018, HUDCO’s total loan book constitutes 93% of loan to the Government Agencies and 7% to the private Sector. In the case of Government Sector, the Net NPA is 0.00% indicating reasonably good asset quality. Whereas, in Private Sector, the Net NPA is 52.95% of the net loan outstanding of the private sector. HUDCO is not making any fresh sanctions to the private sector, since, March, 2013.

During the financial year 2017-18, with the continuing prudent policies of management and its proactive approach, Project Loan defaults has been reduced to the tune of Rs.1121.19 crore i.e. 18.45% from the level of Rs.6078.14 crore as on 31^st March, 2017. As on 31^st March, 2018, loan overdue to Net Loan Assets ratio was 13.76% as against MoU target of 15%.

(iv) Resources Mobilization

During the financial year 2017-18, the company mobilized Rs.4,655 crore through Taxable, Unsecured, Redeemable, Nonconvertible bonds. HUDCO also availed refinance of Rs.1,000 crore from National Housing Bank (NHB) under its Rural Housing Fund Scheme. The company also mobilized, one year USD denominated foreign currency loans from Indian banks, aggregating to Rs.600.15 crore (USD 93.50 mn), in respect of which the Interest rate & Currency risks were hedged through Interest rate swap and an option structure, respectively. Further, an amount of Rs.63.87 crore (including renewals) was also mobilized through HUDCO Public deposit scheme during the financial year 2017-18. As on 31^st March, 2018, HUDCO’s borrowings (long term) to Net worth, stood at 3.02 times as against 2.83 times as on 31^st March, 2017. The details of long term funds mobilized by the Company during the Financial Year 2017-18, are as under:

(Rs. In Crore)

S. No.	Source / Mode of funding	FY 2017-18	FY 2016-17
1.	Taxable Unsecured Redeemable Non-Convertible Bonds	4655.00	3865.00
2.	Refinance from NHB	1000.00	1000.00
3.	FCTL/FCL from Banks	600.15	-
4.	HUDCO Public Deposit Scheme	63.87	306.49
	Total:	6319.02	5171.49

The Company during the financial year 2017-18, to meet its short term fund requirement from time to time, also raised an amount of Rs.6,875 crore through Commercial Paper(s) and Rs.1500 crore (USD 235.03 Mn) through fully hedged Foreign currency loans from Indian Banks. As on 31^st March, 2018, an amount of Rs.2500 crore and Rs.1,500 crore was outstanding against Commercial Paper(s) and Foreign currency loans, respectively, which have since been repaid on the respective maturity date(s), as per the terms of borrowings.

As on 31^st March, 2018, the Company also had approved Cash Credit/ Working Capital Demand Loan limits of Rs.6,720 crore for availment from various banks for its day-to-day operations. Against these limits, the Cash Credit facilities/ Working Capital Demand Loan(s) availed and outstanding as on 31^st March, 2018 was Rs.2364.52 crore. With this, funds raised through short term sources aggregated to Rs.6364.52 crore, comprising of Commercial Paper(s) of Rs.2500 crore, Foreign currency loans of Rs.1500 crore and Cash Credit facilities/ Working Capital Demand Loan(s) of Rs.2364.52 crore.

Accordingly, total funds mobilized during the financial year 2017-18 from various sources amounted to Rs.12,683.54 crore, which included Rs.6319.02 crore through long term sources and Rs.6364.52 crore through short term sources.

(v) Credit Rating

The domestic debt instruments of the Company continued to enjoy ‘AAA’ rating (stable : outlook) - the highest rating assigned by three Credit rating agencies, namely, M/s India Rating & Research Pvt. Limited (IRRPL), M/s CARE Ratings & M/s ICRA Limited.

(vi) Cost of Market Borrowings

The overall weighted average incremental cost of market borrowing for the funds raised through Taxable Bonds during the financial year 2017-18 was 7.52% p.a. The weighted average incremental cost of borrowing through taxable bonds, worked out to 1 (one) bps lower than the Reuters benchmark for ‘AAA’ rated Corporate Bond of equivalent maturity as on 31^st March, 2018. As a result, the Company was able to provide long-term finance for various Housing and Infrastructure projects at competitive rates.

(vii) Redemption and Pre-payment (excluding the borrowings availed and repaid during the same financial year)

During the financial year 2017-18, the Company repaid a total sum of Rs.3,433.74 crore. This included repayment of Rs.506.30 crore on account of long term bonds, Rs.65.64 crore on account of foreign currency loans, Rs.1000.10 crore on account of loans from Banks and Financial Institutions, Commercial Paper(s) of Rs.1,500 crore and Public deposits of Rs.361.70 crore matured/paid during the year.

The company continues to maintain its impeccable track record of servicing its debt in time.

(viii) Unclaimed amount under HUDCO Bonds

Bonds amounting to Rs.6,98,89,541.11 (inclusive of interest amounting to Rs.4,78,89,541.11) in respect of 1935 bondholders remain unpaid as on 31^st March, 2018 as the same have not been yet claimed by the investors.

The details of amount remaining unpaid are as under:

Financial Year	Principal		Interest		Total Amount (Rs.)
	Amount (Rs.)	No. of Bondholder	Amount (Rs.)	No. of Bondholder
2015-16	1,40,00,000	10	2,54,59,796.12	1237	3,94,59,796.12
2016-17	1,20,00,000	9	5,11,87,255.72	1668	6,31,87,255.72
2017-18	2,20,00,000	10	4,78,89,541.11	1925	6,98,89,541.11

In respect of the above unclaimed Bonds, the Bond holder(s) have been requested from time to time through email/letter, etc., for submission of requisite documents for claiming the amount of Principal/Interest, as may be due in their respective case(s).

In respect of Bonds, the Company in terms of section 125 of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 notified on 5^th September, 2016 is presently transferring unclaimed principal and/ or interest, or both (if any), which are paid on due dates as per the terms of the Bonds, after 7 years from the maturity date of the Bonds to Investor Education and Protection Fund (IEPF).

During the financial year 2017-18, no amount become due for transfer to Investors Education and Protection Fund (IEPF) on account of Bonds, as per the provisions of Companies Act. Further, there were no bonds which have been claimed but remained unpaid as at end of the financial year.

(ix) HUDCO Public Deposit Scheme

HUDCO, being a Housing Finance Company registered with National Housing Bank (NHB) is governed by the provisions of Housing Finance Companies (NHB) Directions, 2010 relating to Public Deposits.

During the financial year 2017-18, HUDCO has mobilized deposits of Rs.63.87 crore (including renewals) from 702 depositors and an amount of Rs.361.70 crore was matured/paid to 1241 depositors. The total amount outstanding under HUDCO Public Deposit Scheme was Rs.626.60 crore from 2569 depositors as on 31^st March, 2018.

Keeping in view the competitive environment, the Company has decided to discontinue accepting/ renewing Public Deposit under the Public Deposit Scheme w.e.f. 1^st July, 2019. Further, the maximum period for which deposits shall be accepted (upto 30^th June, 2019) has also been curtailed to 5 years as against maximum deposit acceptance period of 7 years available earlier. However, redemption of deposits already taken shall be made on due date(s).

(x) Unclaimed amount under HUDCO Public Deposit Scheme

As on 31^st March, 2018, deposit(s) amounting to Rs.1,61,80,921/- (inclusive of Principal and Interest) from 60 depositors’ remains unclaimed.

In respect of unclaimed Deposits, the Deposit holder(s) have been intimated through email/ letters regularly with a request to claim the amount matured or renew the deposits. During the financial year 2017-18, an amount of Rs.1,19,680/- remaining unclaimed for more than seven years from the date of maturity was transferred to ‘Investor Education and Protection Fund’ (IEPF), as per the provisions of the Companies Act, 2013 and rules made thereunder.

(xi) Deployment of Resources at the close of the year

At the close of the financial year 2017-18, the total resources of your company stood at Rs.48930.15 crore, which includes, Equity Share Capital amounted to Rs.2,001.90 crore, Reserves & Surplus stood at Rs.7819.84 crore, Loans from Financial Institutions, Commercial Banks, Multilateral Institutions and Market Borrowings through Bonds and Commercial paper accounted for Rs.37408.02 crore, Deferred Tax Liabilities (Net) amounted to Rs.276.09 crore and other liabilities & provisions stood at Rs.1424.30 crore. These funds were deployed as Long/Short Term Loan & Advances of Rs.47154.05 crore, Fixed Assets(net of depreciation) of Rs.105.34 crore (including capital work-in-progress), Investments of Rs.368.52 crore, Cash & Bank Balances of Rs.222.34 crore and other assets of Rs.1079.90 crore.

8. RISK MANAGEMENT IN HUDCO

Your Company, being a Housing Finance Company is exposed to various types of risks like credit risk, operational risk, liquidity risk, market risk and foreign currency risk. Your Company is fully committed to manage these risks in an effective and proactive manner, for which HUDCO has in place a Risk Management Policy and Operating Manual in line with its objectives covering both the internal and external environment.

With a view to minimize the impact of various risks to which your Company is exposed to, your Company has in place a Board level Committee namely ‘Risk Management Committee’(RMC) headed by Chairman & Managing Director which reviews various suggestions/ recommendations/reports and action taken by three sub-committees namely:

- Assets & Liabilities Management Committee (ALCO);

- Credit Risk Management Committee (CRMC); and

- Operational Risk Management Committee (ORMC)

The Assets & Liabilities Management Committee (ALCO) and Credit Risk Management Committee (CRMC) are headed by Director (Finance) and the Operational Risk Management Committee (ORMC) is headed by Director (Corporate Planning). The recommendations of the Risk Management Committee are submitted to the Board of Directors.

HUDCO has effective Assets and Liabilities Management system. ALCO reviews the risks relating to Assets and Liabilities and ensures management of mismatches through liquidity gap analysis, interest rate sensitivity analysis as per NHB guidelines. It is ensured that the ALM risks, if any, are managed within the permissible limits. During the financial year 2017-18, 18 number of ALCO meetings were held.

The Credit Risk Management Committee (CRMC) oversees and ensures that the institution’s credit policies are complied with and the procedures are being consistently applied. The Operational Risk Management Committee (ORMC) oversees and ensures the implementation of operational risk framework to explicitly manage each and every source of operational risk including Technology risk, Employee risk, Customer risk, Capital Asset risk and External risk. During the financial year 2017-18, 4 number of CRMC and 4 number of ORMC meetings were held.

The various types of risks to which your Company is exposed to and the efforts taken towards their effective management and mitigation are as briefly described as under:

a) Credit Risk

For management of credit risks in an effective manner, Your Company has established a strong appraisal mechanism containing comprehensive appraisal techniques/ guidelines in order to ensure timely repayments of principal & interest amount.

b) Operational Risk

In order to mitigate the operational risk(s) associated with the operations of the organization both internal as well as external including technology risk, employee risk, capital asset risk, external risk, compliance risks viz. external fraud, legal risk, etc, your Company has established a strong reporting and monitoring mechanism.

Operational Risk Management framework covers managing each and every source of Operational Risk as a distinct risk to the institution’s safety and soundness. The requisite information on the Operational risk is obtained through quarterly reports of ‘Operational risk Factors and Key Risk Indicators (KRIs)’ from Regional Offices/ departments which are further reviewed and analyzed for mitigation of operational risk.

c) Liquidity Risk

To manage the liquidity risk, your Company has in place an effective Asset Liability Management System. The liquidity risk is being monitored with the help of liquidity gap analysis. Further, the funds are mobilized at competitive rates through various strategies viz. bonds, public deposits, term loans etc.

d) Market Risk

In order to mitigate the risks arising from fluctuations in interest rates and foreign currency exchange rates, your Company periodically reviews and determines its lending rates based on its cost of funds and the market scenario. Further, the interest rate risk is being monitored with the help of interest rate sensitivity analysis under the Asset Liability Management System.

e) Foreign Currency Risk

In order to mitigate the risks associated with Foreign Currency Fluctuations, your Company has a Foreign Currency Risk Management policy. Your Company has entered into hedging transactions to cover the exchange rate and interest rate risks. As on 31^st March, 2018, the total foreign currency liabilities are USD 380.923 million and JPY 2139.308 million and 92.62% of the foreign currency exchange rate risk is covered through hedging instruments.

9. JOINT VENTURE, ASSOCIATE AND SUBSIDIARY COMPANY

As on 31^st March, 2018, your Company has three Joint Venture(s) namely, Pragati Social Infrastructure & Development Ltd. (PSIDL), Shristi Urban Infrastructure Development Ltd. (SUIDL), Signa Infrastructure India Ltd. (SIIL), one Associate namely Ind Bank Housing Limited’ (IBHL) and do not have any Subsidiary Company.

HUDCO had invested Rs.2.14 crore in the Joint venture Companies {PSIDL - Rs.0.13 crore (26%), SUIDL- Rs.2.00 crore (40%) and SIIL- Rs.0.01 crore (26%)}. During the financial year 2015-16, HUDCO has decided to exist from joint venture companies by invoking the exit clauses, as the performance of these joint ventures was not found to be satisfactory. The Company is in the process of existing from these joint ventures.

In the case of IBHL, a associate Company, HUDCO has invested Rs.2.50 crore, being 25% of the paid up equity share capital. The investment in HUDCO books is appearing at Rs.1 only.

10. CONSOLIDATED FINANCIAL STATEMENTS

Pursuant to Section 129(3) of the Companies Act, 2013 and Accounting Standard 23 & 27, your Company has prepared Consolidated Financial Statement (CFS) in respect of only one Joint Venture Company namely M/s Shristi Urban Infrastructure Development Limited. However, consolidation in respect of other Joint Venture(s) namely, Pragati Social Infrastructure Development Limited (PSIDL), Signa Infrastructure India Limited (SIIL) and one Associate Company M/s Ind Bank Housing Limited’(IBHL) has not been considered during the financial year 2017-18, due to the reasons given below:

I. In case of PSDIL (JV), the Company has decided to exit from this entity and provided for full diminution in the value of investment.

II. In case of SIIL (JV), the Company has decided to exit from said entity and the figures not being material.

III. In case of IBHL (Associate), the Company has provided for full diminution in the value of investment.

Statement containing salient features of Financial Statements of Joint Venture and Associate Companies

Pursuant to Section 129(3) of the Companies Act, 2013, a Statement containing salient features of financial statements of Joint Venture and Associate Companies, has been given in the prescribed form AOC - 1, forms part of this Annual Report.

11. INTERNAL FINANCIAL CONTROLS POLICY AND INTERNAL AUDIT

Pursuant to Section 143(3)(i) of the Companies Act, 2013, your Company has put in place Internal Financial Controls for ensuring the orderly and efficient conduct of its business in adherence with the laid down policies and procedures, i.e., adherence to such policies, safeguarding assets of the Company, prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, which is commensurate with the operations of the Company.

Apart from, Internal Financial Controls Policy, your Company have prepared Risk Control Matrices and Flow Charts, which are helpful for the management to depict the process to initiate, authorise, process, record and report transactions; the points within the process at which misstatements could occur; and control activities that are designed to prevent or detect such misstatements, including providing greater transparency to segregation of duties. These diagrams also depict the relevant systems and Information Produced by the Entity (IPE).

The Operating efficiency of existing Internal Financial Controls have been reviewed and tested by a firm of Chartered Accountants and based on their testing and review, it has been found that IFC are working effectively and satisfactory during the year under review. As per the advice of the Chartered Accountants firm, appropriate steps have been taken for further strengthening the IFC.

Internal Audit

Your Company has a separate Internal Audit department headed by an Executive Director, who directly reports to the Chairman & Managing Director. During the year under review, an extensive internal audit of all the Regional Office(s) and major divisions of Corporate Office were carried out by in-house internal audit team and by outsourced Chartered Accountants firm.

The significant observations of the internal audit were periodically submitted to the Audit Committee and necessary action as directed by the Audit Committee is taken by the Internal Audit Department. Directions have also been issued to all concerned for adherence to the policies, guidelines and procedures and for timely compliance of the Audit Observations.

In order to give assurance to the management, Audit Committee has decided to introduce a comprehensive Risk based Audit Plan encompassing the activities carried out in the Company, so as to evaluate risks in its operations and strategic activities, for which necessary plan alongwith proposed remedial action and/ strategies based on the risks to which HUDCO is being exposed to, is being formulated.

Further, to strengthen the Internal Audit Control System and to have systematic and regular approach to evaluate and improve the controls, governance processes, risk management, etc., the Audit Committee advised, to appoint Chartered Accountants for carrying out the Audit of Regional Offices of the Company. The reports of these, Chartered Accountant firms would be analysed & scrutinized by Internal Audit Department of the Company with regard to various applicable laws, guidelines and norms of the Company. The significant observations of the Internal Audit Department would continue to be put up to the Audit Committee for its review and approval.

12. HUDCO - AN ISO 9001:2008 CERTIFIED COMPANY

HUDCO has got certified as an ISO 9001:2008 for Quality Management for its full range of activities, mainly in project and retail financing services, resource mobilisation for funding, consultancy & joint ventures and research & training through HSMI, for optimising organisational efficiency and continual improvements of systems & processes.

13. HUMAN SETTLEMENT MANAGEMENT INSTITUTE (HSMI)

HUDCO’s, Human Settlement Management Institute (HSMI) is functioning as the Research & Training Wing of HUDCO and its activities are supported by a core group of qualified and experienced professionals from various disciplines. HSMI continued its efforts to provide capacity building to the professionals engaged in the Housing and Urban Development sector including international professionals, functionaries from HUDCO’s borrowing agencies as well as its own employees.

During the Financial Year 2017-18, a total of 23 Training Programmes have been conducted, imparting capacity building training to 902 professionals with a total of 4921 man-days as under:

a) 14 Capacity Building Programmes with emphasis on strengthening and working with State Public Agencies and Urban Local Bodies and supporting them for taking-up projects funded by HUDCO, in association with HUDCO Chair Institutions covering 522 professionals from Urban Local Bodies and other agencies, imparting training of 1119 man-days.

b) 3 fee based training programmes, 1 for Rail Land Development Authority (RLDA) Officers sponsored by NAREDCO and two international programmes fully sponsored by the Ministry of External Affairs, Government of India under its ITEC programme covering 73 officers/ professionals imparting training of 2283 man-days.

c) 6 in-house training programmes for HUDCO officers, in the discipline of Law, Finance, and Projects with participation of 307 officials imparting training of 1519 man-days.

During the year under review, HSMI under its collaborative research & development activities organized 11 research seminars for presentation of research study reports and 5 research studies were completed. Cumulatively, out of 35 research projects sanctioned during the period from 2012-2017 under HUDCO R&D Policy, a total of 19 research projects have been completed so far. Further, as part of HUDCO Chair activities, HUDCO’s HSMI supported 18 reputed institutions to undertake research and training activities in the habitat sector.

As part of HUDCO Best Practices Awards to improve the living environment in the Habitat Sector, 10 ‘Best Practices Awards’ and 6 Certificates of Appreciation were given to agencies during the year, for undertaking unique/novel projects/schemes after recognising their potential for replication and adaptation by other agencies in the Country.

The Ministry of Housing and Urban Affairs has identified HSMI as Anchor Institution for carrying IBSA-HS activities as well as one of the Nodal Resource Centre for undertaking various training and other activities for implementing action plan programmes of the Ministry. Besides, HUDCO, being an Associate Member of ClTYNET since 1993, HSMI has been engaged with CITYNET through research and training activities. HUDCO has also established an India chapter of CITYNET, so that more Indian cities could benefit from HUDCO’s vast experience in the area of common interest.

14. HUMAN RESOURCES

Your Company has a high performing and engaged workforce equipped to deliver the results. To ensure their constant upgradation of skills and knowledge base, capability development programmes were organized in various strategic, functional and behavioural areas for the employees through in-house training institute as well as other institutes of prestige. The Company has an effective Performance Management System to identify and develop talent and also reward for their performance achievement through set KRAs and goals. Your Company maintains cordial relations with employees at all levels.

As on 31^st March, 2018, HUDCO has a total strength of employees as 869 against 875 in the previous year.

Representation of Women Employees

As on 31^st March, 2018, HUDCO had 253 women employees, representing 29 % of the total workforce. There is no discrimination of employees on the basis of gender.

Pay Revision

The Ministry of Housing and Urban Affairs vide its letter no.A-42012(12)1/2017-M-UD(E-9031298) dated 25^th January, 2018 has issued the Presidential Directive to implement the Pay Revision of Board level and below Board level Executives and NonExecutives of HUDCO w.e.f. 1^st January, 2017, for a period of three years as per DPE guidelines contained in its OM. Nos.W-02/0028/2017-DPE(WC)-GL-XIII/17 dated 3^rd August, 2017 and W-02/0028/2017-DPE(WC)-GL-XIV/17 dated 4^th August, 2017. Accordingly, pay scales of Board level and below Board level Executives and Non-Executives have been revised with effect from 1^st January, 2017 as per guidelines issued by Department of Public Enterprises (DPE) and the total financial implication towards the same is Rs.27.89 crore. It will help in boosting the morale of the employees and sustain high performance in future.

15. VIGILANCE

As per the directions of CVC from time to time, the Corporate Vigilance Department (CVD) continued to strive for improving the systems and procedures and strengthen the mechanism to ensure pre-emptive actions and advising reformatory measures in the possible areas of corruption/financial irregularities as a part of preventive vigilance such as e-procurements; e-payments; creating general awareness amongst the officials; adoption of Integrity Pact wherever applicable; digitalisation of system/process to avoid manual intervention, etc.

Vigilance Awareness Week was observed by the Corporation from 30^th October to 4^th November, 2017 in the Head Office as well as at all the Regional Offices. During the week, various programmes were organized not only at the premises of 21 Regional Offices but also in schools & colleges and other prominent places in the city within jurisdiction of each Regional Office throughout the country. The programmes were the theme centric declared by the CVC i.e. “My Vision - Corruption free India”. During the Week, Dr. M. Ravi Kanth, Chairman & Managing Director and Shri Ajay Mishra, Chief Vigilance Officer, released a pamphlet on ‘Do’s and Don’ts on preventive vigilance’. This was distributed amongst the officials of HUDCO Head Office and the Regional Offices throughout the country. During the year, routine and specific inspection of selected Regional Offices was conducted which included random check of activities of Regional Offices and specific examination of certain cases.

Shri Ajay Mishra, IDAS took over the charge of Chief Vigilance Officer, HUDCO on 4^th September, 2017 and at present the main thrust of CVD is being laid on completion of long pending departmental proceedings expeditiously. The emphasis of CVD is also on prompt action on the complaints received.

16. OFFICIAL LANGUAGE

In compliance of Government of India’s policy on Official Language, your Company has taken various initiatives for promotion and implementation of use of ‘Hindi’ as Official Language in all of its offices. Your Company has received ‘Rajbhasha Kirti Puraskar’ on 14^th September, 2017 from the Hon’ble President of India, for outstanding work in Hindi. Your Company Celebrated ‘Rajbhasha Pakhwara’ in its Head Office and all Regional Offices spread throughout the country in the month of September wherein several workshops and Hindi competitions were organized.

During the year Parliamentary Committee on Official Language inspected our Ahmedabad Regional Office and appreciated the work done towards promotion of official language. Further a team of Hindi Officials from Ministry of Housing and Urban Affairs inspected HUDCO Head Office and were quite happy with the work being done for the progressive use of Hindi.

During the year under review, two meetings of the Nagar Rajbhasha Karyanvyan Samiti (NARAKAS)/Town Official Language Implementation Committee (TOLIC) were held under the Chairmanship of Chairman & Managing Director, HUDCO. 54 PSUs located at Delhi participated in these meetings. Emphasis is being given on the promotion of official language as per norms set by the Department of official language through seminars, technical Hindi training on computer, quarterly progress report, workshop, Kavi Sammelans, publication of magazines etc.

17. COMPLIANCES OF VARIOUS ACTS/ GUIDELINES Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

In line with provisions of ‘Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, HUDCO has in place an ‘Internal Complaints Committee’ for redressal of complaint(s) against sexual harassment of women employees, which is headed by a senior level woman official of the Company and includes an NGO representative as one of its members. Anti-sexual harassment stance of the Company is also outlined in HUDCO (Conduct, Discipline and Appeal) Rules.

During the year under review, no complaint of sexual harassment was received by the Company.

Public Grievance Redressal Mechanism of HUDCO

The top management plays a leading role in creating organization wide focus for the customers. In accordance with the guidelines issued by the Government of India and National Housing Bank (NHB), HUDCO has an appropriate Grievance Redress Mechanism, which is available on HUDCO’s website.

Implementation of Micro, Small & Medium Enterprises (MSME) Policy

The Government of India has notified a Public Procurement Policy for Micro and Small Enterprises vide Micro and Small Enterprises (MSEs) Order 2012, which has been duly followed in HUDCO.

During the year 2017-18, HUDCO made total procurement of Rs.4.78 crore from MSEs (including MSEs owned by SC/ST entrepreneurs), which constitute 35.15% of total annual procurement made by HUDCO.

Right to Information Act

In order to promote transparency and accountability, Your Company has implemented the provisions of the RTI Act, 2005 in its true letter and spirit and an appropriate mechanism has been set up in the Company with a dedicated centralized RTI Cell to provide information to the citizens under the provisions of this Act. During the year 2017-18, 593 applications and 57 appeals were received including 19 application and 3 appeals of previous years, out of which 563 application and 53 appeals were disposed off and 30 numbers of applications and 4 appeals were carried forward, which were subsequently disposed off in the financial year 2018-19 as per Act.

HUDCO has complied with all the provisions of the RTI Act, 2005 since the enactment of the Act in 2005.

18. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134 (5) of the Companies Act, 2013, it is confirmed that:

a) in preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same;

b) such accounting policies have been selected and applied consistently (except for changes in accounting policies as disclosed in the Note to Accounts to the Financial Statements) and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with provisions of Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the annual accounts have been prepared on a ‘going concern’ basis;

e) the Company has laid down Internal Financial Controls to be followed and such internal financial controls are adequate and were operating effectively; and

f) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.

19. MANAGEMENT DISCUSSION & ANALYSIS REPORT

Pursuant to Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, Management Discussion & Analysis Report for the year under review, is annexed and forms part to this report.

20. CORPORATE GOVERNANCE

Pursuant to Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and DPE’s Guidelines, a separate section on ‘Corporate Governance’ alongwith certificate from Grover Ahuja & Associates, Company Secretaries, confirming compliance of the conditions of Corporate Governance as stipulated in the SEBI (LODR) Regulations, 2015 and DPE guidelines alongwith management reply to the observation(s) is annexed and forms part to this report. The report also includes certain sections which are required to be given as per provisions of the Companies Act, 2013.

21. SECRETARIAL AUDITORS & AUDIT REPORT

Pursuant to section 204 of the Companies Act, 2013, M/s Grover Ahuja & Associates, Company Secretaries in practice, were appointed as Secretarial Auditors to conduct Secretarial Audit for the financial year 2017-18 and they have submitted their report thereon. The copy of the Secretarial Audit Report alongwith Management reply on the observations thereon is annexed and forms part to this report.

22. BUSINESS RESPONSIBILITY REPORT

Pursuant to Regulation 34(2) of the Securities and Exchange Board of India (Listing Obligations and Disclosures Requirement) Regulations, 2015, as amended, a separate section titled ‘Business Responsibility Report’ is annexed and forms part to this report. The ‘Business Responsibility Report’ is also available on the website of the Company at www.hudco.org.

23. DIRECTORS AND KEY MANAGERIAL PERSONNEL

HUDCO, being a Government Company, the power to appoint Directors on its Board is vested with the President of India acting through the Administrative Ministry i.e. Ministry of Housing and Urban Affairs, Government of India.

The term of appointment of Shri Nand Lal Manjoka (DIN: 06560566) who was appointed as Director(Corporate Planning) on the Board of HUDCO for a period of five years w.e.f 11^th April, 2013 by the Administrative Ministry vide its office order dated 10^th April, 2013 has been extended by the Ministry vide orders dated 11^th April, 2018 for the period with effect from 11^th April, 2018 and till 30^th November, 2018 i.e. till the date of his superannuation, or until further orders, whichever is the earlier.

Shri Amrit Abhijat (DIN: 03022727), Joint Secretary (HFA), Ministry of Housing and Urban Affairs has been appointed as Part-time Official Government Director vice Shri Rajiv Ranjan Mishra with effect from 1^st June, 2018 on the Board of the Company by the Administrative Ministry vide order No. 42021/39/2017-AA (E-9026701) dated 1^st June, 2018.

In accordance with the provisions of Section 152 of the Companies Act, 2013, and Articles of Association, Smt. Jhanja Tripathy (DIN: 06859312), Joint Secretary & Financial Advisor, Ministry of Housing and Urban Affairs, Part time official (Non Executive) Director, being longest in office among the Directors who are liable to retire by rotation, retires by rotation and being eligible, offers herself for reappointment at the ensuing Annual General Meeting.

HUDCO, being a Government Company, the appointment and performance evaluation of Directors are done by the Administrative Ministry.

All the Part-time Non-official Independent Directors have given declarations as required under Section 149(6) of the Companies Act and Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 as to their Independence.

None of the Directors of your Company are related to each other and based on the confirmations received from them, none of them are disqualified for being appointed/ reappointed as directors in terms of Section 164 of the Companies Act, 2013.

During the year under review, there was no change in Key Managerial Personnel and the detail of KMP was as under:

Sl. No.	Name of Key Managerial Personnel	Designation
1.	Dr. M. Ravi Kanth	Chairman & Managing Director
2.	Shri N. L. Manjoka	Director - Corporate Planning
3.	Shri Rakesh Kumar Arora	Director - Finance & Chief Financial Officer
4.	Shri Harish Kumar Sharma	Company Secretary

24. AUDITORS & AUDITORS REPORT

M/s Prem Gupta & Co., Chartered Accountants (Firm Reg. No. 000425N), New Delhi, appointed as Statutory Auditors’ by the Comptroller and Auditor General of India (C&AG) under section 139 of the Companies Act, 2013 for the financial year 2017-18, had conducted the audit of the Financial Statements (both Standalone & Consolidated) and submitted their report thereon. The comments of the Statutory Auditors on the financial statement alongwith management reply thereto are annexed and forms part of the report.

