Dear Members,

Your directors are pleased to present the 56th Annual Report
on the business and operations of the Company along with Audited Standalone and
Consolidated Financial Statements for the year ended 31st March, 2026.

1. FINANCIAL PERFORMANCE AND HIGHLIGHTS 


The financial highlights of your Company for the Financial Year 2025-26
are briefly mentioned below to give an overview of accomplishments on all fronts:

  

    
Particulars
    
2025-26
    
2024-25
  
  

    
Revenue from Operations
    
13150.40
    
10311.29
  
  

    
Other Income
    
176.73
    
37.09
  
  

    
Total Income
    
13327.13
    
10348.38
  
  

    
Finance cost
    
8930.69
    
6747.45
  
  

    
Net Loss on Fair Value Changes
    
936.63
    
-
  
  

    
Impairment on Financial instruments
    
(191.60)
    
(410.50)
  
  

    
Other Expenses including Employee Benefit
    Exp.
    
429.97
    
374.77
  
  

    
Total Expenditure
    
10105.69
    
6711.72
  
  

    
Profit before tax
    
3221.44
    
3636.66
  
  

    
Less:
    

    

  
  

    
Current Tax
    
603.00
    
637.00
  
  

    
Deferred tax
    
(1459.07)
    
292.90
  
  

    
Adjustment of tax of earlier years (Net)
    
43.14
    
(2.38)
  
  

    
Profit after tax
    
4034.37
    
2709.14
  
  

    
Other Comprehensive Income
    
(557.22)
    
(164.80)
  
  

    
Total Comprehensive Income
    
3477.15
    
2544.34
  
  

    
Balance Surplus of previous year
    
520.78
    
215.14
  
  

    
Amount available for Appropriation
    
3997.93
    
2759.48
  
  

    
Less: Appropriation
    

    

  
  

    
Transfer to Special Reserve u/s 36(1)(viii)
    of the Income Tax Act, 1961 and u/s 29C of the NHB Act, 1987
    
525.00
    
550.00
  
  

    
Transfer to Reserve Fund u/s 45IC of the RBI
    Act, 1934
    
807.00
    
542.00
  
  

    
Transfer to Debenture Redemption Reserve
    
229.60
    
239.58
  
  

    
Transfer to Reserve for Bad & Doubtful
    Debt
    
118.00
    
135.00
  
  

    
Interim Dividend
    
910.86
    
620.59
  
  

    
Transfer to Impairment Reserve
    
122.06
    
102.96
  
  

    
Issue Expenses on Perpetual Debt Instruments
    
1.78
    
-
  
  

    
Other Comprehensive Income (Net) on account
    of Hedge Accounting
    
(543.23)
    
(161.63)
  
  

    
Net surplus after appropriations
    
1826.86
    
730.98
  
  

    
Proposed final dividend
    
300.29
    
210.20
  
  

    
Surplus available after final dividend
    
1526.58
    
520.78
  
  

    
EPS (Basic/Diluted) (in `)
    
20.15
    
13.53
  

During the period, your Company has performed very well by witnessing a
growth of 48.92% in Profit after Tax (PAT). 
Your Company has seen a growth of 22.30% in its Net Worth that has
reached Rs.21,977.20 Crore in Financial Year 2025-26 from Rs.17,969.79 Crore in Financial
Year 2024-25.
Consolidated Financial Statements


Pursuant to Section 129(3) of the Companies Act, 2013, the Company has
prepared Consolidated Financial Statement (CFS) in respect of only one Associate Company
namely 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 Consolidated Financial Statements.
There are no material changes and commitments, occurred subsequent to
the close of Financial Year of the Company and 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 are also
available 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, have recommended payment of Final Dividend @
15.00%, i.e. Rs.1.50 per equity share having Face Value of Rs.10/- each for the Financial
Year 2025-26, subject to approval of the Shareholders at the ensuing 56th
Annual General Meeting.
The above dividend is in addition to following Interim Dividends
declared for the Financial Year 2025-26 on the paid-up equity share capital of the
Company:

  

    
Month of Declaration
    
Interim Dividend
    
Rate %
    
Amount Per- share (In Rs.)
    
Total Amount (Rs. in Crore)
  
  

    
August, 2025
    
1st
    
11.50
    
1.15
    
230.22
  
  

    
November, 2025
    
2nd
    
10.00
    
1.00
    
200.19
  
  

    
January, 2026
    
3rd
    
11.50
    
1.15
    
230.22
  
  

    
March, 2026
    
4th
    
12.50
    
1.25
    
250.24
  

In view of above, total dividend declared and paid for the Financial
Year 2025-26 would be amounting to Rs.6.05 per equity share (60.50%).
In compliance with regulation 43A of Securities and Exchange Board of
India (Listing Obligations and Disclosure Requirements) 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, the 
NBFC Company is required to pay a minimum Annual Dividend of 30% of
Profit after Tax (PAT), subject to maximum limit prescribed by RBI. After analysis of
various financial parameters (including CRAR, Net NPA etc), Cash Flow Position and
available distributable profits, the Board of Directors have paid/recommended Total
Dividend of Rs.6.05 per equity share (60.50%).

3. SHARE CAPITAL 

As on 31st March, 2026, the authorized share capital of
the Company was Rs.2,500 Crore with issued, subscribed and paid-up equity share capital of
Rs.2,001.90 Crore. The paid-up share capital comprises Promoters shareholding of 75.00%
held by the President of India through the Ministry of Housing and Urban Affairs (MoHUA) -
54.27% and 
Ministry of Rural Development (MoRD) - 20.73% and the balance 25.00% is
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. differential The Company has not
issued any shares with 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 2026-27 has been paid to the Stock Exchanges. 
Transfer of unclaimed Dividend and Shares to Investor Education
& Protection Fund Amounts transferred to IEPF


In compliance of the provisions of Section 125 of the Companies Act,
2013 and Rule made thereunder read with relevant provisions of SEBI (LODR) Regulations,
2015 as amended from time to time, the dividend amounts, which remain unpaid/unclaimed for
a period of seven years, are transferred to the Investor Education and Protection Fund
(IEPF) of the Central Government.
Accordingly, during the Financial Year 2025-26, an amount of
Rs.9,63,667.25 pertaining to unclaimed dividend for the Financial Year 2017-18 and
Interim/Final dividend declared on shares already transferred to IEPF, have been
transferred to Investor Education and Protection Fund.
Equity Shares transferred to IEPF


In terms of Section 124(6) of the Companies Act, 2013 and IEPF
Authority (Accounting, Audit, Transfer and Refund) 
Rules, 2016, as well as in accordance with the circulars/notifications
issued by the MCA from time to time, the shares in respect of which the dividend has not
been paid or claimed for a consecutive period of seven years or more, is required to be
transferred to Investor Education and Protection Fund (IEPF) Authority account. 
Accordingly, during the Financial Year 2025-26, 7037 equity shares
pertaining to Interim/final dividend for the Financial 
Year 2017-18 were transferred to the Demat Account of the IEPF
Authority opened with NSDL. 
Details of the shareholders whose unclaimed dividend/shares were
transferred to the IEPF Account is available on the website at the following link:
https://hudco.org.in//writereaddata/shares-transferred-to-IEPF-authority-17-18.pdf Members
may check their details on the aforesaid web-link.
Claim from IEPF Account


Any person, whose share or unclaimed dividend etc. has been transferred
to the IEPF, may claim the shares under provision to sub-section (6) of section 124 or
apply for refund under clause (a) of sub-section (3) of section 125 or under proviso to
sub-section (3) of section 125 of the Companies Act, 2013, as the case may be, to the
Authority by making an online application in Form IEPF-5.

4. MEMORANDUM OF UNDERSTANDING (MoU) 


As a Central Public Sector Enterprise (CPSE), your Company enters into
an Annual Memorandum of Understanding 
(MoU) with the Ministry of Housing and Urban Affairs (MoHUA), which
serves as the overarching framework for evaluating organizational performance across a set
of mutually agreed financial and non-financial parameters, benchmarked against annual
targets prescribed by the Department of Public Enterprises (DPE).
Y our Directors are proud to share that your Company achieved an
exceptional MoU score of 97.90 out of 100, an 
‘Excellent' MoU Rating, for the performance in Financial Year
2024-25, setting a benchmark among its financial- peers and reaffirming its position as a
high-performing and dependable public sector undertaking. This is the second consecutive
year of 'Excellent' MoU rating- the highest classification under the DPE's performance
evaluation framework, reflecting the consistency and strategic focus with which the
Company pursues its corporate objectives.
HUDCO excelled in 9 out of 12 performance parameters, achieving perfect
scores of 100% in several critical areas, underscoring the Company's strong governance
framework, operational efficiency, and commitment to its social mandate. With respect to
the Compliance Parameters, your Company recorded near-full compliance across all
prescribed areas, including Corporate Governance, Corporate Social Responsibility (CSR),
Procurement from Micro and Small Enterprises (MSEs), and Health & Safety initiatives
undertaken for the benefit of its employees.
During Financial Year 2025-26, your Company demonstrated an outstanding
performance across both operational and financial metrics, exceeding its own performance
benchmarks. This achievement stands out as a strong testament to HUDCO's commitment to
performance excellence, financial prudence, and institutional accountability. Your
Directors remain confident that the Company is well-positioned to sustain and build upon
this performance trajectory in the years ahead. The Annual MoU signed with MoHUA for
Financial Year 2025-26 comprises 11 Main Performance Parameters, predominantly financial
in nature, and 9 Compliance Parameters. The actual achievements against key parameters are
set out in the following table:

MoU 2025 - 26: Achievement of Key Performance Parameters (as on
31.03.2026)


  

    
Sl. No. MoU Parameter
    
MoU Target FY2025-26
    
Actual Achievement (absolute value Rs. in
    Crore)
  
  

    
1. Loan disbursed to Total Funds Available
    
100%
    
100% (51194.21/51196.29)
  
  

    
2. Overdue Loans to Total loans (net)
    
1.97%
    
1.51% (2409.41/159135.81)
  
  

    
3. Net NPA / Total loans (net)
    
0.35%
    
0.05% (85.35/159135.81)
  
  

    
4. Cost of raising funds through bonds as
    compared to similarly rated CPSEs (Margin over Reuters)
    
(-) 8 bps
    
(-) 8.20 bps
  
  

    
5. Procurement from GeM (as percentage of
    Total Procurement)
    
65%
    
79.85% (26.4241/33.0939)
  

In compliance with DPE's O.M, dated 24th March, 2026,
issued for performance evaluation of CPSEs for MoU Financial Year 2025-26, the mandatory
parameters to be included in the Annual Report are annexed and form part to the
Directors' Report. 

