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Housing & Urban Development Corporation Ltd.

BSE: 540530 Sector: Financials
NSE: HUDCO ISIN Code: INE031A01017
BSE 00:00 | 20 Jul 51.25 -1.10






NSE 00:00 | 20 Jul 51.15 -1.20






OPEN 52.15
VOLUME 144688
52-Week high 92.60
52-Week low 51.15
P/E 12.84
Mkt Cap.(Rs cr) 10,260
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 52.15
CLOSE 52.35
VOLUME 144688
52-Week high 92.60
52-Week low 51.15
P/E 12.84
Mkt Cap.(Rs cr) 10,260
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Housing & Urban Development Corporation Ltd. (HUDCO) - Director Report

Company director report

Dear Members

Your Directors are pleased to present their 47th Annual Report alongwith auditedfinancialstatement(s) for the year ended 31st March 2017.


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

(Rs. in crore)

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

* Your directors have recommended final divided of Rs. 0.05 per equityshare of Rs. 10 each subject to approval of the shareholders in the Annual GeneralMeeting. This is in addition to the interim dividend of Rs. 0.50 per equity sharealready declared and paid in the month of March 2017 thereby making the total dividendfor the financial year 2016-17 toRs. 0.55 per equity share. Further in terms ofrevised Accounting Standards (AS) AS-4 "Contingencies and Events Occurring after theBalance Sheet date" as notified by the Ministry of Corporate Affairs throughamendments to the companies (Accounting Standards) Rules 2016 the Company has notappropriated the proposed final dividend (including dividend tax) from the Statement ofProfit & Loss.

Financial Performance:

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

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

2) Posted Profit after Tax (PAT) ofRs. 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 financialyearaffecting the financial position of the company and its state of affairs till the date ofthis report.


Your Company has a consistent track record of rewarding the shareholders for thelast many years. The Company’s Dividend policy ensures that the amount in excess ofits statutory commitments/provisions and immediate & foreseeable needs is rewarded tothe 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 facevalue of Rs. 10/- each in March 2017. Further the Board of Directors of your companyhave recommended a final dividend ofRs. 0.05 per equity share for the financial which issubject to the approval of the shareholders at the ensuing Annual General Meeting therebymaking the total dividend for the Financial year 2016-17 to Rs. 0.55 per equity share. Thetotal dividend pay-out for the financial Rs. 110.02 crore excluding dividend distributiontax of Rs. 22.40 crore.


The Issued and Paid-up Equity Share Capital of the Company as on March 31 2017 wasRs. 2001.90 crore divided into 2001900000 equity shares of Rs. 10/- each against theAuthorized Share Capital of Rs. 2500 crore divided into 2500000000 equity shares ofRs.10/- each. Entire equity share capital of the Company was held by President of Indiathrough the then Ministries of Housing & Urban Poverty Alleviation (MoHUPA) UrbanDevelopment (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 shareholdingpattern.

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

Further during the year 2017-18 President of India through the then Ministry ofHousing & Urban Poverty Alleviation has divested 204058747 equity shares of facevalue of Rs. 10/- each constituting 10.19% of the total paid up equity share capital ofthe Company through an Initial Public Offer. After divestment the shareholding ofPresident of India has been reduced to 89.81% which is held through the MoHUA 69.08% andMoRD 20.73% respectively.

Unclaimed Shares

Your Company was a wholly owned Government Company as on 31st March 2017 where entirepaid up equity share capital was held by President of India. On disinvestment by thePresident of India your Company obtained listed status on 19th May 2017. The details ofthe unclaimed shares / shares claimed and closing balance of unclaimed shares as on 30thJune 2017 is as under

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

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


Under the disinvestment programme of Government of India your Company’s InitialPublic Offer (IPO) for disinvestment of 10.193% of equity shareholding of Government ofIndia comprising of 204058747 equity shares of face value of Rs. 10/- opened forsubscription on 8th May 2017 and closed on 11th May 2017. The equity shares were issuedat a price of Rs. 60/- per share (including premium of Rs. 50/- per share) with adiscount 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 issuereceived over 20 lakh applications and was over-subscribed to the extent of 79.60 times asper the bid book of BSE and NSE. The details of category-wise subscription received in theissue and shares allotted was as under:

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

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

As the present offer for sale of 204058747 Equity Shares was by the President ofIndia 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 theoffer went directly to the Selling Shareholder i.e. the then MoHUPA as such the Companydid not received any proceeds from the offer.


