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Housing & Urban Development Corporation Ltd.

BSE: 540530 | NSE: HUDCO |

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Series: EQ | ISIN: INE031A01017 | SECTOR: Construction & Contracting - Real Estate

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Annual Report

For Year :
2018 2017 2010

Director’s Report

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

Director’s Report