5. LENDING ACTIVITIES 


HUDCO, India's foremost techno-financing institution under the
Ministry of Housing and Urban Affairs, has successfully concluded another landmark year of
dedicated service to the nation. Despite a dynamic and challenging environment, the
organization demonstrated promising operational resilience and financial performance.
Through its continued support for infrastructure development and housing initiatives
across the country, HUDCO has further strengthened its role as a key catalyst in
India's urban transformation and nation-building journey.
During the Financial Year 2025-26, HUDCO, driven by proactive
management, prudent business strategies and policies, recorded remarkable growth in its
operational performance. The organization achieved sanctions amounting to Rs.1,64,757.79
Crore and disbursements of Rs.51,194.21 Crore, reflecting a significant increase over the
previous year's sanctions of Rs.1,27,952.49 Crore and disbursements of Rs.40,037.51
Crore. These achievements underscore 
HUDCO's sustained commitment to financing infrastructure and
housing development across the nation.
Since its establishment in 1970, HUDCO has built a distinguished legacy
spanning 56 years of dedicated service to the nation. Over this period, the organization
has sanctioned 17,537 urban infrastructure and housing projects, with cumulative loan
sanctions amounting to Rs.6,03,463.90 Crore and disbursements reaching Rs.3,11,006.76
Crore. 
HUDCO has also extended financial assistance for more than 204 lakh
dwelling units across rural and urban India. 
Notably, 93.6% of these units, representing 190.9 lakh dwelling units,
have been targeted towards the Economically 
Weaker Sections (EWS) and Lower Income Groups (LIG), reaffirming
HUDCO's enduring commitment to inclusive and affordable housing development.
Urban Infrastructure Lending


HUDCO sanctioned 90 projects in Urban infrastructure sector during the
year, extending total loan assistance of Rs.1,55,344.74 Crore across key sectors including
Transport & Logistics, Water & Sanitation, Energy, Social and 
Commercial Infrastructure, and other infrastructure segments. The
organization disbursed Rs.45,924.53 Crore during the year towards the implementation of
various infrastructure development schemes, further reinforcing its commitment to
strengthening India's infrastructure landscape.
Housing Operations 


Under the Housing sector during the year, HUDCO sanctioned 6 projects
with total loan assistance of Rs.9,413.05 
Crore, facilitating the construction of 2,22,076 dwelling units across
the country. During the year, the organization also disbursed a loan amount of Rs.5,269.68
Crore, reaffirming its continued commitment to promoting affordable housing and supporting
inclusive urban development.
In the Financial Year 2025-26, major projects sanctioned and loan
disbursed are as under: Transport and Logistics


The Twin Tunnel Project of Bruhat Bengaluru Mahanagara Palike, being
implemented through Bengaluru Smart 
Infrastructure Limited (BSMILE), is a major urban mobility initiative
aimed at decongesting traffic in Bengaluru through high-capacity underground corridors.
HUDCO has extended a loan of Rs. 9,303.66 Crore to support this transformative
development, underscoring its pivotal role in financing complex urban mobility solutions
across the country. HUDCO's financial intervention not only enables timely execution
of this critical mobility project but also reinforces its broader mandate of strengthening
India's urban infrastructure.
HUDCO has extended financial assistance of Rs.1,624.34 Crore to Chennai
Metro Asset Management Limited (CMAML) for implementing Transit Oriented Development (TOD)
across four prime locations adjoining Chennai Metro stations, aimed at creating vibrant,
integrated commercial and urban hubs that strengthen last-mile connectivity and enhance
the economic potential of the metro network. 
HUDCO financed loan of Rs.1,539.87 Crore to Maharashtra Rail
Infrastructure Development Corporation Limited 
(MRIDCL) for construction of 52 Road Over Bridges (ROB), Road Under
Bridges (RUB), and Limited Height Subways 
(LHS) at strategically identified locations across Maharashtra to
eliminate both manned and unmanned railway level crossings. The initiative aims to ensure
safe and seamless movement of road and rail traffic, reduce accident risks, and alleviate
congestion in urban and semi-urban areas. HUDCO had sanctioned a loan of Rs.27,000 Crore
to Bangalore Development Authority during the previous Financial Year for the land
acquisition and development of the Bangalore Business Corridor - Peripheral Ring Road
(PRR) project in Bengaluru, with an initial disbursement of Rs.50 Crore made during the
Financial Year 2025-26. This strategically significant project is aimed at decongesting
the city, enhancing traffic efficiency, and improving connectivity across key urban and
peri-urban areas. HUDCO had sanctioned a loan of Rs.22,250 Crore during the previous
Financial Year to Maharashtra State Road Development Corporation for land acquisition for
the Virar–Alibaug Multimodal Corridor project. During Financial Year 
2025-26, an amount of Rs.3,400 Crore has been released towards the
project. This strategically significant corridor is envisaged as an Outer Ring Road for
the Mumbai Metropolitan Region (MMR), providing high-speed connectivity to key growth
centres.
HUDCO had sanctioned a loan of Rs.11,000 Crore during the previous
Financial Year to Andhra Pradesh Capital Region 
Development Authority (APCRDA) for the construction of housing, office
buildings, and infrastructure development in 
Amaravati, the new capital city of Andhra Pradesh. During Financial
Year 2025-26, an amount of Rs.2,196.83 Crore has been disbursed towards the project,
supporting planned urban development and creation of modern infrastructure assets.
Energy


HUDCO has sanctioned a total loan of Rs.6,426 Crore to Rajasthan's
three DISCOMs i.e; JdVVNL, AVVNL, and JVVNL- for the installation of 1.1 kW and above
rooftop solar systems at individual residential households under the PM Surya Ghar: Muft
Bijli Yojana. Targeting 37.80 Lakh residential consumers, the programme provides both
Central and State 
Financial Support, with HUDCO financing the state's share to
enable seamless implementation. The project significantly expands decentralized renewable
energy capacity, reduces household electricity expenditure, and strengthens energy access
across Rajasthan.
A term loan of Rs.1,700 Crore has been extended to Maharashtra State
Power Generation for the 400 MWAC grid-connected, ground-mounted Solar PV Renewable Energy
Bundling Project (Phase-I) in Maharashtra, a key initiative to substantially enhance the
state's renewable power capacity. The project will accelerate clean-energy
generation, reduce dependence on fossil fuels, and contribute to India's national
targets for large-scale renewable integration. This intervention reflects HUDCO's
broader commitment to financing transformational infrastructure that delivers long-term
environmental and socio-economic benefits across the country.
HUDCO has sanctioned a loan of Rs.801.51 Crore to Andhra Pradesh Power
Generation Corporation Ltd (APGENCO) for undertaking Renovation & Modernization
(R&M) and Life Extension of thermal power stations. The project focuses on
revitalizing aging power assets to enhance efficiency, reliability, and availability,
while optimizing existing generation capacity in a cost-effective manner. It is expected
to result in improved operational performance, extended plant life, and better safety and
environmental standards, thereby strengthening the overall power infrastructure. Out of
the sanctioned amount, Rs.80 Crore has already been disbursed.
During Financial Year 2025-26, HUDCO disbursed Rs.1,000 Crore to the
Tamil Nadu Power Distribution Corporation 
Ltd. (TNPDCL), against a sanction accorded in previous Financial Year.
This financial assistance is directed toward the improvement and modernization of the
power distribution network across Tamil Nadu, reflecting HUDCO's continued focus on
strengthening vital state-level utility infrastructure.
Water and Sanitation


HUDCO sanctioned financial assistance of Rs.340 Crore to the State
Industries Promotion Corporation of Tamil Nadu 
Limited (SIPCOT). This term loan will fund SIPCOT's contribution toward
the development of a 60 MLD Desalination plant and associated product water conveyance
mains at Mullakadu Village in Tuticorin District, Tamil Nadu. The project is being
executed on a Hybrid Annuity Model (HAM) under the Public-Private Partnership (PPP)
framework, reinforcing HUDCO's support for critical water infrastructure.
HUDCO is providing Rs.938.51 Crore as gap funding to the Maharashtra
Urban Infrastructure Fund (MUIF) for the augmentation of Water Supply Project of
Chhatrapati Sambhajinagar and Mira Bhayander Municipal Corporation under the AMRUT 2.0
mission. HUDCO's financing enables timely execution of the project, supports
inclusive urban development, and significantly enhances the quality of life for residents
by improving access to reliable and safe drinking water. Out of the total sanctioned
amount, Rs.116.43 Crore has already been disbursed.
Rajasthan Water Supply and Sewerage Corporation (RWSSC) has secured
financial assistance of Rs.5,000 Crore from HUDCO for implementing a wide range of water
supply schemes under Jal Jeevan Mission (Phase III). This major investment aims to enhance
potable water availability and ensure sustainable household tap-water connectivity across
multiple regions of Rajasthan. The project will significantly strengthen drinking water
infrastructure, reduce regional water scarcity, and improve public health outcomes for
urban and rural communities. HUDCO sanctioned a term loan of Rs.2,944 Crore to the
Hyderabad Metropolitan Water Supply & Sewerage Board 
(HMWSSB). This financial assistance is earmarked for the execution of
the Godavari Drinking Water Supply Project 
Phase-II, along with the rejuvenation of the Osmansagar and
Himayathsagar reservoirs as part of the comprehensive 
Musi River clean-up initiative. This partnership underscores HUDCO's
ongoing commitment to financing vital public health and environmental infrastructure.
Social and Commercial Infrastructure


HUDCO sanctioned a substantial financial assistance of Rs.3,826.50
Crore to the Maharashtra Industrial Development 
Corporation (MIDC). This term loan is earmarked for the development of
Industrial Parks at 13 distinct locations across multiple districts in Maharashtra. This
strategic partnership underscores HUDCO's ongoing commitment to financing robust core
infrastructure and supporting the expansion of the state's industrial footprint.
HUDCO sanctioned a term loan of Rs.5,000 Crore to the AP State Special
Projects Development Corporation Ltd. (APSPDCL) to fund the comprehensive development of
three new Industrial Parks in the state of Andhra Pradesh. 
Against this sanction, an amount of Rs.2,072 Crore has been disbursed.
This financial assistance reflects HUDCO's continued focus on supporting and executing
vital, state-led industrial infrastructure projects.
Demonstrating its sustained support for state-led economic initiatives,
HUDCO sanctioned financial assistance of 
Rs.1,700 Crore to the State Industries Promotion Corporation of Tamil
Nadu Limited (SIPCOT). This vital funding facilitates the establishment of the SIPCOT
Industrial Park (Echur Scheme) and fulfills the remaining land cost requirements for the
Manallur Phase III Scheme, directly enhancing the state's industrial infrastructure
footprint.
Housing


The implementation of the EWS Affordable Housing Scheme (Indiramma
Indlu) in Telangana, under PMAY(G) by the Telangana State Housing Corporation Limited
(TGHCL), with financial support of Rs.5,000 Crore from HUDCO which ensures significant
improvement in the rural living conditions through the construction of 146,628 dwelling
units. It reflects the HUDCO's commitment in India's vision of inclusive growth,
poverty alleviation, and sustainable rural development. Out of the total sanctioned Loan,
Rs.1,500 Crore has been disbursed.
The EWS Rural Housing Scheme across various Gram Panchayats in Kerala
funded by HUDCO with a loan assistance of Rs.1,500 Crore against which Rs.400 Crore has
already been disbursed, has a significant socio-economic impact for 
India, particularly in advancing inclusive growth and social equity. By
supporting the construction of 31,679 new houses and the completion of 43,321 in-progress
houses totalling 75,000 dwelling units, the project strengthens the "Housing for
All" vision under the LIFE Mission of the Government of Kerala. 
The housing project of Central Government Employees Welfare Housing
Organization, supported by a term loan of 
Rs.92 Crore from HUDCO, out of which Rs.70.94 Crore has already been
disbursed, envisages the development of 144 well-planned 3 BHK and 4 BHK dwelling units
for Central Government employees. The project will enhance access to quality housing,
promote planned urban development, and support the long-term welfare and social security
of the workforce while reinforcing the role of institutional housing initiatives in India.
Sectorial overview and government initiative:


Support to Economically Weaker Sections


HUDCO has consistently made focused efforts to serve underserved
sections of society while supporting the flagship initiatives of the Government of India.
The organization remains committed to fulfilling the housing needs of Economically Weaker
Sections (EWS) and Low-Income Groups (LIG) by providing financial assistance and loans at
comparatively affordable interest rates. So far, the Company has sanctioned financial
assistance for over 204 Lakh housing units in both rural and urban areas across the
country. Demonstrating its strong social commitment, nearly 190.9 Lkh housing units, more
than 93.6% of the total sanctions, have been directed towards beneficiaries belonging to
the EWS and LIG categories.
HUDCO's Support for projects in the North-Eastern Region


HUDCO continues to support the development of the North Eastern Region
through financial assistance for housing and infrastructure projects. During FY 2025-26,
HUDCO disbursed Rs.54.94 Crore across 9 projects in the region, including three housing
schemes and six infrastructure projects. The assistance includes construction of the
Manipur Institute of Performing Arts at Gurgaon, staff quarters and basement parking at
Dwarka, New Delhi, multi-storeyed government quarters (G+7) at Langol, District Office
Complex Mokokchung, Nagaland State Commission Complex, PWD Complex Tuensang Phase-I, and
SDO Office Complex at Pfutsero etc. reflecting HUDCO's commitment to strengthening
infrastructure in the North Eastern Region.