The Comptroller and Auditor General of India (C&AG) vide their letter dated 24^th July, 2018, has appointed M/s Prem Gupta & Co, Chartered Accountants, New Delhi as Statutory Auditors of your Company for the financial year 2018-19.

Comments of Comptroller & Auditor General of India (C&AG) of India

The Comptroller and Auditor General of India (C&AG) vide their letter(s) both dated 3^rd August, 2018, has given ‘NIL Comments’ on the audited financial statements (standalone & consolidated) for the financial year 2017-18 under section 143 of the Companies Act, 2013 and the same are annexed hereto forming part of the Annual Report.

25. DISCLOSURES

(i) Corporate Social Responsibility Committee

Your Company has in place ‘Corporate Social Responsibility’ Committee of the Board in compliance with the provisions of Section 135 of the Companies Act, 2013. As on 31^st March, 2018, the Committee consists of four member(s) namely: Dr. M. Ravi Kanth as Chairman, Shri Mukesh M. Arya, Prof. Chetan V. Vaidya and Shri Amarishkumar G. Patel. The CSR Committee was reconstituted on 19^th April, 2018 and Dr. Sudip Kumar Nanda was appointed as a member of the Committee.

The Committee is headed by Chairman & Managing Director and the remaining four members are Part-time Non-official Independent Directors. The constitution of the Committee is in compliance with the provisions of the Companies Act, 2013.

Your Company has in place Corporate Social Responsibility Policy (CSR Policy) which inter-alia lays down the guidelines and the activities to be undertaken by the Company and the same has been put on the Company’s website www.hudco.org.

The Company has not been able to spend the whole of the amount earmarked for CSR activities during the year 2017-18; the reasons for the same are given in the Annual Report on CSR activities. The Annual Report on CSR activities is annexed hereto forming part of the Annual Report.

(ii) Board and its Committees

The detailed composition of the Board and its various Committees, their scope and terms of reference, number of meetings of the Board/Committees held during the year and attended by directors/members of the Committees alongwith other particulars are given in the Report on Corporate Governance Report and the same is annexed and forms part to this report.

(iii) Particulars of Loans, Guarantee or Investments

Your Company being a Housing Finance Company, the provisions of Section 186 of the Companies Act, 2013 regarding disclosure with respect to loan made, guarantee given or securities given in the ordinary course of its business are not given, as the Housing Finance Companies are exempted from the same.

Further details of investments made by the Company covered under section 186 of the Act are disclosed in the financial statements for the year 2017-18.

(iv) Extract of Annual Return

Pursuant to Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013, the extract of Annual Return as at 31^st March, 2018 in the prescribed format is annexed and forms part to this report. The same is also available on the website of the Company at www.hudco.org.

(v) Energy Conservation, Technology Absorption and Foreign Exchange Earning & Outgo.

a) Conservation of Energy

Your Company being a Housing Finance Company is not engaged in any manufacturing operations and thus its present area of operations are not energy intensive.

Your Company being energy conscious has taken lot of initiatives/ steps with a view to conserve energy both at its Head Office and its Regional Offices such as replacement of high power consuming equipments with low energy consuming equipments, replacement of CFL with LED lights and maximum use of natural lights in its day to day operations. Further, Company has also installed solar panels with a view to conserve energy. All these efforts have resulted in power saving both in terms of its usage and cost.

b) Technological Absorption

Your Company being a Housing Finance Company having no manufacturing operations, therefore, has not absorbed any technology indigenous/ imported. Further, no technology was imported during the last three years.

Your Company has formulated a Research & Development (R&D) Policy in line with the guidelines issued by the Department of Public Enterprises (DPE) vide OM dated 20^th September, 2011. As per R&D guidelines of DPE, an amount of Rs.4.21 crore has been earmarked for the financial year 2017-18, out of which, an amount of Rs.1.04 crore has been spent on R&D activities and balance amount of Rs.3.17 crore has been kept as non-lapsable budget.

c) Foreign Exchange Earnings and Outgo

During the year under review, the inflow on account of Foreign Exchange Transaction was Rs.2.32 crore (previous year Rs.2.02 crore) while, Foreign Exchange outgo/ expenditure was Rs.6.04 crore (previous year Rs.6.06 crore).

26. GENERAL

(i) The provisions of Section 197 read with rules on Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are not applicable to your Company as the Ministry of Corporate Affairs vide notification dated 5^th June, 2015 has exempted Government Companies from compliance of Section 197 with respect to the remuneration drawn by employees/ directors, accordingly, the same have not been given;

(ii) In compliance with the provisions of Section 188(1) of the Companies Act, 2013, details of Related Parties Transactions entered into during the year under review are given in the financial statements;

(iii) There is no change in the nature of business of the Company during the year;

(iv) No significant and material orders were passed by the regulators or courts or tribunals which impact the going concern status and Company’s operations in future;

(v) Board of Directors of HUDCO are appointed by the President of India through the Administrative Ministry and their performance is being evaluated by the Ministry itself, hence the requirement of carrying out formal annual evaluation by the Board of its own performance and that of its committees and individual directors is not applicable as per Ministry of Corporate Affairs notification dated 5^th June, 2015;

(vi) Company’s Policy on Directors’ appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Section 178(3) are not applicable to your Company as per notification dated 5^th June, 2015 issued by the Ministry of Corporate Affairs notification;

(vii) No material case of frauds by the Company or on the Company by its Officers or Employees has been reported by Auditors under Section 143(12) of Companies Act, 2013, hence, disclosure under section 134(3)(ca) of the Act, is not required;

(viii) The Board of Directors of your company has laid down Code of Conduct and Ethics for all Board members and Senior Management Personnel and the same is placed on the Company’s website. All the Board members and Senior Management personnel have affirmed compliance with the Code. The copy of the declaration made by Chairman & Managing Director is annexed and forms part of this report; and

(ix) As HUDCO, is a Housing Finance Company registered with National Housing Bank(NHB), so, maintenance of cost records as specified by the Central Government under Section 148(1) of the Companies Act, 2013 is not required by the Company.

27. FUTURE OUTLOOK - MEDIUM AND LONG TERM STRATEGIES

Increasing the business volume and containing the level of NPA’s/defaults within an acceptable level should form part of the core strategy of HUDCO. HUDCO may adopt a business model on the lines of-“High Volume-Low Risk-Low Margin” in respect of Government/Public Sector operations to maintain its position as the major lender for social housing. HUDCO would also accord emphasis on supporting implementation of various Missions of Government of India. In this regard, HUDCO has set a target of supporting 1 million housing units every year so that by 2022 HUDCO’s total support to housing stock reaches 22 million units. Further, the main focus will be on enhancing the share of Housing sector from 40.82% in 2017-18 to 50% in 2022 so as to achieve a balance of 50%:50% for housing and infrastructure development by 2022. The strategies for promoting social housing and core infrastructure business would include propagation of HUDCO’s competitive lending terms to the States. HUDCO will support the Ministry (MoHUA) by contributing to the successful implementation of Government of India flagship programmes such as PMAY, development of 100 smart cities, Swachh Bharat Mission (SBM), Atal Mission for Rejuvenation & Urban Transformation-AMRUT, National Heritage City Development and Augmentation Yojna (HRIDAY), etc., both through technical support as well as funding opportunity. HUDCO will promote ‘inclusive growth’ in its operations through support to various Urban and Rural Missions including developmental support to ‘Aspirational Districts’ identified as backward by NITI Aayog. New opportunities in the emerging sectors shall also be explored. HUDCO will make efforts to explore the scope of consultancy services which would enhance the fee-based income. Efforts are being done to implement comprehensive and integrated ERP system in HUDCO during the year 2019-20 which would help in comprehensive data management. Further, Human Settlement Management Institute (HSMI), the research and training wing of HUDCO would continue to focus on capacity building of housing and urban development personnel and also propagate the best practices in the sector.

HUDCO continues to be among the leading institutions in the public sector supporting the housing and infrastructure development initiatives in the country. With the various flagship programmes of Government of India in the Housing and Urban Development sector being in active implementation mode, it is only logical that HUDCO’s role, contribution and associated financial strength would continue to strengthen in the coming years. Its ability to provide comprehensive support for technical appraisal/ scrutiny, taking up site-inspection, wherever required, and providing loan assistance as viability gap funding to States and their agencies to meet the State/ ULB share of project cost together make it a unique institution for comprehensive support for programme implementation.

28. STATUTORY AND OTHER INFORMATION REQUIREMENT

The various information, required as per the Companies Act, 2013, Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and DPE guidelines are annexed to this report are as under:

Particulars	Annexure
Management Discussion & Analysis Report	1
corporate Governance Report	2
Secretarial Auditors Report and Management Reply to Corporate Governance and Secretarial Audit Report	3
Business Responsibility Report	4
Independent Auditors Report and Management Reply to the comments/ observations thereon	5
Comments of Comptroller & Auditors General of India	6
Annual Report on CSR Activities	7
Extract of Annual Return	8
Declaration of the Code of Conduct	9

29. ACKNOWLEDGEMENTS

Your Directors wish to place on record their gratitude for the co-operation, support and guidance of the Government of India, especially the Ministry of Housing and Urban Affairs, Ministry of Rural Development, Ministry of Finance, National Housing Bank, Regulatory and Statutory Authorities.

The Directors also acknowledge the support, faith reposed in the Company by all its stakeholders, bondholders, public deposit holders, the State Governments, Housing Boards, Development Authorities, Municipal/Local Bodies and other Borrowers.

Your Directors also thanks the BSE Limited, National Stock Exchange of India Limited, National Securities Depository Limited, Central Depository Services Limited, Credit Rating Agencies, Registrar & Transfer Agents and other agencies for their continued cooperation and support.

The Directors also thank the Comptroller and Auditor General of India, Statutory Auditors, M/s Prem Gupta & Co., Chartered Accountants, Secretarial Auditors, M/s. Grover Ahuja & Associates, Company Secretaries, for their valued guidance and support.

The Directors also expresses their appreciation for the dedication, commitment and significant contribution made by employees at all level in maintaining consistent growth of the Company.

For and on behalf of the Board of Directors

Sd/-

Dr. M. Ravi Kanth

Place : New Delhi Chairman & Managing Director

Date : 7^th August, 2018 (DIN:01612905)

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Mar 31, 2017

Dear Members,

The Directors are pleased to present their 47^th Annual Report along with audited financial statement(s) for the year ended 31^st March, 2017.

1. FINANCIAL RESULTS

The summarized financial performance, for the year ended 31^st March, 2017 is as under:

(Rs in crore)

Particulars	2016-17	2015-16
Revenue from Operations	3498.85	3204.81
Other Income	85.99	97.39
Total Revenue	3584.84	3302.20
Finance cost	1986.32	1907.37
Other expenses	175.43	193.05
Provision and contingencies (Net)	297.33	129.20
Total expenditure	2459.08	2229.62
Profit before exceptional items and tax	1125.76	1072.58
Exceptional items	0.26	5.16
Prior period adjustments	48.98	(0.64)
Profit before tax	1175.00	1077.10
Less:
Current Tax	389.80	314.00
Deferred tax	(60.41)	(21.22)
Prior period tax adjustments	3.80	0.53
Profit after tax	841.81	783.79
Balance from previous year	18.50	37.00
Total amount available for appropriation	860.31	820.79
Less : Appropriation
Interim Dividend	100.01	-
Proposed dividend on equity shares	-	100.01
Tax on Interim dividend	20.36	-
Tax on Proposed dividend	-	20.36
Transfer to Special Reserve u/s 36(1)(viii) of Income Tax Act, 1961 and u/s 29C of NHB Act, 1987	284.50	240.00
Transfer to Debenture Redemption Reserve	439.83	439.83
Transfer to Welfare Reserve	3.47	2.04
General Reserve	-	0.05
Surplus carried forward to next year	12.14	18.50
Proposed dividend on equity shares	10.01*	-
Tax on Proposed dividend	2.04*	-
Surplus available after proposed Dividend of the current year	0.09	18.50
EPS (Basic/Diluted) (in Rs.)	4.21	3.92

* Your directors have recommended final divided of Rs.0.05 per equity share of Rs.10 each subject to approval of the shareholders in the Annual General Meeting. This is in addition to the interim dividend of Rs.0.50 per equity share already declared and paid in the month of March, 2017, thereby making the total dividend for the financial year 2016-17 to Rs.0.55 per equity share.

Further, in terms of revised Accounting Standards (AS), AS-4 “Contingencies and Events Occurring after the Balance Sheet date” as notified by the Ministry of Corporate Affairs, through amendments to the companies (Accounting Standards) Rules, 2016, the Company has not appropriated the proposed final dividend (including dividend tax) from the Statement of Profit & Loss.

Financial Performance:

The major highlights of the Company’s performance during the year under review are as under:

1) Posted Profit before Tax (PBT) of Rs.1175.00 crore (previous year Rs.1077.10 crore), recording a growth of 9.09%.

2) Posted Profit after Tax (PAT) of Rs.841.81 crore, highest ever since inception (previous year Rs.783.79 crore), recording a growth of 7.40%.

No material changes and commitments have occurred after the close of financial year affecting the financial position of the company and its state of affairs till the date of this report.

2. DIVIDEND

Your Company has a consistent track record of rewarding the shareholders for the last many years. The Company’s Dividend policy ensures that the amount in excess of its statutory commitments/provisions and immediate & foreseeable needs is rewarded to the shareholders by way of dividend in compliance with the provisions of applicable laws.

Your Company has paid an interim dividend of Rs.0.50 per equity share having face value of Rs.10/- each in March, 2017. Further, the Board of Directors of your company have recommended a final dividend of Rs.0.05 per equity share for the financial year 2016-17, which is subject to the approval of the shareholders at the ensuing Annual General Meeting, thereby making the total dividend for the Financial year 2016-17 to Rs.0.55 per equity share. The total dividend pay-out for the financial year 2016-17 will be Rs.110.02 crore excluding dividend distribution tax of Rs.22.40 crore.

3. SHARE CAPITAL

The Issued and Paid-up Equity Share Capital of the Company as on March 31, 2017 was Rs.2001.90 crore divided into 2,001,900,000 equity shares of Rs.10/- each against the Authorized Share Capital of Rs.2500 crore divided into 2,500,000,000 equity shares of Rs.10/each. Entire equity share capital of the Company was held by President of India through the then Ministries of Housing & Urban Poverty Alleviation (MoHUPA), Urban Development (MoUD) and Ministry of Rural Development (MoRD) in the ratio of 69.19%, 10.08% and 20.73% respectively. During the year 2016-17, there was no change in the shareholding pattern.

The Ministry of Housing and Urban Poverty Alleviation and Ministry of Urban Development have been merged and renamed as the Ministry of Housing and Urban Affairs (MoHUA) by the Government of India vide Gazette of India: Extraordinary notification dated 6^th July, 2017 and accordingly, the MoHUA will be the Administrative Ministry for HUDCO in place of erstwhile Ministry of Housing and Urban Poverty Alleviation (MoHUPA).

Further, during the year 2017-18, President of India through the then Ministry of Housing & Urban Poverty Alleviation has divested 20,40,58,747 equity shares of face value of Rs.10/- each constituting 10.19% of the total paid up equity share capital of the Company through an Initial Public Offer. After divestment, the shareholding of President of India has been reduced to 89.81% which is held through the MoHUA - 69.08% and MoRD - 20.73% respectively.

Unclaimed Shares

Your Company was a wholly owned Government Company as on 31^sl March, 2017, where entire paid up equity share capital was held by President of India. On disinvestment by the President of India, your Company obtained listed status on 19^th May, 2017. The details of the unclaimed shares / shares claimed and closing balance of unclaimed shares as on 30^th June, 2017 is as under

Particulars	Records/ No. of Shareholders	Shares
Opening balance as on 1st April, 2017	0	0
Add : shares transferred to suspense account on 18th May, 20171	15	3000
Less : claims received and shares transferred	6	1200
Closing Balance as on 30th June, 2017	9	1800

* Number of shareholders and shares transferred to Suspense Account due to failure of Corporate Action at the time of transfer of shares to the account of successful allottees in the Initial Public Offer of the Company.

4. INITIAL PUBLIC OFFER

Under the disinvestment programme of Government of India, your Company’s Initial Public Offer (IPO) for disinvestment of 10.193% of equity shareholding of Government of India, comprising of 20,40,58,747 equity shares of face value of Rs.10/-, opened for subscription on 8^th May, 2017 and closed on 11^th May, 2017. The equity shares were issued at a price of Rs.60/- per share (including premium of Rs.50/- per share), with a discount of Rs.2/- per share for Retail Investors and eligible employees of the Company.

The Initial Public Offer received overwhelming response from investors, as the issue received over 20 lakh applications and was over-subscribed to the extent of 79.60 times as per the bid book of BSE and NSE. The details of category-wise subscription received in the issue and shares allotted, was as under:

Category	Valid Shares received in each category	No. of Equity Shares available for allocation (as per Prospectus)	Unsubscribed portion of employee category (No of equity shares)	No. of Equity Shares available for allocation (including spill over from employee portion) and allotted
Qualified Institutional Buyers - Mutual Funds	1006538600	5004750	40769	5045519
Qualified Institutional Buyers - Mutual Funds & Others	5518527281	95090250	774603	95864853
Non Institutional Investors	9864089600	30028500	244613	30273113
Retail Individual Investors	702231600	70066500	570762	70637262
Employee Reservation	2238000	3868747	(1630747)	2238000
Total	17093625081	204058747		204058747

The equity shares were allotted by the company on 17^th May, 2017 and the shares of the Company were listed on the Stock Exchanges i.e. BSE and NSE on 19^th May, 2017.

As the present offer for sale of 20,40,58,747 Equity Shares was by the President of India acting through the then Ministry of Housing and Urban Poverty Alleviation (i.e. Selling Shareholder), hence the entire proceeds of Rs.1209.78 crore collected in the offer went directly to the Selling Shareholder i.e. the then MoHUPA, as such the Company did not received any proceeds from the offer.

5. MEMORANDUM OF UNDERSTANDING (MoU)

Your Company is likely to be accorded ‘Excellent’ Rating by the Department of Public Enterprises (DPE) for sixth year in a row, for its performance on the MoU parameters signed with the then Ministry of Housing and Urban Poverty Alleviation for the year 2016-17, as HUDCO has surpassed the ‘Excellent level’ as fixed in the MoU targets on all the 14 parameters assigned as per MoU.

The Company’s successive ‘Excellent’ MoU ratings have been made possible due to the diligent efforts put in terms of timely monitoring, right interventions by and guidance of the esteemed Management but this feat would not have fructified without the unrelenting & timely support provided by the then Ministry of Housing and Urban Poverty Alleviation from time to time which aided the company to tide over challenges faced during the year and achieve its targets.

6. OPERATIONS

(i) The year 2016-17 was a very challenging year because of the difficult economic and market scenario in various sectors, especially the financial sector. Against this background, it is a matter of great pride that HUDCO has achieved the highest ever loan sanctions since inception i.e. Rs.31,862 crore and the highest ever disbursements in the last 47 years i.e. Rs.9,095 crore, surpassing the MoU targets.

a) Since its inception in 1970 and till March 2017, HUDCO has sanctioned a total of 17,087 housing and urban infrastructure projects with a loan component of Rs.1,66,151 crore and has made a total disbursement of Rs.1,18,672 crore. HUDCO has sanctioned more than 16.49 million houses in the country in both rural and urban areas so far;

b) In respect of housing, during the year 2016-17, HUDCO has sanctioned 29 housing projects, with a loan amount of Rs.7,571 crore. In addition, HUDCO has also sanctioned a major housing scheme with a loan amount of Rs.361 crore for upgradation of 3,000 houses for rural poor households in Sikkim;

c) HUDCO is already one of the Central Nodal Agency for the Credit Linked Subsidy Scheme (CLSS) component of Pradhan Mantri Awas Yojna (PMAY) - Housing for All Mission to reach the prospective beneficiaries of the EWS, LIG. Now the scheme has been extended to the MIG segments of the society;

d) In respect of urban infrastructure, during the year 2016-17, HUDCO has sanctioned 149 projects, with a total loan amount of Rs.24,291 crore;

e) HUDCO has achieved all the targets as per Memorandum of Understanding for the financial year 2015-16 at the ‘Excellent level’ and thus gaining the full 100% score for all round performance. Based on the continued consistent performance, HUDCO is likely to be accorded ‘Excellent’ Rating by the Department of Public Enterprises (DPE) for sixth year in a row for the year 2016-17 as well;

During the first quarter of financial year ended 30^th June, 2017, Your Company has sanctioned a total loan of Rs.7048 crore and disbursed an amount of Rs.1005 crore which is 99.66% and 38.05% higher respectively as compared with the corresponding figures of first quarter of 2016-17.

(ii) Consultancy Initiatives

HUDCO has been involved in showcasing various facets of consultancy services, thereby contributing to the overall image building of HUDCO. Utilising its inherent strength of technical personnel, long experience and expertise in the fields of Architecture and Planning, a distinct thrust has been extended to the fee based consultancy.

As a part of business development initiative, HUDCO has executed an agreement in May, 2016 with Madhya Pradesh Housing & Infrastructure Development Board (MPHIDB), wherein HUDCO has been entrusted with another prestigious project - Preparation of Detailed Project Report for Housing Project Under Atal Ashray Yojana at Girgaon, Gwalior. Apart from above, HUDCO is working on projects like Preparation of DPRs for Market-cum-Office Complexes at various locations in Manipur from PDA Manipur; Affordable Housing in Siliguri Jalpaiguri Planning Area from SJDA; Vertical Housing Colony - Shehjar Apartments at Bemina, Srinagar from SDA, etc.

Activities with regard to Urban & Regional Planning include preparation of Development Plans in places like Khargone and Jhabua in the State of Madhya Pradesh and Jaigaon Planning Area in West Bengal.

HUDCO has been empanelled with Jharkhand Urban Infrastructure Development Company Ltd. (JUIDCO) to provide consultancy for preparation of Techno-Economic Feasibility Reports, Detailed Project Reports and providing Project Management Consultancy Services in the field of various Urban Services and Urban Infrastructure Projects under Urban Development and Housing Department, Govt. of Jharkhand.

HUDCO has offered for extending consultancy services to the Directorate of Town and Country Planning Department, Government of Himachal Pradesh for preparation of Regional Plans for the twelve districts of Himachal Pradesh.

(iii) HUDCO Design Awards 2016

In keeping with the tradition of improving the habitat conditions, especially of the urban poor, HUDCO had instituted HUDCO DESIGN AWARDS in 2012 to give recognition and felicitate innovative ideas and initiatives that contribute to make our cities inclusive, liveable and environmentally sustainable. HUDCO Design Awards 2016 was announced in October 2016 and received an overwhelming response from urban professionals across the country. HUDCO also sponsors HUDCO NASA Design Trophy each year to encourage and appreciate young architecture students. The Topic provided by HUDCO for 59^th HUDCO-NASA Design Trophy 2016-17 was “In-situ Slum Redevelopment with land as a resource”.

(iv) HUDCO Buildtech 2016

HUDCO organized HUDCO Buildtech 2016 - an exposition on cost effective and environmentally friendly building materials and technologies as a part of India International Trade Fair held from 14^th to 27^th November 2016 at Pragati Maidan, New Delhi. The exhibition was inaugurated by Shri Venkaiah Naidu Ji, the Hon’ble Union Minister of Housing & Urban Poverty Alleviation, Urban Development and Information & Broadcasting. A large scale display was put up for visitors in around 1166 Sqm. area in Hall No.5, Pragati Maiden, showcasing various HUDCO activities and areas of operation. The event, which also included a grand display of cost effective and environmentally friendly building materials and technologies, by way of construction of dwelling units by various building centers and HPL using pre-fab technologies, received much appreciation from the general public. Various State Governments like Gujarat, Chhattisgarh, Tamil Naidu and Rajasthan also participated in the exhibition on behalf of the then Ministry of Housing & Urban Poverty Alleviation.

(v) PMAY-Housing for all (PMAY HFA Urban), Deen Dayal Antyodya Yojna - National Urban Livelihood Mission: Shelter for Urban Homeless (Day-Nulm Suh); 10% Lumpsum Scheme for North-Eastern Region; JNNURM Jawaharlal Nehru National Urban Renewal Mission (JNNURM) program that was granted extension upto March 2017 for completion of on-going projects has been closed as on 31^st March 2017, while the Rajiv Awas Yojna was subsumed with PMAY-HFA (Urban). During the year 2016-2017, HUDCO has appraised 10 revised BSUP / IHSDP projects with Project Cost of Rs.243.81 crore and Central Share of Rs.137.92 crore for construction of 12855 Dwelling Units in 3 Cities / Towns.

HFA Cell is also involved in inspection of Night Shelters under the Deen Dayal Antyodaya Yojna - National Urban Livelihood Mission: Shelter for Urban Homeless (DAY - NULM SUH) wherein upto 31^st March, 2017, HUDCO has inspected 568 Night Shelters across the country including 74 night shelters in 54 towns/ cities under 12 States in financial year 2016-17.

As part of the Government of India’s programme for Development of Social Infrastructure of North Eastern States including Sikkim also known as 10% Lump Sum Scheme, HUDCO has inspected 7 Ongoing Projects and further 69 completed projects are to be inspected in the financial year 2017-18.

Further, as part of fee based consultancy initiatives, HFA Cell is also undertaking Third Party Inspections of 18 Delhi Police projects.

In respect of above scrutiny/ appraisal/ re-appraisal/ TPIMA Analysis & Monitoring/ Inspection activities of HFA Cell, HUDCO has earned Rs.2.532 crore towards fee based income of HUDCO in financial year 2016-17.

7. FINANCIAL REVIEW

(i) Accounting Policies

Your Company has added one new accounting policy on ‘Depreciation charged on the Library Books’ (Refer Note 1 point no. 6 (i)(h) of the financial statements) and deleted on accounting policy on ‘Cost of Mobile Phones reimbursed to employees upfront...’ and has made some minor clarificatory changes in five existing accounting policies, having no financial impact of the same on the financial position of the company.

(ii) Income from Operations and Profitability

The total operating income of your Company for the financial year 2016-17 was Rs.3498.85 crore. While the overall Profit before Tax (PBT) for the year was Rs.1175.00 crore, the Profit before tax (excluding other income, prior period adjustment, extraordinary and exceptional items) was Rs.1039.77 crore. The Profit after Tax (PAT) increased to Rs.841.81 crore from Rs.783.79 crore in the previous year, which was highest since inception.

(iii) Non-Performing Assets

Your Company is adhering to prudential guidelines for Non-Performing Assets (NPA) under the Housing Finance Companies (NHB) Directions, 2010, as amended from time to time in its letter and spirit. The position of NPAs is regularly monitored by the management and reviewed by the Board of Directors periodically and necessary corrective/remedial measures including legal action, wherever required are taken to reduce the level of NPAs. The Company did not recognize any income on NPAs in its books of accounts and the necessary provisioning as required under the NHB Directions has been created. The Company has also made additional provisioning to meet unforeseen contingencies.

During the year under review, HUDCO reported Gross NPA of Rs.2386.23 crore constituting 6.02% to total loan portfolio and Net NPA of Rs.433.53 crore constituting 1.15% to Net Outstanding. In the above, however, two accounts i.e. M/s RKM Powergen Private Limited and M/s Nagarjuna Oil Corporation Limited with total outstanding amount of Rs.832.45 crore have not been considered as NPA, in terms of the order of Hon’ble Madras High Court and as per relaxation in norms given by NHB respectively. Total provisioning made towards NPA as on 31^st March, 2017 stands at Rs.1952.70 crore inclusive of Rs.330 crore as an additional provisioning.

Through persistent efforts of the management, HUDCO has been able to reduce the Project Loan defaults to the tune of Rs.396.16 crore i.e. 6.61% from the level of Rs.5991.09 crore as on 31^st March, 2016. The Total Loan default is 15.33% as on 31^st March, 2017. Loan overdue to Loan Assets ratio as on 31^st March, 2017 is 16.12% as against MoU target of 17.01%.

As on 31^st March, 2017, 91% of loan book is to the Government Agencies, with net NPA of only being 0.00% indicating reasonably good asset quality. As far as loan book to private sector is concerned, Company is not making any fresh sanction since, March, 2013. The NPA’s in the loan book to private sector which is around 9% of the total loan book, are in the range of 60.34% as on 31^st March, 2017. As against this, provision (after excluding provision on standard assets) of Rs.1952.70 crore has been created till 31^st March, 2017

(iv) Resource Mobilization

During the financial year 2016-17, HUDCO mobilized Rs.3,865 crore through Taxable, Unsecured, Redeemable, Nonconvertible bonds. HUDCO also availed refinance of Rs.1,000 crore from National Housing Bank (NHB) under its Rural Housing Fund Scheme. An amount of Rs.306.49 crore (including renewals) was also mobilized through HUDCO Public deposit scheme during the financial year 2016-17. HUDCO’s borrowings (long term) to Net worth for 2016-17 stood at 2.83 times as against 2.63 times in the previous year. The detail of long term funds mobilized during the financial year 2016-17 is as under:

(Rs in Crore)

	Source / Mode of funding	FY 2016-17	FY 2015-16
1.	Taxable Unsecured Redeemable Non-Convertible Bonds	3865.00	0.00
2.	Tax-free Secured Redeemable Non-Convertible Bonds	0.00	5000.00
3.	Refinance from NHB	1000.00	0.00
4.	HUDCO Public Deposit Scheme	306.49	1332.80
	Total	5171.49	6332.80

During the Financial year 2016-17, to meet its short term fund requirement from time to time, the Company also raised an amount of Rs.3,350 crore through Commercial Paper(s) against which Rs.1,500 crore was outstanding as on 31^st March, 2017. This outstanding amount of Rs.1,500 crore, as on 31^sl March, 2017, has since been repaid on the respective maturity date(s), as per the terms of Issue.

As on 31^st March, 2017 the Company also had approved Cash Credit/ Working Capital Demand Loan limits of Rs.6,290 crore for availment from various banks for its day-to-day operations. Against these limits, the Cash Credit/ Working Capital Demand Loan facilities availed and outstanding as on 31^st March, 2017 was Rs.490 crore.

