Ladies & Gentlemen
It is my privilege to extend a warm welcome to all of you for the 46th Annual GeneralMeeting (AGM) of your Company and I would like to place on record my appreciation to allthe stakeholders and acknowledge your continuous support that contributed in realising yetanother ` year of excellence' for HUDCO in the service of the nation. HUDCO is expectedto get Excellent' Rating for the __h consecutive year for its best performancevis--vis MoU parameters for 2015-16. A look at the highlights of HUDCO's performanceduring 2015-16 reveals that your company has set newer and higher standards by surpassingpast performance of its own. It is time now to share the highlights of HUDCO's performanceduring 2015-16 the business environment issues to be tackled and future outlook for thecompany. the Director's Report the audited final accounts of the Company for 2015-16along with the Auditor's Report thereon have already been provided.
1. Economic Environment
the Indian economy has emerged as the fastest growing major economy Dr. M Ravi Kanthin the world. During 2015-16 as per the Central Statistics Organisation
Chairman & Managing Director
(CSO) data the economy has registered a GDP growth rate of 7.6% as compared to 7.2% in2014-15. the year witnessed an improvement in India's economic fundamentals with clearsigns of improvement in macro-economic parameters like inflation fiscal deficit andcurrent account balance. is is even more commendable as the global economy grew only at amodest pace.
2. Emerging issues in housing and urban infrastructure
As per Census 2011 a few States like Maharashtra Mizoram Tamil Nadu and Goa havealready attained urbanization levels of more than 35%. With this rapid pace the magnitudeof urban housing requirements has been increasing mainly for the poorer sections of thesociety. According to government estimates the total urban housing shortage at thebeginning of the XII Plan was 18.78 million units and the housing requirement is projectedto reach 20 million by 2022 which would in turn require ` 12 lakh crore investments at anaverage unit cost of ` 6 lakh. the housing and infrastructure sectors are the priorityareas for the Government of India. On the policy front the Government has launchedPradhan Mantri Awas Yojana (PMAY) the Housing for All (Urban) by 2022. the missionseeks Heritage of Chettinad Tamilnadu to address the housing requirement of urbanpoor including slum dwellers. To revitalise the urban sector Government of India hasunveiled several initiatives like Development of 100 Smart Cities AtalMission for Rejuvenation and Urban Transformation (AMRUT)' for 500 cities etc. All theseprogrammes are likely to catalyse huge investment-`flow into the urban housing &infrastructure sector across the country. With the easing of inflation and moderation ininflationary expectations during the year RBI effected a cut of around 125 basis pointsin the policy repo rate between January 2015 and February 2016. Subsequently the interestrates and home loan rates so_ened to some extent. Despite lower interest rates there wasonly a marginal growth in gross bank credit which grew by 9% in 2015-16 compared to 8.6%in 2014-15. the sluggish growth was because the banks did not pass on the entire benefitto borrowers. Moreover banks were unwilling to lend credit in the market on account ofrising non-performing assets (NPA). the financial sector also witnessed a build-up in theNPAs of many banks and financial institutions during the year.
3. Operational & Financial performance
As on 31st March 2016 HUDCO has cumulatively financed 17000 housing and urbaninfrastructure projects with sanctions of ` 161871crore and disbursements of ` 109438crore. HUDCO has supported more than 16.57 million houses in the country in both ruraland urban areas so far thus making it the largest facilitator of housing delivery in thecountry.
During the year 2015-16 HUDCO sanctioned loans of ` 30774 crore which was the highestever sanction since its inception in 1970 (` 18790 crore for housing and ` 11984 crorefor urban infrastructure schemes). A total of
202 schemes were sanctioned (32 housing 170 urban infrastructure) for projects such ashousing water supply sewerage drainage industrial infrastructure power transportetc.
During 2015-16 major housing schemes sanctioned were 1.6 lakh housing units for weakersections under the 2 DIRECTORS'' REPORT
BHK housing programme in Telangana and the EWS housing programme in rural areas for 2lakh households in Andhra Pradesh. Some of the infrastructure projects sanctioned includeWater Supply Distribution Network project in Greater Hyderabad area water supply andsewerage schemes for Nellore town airport projects at Bhogapuram in Vizianagaram.
2015-16 also witnessed a disbursement of ` 8250 crore which is the highest ever in thelast 46 years of HUDCO's operations (` 3186 crore for housing ` 5064 crore for urbaninfrastructure).
Your company has posted a net profit of ` 783.79 crore during 2015-16 which is thehighest ever net profit so far as against ` 777.63 crore in the previous year.
The total net worth of the company stood at ` 8445.81 crore as on 31st March 2016. thetotal dividend pay-out for the financial year 2015-16 will amount to `120.37crore(including dividend distribution tax of ` 20.36 crore).