HUDCO's role in Government of India scheme(s) Pradhan Mantri Awas
Yojana

HUDCO is committed to supporting the Ministry of Housing and Urban
Affairs (MoHUA) in the implementation of PMAY(U)-2.0, which aims to provide financial
assistance to One Crore urban poor and middle-class families (EWS/ LIG/MIG categories) to
construct, purchase, or rent affordable houses in urban areas over five years, starting
from 
September 1, 2024. 
HUDCO has been entrusted by MoHUA for desk and/or site scrutiny in
respect of Affordable Housing in Partnership (AHP) and Beneficiary Led Construction (BLC)
vertical and also designated as one of the Central Nodal Agencies under the Interest
Subsidy Scheme (ISS) vertical. Further, for meeting fund requirement of
State/ULB/Beneficiary share, HUDCO also offers viability gap funding/ loan assistance to
meet the requirement beyond the grant available from the 
Government of India.
HUDCO, as Central Nodal Agency (CNA), under PMAY(U)-2.0 Interest
Subsidy Scheme (ISS), has disbursed subsidy of Rs.30.01 Lakh to 79 beneficiaries during
2025-26.
Property Development and Consultancy


HUDCO extends its consultancy expertise across India in urban &
regional planning, architecture, environmental engineering, construction, and project
management, prioritizing green and sustainable solutions.
The consultancy assignments undertaken by HUDCO are diverse in nature
and include DPR preparation for 
Ummedpura Affordable Housing Project, Samvidhan Park in Kota, various
urban infrastructure development works in Sojat, Rajasthan, Development of White Town in
Puducherry under the Challenge Based Destination Development (CBDD ) Scheme (a sub-scheme
of Swadesh Darshan 2); Development of Inter State Bus Terminal at ECR Road, 
Puducherry, Placemaking and Beautification in three locations in
Chennai for Chennai Metro Rail Limited, Housing 
Project at Bengaluru to Hindustan Aeronautics Limited incorporating
green building concepts, Karnataka Slum Development Board for Social Housing
Rehabilitation Project taken up in PPP mode in Bengaluru, Phase II of the Shehjar
Apartments at Bemina, Srinagar for the Srinagar Development Authority. HUDCO is also
involved in further stages of ongoing planning consultancy assignment for GIS based
Integrated Master Plan for Rajgir Regional Planning Area and Nalanda Mahavihara World
Heritage Site in Bihar, as well as preparation of Land Use Maps & Registers and Land
Use and Development Control Plan for Bidhannagar MC Area and Nabadiganta Industrial
Township Area in West Bengal.
HUDCO has undertaken project works for development of its vacant
properties through development of commercial office/ institutional properties in a modern,
energy efficient and sustainable manner at Noida, Kaushambi, Panchkula. Projects for
construction of additional built spaces are also undertaken in HUDCO's existing
Regional Offices at Kolkata, 
Jammu and Ahmedabad to fruitfully make use of the unused available FAR.
Reconstruction of six HUDCO residential flats at Asian Games Village, New Delhi has also
been taken up to provide sustainable housing for its officers. With an objective to
provide a standardised, state of the art workspace environment to HUDCO employees across
India, phased upgradation of HUDCO offices in selected need-based locations is being taken
up starting with the ongoing renovation of office space at HUDCO House, Lodhi Road, New
Delhi.
The organization continues its association with the National
Association of Students of Architecture (NASA) to host the HUDCO NASA Design Trophy that
challenges young minds to give innovative solutions to complex contemporary challenges in
Indian cities. The Theme for HUDCO NASA Design Trophy 2026 is "Design Solutions for
Future Ready Cities in India."

6. FINANCIAL REVIEW (i) Accounting Policies 


There has been updation in the accounting policy during the quarter/
year ended period. However, there is no profit/loss, material financia impact on
net total comprehensive income or any other relevant financial item(s) due to updation in
accounting policies.

(ii) Income from Operations and Profitability 
Y our Company has reported Total Income for the Financial Year 2025-26
at Rs.13327.13 Crore (Previous Year 
Rs.10348.38 Crore) inclusive of Other Income of Rs.176.73 Crore
(Previous Year Rs.37.09 Crore). While the 
Profit before Tax (PBT) for the Financial Year was Rs. 3,221.44 Crore
(Previous Year Rs.3,636.66 Crore) and Profit after Tax (PAT) was Rs.4,034.37 Crore
(Previous Year Rs.2,709.14 Crore). Total Comprehensive Income for the Financial Year was
reported as Rs.3,477.15 Crore (Previous Year Rs.2,544.34 Crore).

(iii) Non-Performing Assets

Your Company continues to demonstrate robust asset quality, reflected
in its consistently low NPA levels. This is supported by specialized teams dedicated to
recovery, project oversight, and stressed asset management. The loan portfolio is subject
to continuous monitoring, allowing the Company to track repayment behaviour, identify
potential stress at an early stage, and take timely corrective actions wherever necessary.
Instances of delay or default are addressed through a structured and
time-bound approach. The Company engages with borrowers through various channels such as
written communication and meetings to facilitate account regularization. Simultaneously,
regulatory requirements like SMA classification and reporting to RBI, along with
disclosures to credit information systems such as CRILC and CIBIL, are adhered to
diligently.
HUDCO remains proactive in resolving stressed assets by leveraging
multiple avenues, including One-Time Settlements (OTS), legal proceedings, actions under
the Insolvency and Bankruptcy Code (IBC) 2016, technical write-offs, and case-specific
default resolution packages. The Stressed Asset Management Department, in coordination
with the Corporate Law Wing, regularly undertakes joint reviews with each Regional Office
to assess NPAs, track the legal status of recovery proceedings, and explore resolution
options through available mechanisms. The status and progress of these efforts are
periodically placed before the Committee for Review of 
NPAs (a Board-level committee) and the Board of Directors.
As a result of diligent efforts and strategic approach in managing
Stressed Assets portfolio, at the end of the Financial 
Year ended 31st March, 2026, your Company reported Gross NPA
of Rs.1,673.84 Crore, which constitutes 1.04% of total loan portfolio. The Net NPA as on
31st March, 2026 stood at Rs.85.35 Crore, constituting 0.05% to net loan
outstanding, as against MoU target of 0.35%. During the year 2025-26, an amount of
Rs.402.96 Crore was recovered from the accounts (Project loans) which were in NPA as on
31.03.2025 including complete resolution of twenty NP Accounts with Principal
Outstanding of Rs.425.88 Crore through IBC/ OTS/ DRT/ Technical Write-Off. 
A total impairment provision of Rs.1,621.21 Crore as per the ECL
Approach, including Rs.1,588.49 Crore towards the provision against NPA (Stage - III)
loans was made by the Company, exhibiting adequate provision coverage ratio of 94.90%.
(iv) Resource Mobilization


The Company continued to pursue a prudent and diversified resource
mobilization strategy during Financial Year 2025-26, with a focus on ensuring adequate
availability of funds, optimizing borrowing costs, maintaining liquidity, and supporting
its growing lending operations. Leveraging its strong credit profile and established
presence in domestic and international debt markets, the Company successfully mobilized
aggregate resources amounting to Rs.67,503.22 Crore during the year through a mix of
bonds, term loans, short-term borrowings and external commercial borrowings (ECBs).
The resource mobilization during the year comprised Rs.10,396.12 Crore
through issuance of unsecured taxable bonds, Rs.49,184.69 Crore through rupee term loans
from banks, Rs.2,503.72 Crore through short-term bank borrowings and Rs.5,418.69 Crore
through the ECB route. The Company continued to diversify its funding sources across
instruments, maturities and markets, thereby strengthening its funding resilience and
enhancing financial flexibility.
The borrowing programme was aligned with the Company's Asset
Liability Management (ALM) framework and was undertaken after due consideration of
liquidity requirements, maturity profiles, interest rate outlook and prevailing market
conditions. The Company maintained a balanced liability structure and adopted proactive
treasury management practices to optimize the overall cost of funds.
The Company continued to follow a prudent liquidity management policy
whereby short-term borrowings are periodically refinanced with longer-tenor resources,
taking into account market opportunities, liquidity position and business requirements.
Surplus funds, wherever available, were deployed in accordance with Board-approved
investment policies with the objective of preserving capital, maintaining liquidity and
reducing negative carry.
The Company remained fully compliant with the Liquidity Coverage Ratio
(LCR) requirements prescribed by the Reserve Bank of India and maintained adequate High
Quality Liquid Assets (HQLA) to withstand potential liquidity stress scenarios. The robust
liquidity framework and continuous monitoring mechanisms enabled the Company to maintain a
strong liquidity position throughout the year.

As on 31st March, 2026, the Company's outstanding
borrowings stood at Rs.1,41,389.61 Crore, comprising long and medium-term borrowings of
Rs.1,38,885.89 Crore, including foreign currency borrowings of Rs.12,475.64 
Crore, and short-term borrowings of Rs.2,503.72 Crore. The
Company's diversified liability profile, coupled with prudent risk management
practices, continues to provide a strong foundation for supporting its business growth
while maintaining financial stability.
The composition of outstanding borrowings as on 31st March,
2026 is as under:
During the year, HUDCO achieved a significant milestone by becoming an
eligible issuer of Capital Gain Tax 
Exemption Bonds under Section 54EC of the Income Tax Act, 1961
(corresponding section 85 of the Income Tax 
Notification Act, 2025) pursuant to No. S.O. 1644(E) dated 7th
April, 2025 issued by the CBDT, Ministry of Finance, Government of India. Subsequently,
the Company successfully launched its maiden 54EC Capital Gain Bond issue through the
private placement route. The Bonds were issued with a tenor of five years and carried a
coupon rate of 5.25% per annum. The issue received a positive response from investors,
enabling the Company to mobilize over Rs.121 Crore within eleven months of launch,
exceeding the initial issue size of Rs.100 Crore. The issuance has broadened HUDCO's
resource mobilization avenues, diversified its investor base and strengthened its capacity
to raise long-term funds for financing infrastructure and housing projects in line with
its developmental mandate.
During the year, the Company successfully raised Rs.1,442 Crore through
the issuance of its maiden Tier-I Perpetual Debt Instrument. The proceeds have
strengthened the Company's Tier-I capital base, enhanced its capital adequacy position and
asset-liability management profile, and provided additional headroom for supporting future
business growth while maintaining prudent leverage levels. The outstanding
borrowings-to-net worth ratio stood at 6.43 times (5.52 times excluding GoI serviced
bonds) as on 31st March, 2026 as against 5.97 times (4.86 times excluding
Government of India serviced bonds) as on 31st March, 2025, reflecting the
growth in the Company's resource base in line with the expansion of its lending
operations.

(v) Cost of Borrowings

The Company continued to focus on optimizing its cost of funds through
a judicious mix of borrowing instruments, diversification of funding sources and proactive
treasury management. During Financial Year 2025-26, the weighted average cost of resources
mobilized during the year stood at 6.56% per annum. The weighted average cost of
outstanding borrowings as on 31st March, 2026 declined to 7.17% per annum as
compared to 7.44% per annum as on 31st March, 2025, reflecting the Company's
sustained efforts towards efficient liability management and cost optimization.
During the year, the weighted average incremental cost of borrowings
through taxable bonds/debentures was 8.20 basis points lower than the prevailing Reuters
benchmark yield of AAA-rated CPSE bonds of comparable tenor at the respective times of
issuance. This enabled the Company to achieve the "Excellent" category target
under the Memorandum of Understanding (MoU) parameters relating to cost of borrowings.
As part of its strategy to diversify funding sources and optimize
borrowing costs, the Company successfully accessed international markets and raised
External Commercial Borrowings (ECBs) aggregating JPY 92 billion during Financial Year
2025-26. These borrowings were raised at an overall average all-in cost of 5.76% per
annum, including hedging costs, thereby contributing to further diversification of the
Company's liability profile.
The Company continued to maintain a prudent foreign currency risk
management framework. The ECB exposures were appropriately hedged through derivative
instruments, including option-based structures, in accordance with the Company's approved
risk management policies. Further, hedge accounting under Ind AS 109 has been adopted for
ECB exposures from the inception of the respective borrowings, thereby ensuring alignment
of accounting treatment with the underlying risk management objectives.
The Company's ability to maintain a competitive cost of funds through
effective treasury operations, disciplined liability management and diversified market
access enabled it to continue providing financial assistance for housing and urban
infrastructure projects across the country on competitive terms, while maintaining
financial sustainability and supporting long-term business growth.

