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Housing & Urban Development Corporation Ltd.

BSE: 540530 | NSE: HUDCO |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE031A01017 | SECTOR: Construction & Contracting - Real Estate

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45.60 0.50 (1.11%)
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Annual Report

For Year :
2018 2017 2010

Director’s Report

Dear Members,

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


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

(Rs in crore)




Revenue from Operations



Other Income



Total Revenue



Finance cost



Other expenses



Provision and contingencies (Net)



Total expenditure



Profit before exceptional items and tax



Exceptional items



Prior period adjustments



Profit before tax




Current Tax



Deferred tax



Prior period tax adjustments



Profit after tax



Balance from previous year



Total amount available for appropriation



Less : Appropriation

Interim Dividend



Proposed dividend on equity shares



Tax on Interim dividend



Tax on Proposed dividend



Transfer to Special Reserve u/s 36(1)(viii) of Income Tax Act, 1961 and u/s 29C of NHB Act, 1987



Transfer to Debenture Redemption Reserve



Transfer to Welfare Reserve



General Reserve



Surplus carried forward to next year



Proposed dividend on equity shares



Tax on Proposed dividend



Surplus available after proposed Dividend of the current year



EPS (Basic/Diluted) (in Rs.)



* 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.


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.


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 6th 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 31sl 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 19th May, 2017. The details of the unclaimed shares / shares claimed and closing balance of unclaimed shares as on 30th June, 2017 is as under


Records/ No. of Shareholders


Opening balance as on 1st April, 2017



Add : shares transferred to suspense account on 18th May, 20171



Less : claims received and shares transferred



Closing Balance as on 30th June, 2017



* 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.


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 8th May, 2017 and closed on 11th 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:


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





Qualified Institutional Buyers - Mutual Funds & Others





Non Institutional Investors





Retail Individual Investors





Employee Reservation









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


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.


(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 30th 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 59th 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 14th to 27th 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 31st 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 31st 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.


(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 31st 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 31st March, 2016. The Total Loan default is 15.33% as on 31st March, 2017. Loan overdue to Loan Assets ratio as on 31st March, 2017 is 16.12% as against MoU target of 17.01%.

As on 31st 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 31st March, 2017. As against this, provision (after excluding provision on standard assets) of Rs.1952.70 crore has been created till 31st 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


Taxable Unsecured Redeemable Non-Convertible Bonds




Tax-free Secured Redeemable Non-Convertible Bonds




Refinance from NHB




HUDCO Public Deposit Scheme






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 31st March, 2017. This outstanding amount of Rs.1,500 crore, as on 31sl March, 2017, has since been repaid on the respective maturity date(s), as per the terms of Issue.

As on 31st 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 31st 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 31st 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 31st March, 2017 as the same have not been claimed by the investors.

The details of amount remaining unpaid are as under:

Financial Year




Amount (Rs.)

No. of Holders

Amount (Rs.)

No. of Holders

Amount (Rs.)



















*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 31st 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 31st March, 2017.

(x) Unclaimed amount under HUDCO Public Deposit Scheme

As on 31st 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.


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 31st 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.


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 29th 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.


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.


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. 1st 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.


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.


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 31st 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 28th 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 6th 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.


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.


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.


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 31st October to 5th 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 29th 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.


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


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.


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.


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.


Date of appointment/ cessation



Shri Anand K Pandit (DIN No. 00015551)



Shri Anand K Pandit (DIN No. 00015551)




Shri Mukesh M Arya (DIN No. 02753885)




Prof. Chetan V. Vaidya (DIN No. 07550281)




Shri Amarishkumar G Patel (DIN No. 07591533)



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 18th 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



Dr. M. Ravi Kanth

Chairman & Managing Director


Shri N L Manjoka

Director - Corporate Planning


Shri Rakesh Kumar Arora

Director - Finance & Chief Financial Officer


Shri Harish Kumar Sharma

Company Secretary


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 11th July, 2017, received on 25th 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 14th July, 2017 and 17th 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.


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.


(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 31st 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 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 31st 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).


(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 5th 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 5th 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.


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



Management Discussion & Analysis Report


Corporate Governance Report


Secretarial Auditors Report alongwith Management Reply to Corporate Governance and Secretarial Auditors Report


Observations/comments of Statutory Auditors alongwith Management Reply


Comments of Comptroller & Auditors General of India


Annual Report on CSR Activities


Extract of Annual Return


Declaration of the Code of Conduct



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


Dr. M. Ravi Kanth

Place : New Delhi Chairman & Managing Director

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

Director’s Report