With this, the total funds mobilized during the financial year 2016-17 from various sources amounted to Rs. 7,161.49 crore, which included Rs. 5,171.49 crore raised through long term sources and Rs. 1,990 crore through short term sources.

(v) Credit Rating

HUDCO continues to enjoy ‘AAA’ rating - the highest rating on standalone basis in respect of domestic debt instruments assigned by three credit rating agencies namely M/s India Ratings & Research Private Limited (Fitch group), M/s Care Ratings and ICRA Limited.

(vi) Cost of Market Borrowings

The overall weighted average incremental cost of market borrowing for the funds raised through Taxable Bonds during the financial year 2016-17 was 7.28% p.a. The weighted average incremental cost of borrowing through taxable bonds, worked out to 28 bps over 10 Year G Sec as on 31^st March, 2017. Further, the said cost of raising funds through bonds during financial year 2016-17 on a weighted average basis was at Reuters benchmark rate for ‘AAA’ rated papers of corresponding maturities plus ( ) 10 bps. As a result, the Company was able to deliver debt financing at competitive rates.

(vii) Redemption and Pre-payment

During the financial year 2016-17, the Company repaid a total sum of Rs. 2,768.38 crore. This included repayment of Rs. 1,305.20 crore to bond holders, Rs. 64.03 crore on account of foreign currency loans, Rs. 361.41 crore on account of loans from Banks and Financial Institutions and Public deposits of Rs. 1,037.74 crore matured/paid during the year.

(viii) Unclaimed amount under HUDCO Bonds

Bonds amounting to Rs 6,31,87,255.72 (inclusive of interest amounting to Rs. 5,11,87,255.72) in respect of 1677 bondholders’ remain unpaid as on 31^st March, 2017 as the same have not been claimed by the investors.

The details of amount remaining unpaid are as under:

Financial Year	Principal		Interest		Total
	Amount (Rs.)	No. of Holders	Amount (Rs.)	No. of Holders	Amount (Rs.)
2014-15	1,20,00,000	9	2,05,55,508.51	1197	3,25,55,508.51
2015-16	1,40,00,000	10	2,54,59,796.12	1237	3,94,59,796.12
2016-17*	1,20,00,000	9	5,11,87,255.72	1668	6,31,87,255.72

*Unclaimed Principal amount of Rs.1.20 crore correspond to 17 No. of Bonds. Accordingly, total no. of bondholders representing unclaimed amount, works out to 1677, as on 31^st March, 2017.

In respect of the above unclaimed Bonds, the Bond holder(s) have been requested from time to time through email/letter, etc. for submission of requisite documents for claiming the amount of Principal/Interest, as may be due in their respective case(s).

Further, as per the provisions of the Companies Act, 2013 and rules made thereunder, the bonds remaining unclaimed for more than seven years from the date of maturity have been transferred to the ‘Investors Education and Protection Fund’ (IEPF). During the Financial year 2016-17, no amount was transferred to Investor Education and Protection Fund (IEPF) on account of Bonds.

Further, there were no bonds which have been claimed but remained unpaid as at end of the financial year.

(ix) HUDCO Public Deposit Scheme

HUDCO ,being a Housing Finance Company registered with National Housing Bank (NHB) is governed by the provisions of Housing Finance Companies (NHB) Directions, 2010 relating to Public Deposits.

During the financial year 2016-2017, HUDCO has mobilized deposits of Rs. 306.49 crore (including renewals) from 1054 depositors and an amount of Rs. 1037.74 crore was matured/paid to 2259 depositors. The total amount outstanding under HUDCO Public Deposit Scheme was Rs. 924.43 crore from 3108 depositors as on 31^st March, 2017.

(x) Unclaimed amount under HUDCO Public Deposit Scheme

As on 31^st March, 2017, deposit(s) amounting to Rs.1,36,56,769/- (inclusive of Principal and Interest) from 87 depositors’ remains unclaimed.

In respect of unclaimed Deposits, the Deposit holder(s) have been intimated through email/ letters regularly with a request to claim the amount matured or renew the deposits. During the Financial Year 2016-17, an amount of Rs 2,93,372/- remaining unclaimed for more than seven years from the date of maturity was transferred to ‘Investor Education and Protection Fund’ (IEPF), as per the provisions of the Companies Act, 2013 and rules made thereunder.

(xi) Deployment of Resources at the close of the year

At the close of the financial year 2016-17, the total resources of your company stood at Rs.39322.15 crore. Out of this, Equity Share Capital amounted to Rs.2,001.90 crore, Reserves & Surplus stood at Rs.7165.35 crore, Loans from Financial Institutions, Commercial Banks, Multilateral Institutions and Market Borrowings through Bonds and Commercial paper accounted for Rs.28432.43 crore, Deferred Tax Liabilities (Net) amounted to Rs.425.26 crore and other liabilities & provisions stood at Rs.1297.21 crore. These funds were deployed as Long/Short Term Loan & Advances of Rs.37526.54 crore, Fixed Assets (net of depreciation) of Rs.103.91 crore (including capital work-in-progress), Investments of Rs.368.53 crore, Cash & Bank Balances of Rs.332.84 crore and other assets of Rs.990.33 crore.

8. RISK MANAGEMENT IN HUDCO

HUDCO, being a Housing Finance Company is exposed to various risks like credit risk, liquidity risk, market risk, foreign currency risk and operational risk. For management of the various risks in an effective and proactive manner, HUDCO has in place a Risk Management Policy and Operating Manual. The Policy aims at establishing the company’s risk management strategy in line with the goals of the organization and the internal and external environment.

HUDCO has a strong, prudent and efficient risk management framework. Your Company has a ‘Risk Management Committee’ (RMC) under the Chairmanship of the Chairman & Managing Director which reviews various reports and action taken by three sub-committees namely:

- Assets & Liabilities Management Committee (ALCO);

- Credit Risk Management Committee (CRMC); and

- Operational Risk Management Committee (ORMC)

The Assets & Liabilities Management Committee (ALCO) and Credit Risk Management Committee (CRMC) are headed by Director (Finance) and the Operational Risk Management Committee (ORMC) is headed by Director (Corporate Planning). The recommendations of the Risk Management Committee (RMC) are submitted to the Board of Directors.

HUDCO has effective Assets and Liabilities Management system. ALCO reviews the risks relating to Assets and Liabilities and ensures management of mismatches through liquidity gap analysis, interest rate sensitivity analysis as per NHB guidelines. It is ensured that the ALM risks, if any, are managed within the permissible limits. ALCO meetings are held every month to review position of ALM.

HUDCO is making constant efforts for management and mitigation of the various risks which are briefly described below:

a) Credit Risk

To manage the credit risk, HUDCO has established a strong appraisal mechanism containing comprehensive appraisal techniques/ guidelines in order to ensure timely repayments of principal & interest amount. Default Recovery and Monitoring Cell (DMRC) has also been set up for constant review of the default position and its follow up.

b) Liquidity Risk

To manage the liquidity risk, HUDCO has in place an effective Asset Liability Management System. The liquidity risk is being monitored with the help of liquidity gap analysis. Further, the funds are mobilized at competitive rates through various strategies viz. bonds, public deposits, term loans etc.

c) Market Risk

In order to mitigate the risks arising from fluctuations in interest rates and foreign currency exchange rates, your Company periodically reviews and determines its lending rates based on its cost of funds and the market scenario. Further, the interest rate risk is being monitored with the help of interest rate sensitivity analysis under the Asset Liability Management System.

d) Foreign Currency Risk

In order to mitigate the risks associated with foreign currency fluctuations, your Company has a Foreign Currency Risk Management policy. Your Company has entered into hedging transactions to cover the exchange rate and interest rate risks. As on 31^st March, 2017, the total foreign currency liabilities are USD 60.28 million and JPY 2562.23 million and 64.06% of the foreign currency exchange rate risk is covered through hedging instruments.

e) Operational Risk

In order to mitigate the operational risk(s) associated with the operations of the organization both internal as well as external including technology risk, employee risk, capital asset risk, external risk, compliance risks viz. external fraud, legal risk, etc, your Company has established a strong reporting and monitoring mechanism. Operational risk management framework covers managing each and every source of operational risk as a distinct risk to the institution’s safety and soundness. The requisite information on the Operational risk is obtained through quarterly reports of ‘Operational risk Factors and Key Risk Indicators (KRIs)’ from Regional Offices/ departments which is further reviewed and analyzed for mitigating the operational risk.

9. JOINT VENTURE AND ASSOCIATE COMPANY

HUDCO had formed four Joint Venture Companies (JVs) viz Pragati Social Infrastructure Development Ltd. (PSIDL), Shristi Urban Infrastructure Development Ltd (SUIDL), MCM Infrastructure Pvt. Ltd. (MCMI) and Signa Infrastructure India Ltd. (SIIL) with total equity contribution of Rs.2.403 crore. During the financial year 2015-16, HUDCO has decided to exit from all the four aforesaid Joint Ventures by invoking the exit clauses as the performance of these JVs was not found to be satisfactory. HUDCO has exited from JV with MCMI on 29^th September, 2016 and the company is in process of exiting from the remaining three JVs.

HUDCO has one associate company viz “Ind Bank Housing Ltd” (IBHL) where it has invested Rs.2.50 crore (25% of the paid up capital of the investee company). The investment in HUDCO books is appearing at Re. 1 only.

10. CONSOLIDATED FINANCIAL STATEMENTS

Pursuant to Section 129(3) of the Companies Act, 2013 and Accounting Standards - 23 & 27, HUDCO has prepared Consolidated Financial Statement (CFS) including that of its Joint Venture Company (JV) i.e. M/s Shristi Urban Infrastructure Development Ltd. However, consolidation in respect of other JVs companies namely; M/s Pragati Social Infrastructure & Developpent Ltd. (PSDIL), M/s Signa Infrastructure India Ltd. (SIIL) and one associate company M/s Ind Bank Housing Limited (IBHL) has not been considered during the financial year 2016-17 due to the reasons given below:

i. In case of PSDIL (JV), the Company has decided to exit from this entity and provided for full diminution in the value of investment;

ii. In case of SIIL (JV), the Company has decided to exit from said entity and the figures not being material; and

iii. In case of IBHL (Associate), the Company has provided for full diminution in the value of investment.

Statement containing salient features of financial statements of Joint Venture and Associate Companies

Statement containing salient features of financial statements of Joint Venture and Associate Companies under section 129 (3) of the Companies Act, 2013, in the prescribed form AOC - 1 forms part of this Annual Report.

11. INTERNAL FINANCIAL CONTROLS POLICY OF HUDCO

Pursuant to Section 143(3)(i) of the Companies Act, 2013, concept of ‘Internal Financial Controls’ (IFC) has been introduced in the Company w.e.f. 1^st April, 2015, covering whole range of financial and non-financial controls existing in a Company relating to its day to day operations, functions & processes and casting additional responsibility on Management and Auditors to evaluate and report on adequacy and effectiveness of these Controls.

In compliance of the above, HUDCO has prepared an ‘Internal Financial Control’ Policy which gives broad framework of different activities with policies and procedures for ensuring the orderly and efficient conduct of its business, adherence to such policies, safeguarding assets of the Company, prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.

In addition to IFC Policy, Risk Control Matrices and Flow Charts have also been prepared. Process Flow Charts are helpful form of documentation for auditors to depict the process to initiate, authorise, process, record and report transactions; the points within the process at which misstatements could occur; and control activities that are designed to prevent or detect such misstatements, including providing greater transparency to segregation of duties. These diagrams also depict the relevant systems and Information Produced by the Entity (IPE).

The Review and Testing of the Operating efficiency of existing Internal Financial Controls for the financial year 2016-17 has been carried out by M/s Kedia Goel & Co., Chartered Accountants. They have observed that the Company has adopted effective and adequate Internal Financial Controls and in the process of diagnosis review. Being a continuous process, efforts are being made to further strengthen the IFC.

Internal Audit

During the year under review, internal audit of all the Regional Offices and major divisions of Corporate Office were carried out by in-house internal audit team and by outsourced Chartered Accountants firm. The significant observations of the internal audit were periodically submitted to the Audit Committee and necessary action as directed by the Audit Committee is taken by the Internal Audit Department. Directions have also been issued to all concerned for adherence to the policies, guidelines and procedures and for timely compliance of the Audit Observations.

12. HUDCO - AN ISO 9001:2008 CERTIFIED COMPANY

HUDCO is an ISO 9001:2008 certified company for Quality Management for its full range of activities covering project and retail financing services, resource mobilisation for funding, consultancy and joint ventures. The certification is valid till September, 2018.

13. HUMAN RESOURCES

Your Company has a highly talented, dedicated and committed team of professionals at all levels. Your Company recognizes the contribution of employees in furthering the interest of the organization and in maintaining its consistent growth. With a view to hone the skills of employees, capability development programme were taken up in various strategic, functional and behavioural areas of employees and 256 employees were imparted training in India and abroad. .

As on 31^st March, 2017, HUDCO has total strength of employee’s at 875 (previous year 863) out of which 253 are women employees representing 28.91% of total work force. There is no discrimination of employees on the basis of gender. .

(i) Human Settlement Management Institute (HSMI)

During the Financial Year 2016-17, HUDCO’s HSMI continued its efforts for capacity building for professionals engaged in housing and urban development, including HUDCO’s borrowing agencies, Urban Local Bodies (ULBs) and HUDCO officials. A total of 32 training programmes were organised, imparting training to 1008 national and international professionals. The training programmes included 13 capacity building programmes for ULBs in association with 18 HUDCO Chair Institutions. Other programmes includes, one for National Real Estate Development Council (NAREDCO) on ‘Real Estate Management’, one DoPT Programme for Central Services Officers (IAS/IPS), one capacity building programme for officials of MP Housing & Infrastructure Development Board, two International training programme and 14 in-house training programmes.

As part of MoU Target for the financial year 2016-17, HUDCO’s HSMI installed 3 Nos. of Roof Top Solar Power Plants of total capacity of 7 KWp at HSMI Hostel, New Delhi on 28^th September, 2016. “HUDCO Award for Best Practices” was given to 6 agencies in various fields to improve living environment. Further, under its collaborative research activities, HSMI sanctioned eight new research projects including two research projects being funded out of HUDCO’s research grant and six research projects being funded out of the then Ministry of Housing and Urban Poverty Alleviation research grant.

During the year, 22 other activities were organized by HSMI for the then Ministry of Housing and Urban Poverty Alleviation, Government of India which included seminars, workshops, stakeholder meets, National Habitat Committee meetings etc. HSMI also rendered active support for organizing the 6^th APMCHUD Conference at New Delhi. As an anchor institution for undertaking activities under IBSA-HS, HUDCO’s HSMI supported the IBSA-HS meeting held during the Habitat-III at Quito in October 2016. Besides, HUDCO, being an associate member of CITYNET since 1993, HSMI has been engaged with CITYNET through research and training activities.

(ii) Implementation of Micro, Small & Medium Enterprises (MSME) Policy

The Government of India has notified a Public Procurement Policy for Micro and Small Enterprises vide Micro and Small Enterprises (MSEs) Order 2012. During the year 2016-17, your company made total procurement of Rs.1.24 crore from MSEs (including MSEs owned by SC/ST entrepreneurs), which constitutes 23.7% of total annual procurement made by your Company.

(iii) Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

In line with provisions of ‘Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, HUDCO has in place an ‘Internal Complaints Committee’ for redressal of complaint(s) against sexual harassment of women employees, which is headed by a senior level woman official of the company and includes an NGO representative as one of its members. Anti-sexual harassment stance of the Company is also outlined in HUDCO (Conduct, Discipline and Appeal) Rules.

During the year under review, no complaint of sexual harassment was received by the Company.

(iv) Public Grievance Redressal Mechanism of HUDCO

The top management plays a leading role in creating organization wide focus for the customer. In accordance with the guidelines issued by the Government of India and National Housing Bank (NHB), HUDCO has an appropriate Grievance Redressal Mechanism, which is available on HUDCO’s website.

14. OFFICIAL LANGUAGE

In compliance of Govt. of India’s policy on Official Language, Your Company has taken various initiatives for promotion and implementation of use of ‘Hindi’ as official language in all of its offices.

Your Company has celebrated ‘Rajbhasha Pakhwara’ in its Corporate Office and all Regional Offices spread throughout the Country wherein several workshops and Hindi competitions were organized and prizes were given to winners of various competitions by Chairman & Managing Director, HUDCO.

During the year, HUDCO also organized ‘Special Hindi Conference’ for all the offices under the administrative control of the then Ministries of Urban Development and Housing & Urban Poverty Alleviation.

During the year, Parliamentary Committee on Official Language inspected our Mumbai and Raipur Regional Offices and no adverse comments were conveyed by the Committee.

It is a matter of pride that HUDCO has been entrusted with the Chairmanship of ‘Town Official Language Implementation Committee’, Delhi (UPKRAM-2) by the Department of Official Language, Ministry of Home Affairs, Government of India.

15. RIGHT TO INFORMATION ACT

In order to promote transparency and accountability, Your Company has implemented the provisions of the RTI Act, 2005 in its true letter and spirit and an appropriate mechanism has been set up in the Company with a dedicated centralized RTI Cell to provide information to the citizens under the provisions of this Act. All the RTI applications and the appeals received both on line and off line during the year 2016-17 have been processed and information was provided in a time bound manner as stipulated in the Act.

There have been no instances of non-compliance by the Company. No penalties or strictures were imposed on the Company by any statutory authority during the last three years with respect to RTI.

16. VIGILANCE

The Corporate Vigilance Department (CVD) continued to focus on improving the systems and procedures in the working of the company, in line with CVC directions issued from time to time.

During the year 2016-17, Vigilance Awareness Week was observed by the Company from 31^st October to 5^th November, 2016 in the Head Office as well as at all the Regional Offices. During the week, various programmes were organized not only at the premises of 21 Regional Offices but also in at least 2 schools & 2 colleges within jurisdiction of each Regional Office throughout the Country. The programmes were the theme centric declared by the CVC i.e. “Public Participation in Promoting Integrity and Eradicating Corruption”.

Shri Sanjiv Swarup, CVO, NBCC (India) Limited took over the additional charge of CVO, HUDCO on 29^th November, 2016 and at present the main thrust of CVD is being laid on completion of long pending departmental proceedings expeditiously.

Further, in compliance of DoPT’s directions, the data on vigilance status/profile of Board level and two levels below Board level executives was uploaded on web portal developed by NIC-DoPT. The data, as required, is being updated as per prescribed guidelines and further data would be uploaded from time to time.

17. MANAGEMENT DISCUSSION & ANALYSIS REPORT

Management Discussion & Analysis Report for the year under review, as required under the SEBI (LODR) Regulations, 2015 is annexed to this report.

18. CORPORATE GOVERNANCE

Pursuant to SEBI (LODR) Regulations, 2015 and DPE’s Guidelines, a separate section on ‘Corporate Governance’ alongwith certificate from Grover Ahuja & Associates, Company Secretaries confirming compliance of the conditions of Corporate Governance as stipulated in the SEBI (LODR) Regulations, 2015 and DPE guidelines alongwith management reply to the observation(s) is annexed to this report.

19. DIRECTORS’ RESPONSIBILITY STATEMENT

As required under Section 134 (5) of the Companies Act, 2013, it is confirmed that:

a) in preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same;

b) such accounting policies have been selected and applied consistently (except for changes in accounting policies as disclosed in the Note to Accounts to the Financial Statements) and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with provisions of Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the annual accounts have been prepared on a ‘going concern’ basis;

e) the Company has laid down Internal Financial Controls to be followed and such internal financial controls were adequate and operating effectively; and

f) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.

20. DIRECTORS AND KEY MANAGERIAL PERSONNEL

The then Ministry of Housing & Urban Poverty Alleviation, Government of India has made the appointment of four Part-time Non-official Independent Directors on the Board of HUDCO during the year under review, out of which Shri Anand K Pandit has resigned from the Board during the year, the detail of which is as under:

Sl. No.	Name	Date of appointment/ cessation	Remarks
1.	Shri Anand K Pandit (DIN No. 00015551)	17.06.2016	Appointment
	Shri Anand K Pandit (DIN No. 00015551)	10.02.2017	Resignation
2.	Shri Mukesh M Arya (DIN No. 02753885)	17.06.2016	Appointment
3.	Prof. Chetan V. Vaidya (DIN No. 07550281)	22.06.2016	Appointment
4.	Shri Amarishkumar G Patel (DIN No. 07591533)	16.08.2016	Appointment

Further, the then Ministry of Housing & Urban Poverty Alleviation, Government of India has made the appointment of two more Part-time Non-Official Independent Director(s) on the Board of HUDCO namely Smt. Pratima Dayal (DIN: 06992866) and Dr. Sudip Kumar Nanda (DIN: 00315376) w.e.f 18^th April, 2017.

With Induction of Independent Directors, composition of the Board of Directors of the Company is in line with the provisions of the Companies Act and SEBI (LODR) Regulations, 2015 and DPE Guidelines.

All the Part-time Non-official Independent Directors have given declarations as required under section 149 of the Act as to their Independence.

During the year under review, there was no change in Key Managerial Personnel and the detail of KMP was as under:

Sl. No.	Name of Key Managerial Personnel	Designation
1.	Dr. M. Ravi Kanth	Chairman & Managing Director
2.	Shri N L Manjoka	Director - Corporate Planning
3.	Shri Rakesh Kumar Arora	Director - Finance & Chief Financial Officer
4.	Shri Harish Kumar Sharma	Company Secretary

21 AUDITORS & AUDITORS REPORT

M/s Dhawan & Co., Chartered Accountants (Firm Reg. No. 002864N), New Delhi, appointed as Statutory Auditors’ by the Comptroller & Auditor General of India (C&AG) under section 139 of the Companies Act, 2013 for the financial year 2016-17, had conducted the audit of the Financial Statements (both Standalone & Consolidated) and submitted their report thereon.

The comments of the Statutory Auditors on the standalone financial statement alongwith management reply thereto are annexed hereto and forms part of the report.

The Comptroller and Auditor General of India (C&AG) vide their letter dated 11^th July, 2017, received on 25^th July, 2017, has appointed M/s Prem Gupta & Co, Chartered Accountants, New Delhi as Statutory Auditors of your Company for the financial year 2017-18.

Comments of Comptroller and Auditor General of India (C&AG)

The Comptroller and Auditor General of India (C&AG) vide their letter(s) dated 14^th July, 2017 and 17^th July, 2017, has given ‘NIL Comments’ on the audited financial statements (consolidated & standalone) for the Company for the financial year 2016-17 under section 143 of the Companies Act, 2013 and the same are annexed hereto forming part of the Annual Report.

22. SECRETARIAL AUDITORS & AUDIT REPORT

M/s Grover Ahuja & Associates, Company Secretaries in practice, were appointed as Secretarial Auditors pursuant to section 204 of the Companies Act, 2013 to conduct Secretarial Audit for the financial year 2016-17 and they have submitted their report thereon.

The Secretarial Audit Report for the financial year 2016-17 alongwith Management reply on the observations thereon is annexed hereto forming part of the Annual Report.

23. DISCLOSURES

(i) Corporate Social Responsibility Committee

HUDCO has constituted ‘Corporate Social Responsibility’ Committee of the Board in compliance with the provisions of Section 135 of the Companies Act, 2013 comprises of four member(s) namely: Dr. M. Ravi Kanth as Chairman, Shri Mukesh M. Arya, Prof. Chetan V. Vaidya and Shri Amarishkumar G. Patel as member(s). The Committee is headed by Chairman & Managing Director and the remaining three members are Part-time Non-official Independent Directors. The constitution of the Committee as on 31^st March, 2017 was in compliance with the provisions of the Companies Act, 2013.

‘Corporate Social Responsibility Policy’ (CSR Policy) of HUDCO which lays down the guidelines and the activities to be undertaken by the Company has been put on the Company’s website www.hudco.org. All the activities undertaken during the year are as per CSR Policy of the Company.

The Company has not been able to spend the whole of the amount earmarked for CSR activities during the year 2016-17; the reasons for the same are given in the Annual Report on CSR activities. The Annual Report on CSR activities is annexed hereto forming part of the Annual Report.

(ii) Board and its Committees

The details of the composition, terms of reference, number of meetings held/attended by directors/members and other particulars are given in the Corporate Governance Report annexed to this Report.

(iii) Particulars of Loans, Guarantee or Investments

The provision(s) of section 186 of the Act regarding loan made, guarantee given or securities provided are not applicable to Housing Finance Company, hence, the same are not given. Further, the details pertaining to investments covered under the provisions of section 186 of the Act forms part of the financial statement for the financial year 2016-17.

(iv) Extract of Annual Return

Pursuant to provisions of section 92(3) read with section 134(3)(a) of the Companies Act, 2013, the extract of Annual Return as at 31^st March, 2017 in the prescribed format is annexed hereto and forming part of the Report.

(v) Energy Conservation, Technology Absorption and Foreign Exchange Earning & Outgo.

a) Conservation of Energy

Your Company being a Housing Finance Company is not engaged in any manufacturing operations and the present area of operations are not energy intensive. Your Company being energy conscious has taken lot of initiative with a view to conserve energy both at its Head Office and its Regional Offices.

b) Technological Absorption

Your Company being a Housing Finance Company having no manufacturing operations, therefore, has not absorbed any technology indigenous/ imported. Further, no technology was imported during the last three years.

c) Foreign Exchange Earnings and Outgo

The inflow on account of foreign exchange transaction was Rs.2.02 crore (previous year Rs.1.45 crore) while foreign exchange outgo/ expenditure was Rs.6.06 crore (previous year Rs.5.36 crore).

24. GENERAL

(i) Government Companies are exempted from complying with the provisions of section 197 read with rules on Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 vide notification dated 5^th June, 2015 issued by the Ministry of Corporate Affairs, hence, the particulars with respect to the remuneration drawn by employees/ directors have not been given.

(ii) The details of related parties transactions entered into during the year under review under section 188(1) of the Companies Act, 2013 are given in the financial statements.

(iii) There is no change in the nature of business of the Company during the year.

(iv) No significant and material orders were passed by the regulators or courts or tribunals which impact the going concern status and Company’s operations in future.

(v) Board of Directors of HUDCO are appointed by the President of India through the Administrative Ministry and their performance is being evaluated by the Ministry itself, hence the requirement of carrying out formal annual evaluation by the Board of its own performance and that of its committees and individual directors is not applicable as per Ministry of Corporate Affairs notification dated 5^th June, 2015.

(vi) No material changes and commitments have occurred after the close of financial year till the date of this Report, affecting the financial position of the Company.

(vii) No material case of frauds by the Company or on the Company by its officers or employees has been reported by auditors under sub-section 12 of section 143 of Companies Act, 2013.

(viii) The Board of Directors of your Company has laid down Code of Conduct and Ethics for all Board members and Senior Management Personnel of the Company and the same is placed on the Company’s website. All the Board members and Senior Management Personnel have affirmed compliance with the code. The copy of the declaration made by Chairman & Managing Director is annexed hereto and forming part of this report.

25. STATUTORY AND OTHER INFORMATION REQUIREMENT

The various information, required as per the Companies Act, 2013, SEBI (LODR) Regulations, 2015 and DPE guidelines are annexed to the report as under:

Particulars	Annexure
Management Discussion & Analysis Report	1
Corporate Governance Report	2
Secretarial Auditors Report alongwith Management Reply to Corporate Governance and Secretarial Auditors Report	3
Observations/comments of Statutory Auditors alongwith Management Reply	4
Comments of Comptroller & Auditors General of India	5
Annual Report on CSR Activities	6
Extract of Annual Return	7
Declaration of the Code of Conduct	8

26. ACKNOWLEDGEMENTS

Your Directors wish to place on record their gratitude to the Government of India particularly to the Ministry of Housing and Urban Affairs, Ministry of Rural Development, Ministry of Finance, National Housing Bank, Department of Investment and Public Asset Management, Securities and Exchange Board of India, Ministry of Corporate Affairs and Registrar of Companies for their continued co-operation, support and guidance in effective management of the Company’s affairs and resources.

The Directors thank the State Governments, Housing Boards, Development Authorities, Municipal/Local Bodies and other Borrowers for their continued support and valuable suggestions.

The Directors also place on record its appreciation to the domestic and overseas Banks, BSE Limited, National Stock Exchange of India Limited, National Securities Depository Limited, Central Depository Services (India) Limited, National Credit Rating Agencies, Registrar & Transfer Agents and other agencies associated with the Initial Public Offer of the Company, Debenture/Bond holders especially the Retail Investors, depositors and other Stakeholders, for their support extended to the Company from time to time.

The Directors also thank the Comptroller & Auditor General of India, M/s Dhawan & Co., Statutory Auditors, M/s. Grover Ahuja & Associates, Company Secretaries, Secretarial Auditors for their valued guidance and support.

The Directors also place on record its sincere appreciation for their valuable contribution and dedicated efforts of employees at all level in steering the Company to excellent performance.

For and on behalf of the Board of Directors

Sd/-

Dr. M. Ravi Kanth

Place : New Delhi Chairman & Managing Director

Date : 9^th August, 2017 (DIN: 01612905)

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Mar 31, 2010

To The Esteemed Members Housing and Urban Development Corporation Ltd.

The Directors take pleasure in presenting the Fortieth Annual Report on the business, operations and achievements of Housing and Urban Development Corporation Limited (HUDCO), together with Audited Accounts for the financial year ended March 31st, 2010.

HUDCO - FACILITATING SUSTAINABLE DEVELOPMENT OF HOUSING AND URBAN INFRASTRUCTURE IN THE NATION

Our country continues to march forward, registering a high economic growth rate consistently. There is a clear understanding and recognition of the fact that sustaining such a growth pace would require an increased investment in the basic requirements of human settlements. Housing and infrastructure form basic essentials for organised and sustainable development of human settlements, and thereby the economy.

With the estimates of requirement for housing far exceeding the level of net annual addition, there is an urgent necessity to address this basic need in a more aggressive manner. A far more serious concern is the extent of weaker sections and low-income population who are affected in view of the lack of access to housing. Estimates indicate that almost the entire deficit pertains to Economically Weaker sections and Low Income groups. With an increase in the level of urbanisation and the rapid growth of slums and informal settlements in urban areas, this problem is expected to only intensify further. On the one hand, the cities are emerging as engines of economic growth, and on the other, their sustainability is under severe strain in view of the pressure on the limited available services. Cities need to be promoted as inclusive entities. It will be necessary to vision the urban development process to make the cities fully democratic, economically productive, socially just, environmentally sustainable and culturally vibrant.