(vi) Domestic and International Credit Ratings

The Company continued to enjoy strong credit ratings from leading
domestic and international credit rating agencies during Financial Year 2025-26,
reflecting its established market position, prudent financial management and sustained
operational performance. The ratings assigned to the Company support its ability to access
diverse funding sources across domestic and international markets and reinforce
stakeholder confidence in its creditworthiness.
Domestic and International Credit Ratings


The international ratings are aligned with the sovereign rating
framework applicable to Indian issuers and reaffirm the Company's standing in
international financial markets.
The continued retention of the highest domestic credit ratings and
strong investment-grade international ratings enhances the Company's ability to mobilize
resources efficiently across a diversified range of funding sources. The ratings support
wider investor participation, facilitate competitive pricing of borrowings and strengthen
financial flexibility, thereby enabling the Company to effectively support its business
growth and long-term financing objectives.

(vii) Debt Securities and Investor Servicing
Issuance and Dematerialization of Bonds/Debentures

During the Financial Year 2025-26, the Company issued Unsecured,
Taxable Bonds/ Debentures exclusively in dematerialized form. Consequently, all Taxable
Bonds/Debentures issued by the Company and outstanding as on 31st March 2026
are held in dematerialized form only.
The Company has established necessary arrangements with the National
Securities Depository Limited (NSDL) and Central Depository Services (India) Limited
(CDSL) for issuance and holding of Bonds/Debentures in dematerialized form. The Company
has also appointed Registrar and Transfer Agent(s) to ensure seamless electronic
connectivity with NSDL/CDSL and to facilitate efficient maintenance and servicing of
investor accounts.
Investors may hold, transfer, and transact in the Bonds/Debentures in
dematerialized form in accordance with the provisions of the Depositories Act, 1996, as
amended from time to time, and the rules, regulations, and bye-laws framed thereunder.
Such securities are eligible for trading on recognized stock exchanges and are cleared and
settled through the mechanism of clearing corporations and depositories, in accordance
with the guidelines issued by the Securities and Exchange Board of India (SEBI) and the
respective stock exchanges from time to time.
Redemption of Debt Securities and Repayment of Loans


The Directors are pleased to report that during the year under review,
the Company successfully redeemed Bonds/Debentures and discharged its other debt
obligations aggregating to Rs.18,781.85 Crore in a timely and efficient manner, without
any instance of delay or default in debt servicing.
The repayments during the year comprised redemption of Bonds/Debentures
amounting to Rs.5,487.68 Crore, repayment of Term Loans and Short-Term Loans from banks
and financial institutions aggregating to Rs.13,282.98 
Crore, and repayment of foreign currency loans availed from
multilateral agencies amounting to Rs.11.19 Crore. The Company continues to maintain an
impeccable track record of timely servicing of all its debt obligations and has not
defaulted in repayment of principal or payment of interest on any of its borrowings.
During the ensuing Financial Year, the Company is scheduled to meet
redemption and repayment obligations towards Bonds and other long-term borrowings
amounting to approximately Rs.16,914.70 Crore. The Directors are confident that the
Company's internal accruals and cash flows will be adequate to meet these obligations
as and when they fall due.

(viii) Unclaimed Principal and Interest on Bonds

As on 31st March 2026, an aggregate amount of
Rs.21,57,37,258/-, comprising principal of Rs.9,09,03,000/- and interest of
Rs.12,48,34,258/-, pertaining to 4,106 bondholders, remained unclaimed as the same had not
been claimed by the respective bondholders.
The Company has been making continuous efforts to facilitate settlement
of unclaimed amounts by issuing periodic communications through email, letters and other
appropriate modes, requesting investors to complete requisite formalities and submit
necessary documents for claiming their dues.
The details of unclaimed principal and interest outstanding are
disclosed in the accompanying table:

  

    

    
Principal
    
Interest
    
Total Amount
  
  

    
Financial year
    
Amount (Rs.)
    
No. of holders
    
No. of NCDs
    
Amount (Rs.)
    
No. of holders
    
No. of NCDs
    
(Rs.)
  
  

    
2025-26
    
9,09,03,000
    
370
    
88428
    
12,48,34,258
    
3736
    
1459631
    
21,57,37,258
  
  

    
2024-25
    
8,16,25,000
    
306
    
79150
    
9,84,03,821
    
3449
    
1144226
    
18,00,28,821
  
  

    
2023-24
    
7,49,67,000
    
276
    
72492
    
9,73,85,869
    
3335
    
1191090
    
17,23,52,869
  

Transfer to Investor Education and Protection Fund (IEPF)


In accordance with the provisions of the SEBI (Listing Obligations and
Disclosure Requirements) (Fifth Amendment) Regulations, 2021, read with Section 125 of the
Companies Act, 2013, any principal and/or interest remaining unclaimed for a period of
seven years from the date of payment is required to be transferred to the Investor
Education and Protection Fund (IEPF).
During the Financial Year 2025-26, the Company transferred an amount of
Rs.95,27,768/- to the IEPF in respect of unclaimed amounts pertaining to Bonds/
Debentures, in compliance with the applicable regulatory provisions. Investor Servicing
and Commitment


The Company remains committed to maintaining high standards of investor
servicing and continues to take all necessary steps to ensure timely payment of interest
and redemption proceeds. The Company also actively engages with investors to facilitate
resolution of pending claims and to safeguard investor interests in accordance with
applicable regulatory requirements.

(ix) Unclaimed amount under HUDCO Public Deposit Scheme

HUDCO had discontinued acceptance and renewal of deposits under the
HUDCO Public Deposit Scheme with effect from July 1, 2019. Accordingly, no fresh deposits
have been accepted or renewed under the Scheme thereafter.
As on March 31, 2026, there were no outstanding public deposits under
the Scheme, except for certain unclaimed deposits. During Financial Year 2025-26, an
amount of Rs.1,016 representing deposits remaining unclaimed for more than seven years
from the date of maturity, was transferred to the Investor Education and Protection Fund
(IEPF) in compliance with the provisions of the Companies Act, 2013 and the rules framed
thereunder.
The aggregate amount of unclaimed deposits outstanding as on March 31,
2026 stood at Rs.1.82 Lakh (inclusive of principal and interest), relating to three
depositors.

(x) Deployment of Resources at the close of the year

As on March 31, 2026, the total resources of the Company stood at
Rs.1,66,839.79 Crore. These comprised Equity Share Capital of Rs.2,001.90 Crore, Reserves
& Surplus of Rs.18,533.30 Crore, Tier-I Perpetual Debt Instruments of Rs.1,442 Crore,
borrowings of Rs.1,41,677 Crore from various sources, including Financial Institutions,
Commercial Banks, Multilateral Agencies and domestic debt markets, and Other Liabilities
& Provisions of Rs.3,185.59 Crore.
The resources were deployed mainly in Loans & Advances amounting to
Rs.1,60,547.15 Crore. The balance resources were deployed in Investments of Rs.2,228.66
Crore, Cash & Bank Balances of Rs.226.11 Crore, Fixed Assets (net) of Rs.111.04 Crore,
Deferred Tax Assets (Net) of Rs.448.08 Crore, and Other Assets of Rs.3,278.78 Crore.
The resource deployment reflects the Company's emphasis on
financing its business operations while ensuring adequate liquidity and maintaining a
sound financial position.

7. RISK MANAGEMENT IN HUDCO 


In compliance with the directions given by the Reserve Bank of India
(RBI), HUDCO has put in place Comprehensive 
Risk Management Policy and Risk Register cum Early Warning Signals
through which it reviews and assesses significant risks on a regular basis to ensure that
there is a robust system of risk control 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. The Company has also put in
place Internal Capital Adequacy Assessment Process 
(ICAAP) policy, through which it identifies, assesses, and manages
risks that could impact its business operations, financial position, and capital adequacy.
In compliance with the SEBI (LODR) Regulations, 2015, your Company has
in place a Board Level Committee i.e. ‘Risk Management Committee' (RMC). The
Chairperson of RMC is a member of the Board of Directors. The RMC ensures that risks are
effectively managed and aligned with the organisation's objectives. The Committee
also ensures the development and oversight of the organisation's policy and framework
and provides governance for effective Risk 
Management. The RMC reviews various recommendations of the two
sub-committees namely: - 
• Assets & Liabilities Committee (ALCO); and
• Credit & Operational Risk Management Sub-Committee (CORMSC) 
Assets and Liabilities Committee (ALCO) reviews the market risk
& liquidity risk 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. During the year, 16 meetings of ALCO were held. Credit &
Operational Risk Management Sub Committee (CORMSC): The CORMSC periodically monitors
credit and operational risks in the Company. The sub-committee oversees and ensures that
the credit policies are put in place and monitors the credit risk by reviewing asset
quality & asset classification as well as reviews the migration of loan assets. 
The sub-committee also monitors and ensures mitigation of internal and
external operational risks including Information Technology & Cyber Security risk,
Employee Risk, Compliance Risk, Fraud Risk, Legal Risk, Reputational Risk, etc. This is
achieved by strengthening internal control systems, establishing policies &
procedures, and providing adequate training to employees. During the year, five meetings
of CORMSC were held. 
With the prudent policies and professional approach of the management,
HUDCO has been successful in mitigating various risks, briefly described as under: -
Credit Risk - Your Company's core business is lending,
which exposes it to Credit risk. Credit risk is the inherent risk in the financing
industry and involves the risk of loss, arising from the diminution in credit quality of a
borrower and the risk that the borrower will default on contractual repayments under a
lending arrangement. To manage credit risks associated with business, your Company is
adhering to RBI mandated prudential norms, ensuring portfolio diversification, has put in
place a robust credit appraisal mechanism containing comprehensive appraisal techniques/
guidelines and conducts regular monitoring etc. to ensure timely repayments of principal
& interest amount.
Operational Risk - Operational risks refer to potential losses
arising from inadequate or failed internal processes, people, and systems or from external
events. Your Company has established a robust reporting and monitoring framework to manage
operational risks arising from both internal and external factors, including Information
Technology and Cyber Security Risk, Employee Risk, Compliance Risk, Fraud Risk, Legal
Risk, and Reputational Risk, etc. The Company has put in place a comprehensive Risk
Register through which all operational risks are identified, measured and categorised as
high, moderate or low risk category and regularly reported to Credit and Operational Risk
Management Sub- Committee, which is a functional-level Committee to review, monitor and
manage operational risks.
Foreign Currency Risk - Foreign currency exchange risk involves
exchange rate movements among currencies that may adversely impact the value of foreign
currency denominated assets, liabilities and off-balance sheet arrangements. 
Your 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 movement, your Company has entered into hedging
transactions. As on 31st March, 2026, the total foreign currency liabilities
are USD 206.25 million (INR 1942.93 Crore) and JPY 216 billion (INR 12694.46 Crore) and
99.71% of the foreign currency exchange rate risk is covered through hedging instruments.
Liquidity Risk - Liquidity Risk is the risk that a Company may
not be able to raise funds, meet its financial obligation due to an asset liability
mismatch or interest rate fluctuation or lack of sufficient cash. 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, ECB, etc., and the mismatch in the assets and liabilities, if any, are managed
through committed bank lines. In order to mitigate the liquidity risk, a dynamic mix of
strategies including forward looking resource mobilisation based on project disbursements
and maturing obligations has been put in place.
Environment, Social and Governance (ESG) Risks - ESG risks
emanate from environmental, social and governance factors that have an impact on the
operations, financial performance and management of Company. Owing to the rising climate
concerns & impetus of Governments in respective economies across the globe, ESG risks
have attained great significance. In order to positively impact the environment,
customers, employees, and the community at large, your company has Board approved
Environment, Social & Governance (ESG) Policy framework, which is in line with 
HUDCO's Vision and Mission statements that recognize the
importance of sustainable development and responsible corporate citizenship. The ESG
Policy framework articulates the Company's commitment to ESG and long-term value
creation for internal and external stakeholders including customers, employees, investors,
regulators, business partners and community members. Your Company has been rated by
various rating agencies with "Adequate" rating grade.

