About Housing & Urban Development Corporation Ltd

HUDCO was incorporated as 'The Housing and Urban Development Finance Corporation Private Limited' on April 25, 1970, as a Private Limited Company and granted a certificate of incorporation by the then Registrar of Companies, Delhi. Subsequently, name of the Company was changed to 'Housing and Urban Development Corporation Limited' and a fresh Certificate of Incorporation dated July 9, 1974, was issued by the then Registrar of Companies, Delhi & Haryana. Presently, the Company is a Public Sector Undertaking engaged in providing loan financing for housing and urban infrastructure projects in India. In 1977, HUDCO launched rural housing schemes for providing loan assistance for construction of rural houses. In 1986, the company established the Human Settlement Management Institute, the research, and training division of the company. In 1988, the company commenced urban infrastructure financing. In 1996, the company was notified as a public financial institution under Section 4A of the Companies Act, 1956 by the Department of Company Affairs, Ministry of Finance, GoI. In 1999, HUDCO began retail financing under the brand name HUDCO Niwas. In 2012, the company's profit after tax (PAT) crossed Rs 600 crore marks. During the financial year 2011-2012, the company raised Rs 5000 crore through an issue of tax-free bonds, as allocated by the CBDT in its budget allocation for the year, including Rs 4684.7 crore raised through a public issue of tax-free bonds. In 2013, HUDCO's PAT crossed Rs 700 crore mark. During the financial year 2012-2013, the company raised Rs 2401.35 crore through a public issue of tax-free bonds, as allocated by the CBDT in its budget allocation for the year. During the financial year 2013-2014, HUDCO raised Rs 4987.12 crore through an issue of tax-free bonds, as allocated by the CBDT in its budget allocation for the year, including Rs 4796.32 crore raised through a public issue of tax-free bonds. During the financial year 2015-2016, the company raised Rs 5000 crore through an issue of tax-free bonds, as allocated by the CBDT in its budget allocation for the year including Rs 3500 crore raised through a public issue of tax-free bonds. Government of India (GoI) carried out disinvestments of 20.4 crore shares constituting 10.19% stake in HUDCO via an initial public offer (IPO) in May 2017. Post successful completion of the IPO, GoI's stake in HUDCO came down to 89.81% from 100%. HUDCO shares were listed on the bourses on 19 May 2017. On 28 March 2018, the Board of HUDCO approved the annual borrowing programme of maximum upto Rs 40000 crore for the financial year 2018-19 through various sources/modes. The borrowing limit includes the power to make a private placement of non-convertible debentures (NCDs), subject to the approval of the shareholders of the company in general meeting. On 28 May 2018, HUDCO announced that an old default case of a borrower has been substantially resolved after prolonged litigation, where HUDCO has received an amount of Rs 317 crore, against the dues of Rs 469.38 crore as on 31 March 2018. Housing and Urban Development Corporation Limited (HUDCO) came out with an Initial Public Offering (IPO) of 204,058,747 equity shares of Face Value of Rs 10 each for cash at a price of Rs 60 per equity share aggregating to Rs1209.78 Crores. There was no fresh issue of shares by the company. The IPO was priced at Rs 60 per share. As at 31st March 2019, 89.81% of the shareholding is held by President of India through the Ministry of Housing and Urban Affairs (MoHUA) - 69.08% and Ministry of Rural Development (MoRD) - 20.73% respectively and balance 10.19% is held by Public. During the year 2019, HUDCO completed the consultancy services for construction of Office building for Archaeological Survey of India at Tilak Marg, New Delhi. As on 31st March, 2019, HUDCO has three Joint Venture Companies namely a) Shristi Urban Infrastructure Development Ltd. (SUIDL) b) Pragati Social Infrastructure & Development Ltd. (PSIDL) and c) Signa Infrastructure India Ltd. (SIIL), Further, there is one associate namely Ind Bank Housing Limited. In the case of an associate Company, namely Ind Bank Housing Limited, the company made an investment of Rs 2.50 crore in its equity, being 25% of the paid-up equity share capital. The Company provided for full diminution in the value of investment made in IBHL. During the year 2019, HUDCO sanctioned 55 proposals for financial assistance of Rs 7,196 crore (inclusive of proposals for loan assistance of Rs 893 crore in North Eastern States) under different sectors like water supply, drainage, power sector, social infrastructure, commercial infrastructure, road & transport, etc., against which, an amount of Rs 3,594 crore has been released. During the first quarter of financial year 2019-20, ended 30th June 2019, The Company sanctioned a total loan of Rs 4211.08 crore and disbursed an amount of Rs 3838.88 crore. In Mar'20, HUDCO sanctioned a total of 17,284 housing and urban infrastructure projects, with a total loan component of Rs. 2,08,039 crore and has made a cumulative disbursement of Rs. 1,71,216 crore. During the year 2019-20, it sanctioned projects, with a loan amount of Rs. 3,790 crore in housing; and sanctioned urban infrastructure projects with a total loan amount of Rs. 16,124 crore respectively. In Mar'21, HUDCO sanctioned a total of 17,301 Housing and Urban Infrastructure (UI) projects with a total loan of Rs. 2,13,082 crore and disbursed an amount of Rs. 1,79,527 crore. Further, it has sanctioned financial assistance to more than 192.45 lakh housing units both in rural and urban areas in the Country of which, 183.19 lakh (95.19%) pertains to EWS/LIG categories. In addition, under HUDCO Niwas, a retail lending window, it sanctioned financial assistance of Rs. 6,846 crore to 3.86 lakh individuals and disbursed an amount of Rs. 5,160 crore. Under Housing Sector, it sanctioned projects with loan assistance of Rs. 937 crore, inclusive of Rs. 21 crore under HUDCO Niwas, thereby facilitating construction of 12,488 dwelling units, of which Rs. 3,701 crore was released during current year. Under Urban Infrastructure portfolio, it sanctioned 32 urban infrastructure projects, with loan assistance of Rs. 8,265 crore across various sectors like Water Supply, Metro, Power, Social Infrastructure, Commercial Infrastructure, Road & Transport etc. of which Rs. 4,622 was released during the current year. During the year 2021-22, 8% of equity shareholding in HUDCO comprising of 16,01,63,774 equity shares of face value of Rs. 10/- each through Ministry of Housing and Urban Affairs (MoHUA), Government of India was divested by the President of India, being the promoter in the month of July/August, 2021. HUDCO has sanctioned projects with a loan assistance of Rs. 1,759 crore, inclusive of Rs. 13 crore under HUDCO Niwas, thereby facilitating construction of 88,523 dwelling units. It sanctioned 32 projects with a loan assistance of Rs. 18,904 crore covering various sectors like Water Supply, Sewerage System, Social Infrastructure, Commercial Infrastructure, Road & Transport, Metro, Power, etc. Further, a release of Rs. 7,607 crore was made during the year in various schemes. In FY 2021-22, HUDCO supported the flagship programs by extending financial assistance of 600 crore to Rajasthan Urban Drinking Water Sewerage & Infrastructure Corporation (RUDSICO). It also sanctioned, financial assistance to mega projects of Public Health Department, Government of Maharashtra, Bihar State Road Development Corporation Limited and Maharashtra State Road Development Corporation Limited, Bihar Rajya Pul Nirman Nigam Limited, Tamil Nadu Water Supply and Drainage Board, Kerala Infrastructure Investment Fund Board (KIIFB), etc. During 2021-22, HUDCO's Construction and Consultancy Wing worked on design concepts remaining responsive to clients' diverse requirements. Some new assignments, while continuing work on other ongoing prestigious assignments, include providing consultancy services for the construction of Housing Complex for Tripura Tribal Areas Autonomous District Council at Tripura. HUDCO completed the preparation of the Housing for All plan of action under PMAY (U) of 61 towns for the State of Karnataka, and, the Design Consultancy services for Construction of Officers' Quarters with Allied Services (Phase-III) for M/s Hindustan Aeronautics Limited, Bangalore, designed for GRIHA rating is on the verge of completion. As part of environmental engineering consultancy, it undertook appraisal of 8 Integrated Management Plans under National Plan of Conservation of Aquatic Eco-systems (NPCA) namely 2 each in Mizoram, Chandotal Wetland in Basti- U.P, East Kolkata Wetlands- WB, and, Jagatpur Gam Talav Wetland-Bihar. Under Housing sector during 2022-23, HUDCO sanctioned 5 projects with a loan assistance of Rs 3,466 Crore, thereby facilitating construction of 3,49,308 dwelling units. Loan release for an amount of Rs 1,838 Crore was made during 2022-23. Similarly, under the Urban Infrastructure portfolio, the Company sanctioned 36 projects with a loan assistance of Rs 21,106 crore covering various sectors like Water Supply, Smart City, Transport Nagar, Social Infrastructure, Commercial Infrastructure, Road & Transport, Power, etc. Further, a release of Rs 6,628 Crore was made during the year in various schemes. In the Financial Year 2022-23, HUDCO provided financial assistance of Rs 2,385 crore for construction of 63,246 DUs under Affordable Housing Project (AHP) and 2,56,880 DUs under Beneficiary-Led-Construction (BLC) vertical totalling 3,20,126 DUs covering 28 districts and 169 ULBs. Besides, it had sanctioned a scheme for loan amount of Rs 1,000 crore to Telangana Housing Board (THB) to construct 28,979 DUs (22,772 DUs in Rural areas and 6,207 Units in Urban Areas of Telangana. In FY 2022-23, HUDCO provided financial assistance of Rs 170 crore for Implementation of Smart City Project at Kohima and Rs 50 crore for Infrastructure Development work in Udaipur Smart City, Rajasthan. The other major project sanctioned in the financial year was water conservation schemes at various Districts of Maharashtra (Loan Rs 3,500 crore) and Construction of various infrastructure development works in ULBs in Rajasthan (Loan Rs 2,235 crore). HUDCO provided loan assistance for JP Ganga Path, Phase-2 in Bihar (Loan Rs 541 crore), Infrastructure facilities for EWS Housing units under PMAY-HFA (Urban), Phase-II, in the State of Andhra Pradesh (Loan Rs 750 crore), Construction of 4 lane elevated corridor Patna, Bihar (Loan Rs 275 crore), etc. HUDCO had sanctioned Rs 2,000 Crore to Kerala Infrastructure Investment Fund Board (KIIFB) for improving the medical infrastructure in the State and out of which an amount of Rs 1,000 Crore released.