Your Company is likely to be accorded ‘Excellent’ Rating by the Department ofPublic Enterprises (DPE) for sixth year in a row for its performance on the MoUparameters signed with the then Ministry of Housing and Urban Poverty Alleviation for theyear 2016-17 as HUDCO has surpassed the ‘Excellent level’ as fixed in the MoUtargets 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 putin terms of timely monitoring right interventions by and guidance of theesteemedManagementbutthisfeatwouldnothavefructifiedwithout the unrelenting & timelysupport provided by the then Ministry of Housing and Urban Poverty Alleviation from timeto time which aided the company to tide over challenges faced during the year and achieveits targets.


(i) The year 2016-17 was a very challenging year because of the difficult economicand market scenario in various sectors especially the financialsector. Against thisbackground it is a matter of great pride that HUDCO has achieved the highest ever loansanctions since inception i.e. Rs. 31862 crore and the highest ever disbursements in thelast 47 years i.e. Rs. 9095 crore surpassing the MoU targets.

a) Since its inception in 1970 and till March 2017 HUDCO has sanctioned a total of17087 housing and urban infrastructure projects with a loan component of Rs. 166151crore and has made a total disbursement of Rs. 118672 crore. HUDCO has sanctioned morethan 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 housingprojects with a loan amount of Rs. 7571 crore. In addition HUDCO has also sanctioned amajor housing scheme with a loan amount of Rs. 361 crore for upgradation of 3000 housesfor rural poor households in Sikkim;

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

d) In respect of urban infrastructure during the year 2016-17 HUDCO has sanctioned149 projects with a total loan amount of Rs. 24291 crore;

e) HUDCO has achieved all the targets as per Memorandum of Understanding for thefinancial 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 islikely to be accorded ‘Excellent’ Rating by the Department of Public Enterprises(DPE) for sixth year in a row for the year 2016-17 as well;

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

(ii) Consultancy Initiatives

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

As a part of business development initiative HUDCO has executed an agreement in May2016 with Madhya Pradesh Housing & Infrastructure Development Board (MPHIDB) whereinHUDCO has been entrusted with another prestigious project - Preparation of DetailedProject Report for Housing Project Under Atal Ashray Yojana at Girgaon Gwalior. Apartfrom above HUDCO is working on projects like Preparation of DPRs for Market-cum-OfficeComplexes at various locations in Manipur from PDA Manipur; Affordable Housing in SiliguriJalpaiguri Planning Area from SJDA; Vertical Housing Colony Shehjar Apartments at BeminaSrinagar from SDA etc.

Activities with regard to Urban & Regional Planning include preparation ofDevelopment Plans in places like Khargone and Jhabua in the State of Madhya Pradesh andJaigaon 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 ReportsDetailed Project Reports and providing Project Management Consultancy Services in thefield of various Urban Services and Urban Infrastructure Projects under Urban Developmentand Housing Department Govt. of Jharkhand.

HUDCO has offered for extending consultancy services to the Directorate of Town andCountry Planning Department Government of Himachal Pradesh for preparation of RegionalPlans for the twelve districts of Himachal Pradesh.