8. JOINT VENTURE, ASSOCIATE AND SUBSIDIARY COMPANY


As on 31st March, 2026, HUDCO has three Joint Ventures/
Associates, 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 Rs.2.14 Crore in the Joint Venture Companies
{PSIDL – Rs.0.13 Crore (26%), SUIDL– Rs.2.00 Crore (40%) and SIIL– Rs.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/ Associates, for which
necessary steps are being taken. The investment in respect of PSIDL and SIIL is being
shown as Re.1/- in HUDCO books while accounts of SUIDL are being consolidated with HUDCO
accounts. Presently, HUDCO is valuing its stake in IBHL at Re. 1/- only, since there is
very limited trading in the stock market. Reserve Bank of India vide letter dated 10th
October 2023 has informed that Certificate of Registration (CoR) granted , by National
Housing Bank to IBHL has been cancelled vide order dated 21st September, 2023
hence, IBHL is no longer an HFC. In the case of IBHL, an associate company, HUDCO has
investment of Rs.2.50 Crore which constitutes 25% of paid-up capital in IBHL.

9. INTERNAL FINANCIAL CONTROL POLICY AND INTERNAL AUDIT


Your Company maintains an effective Internal Financial Control (IFC)
system designed to ensure the orderly and efficient conduct of business operations. The
framework encompasses strict adherence to established policies and procedures,
safeguarding of Company assets, prevention and detection of frauds and errors, accuracy
and completeness of accounting records, and timely preparation of reliable financial
information aligned with the scale of operations.
Evaluation of adequacy and effectiveness of Internal financial control
is carried out every year and placed before Audit committee and directions by Audit
committee are duly implemented. defined The IFC system framework establishes well- Risk
Control Matrices and Process Flow Charts that depict the process to initiate, authorize,
process, record and report transaction, and prevent or detect errors. Risk Control
Matrices are structured around a comprehensive risk and control framework covering all
major business processes. Internal Audit periodically conducts control testing of these
matrices to validate their effectiveness. Additionally, the process flowcharts enhance
transparency and strengthen the overall control environment Internal Audit 


Internal Audit plays a pivotal role in ensuring adherence to the
Company's policies, guidelines, and procedures. The 
Internal Audit Department is adequately staffed and has adopted a
Risk-Based Internal Audit (RBIA) framework in line with the Reserve Bank of India's
guidelines on RBIA systems, thereby strengthening and streamlining all auditable
activities.
During the year under review, RBIA was conducted at the Corporate
Office as well as across all Regional Offices. Significant audit observations were
presented to the Audit Committee, and appropriate actions were taken in accordance with
the Committee's directions.

10. INFORMATION TECHNOLOGY
HUDCO continues to leverage its ERP framework to institutionalize
seamless operational workflows across core functions, including lending, treasury,
procurement, and human capital management. The ERP system ensures data integrity, enhances
real-time reporting accuracy, and optimizes resource allocation. 
Parallelly, the Corporation is actively integrating AI to its digital
ecosystem for more efficiency. This includes the deployment of intelligent Chatbots for
internal and external stakeholder engagement, Predictive Monitoring for infrastructure
resilience, and advanced Cyber-Threat Detection systems. Furthermore, the Corporation is
in the process of implementing AI-powered solutions to streamline executive governance and
enhance decision-making efficiency.

11. HUMAN SETTLEMENT MANAGEMENT INSTITUTE 

Human Settlement Management Institute (HSMI) of HUDCO is involved in
both research and capacity-building activities in the urban sector. HSMI provides a forum
for interaction for administrators, professionals, researchers, and others engaged with
the issues of human settlement development. 

T raining Activities 

Since its inception in 1985, HUDCO's HSMI has so far benefited
60463 officials through 1890 training programmes and continues to provide
capacity-building support for professionals. This is inclusive of the training courses
conducted under the Indian Technical and Economic Cooperation (ITEC) programme of the
Ministry of External Affairs, Government of India. Under the ITEC programme, 1443 overseas
participants have benefited through 7 e-ITEC and 61 training courses. Capacity Building
and Training conducted in Financial Year 2025-26: 
In FY 2025-26, HUDCO's HSMI has provided training to 3395
officials through 55 programmes, including 5 courses under the ITEC programme sponsored by
the Ministry of External Affairs, Government of India, benefiting 113 overseas
participants. For HUDCO and other CPSEs officers


In the Financial Year 2025-26, HUDCO's HSMI conducted 11 Webinars,
8 Hybrid, and 31 In-person training programmes, imparting training to 3282 participants,
including officers from HUDCO as well as other CPSEs. 
Webinars 


The webinars were conducted on relevant themes like Corporate vision,
Finance for Non-finance, PM Awas Yojana, 
Ethical Conduct and Vigilance, HR policy, RBI Regulatory Compliance,
Consultancy Services, Asset Monetisation and 
Property Development, Resource Mobilisation, Introduction to ERP
module, e-Office system and Capacity Building 
Initiatives. 
Hybrid Training Programme 


The Hybrid training programmes were conducted on regulatory and policy
frameworks like KYC & CKYC, Smart 
Technologies and Controls in Energy-Efficient Buildings, Procurement
through GeM, Insolvency and Bankruptcy Code, 
NCLT Proceedings and SARFAESI Act 2002, Circular Economy and C&D
Waste Management, InvITs & Financial 
Modelling and Urban Transport. These Training programmes were conducted
for officers from HUDCO Corporate Office and Regional Offices across the country. The
Hybrid training programmes were also attended by officers from other 
CPSEs such as Telecommunications Consultants India Limited (TCIL), Bank
of Maharashtra (BoM), National Buildings Construction Corporation Limited (NBCC), National
Bank for Financing Infrastructure and Development (NaBFID), National Highways and
Infrastructure Development Corporation Limited (NHIDCL) and Sagarmala Finance Corporation
Limited (SFCL).
In-person Training Programmes 


A 1-week Induction Programme was organised to familiarise newly
recruited lateral entry officers with the vision and operations of HUDCO. Besides this, 6
offline training Programmes were conducted on themes like Motivation and Team 
Building, Cyber Security, Managing Work Life Balance, Use of Drone
Technology in Urban Planning, Planning to Progress: 
MS Project 2021, Project Finance and PPP. These Training programmes
were conducted for HUDCO officers from the Corporate Office and Regional Offices across
the country. The In-person training programmes were also attended by officers from other
CPSEs such as Telecommunications Consultants India Limited (TCIL), Bank of Maharashtra
(BoM), 
National Buildings Construction Corporation Limited (NBCC), Indian
Renewable Energy Development Agency Limited (IREDA), India Infrastructure Finance Company
Limited (IIFCL), North Eastern Development Finance Corporation Limited (NEDFi), Mahagenco
Renewable Energy Limited (MREL), Delhi Metro Rail Corporation Limited (DMRC), Rural 
Electrification Corporation (REC) and Madhya Pradesh Consultancy
Organisation Limited (MPCON). 
Apart from the above 7 training programmes, HSMI also conducted 2
programmes of 3 days duration under the Rashtriya Karmayogi Jan Seva Training Programme
for Master Trainers of 13 Organisations [Housing and Urban Development Corporation Limited
(HUDCO), National Capital Region Planning Board (NCRPB), National Capital Region Transport

Corporation (NCRTC), Directorate of Estates (DoE), National Institute
of Urban Affairs (NIUA), Building Materials and 
Technology Promotion Council (BMTPC), Delhi Urban Arts Commission
(DUAC), Rajghat Samadhi Committee (RSC), Town & Country Planning Organisation (TCPO),
Hindustan Prefab Limited (HPL), Central Government Employees 
Welfare Housing Organisation (CGEWHO), Land and Development Office
(L&DO) and Directorate of Printing (DoP)] under Ministry of Housing and Urban Affairs
(MoHUA) and 22 training programmes for employees of HUDCO Corporate Office and Regional
Offices across the Country. 
For International Participants under ITEC 


HUDCO's HSMI also conducted 5 training courses under the ITEC
programme sponsored by the Ministry of External 
Affairs, Government of India, on Making Cities Sustainable, Leveraging
Resilience for Future Proofing our Cities, 
Housing the Urban Poor: Policy, Planning and Implementation- the Indian
Experience, Towards Sustainable Urban Mobility in Developing Urban Context and Leadership
Skills for Women. The ITEC courses were conducted for 113 overseas professionals from 47
countries. The courses also showcased various Government of India programmes, projects,
and initiatives implemented pan-India in areas such as Sustainable Urban Mobility, Social
Housing, Sustainable Urban Development practices and Empowerment of Women. 
Publications 

HUDCO's HSMI comes out with a bi-annual ISSN magazine
"Shelter" on themes relevant to the housing and urban development sector.
Shelter features a wide range of articles that provide in-depth insights into creating
sustainable, inclusive, and resilient urban environments. 
The April 2025 issue of Shelter, unveiled on HUDCO's foundation
day by Shri Tokhan Sahu, the Hon'ble Minister of State, focused on transforming
housing and urban development to achieve the goal of Viksit Bharat by 2047. ‘Urban
Crisis Response' was the theme of the October 2025 issue of Shelter, which coincided
with the theme of World Habitat Day. The issue received an overwhelming response and is a
compilation of theme papers, policy reviews, and case studies by eminent scholars in the
urban sector. Research & Development activities 


The Company had formulated a Research & Development (R&D)
policy in line with the guidelines issued by the 
Department of Public Enterprises vide Office Memorandum No. 3(9)/
2010-DPE (MoU) dated 20.09.2011. During the year, to utilise the unspent balance available
under the R&D budget head, the Board of Directors of HUDCO approved the proposal of
the Technical Assistance scheme for Project Formulation, Capacity Building and Research
& Development activities for Government Agencies and ULBs, etc., with an initial
corpus of Rs.5.00 crore. The Board also approved the Revised Guidelines for setting up
HUDCO Chairs at various institutions in the country.

12. INTERNATIONAL COOPERATION AND GLOBAL ENGAGEMENT 

During the year, HUDCO further strengthened its global engagements to
promote knowledge exchange, institutional capacity-building and innovative financing for
sustainable urban development. As part of MoU signed between HUDCO and the Institute for
Housing and Urban Development Studies (IHS), Erasmus University Rotterdam, the
Netherlands, an Executive Course on "Affordable Housing under PMAY-U 2.0" was
organised at IHS, jointly co-sponsored by the Ministry of Housing & Urban Affairs
(MoHUA) and HUDCO for senior functionaries of state governments involved in the
implantation of Pradhan Mantri Awas Yojana-Urban (PMAY-U), Urban Local Bodies and various
other stakeholders. Further, HUDCO in collaboration with UN-Habitat, jointly organised a
national stakeholder consultation on "UN-Habitat's Strategic Plan
2026–2029" and information on the vision and thematic focus of the 13th
World Urban Forum (WUF13), scheduled for 17-22 May 2026.