Housing & Urban Development Corporation Ltd Chairman Speech

Dear Shareholders, Ladies & Gentlemen,

The world is witness to India's resurgent growth story. Amidst the heightened global economic uncertainty where the global growth is likely to bottom out at around 3.0 per cent in 2023-24, India continues to remain a ‘bright spot' as the fastest growing economy in the world and on track to be the 3^rd largest economy by financial year 2028. Though the global pandemic largely receded by the onset of financial year 2022-23, the twin impacts of geo-political tensions arising out of Russia-Ukraine war and emergence of global inflationary pressure posed hurdles and uncertainties to the global economic growth during financial year 2022-23. The interest rates were seen moving up as major central banks, including Reserve Bank of India (RBI) resorted to hiking the policy rates to combat inflation, pushing up domestic lending and borrowing rates. However, your Company successfully navigated through this uncertain business environment during financial year 2022-23, by registering overall loan sanctions of `24,572 crore and disbursements of ` 8,466 crore during the financial year.

I would like to share the highlights of HUDCO's performance during financial year 2022-23, vis-a-vis the economic environment, challenges faced and future outlook of the Company, which would clearly demonstrate that your Company is on a high growth path in its continued efforts for building assets for the nation.

1. Economic Environment

India's growth momentum would continue to be the fastest in the next two years as per IMF-World Economic Outlook Update Report,

July 2023, with the highest growth rate of 6.1 per cent in 2023-24 and 6.3 per cent in next fiscal. As per latest data released by National Statistical Office (NSO), the estimated growth in real GDP during 2022-23 was 7.2 per cent(Provisional estimates of national income for 2022-23, dated 31^st May 2023). Growth was supported by a visible pick-up in the services sector. The disaggregated data showed that the Q1, Q2, Q3 & Q4 GDP had grown by 13.1%, 6.2%, 4.5% & 6.1% respectively in 2022-23, particularly the Q4 growth was better-than-expected.

During the financial year 2022-23, RBI raised the policy repo rate six times between May 2022 and February 2023, from 4% to 6.5% to subdue the inflationary pressures. This resulted in a high interest regime in the domestic economy posing challenges to domestic growth prospects. Further, as per RBI's latest monetary statement (June 2023), the GDP growth is likely to be 6.5 percent this fiscal on the back of supportive domestic demand conditions. This is indicative of India's continued economic resilience and strong macro- economic fundamentals.

2. Sectoral Overview and Government Policy Initiatives

One of the key reasons for India's sustained growth is the contineous investment in real estate sector with its strong income and employment multiplier effects through ‘forward' and ‘backward' linkages with other industries in the economy. The Govt. of India's focus on ‘infrastructure-led economic growth' is further outlined through Union Budget 2023-24, with capital investment outlay for infrastructure has been increased by 33% to `10 lakh crore, which is 3.3 per cent of GDP. States and cities will be encouraged to undertake urban planning reforms and actions to transform cities into ‘sustainable cities of tomorrow'. Through property tax governance reforms and ring-fencing user charges on urban infrastructure, cities will be incentivized to improve their credit worthiness for Municipal Bonds. Further, similar to the RIDF, an Urban Infrastructure Development Fund (UIDF), through use of priority sector lending shortfall, has been established and being managed by the National Housing Bank, which will be used by public agencies to create urban infrastructure in Tier 2 and Tier 3 cities. The outlay for Pradhan Mantri Awas Yojana (PMAY) has been enhanced by 66 per cent to over `79,000 crore (Union Budget speech 2023-24).

3. Emerging Issues in Sustainable Urbanisation, Housing and Urban Infrastructure

India holds the current Presidency of economically powerful G20 countries. Adopting the Indian philosophy of "Vasudhaiva Kutumbakam"- One Earth One Family One Future, the G20 Presidency provides a strong platform for furthering our resolve to achieve the UN Sustainable Development Goals (SDGs) within the defined timeline of 2030, particularly sustainable urbanization, resilient infrastructure development, addressing climate change, green economic growth and transformative habitat development through 5 key pillars: Finance, Technology, Inclusion, Partnerships and Capacity Building. Further, various available data and Reports, such as World Bank Report, NIP Report, etc., point towards a sustained increase in urbanisation level and consequent increase in investment in housing and urban infrastructure sectors. The Government of India has been undertaking various policy measures for orderly & sustainable urbanisation and catalysing steady flow of investments into the housing and urban infrastructure sector. All these emerging developments have great potential for HUDCO to play catalytic roles in addressing the requirements of sustainable & transformative habitat development.

4. Operational and Financial Performance

HUDCO in its glorious journey of 53^rd years, since its inception in 1970, has cumulatively, as on 31^st March 2023, sanctioned a total of 17,335 housing and urban infrastructure projects with a total loan of `2,36,555 crore and disbursements of `1,96,612 crore. Further, your Company has sanctioned financial assistance to more than 196.48 lakh housing units both in rural and urban areas in the

Country, of which 187.27 lakh (95.31%) pertains to EWS / LIG categories. In addition, under HUDCO Niwas, a retail lending window, your Company has cumulatively sanctioned financial assistance of `6,871 crore to 3.86 lakh individuals and released an amount of `5,178 crore.

The Operational and Financial highlights during the financial year 2022-23 are as follows: a) Under Housing sector, HUDCO has sanctioned 5 projects with a loan assistance of `3,466 crore, inclusive of `12 crore under HUDCO Niwas, thereby facilitating construction of 3,49,308 dwelling units. An amount of `1,838 crore has been released (inclusive of `9 crore under HUDCO Niwas) during the financial b) Under the Urban Infrastructure portfolio, HUDCO has sanctioned 36 projects with a loan assistance of `21,106 crore covering various sectors like Water Supply, Smart City, Transport Nagar, Social Infrastructure, Commercial Infrastructure, Road & Transport, Power, etc. Further, a release of `6,628 crore was made during the year in various schemes. c) HUDCO is actively participating in Government of India flagship programmes such as Smart City Mission (SCM), Atal Mission for Rejuvenation and Urban Transformation (AMRUT), Jal Jeevan Mission (JJM), etc. In the financial year 2022-23, HUDCO has provided financial assistance of `170 crore for Implementation of Smart City Project at Kohima and `50 crore for infrastructure development work in Udaipur Smart City, Rajasthan. d) Your Company has reported total income for the financial year 2022-23 at `7086.18 crore (previous year

`6997.66 crore) inclusive of other income of `36.72 crore (previous year `43.58 crore), while the Profit before Tax (PBT) for the year was `2289.41 crore (previous year `2345.94 crore) and Profit after Tax (PAT) was`1701.62 crore (previous year `1716.60 crore). During the period, your Company has maintained the pace of growth with a growth of 1.26 % in total income and marginal decline of 2.41% in Profit before Tax (PBT). Your Company has registered a growth of 6.75% in its net worth that has reached `15,445.25 crore in financial year 2022-23 from `14,468.32 crore in financial year

2021-22. e) The Board of Directors of your Company had earlier approved payment of interim dividend @ 7.50 %, i.e., `0.75 per equity share having face value of `10/- each, totalling to `150.14 crore on the paid-up equity share capital of the Company in March, 2023 and the same has been paid. Further, the Board of Directors have also recommended payment of final Dividend @ 31.00 %, i.e.,`3.10 per equity share, having face value of `10/- each, for the financial year 2022-23, subject to approval of the shareholders at the ensuing 53<sup>rd</sup> Annual General Meeting. f) As at the end of the financial year ended 31 <sup>st</sup> March 2023, HUDCO reported Gross NPA of `2,759.17 crore, which constitutes 3.42% of total loan portfolio. The Net NPA as on 31^st March 2023 is `407.25 crore which constitutes 0.52% of Net loan outstanding as against MoU target of 0.35%. During the year 2022-23, an amount of `145.58 crore was recovered from the accounts which were in NPA as on 31.03.2022. As on 31^st March 2023, Loan Overdue to Net Loan Assets ratio is 3.71% as against MoU target of 6.50%. g) During the year, HUDCO has supported projects in the North-Eastern Region, and sanctioned 9 housing and urban infrastructure schemes with loan amount of `279.13 crore in the States of Assam, Tripura, and Nagaland.