(iii) HUDCO Design Awards 2016

In keeping with the tradition of improving the habitat conditions especially of theurban poor HUDCO had instituted HUDCO DESIGN AWARDS in 2012 to give recognition andfelicitate innovative ideas and initiatives that contribute to make our cities inclusiveliveable and environmentally sustainable. HUDCO Design Awards 2016 was announced inOctober 2016 and received an overwhelming response from urban professionals across thecountry. HUDCO also sponsors HUDCO NASA Design Trophy each year to encourage andappreciate young architecture students. The Topic provided by HUDCO for 59th HUDCO-NASADesign 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 andenvironmentally friendly building materials and technologies as a part of IndiaInternational Trade Fair held from 14th to 27th November 2016 at Pragati Maidan NewDelhi. The exhibition was inaugurated by Shri Venkaiah Naidu Ji the Hon’ble UnionMinister of Housing & Urban Poverty Alleviation Urban Development and Information& Broadcasting. A large scale display was put up for visitors in around 1166 Sqm. areain 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 environmentallyfriendly building materials and technologies by way of construction of dwelling units byvarious building centers and HPL using pre-fab technologies received much appreciationfrom the general public. Various State Governments like Gujarat Chhattisgarh Tamil Naiduand Rajasthan also participated in the exhibition on behalf of the then Ministry ofHousing & Urban Poverty Alleviation.

(v) PMAY-Housing for all (PMAY HFA Urban) Deen Dayal Antyodya Yojna – NationalUrban Livelihood Mission: Shelter for Urban Homeless (Day-Nulm Suh); 10% Lumpsum Schemefor North-Eastern Region; JNNURM

Jawaharlal Nehru National Urban Renewal Mission (JNNURM) program that was grantedextension upto March 2017 for completion of on-going projects has been closed as on 31stMarch 2017 while the Rajiv Awas Yojna was subsumed with PMAY-HFA (Urban). During the year2016-2017 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 DwellingUnits in 3 Cities / Towns.

HFA Cell is also involved in inspection of Night Shelters under the Deen DayalAntyodaya Yojna National Urban Livelihood Mission: Shelter for Urban Homeless (DAY NULMSUH) wherein upto 31st March 2017 HUDCO has inspected 568 Night Shelters across thecountry including 74 night shelters in 54 towns/ cities under 12 States in financial year2016-17.

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

Further as part of fee based consultancy initiatives HFA Cell is also undertakingThird 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 basedincome of HUDCO in financial year 2016-17.


(i) Accounting Policies

Your Company has added one new accounting policy on ‘Depreciation charged on theLibrary Books’ (Refer Note 1 point no. 6 (i)(h) of the financial statements) anddeleted on accounting policy on ‘Cost of Mobile Phones reimbursed to employeesupfront...’ and has made some minor clarificatory changes in five existing accountingpolicies 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 Rs. 3498.85 crore.While the overall Profit year before Tax (PBT) for the year was Rs. 1175.00 crore theProfit before tax (excluding other income prior period adjustment extraordinary andexceptional 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 sinceinception.

(iii) Non-Performing Assets

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

During the year under review HUDCO reported Gross NPA of Rs. 2386.23 croreconstituting 6.02% to total loan portfolio and Net NPA of Rs. 433.53 crore constituting1.15% to Net Outstanding. In the above however two accounts i.e. M/s RKM PowergenPrivate Limited and M/s Nagarjuna Oil Corporation Limited with total outstanding amount ofRs. 832.45 crore have not been considered as NPA in terms of the order of Hon’bleMadras High Court and as per relaxation in norms given by NHB respectively. Totalprovisioning made towards NPA as on 31st March 2017 stands at Rs. 1952.70 crore inclusiveof Rs. 330 crore as an additional provisioning.