13. HUMAN RESOURCES 

At HUDCO, we firmly believe that our success is driven by our people -
our most valuable asset and a key differentiator in an increasingly competitive
environment. This belief continues to guide our human capital strategy, with sustained
focus on employee development, capability building, and organizational growth.
We offer competitive compensation, comprehensive benefits including
medical coverage, superannuation schemes with post-retirement medical support, and a
balanced mix of monetary and non-monetary rewards and recognition. In line with our
commitment to digital transformation, advanced systems such as HRMS and e-Office have been
implemented to enhance operational efficiency and enrich employee experience.
Employee development and engagement remain top priorities. We nominate
employees to various training programmes and hold various Leadership and Development
initiatives. The company conducts diverse employee engagement including sports, yoga
initiatives to foster team building, growth and retention.
As of 31st March, 2026, our workforce stands at 585
employees, including 170 women (29.1% of total strength) which is one of the best in
diversity factor in peer group CPSEs, with representation across all hierarchical levels. Succession
Planning


T o address superannuation-related separations and support our
evolution into an Infrastructure Finance Company (IFC) amid projected growth, steps have
been initiated for proper succession planning.
HUDCO has established a comprehensive Succession Planning Policy to
ensure operational and service continuity in the event of departure of Key Managerial
Personnel and Senior Management. The Policy facilitates the systematic, long-term
development of internal leadership talent, drawing from the managerial cadre to fill
critical positions arising from retirement, disability, death, or other unforeseen
circumstances. 
To address HUDCO's diverse techno-financial and operational portfolio,
the Succession Planning Process encompasses pivotal roles across targeted levels, in
addition to leadership positions

14. VIGILANCE 
Role of Vigilance Department


Corporate Vigilance Department (CVD) actively pursued Preventive &
Corrective Vigilance as per mandate of Central Vigilance Commission (CVC) by conducting
regular and surprise inspections across various Regional Offices and 
Departments. Further, based on inputs by CVD, updation of operational
guidelines of various functional departments has been undertaken by the departments to
promote transparency, fairness and accountability in all operational areas. In this
regard, the following major activities are carried out:-


• Review of audit reports i.e. Internal, Statutory and C&AG
Reports regularly. 
• CTE type scrutiny of contracts undertaken and system
improvements in tendering & contract management implemented.
Field inspections of Regional Offices, HUDCO financed projects and
scrutiny of APRs executives.
In compliance of CVC's directions for observing campaign period from 18th
August - 17th November, 2025 (three months period) as a precursor to Vigilance
Awareness Week, 2025, on vigilance measures activities - (i) Disposal of pending
complaints (ii) Disposal of pending cases (iii) Capacity Building Programmes (iv) Asset
Management (v) Digital Initiatives as focus areas were also taken up in campaign mode.
Vigilance Awareness Week was observed by the Corporation from 27th October to 2nd
Novembe 2025 in the Head Office as well as at all the Regional Offices. The programmes
were r, theme centric, declared by the CVC i.e. "Vigilance: Our Shared
Responsibility". ( - )

15. OFFICIAL LANGUAGE 
During the year, HUDCO undertook several initiatives to promote the use
of Hindi in official work. "Hindi Pakhwada" commenced on September 14, 2025,
with the celebration of Hindi Diwas and the 5th All India Official Language
Conference in Gandhinagar, Gujarat. Various competitions, workshops, and seminars were
organized at Head Office and Regional Offices. Hon'ble Minister of State for Housing
and Urban Affairs, Shri Tokhan Sahu inspected the Head Office on 2nd September,
2025, and appreciated HUDCO's efforts such as the Hindi Library, T lab, in-house
magazines and exhibitions. raining
In addition to this the third Sub-committee for the parliamentary 
Official Language Committee carried out Rajbhasha Inspection at the
Lucknow Regional Office, HUDCO on 19th January, 2026 and awarded a certificate
of "Excellence" to HUDCO.
During this year, the in-house magazine of HUDCO, Awaas Dhwani received
first prize from NARAKAS Delhi Upakram- 2. Furthermore, through the joint efforts of the
Department of Official Language, Ministry of Home Affairs, Government of India and HUDCO,
a book based on Artificial Intelligence was published; it was released on September 14,
2025, on occasion of Hindi Diwas, by the Hon'ble Union Minister of Home Affairs and
Cooperation, Shri Amit Shah. The CMD, 
HUDCO was also present on this occasion. Additionally, HUDCO received
the third "Rajbhasha Kirti Award" from Shri 
Arjun Ram Meghwal, Hon'ble Minister of State, Ministry of
Parliamentary Affairs, Government of India, for outstanding performance in the
implementation of the Official Language.

16. COMPLIANCES OF VARIOUS ACTS/ GUIDELINES

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.
During the year under review, the Company complied with the provisions
of all applicable labour laws, rules, regulations, and guidelines. No penalty was imposed,
nor any stricture passed, against the Company by any statutory authority during the
period.
Disclosure under the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013


An Internal Complaints Committee (ICC), headed by a senior woman
officer, addresses sexual harassment complaints under the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013. Sexual harassment constitutes
misconduct under HUDCO's Conduct, Discipline and Appeal Rules. During the year, a meeting
of an Internal Complaints Committee was held on 12th January, 2026.
No sexual harassment complaints were pending at the start of Financial
Year 2025-26, received during the year, or pending at year-end.
Disclosure under Maternity Benefit Act, 1961


During the year under review, the Company has complied with the
provisions of Maternity Benefit Act, 1961 including Maternity leave provisions, Salary and
benefits and other related employee entitlements.
Public Grievance Redressal Mechanism of HUDCO


HUDCO, as a Public Sector Undertaking (PSU) under the Ministry of
Housing and Urban Affairs (MoHUA), remains steadfast in its commitment to maintaining a
quick and responsive Public Grievance Redressal System.
The Public Grievance (PG) Cell of HUDCO serves as the nodal agency for
the receipt, processing, and resolution of grievances received through the CPGRAMS portal
and PG official mail. PG Cell functions under the framework and timelines laid down by the
Ministry of Housing and Urban Affairs (MoHUA) and the Department of Administrative 
Reforms and Public Grievances (DARPG), from time to time. Operational
Framework & Commitment:


In alignment with the principles of citizen-centric governance, the PG
Cell ensures that every grievance is handled with due diligence through the following
actions: Confirmation Prompt Acknowledgment: Initial receipt/ and categorization of
grievances.
Time-Bound Resolution: Disposing of grievances including interim
responses on a prescribed time-scale in strict adherence to rules and recommendations laid
down by ministry.
Strategic Redirection: Forwarding matters to the concerned
functional departments/verticals for eliciting due response including
specialized/technical inputs for resolution of grievance.
Adherence to Guidelines: Operating strictly under the
administrative guidelines of MoHUA by duly ensuring accountability and transparency in
service delivery.
During the Financial Year 2025-26, the PG Cell has maintained a high
disposal rate in accordance with the MoHUA benchmarks. There have been no instances of
systemic non-compliance with the prescribed grievance redressal protocols. No penalties,
strictures or adverse remarks were passed or imposed on the company by any Authority
during the period under review.
Implementation of Micro, Small & Medium Enterprises (MSME)
Policy


Implementation of Micro, Small & Medium Enterprises (MSME) Policy,
the Government of India, Ministry of Micro, Small & Medium Enterprises (MSME), has
advised Central Ministry/ Department CPSEs that 25% of overall annual procurement, be
procured through MSEs, 4% of overall procurement through MSEs owned by SC/ST and 3% of
overall procurement from MSEs women entrepreneurs. During the Financial Year 2025-26,
HUDCO has made total procurement of Rs.33.0940 Crore. In compliance of the Public
Procurement Policy for Micro and Small Enterprises, issued by Government of India vide
Micro and Small Enterprise (MSEs) Order, 2012 dated 25th March 2022, during the
Financial Year 2025-26, HUDCO has made procurement amounting to Rs.20.5868 Crore from
MSEs, constituting 62.21% of its total annual procurement inclusive of 4.50% from MSEs
owned by SC/ST entrepreneurs amounting to Rs.1.4878 Crore and 9.91% from Women
Entrepreneurs constituting Rs.3.2803 Crore. Right to Information Act HUDCO, as a
PSU under the Central Government, is a Public Authority under the RTI Act, 2025. As such
Public Authority, HUDCO is committed to maintain transparency in all spheres of its
activities by proactively and suo-moto disclosing vital information to the General Public
in its official website in the spirit of the mandate u/s 4 of the RTI Act, 
2005. Further, HUDCO is, has been and continues to be committed to
provide the information to the Citizen of India sought by them u/s 6 and 7 of the RTI Act
within the statutorily prescribed time.
During the Financial Year 2025-26, there has been no instance of
non-compliances by the Company. No penalties, strictures or adverse remarks were passed or
imposed on the company by any Statutory Authority during the period under review.
Environmental, Social and Governance (ESG) and Sustainable
Development


Although ESG has emerged as a formal framework in recent years, its
core principles have long been embedded in HUDCO's institutional ethos and development
mandate. Since its inception, the Company has been committed to financing housing and
urban infrastructure such as water supply, sewerage, sanitation, environmental
infrastructure and, more recently, renewable energy and climate-resilient projects that
promote inclusive growth, environmental sustainability and good governance.
During the year, HUDCO continued to strengthen the implementation of
its Environmental, Social and Governance 
(ESG) framework, building upon the ESG Policy approved by the Board in
the previous financial year. The Company also launched its inaugural ESG Report released
in September,2025, which articulated HUDCO's ESG vision and governance framework,
highlighting the Company's commitment to environmental sustainability, social
responsibility and governance excellence, while laying the foundation for its ESG journey.
The Company's lending portfolio continues to support projects that
contribute to environmental sustainability and social development, complemented by
initiatives relating to resource conservation, waste management, employee well-being,
workplace safety, information security, cybersecurity, tree plantation and community
development through its business operations and CSR programmes. During the year, HUDCO
also progressed on its sustainable finance initiatives, including the introduction of Blue
Loans and the KfW-supported Sustainable Finance Programme, further strengthening its
ability to mobilise long-term capital for sustainable development. Recognising the
evolving landscape of ESG and sustainable finance, the Company remains committed to
continuously enhancing its ESG practices and disclosures in line with its development
mandate, stakeholder expectations and the evolving regulatory framework.
The Company's continued focus on strengthening its ESG framework and
responsible business practices was reflected in favourable ESG assessments during the
year, including a 'Stable' ESG Rating by the National Stock Exchange (NSE), an
'Adequate' ESG Rating by CRISIL, and a 'Low ESG Risk'rating by Sustainalytics.
Recognizing the evolving landscape of ESG and sustainable finance,
HUDCO remains committed to continuously strengthening its ESG practices and disclosures in
line with its development mandate, stakeholder expectations and the evolving regulatory
framework.

17. DIRECTORS' RESPONSIBILITY STATEMENT

As per requirement 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 Financial 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 effectively; adequate and were
operating 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.

18. MANAGEMENT DISCUSSION & ANALYSIS REPORT 

The Management Discussions & Analysis Report, stipulated in terms
of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and DPE
guidelines, for the year ended 31st March, 2026, is annexed and forms part of
the Directors' Report.

19. CORPORATE GOVERNANCE 

The Corporate Governance Report as stipulated under Regulation 34(3) of
the SEBI (Listing Obligations and Disclosure 
Requirements) Regulations, 2015 and DPE guidelines, together with a
certificate from M/s VAP & Associates, Company 
Secretaries in Practice, on compliance with the Corporate Governance
norms is annexed and forms part of the Directors' Report.

20. BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT

In compliance with Regulation 34 of the SEBI (LODR) Regulations, 2015,
Mehta & Mehta, Company Secretaries, have conducted Reasonable Assurance Audit for
Financial Year 2025-26. The Business Responsibility & Sustainability Report and
Reasonable Assurance Report on BRSR Core are annexed and forms part of the Directors'
Report.

21. DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year under report, following changes took place in the
composition of the Board of Directors: Appointment of Part-time Official (Government)
Director


Ministry of Housing and Urban Affairs (MoHUA), Government of India vide
order dated 26th August, 2025 has conveyed the appointment of Shri Baldeo
Purushartha, (DIN:07570116) I.A.S., then Joint Secretary (Infrastructure Policy & 
Planning Division), Ministry of Finance, GoI as Part-time Official
Director in place of Shri Solomon Arokiaraj on the Board of HUDC with immediate effect
until further orders. In compliance with the provisions of the Companies Act, 2013 and O,
SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015, the Board, upon the recommendation of 
Nomination & Remuneration Committee, appointed Shri Baldeo
Purushartha, as Part-time Official Director (Additional 
Director) (liable to retire by rotation) w.e.f. 8th
September, 2025 till the date of the next Annual General Meeting of the Company i.e. 15th
September, 2025. Accordingly, Shri Baldeo Purushartha was ceased to be Part-time Official 
(Government Nominee) Director on 15th September, 2025.
Further, the Board, upon the recommendation of Nomination &
Remuneration Committee, re-appointed Shri Baldeo 
Purushartha, as Part-time Official Director (Additional Director)
(liable to retire by rotation) w.e.f. 15th September, 2025 till the date of the
next Annual General Meeting of the Company.
Appointment of Part-time Non-official (Independent) Directors


MoHUA, GoI has, vide separate orders dated 7th April, 2025,
had re-appointed Smt. Sabitha Bojan (DIN: 09398364) and appointed Shri Kantilal Chaturbhai
Patel (DIN: 06610367) as Non-Official (Independent) Directors on the Board of the Company
for a period of one year from the date of issue of the orders or until further orders,
whichever is earlier. In compliance with the provisions of the Companies Act, 2013 and
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board, upon
recommendation of Nomination & Remuneration Committee, re-appointed Smt. Sabitha Bojan
and appointed Shri Kantilal Chaturbhai Patel as Non-Official (Independent) Directors 
(Additional Directors) (not liable to retire by rotation) on the Board
of the Company w.e.f. 28th April, 2025. 
Further, MoHUA, GoI, vide order dated 15th May, 2025 had
re-appointed Dr. Ravindra Kumar Ray (DIN: 09394495) as 
Non- (Independent) Director on the Board of the Company for a period of
one year from the date of issue of the order or until further orders, whichever is
earlier. In compliance with the provisions of the Companies Act, 2013 and SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015, the Board, upon recommendation
of Nomination 
& Remuneration Committee, re-appointed Dr. Ravindra Kumar Ray as
Non-Official (Independent) Director (Additional 
Director) (not liable to retire by rotation) on the Board of the
Company w.e.f. 29th May, 2025.
Accordingly, Smt. Sabitha Bojan, Shri Kantilal Chaturbhai Patel and Dr.
Ravindra Kumar Ray were appointed as Non-
Official (Independent) Directors on the Board of the Company in the 55th
Annual General Meeting of the Company held on 15th September, 2025.
Declarations of Independence by Non-official (Independent) Directors


During the year, pursuant to the provisions of Section 149(6) of the
Companies Act, 2013 and Regulation 16(1)(b) of the official SEBI (LODR) Regulations, 2015,
all the Non- (Independent) Directors, have given their declarations as to their confirmation
Independence. Based the disqualified received from Directors, none of them are for
being appointed/ re-appointed as directors in terms of Section 164 of the Companies Act,
2013 and other applicable laws, if any and are not related to each other.
Rotation of Director in the ensuing Annual General meeting


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 Daljeet Singh Khatri (DIN: 06630234), Director (Finance) being longest in
office among the Directors since his last appointment, is liable to retire by rotation and
being eligible, offers himself for re-appointment at the ensuing Annual General Meeting.
The Board recommends re-appointment of Shri Daljeet Singh Khatri, as Director (Finance)
for approval of the members at the ensuing Annual General Meeting on the same terms and
conditions as approved by the President of India.
Cessation of Directors


Shri Solomon Arokiaraj ceased to be Part-time Official Director w.e.f.
02.09.2025 in accordance with Ministry of Housing and Urban Affairs, Government of India
Order dated 26.08.2025.
After closure of the Financial Year Cessation of Directors


Shri Kantilal Chaturbhai Patel, Smt. Sabitha Bojan with effect from
06.04.2026 and Dr. Ravindra Kumar Ray with effect official from 14.05.2026 ceased to be
Part-time Non- (Independent) Directors on completion of their term as per terms and
conditions of their appointment. 

KEY MANAGERIAL PERSONNEL

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

  

    
Sl. No. Name of Key Managerial Personnel
    
Designation
  
  

    
1. Shri Sanjay Kulshrestha
    
Chairman & Managing Director
  
  

    
2. Shri Muniappa Nagaraj
    
Director (Corporate Planning)
  
  

    
3. Shri Daljeet Singh Khatri
    
Director (Finance) and Chief Financial
    Officer 
  
  

    
4. Shri Vikas Goyal
    
Company Secretary & Compliance Officer
  
  

    
5. Shri L.V.S. Sudhakar Babu
    
Key Managerial Personnel (from 22.01.2025 to
    06.11.2025)
  

The Board placed on the record its appreciation for the valuable
services rendered by Shri Solomon Arokiaraj, as Part time Official Director and Shri
Kantilal Chaturbhai Patel, Smt. Sabitha Bojan and Dr. Ravindra Kumar Ray as Non-official 
(Independent) Directors during their tenure with the Company and
extends warm welcome to Shri Baldeo Purushartha as Part-time Official Director on the
Board of the Company.

22. SECRETARIAL AUDITORS & AUDIT REPORT

In compliance of the provisions of Section 204 of the Companies Act,
2013, and Regulation 24A of SEBI (LODR) Regulation 2015, VAP & Associates, Company
Secretaries, Secretarial Auditors have conducted Secretarial Audit for 
Financial Y 2025-26 and have in their report confirms that the Company
has complied with the provisions of the ear 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 of the Directors' Report.

23. AUDITORS & AUDITORS REPORT 
As per section 139(5) of the Companies Act, 2013, the Statutory
Auditors of your Company are appointed by Comptroller and Auditor General of India (CAG).
M/s S A R C & Associates, (Regd. no. DE2063), Chartered Accountants, New Delhi has
been appointed as Statutory Auditors of your Company for the Financial Year 2025-26 by the
CAG.
M/s S A R C & Associates, Chartered Accountants (FRN-006085N), New
Delhi, the Statutory Auditors had conducted the audit of the Financial Statements (both
Standalone and Consolidated) for the Financial Year 2025-26 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 the Auditors Report are self-explanatory.
Comments of Comptroller and Auditor General of India (CAG)


CAG vide their letter dated 17th July, 2026 has given
‘NIL comments' on the Statutory Auditors report (both standalone and
consolidated) and audited financial statements (both standalone and consolidated) for the
Financial Year 2025-26 under Section 143 of the Companies Act, 2013 and the same have been
annexed and forms part of this report.
24. ST ATUTORY DISCLOSURES 


(i) Corporate Social Responsibility Committee 
In accordance with the provisions of the Companies Act 2013, the Board
of Directors has constituted the Corporate Social Responsibility Committee of the Board.
As on 31st March, 2026, the Committee comprised Shri M. Nagaraj, Director
(Corporate Planning) as Chairman of the Committee, Shri Sanjeet, Govt. Nominee Director
and Smt. Sabitha Bojan, Independent Director as members of the Committee.
The CSR Policy and other information on CSR is available on HUDCO
Website at: http://www.hudco.org.in
The ‘Annual Report on CSR activities for Financial Year
2025-26', indicating details of expenditure which was proposed to be incurred and
expenditure incurred on CSR activities during the Financial Year, along with the reasons
for not spending the entire allocated amount for CSR activities and other information, is
attached to the Directors' report.
During the Financial Year 2025-26, an amount of Rs.57.90 Crore
(including Rs.0.01 Crore surplus amount) was to be incurred on CSR activities, of which
60% was required to be spent on CSR projects related to ‘Health and Nutrition',
the annual theme identified by DPE for the year. During the Financial Year, the Company
has spent a total of Rs.60.06 
Crore (including administrative expenses of Rs.2.89 Crore and Rs.42.58
Crore for ongoing projects approved during the Financial Year 2024-25, 2023-24 and
2022-23. Against the statutory obligation for Financial Year 2025-26, the unspent amount
i.e. Rs.32.75 Crore (including Rs.2.61 Crore disbursed to implementing agencies wherein
submission of utilization is pending), was transferred to the ‘Unspent CSR Account
Financial Year 2025-26' opened with a scheduled bank and shall be utilized in
accordance with CSR Amendment Rules, 2021 under Companies Act, 2013 as in few proposals
the implementing agencies are in process of completion of formalities for execution of the
works like 
of tender etc. and in other cases the same is to be utilized based on
the physical progress achieved in the projects. Furthermore, out of the total amount spent
during Financial Year 2025-26 as indicated above, Rs.39.49 Crore (65.75% of total CSR
Expenditure for Financial Year 2025-26) has been spent on the projects related to
‘Health and 
Nutrition', the annual theme identified by DPE for the year. Under
its CSR activities, HUDCO has supported different proposals as brought out hereunder:
• Purchase of Medical Equipment for Cancer Institute (WIA), Adyar,
Chennai, by Cancer Institute (WIA) (NonGovernmental Organisation)
• Purchase of 5 Vehicles for Solid Waste Disposal by Tura
Municipal Board
• Procurement of a Super sucker machine with one dump tank for
sewer line cleaning by Nagar Nigam, Jaipur, Greater 
• Procurement of medical Equipment for AIIMS, Bibinagar, by AIIMS
Bibinagar, Telangana
• Procurement of 14 Nos. of Auto Tippers for Door-to-Door garbage
collection in District Bundi by Nagar Parishad-Bundi 
• Provided Solar Power Pack to 20 Government Health Sub-Centres
and Solar Water heaters to 36 Government Resident Hostels in Mulugu District of Telangana 
• Project 'Vision Beyond Life: establishment of an Eye Bank' at
AIIMS, Jammu by AIIMS, Jammu
Procurement of 10 numbers of Battery-Operated Vehicles (BOVs) with
stretcher, by HUDCO Regional Office, 
Bhubaneswar, for the SCB Medical College & Hospital, Cuttack,
Odisha
• Procurement and Installation of Medical Equipment at Community
Health Centres (CHCs) at Addanki, Bapatla District and Kanigiri, Prakasam District, Andhra
Pradesh
• Proposals for Strengthening Diagnostic and Surgical Support
Services through Procurement of Digital Slide Scanner and Advanced Hemodynamic Monitoring
Platform at Gujarat Cancer and Research Institute (GCRI), Ahmedabad
• Establishment of 5 Haemodialysis Units and 1 RO plant (1000
Ltr/hr) by BSF Wives Welfare Association (BWWA) in FHQ BSF Hospital-II, Tigri Camp, New
Delhi. (Curtailed & Completed)
• Project for Collection, Transportation, and Processing of MSW
from NSG Campus - Manesar by "National Security Guard" Manesar 
Purchase of 2 Hearse (Shav Vahan) and 5 Cold Coffins in Agra, UP 
• Supply, Delivery and Fixing of CC Cameras at various locations
to deter & monitor anti-social elements and also monitoring garbage vulnerable points
in Nellore Municipal Corporation, Andhra Pradesh
Purchase of three food distribution vehicles in centralized Mid-Day
Meal Kitchen of Akshay Patra in Vrindavan, 
Uttar Pradesh
• Project for upgradation of Medical & Health Institution in
Jaisalmer District (An aspirational district) of Rajasthan by District Health Society
Jaisalmer.
Installation of Open Gym Equipment at different parks across Delhi
• Enhancement of Infrastructure and Equipment at the Comprehensive
Resuscitation Training Centre (CRTC), AIIMS, New Delhi
• Construction of a covered walkway connecting the Speciality OP
and Super Speciality Block for the transportation of patients without obstructing road
traffic at the General Hospital, Ernakulam
• Procurement of FibroScan Equipment for The Institute of Kidney
Diseases and Research Centre, Ahmedabad, Gujarat
Distribution of Aids & Assistive devices to senior citizens and
persons with disability 
• Purchase of Four Buses for the Vision Restoration Program by
Parivaar Education Society
• Procurement of 6 nos. of Shredder Machines and 8 nos. of
Electric Garbage Collection Vehicles by HUDCO for Solid Waste Management in Urban Local
Bodies (ULBs) of Himachal Pradesh.
• Construction of Health Care Park and Open Gym at Basti, Uttar
Pradesh through Nagar Panchayat Babhnan 
Bazar, Basti, Uttar Pradesh
• Support for the educational mainstreaming of 84 underprovided
marginalised children and youth of Manav Mandir Gurukul.
Procurement of Surgical Microscope and Phacoemulsification Machine for
Vivekananda Netralaya, Dehradun
• Zero Waste Model for Asiad Village, Delhi Non-Thematic
Proposals:


• Organised four Theatre Workshops with Children in the Slum Areas
of Delhi, along with the One-day Theatre Festival of plays made by the workshop
participants, by the National School of Drama (NSD)
• Project 'HUDCO Pehal - Steps Towards Inclusive Learning' -
Developing educational and other supportive infrastructure in Govt. and Govt. aided
schools, schools for children with special needs and other child care institutions
• Strengthening Wildlife Rescue Infrastructure & Habitat
Protection in Madhya Pradesh through Madhya Pradesh Tiger Foundation Samiti Further, out
of the total amount spent during Financial Year 2025-26 as indicated above, an amount of
Rs.4.72 Crore was also transferred to ‘Swachh Bharat Kosh', being the unspent
CSR fund due to closure/curtailment of the ongoing proposals of Financial Year 2022-23.