5. Credit Rating of HUDCO

During the financial year 2022-23, the Company's long-term domestic borrowing programme was awarded the highest credit rating of

‘IND AAA/Stable', ‘[ICRA] AAA (Stable)' and ‘CARE AAA [Triple A] Stable' by M/s India Ratings & Research (IRRPL), M/s ICRA and M/s CARE Ratings respectively. The Company also got its short-term borrowing programme rated, obtaining the highest rating of "IND A1+', ‘[ICRA] A1+'' and ‘CARE A1+ [A One Plus]', by the above-mentioned Credit Rating Agencies. As on 31^st March, 2023, HUDCO for its International Borrowing Programme continued to enjoy International Credit Rating of ‘Baa3' with Stable outlook and ‘BBB-' with Stable outlook, respectively, from Moody's and FITCH, International Credit Rating Agencies. Both the assigned ratings are of investment grade and are at the Sovereign ceiling and equivalent as that of our Country.

HUDCO as the premier techno-financial institution assists the Ministry of Housing and Urban Affairs (MoHUA) in scrutiny and inspection of sample projects / DPRs under Pradhan Mantri Awas Yojana (Urban) - Housing for All (PMAY-U) Mission prior to their consideration by the Ministry for sanction of central assistance. As part of the above, HUDCO during financial year 2022-23, carried out site and/or desk scrutiny of 40 projects with project cost of `5717.37 crore & GoI assistance of `1504.26 crore covering 1

Affordable Housing in Partnership (AHP)project,38BeneficiaryLed Construction (BLC) - New Construction/ Enhancement and 1 In-situ Slum Redevelopment (ISSR) project at various locations in 40 towns/ cities under 13 States/ UTs. Cumulatively up to 31^st March 2023, HUDCO has carried out site and/or desk scrutiny of 595 projects for 12.37 lakh DUs with project cost of `57,946.06 crore & GoI assistance of `18,271.88 crore, covering 62 AHP projects, 511 BLC (New Construction/Enhancement) & 22 ISSR projects (inclusive of 1 ISSR – AHP project) at 431 towns/ cities under 34 States/UTs. HUDCO, as a Central Nodal Agency (CNA), has executed Memorandum of Understanding with 91 Banks/Primary Lending Institutions

(PLIs) for EWS/LIG and 87 Banks/PLIs for MIG-I and MIG-II categories. During the financial year 2022-23, HUDCO has disbursed subsidy of `628.43 crore to 25,718 beneficiaries under EWS/LIG category. Cumulatively, HUDCO has disbursed CLSS subsidy of `2635.32 crore to 1,11,955 beneficiaries, throughout the country till 31^st March, 2023. Out of this, an amount of `2297.40 crore has been disbursed to 95,887 EWS/LIG beneficiaries, while an amount of `337.92 crore has been disbursed to 16,068 MIG category beneficiaries.

7. Human Settlement Management Institute (HSMI)

Human Settlement Management Institute (HSMI) of HUDCO is involved in both Research & Training activities in urban sector. The

Quality Management System of HSMI complies with ISO 9001:2015. Cumulatively, HUDCO's HSMI has benefitted about 54,764 officials programmes from 1985-2023 and continues to provide training support for professionals as well as a forum for interaction of administrators, professionals, researchers, and others engaged with the issues of human settlement development. So far, it has provided training sponsored by Ministry of External Affairs, GoI to more than 1170 overseas participants through 51 ITEC (Indian Technical & Economic Cooperation) and 6 e-ITEC training programmes.

During financial year 2022-23, HSMI has conducted 19 training programs on capacity building, imparting training to 1138 participants whichincludedHUDCOofficialsand participants from ULBs & other stakeholders on diverse subjects like ‘Only One Earth Living

Sustainably in Harmony with Nature', ‘Analysis of State Budgets and Generation of Business through Innovative Project Financing', Strategies for increasing HUDCO's Consultancy income, ‘Stress and Anger Free Living & lifestyle', and ‘Chair Yoga' etc. HSMI has also conducted 2 e-ITEC programmes sponsored by the Ministry of External Affairs(MEA),GoI,benefitting23 overseas professionals on ‘Housing for Sustainable Habitats-Policy Planning, Design and Technologies' and ‘Making Cities Future Ready Smart and Carbon Neutral'. HSMI organized the 50^th International Training Programme on ‘Realizing the Right to Adequate Housing in the context of Habitat III New Urban Agenda - Policies, Planning and Practices' sponsored by MEA, GoI under its ITEC Programme attended by 24 delegates from 20 developing countries and the 51^st ITEC training programme on "Formal solutions to Informal Settlements" attended by 25 delegates representing 19 countries. HSMI also organized CITYNET two-day on-line Training Programme for Senior and mid-

Urban Local Bodies (ULBs) and HUDCO officials on ‘Balancing the Budgets of ULBs - Resource Mobilisation v/s levelofficials

Responsibilities' attended by 80 participants.

Further, SHELTER, an ISSN-accredited publication of HUDCO's HSMI, was brought out twice in the year, April 2022 & October 2022, on the themes of ‘Inclusive Housing' and ‘Mind the gap: leave no one and no place behind' respectively.

8. Human Resources Management

HUDCO recognises the value of Human Resources in delivering accelerated performance and contributing to the growth of the organization. It considers human dimension as the key to Organization's success. Several initiatives for development of Human Resources to meet new challenges in the competitive business environment have gained momentum. Your Company has a team of professionals from various disciplines like finance, projects, HR, Law, IT, social sciences, etc. The guiding principle of HUDCO's Human

Resource Management Policy is to ensure availability of competent, motivated, and effective workforce to facilitate achievement of its full potential at all times to achieve organizational goals. As on 31^st March, 2023, HUDCO had a workforce of 673 employees which included 214 women employees, constituting 31.79% of its total strength. Women representations have gone across various hierarchical levels. HUDCO has been complying with all the directives and guidelines issued by the Government of India regarding reservation for SC/ST/OBC/PwD/ Ex-Servicemen/ EWS.

9. Corporate Social Responsibility (CSR)

During the financial year 2022-23, an amount of`44,98,12,667/- was to be incurred on CSR activities, out of which CSR assistance amounting to `26,67,94,463/- for 19 proposals have been approved. However, no expenditure from the proposals approved during the year has been incurred, as the agencies were in process of completion of documentation, etc., and accordingly, the unspent amount has been transferred to the unspent CSR account opened in a scheduled bank and shall be spent as per provision of CSR amended rules of Companies Act. Further, during the financial year 2022-23, the Company has spent a total amount of`3,20,72,843/- for the ongoing projects sanctioned prior to 31<sup>st</sup> March, 2021. As on 31<sup>st</sup> March, 2023, an amount of `18,30,18,204/- being the unspent CSR amount other than the ongoing CSR activities from the CSR amount allocated for the financial year 2022-23, shall be transferred to one of the funds specified in Schedule VII of the

Companies Act, 2013 within the stipulated time period, i.e., on or before 30^th September, 2023. Further, an amount of `25,87,90,596/- being the unspent CSR amount other than ongoing CSR activities as on 31.03.2022 (`16,99,00,000/- is the unspent CSR budget of financial year 2021-22 and`8,88,90,596/- up to 2020-21) was transferred to ‘Swachh Bharat Kosh', a fund specified in Schedule VII of the Companies Act, 2013 on 30^th September, 2022 in accordance with details mentioned in Annual Report on CSR activities for financial year 2021-22.