The Company vigorously followed up with the defaulting agencies for recovery of itsdues. ough
NPA levels across the industry were alarmingly high 35000.00
HUDCO through its timely follow ups identification 30000.00 30774.44 and initiationof action against defaulters and careful 25000.00 23974.06 appraisal and monitoring ofprojects could bring down 19761.67 20511.41 21095.54
20000.00 16623.76 17490.94
the Gross NPA to 6.68% of total loan portfolio and Net 14754.30 Loan sanctioned NPA to2.06% of net outstanding loan thus maintaining 15000.00 12162.55 13500.61 Loan releasedit at almost the same level as last year. 10000.00 6905.29 6079.11 7437.50 8101.29 8249.96
4. Social Orientation of HUDCO's business 5000.00 3452.40 3754.02 3098.07
2006- 2007- 2008- 2009- 2010- 2011- 2012- 2013- 2014- 2015-
HUDCO has a motto of `profitability with social justice' and 2007 2008 2009 2010 20112012 2013 2014 2015 2016 the company's operations reveal its social orientation. During OperationalGrowth of HUDCO 2015-16 a significant proportion of housing sanctions (67%) andhousing disbursements (79%) were for the EWS & LIG segments of the population. Interms of dwelling units during the same period HUDCO has sanctioned 4.57 lakh units fora_ordable housing including Economically Weaker Section (EWS) and Low Income Group (LIG)beneficiaries.
5. Credit Rating of HUDCO
The credibility of HUDCO in the domestic market is quite well established as thedomestic debt instruments of HUDCO continue to enjoy "AAA" rating thehighest rating on standalone basis has been assigned for the first time by threeHUDCODesign Award
First Prize : CUBOID Architects: Under Category Conservation of HeritageArchitectural Heritage of Chettinad Tamilnadu
major rating agencies of the country; namely M/s India Ratings & Research PrivateLimited (Fitch Group) M/s Care Ratings and M/s ICRA Limited.
6. HUDCO's Role in Government of India schemes for housing & urbantransformation
HUDCO has been actively supporting in the implementation of Action Plan Schemes ofGovernment of India from time to time. Under Pradhan Mantri Awas Yojana (PMAY)- Housingfor All by 2022 HUDCO has been identified as one of the Central Nodal Agencies (CNA) tochannelize the subsidy and also monitor the progress of the Scheme. Under PMAY HUDCO hasbeen appointed as an appraisal agency for the three components i.e. in-situ slumredevelopment (using land as a resource) A_ordable Housing in Partnership (AHP)Beneficiary Led Construction (BLC) projects. During 2015-16 HUDCO has appraised 42projects with a total project cost of ` 6432.43 crore and central share of
` 1564.47 crore for construction of 1.11 lakh dwelling units covering 38 cities/towns.HUDCO would continue its efforts to explore funding and consultancy assignments underDevelopment of 100 Smart Cities Atal Mission for Rejuvenation and UrbanTransformation (AMRUT)' for 500 cities and Heritage City Development & AugmentationYojana (HRIDAY).
7. New Initiatives
As part of promoting innovative products and initiatives the company has launched twonew products during the year 2015-16 namely: (1) Scheme for providing concessionalfunding to public agencies for taking up senior citizens' homes with appropriate seniorcitizen-friendly design and related facilities; (2)Programme Assistance to State/UrbanLocal Bodies(ULBs) for development of housing and urban infrastructure for facilitatingthe State Governments/ULBs to leverage substantial quantum of long term loan.
8. Human Settlement Management Institute (HSMI)
HSMI the Research & Training wing of HUDCO intensi_ed its efforts to providecapacity building to the professionals REPORT engaged in housing & urbandevelopment including HUDCO's borrowing agencies Urban Local Bodies (ULBs) and
HUDCO own functionaries. During 2015-16 17 Training programmes including 15 capacitybuilding programmes for Urban Local Bodies one for National Real Estate DevelopmentCouncil (NAREDCO) and one International training programme were conducted and trainingwas imparted to 497 professionals with 2494 mandays. Besides awards were given forBest Practices to Improve the Living Environment in the Habitat Sector'. AnInternational training programme supported by the Ministry of External Affairs on thetheme of Planning and Management of Urban Services' was organised and a study wasundertaken on Improvement of Public Transportation system the missing links' underthe CITYNET National Chapter.
Under its Research & Development initiative HSMI sanctioned projects forapplication of Non-Conventional Energy Roof Top Solar Power Plants for providingheating to 7 night shelters in the cities of Delhi and Ajmer. Further during the yearHUDCO Chairs were renewed and expanded with a total of 15 Chairs operational includingone new Chair for University of Hyderabad and another for Indian Institute of DalitStudies.
9. Human Resources Management
HUDCO recognizes the efforts of its employees at all levels in furthering the interestof the organisation and the same is demonstrated by overall harmony and cordial relationsprevalent in the company. the company groomed its employees by imparting trainingprogrammes covering a wide range of functional areas. rough 29 different trainingprogrammes out of which 4 were International Training Programmes during the year2015-16 a total of 501 mandays of training was imparted to 221 HUDCO employees. We alsoconducted Team building workshops to instil team spirit and work-life balance workshops toaid the employees for managing their life better with least stress and more harmony.