Through persistent efforts of the management HUDCO has been able to reduce the ProjectLoan 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 March2017. Loan overdue to Loan Assets ratio as on 31st March 2017 is 16.12% as against MoUtarget of 17.01%. As on 31st March 2017 91% of loan book is to the Government Agencieswith net NPA of only being 0.00% indicating reasonably good asset quality. As far as loanbook to private sector is concerned Company is not making any fresh sanction sinceMarch 2013. The NPA’s in the loan book to private sector which is around 9% of thetotal loan book are in the range of 60.34% as on 31st March 2017. As against thisprovision (after excluding provision on standard assets) of Rs. 1952.70 crore has beencreated till 31st March 2017

(iv) Resource Mobilization

During the financial Rs. 3865 crore through Taxable Unsecured Redeemable Non- year2016-17 HUDCO mobilized convertible bonds. HUDCO also availed refinance of Rs. 1000crore from National Housing Bank (NHB) under its Rural Housing Fund Scheme. An amount ofRs. 306.49 crore (including renewals) was also mobilized through HUDCO Public depositscheme during the financial year 2016-17. HUDCO’s borrowings (long term) to Net worthfor 2016-17 stood at 2.83 times as against 2.63 times in the previous year. The detail oflong term funds mobilizedduringthefinancialyear 2016-17 is as under:

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

During the Financial year 2016-17 to meet its short term fund requirement from time totime the Company also raised an amount of Rs. 3350 crore through Commercial Paper(s)against which Rs. 1500 crore was outstanding as on 31st March 2017. This outstandingamount of Rs. 1500 crore as on 31st March 2017 has since been repaid on the respectivematurity date(s) as per the terms of Issue.

As on 31st March 2017 the Company also had approved Cash Credit/ Working CapitalDemand Loan limits of Rs. 6290 crore for availment from various banks for its day-to-dayoperations. Against these limits the Cash Credit/ Working Capital Demand Loan facilitiesavailed and outstanding as on 31st March 2017 was Rs. 490 crore.

With this the total funds mobilized during the financial year 2016-17 from varioussources amountedto Rs. 7161.49 crore which included Rs. 5171.49 crore raisedthrough long term sources and Rs. 1990 crore through short term sources.

(v) Credit Rating

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

(vi) Cost of Market Borrowings

The overall weighted average incremental cost of market borrowing for the funds raisedthrough Taxable Bonds during the financial year 2016-17 was 7.28% p.a. The weightedaverage incremental cost of borrowing through taxable bonds worked out to 28 bps over 10Year G Sec as on 31st March 2017. Further the said cost of raising funds through bondsduring year 2016-17 on a weighted average basis was at Reuters benchmark rate for‘AAA’ rated papers of corresponding financial maturities plus (+) 10 bps. As aresult 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. 2768.38crore. This included repayment of Rs. 1305.20 crore to bond holders Rs. 64.03crore on account of foreign currency loans Rs. 361.41 crore on account of loans fromBanks and Financial Institutions and Public deposits of Rs. 1037.74 crore matured/paidduring the year.

(viii) Unclaimed amount under HUDCO Bonds

Bonds amounting to Rs. 63187255.72 (inclusive of interest amounting to Rs.51187255.72) in respect of 1677 bondholders’ remain unpaid as on 31st March 2017as the same have not been claimed by the investors.

The details of amount remaining unpaid are as under:

Financial Year Principal Interest Total
Amount (Rs.) No. of Holders Amount (Rs.) No. of Holders Amount (Rs.)
2014-15 12000000 9 20555508.51 1197 32555508.51
2015-16 14000000 10 25459796.12 1237 39459796.12
2016-17* 12000000 9 51187255.72 1668 63187255.72

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

In respect of the above unclaimed Bonds the Bond holder(s) have been requested fromtime to time through email/letter etc. for submission of requisite documents for claimingthe 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 madethereunder the bonds remaining unclaimed for more than seven years from the date ofmaturity have been transferred to the ‘Investors Education and Protection Fund’(IEPF). During the Financial year 2016-17 no amount was transferred to Investor Educationand Protection Fund (IEPF) on account of Bonds.

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

(ix) HUDCO Public Deposit Scheme

HUDCO being a Housing Finance Company registered with National Housing Bank (NHB) isgoverned by the provisions of Housing Finance Companies (NHB) Directions 2010 relating toPublic Deposits.