HUDCO is fully committed to promote and establish a fair, transparent, and ethical system of Corporate Governance. HUDCO ensures transparency in all its operations with special emphasis on financial prudence, accountability and ensuring customers/ stakeholders' satisfaction. In terms of regulation 34(3) of the SEBI (LODR) Regulations, 2015 and DPE guidelines, a report on Corporate Governance forms the part of the Directors' Report.

The twin impacts of pandemic and Russia-Ukraine war have posed challenges to the global economic growth but India continues to remain bright spot. The key to HUDCO's growth prospect is crucially linked to the urbanisation trend of the country. India's urban population is estimated to increase from 470 million in 2021 to 600 million by 2036 which would constitute about 40% urbanisation level (World Bank Report 2022).

The Report also estimated that India's cities require a capital investment of USD 840 billion in urban infrastructure and municipal services till 2036 in 2020 prices. Further, as per National Infrastructure Pipeline (NIP) Report, total capital expenditure requirement in infrastructure sectors in India during fiscals 2020 to 2025 is projected at about `111 trillion, including `19.19 trillion for urban infrastructure projects including affordable housing projects. Thus, with continuous rise in the urbanisation levels and commensurate increase in capital investment requirement, HUDCO's potential for quantum jump in business operations augurs well. The future outlook in terms of Government's sectoral focus and related developments have positive implications for HUDCO's medium-term and long-term strategies. Demand for housing across India continued to show resilience as reflected in NHB RESIDEX

– Composite price index for 50 cities, which indicates that the prices in 50 major cities in India has been steadily increasing. The enhanced allocation for Pradhan Mantri Awaas Yojana (Urban & Rural) by 66% to over `79,000 crore announced in 2023-24 Union Budget will have positive effect on the housing activities in the country. It is expected that viability gap funding requirements from the state governments would gather momentum by the middle of financial year 2023-24. HUDCO being a major partner in many such housing schemes by the various state governments would stand to benefit. Similarly, the Govt. of India's flagship programmes, AMRUT 2.0 which seeks to provide water supply to households, and Smart

Cities Mission, have been allocated `8000 crore each in 2023-24 Union Budget. The Swachh Bharat Mission (U) has been allocated `5,000 crore in 2023-24. All these allocations are going to catalyse investments in the urban development sector thereby creating business opportunities for HUDCO, as it has been proactively assisting various State Governments in implementation of Government of India programmes. Health infrastructure needs a boost all over the country. HUDCO would continue to fund Social Infrastructure Projects like Health Centres, Government Hospitals, Medical Colleges etc. as the State Governments would be requiring huge funds to expand their Health Care Infrastructure. HUDCO would also give priority for funding Urban Metro Rail projects of all major cities, as the Government is keen to expand the metro network in different cities and is looking for external participation for such projects. In order to align with the country's net zero goals, the government has adopted ‘Green Growth' as one of the seven key priorities (Saptarshi) to lead India in its ‘Amrit Kaal'. HUDCO is therefore poised to increase its funding to ‘green economy' sectors such as green buildings, sustainable transport, water, waste management, land management and renewable energy. Further, the ‘Blue Economy' holds the promise of being the next multiplier of economic growth and well-being and therefore, the GoI's vision of New India by 2030 highlights the Blue Economy as one of the 10 core dimensions of growth. As there is need for substantial capital infusion and investment for development of ports, shipyards, Sagarmala projects and other related infrastructure projects, the blue economy opens up huge opportunities for HUDCO to substantially increase its business operation in this segment.

The Board of Directors of your Company acknowledges its deep sense of appreciation for the continuous support, guidance and cooperation extended by the Government of India, especially the Ministry of Housing and Urban Affairs, Ministry of Rural Development, Ministry of Finance, Reserve Bank of India, National Housing Bank, Ministry of Corporate Affairs, Department of Public Enterprises, Regulatory/Statutory Authorities and various other departments of the Central/State Governments, Stock Exchanges, Depositories, Credit Rating Agencies, Registrar & Transfer Agents, Debenture Trustee(s) and other agencies. The Board of Directors also conveys its gratitude for the unstinting support and cooperation given by the shareholders, bondholders, public deposit holders, Bankers, Financial Institutions, Housing Boards, Development Authorities, Municipal/Local Bodies, and other stakeholders associated with the Company. The Board of Directors also acknowledges the valuable suggestions and guidance extended by Comptroller & Auditor General of India, Statutory Auditors, Secretarial Auditors, and other professionals associated with the Company.

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

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

1. FINANCIAL PERFORMANCE AND HIGHLIGHTS

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

During the period, your Company has maintained the pace of growth with moderate decline of 2.41% in Profit before Tax (PBT).

Your Company has seen a growth of 6.75% in its net worth that has reached ` 15,445.25 crore in financial year 2022-23 from

`14,468.32 crore in financial year 2021-22.

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

A Statement containing salient features of financial statements of Joint Venture and Associate Companies, has been given in the prescribed format AOC - 1 and is annexed as part of the financial statements. There are no material changes and commitments, occurred subsequent to the close of financial year of the date of this Board's report, affecting the financial position of the company and its state of affairs

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

Office of the Company.

2. DIVIDEND

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

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

53^rd Annual General Meeting.

In compliance with Regulation 43-A of Securities and Exchange Board of India (Listing Obligations and Disclosures Requirement) Regulations, 2015, your Company has formulated ‘Dividend Distribution Policy' and the same is available on Company's website at https://www.hudco.org.in//writereaddata/DDP.pdf As per guidelines issued by Department of Investment and Public Asset Management (DIPAM), Government of India, Company is required to pay a minimum annual dividend of 30% of Profit After Tax (PAT) Further, HUDCO had sought exemption from payment of dividend as per available distributable profits in place of prescribed norms stated in OM dated 27^th May, 2016 issued by Ministry of Finance. DIPAM vide its OM no. 5/4/2016-Policy dated 13^th January, 2017, has conveyed that empowered Committee on Management of Government Investment in CPSEs in its meeting held on 9^th January, 2017, under the Chairmanship of Secretary, DIPAM, had observed that "Keeping in view the requirement to meet the statutory deductions out of the profit earned by the Company, the Committee noted that no exemption may be required by the Company under the guidelines". After analysis various financial parameters, cash flow position and available distributable profits, the Board of Directors have paid/recommended total dividend of` 3.85 per share (38.50%).

3. SHARE CAPITAL

As on 31^st March, 2023, the authorized share capital of the Company was ` 2,500 crore with issued, subscribed and paid-up equity share capital of ` 2,001.90 crore. The paid-up share capital comprises of promoter's shareholding of 81.81% held by the President of India through the Ministry of Housing and Urban Affair (MoHUA) - 61.08% and Ministry of Rural Development (MoRD) - 20.73% respectively and the balance of 18.19% held by the Public. There is no change in the authorized, issued, subscribed and paid-up equity share capital of the Company during the year. The Company has not issued any shares with differential voting right/ Sweat Equity Shares during the year under report. Listing of securities and payment of listing fee

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

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

4. MEMORANDUM OF UNDERSTANDING (MoU)

HUDCO enters into an annual MoU with its Administrative Ministry, i.e., Ministry of Housing and Urban Affairs, Government of India, wherein, macro performance parameters, mainly financial and a few non-financial with annual targets are set by the Department of Public Enterprises (DPE). Your Company was rated ‘Good' by DPE for its performance in terms of MoU parameters for the financial year 2021-22. Despite being a COVID year, HUDCO exhibited resilience by striving hard and navigating through the multifarious business challenges that it faced and attained its potential performance

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

Based on the actual achievement against the targets set, DPE evaluates your Company. The MoU rating for financial year

2022-23 is still awaited.

5. LENDING ACTIVITIES

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

` 8,466 crore against the previous year sanctions and release of ` 20,663 crore and ` 8,887 crore respectively.

HUDCO in its glorious journey of 53^rd years, since its inception in 1970, has cumulatively sanctioned a total of 17,335 housing and urban infrastructure projects with a total loan of ` 2,36,555 crore and disbursements of `1,96,612 crore. Further, your

Company has sanctioned financial assistance to more than 196.48 lakh housing units both in rural and urban areas in the

Country, of which 187.27 lakh (95.31%) pertains to EWS / LIG categories.

In addition, under HUDCO Niwas, a retail lending window, your company has cumulatively sanctioned financial assistance of

` 6,871 crore to 3.86 lakh individuals and released an amount of ` 5,178 crore.