In this context, the innovative programme of JNNURM is able to make a substantial impact h not only improving the infrastructure in the urban areas, but also enabling putt in place a fast track reform programme covering varied aspects of city development including governance. The Rajiv A was Yojana looks in to the city development in a comprehensive manner addressing the shelter and related infrastructure requirements of the ''have-nots'' and integrate them into the city''s economy for sustainable growth and governance.

In line with the emerging requirements, HUDCO has been extending a focused emphasis on addressing the shelter requirements of weaker sections of the population at large. Your Company''s support for over 14 million housing units throughout the country, has predominantly addressed the needs of the weaker sections of the society, with as much as 94% of the units, having benefited the economically weaker section and the low-income groups. Your Company being a pioneer techno-financial institution introduced the affordability criterion, to enable the housing solutions offered to the EWS and LIG families, acceptable and feasible. HUDCO has also demonstrated that shelter solutions within reasonable cost ceilings are actually possible, through appropriate innovations in planning, designing, technological options and financial engineering.

HUDCO continues to extend a special focus in its operations, on the core urban infrastructure towards improving the quality of life of the citizens at large. HUDCO''s support for infrastructure covers a diverse basket of sectors including utility infrastructure such as water supply, sanitation/sewerage, drainage, solid waste management, roads, bridges, transport nagars, parts, airports etc; Social Infrastructure covering educational facilities such as schools and colleges, health facilities covering hospitals, health centers and recreational facilities such as parks, ;stadia etc; and economic and commercial infrastructure such as shopping/commercial complexes, technology parks, entertainment centers, industrial infrastructure. Ensuring sustainability and appropriate cost recovery through innovative user pay instruments has been the hallmark of your company''s enabling strategies for infrastructure development.

Cross-subsidisation, differential1 interest rates, realistic cost ceilings, flexible repayment periods, preferential allocation of resources to the socially disadvantaged, promotion of cost-effective building materials and technologies and appropriate designs to assist the economically weaker and disadvantaged sections, are a few'' innovative strategies that enable HUDCO to continue its mission of promoting sustainable housing and urban development.

In the context of the emerging challenges, your Company would continue its efforts for achieving affordable shelter for all, by actively supporting with its techno-financial capabilities, in the effective implementation of the government''s initiatives and programmes in the housing and infrastructure development sector.

OPERATIONAL ACHIEVEMENTS

HUDCO has continued to exhibit growth in its operations and has had another year of significant operational achievements.

During the year, HUDCO has sanctioned 147 schemes for a total loan amount of Rs. 16624 crore as against Rs. 14754 crore in the previous year. Out of the total sanctions, Rs. 2717 crore loan amount has been for housing projects, and Rs. 13907 crore has been for various urban infrastructure schemes. The projects sanctioned cover a wide spectrum of projects forming part of housing and urban infrastructure portfolios.

During the year, a total amount of Rs, 3098.07 crore was released, of which Rs. 802.37 crore was for housing projects, while Rs. 2296.70 crore was released for urban infrastructure schemes.

HOUSING - A BASIC NECESSITY

Housing forms a basic requirement next only to food and clothing. HUDCO is committed to extend its helping hand to the development of housing sector in the country.

Loan Sanctions and Releases for Housing

During the year, a total loan amount of Rs. 2717 crore has been sanctioned for housing schemes and an amount of Rs. 302.37 crore has been released. Of this, an amount of Rs. 30.87 crore was released under HUDCO Niwas (HUDCO''s individual housing loan tending window).

integrated effort at combining drainage, land development and beautification. The project is aimed at addressing the environmental and social concerns and to turn the river front into a major asset for the city.

An area development scheme for the Motor Vehicle Dept, of Nagaland with a loan assistance of Rs. 1 crore has also been approved during the year.

Water Supply

HUDCO has sanctioned 6 water supply projects, with a total loan assistance of Rs. 2652 crore during the financial year 2009-10. This covers 3 schemes in the State of Andhra Pradesh with a loan component of Rs. 1100 crore for Hyderabad, Vijayawada and two small towns namely Kadapa & Proddatur.

HUDCO has also sanctioned loan assistance as viability gap funding support for water supply projects, as part of the JNNURM Programme, in the State of Jharkhand for Ranchi water supply scheme, and in Kerala State for Kannur Water Supply scheme.

HUDCO has also accorded in principle approval for a loan assistance of Rs. 1500 crore, for Tamil Nadu Water & Sanitation Pooled Fund for taking up the combined water supply improvement of Vellore Municipal Corporation, 7 Municipalities, 5 town Panchayats and 64 wayside rural habitations.

Sewerage and Drainage/Sector

During the year, one project each for the sewerage and drainage sectors have been sanctioned to Delhi and Madhya Pradesh States, for a loan assistance of Rs. 800.00 crore and Rs. 9.75*crore respectively.

The Interceptor Sewer Projects in Delhi would enable improvement in water quality of main drains of Najafgarh, Supplementary and Shahdara drain, thereby facilitating improvement in the water quality in river Yamuna. The Interceptor Sewer, a conveyance infrastructure component, will convey wastewater from diversion structures from the un-sewered areas as well as overflows from the existing sewers and direct It to the nearest existing sewerage treatment plant. The proposal has been approved for support under JNNURM programme.

Transportation

During the year, HUDCO has sanctioned 11 road and transportation proposals in the States of Delhi, Karnataka, Meghalaya, Maharashtra, Madhya Pradesh, Rajasthan and Uttar Pradesh for a total UDCO loan of Rs. 3505.14 crore.

Power Sector

During the year, HUDCO has sanctioned 8 projects in the power sector with a total loan amount'' of Rs. 2113 crore.

Emerging Sector including Industrial Infrastructure

Industrial growth is one of the major constituents of the economic growth. HUDCO has also extended loan assistance to the Industrial Sector for the eligible components such as land and land development, water supply, access/circulation roadsi residential townships, street lighting, jetties, bus terminals/stops, community centers, etc.

During the year, HUDCO has funded a total of 5 schemes under this category. The projects included 2 schemes in the Industrial sector, 2 schemes for Government of India Navratna Public Sector Companies and 1 scheme was sanctioned for Area Development sector. The total loan sanctioned for the sector stood at Rs. 3740 crore.

The types of projects sanctioned includes for Steel Plant at Jamshedpur, capacity expansion plans of NTPC, capacity augmentation and new gas pipelines of GAIL and fore land acquisition and Industrial Township development at Luck now.

Commercial Infrastructure Projects

During the year, HUDCO has sanctioned loan assistance to 9 commercial schemes with a total loan amount Rs. 101.70 crore. The projects sanctioned include malls, commercial complex, hotel, office buildings, etc. The major commercial schemes supported by HUDCO during the year are for construction of Himalaya Mall at Mehsana (loan amount Rs. 21.50 crore) and construction of Hotel Taj Gateway at Raipur (loan amount Rs, 20 crore).

Special Projects of High value

HUDCO has given ''in-principle1 approval for a term loan of Rs. 2000 crore for projects that would meet part of capital expenditure of ongoing capacity addition programme, Coal Mining & Washeries and Renovation & Modernisation Programme of various projects.

Further, in-principle sanction has also been accorded for a loan of Rs. 1000 crore for laying of two pipelines viz. Chainsa-Jhajjar-Hissar Pipeline (CJHPL) with a design capacity of 35 MMSCMD, and the Dadri-Bawana-Nangai Pipeline (DBNPL) with a design capacity of 31 MMSCMD for supply and distribution of , Re-gaslfied Liquid Natural Gas/Natural Gas.

New areas/ agencies included in the financing network of HUDCO

Laying stress on acquiring business from Government agencies, HUDCO was able to generate business from the Government of India Navratna companies and Major Steel Companies such as National Thermal Power Corporation Ltd.

(NTPC), Gas Authority of India Ltd (GAIL), and Tata Steel etc.

Infrastructure Development In North Eastern Regions

Beside above, HUDCO has also sanctioned 20 Urban Infrastructure projects with a total loan assistance of Rs. 90.89 crore in the States of Assam, Meghalaya and Nagaland. These projects include construction of various Govt, office buildings* improvement of roads and bridges, etc.

JAWAHARLAL NEHRU NATIONAL URBAN RENEWAL MISSION (JNNURM)

Cities and towns of India constitute world''s second largest urban system, and contribute to over 50% of India''s Gross Domestic Product (GDP). For these cities to realize their full potential and become true engines of growth, it is necessary that focused attention is given to improvement of infrastructure and basic services to the urban poor, i

For achieving this objective, the Humble Prime Minister launched the Jawaharial Nehru National Urban Renewal Mission on 3rd December, 2005. The Mission aims at reform driven, planned development of cities and towns with focus on community participation and accountability of Urban Local Bodies (ULBs)/ Parastatats towards urban citizens. The duration of the Mission is 7 years beginning from 2005-2006 to 2011-J2012. The Mission comprises of two Sub-Missions - one for Basic Services to the Urban Poor (BSUP) and the other for Urban Infrastructure and Governance (UIG) in selected 65 cities. For other cities/towns, two programmes, namely, Integrated Housing and Slum Development Programme (IHSDP) and Urban Infrastructure Development Scheme for Small and Medium Towns (UIDSSMT) have also been implemented simultaneously. The UIG and UIDSSMT programmes are being administered toy the Ministry of Urban Development (MoUD) and the BSUP and IHSDP by the Ministry of Housing & Urban Poverty Alleviation (MoHUPA).

HUDCO has been integrally involved in this programme, since inception, as an appraisal agency for BSUR and IHSDP projects. The focus here has been on provision of housing ''and basic services to the urban poor residing in slums and slum like habitations. Besides appraisal, HUDCO has been instrumental in disseminating information on JNNURM through trainings/workshops across the country, assisting State Governments/Implementing agencies in formulation of detailed project reports (DPRs) by providing technical and design consultancy services for inclusive housing and participating in monitoring of implementation of the projects as and when desired by the Ministry. Till 31st March, 2010, under BSUP & IHSDP, the Ministry has approved 1422 projects with, a total project cost of Rs. 36073.90 crore, out of which HUDCO has appraised 1184 projects with a project cost of Rs. 26481.19 crore, which forms approximately 73% of the total sanctions accorded. In the context of formulation of the 11th five-year plan period, the magnitude of housing shortage at the end of the 10th Plan was estimated to be around 24.7 million for 67.4 million households. It has been further estimated that 99% of this housing shortage pertains to EWS & LIG segments. Under JNNURM, till the period ending March 2010, HUDCO has appraised 1184 projects under BSUP and; IHSDP covering 800 cities and towns in the country, in effect contributing 1.10 million housing units under JNNURM. Appraisal of DPRs under the programme has also contributed to enhancing fee-based income receipt by HUDCO. So far, through appraisal of JNNURM projects, HUDCO has been able to earn a revenue of Rs. 35.86 crore.

The National Urban Housing and Habitat Policy (NUHHP), 2007 recognizes the need for public-private partnerships (PPPs) and development of various financial, legislative and operational innovations for bridging the housing shortage. Towards the same, during the year 2009-2010, the Government unveiled its plan and launched the Rajiv Awas Yojana (RAY) for slum dwellers under JNNURM on the lines of Indira Awas Yojana for the rural poor. The scheme for Affordable Housing through Partnership and the scheme for Interest Subsidy for Housing the Urban Poor (ISHUP) are to be dovetailed with the Rajiv Awas Yojana, which would extend support under JNNURM to states that are willing to assign property rights to people living in slum areas. HUDCO has already been Initiated Into the extension of its services as an appraisal and other technical assistance providing agency, thereby enabling HUDCO play a major role, in conformity with its social mandate of providing housing for Economically Weaker sections and disadvantaged populace.

Implementation of BSUP projects by HUDCO at Patna and Bodhgaya in Bihar

The Government of Bihar has appointed HUDCO as the ''Implementing Agency'' for the BSUP schemes under Jawaharlal Nehru National Urban Renewal Mission (JNNURM) in Patna and Bodhgaya cities. A Memorandum of Understanding (MoU) has been entered into between HUDCO and the Government of Bihar in January, 2008 in this regard.

The project involves construction of 14596 EWS/ LIG houses for slum dwellers including provision of allied external and internal infrastructure services at 58 sites, in and around the two cities, at an estimated cost of Rs. 334.28 crore. The works are at various stages of design, tendering, award of works to contractors and site execution, at the identified sites.

BUILDING CENTRE MOVEMENT

HUDCO continued its efforts for strengthening the Building Centre Movement all over the country, by promoting building material and technologies in the construction sector, which are environment friendly, ecologically appropriate, energy efficient, functionally durable, aesthetically pleasing and yet cost- effective.

The national network covers 655 building centers (covering both urban and rural). A total grant of Rs. 33.65 crore has been sanctioned so far, out of which Rs. 23.96 crore has been released. These building centers have together taken up construction activity to the tune of Rs.1481 crore, produced building components worth Rs. 376.17 crore, and imparted training to over 3.21 lac construction workers.

MODEL VILLAGES/MODEL BASTI SCHEME

HUDCO continued extending support to the Model Villages/Model Basti Scheme. The selected villages/ slums, which would predominantly cover low-income population Is provided with a grant assistance of up to Rs. 35 lac by HUDCO, out4 of the interest accrued from KfW IV and V funds. The matching contribution is to be met by the State Governments/ Union Territories/ Implementing Agencies/ Beneficiaries by dovetailing other resources of Central/State Government schemes with a convergence approach, to provide community buildings and infrastructure facilities.

HUDCO has so far sanctioned 116 Model Village/Model Baste schemes for a total grant assistance of Rs. 3891.83 lac, out of which an amount of Rs. 2931.06 lac has been released and utilisation certificates for an amount of Rs.2634.90 lac, has also been received. Out of total sanctioned, 36 schemes have already been completed and other schemes are at various stages of completion.

Support to Building Material Industries

HUDCO extends financial assistance through equity and term loan support to the building material industries for manufacturing building materials and components, which are innovative, and alternates to the conventional options and utilizing agricultural and industrial wastes and energy efficient and environmentally appropriate options. A major thrust Is laid to support flash based building material industry and also alternates to timber; in different parts of the country. Till date,''30 building material industrial units have been supported with a HUDCO assistance of Rs. 29.48 crore. Some of the waste to wealth products identified are Gypsum products being manufactured from phosphogypsum waste of fertilizer industries, flash based building products such as bricks, blocks, tiles, pipes etc. being manufactured from fly-ash of thermal power plants, Cast polymer product being manufactured from marble waste, and Partition and ceiling boards being manufactured from agricultural waste, The PVC profile acts as a substitute for conventional wooden frames.-

IMPLEMENTATION OF COMMUNITY TOILETS AND SANITATION PROGRAMME

(Sanjha Swachhata Abhlyan) ,

HUDCO, as part of its social responsibility initiative, makes continued efforts for promoting clean habitats. As part of its efforts, recent)/ HUDCO'' has taken an initiative for providing better basic sanitation facilities to benefit the people by launching the "Community Toilet and Sanitation Programme" (Sanjha Swachhata Abhiyan). This programme was launched on 30th January, 2006 at Jhajjar, Haryana with the objective of ensuring clean habitats. The programme envisages to fund construction of community toilets in schools, institutes, hospitals, busy market places, bus stands, railway stations, slum localities, etc. Towards the same, HUDCO would be providing subsidy for the WC seats/bath complexes up to a maximum of RSj 20,000 per seat. The subsidy component of HUDCO for the scheme is available to the nominated Government Agencies, Corporate State Agencies, NGOs, CBOs and Charitable trusts/institutions. HUDCO would also be providing soft loan assistance to such agencies, which undertake construction work for the said project.

So far 20 schemes (net) have been sanctioned with a total HUDCO grant assistance of Rs. 461.00 lac. In addition, a total loan assistance of Rs. 50.33 lac has been sanctioned for 4 schemes for construction of 23Q4 WC/Bath facilities.

Till 2009-10, an amount of Rs. 208.10 lac of HUDCO Grant and Rs. 24.33 lac of HUDCO loan have been released to the implementing agencies.

CONSULTANCY AND PROJECT MANAGEMENT INITIATIVES

Apart from funding, a distinct thrust has been extended to technical consultancy activities by utilizing its inherent strength of technical personnel, long experience and expertise in the fields of Architecture and Urban Planning. During the year, HUDCO has been involved in showcasing various facets of consultancy services, thereby contributing towards the overall image building of HUDCO.

With a view to enhance the fee-based activities, HUDCO has developed proficiency in preparation of Detailed Project Reports for. housing and Infrastructure development for slums. During the year, HUDCO has undertaken the work for preparation of DPRs under BSUP and IHSDP schemes of JNNURM for Meerut, Hastlnapur and Bangaluru. Further, appraisal of DPRs for funding/approval by the Government for projects under JNNURM programme has also been undertaken. HUDCO has also undertaken the assignment of Project Management Consultancy in Patna for BSUP projects under JNNURM.

In continuation to on-going Consultancy Project for Pilgrim Centre, the State govt, of Sikkim has entrusted extended works of the project. HUDCO has been involved in the preparation of a Tourism Plan for Yamuna Nagar, Panchkula and Paonta Sahib Tourism Circuit. The plan entails identification of tourist destinations in the above districts. By developing these destinations would provide new tourist attractions and basic tourist amenities to improve the visitor''s experience. ,

The Institutional building at Tilak Marg, Delhi for Archaeological Survey of India (ASI) is being designed as green building. In addition, HUDCO is providing comprehensive architectural services for the development of its Regional Office buildings at Jaipur, Jammu, Panchkula, Kolkata, etc, and also institutional complex at Noida. Apart from ASI building, HUDCO intends to make institutional complex at NOIDA and Regional Office building at Jaipur as energy efficient green buildings. Recently, Karnataka State Police Housing Corporation (KSPHC) has entrusted 3 projects accommodating Its requirements of housing, office, commercial, clubs, etc. to be designed by HUDCO.

As part ,of the urban and regional planning consultancy initiatives, the works relating to preparation of Master Plans for 8 cities have been .completed. In addition, preparation of city development plans for 8 towns and preparation of state urban development strategy for Jharkhand are under completion. Further, a new assignment for preparation of development plan for Kailashahar in Tripura has been received, which is under preparation, i i :

Another significant initiative of HUDCO towards diversification of its sphere of fee based consultancy activities is the decentralization of its consultancy activities to the Regional Offices. With this initiative, many of the Regional Offices such as Chennai, Jaipur, Chandigarh, Patna, Guwahati and Kohima have also initiated consultancy/fee-based assignments at the Regional level. At present, a large number of consultancy assignments pertaining to social housing and tourism development are being undertaken, having a spread of almost crisscrossing the Puducherry state and other areas, by Chennai Regional Office consultancy unit. Above all, there is a tremendous scope to explore legal and financial consultancy including loan syndication also.

HUDCO NIWAS - INDIVIDUAL HOUSING LOAN SCHEME

HUDCO Nlwas has a network of 29 offices throughout the country and offers customer friendly individual housing loans to Resident Indians/ Non-Resident Indians, under the options of Fixed as well as Floating interest rates. The loans are extended for various purposes like construction/purchase of house/flat/plot, extend or improve the existing house or flat, re-financing of existing housing loans, loan against residential property. Bulk loans to the state governments/para-statals institutions for giving House Building Advance (HBA) to their employees are also offered under HUDCO Niwas. In addition, bulk loans to other Housing Finance Companies are also provided. HUDCO also sanctions individual loans to EWS and LIG beneficiaries, as part of the Government of India''s programme of Interest Subsidy for Housing the Urban Poor (ISHUP).

Under HUDCO Niwas, till 2009-10, an amount of Rs. 3894.52 crore has been disbursed for 327921 applications/ beneficiaries. This includes retail loans provided to 30,680 individual beneficiaries with a total amount of Rs. 877.83 crore. During this year, as part of the HUDCO Niwas portfolio, an amount of Rs. 30.86 crore has been disbursed to 634 beneficiaries.

HUDCO has also decided to sanction HUDCO Niwas i loans to EWS & LIG beneficiaries with simplified procedures, and low rates; of interest under the ISHUP programme of the Government of India.

NEW INITIATIVES

During the year, towards improving the business relationship with the State Governments as well as public sector Institutions, a special emphasis was laid on generation and sanction of projects for this sector. This has helped in improving the proportion of loans extended to this sector in the overall sanctions achieved during the year. Special efforts by the Social Housing & Core Infrastructure SBU during the year, such as competitive interest rates for the EWS/ LIG housing loans and larger contribution as part of the viability gap funding for JNNURM approved schemes, etc have resulted in improvement in the sanctions and releases for this portfolio.

Towards improving the quality of loan portfolio, the Emerging Sector SBU has laid stress on business association with Government of India Navratna/ Miniratna Public Sector Undertakings as well as State Government Undertakings. This has helped in improving the quantum of sanctions to prestigious PSU clients during the year.

FUTURE OUTLOOK

With its techno financial assistance, HUDCO has consistently played a significant role in supporting housing and infrastructure delivery ip the country. In the current context of major programmes for housing for weaker sections and also provision of Infrastructure - both the network based as well as city based, HUDCO''s role would continue to be important, in the ongoing JNNURM programme as well as in the Rajiv Awas Yojana, HUDCO''s relevance is amplified both in funding as well as extending technical assistance. HUDCO''s continued role in project formulation, appraisal and also implementation on selective basis would continue to increase, which would reiterate its position as a techno-financial Institution. In the special programmes of the Government in which emphasis is being laid for providing and improving access to housing for the weaker sections, HUDCO''s roie would continue to increase. This would place and project HUDCO as an Institution of eminence assisting the Government in addressing one of most essential needs of the society - housing with associated infrastructure.

Towards meeting the emerging challenges of the sector and meeting the vision of the Government in respect of housing and urban development sector, HUDCO is geared up with setting up of Strategic Business Units (SBUs) for focused sect oral attention. With the full implementation of the Integrated ERP solutions covering various facets of HUDCO''s activities, which is under way at present, HUDCO is poised to meet the requirements comprehensively.

HUMAN SETTLEMENT MANAGEMENT INSTITUTE (HSMI)

HSMI is the Research & Training Division of HUDCO, and its activities are supported by a core group of qualified and experienced professionals from various disciplines. HSMI continued its efforts to provide capacity building to the professionals engaged in the Housing & Urban Development Sector including HUDCO''s borrowing agencies, Local Bodies, NGOs, private sector Housing Finance Institutions etc. HSMI Is one of the Identified Nodal Resource Centre on behalf of the Ministry of Housing & Urban Poverty Alleviation, to coordinate various training and documentation activities under IEC (Information, Education & Communication) component as part of the Swama Jayanti Shahari Rojgar Yojana (SJSRY), which is major poverty alleviation programme of the Govt, of India. . .

During the year, 226 training programmes have been organized for 6319 professional functionaries from Urban Local Bodies implementing SJSRY programmes in various States. These programmes have been organized both at HSMI and in different States in collaboration with HUDCO Chair Institutions. During the year, HSMI also organized 38 In-house Training programmes for 829

HUDCO employees on areas covering Consultancy Management, Project Appraisal, Project Management, Legal Issues in Financing of Housing & Infrastructure Projects, IT Applications, Management and Behavioral related issues. In addition, HSMI in association with NAREDCO had organized three Training Programmes for'' the Real Estate Professionals in which 135 professionals participated.

Thus in all, during the year, HSMI training programmes covered 7283 personnel with a total of 22008 man-days training extended. HSMI also carried out a series of professional networking events/interactions with various National and International agencies and also state level institutions under the HUDCO Chair to exchange experience and expertise on urban development issues.

The Research and Training activities of HUDCO Chair Institutions cover a range of issues of strategic importance in the housing and urban development sector, such as urban governance, finance, disaster management, project development, urban poverty alleviation; and provision of basic services, urban planning, IT applications and implementation of schemes such as JNNURM, SJSRY, etc. These Institutions have carried out such activities through intensive networking with agencies working at: the State, National and International levels and have provided a platform for HUDCO and Government of India for conducting capacity building exercises in a decentralized manner and establish contacts with a range of stakeholders at various levels. Two issues of the HUDCO magazine ''Shelter1 (Vol.11 No.3 & 4) was also brought out during the year 2009-10, incorporating a large number of research and professional articles of contemporary relevance.

MEMORANDUM OF UNDERSTANDING (MoU)

MoU between HUDCO and Ministry of Housing and Urban Poverty Alleviation *

HUDCO and the Ministry of Housing and Urban Poverty Alleviation have signed a Memorandum of Understanding (MoU) for the year 2010-11 in regard to various operational performance parameters. The Mo envisages significant growth in the operations of HUDCO in the Housing and Urban Development sector with a sanction of about Rs.16500 crore and release of Rs. 5775 crore for the sector during the year. The MoU also provides a major role for HUDCO in the implementation qf the governments projects such as the Interest Subsidy for Housing the Urben Poor (ISHUP), JNNURM and the Rajiv Awas Yojana with its contributions covering both funding and fee based consultancy services.

CREDIT RATINGS

HUDCO''s long-term credit rating has been upgraded to ''AA find)'' by M/s Fitch Ratings India Private Limited. Your Directors are happy to report that M/s CARE Ratings have upgraded the rating of unsecured long term Bonds Programme of HUDCO from AA to AA . Further, M/s Brickwork Ratings have awarded AAA rating to HUDCO''s long-term non-convertible debentures/bonds. This is highest ever rating assigned to HUDCO since inception on stand-alone basis. These up gradation and ratings will benefit your Company in accessing the resources at a lower cost, . .

VIGILANCE FUNCTION IN HUDCO

The Corporate Vigilance Department continued to work on improving systems and procedures in the working of the Company. In line with CVC''s directions, several steps were initiated as part of preventive vigilance by putting in place and implementation of e- govemance by the concerned Wings of the Company and Regional Offices. Besides, proper formulation of R&P Rules was emphasized.

Inspection of Regional Offices at Hyderabad, Bhubaneswar and Guwahatl were carried out during the year and employees were detailed about preventive aspects of Vigilance. Vigilance Awareness Week was observed by the Company from 3rd November to 7th November, 2009 at the Head Office as well as at all the Regional Offices.



OFFICIAL LANGUAGE IMPLEMENTATION

HUDCO has been making concerted efforts in implementing the Official Language Policy of Government of India in all its offices and encouraging the employees at all levels to achieve the targets set in the Annual Official Language Programme issued by Government of India. In this context, during the year 2009- 10, 15 officers/employees were nominated for participation in various official language workshops. During the year, various Hindi workshops and meetings of the Official Language Implementation Committee were held. The Bhopal Regional Office has organized a one-day official language workshop for members of the Bhopal Town Official Language Implementation Committee in association with two other undertakings. The month of September, 2009 waq celebrated as ''Rajbhasha Month'' at Corporate Office as well as in the Regional Offices during which, In addition to promoting the use of Hindi in official work, various competitions were organized and Official Language inspections were conducted by the Company at its Jaipur, Guwahati, Chandigarh, Jammu, Patna, Bangalore and Mumbai Regional Offices to ascertain the status of implementation of Official Language policy. During the year, Guwahati Regional Office was inspected by the Parliamentary Committee of Official Language and the progressive use of Hindi in this office was found satisfactory. In recognition of our efforts towards progressive use of Hindi in HUDCO, the Regional Offices at Bhopal, Thiruvananthapuram, Dehradun and Chandigarh were awarded by the respective Town Official Language Implementation Committee - NARAKAS.

FINANCIAL PERFORMANCE

Your Directors are glad to report that your company has achieved Profit before Tax and after prior period adjustment of Rs. 785.82 crore during the year as against Rs. 656.50 crore in the previous year. The Net Profit stood at Rs, 495.31 crore during the year, as against Rs. 400.99 crore in the previous year. Your Directors are happy to report that this is the highest profit after tax recorded by HUDCO ever. The total Reserves and Surplus stood at Rs. 3095.19 crore as on 31.03.2010.

DIVIDEND

Your Directors are pleased to recommend a final dividend of Rs. 59.08 crore for the year-ended 31.03.2010.

STRESSED ASSETS MANAGEMENT

Your company is regularly following up vigorously with the agencies and also pursuing legal actions for the recovery of defaulted amount. Through persistent efforts, the Net NPA has come down to 0.52% during the year as compared to 4.87% in the previous year. Your Company has also created adequate additional provision as a matter of caution.

RISK MANAGEMENT

Your Company has an Asset Liability Management Committee, which meets periodically to assess and take actions for meeting various risks like Interest rate risk, liquidity mismatch risk etc, A risk management cell has also been established. ''

NET WORTH AND DEBT EQUITY RATIO

The net worth of the Company stood at Rs. 5097.09 crore as on 31.03.2010 as against the net worth of Rs. 4647.46 crore on 31.03.2009. The borrowings from all sources stood at Rs. 15520.48 crore as pn 31.03.2010. The Debt Equity ratio of the Company as on 31.03.2010 works out to 3.04.

RESOURCE MOBILISATION

During the year, your Company mobilized its resources through Banking sector Funds and Public Deposits. The incremental cost of borrowing from Banking Sector Loan has decreased by 18% and that for Public Deposit by 21.37% from previous financial year. The total incremental cost for the resource mobilized during the year has declined by 17.17% as compared to previous year,

COST REDUCTION MEASURES

Efforts to identify costly loans/liabilities, wherein the interest rates could be reset or the outstanding loan could be foreclosed, continued during the year, High cost loans/bonds amounting to Rs. 3022.69 crore were prepaid during the year. It would be imperative to highlight that by virtue of term loan agreement executed with the respective lenders), no prepayment penalty in respect of loans foreclosed have been paid. Pursuant to the Company''s request, interest rate was reset downwards in respect of Rs. 2500.86 crore of loans availed from the banking sector (excluding Rs. 400 crore refinance loan availed from NHB and the loans which were reset during the year, but were finally prepaid). All these measures enabled the Company to bring down the cost of borrowings.

CORPORATE GOVERNANCE

Your Company imparts utmost importance to !good Corporate Governance and as per the required provisions, a Corporate Governance Report and Auditors'' Certificate regarding compliance of Corporate Governance norms, forms part of the Directors'' Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As per the required provisions, a Management Discussion and Analysis Report, forms part of the Directors'' Report.