During the financial year 2016-2017 HUDCO has mobilized deposits Rs. 306.49 crore(including renewals) from 1054 of depositors and an amount of Rs. 1037.74 crore wasmatured/paid to 2259 depositors. The total amount outstanding under HUDCO Public DepositScheme 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. 13656769/- (inclusive ofPrincipal and Interest) from 87 depositors’ remains unclaimed.

In respect of unclaimed Deposits the Deposit holder(s) have been intimated throughemail/ letters regularly with a request to claim the amount matured or renew the deposits.During the Financial Year 2016-17 an amount of Rs. 293372/- remaining unclaimed formore than seven years from the date of maturity was transferred to ‘InvestorEducation and Protection Fund’ (IEPF) as per the provisions of the Companies Act2013 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 companystood at Rs. 39322.15 crore. Out of this Equity Share Capital amounted to Rs. 2001.90crore Reserves & Surplus stood at Rs. 7165.35 crore Loans from FinancialInstitutions Commercial Banks Multilateral Institutions and Market Borrowings throughBonds and Commercial paper accounted for Rs. 28432.43 crore Deferred TaxLiabilities (Net) amounted to Rs. 425.26 crore and other liabilities & provisionsstood 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 & BankBalances 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 creditrisk liquidity risk market risk foreign currency risk and operational risk. Formanagement of the various risks in an effective and proactive manner HUDCO has in place aRisk Management Policy and Operating Manual. The Policy aims at establishing thecompany’s risk management strategy in line with the goals of the organization and theinternal 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-committeesnamely:

• 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 ManagementCommittee (CRMC) are headed by Director (Finance) and the Operational Risk ManagementCommittee (ORMC) is headed by Director (Corporate Planning). The recommendations of theRisk Management Committee (RMC) are submitted to the Board of Directors.

HUDCO has effective Assets and Liabilities Management system. ALCO reviews the risksrelating to Assets and Liabilities and ensures management of mismatches through liquiditygap analysis interest rate sensitivity analysis as per NHB guidelines. It is ensured thatthe ALM risks if any are managed within the permissible limits. ALCO meetings are heldevery month to review position of ALM.

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

a) Credit Risk

To manage the credit risk HUDCO has established a strong appraisal mechanismcontaining comprehensive appraisal techniques/ guidelines in order to ensure timelyrepayments 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 LiabilityManagement System. The liquidity risk is being monitored with the help of liquidity gapanalysis. Further the funds are mobilized at competitive rates through various strategiesviz. bonds public deposits term loans etc.

c) Market Risk

In order to mitigate the risks arising from fluctuations in interest rates and foreigncurrency exchange rates your Company periodically reviews and determines its lendingrates based on its cost of funds and the market scenario. Further the interest rate riskis being monitored with the help of interest rate sensitivity analysis under the AssetLiability Management System.

d) Foreign Currency Risk

In order to mitigate the risks associated with foreign currency fluctuations yourCompany has a Foreign Currency Risk Management policy. Your Company has entered intohedging transactions to cover the exchange rate and interest rate risks. As on 31st March2017 the total foreign currency liabilities are USD 60.28 million and JPY 2562.23 millionand 64.06% of the foreign currency exchange rate risk is covered through hedginginstruments.

e) Operational Risk

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


HUDCO had formed four Joint Venture Companies (JVs) viz Pragati SocialInfrastructure 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 2015-16HUDCO has decided to exit from all the four aforesaid Joint Ventures by invoking the exitclauses as the performance of these JVs was not found to be satisfactory. HUDCO has exitedfrom JV with MCMI on 29th September 2016 and the company is in process of exiting fromthe remaining three JVs.