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

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

HUDCO is actively participating in Government of India flagship program such as Smart City Mission, Atal Mission for

Rejuvenation and Urban Transformation (AMRUT), Jal Jeevan Mission etc. In the Financial Year 2022-23, major projects sanctioned under:

Housing - HUDCO supported the PMAY(U) flagship programme of GoI by providing viability gap funding towards State's share in the state of Chhattisgarh. HUDCO provided financial assistance of`2,385 crore for construction of 63,246 DUs under Affordable Housing Project (AHP) and 2,56,880 DUs under Beneficiary-Led-Construction (BLC) vertical totalling 3,20,126

DUs covering 28 districts and 169 ULBs. Besides the aforesaid mentioned scheme, HUDCO had also sanctioned a scheme for loan amount of `1,000 crore to Telangana Housing Board (THB) to construct 28,979 DUs (22,772 DUs in Rural areas and

6,207 Units in Urban Areas under PMAY flagship programme of GoI in the State of Telangana. The units are proposed with a total plinth area of 560 sqft. with a provision for living room, two bed rooms, kitchen, toilets and wash area, etc.

Core Infrastructure - HUDCO is actively participating in Government of India prestigious flagship program of Smart City Mission and AMRUT. In the FY 2022-23, HUDCO has provided financial assistance of` 170 crore for Implementation of Smart City Project at Kohima and ` 50 crore for Infrastructure Development work in Udaipur Smart City, Rajasthan. The other major project sanctioned in the financial year was water conservation schemes at various Districts of Maharashtra (Loan ` 3,500 crore) and Construction of various infrastructure development works in ULBs in Rajasthan (Loan ` 2,235 crore). HUDCO has also provided loan assistance for JP Ganga Path, Phase-2 in Bihar (Loan ` 541 crore), Infrastructure facilities for EWS Housing units under PMAY-HFA (Urban), Phase-II, in the State of Andhra Pradesh (Loan ` 750 crore), Construction of 4 lane elevated corridor Patna, Bihar (Loan ` 275 crore), etc.

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

The project, "Construction of various infrastructure development works in ULBs in Rajasthan" with financial assistance of

` 2,235 crore aims to improve the infrastructure facility and provide basic civic amenities across all ULBs in the State of Rajasthan by undertaking various infrastructure works such as road upgradation, sewerage, drainage works, construction of

Faecal Sludge Treatment Plants, Town Halls, Bio-Methanation Bottling Plants, beautification works, etc.

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

HUDCO has also sanctioned a scheme for improvement of power distribution network to TANGEDCO, with a loan amount of

`1,000 crore, which will reduce distribution losses, increased metering efficiency, etc., thereby improvement in revenues of

TANGEDCO. The proposed scheme is comprising of procurement of Distribution Transformers of various capacity ranging from 63 KVA to 500 KVA and procurement of Three Phase static bi directional energy meters for Solar Net Metering Accurate Measurement of energy consumption. Social Infrastructure - HUDCO had sanctioned ` 2,000 crore to Kerala Infrastructure Investment Fund Board (KIIFB) for improving the medical infrastructure in the State and out of which an amount of ` 1,000 crore has been released. The sanctioned project is for providing/improving the infrastructure facilities in 26 Govt. Hospitals scattered throughout the State. The project envisages construction of new hospital blocks, modernization of existing facilities and creation/upgradation of required infrastructure facilities. Out of the 26 projects, construction of new buildings & development of infrastructure facilities are proposed in 19 projects, a combination of construction of new buildings, extension/renovation and development of infrastructure facilities are proposed in 6 projects and only development of infrastructure facilities is proposed in one project.

HUDCO as the premier techno-financial institution assists the Ministry of Housing and Urban Affairs (MoHUA) in scrutiny and inspection of sample projects / DPRs under Pradhan Mantri Awas Yojana (PMAY)

– (Urban) - Housing for All (HFA) prior to their consideration by the Ministry for sanction of central assistance.

As a Resource Institution for scrutiny and inspection of sample projects/ DPRs under Pradhan Mantri Awas Yojana (PMAY) (Urban) - Housing for All Mission, HUDCO for financial year 2022-23, carried out site and/or desk scrutiny of 40 projects for 1.00359 lakh dwelling units with project cost of ` 5717.37 crore & GoI assistance of ` 1504.26 crore covering 01 Affordable Housing in Partnership (AHP) project, 38

(BLC) - New Construction/ Enhancement,Beneficiary

01 In-situ Slum Redevelopment (ISSR) project at various locations in 40 towns/ cities under 13 States/UTs. Cumulatively up to

31^st March, 2023, HUDCO has carried out site and/or desk Financial Assistance under PMAY (Urban), Chhattisgarh scrutiny of 595 projects for 12.37 lakh DUs with project cost of by State Urban Development Agency (SUDA)

` 57,946.06 crore & GoI assistance of ` 18,271.88 crore covering 62

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

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

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

Support to Economically Weaker Sections – HUDCO has made concerted efforts to reach the unreached as well as support the flagship programmes of the Government of India. HUDCO continues to address the housing requirements of weaker Sections of the society by offering financial assistance/ loan to the Economically Weaker Sections (EWS) and Low-

Income Groups (LIG) segment of the society at a comparatively lower rate of interest. Further, your Company has cumulatively sanctioned financial assistance to more than 196.48 lakh housing units both in rural and urban areas in the Country, of which

187.27 lakh (95.31%) pertains to EWS/ LIG categories.

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

HUDCO provides consultancy services in the area(s) of Architectural Design & Development; Urban & Regional Planning; Appraisal, Scrutiny & Monitoring of Government Projects; and Environmental Engineering, for the housing and urban development sector, through a dedicated team of qualified and experienced professionals from diverse background such as

Architects, Planners, Landscape Experts, Geographers, Engineers, Valuers, GIS Expert, and other allied professionals that form the core team. The Regional Offices of HUDCO, having their presence in all state capitals, add to HUDCO's versatility and outreach of Consultancy works. HUDCO's Construction and Consultancy Wing, along with the Regional Offices of HUDCO, not only generated fee-based income providing unique design concepts while remaining responsive to its client's diverse requirements but also contributed towards branding HUDCO as a nationally recognized premier techno financial institution.

Post COVID -19 pandemic, works were restricted to a few niche areas, while work continued on the prestigious assignments having long gestation periods; which included providing consultancy services for the construction of a Housing Complex for Tripura Tribal Areas Autonomous District Council (TTAADC) at Tripura and the ‘Vertical Housing Colony: Shehjar Apartments at Bemina, Srinagar', and the Integrated Master Plan for Rajgir Regional Planning Area and Nalanda Mahavihara World Heritage Site in the state of Bihar being prepared on the GIS platform. HUDCO Bangalore RO has undertaken consultancy assignment for obtaining Environment Clearance for the project ‘Construction of HAL staff quarters-Type A, B & C in Bangalore, while Chennai

HUDCO RO, through Puducherry Development Office has been involved in preparation of DPR for ‘Comprehensive EWS

Housing Layout at Kumaraguru Pallam - Puducherry', Master Plan of Thirunallar Town Development Plan, Ph-II, Development of Queue Complex for Arulmighu Mariammam Temple Samayapuram, Spiritual Circuit in the UT of Puducherry, and, DPRs for: i) Identified three lakes at various locations in Puducherry; ii) Development of Arikamedu as tourism destination in Puducherry; and, iii) Residential school and Marriage hall. HUDCO is an empanelled institution for Independent Appraisal of Integrated Management Plans (IMPs) under the National Plan for Conservation of Aquatic Ecosystems (NPCA), a centrally sponsored scheme being implemented by the Ministry of

Environment Forest & Climate Change (MoEF&CC). During the financial year 2022-23, as part of Environment Engineering Consultancy, HUDCO carried out appraisal of Integrated Management Plans for five wetlands across India, namely;

Gurudongmar Wetland Complex (Sikkim), Keetham Wetland (Agra, Uttar Pradesh), Patna Wetland (Etah, Uttar Pradesh), Saman Wetland (Mainpuri, Uttar Pradesh) and Sarsai Nawar Wetland (Etawah, Uttar Pradesh) with a total estimated project cost of about ` 21 crores. Further, three more IMPs from MoEF&CC, namely; Thol Wetland IMP(Gujarat), Sultanpur National Park IMP (Haryana), and Bhindawas Wildlife Sanctuary IMP (Haryana) for appraisal under NPCA, are under progress.