DECLARATION OF CODE OF CONDUCT

Board of Directors of your company has laid down HUDCO''s Code of Conduit and Ethics for all Board Members and senior management personnel of the Company and the same has been placed on the website as well. The Board Members and senior management personnel have affirmed compliance with the Code.

AUDIT REVIEW

Statutory Auditors'' report to the members and comments of the Board of Directors thereon, are self-explanatory and form part of this report as required u/s 217(3) of the Companies Act, 1956.

PARTICULARS OF EMPLOYEES

As required under section 217(2A) of the Companies Act, 1956, the details of the employees who were employed throughout the year and were in receipt of remuneration for that financial year in aggregate of not less than Rs. 24,00,000/- or employed for a part of: the year and were in receipt of remuneration for that part of financial year in the aggregate of not! less than Rs. 2,00,000/- per month, is as follows: -



SI. Name Age (as Desig- Nature Remuneratl No. on 31th nation of -on March Employ Received 2010) ment (Amount In Rs.)

1. Sh. KL Dhingra 54,05 CMD Regular 3333520

2. Sh. T Prabakaran 56 DF Regular 3591644

3. Sh. SK Tripathi 53.10 DCP on 598134 deputation

4. Sh. TK Sanyal 58.04 CVO on 3973063 deputation

5. Sh. RK Khanna 57.05 Sr ED Regular 2801761

6, Sh. HK Dubey 57.05 ED Regular 2549489

7, Sh. R Malhotra 58.04 Chief Regular 1672318 (Sys)

Name Qualifi- Date of Last Date of cation Commen- Employ- Retlre- cement of ment ment/Resig Employ- nation ment

Sh. KL Dhingra M.Cbm, MBA 24.09.07 MRVC Ltd. 07.04.10 (Fini), CAIIB, Mumbai ACIB

Sh. T Prabakaran B.Com, CA 29.12.04 IREDA, New Extension Delhi w.e.f 29.12.09

Sh. SK Tripathi BE (Mech.) 14.11.06 Indian Repatriated Railways on 11.06.09

Sh. TK Sanyal M.sc. LLB 05.10.05 Pr. A/c Gen Extension Punjab 4 UT w.e.f Chandigarh 05.10.08

Sh. RK Khanna Graduate (Fin. 24.06.87 Syndicate 31.10.12 Mgmt), PGD Bank (Mkt& Sales)

Sh. HK Dubey MA (Eco). MBA 31.05.91 DPE 31.10.12

Sh. R Malhotra M.Sc (Stat), 14.06.77 15.10.09 PGD (Trgn. (Deceased) Trainer)

LISTING OF SECURITIES

The Stock Exchanges, wherein your Company bonds are listed as on

31.03.2010, are as follows: - .

1. National Stock Exchange of India Ltd. (NSE)

2. Delhi Stock Exchange Association Ltd. (DSE)

TRANSFER TO/FROM RESERVE AND SURPLUS

During the financial year, your company has transferred Rs. 200 crore to Special Reserve, Rs, 2,26 crore to Welfare Reserve, Rs. 221.99 crore to General Reserve and Rs.130 crore has been carried to balance sheet. Further, an amount of Rs. 2.36 crore has been transferred from Welfare Reserve to Profit and Loss Account and Rs. 125.47 crore has been transferred from Surplus Account to Profit and Loss Account. i

UNCLAIMED DEPOSITS

As mandated under the Housing Finance Companies (NHB) 2001, it is informed that the deposits matured but not claimed as on 31st March, 2010 amounted to Rs. 6.41 crore against 382 FDRs an;d interest thereof was of Rs. 1.33 crore. As per the procedure, regular reminder letters are sent to deposit holders of unclaimed/unpaid deposits for claiming their maturity payment in time.

CONSERVATION OF ENERGY

Since HUDCO is not a manufacturing Company and does not own any manufacturing unit, the disclosure of particulars regarding Conservation of Energy are not applicable, however efforts are made to use energy efficient equipments in the office to ensure conservation of energy.

TECHNOLOGICAL ABSORPTION

HUDCO has entered into a Memorandum of Understanding (MoU) with NT Delhi for synergizing and spreading Bamboo technology. It envisages setting up a National Resource Facility on Bamboo Technology (NRFBT) to promote rural industrialization with focus on bamboo products by upgrading artisan skills, developing improved processes, technology and machinery through scientific, technological and design inputs.

FOREIGN EXCHANGE EARNINGS AND OUTGO 7

During the year, the inflow of Foreign Exchange amounted to Rs. 4.25 crore and outflow of Foreign Exchange was of Rs. 8.34 crore.

COMPOSITION OF AUDIT COMMITTEE

Your Company has an Audit Committee in compliance to the provisions of Section 292A of the Companies Act, 1956 and DPE guidelines and it is dealt in detail in the Corporate Governance section later in the Annual Report.

BUY-BACK OF SHARES

The President of India holds 100% shares of HUDCO and during the year, no offer has been made for buy-back of shares. In view of the same, provisions of section 77A and 217<2B) of the Companies Act, 1956 are not required to be complied and the time limit for compliance for buy back of shares is, therefore, not required.

NAME AND ADDRESS OF DEBENTURE-TRUSTEES

1. Axis Bank Ltd. Maker Tower F, 13tn Floor, Cuffe Parade, Colaba, Mumbai-400005.

2. IL and FS Trust Company Limited Plot C-22, G block, Bandra Kurla Complex, Bandra East, Mumbai-400051.

3. IDBI Trusteeship Services Limited Regd. Office: Asifem Building, Ground Floor, 17, R Kamani Marg, Ballard Estate, Mumbai-400001.

4, United Bank Of India, Block-P, 7 9/90, J C Das Building, Connaught Circus, New Delhi-110001.

5. Punjab National Bank, Sansad Marg, New Delhi -110001.

EMPLOYEE STOCK OPTION SCHEME (ESOS)

HUDCO is a Government Company and all the shares are being held by the President of India. During the year, no Employee Stock Option Scheme has been offeredf to the employees by the Company.

REDEMPTION OF DEBENTURES/BONDS DURING THE YEAR

All the debentures/bonds, which were due for redemption during the year 2009-10, were redeemed in that period and the details are given below:



Series Interest Redemption Redemption Maturity/ rate p.a. Amount date Option (Rs. in crore) exercised

XIV B 12.50% 57.00 08.09.2009 Maturity

XV B 08.25% 50,00 29.03.2010 Maturity

XVI B 11.25% 35.30 31.03.2010 Maturity

SIB - II 12.50% 1.09 23.03,2010 Maturity

SPS -1 11.55% 1.90 10.06.2009 Maturity

SPS-II 12.50% 4.18 15.06.2009 Maturity

SPS-I 07.57% 1.90 10.12.2009 Maturity

SPS-II 12.50% 4.31 15.12.2009 Maturity

XXXVI B 07.20% 4.50 29.03.2010 Put option .

HBS 02 A 08.65% 148.00 29.11.2009 Put option"

XXVIII 07.10% 2.20 06.03.2010 Put option ,

BOARD OF DIRECTORS AND CHANGE IN COMPOSITION OF BOARD

During the year 2009-10, 13 Board Meetings were held to transact the business of the Company. The Audit Committee met 6 times during the year. The Government of India appointed Smt Sudha Krishnan, JS&FA, MoHUPA, as Part- Time Official Director on the Board of HUDCO w.e.f. 3rd December, 2009 in place of Dr. RK Vats. :

Your Directors extend a warm welcome to Smt. Sudha Krishnan for being part of HUDCO. Your Directors also place on record their appreciation for the valuable contribution made by Shri KL Dhingra during his tenure, from 25.09.2007 to 07.04.2010 as Chairman & Managing Director and Dr. RK Vats during his tenure from 18.05.2007 to 03.12.2009 as Director, HUDCO.

Further, Shri T Prabakaran, Director Finance, has been given additional charge of the post of Chairman & Managing Director of HUDCO, w.e.f. 13.04.2010.

DIRECTORS'' RESPONSIBILITY STATEMENT

As required under Section 217 (2AA) of the Companies (Amendment) Act, 2000, the Directors of your company states hereunder:

(i) that in the preparation of the annual accounts, the applicable accounting standards have been followed, along with proper explanation relating to material departures, if any;

(ii) that the directors have selected such accounting particles and applied them consistently* and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for the financial year 2009-2010;

(iii) that the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and

(iv) that the directors have prepared the annual accounts on a going concern basis.

APPRECIATION AND GRATITUDE

Your Directors place on record their gratitude for the invaluable guidance and continued co-operation and support, extended by Ministries of Housing and Urban: Poverty Alleviation, Urban Development, Rural Development, Finance, External Affairs; the Planning Commission, Reserve Bank of India (RBI), National Housing Bank (NHB), Bankers, Comptroller and Auditor Genera!, Statutory Auditors and other Government Departments. Your directors also appreciate the continued support provided by the International Finance Institutions such as Kreditanstalt fur Wideraufbau (KfW), Japan Bank of International Cooperation (JBIC), Aslan Development Bank (ADB), USAID, etc.

Your Directors are grateful to the various State Governments, Housing Boards, Development Authorities, Municipal/Local Bodies and similar Institutions for their

By Order of the Board of Directors

Place: New Delhi H Verma

Dated: 30.06.2010 Company Secretary

---

Mar 31, 2007

The Directors take pleasure in presenting the Thirty-Seventh Annual Report on the business, operations and achievements of Housing & Urban Development Corporation (HUDCO) Limited, together with Audited Accounts for the financial year ended March 31st, 2007.

HUDCO- THE TORCH BEARER

The Indian economy is progressing in parallel with the global economy and the effects of the globalization on Indian economy are becoming clearly visible. India is a developing nation and the graph of its economy is rising at a fast rate and to maintain this pace of development, areas like housing & infrastructure require considerable attention. Your company is playing the role of a Torch Bearer in addressing the areas of housing & infrastructure to enable Indian economy to continue its journey to become a developed nation and provide a magnificence of living to its people.

It is a matter of pride that your company is performing a two fold role, on the one hand it is helping the lower strata of the society (LIG & EWS Categories) in their efforts of getting adequate and habitable housing facilities at affordable rates making the economic growth more inclusive. On the other hand, it is extending financial assistance and need based technical consultancy for the development of town planning, malls, institutions, housing projects, shopping complexes etc. to supplement the economic growth. HUDCO is thus trying to maintain equilibrium in fulfilling its social commitment alongwith profitability by providing relief to the poor and helping India in strengthening the infrastructural base to sustain and prolong the economic development.

In the past, HUDCO was not facing much competition from private sector and other organizations. However, with the globalisation, HUDCO has started facing tough competition from the private sector and other banking organizations. These organisations not only have grown in size but also have the access to low cost funds. Inspite of the aforesaid, your company is successfully maintaining its strong position in the field of Housing & Urban Development sector. Being a techno financial institution, it has gained edge over its competitors, wherein efforts are being made to facilitate its customers under one roof.

HUDCO: AN ISO 9001:2000 CERTIFIED COMPANY

The ISO 9001:2000 certification is a vital step that would lead your company towards rewarding journey for sustainable competitiveness in terms of enhancement of quality service, cost reduction, environmental compliance and brand power.

During the year, Bureau Veritas Certification (BVQI), the quality auditors has made a systematic and detailed assessment of various processes, procedures & quality plans of HUDCO and after in-depth evaluation, your company was awarded ISO 9001:2000 certification by the United Kingdom Accreditation Services (UKAS) and National Accreditation Board for Certification Bodies (NABCB). HUDCO has been appreciated for quality management for all of its activities through systematic procedures, covering projects and retail financing services, resource mobilization for funding, consultancy, joint venture, training, research and networking in human settlement planning & management.

NEW INITIATIVES

During the year, your company has taken a number of initiatives to further strengthen its strong base in housing & infrastructure. These initiatives are not only expected to take your company to new heights in terms of its goodwill and profitability, but will also enable the Indian economy in sustaining its growth and helping the public at large to lead their life in a better way.

The Empress City

HUDCO has assisted for the development of Nagpur by financing for the The Empress City, comprising of Residential Complexes, Information Technology Park, Shopping Mall, etc. The residential complex will rest alongwith a full-fledged Information Technology Park. This place would also include a shopping mall encompassed with terrace gardens, food courts, and restaurants and children entertainment avenues.

Habitat Centre

In order to develop an integrated physical environment, where in various professionals & institutions can deal with different facets of Habitat & Habitat related environment issues in a coordinated manner under one roof, HUDCO financed for the construction of Habitat Centre at Indirapuram, Ghaziabad.

The Habitat Centre at Indirapuram would comprise of a convention hall, auditorium, library, exhibition halls & lounge, art gallery, open concert area, integrated health facility centre, club houses, dining hall, banquet hall, swimming pool, gymnasium, guest rooms, shopping complex and multiplex to cater to the needs of various age groups.

Rajiv Gandhi HUDCO Fellowships in the Habitat Sector

In furtherance of its corporate mission i.e. to promote sustainable habitat development to enhance the quality of life, your company has launched fellowships in the areas related to the Habitat Sector to promote research activities. These fellowships are HUDCOs endeavor to encourage and provide support to bright scholars to undertake research and development activities in the habitat related sectors like slum development, environmental planning, infrastructure development, disaster management, transport planning, building technology, urban renewal and conservation, financing mechanism for poor and Housing economics etc.

This initiative is expected to go a long way to meet the constant need for innovations in housing and infrastructure sector and bring about a paradigm shift to provide adequate housing and assist in fulfilling the infrastructure requirements of the country.

Growth Centre

HUDCO has financed for the development of Growth Centre at Bolpur, Shantiniketan, West Bengal. This novel project will facilitate in creating employment opportunities and business environment, which will enhance the socio-economic scenario in West Bengal. This project comprises of a residential complex with integrated housing for the people having low, middle and high incomes, a commercial complex with bazaars, retail outlets, art & craft centres and hotels. This growth centre will be having a senior citizen residency to serve the need of old age people to provide self dependence and care to them.

Theme Park

HUDCO financed for Theme Park at Chinnakakani, Guntur District, Andhra Pradesh offering high quality recreational facilities to the people. The park would be built on Buddhist architecture for increasing Buddhist tourism in the country. The themed attraction of this park includes monasteries, Herbal Gardens, Ayurveda wellness Center alongwith amusement and recreational activities.

Construction of Stadium for National Games in Jharkand

The Government of Jharkhand has approached HUDCO to finance a project for the construction of a stadium for the National Games, which are scheduled to take place in Ranchi in the year 2008. HUDCO has financed for the development of this prestigious project to facilitate in the construction of main stadium and courts for lawn tennis, badminton, basket ball, gymnastic, khokho, kabaddi together with aquatic & velodrome facilities.

Joint Venture on Public Private Partnership Basis The importance of specialization is well recognized in the current competitive environment. To take the advantage of specializations, different companies associate with each other in one form or another. To reap and provide the benefits of infrastructure development in the country your company has entered into Joint Venture commitment on public private partnership basis to take up various Housing & Infrastructure projects and also in the areas of real estate, IT parks, Port & Airport Development areas.

FUTURE OUTLOOK

Master Plans for Systematic Growth of Cities/ towns

Planned development is a pre-requisite for a comprehensive, cohesive and inclusive development in cities and towns. Your company has been entrusted by the Government of Bihar to prepare master plan initially for eight cities namely Bhagalpur, Gaya, Muzaffarpur, Darbhanga, Arrah, Chapra, Biharsharif and Rajgir. Your company is also undertaking the assignment for preparation of master plans for Bokaro and Deogarh as well as State Urban Development Strategy Report for Jharkhand State. Proposals are under finalisation for extending similar activities in Chattisgarh State as well.

Internationa! Bus Terminal

HUDCO has entered into Memorandum of Understanding (MoU) with Rajasthan Housing Board (RHB) for taking up feasibility study for the multi facility International Bus Terminal project at Mansarovar, Jaipur. The study has been completed and the report has already been submitted to the Government of Rajasthan. Further based on the presentation of feasibility report, RHB has requested HUDCO to act as developer of the said project, which include designing, developing, constructing, marketing & sales of the commercial spaces at the international Bus terminal besides handing over the constructed Bus Terminal asset alongwith its requisite infrastructure facilities to RHB for its operational use and maintenance on profit sharing basis. RHB has also conveyed its decision for entering into development agreement with HUDCO for the proposed development where land will be made available by RHB at its circle rates. The proposal is under consideration.

International Consultancy Project at Ghana

In furtherance of its inherent capability to provide efficient infrastructure consultancy, another feather is added in HUDCOs wings when your company received the proposal from the Government of Ghana for providing consultancy services with regard to drawing up a comprehensive Township Development Plan, for a part of Accra City. HUDCO has also offered its consultancy for setting up a techno-financing institution in Ghana by preparing a feasibility report and introducing an Urban Housing Loan Scheme on HUDCO Niwas Housing Finance Pattern.

Development of Urban Sector & Setting of an Institution similar to HUDCO in Afghanistan Your company has further expanded its horizon of knowledge sharing by holding detailed inter-ministerial discussion with the senior officials of Afghanistan Ministries of Urban Development, Justice & Rural Rehabilitation & Development, Government of Islamic Republic of Afghanistan, for exploring the possibilities of establishing an institutional framework for capacity building, developing institutional relations, undertaking technology transfer, financing and development of Housing and Urban Infrastructure in Afghanistan.

JAWAHAR LAL NEHRU NATIONAL URBAN RENEWAL MISSION (JN-NURM)

The Basic Services to the Urban Poor (BSUP) & Integrated Housing and Slum Development Programme (IHSDP) were launched in the year 2005 under Jawahar Lai Nehru National Urban Renewal Mission with a view to ameliorate the conditions of the urban slum dwellers who are residing in dilapidated conditions. The basic objective of the scheme is to strive for holistic slum development with a healthy and enabling urban environment by providing adequate shelter and basic infrastructure facilities to the urban slum dwellers. BSUP is applicable in 63 identified mission towns, whereas IHSDP is applicable in towns other than those covered under BSUP.

HUDCO is one of the appraising agencies for appraisal of Detailed Project Reports (DPR) received under BSUP & only appraising agency for appraisal of Detailed Project Reports (DPR) received under IHSDP. The existing Valmiki Ambedkar Awas Yojana (VAMBAY) and the discontinued National Slum Development Programme (NSDP) are subsumed in the IHSDP. The main thrust of the programme is to ensure improvement in urban governance so that urban local bodies/para statal agencies become financially sound with enhanced credit rating and ability to assess market capital for undertaking new programmes.

HUDCO is assisting the State Governments/implementing agencies in preparation of DPRs as per guidelines, in addition to organizing Training/workshops to familiarize the agencies with the programmes guidelines.

During the year, your Company has removed the cost ceiling for dwelling units being financed by HUDCO in respect of IHSDPand BSUP under the JNNURM, for Houses under EWS and BPL category. This will help more beneficiaries under the EWS and BPL categories to meet out their housing requirements.

Upto 31.03.2007, 83 BSUP projects, which were appraised by HUDCO, have been sanctioned with project cost of Rs 5471.42 crore envisaging central assistance of Rs 2585.51 crore, and an amount of Rs 5.2399 crore of appraisal fees (including service tax) has been raised by HUDCO pertaining to the BSUP projects.

Further 196 IHSDP projects have been sanctioned with project cost of Rs. 1927.36 crore envisaging central assistance of Rs 1399.75 crore, and amount of Rs 3.1935 crore of appraisal fees (including service tax) raised by HUDCO pertaining to the IHSDP projects sanctioned upto 31.03.2007.

HEALING TOUCH

Your company has always maintained that the needy should be provided with the relief immediately. HUDCO is continuously providing the co- operation and help to all those, who have been shattered due to natural calamities, being faced by our country every year.

Financial assistance for flood affected areas of Gujarat During the year, the areas of Gujarat including Surat were devastated by surge of floods causing serious damage to houses and other civic amenities & loss of human life. To provide immediate relief to the affected people. HUDCO sanctioned a sum of Rs. 1000 crore on the line of credit basis for repairing, retrofitting & reconstruction of infrastructure and houses damaged by flood in the State of Gujarat.

Support for Children affected by Tsunami

In the year 2004, many parts of the Indian coastal areas, especially Andaman & Nicobar Islands, were damaged by the natures wrath in the form of Tsunami. Countless people lost their lives and many became homeless, with a lot of children losing their parents. During -he year,

HUDCO extended its helping hand to support such children to temperate the zest for living.

OPERATIONAL EFFICACY

Operational parameters are significant steps towards the mission of HUDCO to promote sustainable habitat development so as to ensure the enhancement in the quality of life.

During the year, your company has surpassed the operational achievements in comparison to the corresponding year. HUDCO has sanctioned overall 287 schemes for a loan amount of Rs. 12162 crore against the Rs. 10099 crore in the corresponding last year. These sanctions include loan amount of Rs. 2878 crore for Housing (including Rs. 54 crore for HUDCO Niwas) and Rs. 9284 crore for Urban Infrastructure schemes.

An amount of Rs. 3453 crore was released during the year, which includes Rs. 719 crore under Housing (including Rs. 45 crore under HUDCO Niwas) and Rs. 2734 crore under Urban Infrastructure schemes.

HOUSING-A BASIC NECESSITY

Housing is the human need just next to food and clothing and the requirements of housing is increasing with the rapid urbanization. Moreover, investment in Housing is also becoming a key factor to accelerate the pace of development. Your company is commuted to provide helping hand towards solving housing problems of the nation.

Loan sanctions & Releases

During the financial, year a total loan amount of Rs. 2878 crore was sanctioned for Housing Loans. This sanction includes Rs. 2824 crore under VAMBAY, other Action Plans schemes and normal housing schemes, and Rs. 54 crore under HUDCO Niwas.

HUDCO made housing loan releases to the tune of Rs. 719 crore, out of which Rs. 45 crore has been released under HUDCO Niwas.

Dwelling Units sanctioned

During the year, your company has sanctioned 140970 Dwelling Units (DUs) out of which, 80000 DUs have been sanctioned in rural areas and 60970 DUs have been sanctioned in urban areas. Out of the aforesaid, 118983 DUs have been sanctioned for EWS and LIG categories and as such the quantum of Dwelling Units sanctioned to priority sector is more than 84%, which is greater than the stipulated MoU target.

Rural Housing

During the year, one scheme for a loan amount of Rs. 140 crore was sanctioned, for construction of 80000 DUs for the benefit of Economical Weaker Section of people residing in various districts, in the rural areas Andhra Pradesh.

Housing for North Eastern Regions (HUDCOs Helping Hand to North Eastern States)

Your company has sanctioned 11 schemes (including VAMBAY) in the North East Region with a loan assistance of Rs. 53.30 crore, out of which five schemes with a loan assistance of Rs. 32 crore have been sanctioned for construction of 1078 DUs in the State of Assam, one scheme with a loan assistance of Rupees one crore for construction of 62 DUs was sanctioned in the State of Mizoram and five schemes with a loan amount of Rs. 20.30 crore have been sanctioned for construction of 161 DUs in the State of Nagaland.

URBAN INFRASTRUCTURE

Towards facilitating better infrastructure to help India become a prosperous nation, HUDCO sanctioned a total of 135 schemes pertaining to Urban Infrastructure during the year, with a financial assistance of Rs. 9284 crore under various sectors like Water Supply & Sewerage, Solid Waste Management, Power Sector, Social Infrastructure, Commercial Infrastructure, Transport, Industrial Infrastructure, Special Economic Zones (SEZs) etc. Your company released Rs. 2734 crore during the year, for facilitating various schemes pertaining to Urban Infrastructure.

Commercial Infrastructure

Facilitating the commercial infrastructure is one of the premier necessity to build a strong economy. For Facilitating the Commercial infrastructure, your company has provided financial assistance of Rs. 1359.91 crores to 53 schemes in 19 States. Some of the major schemes funded during the year include Five star/Luxury hotels at Udaipur, Jodhpur, Noida, New Delhi & Sholapur, SEZs in the states of Chennai & Karnataka. Malls, Commercial & Office Complexes, at Ludhiana, Raipur, Kolkata, Nagpur, Hyderabad, Mumbai, Manesar (Gurgaon) and Vaishali (Ghaziabad).

IT Park

The world is looking forward to India as upcoming powerhouse in the field of Information Technology (IT) and IT enabled services (ITES). The Government of India is also extending various incentives for the growth of the IT industry.

During the year, your Company has also played a vital role by financing for the development of various projects of IT Parks in different parts of the country. These IT Parks would facilitate the development of business and industry as they lay emphasis on the activities which promotes the growth of research, technology and knowledge based enterprising related to IT areas considered as Specialized Industrial Park. Some of the major schemes funded during the year, were relating to construction of IT Parks at Pune, Bangalore & Chennai.

Industrial Infrastructure

Industrial growth is one of the major constituents of the economic growth. HUDCO has also extended its assistance by financing for eligible components i.e. Land and land Development, water supply, access/Circulation Roads, Residential Townships, street lighting, Jetties, Bus terminals/stops and Community Centers.

During the year, HUDCO has released an amount of Rs. 400 crore during the period, for implementation of various Industrial Infrastructure scheme.

Your company has given in principle approval for financial assistance of Rs. 300 crore for setting up of 1.3 MTPA Integrated steel plant at Jharkhand.

Social Infrastructure

In addition to its efforts in the utility sector, HUDCO has made significant contribution for social infrastructure development enabling upgradation of quality of life. During the year, 37 social infrastructure schemes have been sanctioned in 12 states for a loan assistance of Rs. 552.79 crore. Some of the major schemes funded during the year, are National Games Complex at Jharkhand, Hospital projects in Jammu & Kashmir, Medical College & hospital in Indore, School buildings at Jharkhand & Bangalore and development of tourism facilities in Jharkhand.

Integrated Low Cost Sanitation Programme

The centrally sponsored scheme of Integrated Low Cost Sanitation (ILCS) for Liberation of the Scavengers is being implemented by HUDCO since 1989-90.

HUDCO is the nodal implementing agency for converting the dry latrines into 2-pit pour flush units for liberation of scavengers and to construct new units to improve the sanitation situation. During the year, a record subsidy of Rs. 201.27 crore was sanctioned in the programme to the states of Manipur, Uttar Pradesh and Chattisgarh for three schemes envisaging construction/ conversion of 784332 units. The subsidy assistance of Rs. 470.40 lakh was released by HUDCO to various states. As per the implementation reports, 82665 units have been completely implemented while 131717 units were reported to be in progress. The utilization certificate(s) for Rs. 2877.76 lakh have been received during the year.

Water Supply & Sewerage sector

Water is one of the basic necessities of life, however, in India, still 10% of the population does not have access to potable water facilities even after 60 years of independence. Moreover, according to 2001 census, 26% of the population is still not having access to piped water. HUDCO continues extending special emphasis to the utility services, where water supply and sewerage are treated as foremost in the priority sector of funding.

During the year, your company has provided financial assistance of Rs. 268.22 crore for five water supply schemes in three states viz. Chattisgarh, Jharkhand and Madhya Pradesh. A drainage scheme in the State of Andhra Pradesh with a loan assistance of Rs. 6.14 crore was also sanctioned by HUDCO.

During the year, the loan release for water supply scheme was Rs. 522.82 crore and for sewerage & drainage was Rs. 20.98 crore.

Transport Sector

Transportation facilities are like the veins of the strong economy. It provides for movement of goods and people from one place to another and thus provide mobility to the whole system.

During the year, your company has sanctioned 10 schemes in the transport sector with a total loan amount of Rs. 418.35 crore and released Rs. 470.62 crore for implementation of various transport related schemes. The major schemes sanctioned include Reconstruction of Hatgamharia to Jagannathpur Noamundi Baraiburu Road in Jharkhand, widening & strengthening of eight city roads of Indore, construction & improvements of roads and bridges in Meghalaya, reconstruction of Roads in Jharkhand & fleet augmentation of Uttar Pradesh State Road Transport Corporation Ltd.

Health Sector

Setting up of MedicaS College and Hospital at Madnya Pradesh The health of the economy is directly proportional to the health of its citizens. For healthy citizens, a reasonably good medical facilities within the country are very essential.

India is looked upon as an ideal place for medical tourism by various nations. Keeping in view the reputation of the country in the field and also in view of requirement of adequate medical facilities and education for a large number of population in India, HUDCO is extending its funding to this field.

During the year, your company has sanctioned a scheme for setting up a medical college and hospital in Madhya Pradesh for an amount of Rs. 65 crore. This project will help in providing top class quality medical education and services to the people, which will in, turn help in the upliftment of the society.

Waste Management & Power Sector

Waste management is one of the key concerns worldwide. Worldwide people have been trying to devise new and non-polluting ways to dispose off the waste.

Realizing the importance of waste management and to provide the desired brightness to the India economy, which currently is facing power shortage, your company has contributed its part towards solving this key problem.

During the year, your company has sanctioned 17 schemes in the waste management and power sector for a total loan amount of Rs. 4628.80 crore. In waste management category, two Common Effluent Treatment Plans based on zero effluent were sanctioned in Tamilnadu.

HUDCO sanctioned loan assistance for the power project based on Coal/Lignite & Hydro on consortium basis. When operational these projects are expected to produce about 4915 MW in various states viz. Gujarat, Meghalaya, Maharashtra, West Bengal, Himanchal Pradesh, Orissa, Sikkim & Rajasthan. In addition to this your company has also sanctioned four projects for the improvement in the transmission & distribution system in the states of Rajasthan, Madhya Pradesh & Andhra Pradesh.

Major schemes wherein financial assistance was provided include 1200 MW Hydroelectric power project in Sikkim, 1200 MW project Coal based Power project in Maharashtra and term loan in Andhra Pradesh for strengthening and modernization of transmission systems in Hyderabad and Secundrabad.

During the financial year, HUDCO has released a total loan amount of Rs. 192.68 crore for various waste management and power sector schemes.

CONSULTANCY SERVICES

During the year, your company attained high proficiency in its consultancy efforts through designing a large number of projects in-house, which were spread over the entire country. The design of office buildings for National Commission for Women (NCW), Indian Council for Cultural Relations (ICCR) campus at Chankyapuri, ASI Office Comptex at Tilak Marg, office building for UP Finance Corporation at NOIDA were mainly focused in and around Delhi.