HUDCO has one associate company viz "Ind Bank Housing Ltd" (IBHL) whereit has invested Rs. 2.50 crore (25% of the paid up capital of the investee company). Theinvestment 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 itsJoint Venture Company (JV) i.e. M/s Shristi Urban Infrastructure Development Ltd. Howeverconsolidation in respect of other JVs companies namely; M/s Pragati Social Infrastructure& Developpent Ltd. (PSDIL) M/s Signa Infrastructure India Ltd. (SIIL) and oneassociate company M/s Ind Bank Housing Limited (IBHL) has not been considered during thefinancial year 2016-17 due to the reasons given below: i. In case of PSDIL (JV) theCompany has decided to exit from this entity and provided for full diminution in the valueof investment; ii. In case of SIIL (JV) the Company has decided to exit from said entityand the figures not being material; and iii. In case of IBHL (Associate) the Company hasprovided for full diminution in the value of investment.

Statement containing salient features of financial statements of Joint Venture andAssociate Companies

Statement containing salient features of financial statements of Joint Venture andAssociate Companies under section 129 (3) of the Companies Act 2013 in the prescribedform AOC 1 forms part of this Annual Report.


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

In compliance of the above HUDCO has prepared an ‘Internal FinancialControl’ Policy which gives broad framework of different activities with policies andprocedures for ensuring the orderly and efficient conduct of its business adherence tosuch policies safeguarding assets of the Company prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information.

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

The Review and Testing of the Operating efficiency of existing Internal FinancialControls 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 andadequate Internal Financial Controls and in the process of diagnosis review. Being acontinuous 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 majordivisions of Corporate Office were carried out by in-house internal audit team and byoutsourced Chartered Accountants firm. The significant observations of the internal auditwere periodically submitted to the Audit Committee and necessary action as directed by theAudit Committee is taken by the Internal

Audit Department. Directions have also been issued to all concerned for adherence tothe policies guidelines and procedures and for timely compliance of the AuditObservations.


HUDCO is an ISO 9001:2008 certified company for Quality Management for its fullrange of activities covering project and retail financingservices resource mobilisationfor funding consultancy and joint ventures. The certification is valid till September2018.


Your Company has a highly talented dedicated and committed team of professionals atall levels. Your Company recognizes the contribution of employees in furthering theinterest of the organization and in maintaining its consistent growth. With a view to honethe skills of employees capability development programme were taken up in variousstrategic functional and behavioural areas of employees and 256 employees were impartedtraining in India and abroad. .

As on 31st March 2017 HUDCO has total strength of employee’s at 875 (previousyear 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 forcapacity building for professionals engaged in housing and urban development includingHUDCO’s borrowing agencies Urban Local Bodies (ULBs) and HUDCO officials. A total of32 training programmes were organised imparting training to 1008 national andinternational professionals. The training programmes included 13 capacity buildingprogrammes for ULBs in association with 18 HUDCO Chair Institutions. Other programmesincludes one for National Real Estate Development Council (NAREDCO) on ‘Real EstateManagement’ one DoPT Programme for Central Services Officers (IAS/IPS) one capacitybuilding programme for officials of MP Housing & Infrastructure Development Board twoInternational training programme and 14 in-house training programmes. As part of MoUTarget for the financialyear 2016-17 HUDCO’s HSMI installed 3 Nos. of Roof Top SolarPower 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 toimprove living environment. Further under its collaborative research activities HSMIsanctioned eight new research projects including two research projects being funded out ofHUDCO’s research grant and six research projects being funded out of the thenMinistry of Housing and Urban Poverty Alleviation research grant.

During the year 22 other activities were organized by HSMI for the then Ministry ofHousing and Urban Poverty Alleviation Government of India which included seminarsworkshops stakeholder meets National Habitat Committee meetings etc. HSMI also renderedactive support for organizing the 6th APMCHUD Conference at New Delhi. As an anchorinstitution for undertaking activities under IBSA-HS HUDCO’s HSMI supported theIBSA-HS meeting held during the Habitat-III at Quito in October 2016. Besides HUDCObeing an associate member of CITYNET since 1993 HSMI has been engaged with CITYNETthrough 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 SmallEnterprises vide Micro and Small Enterprises (MSEs) Order 2012. During the year 2016-17your company made total procurement of Rs. 1.24 crore from MSEs (including MSEs owned bySC/ST entrepreneurs) which constitutes 23.7% of total annual procurement made by yourCompany.