HUDCO's consultancy plays a significant role in information dissemination, and, increasing awareness about HUDCO's role in urban development and about GoI‘s flagship programs focusing on housing and sustainable urban development through

Exhibitions and Awards instituted to encourage and appreciate the valuable contribution of the urban professionals towards sustainable habitats, and thereby, creating awareness on excellence in design, sustainable housing, and urban development. HUDCO as in previous years, engaged with the young upcoming professionals/ students of Architecture and Planning, supporting activities of the National Association of Students of Architecture (NASA). HUDCO-NASA Design Trophy 2023 theme "Housing solution for Native Communities: Moving Towards a ‘Developmentalist' Paradigm" in line with the GoI's efforts to bring the tribal people into the mainstream of society, focused on housing solutions for the indigenous people, who have on account of; rapid urbanization, increasing pressure placed on natural resources, focus on environmental conservation, etc., suffered grave injustices. The HUDCO DESIGN AWARDS-2022-23, aimed at encouraging and appreciating the creative and innovative thinking put in by the professionals to make our cities sustainable and more liveable, and invited entries under five categories, viz; Cost Effective

Rural/ Urban Housing Deploying Innovative/ Emerging and Disaster Resistant Technologies, New and Innovative Town Design Solutions/Eco-cities, Conservation of Heritage, Green Buildings and Landscape Planning & Design. All the winning entries for these two Awards, for wide dissemination, are brought out as e-publications.

6. FINANCIAL REVIEW (i) Accounting Policies

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

(ii) Income from Operations and Profitability

Y our Company has reported total income for the financial year 2022-23at ` 7086.18 crore (previous year ` 6997.66 crore) inclusive of other income of ` 36.72 crore (previous year ` 43.58 crore), while the Profit Before Tax (PBT) for the year was `2289.41 crore (previous year ` 2,345.94 crore) and Profit After Tax (PAT) was ` 1701.62 crore (previous year

` 1,716.60 crore). Total comprehensive income for the year was reported at ` 1726.36 crore (previous year ` 1,714.68 crore).

The Default and NPA position of your Company is regularly monitored to keep a check on any fresh addition to NPAs, for resolution of old and chronic defaults and in compliance with the prudential guidelines for Non-Performing Assets (NPAs) under the Housing Finance Companies (NHB) Directions, 2010, as amended from time to time. The default and

NPA position of all Regional Offices is regularly monitored by regional level Default Monitoring & Review Committee and Default Monitoring & Default Resolution (DMDR) Wing at Head Office. DMDR Wing at Head Office also undertakes joint review of Regional Offices along with Operations & Law Wing through Video Conferences. In addition, the overall default

& NPA position is reviewed by Default Monitoring & Resolution Committee (DMRC), Committee for Review of NPAs (a Board level Committee) and Board of Directors. As at the end of the financial yearended31 ^st March, 2023, HUDCO reported Gross NPA of ` 2,759.17 crore, which constitutes 3.42% of total loan portfolio. The Net NPA as on 31<sup>st</sup> March 2023 is ` 407.25 crore which constitutes 0.52% to Net loan outstanding as against MoU target of 0.35%. During the year 2022-23, an amount of ` 145.58 crore was recovered from the accounts which were in NPA as on 31.03.2022. As on 31^st March 2023, Loan Overdue to Net Loan Assets ratio is 3.71% as against MoU target of 6.50%.

As on 31^st March, 2023, out of HUDCO's total loan book pertaining to Project loans of ` 80,503.60 crore, Government Agencies constitute 97.03% of the above loan, i.e., ` 78,113.25 crore while Private Sector constitutes 2.97%, i.e. ` 2,390.35 crore. In the case of loans to Government Sector (Project loans), the Gross NPA is ` 630.56 crore against loan portfolio of ` 78,113.25 crore and provision of ` 239.85 crore has been made towards NPA, whereas, in Private Sector (Project loans), the Gross NPA is ` 2,110.84 crore against loan portfolio of ` 2,390.35 crore and a provision of

` 2,094.30 crore has been made towards NPA. Further, HUDCO is not making any fresh sanctions to the private sector, since March, 2013. In respect of Project Loans, the Company has made a total provision on loans (Impairment) of

` 2,413.13 crore as per ECL Approach. Out of the above, the provision on account of loans (Impairment) against NPA (Stage - III) loans is ` 2,334.15 crore.

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

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

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

As a part of prudent policy, the short-term resources are suitably replaced at an opportune time with longer tenor alternate resources depending upon prevalent market conditions, internal liquidity position and actual operational requirements.

The Company also reviews the fund position on daily basis and parks surplus funds in fixed deposits with scheduled commercial banks as per the board approved policy with an objective of reducing the negative carry to the extent possible.

RBI has prescribed Liquidity Coverage Ratio (LCR) framework for HFCs. These guidelines aim for maintenance of a liquidity buffer in terms of LCR by ensuring that HFCs have sufficient High Quality Liquid Asset (HQLA) to survive any acute liquidity stress scenario lasting for next 30 days. The Company has been complying with the said directions by maintaining sufficient liquidity buffer in the form of HQLA, as prescribed. funding profile HUDCOhasadiversified with sources including tax-free bonds, taxable bonds, refinance from NHB, bank loans, commercial papers, and foreign currency borrowings. As on 31^st March, 2023, HUDCO's overall borrowings stood at ` 62,905.08 crore, which comprised of long-term borrowings of ` 61,135.58 crore and short-term borrowings of ` 1,769.50 crore. Further, as on 31^st March, 2023, the long-term borrowings to Net worth, stood at 3.96 times, as against 4.09 times as on 31^st March, 2022. The composition of outstanding borrowings as on 31^st March, 2023 vis-a-vis 31^st March, 2022 are as under:

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

International

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

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

Company was able to deliver debt financing for various Housing & Infrastructure projects, spread across the Country, at competitive rates.

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

The Directors are pleased to report that during the year under review, the Company successfully redeemed bonds/ debentures and discharged its other debt obligations amounting to `14,769.40 crore in an efficient manner, without a single instance of delay or default in debt servicing. These included Bonds/ Debentures valued at `10,236.19 crore, Term

Loans/ Short-Term loans from Banks and financial institutions worth `4,464.04 crore, foreign currency loans availed from Multilateral Agencies aggregating to `66.98 crore and public deposits of `2.19 crore. The Company is set to honour scheduled obligations towards redemption of Bonds and other long term debt obligations amounting to around `9,113 crore during the next fiscal.

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

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

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

The details of amount remaining unclaimed are as under:

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

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

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

During the financial year 2022-23, HUDCO has issued Unsecured, Taxable Bonds/ Debentures in dematerialized form only. With this, all Taxable Bonds/ Debentures, issued by the Company and outstanding as on 31^st March, 2023 are in dematerialized form only. The Company has made necessary arrangement with NSDL and CDSL for issue of bonds in dematerialized form. The company has also appointed Registrar & Transfer Agents (RTA) for maintaining the continuous electronic connectivity with NSDL/CDSL and investors.

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

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

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

HUDCO Public Deposit Scheme was `1.71 crore from 53 depositors as on 31^st March, 2023

As ^st March, 2023, deposit(s) amounting toon 31 ` 19,22,752/- (inclusive of Principal and Interest) from 17 depositors remains unclaimed. In respect of unclaimed Deposits, the Deposit holder(s) have been requested from time to time through email/ letters, etc., for submission of requisite documents for claiming the unclaimed amount.

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

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

7. RISK MANAGEMENT IN HUDCO

In compliance with the directions given by National Housing Bank, HUDCO has in place Risk Management Policy and Operating

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

In compliance with the SEBI (LODR) Regulations, 2015, your Company has in place a Board level Committee under the nomenclature ‘Risk Management Committee' (RMC) headed by a Non-Executive Director, which reviews various decisions/ recommendations of the three sub-committees namely: -- Assets & Liabilities Management Committee (ALCO); - Credit Risk Management Committee (CRMC); and - Operational Risk Management Committee (ORMC) Assets and Liabilities Management (ALCO) Committee reviews the liquidity risks and ensures management of Assets and Liabilities mismatches through liquidity gap analysis, interest rate sensitivity analysis. The Assets Liabilities mismatch, if any, are being managed through the committed Bank lines, within the permissible limits as per NHB guidelines. During the year, 17 meetings of ALCO were held.

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

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

With the prudent policies and professional approach of the management, HUDCO has been successful in mitigating various risks, briefly described as under: -a) Operational Risk: To manage the operational risks both internal as well as external associated with the operations of the Company like technology risk, employee risk, capital asset risk, external risk, compliance risks viz. external fraud, legal risk, etc., your Company has established a strong reporting and monitoring mechanism. The requisite information on the Operational risk is obtained through quarterly reports of ‘Operational Risk Factors and Key Risk Indicators (KRIs) from Regional Offices/ departments which are further reviewed and analyzed for mitigation of operational risk. b) Credit Risk: To manage credit risks associated with business, your Company has in place a strong and effective credit appraisal mechanism containing comprehensive appraisal techniques/ guidelines ensuring timely repayments of principal & interest amount. c) Liquidity Risk: For management of liquidity risk, your Company has effective Asset Liability Management System. The liquidity risk is being monitored with the help of liquidity gap analysis. Further, the funds are mobilized at competitive rates through various strategies viz. bonds, term loans, etc., and the mismatch in the Asset and Liabilities, if any, are managed through the committed Bank lines. d) Market Risk: The various market risks arising from fluctuations in interest rates and foreign currency exchange rates are periodically reviewed by the Company. Further, based on cost of funds and market scenario, the lending rates are determined. The interest rate risk is being monitored with the help of interest rate sensitivity analysis under the Asset Liability Management System. e) Foreign Currency Risk: The Company has a Foreign Currency Risk Management policy for mitigation of risks associated with Foreign Currency fluctuations. To cover the risks associated with exchange rate and interest rate, your

Company has entered into hedging transactions. As on 31^st March, 2023, the total foreign currency liabilities are USD 10.75 million (INR 74.96 crore) and JPY 24.678 million (INR 1.53 crore) and 20.30% of the foreign currency exchange rate risk is covered through hedging instruments.