The first time efforts of designing your own institutional complex at NOIDA as a "Green Building" are highly appreciated for which, it is proposed to comply with Energy Conservation Building Code (ECBC) and to obtain LEED-lndia rating on its completion.

Some of the landmark projects undertaken were environmental improvement of Somnath and Qutab Complex, development of beach front at Kanyakumari, environmental improvement around Taj Mahal, Agra, which required sensitive perception and expert skills in designing. The assignment for extension works of Pilgrimage Cum Cultural Centre at Sikkim was also carried out by HUDCO. There are various other new consultancy assignments received by your company, which are already covered in the Directors Report.

HUDCO NIWAS HOME LOANS - THE RETAIL WINDOW

HUDCO Niwas Home Loans - the retail housing finance unit of HUDCO, which provides housing loan to the individuals has successfully completed its 8th year of operations. HUDCO Niwas through its network of 34 offices has its reach throughout the country.

HUDCO Niwas Home Loans offers customer friendly individual housing loans to Resident Indians/Non Resident Indian under Fixed and Floating rate of interest with value added benefits for various purposes like construction of a house, purchase of house or flat, purchase of plot from public agencies/co-op societies of Government employees/reputed developers, extend or improve the existing house of flat, registration of existing house including conversion from leasehold to free hold, refinancing of existing housing loans from other financial institution/banks, loan to professionals for non residential premises, loan against residential property.

HUDCO Niwas Home Loans also offers Bulk loan to the State Governments/its agencies and profit making PSUs for giving House Building Advance (HBA) to their employees and Bulk loans to other Housing Finance Companies.

HUDCO Niwas Home Loans has so far disbursed loan amounting to Rs. 3775.38 crore for 325462 applicants/beneficiaries. Out of this, retail loans were disbursed amounting to Rs 758.70 crore for 28,190 applicants. During the year, HUDCO Niwas Home Loans has disbursed retail loans amounting to Rs. 44.81 crore for 1,144 applicants.

HUMAN SETTLEMENT MANAGEMENT INSTITUTE (HSMI)

HSMI, the research and training wing of HUDCO has been providing International training programme, in house training programme for HUDCO officers, customized and fee based training programmes for urban & Housing Sector agencies and real estate management and state wide training programmes through state level institutions having HUDCO chair.

During the year, HSMI carried out a series of research, training and consultancy activities on capacity building of urban and housing sector institutions to enable them to absorb larger investments (projects) and operate existing projects more effectively, These activities include promotion of skills, expertise, sharing of experience and information collection, documentation and dissemination on various schemes and programmes.

These activities have been taken up through a multi pronged strategy covering International Training Programmes, In-House Training Programme for HUDCO Officers, customized and fee-based training programmes for urban & housing sector agencies & real estate management, state-wide training programmes (including the programmes conducted under SJSRY), training programmes through state level institutions having HUDCO Chair.

In order to promote exchange of experience and skills among housing and urban sector institutions and exploit HSMI skills in a decentralized manner, HUDCO has supported State level and National level research and training Institutes to establish HUDCO Chairs for various capacity building and development programmes. At present, there are 22 HUDCO chairs, which have been established including 19 at state level and 3 at National level.

HSMI has also been identified as the nodal agency by the UN (Habitat) for the co-ordination of best practices submissions for the Dubai International Award for the Best Practices 2006.

VIGSLANCE FUNCTION IN HUDCO

The Vigilance department continued to lay stress on improvement in systems and procedures in the working of the company. For further improving corporate governance, in line with CVCs directions, several steps were initiated for expediting e-govemance. Systems and procedures as finalized and approved by the management and certified by the ISO accrediting agency, have been uploaded on the website. Besides information on project and retail finance as well as those relating to public deposit scheme are also made available on the website.

During the year, three handbooks were released for increasing awareness on vigilance matters. This was also supplemented by inspection of 11 field offices.

OFFICIAL LANGUAGE IMPLEMENTATION

HUDCO is implementing the Official Language Policy of Government of India effectively in its Head Office, all Regional Offices, Development Offices and HUDCO Niwas Offices and encourages its employees at all levels to achieve the targets set in the Annual Programme issued by Department of Official Language, Ministry of Home Affairs, Government of India. Besides providing an enabling atmosphere to its employees to learn and work in Hindi, HUDCO also implements various incentive schemes and programmes in the usage of Official Language. Continuous efforts are being made to get the employees trained in Hindi language and Hindi stenography/typing. HUDCO encourages its employees to make progressive use of Hindi in their day-to-day official work. Making its website bilingual is a landmark of HUDCO. During this year, the Committee of Parliament on Official Language inspected a

Thiruvananthapuram and Chandigarh Regional Offices and Goa Development Office and expressed its satisfaction over the use of Hindi in these offices.

FINANCIAL PERFORMANCE

Your directors are glad to report that your company has achieved a Profit before Tax of Rs. 465.27 crore (after prior period adjustment of Rs. 1.67 crore and provision on loans, investment, debtors and other loans and advances of Rs. 107.56 crore) as against Rs. 382.11 crore for the previous year. With the above provisioning, your company has created a cumulative principal provisioning on loans to the tune of Rs. 868.80 crore (previous year Rs. 764.13 crore), which is higher by Rs. 175 crore (previous year Rs. 75 crore) than NHB norms on loans. The Net profit stood at Rs. 308.38 crore (after adjusting the current tax Including Prior period adjustments of Rs. 121.71 crore, deferred tax liability of Rs. 34.28 crore, and Fringe Benefit tax of Rs. 0.90 crore) as against Rs. 260.24 crore during the last year. The total Reserves stood at Rs. 1911.59 crore as on 31.03.2007.

DIVIDEND

The Board of Directors recommend a payment of final dividend of Rs. 20.68 crore for the year ended 31.03.2007.

STRESSED ASSETS MANAGEMENT

Your company is regularly following up vigorously with the agencies and/or also pursuing legal actions for the recovery of defaulted amount. During the financial year, the gross Non Performing Assets (NPAs) stood at Rs. 2717.85 crore as against the previous year of Rs. 2586.35 crore.

The net NPAs for. the year stood at Rs. 1849.05 crore as against Rs. 1822.22 crore of the previous year. During the year, the company also created additional provision of Rs. 175 crore to meet contingencies.

RISK MANAGEMENT

The company has an Asset Liability Management Committee, which meets periodically to assess and take actions for meeting various risks like interest rate risk, liquidity mismatch risk etc.

NET WORTH & DEBT EQUITY

The net worth of the company stood at Rs. 3878.22 crore as on 31.03.2007 as against the networth of Rs. 3589.83 crore as on 31.03.2006. The borrowings from all sources stood at Rs. 20382.60 crore as on 31.03.2007. The Debt Equity works out to 5.26:1.

RESOURCE MOBILISATION

During the financial year, HUDCO mobilized total resources amounting to Rs. 4464.33 crore including Rs. 1490 crore raised through issue of bonds. The year witnessed an increasing trend in Interest rates coupled with extremely tight liquidity situation in the market, which had an impact on HUDCOs cost of incremental borrowings during the year. During the year, HUDCO also availed short term loans/ lines of credit linked to NSE overnight MIBOR, which enabled reduction in overall cost of funds.

COST REDUCTION MEASURES

Efforts to identify costly loans/liabilities wherein the interest rates could be reset or the outstanding loan could be foreclosed continued during the year. Term loans from Banks alongwith resources raised through Bonds route amounting to Rs. 499.97 crore were foreclosed during the year. Further, liabilities outstanding to the tune of Rs. 333 crore were reset to lower rates. The total amount of loans/liabilities prepaid / reset during the financial year amounted to Rs. 832.97 crore. The aforesaid measures enabled your company to partially offset the overall increase in the weighted average cumulative cost of borrowings during the year 2006-07.

CORPORATE GOVERNANCE

Corporate governance is the set of processes, customs, policies, laws and institutions affecting the way in which a corporation is directed, administered and controlled. Corporate governance also includes the healthy maintenance of relationships among players involved like employees, suppliers, customers, banks and other lenders.

As per the required provisions, a Corporate Governance Report and Auditors Certificate regarding compliance of Corporate Governance norms, forms part of Directors Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As per the required provisions a Management Discussion and Analysis Report, forms part of the Directors Report.

DECLARATION OF CODE OF CONDUCT

Board of Directors of your company has laid down HUDCOs Code of Cohduct & Ethics for all Board Members and Senior Management Personnel of the company and the same has been placed on the website as well. All the Board Members and Senior Management Personnel have affirmed compliance with the Code.

AUDIT REVIEW

You will be pleased to note that after completion of the audit by the Government Auditors, for the financial year 2006-07, no qualification on the Annual Accounts of the Company has been given by the Comptroller and Auditor General of India (C&AG).

Further* Statutory Auditors report to the members and comments of the Board of Directors thereon, are self explanatory and form part of this report as required u/s 217(3) of the Companies Act, 1956.

PARTICULARS OF EMPLOYEES

As required under section 217(2A) of the Companies Act, 1956, the details of the employees who were employed throughout the year and were in receipt of remuneration for that financial year in aggregate of not less than Rs. 24,00,000/- or employed for a part of the year and were in receipt of remuneration for that part of financial year in the aggregate of not less than Rs. 2,00,000/-per month, is as follows:

SI. Name Age Desg. No. (as on 31st march 2007)

1. Dr.P S Rana* 60:08 CMD 2. Shri S K 58.07 CP(D& Goel* D.) 3. Shri S C 57.07 ED Sharma

Nature Remune- Qualification of ration Employ Received ment

Contrac Rs. B.Tech 18,94,998 (Civil) PG.D (town & county ping.) PhD Regular Rs. B Arch 11,79,915 PGD in Hsg. & Bldg. Regular Rs. . MA(Eco) 14,74,307 M.Sc.in

Date of Last Date of commence Employment Retirement ment of employment

25.11.2003 D.T.C. 30.09.06 30.12.1977 NA 31.08.2008 25.07.1989 SAIL 28.08.2006



4..Shri N 58.11 Chief Dharmarajan* (EM&D 5. Shri P M 58.09 ED Tripathi (MS) 6. Shri C M 55.09 Chief Anand (MS.) Public Fin. (fiscal study, UK) Regular Rs. B.E. (Civil) 9,37,831 Dip,in Mgt, MIE, MIWWA Regular Rs. B,Sc., LLB* 10,68,513 OPG DPM, PGO (Co. Law . PM Course Sr. Mgt Course (UK). MHRM Regular Rs. MA Eco., 10.48,493 PGD )(Mgt & Comp.) , MBA

31.10.1991 NBCC 30.04.2008 31.05.1996 Hindustan 30.06.2006 Insecticides Limited 06.11.1990 National 09.09.2006 co operative Development

LISTING OF SECURITIES

The Stock Exchahge(s) wherein HUDCO Bonds are listed as on 31.03.2007 are as foliows:

1- The National Stock Exchange of India Limited (NSE)

2- Bombay Stock Exchange Limited (BSE)

3- Delhi Stock Exchange Association Limited: (DSE)

15% HUDCO Infrastructure Bonds Series, which were listed at BSE, redeemed oh 24th April 2007, and after that day HUDCOs privately placed Bonds/Debentures are listed with NSE & DSE only.

TRANSFER TO/FROM RESERVE & SURPLUS

During the financial year, your company has transferred Rs. 205.00 crore to Special Reserve, Rs. 2.33 crore to Welfare Reserve, Rs. 70 crore has been transferred to General Reserve and Rs. 125.47 crore has been carried to balance sheet. Further Rs. 21.87 crore has been transferred from Special Reserve, Rs. 4.24 crore from Welfare Reserve, Rs. 0.39 crore from Bond Redemption Reserve and Rs. 92.12 crore has been transferred from surplus to Profit and Loss Accounts.

UNCLAIMED DEPOSITS

As mandated under the Housing Finance Companies (NHB) Directions, 2001, it is informed that as on 31.03.2007, an amount of Rs. 31.75 crore is unclaimed for deposits from 561 deposit holders. A separate communication has been sent to each depositor(s) regularly requesting them to collect the unclaimed deposit(s) and/or get the same renewed.

CONSERVATION OF ENERGY

Since HUDCO is not a manufacturing Company and does not own any manufacturing unit, the disclosure of particulars regarding Conservation of Energy is not applicable. However an effort is made to use energy efficient equipments in the office to ensure conservation of energy.

TECHNOLOGICAL ABSORPTION

HUDCO has entered into MoU with IIT, Delhi for synergising and spreading Bamboo Technology with HUDCOs cost component of Rs. 71.00 lakh including Rs. 30.00 lakh as grant from the Ministry of Rural Development. The amount of grant has been released to IIT, Delhi for setting up National Resource Facility on Bamboo Technology (NRFBT) to promote rural industrialization with focus on bamboo products by upgrading artisan skills, developing improved process, technology and machinery through scientific, technological and design inputs.

FOREIGN EXCHANGE EARNINGS AND OUTGO

During the year, under review, the inflow of Foreign Exchange totaled Rs. 11.29 crore and outflow of Foreign Exchange was Rs. 14.34 crore.

COMPOSITION OF AUDIT COMMITTEE

Your Company has constituted an Audit Committee pursuant to the provisions of Section 292A of the Companies Act, 1956 and Clause 49 of the Listing Agreement with the stock exchange(s) and it is dealt in detail in the Corporate Governance section later in the Annual Report.

BUY-BACK OF SHARES

100% shares of HUDCO are being held by the President of India and during the financial year 2006-2007, no offer has been made for buy-back of shares. In view of the same, provisions of section 77A & 217(2B) of the Companies Act, 1956 are not required to be complied and the time limit for compliance for buy back of shares is, therefore, not required.

NAME & ADDRESS OF DEBENTURE-TRUSTEES

1. UTI Bank Ltd. Maker Tower F, 13th Floor, Cuffe Parade, Colaba, Mumbai - 400005

2. United Bank of India North India Region, Block -P, 9/90, J C Das Building, Connnaught Place, New Delhi-110001

3. Vijaya Bank,

Vijaya Building , 3rd Floor,

17 Barakhamba Road, New Delhi -1100001.

4. Punjab National Bank

5, Sansad Marg, New Delhi

5. I IL & FS Trust Company Ltd.

Plot C-22, G Block, Bandra Kurla Complex, Bandra East, Mumbai-400051

6. IDBI Trusteeship Services Ltd. Regd. Office: Asian Building , Ground Floor, 17, R Kamani Marg, Ballard Estate, Mumbai-400 001

EMPLOYEE STOCK OPTION SCHEME (ESOS)

HUDCO is a Government Company and all the shares are being held by the President of India. During the year, no Employee Stock Option Scheme has been offered to the employees by the Company.

REDEMPTION OF DEBENTURES/BONDS DURING THE YEAR

All the debentures, which were due for redemption during the financial year 2006-2007, were redeemed in that period and the details are given below:

Series Interest rate Redemption Redemption Per Annum Amount Date (Rs. in crs)

2005 SDI 6.11% 218.00 April 1,2006 SPS I (A) 9.34% 1.60 June 10,2006 SPS ll(A) 12.75% 3.47 June 15, 2006 HBXXA 10.30% 166.65 July 20, 2006 2001 SD I 10.65% 100.00 July 20, 2006 HB XIVA 12.25% 173.38 September 8, 2006 September 20, HB XXXVIII 6.92% 285.00 2006 2001 HBSD-II 10.00% 50.00 October 31, 2006 ST001 FY (06-07) 7.15% 200.00 November 22, 2006 SPS I (A) 10.19% 1.60 December 10, 2006 SPS ll(A) 12.75% 3.58 December 15, 2006 HB-XXIA 8.40% 40.00 January 30, 2007 2001HBSD-III 9.50% 50.00 January 30, 2007 HGPSTF-IA 8.50% 83.40 March 6, 2007 HB-XXIIIA 9.25% 15.10 March 27, 2007 2002 HB SD-I 9.25% 69.00 March 27, 2007 HB-XXIIA 9.00% 59.00 March 28, 2007 HB-XXIVA 9.25% 17.85 March 28, 2007 HGPSTF-ilA 8.00% 43.50 March 28, 2007 HBXVA 7.99% 100.00 March 29, 2007 HBVII 13.50% 52.00 March 31, 2007 HB XVIA 11.00% 36.50 March 31, 2007

BOARD OF DIRECTORS AND CHANGE IN COMPOSITION OF BOARD

During the year, 22 Board Meeting were held to transact the business of the company. The Audit Committee met six times during the year.

Shri Ranjit Issar, Secretary (MOH&UPA), Ministry of Housing & Urban Poverty Alleviation, was appointed as official Director in place of Shri Pankaj Jain on 29th September, 2006. Further Shri Ranjit Issar, was appointed as Chairman & Managing Director, HUDCO (additional charge), in place of Dr. P.S Rana w.e.f 30th September, 2006, on account of reaching the age of superannuation.

Shri S.K Tripathi has been appointed as Director (Corporate Planning) w.e.f 14th November, 2006. Dr. Raghubir Singh, AS&FA MOH&UPA had been appointed as Part-Time official Director w.e.f. 05th December, 2006, in place of Smt. Neena Garg. Further Dr. R K Vats has been appointed as Part-Time official Director w.e.f. 18th May, 2007, in place of Dr. Raghubir Singh.

Dr. HS Anand, Secretary, Ministry of Housing & Urban Poverty Alleviation, had been appointed as Official Director and Chairman & Managing Director (additional charge) in place of Shri Ranjit Issar w.e.f 14th May, 2007.

Shri Sunil Kumar Singh, Joint Secretary (Housing) has been appointed as Part Time Official Director in place of Dr. H S Anand w.e.f. 6th June, 2007. Further Shri T Prabakaran Director (Finance) had been given the additional charge of Chairman & Managing Director, HUDCO w.e.f. 06th June, 2007 for a period of three months.

Shri K L Dhingra, has taken over the charge as Chairman & Managing Director, HUDCO w.e.f. 24th September, 2007.

Your Director wish to extend a warm welcome to Shri S K Tripathi, Dr. R K Vats and Shri Sunil Kumar Singh & Shri K L Dhingra for being part of our esteemed organization and place on record the valuable contribution made by Dr. P S Rana, Shri Ranjit Issar, Dr H S Anand, Shri Pankaj Jain, Smt. Neena Garg, and Dr. Raghubir Singh during their tenure as CMDs/Directors in HUDCO.

All the changes In the directorship were effected by the order of the Administrative Ministry i.e. Ministry of Housing and Urban Poverty Alleviation.

DIRECTORS RESPONSIBILITY STATEMENT

As required under Section 217 (2AA) of the Companies (Amendment) Act, 2000, the Directors of your company states hereunder:

(i) that in the preparation of the annual accounts, the applicable

accounting standards have been followed, alongwith proper explanation relating to material departures, if any;

(ii) that the directors have selected such accounting policies

and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for the financial year 2006-2007;

(iii) that the directors have taken proper and sufficient care for

the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and that the directors have prepared the annual accounts on a going concern basis.

APPRECSATIOW AMD GRATITUDE

The Directors place on record their gratitude for the assistance and guidance rendered by Ministry of Housing and Urban Poverty Alleviation, Urban Development, Rural Development, and Finance, External Affairs, the Planning Commission, Reserve Bank of India (RBI), National Housing Bank (NHB), Bankers, Comptroller & Auditor General, Statutory Auditors and other Government Departments. Directors also acknowledge the support of International Finance Institutions such as Kreditanstalt fur Wideraufbau (KfW), Japan Bank of International Cooperation (JBIC), Asian Development Bank (ADB), USAID, and wishes to place on record their appreciation to ail the members of HUDCO family, whose dedication, hard work and cooperation have made it possible for the company to show satisfying performance.

For and on behalf of the Board of Directors

Chairman & Managing Director Place: New Delhi Date : 14th Dec,2007

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Mar 31, 1999

The Directors have pleasure in presenting the Twenty Ninth Annual Report on the working of the Housing and Urban Development Corporation Ltd. (HUDCO) together with the Audited Statement of Accounts for the year ended 31st March, 1999.

MAJOR ACHIEVEMENTS

Launching of HUDCO Niwas

HUDCO after having contributed to the construction of houses benefiting over 85.58 lacs housing units, through its financial assistance of the order of Rs 23055 crore to public sector agencies, private sector, joint sector, cooperative sector, corporate sector and community sector, has now launched the HUDCO Niwas - the housing loan scheme for individuals.

The user friendly scheme aims to provide speedy and value added housing finance loans for construction of houses, outright purchase of flats/apartments/houses, and also for home improvement or upgradation. Planned to meet the varied requirements of all households, HUDCO Niwas will cater to all the segments of society, by providing assistance upto Rs 15 lacs at competitive interest rates. Launched on March 8th, 1999, HUDCO Niwas, with a broad based user friendly options and also value added services extended as part of the scheme, has received overwhelming response.

HUDCO has been progressively moving towards provision of individual housing loans. In fact, HUDCO had a corporate strategy for housing as far back as 1992, as part of our Corporate Plan `Vision-2002'. The diversification of its operations into the various housing delivery modes has been systematic and well planned. From the initial financing of public sector housing agencies such as housing boards and development authorities, HUDCO diversified into financing cooperative housing in the mid-seventies. This was followed by corporate lending - both in the public and private sector. HUDCO then went on to financing real estate builders. Recently, HUDCO started down-marketing credit to the poor through non-conventional routes like NGOs, CGOs and CBOs. Extending techno financial assistance to individuals was the last link in this chain, and HUDCO have entered that too, now.

HUDCO Niwas would provide a package of services, besides access to competitive loans on easy and affordable terms. This scheme offers substantial back-up services for guidance, on cost effective housing and an innovative package for loan servicing with a variety of options like the graduated and telescopic loan repayment packages for young home builders. Equally important is the terms of loan assistance offered for employees with long services or those starting their housing efforts towards the end of their career.

The target for a total sanctions for HUDCO in 1999-2000 is fixed at Rs 6130 crore. For the individual housing loan portfolio, a sum of about Rs 500 crore would be set aside. The individual housing loan window will operate seven days a week. The loans will be expeditiously processed and sanctioned after receipt of a completed loan application.

A Momentous year

The financial year 1998-99 has been a momentous year for HUDCO - be in respect of its operational performance, diversification of its delivery modes, expansion of its equity base, or forging of tie-ups in green-field areas, and HUDCO achieved a landmark performance. Reaching out to every section of the population, with a variety of delivery options, both in housing and urban infrastructure development, and diversification of its activities, towards achieving this objective were the hall mark of its operational success during the year. During the year 1998-99, HUDCO has achieved an all time high loan sanctions of Rs 6686.67 crore, 118% above last year's achievement of Rs 3061.86 crore, providing assistance for construction of a record 18.60 lacs dwelling units, over 9 lacs sanitation units, and 122 urban infrastructure projects throughout the country. The loan released during 1998-99 amounted to Rs 3200.68 crore, an increase of about 42% as compared to Rs 2263 crore released last year.

Shelter Fund for 2 Million Housing

As part of the National Agenda, the Government has accorded priority to 'Housing for All' and was proposed to take up for constructing 2 million houses out of which 13 lacs would be in rural areas and 7 lacs in the urban areas. The Ministry of Urban Development has drafted an Action Plan for construction of 7 lacs additional dwelling units in the urban areas for EWS and LIG beneficiaries. The Action Plan envisages an investment of over Rs 4000 crore every year to meet the target of 7 lacs additional dwelling units in urban areas.

The Action Plan also envisages HUDCO to provide finance for 1/3rd of the total requirement and balance 2/3rd would be shared by the other Housing Finance Institutions and Banks. Since, the entire housing programme is tuned to meet the requirements of EWS and LIG, there is necessity to provide funds at lower rate of interest. In order to mobilise resources at cheaper interest rate and also extend the financial facility to HUDCO and other Housing Finance Institutions, the Government of India is proposing to set up a Shelter Fund which would bridge the gap given in the borrowing and lending rate. The scheme has been formulated by Government of India and the fund is proposed to be set up at HUDCO. The contribution in the fund will come from budgetary support from Central and State Governments, Corporate Sector and from other sources by providing tax incentives under the Income Tax Act.

HUDCO's contribution for the 2 million housing programme during the year has been significant as HUDCO has sanctioned a loan assistance of Rs 1891 crore for construction of 10.65 lacs units against its target of 10 lacs units, under the 2 million housing programme. HUDCO has supported 4.30 lacs units in urban areas against 4 lacs units assigned and 6.35 lacs units in rural areas against the target of 6 lacs units.

Larger Budgetary Support

The budgets for 1998-99 and 1999-2000 have provided massive support for HUDCO's housing and urban development operations. In recognition of HUDCO's significant contribution in the field of housing and urban infrastructure development, the Government has raised the authorised capital of HUDCO from the earlier Rs 385 crore to Rs 1250 crore. During the year 1998-99, the Government provided an additional equity of Rs 192 crore (including Rs 11 crore advance against Share Capital received in the previous year). In addition, the Government has allocated an additional equity of Rs 321 crore for the year 1999-2000. With this enhancement, HUDCO's equity base would be of the order of Rs 898 crore by the end of 1999-2000. This would enable it to mobilise an additional Rs 4200 crore, from a broad based market sources, for extending finance to housing and urban development activities, in a more significant manner.

FUTURE OUTLOOK

HUDCO is now gearing up to support 1.5 million dwelling units every year and other urban infrastructure projects with operations envisaged for 1999-2000 of the order of Rs 7340 crore - Rs 4650 crore for housing and Rs 2690 crore for urban infrastructure development.

With the launching of HUDCO Niwas, HUDCO is moving closer to achieving the objective of `Shelter for All'. HUDCO hope to fulfill its social objective of reaching out to the masses and make their dreams of owning a roof over their head, a reality.

OPERATIONAL HIGHLIGHTS

Housing

In the area of Housing, HUDCO achieved significant strides during the year by sanctioning 1025 schemes with HUDCO loan assistance of Rs 4016.92 crore. A total of 18.60 lacs units have been funded, with 13.04 lacs benefiting rural areas and the balance 5.56 lacs benefiting urban areas.

Emphasis on Economically Weaker Sections and Low Income Groups

A significant emphasis has been laid on the housing requirements of Economically Weaker Sections and Low Income Groups during the year. Out of the total 18.60 lacs units sanctioned during the year, as much as 18.25 lac units are for the EWS and LIG categories.

A total of 101 schemes have been sanctioned for a total loan amount of Rs 302.24 crore for construction of 1.59 lacs units under the Maithri Housing Scheme in Kerala. In Karnataka, as part of the Ashraya Housing Scheme for the weaker sections, 161 schemes have been sanctioned for a total loan amount of Rs 315.88 crore for the construction of 2.25 lacs units. Further, 5 schemes have been sanctioned to the Krishna Bhagya Jal Nigam Ltd. with a total loan assistance of Rs 269.36 crore for construction of 97,913 units for the rehabilitation of the people displaced by Upper Krishna Project. In addition, 83 Rural Housing Schemes for a total loan assistance of Rs 272.33 crore for construction of 2.72 lacs houses have been sanctioned to Andhra Pradesh. Sanction of 11 schemes for Rs 29.45 crore HUDCO's assistance for the construction of 18,312 houses in Himachal Pradesh as part of the Gandhi Kutir Yojana, 14 schemes for construction of 50,000 units with an assistance of Rs 171 crore as part of Rajiv Ashray Yojana in Madhya Pradesh, and 8 schemes for construction of 40,800 units with a loan assistance of Rs 124 crore in Uttar Pradesh are some of the other major schemes taken up during the current year for the Weaker Section Housing.

Disaster Relief

HUDCO continued its positive response to the people ravaged by the natural disasters in the country. During the year 1998-99, HUDCO has sanctioned 2 major schemes to the Government of West Bengal for a total loan assistance of Rs 100 crore for reconstruction/repair of 6,40,000 units for the people affected by tornado/floods and other natural calamities in the districts of Malda, Murshidabad, Midnapore etc. Further, in continuation of the already extended assistance for earthquake rehabilitation at Jabalpur, HUDCO sanctioned additional 4 schemes, during 1998-99, with a total loan assistance of Rs 10.36 crore for reconstruction/repair of 3050 units, adding up the total assistance extended to Rs 60 crore for construction of about 22,000 units. A total of 7 schemes have been sanctioned to the State of Orissa for construction of houses for rehabilitation of fire affected villages, with a total loan assistance of Rs 10.50 crore for 4200 units in the district of Khurda, Puri and Ganjam. HUDCO has also responded spontaneously for reaching out to the earthquake affected population in the Chamoli and Rudraprayag regions of Uttar Pradesh which were recently rocked by massive earthquake. In addition to financial assistance as soft loans for reconstruction/repairs/renewals/retrofitting of the damaged housing stock, HUDCO has also offered to provide technical expertise for the same through the establishment of 5 Building Centres, with 3 in Chamoli district and 2 in Rudraprayag district. HUDCO would also adopt one village each in both affected districts as HUDCO Adarsh Gram for integrated development of the affected villages. HUDCO also proposes to set up few demonstration units to exhibit appropriate technologies for disaster resistant construction.

For the significant contribution made by HUDCO for evolving appropriate rural habitat design, for the rehabilitation of earthquake affected population at Latur, HUDCO has been awarded the prestigious "Architect of the Year Award - 1998" from M/s JK Cements (India) Ltd.

Housing Through NGOs/CBOs Initiatives

HUDCO has consistently extended a significant emphasis on promoting NGO/CBO initiatives for housing delivery. During 1998-99, a total of 17 schemes with a total project cost of Rs 15.26 crore with a HUDCO loan assistance of Rs 11.05 crore for construction of 4291 housing units were sanctioned. Major NGOs to whom schemes have been sanctioned include SPARC, Mumbai (700 units), RASS, Andhra Pradesh (1000 units), SIDA, Kerala (500 units), COSTFORD, Kerala (500 units) and KVK, Tamil Nadu (750 units). Lead participation of HUDCO in the pioneering Insurance linked Savings-cum-Loan-cum-Subsidy scheme of the CDS in Kerala has been a trend setting one, offering substantial potential for replication.