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

In line with provisions of ‘Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 HUDCO has in place an ‘Internal ComplaintsCommittee’ for redressal of complaint(s) against sexual harassment of womenemployees which is headed by a senior level woman official of the company and includes anNGO representative as one of its members. Anti-sexual harassment stance of the Company isalso outlined in HUDCO (Conduct Discipline and Appeal) Rules. During the year underreview 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 thecustomer. In accordance with the guidelines issued by the Government of India and NationalHousing Bank (NHB) HUDCO has an appropriate Grievance Redressal Mechanism which isavailable on HUDCO’s website.


In compliance of Govt. of India’s policy on Official Language Your Companyhas 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 andall Regional Offices spread throughout the Country wherein several workshops and Hindicompetitions were organized and prizes were given to winners of various competitions byChairman & Managing Director HUDCO.

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

During the year Parliamentary Committee on Official Language inspected our Mumbai andRaipur 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 theDepartment of Official Language Ministry of HomeAffairs Government of India.


In order to promote transparency and accountability Your Company has implemented theprovisions of the RTI Act 2005 in its true letter and spirit and an appropriate mechanismhas been set up in the Company with a dedicated centralized RTI Cell to provideinformation to the citizens under the provisions of this Act. All the RTI applications andthe appeals received both on line and off line during the year 2016-17 have been processedand information was provided in a time bound manner as stipulated in the Act. There havebeen no instances of non-compliance by the Company. No penalties or strictures wereimposed on the Company by any statutory authority during the last three years with respectto RTI.


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

During the year 2016-17 Vigilance Awareness Week was observed by the Company from 31stOctober 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 RegionalOffices but also in at least 2 schools & 2 colleges within jurisdiction of eachRegionalOfficethroughout the Country. The programmes were the theme centric declared bythe CVC i.e. "Public Participation in Promoting Integrity and EradicatingCorruption".

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

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


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


Pursuant to SEBI (LODR) Regulations 2015 and DPE’s Guidelines a separatesection on ‘Corporate Governance’ alongwith Grover Ahuja & AssociatesCompany Secretaries confirmingcompliance of the conditions of Corporate Governancecertificate as stipulated in the SEBI (LODR) Regulations 2015 and DPE guidelinesalongwith 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 beenfollowed and no material departures have been made from the same;

b) such accounting policies have been selected and applied consistently (except forchanges in accounting policies as disclosed in the Note to Accounts to the FinancialStatements) and made judgments and estimates that are reasonable and prudent so as to givea true and fair view of the state of affairs of the Company at the end of the financialyear and of the profit of the Company for that period;

c) proper and sufficientcare has been taken for the maintenance of adequate accountingrecords in accordance with provisions of Companies Act 2013 for safeguarding the assetsof 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 suchinternal financial controls were adequate and operating effectively; and

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


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

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

Further the then Ministry of Housing & Urban Poverty Alleviation Government ofIndia 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 theCompany is in line with the provisions of the Companies Act and SEBI (LODR) Regulations2015 and DPE Guidelines.

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

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

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


M/s Dhawan & Co. Chartered Accountants (Firm Reg. No. 002864N) New Delhiappointed as Statutory Auditors’ by the Comptroller & Auditor General of India(C&AG) under section 139 of the Companies Act 2013 for the financial conducted theaudit of the Financial Statements (both Standalone & Consolidated) and submitted theirreport thereon. The comments of the Statutory Auditors on the standalone financialstatement alongwith hereto and forms part of the report.

The Comptroller and Auditor General of India (C&AG) vide their letter dated 11thJuly 2017 received on 25th July 2017 has appointed M/s Prem Gupta & Co CharteredAccountants New Delhi as Statutory Auditors of your Company for the financial year2017-18.

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

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


M/s Grover Ahuja & Associates Company Secretaries in practice were appointed asSecretarial Auditors pursuant to section 204 of the Companies Act 2013 to conductSecretarial Audit for the financial thereon.