8. JOINT VENTURE, ASSOCIATE AND SUBSIDIARY COMPANY

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

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

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

9. INTERNAL FINANCIAL CONTROL POLICY AND INTERNAL AUDIT

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

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

Internal Audit

Y our Company has a separate Internal Audit Department and Head Internal Audit directly reports to the Chairman & Managing

Director. In order to strengthen and streamline all the auditable activities, Internal Audit of your Company is being carried out based on Risk Based Internal Audit Framework.

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

HUDCO is known for its technology support apart from itsfinancingsupport. HUDCO has taken many new initiatives and progressive reforms to be in the segment of market leaders. HUDCO has been very keen to use power of digital technology not only for rising in its business operations but also in secured environment maintaining transparency in line with national agenda.

The initiatives already taken by HUDCO like implementation of ERP, Information Storage & Security Systems and e-office will definitely enhance its operational and financial efficiency.

HUDCOisanISO9001:2015certifiedCompany from National Accreditation Board for Certification Bodies (NABCB)/ United

Accreditation Service (UKAS) through M/s United Registrar of Systems (URS) Certification Limited. The certification is valid for its major business processes covering Project and Retail Financing Services, Resource Mobilisation for funding, Consultancy

Services through the Head Office and all Regional Offices. Human Settlement Management for Training Research & Networking.HUDCOisrecertifiedas ISO 9001:2015 company for Quality Management System (QMS) from NABCB/UKAS through URS for these activities and the certification is valid up to 13 ^th September, 2024. Significantchanges for improvement have been introduced in HUDCO's QMS with increased emphasis on seeking opportunities for improvement through Customer Satisfaction and Stakeholder Consultation. The organization periodically identifies and assesses risks and eliminates weakness & threats, and challenges for opening new opportunities of business with optimum allocation of its resources. QMS Auditor awareness cum audit training is being provided to officers Corporate Office and HSMI through Internal Auditor training.

HUDCO's Human Settlement Management Institute (HSMI) is involved in both Research & Training activities in urban sector.

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

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

Webinar on ‘Procurement for the benefit through GeM' being priority of Government. International Training Programme for overseas professionals Under MEA, ITEC

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

HSMI has also conducted two e-ITEC programmes sponsoredbyMEAbenefitting23 overseas professionals - firstly on ‘Housing for Sustainable Habitats-Policy Planning, Design and Technologies' from 10^th to 12^th October 2022 for 11 professionals and next on ‘Making Cities Future Ready Smart and Carbon Neutral' from 7^th to 11^th November 2022 for 12 professionals.

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

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

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

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

As ^st March,on 312023, HUDCO has a workforce of 673 employees which includes 214 women employees, constituting 31.79% of its total strength. Women representations have gone across various hierarchical levels. HUDCO has been complying with all the directives and guidelines issued by the Government of India regarding reservation for SC/ST/OBC/PwD/ Ex-Servicemen/ EWS.

14. VIGILANCE

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

Free India for a Developed Nation'. During the year, routine and Vigilance Awareness Week observed by HUDCO specific inspections of some Regional Offices were carried out.

15. OFFICIAL LANGUAGE

During the year, your Company has taken various initiatives for the progressive use of Hindi in official work of HUDCO. Implementing the Official Language Policy, HUDCO celebrated ‘Rajbhasha Fortnight' in the month of September, 2022 in its Corporate Office and Regional Offices spread throughout the country. Rajbhasha

Fortnight programme began with the inaugural function of All India Rajbhasha Conference organized at Surat on 14^th September, 2022. This inaugural function and two days All India Rajbhasha Conference was attended by Director (Corporate Planning) and officials from Head Office and Ahmedabad Regional Office. During the Rajbhasha

Fortnight programme, various competitions and workshops were organized.

During the period under review, third sub-committee of Committee Shri M. Nagaraj, DCP (HUDCO), received the award from of Parliament on Official Language inspected HUDCO's Dehradun, Shri Ajay Mishra, Hon'ble Union Minister of State for Home NCR, Bengaluru, and Thiruvananthapuram Regional Offices. It is Affairs, Govt. of India, on the occasion of Hindi Divas, at also referential to mention that the Parliamentary Committee found Surat, Gujarat the satisfactory implementation of Official Language Policy in the Regional Offices. During the said period, HUDCO participated in the meeting of Hindi Consultative Committee of the Ministry of Housing and Urban Affairs, organized at Ooty on 26^th August, 2022. Further HUDCO did not receive any adverse comments from the Ministry for the progressive use of Official Language in the Corporation.

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

An Internal Complaints Committee to examine the cases related to sexual harassment has in place in HUDCO. This Committee is headed by a senior woman officer of the Company for redressal of complaints, if any, related to sexual harassment as per

Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Sexual Harassment in any form is a misconduct under HUDCO (Conduct, Discipline and Appeal) Rules. There is no complaint pending at the beginning of the year and no complaint related to sexual harassment was received during the year.

HUDCO has an appropriate grievance redressal mechanism and escalation matrix for receiving, registering and disposal of grievances. HUDCO has been resolving grievances in a time bound manner. The systemic improvement has been strengthened including qualitative and quantitative improvements. The grievance system has been digitized for timely submission and disposal of grievances. Public Grievance Redressal Mechanism of HUDCO is being followed as per the directions issued by the Government of India for Centralized Public Grievance Redress and Monitoring System (CPGRMS) portal and Grievance Registration & Information Database System (GRIDS) portal by Regulators National Housing Bank/ Reserve Bank of India respectively. Implementation of Micro, Small & Medium Enterprises (MSME) Policy

As per Ministry of Micro, Small & Medium Enterprises (MSME), Government of India, directions, every Central Ministry/ Departments/CPSEs are require to procure 25% of its overall procurement annually through MSME. Out of 25% target,

4% is earmarked for SC/ST and 3% for Women Entrepreneurs. During the financial year 2022-23, HUDCO has made total procurement of ` 15.78 crores.

In compliance of the Public Procurement Policy for Micro and Small erprises, issued by Government of India vide Micro andEnt

Small Enterprise (MSEs) Order, 2012, during the financial year 2022-23, HUDCO has made the procurement as per details given as under:

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

Right to Information Act

HUDCO has been functioning in all its areas in true letter and spirit of Right to Information Act, 2005. An appropriate mechanism is in place with a dedicated centralized RTI Cell to achieve the objective of maintaining transparency in HUDCO. During the period under report, there has not been any instance of penalties or strictures by any authority on HUDCO and

HUDCO has achieved a score of 94.96% for transparency audit during the financial year 2021-22.

As per requirements of Section 134(5) of the Companies Act, 2013, your Directors confirm that: a) in preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same; b) such accounting policies have been selected and applied them consistently and made judgments and estimates that are reasonable and prudent to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review; c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with provisions of Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) the annual accounts have been prepared on a ‘Going Concern' basis; e) the Company has laid down Internal Financial Controls to be followed and such Internal Financial Controls are adequate and were operating effectively; and f) proper systems have been devised to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.

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

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

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

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

: Chairman & Managing Director

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

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

MoHUA, Government of India: a) vide order dated 6^th October, 2022 has conveyed cessation of Shri Shyam S. Dubey as Part-time Official Director on the Board of HUDCO, w.e.f., 4^th August, 2022, however, the same is effective from 12^th October, 2022, being the date of approval by the Board of Directors of HUDCO; b) vide order dated 18^th November, 2022 has appointed Shri Ashish Upadhyaya, Special Secretary & Financial Adviser,

Ministry of Power as Part-time Official Director, on the Board of Directors of HUDCO, in his capacity as Link Officer of

Financial Advisor, MoHUA with effect from 18^th November, 2022; and c) vide order dated 21^st December, 2022 has appointed Shri Sanjeet, Joint Secretary & Financial Adviser, MoHUA as

Part-time Official Director, on the Board of Directors of HUDCO in place of Shri Ashish Upadhyaya with effect from 21^st December, 2022. The appointment of Shri Sanjeet as Part-time Official Director, on the Board of Directors of HUDCO is effective from 22^nd December, 2022 being the date of allotment of DIN by Ministry of Corporate Affairs, Government of India. In compliance with the provisions of the Companies Act, 2013 and SEBI(LODR) Regulations, 2015, approval of the shareholders regarding appointment of Shri Sanjeet, Part-time Official Director (liable to retire by rotation), as Director has been obtained through postal ballot process on 29^th January, 2023.