Rental Housing Initiatives

A number of special projects have also been sanctioned for staff rental housing for the State Government employees and Police Personnel during the year 1998-99. A total of 41 schemes for a loan amount of Rs 504.70 crore, for the construction of 12535 rental housing units for Police Personnel and 13063 units for Government Rental/HBA schemes, have been sanctioned. The major beneficiary states include Tamil Nadu (6964 units), Assam (4066 units), Meghalaya (4006 units), Andhra Pradesh (3000 units) and Punjab (2887 units).

Special Initiatives in the North Eastern Region

HUDCO continued its special thrust towards development of the North Eastern States through a special allocation of 10% of its annual funds under its housing portfolio. During the year 1998-99, HUDCO sanctioned 28 schemes with a total loan component of Rs 339.33 crore for construction of 45895 dwelling units. This includes 9 schemes in Assam for construction of 37208 units, 4 schemes in Meghalaya for 4138 units, 5 schemes each in Manipur for 2023 units, Nagaland 2020 units and Mizoram 495 units.

HUDCO has sanctioned a loan assistance of Rs 35 crore to the Planning & Development Authority, Imphal for development of Sports Complex for the Vth National Games at Imphal. The Sports Complex consists of main stadium cycle velodrome, indoor stadium aquatic complex, shooting range, boxing range etc. This is in addition to HUDCO's assistance extended for construction of Games Village Complex, to the tune of Rs 46 crore last year.

Urban Infrastructure

As market leader in urban infrastructure financing, HUDCO continued extending finance for a variety of projects during 1998-99. During the current financial year, a total of 122 urban infrastructure projects have been sanctioned with a total project cost of Rs 5097.82 crore with a HUDCO loan component of Rs 2654.75 crore, as against Rs 1268 crore in 1997-98, registering a growth of over 109%. An amount of Rs 1272.89 crore has been released. The projects sanctioned include 29 water supply schemes, 21 sewerage/drainage/solid waste management schemes, 22 road transport projects, 30 social infrastructure projects, 14 area development projects and 6 other projects including commercial schemes.

Water Supply

The special emphasis extended by HUDCO for the water supply sector, continued this year too. A total of 29 schemes with a total loan amount of Rs 679.47 crore have been sanctioned during the financial year 1998-99. The significant water supply schemes sanctioned include the Pune Water Supply Scheme (loan amount Rs 100 crore), augmentation of existing water supply scheme of Bhopal (Rs 77.51 crore), water supply scheme for Faridabad (Rs 20 crore), water supply for Silchar town (Rs 9.54 crore), water supply in 44 towns in Tamil Nadu through TWAD Board (Rs 178.10 crore), and water supply for Coimbatore (Rs 15 crore). These also covers 8 schemes in Tamil Nadu (loan amount Rs 339 crore), 5 towns in Kerala (Thrissur, Calicut, Tirur, Varkala and Palakkad - Rs 55.46 crore), 3 towns each in Assam (Tinsukia, Lanka and Greater Silchar - Rs 25 crore), Gujarat (two schemes in Ahmedabad and one in Veraval-Patan - Rs 17.42 crore) and Madhya Pradesh (Bhopal, Guna and Indore - Rs 106.93 crore) 2 towns in Nagaland (Mon and Zunheboto - Rs 8.28 crore) and Amritsar (Rs 6.82 crore) in Punjab.

Environmental Improvement Schemes including Waste Management

A total of 10 schemes for provision/improvements in sewerage/drainage systems have been sanctioned during the financial year. This include two drainage schemes in Rajasthan (Rs 13.44 crore), sewerage schemes at Jaipur (Rs 18.2 crore), Jammu (Rs 17.33 crore), five towns in Punjab including Amritsar (Rs 19.36 crore) and Lucknow (Rs 4.01 crore).

A unique project has been sanctioned to Chennai Metropolitan Development Authority for a loan amount of Rs 143.78 crore for improvements to 122.28 km length of water ways in Chennai which includes River Cooum, Adyar and Buckingham Canal. The project envisages construction of flood defences and resectioning of water ways by desludging and desilting, rehabilitation and resettlement of slums located along the water ways.

Waste Management Efforts

During 1998-99, HUDCO has extended significant emphasis on waste management projects. HUDCO has taken lead to bring in synergy in the efforts of Ministry of Non-Conventional Energy Sources (MNES) and Ministry of Agriculture. A total of 11 schemes with a loan assistance of Rs 100.61 crore have been sanctioned to waste management schemes. This includes the 7 schemes for a total loan amount of Rs 24.17 crore, for Municipal Solid Waste Management in the towns of Varanasi (Uttar Pradesh), Shillong (Meghalaya), Pondicherry, Alwar (Rajasthan), Imphal (Manipur), Thrissur (Kerala) and Nagpur (Maharashtra).

HUDCO has also participated in a number of `waste to energy' projects during the current year. HUDCO has taken lead by financing the Country's first project on BOO/BOOM basis in the waste management sector in Nagpur. This plant has the distinction of being the first MSW based biomethanation plant (on a commercial basis) in India.

Besides this, HUDCO widened its sphere of activities by financing agro/industrial waste projects in the form of Bagasse based co-generation projects. Four such schemes have been sanctioned in Mudhol (Karnataka), Vadodara (Gujarat), Satara and Sangli (Maharashtra) for a total loan assistance of Rs 76.44 crore. The total installed capacity of power production from these plants is 63.75 MW with an exportable surplus power production of 33.26 MW.

HUDCO has prepared solid waste management project reports for 9 towns/cities including the pilgrim towns of Thrissur and Guruvayur in Kerala, Imphal (Manipur), Shillong (Meghalaya), Pondicherry, Anantpur (Andhra Pradesh), Alwar (Rajasthan), Aligarh and Allahabad (Uttar Pradesh). The towns of Thrissur, Imphal, Shillong, Pondicherry and Alwar have also availed HUDCO's financial assistance for implementation of the schemes.

Transport Sector

In line with the increasing need to provide adequate infrastructure facilities in urban areas, a special thrust has been laid during the year 1998-99 towards provision and improvement of roads/bridges and other transport sector requirements. A total of 24 projects in transport sector with a total project cost of Rs 1651.73 crore and with a HUDCO loan component of Rs 903.10 crore have been sanctioned. This includes the additional loans to Cochin Airport (Nedumbacherry) for its expansion to the tune of Rs 35.23 crore, during the current year. Thus, the total loan assistance extended to Cochin International Airport is about Rs 143 crore. Another major project has been sanctioned to CIDCO Maharashtra, for the development of Commuter Railway Project in three different corridors - Vashi to Thane, Belapur to Panvel and Nerul/Belapur to Uran for a loan assistance of Rs 365.74 crore against the project cost of Rs 493.92 crore. This project involves laying of 59.4 kms of railway line and development of 19 railway stations in Navi Mumbai to connect it with Greater Mumbai. The significant road transport projects sanctioned during 1998-99 include the sanction of Rs 50 crore to Punjab for upgradation of 356 kms of road including provision of bridges, sanction of Rs 72.75 crore to Chennai Corporation for construction of 10 fly-overs, construction of bye-pass road at Coimbatore (Rs 15 crore), construction/completion of outer ring road (Rs 33.73 crore) and construction of grade separator at Richmond circle (Rs 20.46 crore) at Bangalore, improvements to NH-8 and NH-8-A (Sections Bagodhara-Vataman-Tarapur-Vasad Road and construction of Section Ahmedabad - Rajkot) with a total loan assistance of Rs 198.22 crore and development of inter-state bus terminus at Patna (Rs 12 crore).

Social Infrastructure

HUDCO continued its thrust towards sanctioning schemes of significant social relevance that enable enhancement of the quality of life in urban areas. During the year 1998-99, a record number of 30 social infrastructure schemes have been sanctioned with a total project cost of Rs 619.36 crore and with a HUDCO loan component of Rs 331.69 crore. The significant projects include six major medical facilities in Calcutta, Delhi, Erode, Bangalore, Thiruvananthapuram and Chenganur (Kerala) for a total assistance of Rs 122.28 crore, construction of Police stations and related infrastructure in the states of Andhra Pradesh, Rajasthan, Haryana, Himachal Pradesh and Kerala for a total loan assistance of Rs 67.53 crore. Schemes for construction of primary school buildings in the state of West Bengal with a loan assistance of Rs 30 crore have also been sanctioned. In addition, an amount of Rs 35 crore has been sanctioned for construction of the sports complex at Imphal for the Vth National Games.

Special Project for Energy Efficiency

A special scheme for providing a line of credit for energy saving initiatives in Karnataka has been sanctioned for Rs 150 crore, to the Karnataka Electricity Board, which would substantially bring in efficiency in the distribution system to generate more revenues, through reduction in unaccounted losses and transmission losses. This project is unique and first of its kind and which besides additional revenue generation. would also help in conservation of fast depleting natural resources.

Establishment of Model Village [(Adarsh Gram)/Model Improved Slums (Adarsh Basti)]

HUDCO initiated a programme for development of Model Villages (Adarsh Gram) and Model Improved Slums (Adarsh Basti) for providing integrated inputs of physical planning, architectural design, efficient utilisation of land and appropriate technologies ensuring user participation, use of innovative/renewable sources of energy etc. With a convergence mode in all the States and Union Territories, as a part of the Golden Jubilee Year initiative, so far 10 Model Villages and 13 Model Bastis have been approved for grant-in-aid assistance of Rs 8.40 crore.

CUMULATIVE ACCOMPLISHMENTS

Cumulatively till March 1999, HUDCO has sanctioned a total of 14263 schemes involving a total project cost of Rs 38416 crore with HUDCO's loan component of Rs 23055 crore. An amount of Rs 15473 crore has been released so far. HUDCO's assistance has helped in the construction of 85.58 lacs residential units, about 49 lacs sanitation units and in undertaking 709 urban infrastructure schemes effectively improving the living conditions in the urban and rural areas, in 1726 towns and thousands of villages.

FINANCIAL HIGHLIGHTS

HUDCO has continued its tradition of profit making organisation with social focus. Your Directors feel immense pride to report that 1998-99 has been yet another year of impressive financial results. The profit (after prior period adjustment but before the non recognising the income of Rs 133.43 crore towards interest in respect of loans which has become NPA) is Rs 221.41 crore as against Rs 156.86 crore for the previous year. After providing Rs 7.50 crore towards NPA provision for principal, Rs 20.86 crore towards provision for income tax and after adjusting Rs 10.09 crore towards excess/short provision of income tax and interest tax of earlier years, Rs 69.71 crore is available for appropriation. Out of this, your Directors recommend transfer of Rs 57.16 crore to the special reserve u/s 36(1)(viii) of the Income Tax Act, 1961, Rs 5 crore to reserve for provision of bad and doubtful debts and balance of Rs 7.55 crore to the Debenture Redemption Reserve. The total reserves of HUDCO at the end of the year stand at Rs 599.47 crore, the paid-up equity share capital at Rs 396 crore and Share Application Money at Rs 181 crore.

RESOURCE MOBILISATION

HUDCO enjoyed substantial recognition and appreciation in the domestic capital market as well as with international agencies. Substantial new initiatives in increasing market orientation of resource mobilisation, as against dependence on direct credit were taken by HUDCO.

In 1998-99, HUDCO has been able to achieve a significant success in its resource mobilisation efforts. A record mobilisation of Rs 3240 crore (including Rs 11 crore advance against Share Capital received in the previous year) has been achieved surpassing the MoU target of Rs 2050 crore by 58.05%, and also registering an increase of over 22.5% over the last year's achievement (Rs 2635.09 crore). This mobilisation has been through a basket of options covering both domestic and external funding sources. An additional equity of Rs 192 crore during 1998-99 has been received from the Government of India. The other sources include the term loans from the banking and insurance sector (Rs 1729 crore), public sector bonds (Rs 645.60 crore), loan drawals from OECF (Rs 41.87 crore), HUDCO's Public Deposit Scheme (Rs. 36.90 crore), loans from other financing institutions such as NHB, SIDBI etc. (Rs. 566.61). In addition, a grant amount of Rs 28.58 crore has also been received from Government of India and KfW for building centres and related activities.

A major highlight of the resource mobilisation during 1998-99 is that over 95% of the funds raised are for long-term nature. HUDCO has been able to raise Special Infrastructure Bonds of Rs 150 crore from the proceeds of Resurgent India Bonds.

INTERNATIONAL ASSISTANCE

KfW

The funding from Kreditanstalt Fur Wiederanfbau to HUDCO, under Indo-German Bilateral Assistance is an on-going process since 1984. Out of the total 10 line of credit with a total financial co-operation of over DM 300 million, DM 143.04 million has so far been availed. During this financial year, DM 6.74 million equivalent to Rs 16.08 crore has been drawn. This includes the major release for the Andhra Pradesh Cyclone Rehabilitation measures for construction of EWS Housing Schemes in the coastal Districts of East Godawari, West Godawari, Cuddapah and Prakasham.

In addition, the programme of developing Model Villages (Adarsh Grams in Rural areas) and Model Slums (Adarsh Bastis in Urban areas) is being partly financed out of the interest earnings of KfW support. During this year, 23 such Model Villages/Bastis have been sanctioned in various parts of the country, with the financial assistance of over Rs 8 crore from KfW.

OECF

HUDCO's continued efforts for mobilising international assistance, have yielded results. Two water supply schemes, namely, the Solapur Water Supply Scheme by Solapur Municipal Corporation and the Hetawane Water Supply Scheme by City and Industrial Development Corporation of Maharashtra Ltd. (CIDCO) are funded under the Overseas Economic Cooperation (OECF) Fund first loan assistance of 6.78 Billion Japanese Yen. Solapur Water Supply Scheme has been successfully completed and test commissioned in the month of June 1998. Hetwane Water Supply Scheme of CIDCO is expected to complete by March 2000. Total OECF funds drawn for these two schemes amount to 3.74 Billion Japanese Yen.

Under the second OECF Line of Credit of 8.67 Billion Japanese Yen, HUDCO has drawn up-to-date 3.66 Billion Japanese Yen for eight infrastructure schemes cleared by OECF.

USAID

During the year under review, HUDCO has concluded a borrowing under the United States Agency For International Development (USAID) Programme. HUDCO has been selected as one of the financial intermediaries by USAID for raising resources in USA under the USA Housing Guarantee Scheme. As per the agreement, both HUDCO and ILFS have been authorised to raise resources for US $ 125 Million. HUDCO has since initiated action to raise US $ 10 Million which is likely to be concluded by 30th September, 1999.

ADB

HUDCO also is likely to get a sum of US $ 90 Million from Asian Development Bank (ADB) for funding urban infrastructure projects. During the year, HUDCO has so far drawn US $ 50 Million from ADB, out of the Line of Credit of US $ 100 Million provided by ADB under the India Housing Programme and the balance US $ 50 Million would be drawn before 31.12.1999.

World Bank

The World Bank TA Study on HUDCO's Infrastructure operations through the International Consultant M/s Price Water House & Coopers has since concluded. The consultants have since submitted their report to the World Bank which is under consideration of the World Bank.

HUMAN SETTLEMENT MANAGEMENT INSTITUTE (HSMI)

HUDCO's operations can be summarised as one signifying "Profitability with Social Justice". HUDCO's prime concern, thereby lies in affordable housing for economically weaker sections and low income families having very low repaying capacity through efficient design support to building material industry and design development. Besides, there is equal stress on expansion of urban infrastructure lending, housing delivery through expanded avenues including retail financing, increased consultancy assistance services for projects initiatives and in-house research and training programmes with national and international networking. An in-depth knowledge, therefore, of the socio-economic background of the people, technical and managerial skills are essential to handle this task effectively.

The Human Settlement Management Institute (HSMI), the Research and Training Wing of HUDCO functioning at the national level in the field of human settlements has been fulfilling some of these intrinsic requirements through research and training efforts. With its efforts to provide capacity building to the professionals engaged in this sector, HSMI, during 1998-99 organised 123 events for the officials of HUDCO's Borrowing Agencies, Urban Development Authorities, Local Bodies as well as for NGOs, Private Sector, Housing Finance Institutions, Project Managers of Building Centres, Senior Officials sponsored by Department of Personnel and Training and Civil Servants benefiting over 3000 professionals. These professionals include the functionaries involved in the Swarna Jayanti Sahari Rozgar Yojna (SJSRY) programme of the Govt. of India, for which HSMI has been identified as the nodal institute for Information, Education and Communications (IEC) component of the scheme. It also promoted new training areas of Urban Management, Urban Infrastructure, Poverty Alleviation, Urban Environment, Disaster Management, City Level Information Systems etc. Another feature of HSMI training is a regular professional course of eight weeks for the Overseas Administrators from the regions of Asia, Africa and Latin America on Urban Development Management. Of significance is the regular training programme conducted by the Institute for the managers of the building centres from all over the country. HSMI has also conducted training programme for 100 bright young professionals recruited by HUDCO under in-house training initiatives.

HSMI has been working with several international organisations such as UMP, UNCHS, UNDP, UN-ESCAP, ADPC and AIT, Bangkok, Collaboration for common areas of interest with WHO, DFID, USAID, DTUDP, IHS, Rotterdam, UNCHS and CITYNET have been significant developments for future directions of the Institute. These include hosting of CITYNET Executive Committee Meeting, Training of Trainers' programme in collaboration with UNCHS, International Seminar with DTUDR IHS, Rotterdam and Workshop on Technical Hazards with ADPC, Bangkok in collaboration with National Safety Council, Mumbai. Further, substantial international networking for Research and Training in the field of human settlement through the newly set-up LOGOTRI by UN-ESCAP and well established networks such as CITYNET and TRISHNET for Asia and the Pacific Region is also being strengthened by HSMI with national, regional and international support.

The Ministry of Urban Development has identified HSMI as a nodal Institute for documenting the Best Practices in the sector for submission to UNCHS for their consideration of Dubai Award for the Best Practices in the year 2000. Under this assignment, the Institute has contributed in i) Documentation of the Best Practices for the year 1998 for submission to UNCHS ii) Release of a book on the Best Practice Cases documented in 1996 and iii) Release of a CD on Best Practices containing cases of 1996 including select cases of 1998. Under new initiatives in training, HSMI and IHS, Rotterdam have jointly conducted a sandwich programme of three months duration on "Environmental Management of Human Settlements". The Government of Netherlands fully funded the first course attended by a group of 16 participants from 10 cities in India.

BUILDING CENTRE MOVEMENT

HUDCO continued its efforts in expanding the Building Centre Movement towards promoting cost effective, durable, aesthetically pleasing building materials and technologies during the year. A total of 90 new Building Centres were sanctioned, making a cumulative total of 624 Building Centres in the National Network, of which 352 Building Centres are fully functional, and the others are in various stages of establishment. A significant emphasis has been made towards expanding the network to cover areas, which have not been covered so far. Another major positive aspect is the increasing involvement of the NGOs and Voluntary Organisations and Charitable Trusts as indicated by sanction of 35 building centres to these agencies during 1998-99.

During the year, five special Building Centres, 3 in Chamoli and 2 in Rudraprayag Districts have been established for the rehabilitation measures and implementation of earthquake resistant housing/building construction programme, with the principal participation of Uttar Pradesh Housing and Development Board.

Special emphasis has also been laid on expanding the Building Centre Movement in the North Eastern Region. A total 16 Building Centres have been approved covering 6 in Nagaland, 3 in Assam, 2 each in Manipur, Mizoram and Arunachal Pradesh and 1 in Tripura. In addition, 29 Building Centres in Uttar Pradesh, 7 each in Karnataka and Bihar and 6 in Maharashtra have also been sanctioned during the current year. The Building Centres so far have taken up construction activity to the tune of Rs 554 crore (during 1998-99 Rs 78.30 crore). The Building Centres Movement has generated substantial employment opportunities, with the total trained artisans crossing 1.30 lacs (during 1998-99 15,270 artisans trained). Further, as a part of the Golden Jubilee Celebrations, work on establishment of four State Level Building Centres in the States of Karnataka, Andhra Pradesh, Pondicherry and Nagaland are in progress for being developed as Building Technology Parks.

CONSULTANCY ACTIVITIES AND SUPPORT

HUDCO's Design Development and Consultancy assistance covers cost effective housing, slum improvement, natural disaster rehabilitation and integrated area development including infrastructure development. HUDCO has made significant contribution in the field of cluster housing, low-rise high density development especially in the field of economically weaker section and low income group housing.

Weaker Section Housing

The novel concept of integrated house cum work area for the basket weavers at Coimbatore has been adjudged within the 100 "Best Practices" for sustainable human settlements development constituted by the UNCHS.

Disaster Rehabilitation

The rehabilitation of earthquake affected villages in Latur district has been awarded "Architect Of The Year Award-97" by IIA. HUDCO has extended techno financial assistance to the earthquake hit Chamoli district. Demonstration housing exhibiting use of locally available building materials and appropriate earthquake resistant technologies is proposed in the adopted villages. Technologies appropriate for earthquake resistant construction including retrofitting have been documented in local language for dissemination.

Township Development

A major breakthrough in development in the North-Eastern Region has been achieved with a planning strategy proposal for New Shillong Township spread over 2030 ha. A similar proposal for New Itanagar is in the pipeline.

Feasibility Studies - Financial Viability and Demand Assessment

In view of HUDCO's proactive approach for urban development, a number of feasibility studies have been conducted covering a wide spectrum of development activities such as Tourism: development of model tourist resort at Shankarpur, West Bengal: Transportation: demand assessment and financial viability of Integrated bus terminal cum commercial complex in four major towns in Punjab, High-tech office complex in sector 17, Chandigarh and Convention Centre, Mumbai.

Model Village and Basti

A holistic approach for an overall integrated development has been adopted in the various model village schemes in a number of States. Technical inputs are being worked out for slum improvement projects under the slum development programme.

EXHIBITIONS/CONFERENCES

"HUDCO Build Tech" an exhibition on cost effective building materials and technologies was organized at the India International Trade Fair-1998. HUDCO pavilion bagged the IITF gold medal for the third year in a row and a total of five times till date.

"World Habitat Day-1998" on the theme Safer Cities was organized at Vigyan Bhawan, New Delhi. Interactive technical sessions culminated in comprehensive recommendations for safer cities highlighting the need for development policies to managers, planners and community members for emergency situations and special programme for high risk situations.

HUDCO has actively participated in international exhibitions and conferences such as "INBUILD-98" & `WATER ASIA". HUDCO has co-sponsored "INFRANET-98" with Confederation of Indian Industries (CII). This conference has projected HUDCO's role in the field of Infrastructure Financing.

During the year HUDCO has participated in "Retrospective Exhibition" on 50 years of Indian Architecture and Planning at School of Planning and Architecture, New Delhi and the "Swadeshi Mela" highlighting the achievements and capabilities of the corporate sector and focussed on the challenges of the global economic scenario.

AWARDS

This year HUDCO has instituted Clean City Award for the best initiatives towards promoting cleaner, greener and healthy cities, in addition to the other annual awards in recognition of excellence in housing and urban development. Hyderabad Municipal Corporation, Pune Municipal Corporation, Corporation of Chennai and Bangalore City Corporation were the recipients of this award. Kerala State Housing Board, Karnataka Housing Board, Andhra Pradesh State Housing Corporation and Tamil Nadu Housing Federation have won the outstanding performance for housing. While the Chennai Metropolitan Development Authority, City and Industrial Development Corporation Maharashtra, Bangalore Development Authority, Planning and Development Authority Manipur have bagged the outstanding performance award for urban infrastructure development.

Andhra Pradesh Urban Infrastructure Finance and Development Corporation and Andhra Pradesh State Housing Corporation won the outstanding performance award for low cost sanitation. While Bangalore, Chennai and Guwahati Regional Offices were awarded for outstanding performance among HUDCO offices.

The recipients of the Hari Om Ashram Prerit, Sir M Viswesvaraya Prize for Low Cost Housing Competition (Urban) - 1997 are the Nirmithi Kendra - Thrissur, Laurie Baker Building Centre - New Delhi, Kattida Maiyam - Tiruchirapali. Six other building centres were awarded commendation prizes and certificates of merit. HUDCO's award for environment friendly, ecologically appropriate and energy efficient projects were presented to the Shantigiri Ashram Pothencode for their efforts in rainwater harvesting, the Bangalore Water Supply and Sewerage Board and the Karnataka Electricity Board.

PROGRESSIVE USE OF HINDI

Continuous efforts were made to promote and accelerate use of the official language `Hindi' in HUDCO's offices. The annual programme of the Official Language Department of Government is being adhered to. During the year, HUDCO organised thirty two Hindi Workshops at Head Office and its Regional Offices. During the year, the literature used for technical scrutiny of the scheme has been translated and completed in bilingual form for use in all the regional offices and other concerned.

HUMAN RESOURCE DEVELOPMENT

HRD continues to be a thrust area for your Company. HUDCO is taking appropriate measures to gear its human resource to take-up new challenges in the changing environment. HUDCO's endeavor to utilize the potentials of people at work and develop their capabilities on sustained basis by providing better working environment for a better quality of work life, continues. HUDCO believes in developing and sustaining a climate which nurtures performance and growth.

The specific need for facilitating development of its women employees was addressed in an in-house programme exclusively for Women employees: "Fast Track Corporate Women" in May 1998. A Committee of Women has been functioning in HUDCO since over last 4 years with the objectives of voicing the concerns and issues of women employees.

The total human resource strength of HUDCO is 994 out of which 541 are executives with multi disciplinary professionals backgrounds of Architecture, Engineering, Town Planning, Community Development, Finance, Law etc., there are 181 SC, 43 ST, 30 OBC, 40 Ex-Servicemen and 20 Handicapped employees, which is in line with the Government directions regarding reservation of post for SC, ST, OBC and Ex-Servicemen. Whereas, of the 242 women employees, 35 are SC and 4 ST.

Like earlier years employees welfare activities continued to remain in focus. The Corporation organized "Inoculation Camps" for the employees and their families at regular intervals apart from organising sports and recreational events.

VIGILANCE

For better understanding of the need for elimination of malpractices, HUDCO Vigilance Wing continued its endeavour to create an awareness amongst its employees and suggest Preventive Vigilance Measures. The Vigilance Wing of HUDCO has also brought out `Guidelines for Preventive Vigilance' and also organised an, awareness programme on Preventive Vigilance for HUDCO executives. Besides the above, the cases of various employees for issuing Vigilance Clearance for promotion, probation clearance, NOC for Passport, Superannuation and Gratuity matters were also dealt with.

YEAR 2000 COMPLIANCE (Y2K)

Y2K compliance implies that all computer systems are verified to be capable of correctly recognising and processing date related information beyond 31st December, 1999. Your company has been cognizant of the problem of Y2K. HUDCO has constituted a Y2K compliance monitoring committee consisting of the Senior functionaries of the Finance and the Systems Department to plan and coordinate the work relating to Y2K compliance of all computerized applications. Your Company has incurred around Rs 42 lacs for replacement of non Y2K compliant computers and is well equipped with trained manpower to take care of any contingencies of Y2K.

LISTING OF SECURITIES

The securities issued by HUDCO continued to be listed in the National Stock Exchange of India and Mumbai and Delhi Stock Exchanges. Your company has remitted the listing fee regularly to the stock exchanges for the year under review.

UNCLAIMED DEPOSITS

As mandated under The Housing Finance Companies (NHB) Directions, 1989, as amended, it is informed that as on 31.3.1999, an amount of Rs 4.60 lacs was remained unclaimed, for 8 depositors. A separate communication has been sent to each depositor(s) requesting them to collect the unclaimed deposits and/or get the same renewed.

AUDIT REVIEW

The comments of Comptroller & Auditor General of India (CAG), review of accounts for the period ending 31st March, 1999 by the CAG, Statutory Auditors' report to the members and comments of the Board of Directors thereon are annexed hereto and form part of this report as required u/s 217(3) of the Companies Act, 1956.

FOREIGN EXCHANGE EARNINGS & OUTGO

During the year under review, the inflow of the foreign exchange amounted to Rs 463.88 lacs and outflow of foreign exchange was Rs 604.90 lacs.

Since HUDCO does not own any manufacturing activity, the other particulars required by the Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the report of the Board of Directors) Rules, 1988, as amended, are not applicable to it.

PARTICULARS OF EMPLOYEES

Information on the particulars of employees as required u/s 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1994, as amended, is Nil.

MEMORANDUM OF UNDERSTANDING

HUDCO has once again been awarded "Excellent" rating for the year 1998-99 by the Department of Public Enterprises of the Govt. of India in continuation of previous two years. HUDCO has surpassed all the targets set for it in various operational areas in 1998-99.

BOARD OF DIRECTORS

During the year, 18 meetings of the Board of Directors were held to transact the business of HUDCO. In addition 26 meetings of the Committee of Directors to sanction schemes and on Project Management were also held. The decisions taken by these Committees were reported to the Board of Directors in the subsequent meetings.

On the expiry of his tenure, Shri B Danam, Principal Secretary (Housing) to the Govt. of Andhra Pradesh, ceased to be part time official Director w.e.f. 17.09.1998.

Shri Atul Kumar Gupta, Secretary Housing (Govt. of Uttar Pradesh) was appointed as part time official Director w.e.f. 30.11.1998. Shri Niranjan Hiranandani and Shri Thenucho were appointed as part time non-official Directors from 29.01.1999.

Your Directors heartily welcome the incoming Directors and place on record their sincere appreciation for the contributions made by Shri B Danam for steering the organisation to achieve excellent results.

It is a matter of immense pride that Shri V Suresh, Chairman & Managing Director has been elected a "Honorary Fellow" by the Indian Institute of Architects, India.

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Mar 31, 1998

The Directors have pleasure in presenting the Twenty Eighth Annual Report of the Housing and Urban Development Corporation Limited (HUDCO) together with the Audited Statement of Accounts for the year ended 31st March, 1998.

HUDCO - THE NATION BUILDER

Since independence our Nation has significantly achieved self sufficiency in food production and clothing. The effort in providing a roof over everyone's head is resulting in significant progress despite daunting population growth. Today, the housing shortage stands at 7.6 million in urban areas and 13.7 million in rural areas. HUDCO as a pioneering organisation has contributed its mite towards the objective of extending affordable housing finance. HUDCO, a premier techno-financing institution aims to provide "Housing for All" capturing the various elements or creating sustainable built environments for better housing and services.