10. Corporate Social Responsibility (CSR)
CSR has always been a part of HUDCO's operations. Making CSR mandatory has only given afurther boost to the company's overall CSR activities. During the year 2015-16 a total of19 projects with an amount of ` 11.86 crore were sanctioned out of which an amount of `7.86 crore has been released to various agencies for implementation of the proposalsincluding the proposals sanctioned in the earlier years. Some of the key CSR projectsfunded during the year were for various activities in many states; namely forConstruction of Night Shelters and public toilets Development & Up-gradation of Parksand Dr. K L Rao Park maintenance for three years at Vijayawada; Development Beauti_cationand Maintenance of Shambuni Chervu Palakol and Maintenance of Central Bus Depot & IBTComplex in Agartala Skill Development Training programmes for dependents of SafaiKaramcharis and specially-abled persons in different locations of various states.
11. MoUs signed by HUDCO
MoU signed with Madhya Pradesh Housing & Infrastructure Development Board forcooperation in the field of consultancy and capacity building;
MoU with Telangana Drinking Water Supply Corporation Ltd. to provide safe drinkingwater to the people of
Telangana through its flagship programme - "Mission Bhagiratha" ;
MoU with Telangana State Housing Corporation Ltd. for construction of houses for weakersection families.
12. Awards & Accolades
I am delighted to convey that during the year HUDCO received following Awards:
Governance Now PSU Award-2015' for Value Growth in Mini Ratna I category;
5th Annual Greentech CSR Award 2015' winner of Gold award in Servicessector for outstanding achievement in Corporate Social Responsibility;
Award from National Safai Karamcharis Finance & Development Corporation (NSKFDC)Ministry of Social Justice & Empowerment in recognition of contribution to socialsector during CSR Coclave-2015.
Swachh Bharat Award' given by Indian Book of Records and Swachh Bharat Trust.
13. Other Initiatives
We at HUDCO truly believe that attaining a Clean India' by 2nd October 2019the 150th Birthday of Mahatma Gandhi is a collective responsibility of each and everycitizen of the country. During 2015-16 HUDCO undertook a numberDIRECTORS'' REPORT ofawareness creation activities towards cleanliness and sanitation programmes wereorganised on All India level to commemorate the 125th birth anniversary of Bharat RatnaDr. Bhim Rao Ambedkar.
14. Corporate Governance
the Company endeavours to meet the statutory requirements and to establish systems& procedures that are in tune with the global trends of making management completelytransparent and institutionally sound. Good Corporate Governance practices and ethicalbusiness conduct remain at the core of HUDCO's value system. HUDCO's corporate governancewith timely disclosure transparent accounting policies and positive & proactive Boardwould go a long way in maximizing the corporate values.
15. Future Outlook
With enormous experience & expertise HUDCO has huge potential to be part of urbanrejuvenation programmes of Government of India for Pradhan Mantri Awas Yojana (PMAY)-Housing for All by 2022 Development of 100 Smart Cities both in terms of lending as wellas by offering consultancy services. There exists substantial opportunity for funding inhousing and related infrastructure across the country. With the passage of time banks andother financial institutions have also entered these arenas and HUDCO has to face sti_competition. Further the financial sector has been witnessing high level of defaults inrecent months. the banks and Financial Institutions had to make substantial provisioningon account of rising default levels impacting their bottom lines. Similar issues are alsoposing some challenges for HUDCO which have been managed well but they still have thepotential to become a sore point anytime.
On behalf of the Board of Directors I am thankful for the co-operation extended by theMinistry of Housing and Urban Poverty Alleviation Ministry of Urban Development Ministryof Rural Development Ministry of Finance and Ministry of External Affairs Reserve Bankof India (RBI) National Housing Bank (NHB) Comptroller and Auditor General StatutoryAuditors Bankers and other Government Departments. Also I appreciate the supportprovided by the International Financial Institutions such as Kreditanstalt fur Widerau au(KfW) Japan Bank of International Cooperation (JBIC) Asian Development Bank (ADB)USAID etc.
I acknowledge the support of the State Governments State Housing Boards DevelopmentAuthorities Urban Local Bodies etc. and other large clientele for realizing the mandateof the Company. I am thankful to the debenture/bond holders depositors and otherinvestors for their patronage to the various instruments issued by HUDCO. I extend mythanks to the valuable clients with whom HUDCO has nurtured close and mutually-beneficialrelationships. I would likeHUDCO Design Award
First Prize : CUBOID Architects: Under Category Conservation of HeritageArchitectural Heritage of Chettinad Tamilnadu
to conclude by commending the efforts made by the members of HUDCO family towardsachievement of the all-round growth of the Company.
ank you for your kind support and keen attention.
| ||Sd/- |
|Place: New Delhi ||Dr. Medithi Ravi Kanth IAS (KL:86) |
|Date : 23rd August 2016 ||Chairman & Managing Director |