As per requirements of Section 152 of the Companies Act, 2013 [including any statutory modification(s) or re-enactment(s) thereof, for time being in force, read with the applicable rules, as amended] and Articles of Association of the Company, Shri

Muniappa Nagaraj (DIN: 05184848), Director (Corporate Planning) being longest in office among the Directors since their last appointment, is liable to retire by rotation and being eligible, offers himself for reappointment at the ensuing Annual General Meeting.

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

Narayan with immediate effect until further orders.

The Board recommends reappointment of Shri Muniappa Nagaraj, Director (Corporate Planning) and appointment of Shri

Satinder Pal Singh, as Part-time Official Director for approval of the members at the 53^rd Annual General Meeting, on the same terms and conditions as earlier approved by the President of India.

The Board placed on record its appreciation for the valuable services rendered by Shri Kamran Rizvi, as Chairman & Managing

Director, Shri Shyam S. Dubey and Shri Ashish Upadhyaya, as Part-time Official Directors during their tenure with the Company and extended a warm welcome to Shri Sanjeet and Shri Satinder Pal Singh, newly appointed Part-time Official Directors and

Shri Kuldip Narayan, as CMD, HUDCO.

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

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

In compliance of the provisions of Section 204 of the Companies Act, 2013, M/s Malhotra Arora & Associates, Company

Secretaries in Practice, Secretarial Auditors have conducted Secretarial Audit for financial year 2022-23 and have in their report confirms that the Company has complied with the provisions of the Act, Rules, Regulations and Guidelines applicable to the Company and there were no qualifications, reservations, or adverse remarks except certain observations, which are self-explanatory. The Secretarial Audit Report is annexed and forms part to the Directors' Report.

23. AUDITORS & AUDITOR'S REPORT

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

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

Comments of Comptroller and Auditor General of India (CAG)

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

(i) Corporate Social Responsibility Committee

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

Sabitha Bojan and Shri Banshi Lal Gujar as members of the Committee.

The extant Corporate Social Responsibility Policy of the Company is available on Company's website at the following link: https://www.hudco.org/writereaddata/csrpolicy.pdf CSR assistance for Strengthening & Restructuring of Sub-Centres of PHCs, Bavali, Kerala

The Annual Report on CSR activities for financial year

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

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

As on 31^st March, 2023, an amount of `18,30,18,204/- being the unspent CSR amount other than the ongoing CSR activities from the CSR amount allocated for the financial year 2022-23, shall be transferred to one of the funds specified in Schedule VII of the Companies Act, 2013 within the stipulated time period, i.e., on or before 30<sup>th</sup> September, 2023. Further, an amount of ` 25,87,90,596/- being the unspent CSR amount other than ongoing CSR activities as on 31^st March, 2022 (`16,99,00,000/- is the unspent CSR budget of financial year 2021-22 and` 8,88,90,596/- up to 2020-21) was transferred to ‘Swachh Bharat Kosh', a fund specified in Schedule VII of the Companies Act, 2013 on 30 ^th September, 2022 in accordance with details mentioned in the annual report on CSR activities for financial year 2021-22;

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

(iii) Particulars of Loans, Guarantee, or Investments

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

Company forms part of the financial statements for the year 2022-23;

Pursuant to Section 92(3) and Section 134(3)(a) of the Companies Act, 2013, the Annual Return as at 31^st March, 2023 will be available on the website of the Company on the following link: https://hudco.org.in//Site/ FormTemplete/frmTemp1PLargeTC1C_P.aspx?MnId=463&ParentID=391;

(v) HUDCO being a Government Company, the provisions of Section 164(2) of the Act in respect of disqualification of directors are not applicable to the company in terms of notification no. G.S.R.463(E) dated 5^th June, 2015 issued by Ministry of Corporate Affairs, Government of India; (vi) HUDCO, being a Government Company is exempted from the provisions of Section 197 of the Companies Act, 2013 and Rules made thereunder relating to managerial remuneration, hence, no disclosure is required to be made; (vii) As per the statutory provisions, a listed company is required to disclose in its Board's Report, a statement indicating the manner in which formal annual evaluation of the performance of the Board, its committees and individual Directors has been made and the criteria for performance evaluation of its Independent Directors, as laid down by the Nomination & Remuneration Committee.

The Ministry of Corporate Affairs, Government of India vide notification ^th June,dated 2015 has, inter-alia, exempted Government companies from the above requirement, in case the Directors are evaluated by the Ministry or Department of the Central Government which is administratively in charge of the company, as per its own evaluation methodology.

Further, MCA vide notification dated July 5, 2017, also prescribed that the provisions relating to review of performance of Independent Directors and evaluation mechanism prescribed in Schedule IV of the Companies Act, 2013, is not applicable to Government companies.

Accordingly, HUDCO, being a Government company, is exempted in terms of the above notifications, as the evaluation of performance of all members of the Board of the Company is being done by the Administrative Ministry, i.e., the Ministry of Housing and Urban Affairs, GoI; (viii) The Company is compliant with the applicable Secretarial Standards issued by Institute of Company Secretaries of India (ICSI); (ix) In compliance of the SEBI(LODR) Regulations, 2015, and DPE Guidelines on Corporate Governance, based on the from Board Members and Senior Management Personnel, declaration regarding compliance of affirmation

Code of Conduct made by the Chairman & Managing Director is annexed and forms part to the Directors' Report. A copy of the Code is available on the website of the Company at www.hudco.org.in; (x) In compliance with Regulation 25(10) of the SEBI (LODR) Regulations, 2015, your company has obtained Directors and

Officers Liability Insurance Policy, ensuring adequate insurance coverage, covering all the directors of the Company including Independent Directors, Key Managerial Personnel, and Senior Officers against the risk of financial loss including the expenses pertaining to defence cost and legal representation expenses arising in the normal course of business;

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

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

Foreign Exchange Earnings and Outgo

During the financial year 2022-23, foreign exchange inflows was` 0.06 crore (previous year ` 0.27 crore) and foreign currency outflow was` 2.51 crore (previous year ` 1.46 crore); (xii) There is no change in the nature of business of the Company during the year;

(xiii) There and material orders passed by the regulators or courts or tribunals impacting the going concern arenosignificant status and operations of your company in future;

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

Section 148 of the Companies Act, 2013. Accordingly, cost accounts and records are not required to be maintained by the Company; (xv) HUDCO has not made any application under the Insolvency and Bankruptcy Code, 2016 (31 of 2016), directly on standalone basis during the year; (xvi) The Company has not entered into one time settlement with Banks or Financial Institutions during the year, hence, details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions is not given; and (xvii) During the year under review, the statutory auditor, has not reported any material case of fraud committed against by its officers or employees under Section 143(12) of the CompaniesAct, 2013, hence, no disclosure is made.

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

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

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

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

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

e. AMRUT, launched in June 2015 in selected 500 cities, seeks to focus on developing basic infrastructure related to several services such as water supply, sewerage, and non-motorised urban transport. AMRUT 2.0 was launched in

October 2021 for five years (2021-22 to 2025-26). AMRUT 2.0 seeks to provide water supply to households and in 2023-24, it has been allocated ` 8,000 crore under the budget; f. The Smart Cities Mission, launched in June 2015 for five years, seeks to promote 100 smart cities that provide core infrastructure. In 2023-24 budget, the Mission has been allocated ` 8,000 crore; g. Swachh Bharat Mission (U) has been allocated ` 5,000 crore in 2023-24. HUDCO Regional Offices are assisting and handholding with State Government Parastatal and Nodal Agencies of this program for providing financial assistance/

Viability Gap Funding;

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

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

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

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

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

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

(s) and other agencies. The Board of Directors also conveys its gratitude for the unstinting support and cooperation given by the shareholders, bondholders, public deposit holders, Bankers, Financial Institutions, Housing Boards, Development Authorities, Municipal/ Local Bodies and other stakeholders associated with the company. The Board of Directors also acknowledges the valuable suggestions and guidance extended by Comptroller & Auditor General of India, Statutory Auditors, Secretarial Auditors, and other professionals associated with the Company. The Board of Directors also take this opportunity to acknowledge and appreciate the hard work and efforts put in by HUDCO employees at all levels towards achievement of the all-round growth of the company.