Today, HUDCO assistance covers the housing needs of all income categories of the society mainly economically weaker section, low income group, middle income group and high income group. HUDCO assistance covers assistance for construction of new housing stock as well as repair, renewal and retrofitting of existing housing stock. HUDCO does this in various ways by making available funds at lower rates of interest, longer repayment period and also earmarking specific funds in each year out of the housing portfolio for covering the needs of the weaker section and low income groups.

With the cost of construction increasing year after year, housing is becoming beyond the reach of all and therefore the need arises for utilizing the results of R&D efforts for constructing cost effective houses. This can happen only when technology transfer is set up to train local artisans on the technology options are put in place. This has been addressed to by HUDCO through establishment of a network of about five hundred building centres.

A significant social orientation has been consciously captured in nature of assistance given by HUDCO. With a clear cut portfolio allocation of the financial assistance to serve all groups, HUDCO, as of March, 1998 has been able to contribute to the construction of 67.71 lakh dwelling units all over the country; of this 35.47 lakh houses benefit the rural housing needs and the balance of 32.24 lakh benefitting the urban housing needs.

Most part of the country suffer from some natural calamity at different intervals like cyclone, earthquake, floods, landslides, sea erosion etc. HUDCO has always responded spontaneously with its techno-financing options to assist in reconstruction, repair and retrofitting of the houses affected by natural calamities.

Housing does not end with just walls and roofs. Amenities and facilities make it livable. HUDCO assists extensively in the provision/rehabilitation of services needed for the human settlements be it water supply, sewerage, drainage, solid waste disposal, road network, sociocultural infrastructure buildings for health, education and recreation and shopping and marketing facilities. Substantial stress is given for creation of human settlements with environmental friendly, ecologically sensitive and energy saving initiatives. HUDCO's assistance has been extended in addition to housing sector, to 602 infrastructure projects covering water supply in 234 towns, sewerage in 39 towns, drainage in 6 towns, solid waste management in 6 towns, roads, bridges, transport nagars and terminals in 54 towns, social infrastructure in 21 towns, airports and ports in 3 towns and area development and other schemes in 71 towns.

What is significant is the spread of coverage of HUDCO assistance extending over the length and breadth of the entire country in all States/UTs covering 1701 towns and thousands of villages.

HUDCO's participation in the Swaran Jayanti Programme

In the 50th year of independence HUDCO re-dedicated itself and continued its commitment to cover the growing housing and infrastructure needs of the country. It has taken a number of initiatives during the 50th year of independence for establishment of Model Villages (Adarsh Grams) and Model Slums (Adarsh Bastis) in all States and Union Territories and establishment of state level special Building Centres as Building Technology Parks as a collaborative initiative with Central and State Governments, Building Materials and Technology Promotion Council (BMTPC) and other technology transfer agencies in the States.

AN EVENTFUL YEAR

The year has been a successful year. The Directors are happy to report that as a result of the untiring efforts put in by the company, very critical and long pending issues have reached their logical conclusions. The disputes relating to dues from Canfina and ABFSL have been resolved. Further HUDCO has been able to work out packages with UP and Gujarat State Govts. for the outstanding dues from the agencies of these States and the dues from Regional Sports Centre Cochin were also recovered as per the orders of the Court. All these settlements will lead to significant improvement in the NPA position. Further, the company has also obtained the completion certificate from the Municipal Corporation of Delhi for the Andrews Ganj Project.

REVIEW OF BUSINESS OPERATIONS

Loan Sanctions

The financial year 1997-98 has been a landmark in the performance of HUDCO operations. HUDCO, during the year, provided assistance for construction of 5.53 lakh dwelling units and 128 Urban Infrastructure projects to various agencies in the country. This year HUDCO sanctioned a total of 795 schemes worth Rs. 4848 crore, out of which HUDCO's loan commitment is for Rs. 3061.86 crore as against the last year's loan commitment of Rs. 2470.59 crore, registering an increase of 24 percent over last year's loan sanctions. Besides this, HUDCO has also sanctioned 9 schemes for working capital loan;3 for urban infrastructure for loan of Rs. 22.00 crore and 6 for housing projects for a loan of Rs. 24.66 crore.

Loan Disbursements

The loan disbursements during the year amounted to Rs. 2263.20 crore; an increase of over 43.61 per cent as compared to Rs. 1575.90 crore disbursed last year.

Cumulative Operations

Cumulatively, till March, 1998, HUDCO has sanctioned a total of 13248 schemes involving a total project cost of Rs. 27814 crore with HUDCO's loan component of Rs. 16630 crore. An amount of Rs. 12272 crore has been released so far. HUDCO's assistance has helped in the construction of 6.77 million residential units and 602 urban infrastructure projects effectively improving the living conditions in the urban and rural areas throughout the country.

Urban Housing

In the area of Urban Housing, HUDCO achieved significant strides during the year by sanctioning 667 schemes with HUDCO loan assistance of Rs. 1705.37 crore. Of the 667 schemes 196 schemes were for Rural Housing with a total loan amount of Rs. 388.11 crore for the construction of 3.55 lakh rural houses.

An emphasis has been laid on the housing requirements of Economically Weaker Section and Low Income Group during the year 1997-98. 32 Schemes have been sanctioned for a total loan amount of Rs. 95.76 crore for construction of 50400 units under the `MAITHRI' Housing scheme of Kerala which envisages providing 1 lakh houses every year. Similarly, HUDCO associated itself actively with the 'ASHRAYA' Housing Scheme of Karnataka under which 37 schemes have been sanctioned for a loan amount of Rs. 58.26 crore for construction of 54711 residential units for Weaker Section.

Participation in Rural Development

Fifty three Rural Housing Schemes have been sanctioned to Andhra Pradesh with a loan assistance of Rs. 111.19 crore to cover 1.52 lakhs rural housing units. Under the Gandhi Kutir Yojana for Rural housing of Govt. of Himachal Pradesh, HUDCO sanctioned 17 schemes for loan amount of Rs. 47.78 crore for construction of 29715 units.

In addition, 36 schemes have been sanctioned for a loan amount of Rs. 49.59 crore for construction of 57000 units as part of the special scheme being implemented by the Govt. of Tamil Nadu for the marginal farmers. Similarly, 3 schemes with a total loan amount of Rs. 6.50 crore have been sanctioned for construction of 10000 units for beedi workers in the State of Andhra Pradesh. HUDCO continued its assistance for the rehabilitation of the people affected by Sardar Sarovar Project in Gujarat by sanctioning a loan amount of Rs. 49 crore for construction of 7000 units during the current year, of the total committed loan of Rs.68.69 crore for construction of 10000 houses.

Disaster Relief

HUDCO continued its positive response to the people ravaged by the floods and cyclone in the coastal area of Andhra Pradesh in November 1996, by sanctioning 14 schemes for a loan amount Rs. 18.75 crore enabling construction of 18754 units during the year 1997-98. This is in addition to Rs. 42 crore of KfW Grant sanctioned and Rs. 16.80 crore released. As in Latur, HUDCO has responded to the housing requirements of the earthquake affected people at Jabalpur in Madhya Pradesh. To facilitate rehabilitation of the victims, HUDCO sanctioned 13 schemes with a loan amount of Rs. 52.95 crore for reconstruction of 7398 units and upgradation of 12633 units. HUDCO also sanctioned 2 schemes for rehabilitating the fire affected villages in Orissa in Dhenkanal district for construction of 549 houses with a loan amount of 1.37 crore.

Development of North-Eastern Region

HUDCO continued its special thrust towards development of the North-Eastern States with the sanction of the National Games Village project at Imphal, Manipur with a loan assistance of Rs. 5.59 crore for construction of 116 residential units during the current year. Similarly, in Assam, for the Staff Housing Scheme of the Numaligarh Refinery, a loan amount of Rs. 4.61 crore for construction of 181 residential units has been sanctioned. In total, during the year, 6 schemes with a loan amount of Rs. 16.51 crore for the construction of 1425 units in Assam, 6 schemes with a loan amount of Rs. 22.28 crore for the construction of 2391 units in Manipur, 2 schemes with a loan amount of Rs. 13.13 crore for construction of 2519 units in Nagaland. 2 schemes for a loan amount of Rs. 6.38 crore for construction of 1930 units in Mizoram and 2 schemes with a loan amount of Rs. 1.50 crore for construction of 238 units in Tripura have been sanctioned. HUDCO also sanctioned a special scheme to an NGO to provide rehabilitation housing to 30 riot victim families in Nagaland. To help accelerate housing activities in this region, HUDCO decided to open a Development Office at Agartala, Tripura.

Rental Housing

A number of special projects have also been sanctioned for Staff Rental Housing for State Govt. employees during the year 1997-98. The Bhubaneshwar Development Authority has been sanctioned a loan of Rs. 44.09 crore for construction of 1204 units. Similarly, 12 schemes have been sanctioned to Rajasthan for construction of rental housing for State Govt. employees with a loan amount of Rs. 61.47 crore for construction of 1863 dwelling units.

In line with the State Govt. priorities housing schemes for police personnel has been extensively sanctioned during the year 1997-98. 33 police housing schemes have been sanctioned in the States of Andhra Pradesh, Karnataka, Punjab, Rajasthan and Tamil Nadu for a total loan amount of Rs. 209.42 crore for construction of 9253 units.

Housing through Private Sector

A thrust has been given for taking up housing projects through a broad based delivery system including public-private partnership. Ten schemes for housing development with loan commitment of Rs. 15.92 crore have been sanctioned to private sector agencies. Special mention may be made of the support given to the joint sector initiative of Bengal Ambuja Housing Development Corporation for the housing schemes for low, middle and high income groups of Calcutta.

Housing Schemes through NGOs

A line of credit to Shri Mahila Sewa Sahakari Bank Limited (SEWA Bank), Ahmedabad covering loan of Rs. 2.88 crore has been sanctioned for upgradation, renewal of 3600 houses which promotes tapping of household savings. This especially addresses the requirements of women in particular. In addition, 14 schemes have also been sanctioned to NGOs/CBOs for construction of 2596 houses with a HUDCO loan assistance of Rs. 4.08 crore.

TWO MILLION HOUSING PROGRAMME

HUDCO is also enlisted to play a significant role in the Government's new programme to provide 20 lakh additional housing units every year. Of the 20 lakh additional housing units, 7 lakhs are to be provided in urban areas involving a total cost of Rs. 4000 crore. Of this, HUDCO would be taking up provision of 1/3rd of the 7 lakhs units in urban areas by extending a loan assistance of Rs. 933 crore every year. This would be in addition to HUDCO's contribution for extending assistance to part of 13 lakhs additional units in the rural areas. HUDCO's participation in this programme would be over and above its normal operations.

HUDCO'S ROLE IN URBAN INFRASTRUCTURE DEVELOPMENT

As market leader in urban infrastructure financing, HUDCO financed a variety of schemes. A significant aspect of HUDCO's infrastructure finance has been its emphasis on ecologically appropriate infrastructure projects comprising projects for utilization of liquid and solid waste, recycling of waste water, bio-gas, etc. During the year, 128 urban infrastructure projects have been sanctioned with a project cost of Rs 2159.57 crore and a loan amount of Rs. 1267.84 crore as against Rs. 1028.90 crore in 1996-97 registering growth of over 23%.

Till 31.3.98, HUDCO has sanctioned 602 urban infrastructure projects with project cost of Rs. 9000.74 crore with a loan commitment of Rs. 4920.53 crore.

Water Supply Schemes

The special emphasis extended by HUDCO for Water Supply sector continued this year too. A total of 37 projects with loan amount of Rs. 443.76 crore have been sanctioned during the year which is around 34 per cent of the total urban infrastructure financing during the year. The significant water supply schemes sanctioned include Jalgaon in Maharashtra with a loan assistance of Rs. 50 crore and augmentation of water supply in the Pilgrim town of Tirupati with a loan assistance of Rs. 48.12 crore.

Environmental Improvement Schemes including Waste Management

HUDCO has sanctioned a few unique projects which would contribute significantly towards environmental improvement of Bangalore city. These projects include construction of two Tertiary Treatment Plants at the cost of Rs. 55 crore for supply of 70 mld of treated water for industrial and other uses, scheme for incorporating energy saving devices, renovation and modernization of pumping installation of Cauvery water supply system with a loan amount of Rs. 11.70 crore, scheme for improvement of solid waste management system in the city of Calicut with a loan assistance of Rs. 3.6 crore; this integrated scheme encompasses improvement in collection, transportation and treatment methods of Solid Waste in the city of Calicut, scheme for underground sewerage system for Tirupati with HUDCO loan assistance of Rs. 25.67 crore; a comprehensive sewerage scheme for Guntur with loan commitment of Rs. 18.60 crore, scheme for construction of storm water drainage at Lucknow with a loan commitment of Rs. 4.65 crore for Uttar Pradesh and a drainage scheme at Jodhpur with a loan commitment of Rs. 0.60 crore for Rajasthan.

Transport Sector

Good transportation system is one of the key indicators of economic development. In line with the increasing need to provide adequate infrastructure facilities in urban areas, your Directors during the year have laid stress on the provision and improvement of roads and bridges and other transport sector requirements. HUDCO, during the year, has sanctioned 17 projects in this sector with a loan amount of Rs. 397.70 crore. These include projects for the construction or reconstruction of 50 bridges with a loan of Rs. 170 crore in Chennai, Trichy, Tirunelveli and Coimbatore circles of Tamil Nadu and projects for improvement to Radial Roads of Chennai city for total loan assistance of Rs. 147.00 crore. The other important project sanctioned is the construction of a road bridge across the river Mandovi in Goa for a loan assistance of Rs. 11.85 crore.

Two projects on BOT basis - one for construction of road in Gujarat and another for construction of a bye-pass at Pali in Rajasthan with a total loan commitment of Rs. 16.07 crore have also been sanctioned.

Innovative Scheme

An Innovative scheme for enhancing the water availability by ensuring adequate acquifer recharging has been sanctioned for Shantigiri Ashram, Pothencode, near Thiruvananthapuram. HUDCO has extended an assistance of Rs. 25.2 lakhs. The scheme primarily envisages preserving the precious rain water during the monsoon period and using the same during lean period. The scheme envisages collecting rain water in an existing rockypit and providing preliminary treatment before further distribution, in a localised environment. This innovative scheme envisages harvesting about a million litres of rain water every year.

Special Infrastructure Projects

A novel scheme for construction of office-cum-shopping complex in the name of "Revenue Towers" in five cities of Kerala with a view to bring the Govt, Quasi Govt offices under one roof have been sanctioned with a total loan assistance of Rs. 32.88 crore. On similar lines, a scheme for construction of Goa State Legislative Assembly Complex at Porvorihi on the pattern of traditional Goan architecture has been sanctioned with a loan assistance of Rs. 21 crore for Goa. A major initiative for integrated township development incorporating land and infrastructure has been taken up in Lucknow, Uttar Pradesh through sanction of four schemes with a total loan amount of Rs. 12.20 crore involving an area of 204.27 hectares. In addition, a project for construction of approach road for Gandhi Setu across Gomti river that would open up new areas for urban development has also been sanctioned with a loan amount of Rs. 6.79 crore.

FINANCIAL PERFORMANCE

The Directors are glad to report that 1997-98 has been yet another year of impressive financial results. The profit after prior period adjustment but before non-recognising the income of Rs. 84.78 crore towards interest in respect of loans which has become NPA is Rs. 156.86 crore as against Rs. 121.03 crore for the previous year. After providing Rs. 2.70 crore towards NPA provision for principal, Rs. 27.28 crore towards provision for income tax and after adjusting Rs. 1.56 crore towards excess/short provision of income tax and interest tax of earlier years, Rs. 40.54 crore is available for appropriation. Out of this, your Directors recommend transfer of Rs. 31.78 crore to the special reserve u/s 36(1)(viii) of the Income Tax Act, 1961, Rs. 4.18 crore to Reserve for provision of Bad & Doubtful debts u/s 36(1)(vii)(a)(c) of the Income Tax Act, 1961 and balance of Rs. 4.58 crore to the Debenture Redemption Reserve. The total reserves of HUDCO at the end of the year stand at Rs. 525.57 crore, the paid up equity share capital at Rs 385 crore and advance against share capital is at Rs. 11 crore.

RESOURCE MOBILISATION

HUDCO's efforts during the year have resulted in the record mobilisation of Rs. 2635.09 crore surpassing the target of Rs. 1350 crore by about 96 per cent. This mobilisation effort has been through a basket of options covering both national and international funding sources. The funds mobilized include Rs. 159.75 crore from International agencies such as ADB, OECF of Japan and KfW of Germany. HUDCO also received Rs. 46 crore from the Government as equity contribution.

HUDCO relaunched its Public Deposit Scheme in June, 1997 and during the short period of nine months, your Company raised Rs. 498.93 crore through this scheme. You will be happy to note that HUDCO has set the trend in its Public Bond Issue by undertaking book-building exercise and has been able to mobilize Tax Free Bonds at 8.75 per cent and taxable bonds at 12.50-13%, which has set a bench mark for all the financial institutions to float such bonds.

INTERNATIONAL ASSISTANCE

Overseas Economic Co-operation Fund (OECF)

HUDCO's continued efforts for mobilizing international assistance, have yielded results. The water supply projects at Solapur and Navi Mumbai funded through OECF loan are under active implementation. Solapur project of the Solapur Municipal Corporation has achieved an overall physical progress of 98% and is expected to be completed shortly. For the Hetwane project of Navi Mumbai, HUDCO has sanctioned an additional loan of Rs. 54.55 crore and released additional loan of Rs. 22.00 crore to City and Industrial Development Corporation of Maharashtra Ltd (CIDCO).

During the year, OECF has also released Rs. 12.38 crore for the 4 approved water supply schemes under the line of credit of 8.67 Billion Japanese Yen.

KfW

As you are aware, Kreditanstalt fur Wideranfbau (KfW) under its VI Line of Credit and grant had committed an amount of DM 50 million for funding urban and rural housing projects for weaker section. During the year, the agreement was executed and out of grant portion KfW disbursed DM 10 million out of which DM 8 million has been released for AP Cyclone Rehabilitation Programme.

Further, KfW has committed an amount of DM 10 million under VII line of credit for strengthening Building Centre Movement and DM 55 million under VIII line of credit and grant for urban and rural weaker section housing. With this KfW assistance to HUDCO totals to DM 245 million. HUDCO's proposal for IX and X lines of credit for improvement of urban infrastructure and for rural and mobile building centres for a total amount of DM 65 million are under consideration. KfW has also approved utilization of the interest portion accrued out of IV & V line of credit and grant for the development of Model Village and Bastis.

ADB

As you are aware, HUDCO was negotiating for a line of credit of US $ 100 million from the Asian Development Bank under its Housing Finance Facility project. During the year, sanction for this loan was received from ADB out of which US $ 20 million have been drawn.

REVISION OF FINANCING PATTERN

With the emergence of a liberalized domestic capital market alongwith the entry of banks and housing finance companies in housing finance, the competition in this sector got further intensified. In view of the competition from commercial banks, financial institutions and finance companies, HUDCO continued to review its lending policies, particularly for MIG, HIG, Rental Housing Schemes etc. so as to ensure that HUDCO loans remain attractive in the competitive environment.

HUDCO also initiated during the year a scheme for providing operational finance to all its borrowing agencies with good track record.

DEBT RECOVERY

Debt Recovery has always been a cause of concern for your company. During the year under report, your Board has monitored the recovery position very closely and special attention was paid to chronic defaults to bring down the level of defaults. Your Directors are glad to report that the Debt Recovery level of HUDCO has improved considerably with defaults brought down from 11 per cent in 1996-97 to a mere 8.51 per cent in 1997-98 taking HUDCO's loan recoveries to 91.49 per cent.

COMPOSITE CREDIT SCHEME FOR POOR

HUDCO has the social mandate to assist in the shelter needs of the Economically Weaker Section and Low Income Group of the Society but of late the need is felt to link up the housing loans with the income generation loans which will upgrade their income resulting in increasing their loan repayment capacity. Keeping this in view, your Board has approved the Composite Credit Scheme which includes income support and Housing loans as a measure to provide loans through one window operation. The scheme has been forwarded to the Government for approval.

BUILDING CENTRE MOVEMENT

HUDCO continued its efforts in expanding the Building Centre movement towards promoting cost effective, durable, aesthetically pleasing building materials and technologies. A total of 81 new building centres were sanctioned making a cumulative total of 552 building centres in the national network. An emphasis has been made towards expanding the network to cover areas which have not been covered so far. During the year, 6 building centres have been approved in Jammu & Kashmir including one at Leh; the building centre established at the highest altitude. In the North East, 5 building centres have been approved in Assam, 2 in Manipur and 5 in Nagaland. The building centre movement has generated substantial employment opportunities with a total trained artisans crossing 1.25 lakhs.

As part of the Golden Jubilee Celebrations, work on establishment of one State level building centre to be developed as Building Centre Technology Park in each State has also been initiated during 1997-98.

HUDCO CONSULTANCY

HUDCO consultancy services were provided for the Jabalpur earthquake rehabilitation project. HUDCO adopted two villages Koshanghat and Ghana for development as model villages. In Koshanghat, 108 new houses using earthquake resistant technologies with roads, drains, arboriculture, street lighting, community toilets, community building and public fountains were proposed and 203 houses in Ghana have been taken up for retrofitting with other amenities.

The second project undertaken was the "Reconstruction of houses in Cyclone affected villages of Gadianoga and Vadapalem in East Godavri District of Andhra Pradesh. A model village of cyclone resistant houses with Vastu principles was proposed taking wind direction into consideration. Further, techno financial feasibility study and urban design services were provided to National Textile Corporation, Bangalore and Integrated Complex at Maharani Bagh, New Delhi.

COMPETITION

As in the previous years, HUDCO and Hari Om Ashram Trust jointly sponsored a Design Ideas Competition on "Rural Primary School" on an All India basis. This competition was co-sponsored by the Education Cell of the Ministry of Human Resource Development. The first prize of Rs. 1,00,000/-, second prize of Rs. 75,000/- were awarded to Shri Anant Mann & Sidharat Wig, Panchkula, and Shri Ashok Grover & Associates, NOIDA respectively and the third prize of Rs. 50,000/- was shared between STUP Consultants, Ahmedabad and Creative Design Oracle, New Delhi. Besides these three prizes, two commendation prizes of Rs. 10,000/- were also awarded to S/Shri Ram Ganpati, KS Money, P. Madhavan, Chennai and Parag Sen, Ganda Bhai Patel, Sudhir Chaugle, Gureg Desai, Ahmedabad.

EXHIBITIONS

During the year 1997-98, HUDCO organised HUDCO Build Tech - 1997 at India International Trade Fair titled "Housing for All" in which a large number of industries participated. The exhibition demonstrated cost effective technologies, building centre movement, innovative design solutions and long term financial assistance catering to all sections of society. HUDCO once again was awarded "Gold Medal" for special display.

HUDCO also participated in the mobile exhibition on Rails organised by the Railways as part of 50 years of India Independence and the Uganda International Trade Fair in October 1997 at Kampala, Uganda covering building, housing, construction and habitat issues.

The company also for the first time, presented a tableau on "HOUSING FOR ALL" with a special theme on food, shelter and housing in the Republic Day Parade, on 26th January, 1998. The tableau projected the need for creation of sustainable human settlements with affordable shelter and services to all.

HUMAN SETTLEMENT MANAGEMENT INSTITUTE

Human Settlement Management Institute (HSMI), the Research and Training wing of HUDCO at National level is playing an important role in development of technical and managerial skills of the professionals engaged in the field of Human Settlements.

HSMI, during the year organised seventy four training programmes and nine seminars to provide capacity building benefitting over 2124 professionals of the various agencies involved in urban development planning and management issues. These training programmes include the training programmes for the IAS officers sponsored by the Department of Personnel & Training; programmes for the State Housing Boards, Urban Develop-ment Authorities, Local Bodies, Project Managers of Building Centres, NGOs, Private Sector etc. Another feature of HSMI training during the year, was to impart training for eight weeks to the Overseas Administrators from the regions of Asia, Africa and Latin America on Urban Development Management. HSMI also continued its training operations through its decentralised training centres in collaboration with state level training institutions in the States of Karnataka, Maharashtra, Rajasthan, Uttar Pradesh and Kerala. A collaboration with Assam Administrative Staff College (AASC) for north-eastern region has also been finalized for which an MoU is being signed shortly. Further substantial international networking for Research & Training in the field of human settlements through CITYNET and TRISHNET for Asia and the Pacific Region is also being strengthened by HSMI with national, regional and international support. HSMI has been designated as the nodal point for documentation and the dissemination of Best Practices in the field of Human Settlements both by the Govt of India and the UNCHS.

The Ministry of Urban Affairs and Employment, Government of India has also identified HSMI as the nodal institute for the Information, Education and Communication (IEC) component of the Government sponsored scheme of Swaran Jayanti Shahri Rojgar Yojna.

HSMI also conducted one start-up workshop on Community Approach to Integrated Basic Services Promoting Health and Livelihood for the urban poor leading to the UNCHS funded pilot projects in three towns of Vishakhapatanam, Rajkot and Lucknow.

IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY

As in the previous years, continuous efforts were made by the Corporation to promote the use of Hindi as an Official Language in compliance with the provisions of the Official Language Act and the rules framed thereunder. HUDCO has established its own departmental training centre to enable its employees to acquire the working knowledge and proficiency in Hindi. In this centre training in Hindi stenography and typing is also imparted. During the year HUDCO's Regional Offices at Bhopal and Jaipur have won commendation and third Prize respectively from respective Nagar Rajbhasha Karyanavayan Samities.

COMPUTERIZATION

HUDCO has kept pace with the technological development in the field of computers. Computers have been installed in all the functional areas of HUDCO. The software development for various applications like scheme data-base, loan accounting, financial accounting have been standardized around "Oracle" data base management system in an on-line environment. All the Regional Offices have been linked to the Head Office through Electronic Mail for faster transmission of the messages and data. HUDCO has also created its own Website on the Internet. This has provided access to the wealth of technical information available on the Internet for many senior managers.

In order to improve the operational efficiency of the borrowing agencies, HUDCO is providing financial assistance for computers, office automation, E-mail etc under its Technical Assistance Programme.

HUMAN RESOURCE DEVELOPMENT

HUDCO values contribution of its human resource as a critical input in realizing its corporate objectives and goals. The company has embarked on a major programme for strengthening its techno-managerial cadres by upgrading skills and knowledge at all levels of its existing employees on continuing basis. With a view to build-up multi-functional team of competent professionals who could take up the housing and urban development challenges for the millennium and participate in shaping the HUDCO Vision 2002, the company inducts young professionals as Trainee Officers in its various functions for developing HUDCO cadre. The trainee officers before induction into the regular cadres are put to rigorous institutional and on the job training.

During the year 1997-98, HUDCO strengthened its endeavors to further streamline the employee training and development function to make it broad based and multi-dimensional. Towards this objective, a number of initiatives were taken and a series of in-house development programmes were launched. During the year 302 employees at different levels were sponsored for training within India and abroad.

The Corporation continues to follow the Government's directions regarding reservation for SC/ST, OBC and Ex-Servicemen. As on 31st March, 1998 out of total staff strength of 895, there were 164 SC, 37 ST, 20 OBC and 40 Ex-servicemen. Efforts to achieve the prescribed targets for ST are continuing.

Employees welfare activities continued to remain in focus as in the previous years with special emphasis on health care.

VIGILANCE

Preventive aspect of the vigilance is the focus of the activities of Vigilance Wing of HUDCO. As part of this, inspections of five Regional offices, forty eight Projects and twenty one building centres were carried out. Inspection of some of the construction projects under progress was coordinated.

PRESIDENTIAL DIRECTIVES

A Presidential Directive under Article 127 of the Articles of Association of your Corporation has been received from the Government directing that the interest on loans disbursed by HUDCO for the reconstruction/repair of EWS/LIG houses by the victims of earthquake which hit Jabalpur and adjoining areas on 22nd May, 1997 be waived for the first three years. Your Directors report that the financial implications of waiving of the interest on the loans released upto 31.3.1998 would be Rs. 5.38 crore for the three year period. The interest loss will further increase as and when further loan amounts are released.

MEMORANDUM OF UNDERSTANDING

HUDCO has successfully completed all the targets specified in the MoU entered into between the Ministry of Urban Affairs and Employment and HUDCO for the year 1997-98 and achieved "Excellent" rating in respect of the actual performance in respect of all targets identified and achieved a provisional composite score of 1.23.

FOREIGN EXCHANGE OUTGO

The outgo of foreign exchange amounted to Rs. 104.25 lakhs and inflow of foreign exchange is Rs. 126.74 lakhs.

AUDIT REVIEW

The comments of the Comptroller and Auditor General of India (CAG), Review of Accounts for the period ending 31st March, 1998 by the CAG, Statutory Auditors Report to the members and comments of the Board of Directors thereon are annexed.

BOARD OF DIRECTORS

On relinquishing the charge of post of Jt Secretary in the Ministry of Urban Affairs and Employment, Shri AP Sinha ceased to be the Director of HUDCO w.e.f. 23.6.97. Shri JP Murty, who took over as Jt Secretary (HEPA) in the Ministry was appointed as part-time official Director on HUDCO's Board w.e.f. 23.6.1997.

Dr PS Rana, Executive Director (Infrastructure) was appointed as the whole-time Director (Corporate Planning) w.e.f. 29.8.1997.

Shri B Danam, Principal Secretary to the Government of Andhra Pradesh was appointed as part-time official Director w.e.f. 17.9.1997.

On completion of their tenure, Shri Kirtee Shah and Dr BN Reddy ceased to be part-time non-official Directors w.e.f. 10.1.1998.

Your Board welcomes the incoming Directors and places on record their sincere appreciation for the valuable services rendered by the outgoing Directors.

It is a matter of pride for HUDCO that its Chairman & Managing Director, Shri V Suresh was honoured with the "Best Chief Executive Award" by National Foundation of Indian Engineers.

During the year, 13 meetings of the Board of Directors were held to transact the business of the Corporation. Besides, 22 meetings of the Committee of Directors to sanction schemes and Project Management were also held. The decisions taken by these Committees were reported to the Board of Directors in the subsequent meetings.

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Mar 31, 1997

Not available.