The Secretarial Audit Report for the financial year 2016-17 alongwith Management replyon 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 theBoard in compliance with the provisions of Section 135 of the Companies Act 2013comprises of four member(s) namely: Dr. M. Ravi Kanth as Chairman Shri Mukesh M. AryaProf. Chetan V. Vaidya and Shri Amarishkumar G. Patel as member(s). The Committee isheaded by Chairman & Managing Director and the remaining three members are Part-timeNon-official Independent Directors. The constitution of the Committee as on 31st March2017 was in compliance with the provisions of the Companies Act 2013.

‘Corporate Social Responsibility Policy’ (CSR Policy) of HUDCO which laysdown the guidelines and the activities to be undertaken by the Company has been put on theCompany’s website All the activities undertaken during the year are asper CSR Policy of the Company.

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

(ii) Board and its Committees

The details of the composition terms of reference number of meetingsheld/attended by directors/members and other particulars are given in the CorporateGovernance 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 orsecurities provided are not applicable to Housing Finance Company hence the same are notgiven. Further the details pertaining to investments covered under the provisions ofsection 186 of the Act forms part of the financial statement for the financial year2016-17.

(iv) Extract of Annual Return

Pursuant to provisions of section 92(3) read with section 134(3)(a) of the CompaniesAct 2013 the extract of Annual Return as at 31st March 2017 in the prescribed format isannexed 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 manufacturingoperations and the present area of operations are not energy intensive. Your Company beingenergy conscious has taken lot of initiative with a view to conserve energy both at itsHead Office and its Regional Offices.

b) Technological Absorption

Your Company being a Housing Finance Company having no manufacturing operationstherefore has not absorbed any technology indigenous/ imported. Further no technologywas 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 yearRs. 1.45 crore) while foreign exchange outgo/ expenditure was Rs. 6.06 crore (previousyear Rs. 5.36 crore).


(i) Government Companies are exempted from complying with the provisions of section 197read with rules on Companies (Appointment and Remuneration of ManagerialPersonnel)Rules2014videnotificationdated 5 th June 2015 issued by the Ministry ofCorporate Affairs hence the particulars with respect to the remuneration drawn byemployees/ directors have not been given.

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

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

(iv) orders were passed by the regulators or courts or tribunals which impactthe going concern Nosignificant status and Company’s operations in future.

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

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

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

(viii) The Board of Directors of your Company has laid down Code of Conduct and Ethicsfor all Board members and Senior Management Personnel of the Company and the same isplaced on the Company’s website. All the Board members and Senior ManagementPersonnel have affirmed compliance with the code. The copy of the declaration made byChairman & 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:

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


Your Directors wish to place on record their gratitude to the Government of Indiaparticularly to the Ministry of Housing and Urban Affairs Ministry of Rural DevelopmentMinistry of Finance National Housing Bank Department of Investment and Public AssetManagement Securities and Exchange Board of India Ministry of Corporate Affairs andRegistrar of Companies for their continued co-operation support and guidance in effectivemanagement of the Company’s affairs and resources.

The Directors thank the State Governments Housing Boards Development AuthoritiesMunicipal/Local Bodies and other Borrowers for their continued support and valuablesuggestions.

The Directors also place on record its appreciation to the domestic and overseas BanksBSE Limited National Stock Exchange of India Limited National Securities DepositoryLimited Central Depository Services (India) Limited National Credit Rating AgenciesRegistrar & Transfer Agents and other agencies associated with the Initial PublicOffer of the Company Debenture/Bond holders especially the Retail Investors depositorsand other Stakeholders for their support extended to the Company from time to time. TheDirectors also thank the Comptroller & Auditor General of India M/s Dhawan & Co.Statutory Auditors M/s. Grover Ahuja & Associates Company SecretariesSecretarialAuditors for their valued guidance and support.

The Directors also place on record its sincere appreciation for their valuablecontribution and dedicated efforts of employees at all level in steering the Company toexcellent 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)