(ii) Board and its Committees

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 annexed in the
Corporate Governance Report, forming part to 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 an NBFC (IFC) registered with Reserve Bank of India. The detail with
respect to Investments made by the Company forms part of the Financial Statements for the
Financial Year 2025-26. During the Financial Year, all the existing Related Party
Transactions were on an arm's length basis and were in the ordinary course of
business. There are no materially significant related party transaction(s) made by the
Company, which may have a conflict with the interest of the Company. Further, there was no
contract or arrangement entered into by the Company as listed under Section 188 of the
Companies Act, 2013.

(iv) Annual Return

Pursuant to Section 92(3) and Section 134(3)(a) of the Companies Act,
2013, the Annual Return as at 31st March, 2026 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 5th 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 there under 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
have 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 dated 5th June, 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 notification evaluation methodology. Further, MCA vide dated 5th
July, 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. In view
of above, as per requirement of Regulation 
17(10) of the SEBI (LODR) Regulations, 2015, evaluation of Independent
Directors was not made by the Board of Directors.
Further, as per Regulation 25 (4) of the SEBI (LODR) Regulations, 2015,
the performance of the Board as a whole and non-independent director including the
Chairman & Managing Director were evaluated by the Independent Directors in a separate
meeting held on 29.01.2026. Independent Directors also assessed the quality, quantity, and
timeliness of flow of information between the Company's Management and the Board. The
meeting was attended by all the Independent Directors.

(viii) The Company is compliant with the applicable Secretarial
Standards issued by the Institute of Company Secretaries of India (ICSI).

(ix) In compliance of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, and DPE 
Guidelines on Corporate Governance, based on the affirmation received
from Board Members and Senior 
Management Personnel, declaration regarding compliance of Code of
Conduct made by the Chairman & Managing Director is annexed and forms part of 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 (Listing
Obligations and Disclosure Requirements) 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 Earning & 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 2025-26, foreign exchange inflows was Rs. NIL
(previous year Rs. ‘NIL') and foreign currency outflow was Rs.160.21 Crore
(previous year Rs.109.69 Crore).

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

(xiii) There are no significant and material orders passed by the
Regulators or Courts or Tribunals impacting the going concern 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
Bank 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 Institution is not given. (xvii)
During the year under review, the Statutory Auditors, have not reported any case of fraud
against the Company by its officers or employees under Section 143(12) of the Companies
Act, 2013.

(xviii)Compliance Function

HUDCO has an independent Compliance Function headed by Chief Compliance
Officer for ensuring effective monitoring of compliances in accordance with the statutory
and regulatory requirements. Regulatory updates are tracked to ensure timely
implementation of requisite compliances. The Company has a robust system in place for
constant monitoring of compliances with the statutory and regulatory requirements.
Structured approach is being followed for identification, assessment and mitigation of
compliance risk. With the constant monitoring and active coordination with the concerned
departments, compliance culture has been developed. The Compliance Department acts as a
nodal department for monitoring of compliances with regulatory requirements and handling
RBI Inspections.
During the year, Company has onboarded on RBI Portals - Centralized
Information Management System (CIMS) and DAKSH Portal - Reserve Bank's Advanced
Supervisory Monitoring System for submission of applicable returns and various
information/compliances.

(xix) In compliance of Office Memorandum
F.No.41034/5/2022-Estt.(Res-I) dated 24.10.2025 issued by the Ministry of Personnel,
Public Grievances and Pensions, Department of Personnel and Training read with Office 
Memorandum No. A-14011/12/2025-RESV. CELL dated 04.11.2025 issued by
the Ministry of Housing & Urban 
Affairs, Reservation Cell, Data on representation of SC, ST, OBC and
others in Government posts and services are as under i. As on 31st March, 2026,
HUDCO has a workforce of 585 employees. The category wise details of employees are as
under:

  

    
Group
    
General
    
SC
    
ST
    
OBC
    
EWS
    
Ex. Serv.
    
Total
    
Physically Handicapped*
  
  

    
A
    
291
    
82
    
36
    
97
    
4
    
0
    
510
    
6
  
  

    
B
    
4
    
1
    
0
    
0
    
0
    
0
    
5
    
0
  
  

    
C
    
6
    
3
    
5
    
3
    
0
    
0
    
17
    
0
  
  

    
D
    
22
    
15
    
9
    
7
    
0
    
0
    
53
    
1
  
  

    
Total
    
323
    
101
    
50
    
107
    
4
    
0
    
585
    
7
  

* Physically Handicapped categorization is included in their respective
categories ii. Backlog reserved vacancies filled up during the year and remaining unfilled
along with reasons - 1 SC and 2 OBC in Group A Backlog vacancy undertaken and were filled
during the year. There are 2 Backlog vacancy of OBC at present. iii. Details of Liaison
Office(s) designated by the organizations for SC/ST, OBC, PwD, EWS and Ex-servicemen, as
required in terms of instructions issued by DoPT from time to time:

  

    
Name of the Officer with Designation
    
Liaison Officer for
  
  

    
Smt. Radha Roy, Executive Director (Projects)
    
SC/ST
  
  

    
Smt. Vandana Motsara, Executive Director (HR)
    
PwD
  
  

    
Ms. Vineeta Rani, Joint General Manager
    (Projects)
    
OBC
  
  

    
Shri Prabhjot Makkar, General Manager (HR)
    
EWS
  
  

    
Shri Godwin Dan Toppo, JGM (Administration)
    
Ex-Servicemen
  

iv. Details of the Reservation Cell constituted by the organization, as
required in terms of aforementioned instructions of DoPT- The Reservation Cell has been
constituted with the following officers:
1. Shri Godwin Dan Toppo, JGM(Administration) 2. Shri Ravi Ranjan,
AGM(IT) 3. Shri Yashpal Huria, AGM(HR) 4. Shri Satbir Singh, SM(IT)

25. FUTURE OUTLOOK - MEDIUM AND LONG-TERM STRATEGIES

Powering India's Journey of Inclusive Progress Towards Viksit Bharat
2047


As India advances towards the vision of Viksit Bharat 2047,
infrastructure development is expected to remain one of the key drivers of economic
growth, social inclusion and sustainable development. The Government of India's continued
focus on infrastructure-led development is reflected in the Union Budget 2026-27, which
provides a record public capital expenditure of Rs.12.2 Lakh Crore (Budget Estimate).
Continued public investment, policy reforms and increasing participation of institutional
finance are expected to accelerate investments across housing, urban infrastructure,
transportation, water supply and sanitation, renewable energy, logistics and emerging
infrastructure sectors. As a leading NBFC-Infrastructure Finance Company (NBFC-IFC), HUDCO
is well positioned to support this transformation as key contributor to National
development through long-term financing, technical consultancy and project development
support. Building on its strong financial performance and consistent with its strategic
objective of expanding its loan book beyond Rs.3 Lakh Crore by 2030, HUDCO intends to
continue financing sustainable and inclusive infrastructure that enhances quality of life
and contributes to India's journey towards Viksit Bharat 2047. 

a) Catalysing Urban Transformation through the Urban Challenge Fund

The Government of India's continued emphasis on urban-led economic
growth through the Urban Challenge Fund 
(UCF) is expected to create significant opportunities for
infrastructure financing. With a Central Assistance outlay of Rs.1 
Lakh Crore during Financial Year 2025-26 to Financial Year 2030-31 and
a budgetary allocation of Rs.10,000 Crore in Financial Year 2026-27, the UCF seeks to
leverage nearly Rs.4 Lakh Crore of investment through market-based financing of
transformative urban infrastructure projects. By promoting financially sustainable urban
development under the pillars of Cities as Growth Hubs, Creative Redevelopment of Cities,
and Water & Sanitation, the initiative is expected to strengthen project bankability
and enhance the financial capacity of Urban Local Bodies (ULBs). Leveraging its
long-standing engagement with State Governments, ULBs and public sector agencies, HUDCO is
poised to play a pivotal role in providing long-term financing, project structuring
support and technical advisory services, thereby facilitating implementation of
reform-oriented urban infrastructure projects. 

b) Advancing Water Security and Universal Access The Government's
continued focus on expanding access to safe, regular and potable drinking water through
the Jal 
Jeevan Mission (JJM) is expected to create sustained opportunities for
financing water infrastructure. Supported by the Central Government's allocation of
Rs.67,670 Crore under JJM for Financial Year 2026-27, investments in climate-resilient
water supply systems, treatment facilities and distribution infrastructure are expected to
accelerate. 
Capitalizing its NBFC-IFC capabilities, HUDCO is strategically
positioned to provide affordable and long-term financing for water supply, sanitation and
allied infrastructure projects, thereby supporting improved public health, environmental
sustainability and inclusive development. 

c) Supporting Affordable Housing through PMAY-U 2.0

The implementation of PMAY-U 2.0, aimed at facilitating one crore
affordable houses over the next five years with an estimated investment of Rs.10 Lakh
Crore, including Central assistance of Rs. 2.30 Lakh Crore, is expected to strengthen
India's affordable housing ecosystem. Building on its more than five decades of experience
in housing finance, 
HUDCO will continue to contribute to the Government's vision of Housing
for All through gap funding/bridge finance and implementation of the Interest Subsidy
Scheme (ISS) under PMAY-U 2.0. The Corporation will also continue to utilize its technical
expertise by providing consultancy, Detailed Project Report (DPR) preparation, project
management and technical advisory services, wherever engaged. 

d) Promoting Sustainable Urban Mobility

India's continued investment in sustainable urban mobility is expected
to generate significant opportunities for infrastructure financing. The Union Budget
2026-27 provides an allocation of Rs.28,740 Crore for Metro Rail and 
Mass Rapid Transit Systems (MRTS), alongside continued investments in
Regional Rapid Transit Systems (RRTS), multimodal transport infrastructure and
transit-oriented development. With India's metro rail network continuing to expand, the
requirement for long-tenure infrastructure financing is expected to remain strong. HUDCO
is expected to play a significant role in supporting metro rail, RRTS, multimodal
transport hubs and allied urban mobility infrastructure through innovative financing
solutions, contributing to improved connectivity, reduced congestion and sustainable urban
development. 

e) Financing India's Clean Energy Transition

India's commitment to achieving 500 GW energy generation through
non-fossil fuel capacity by 2030 and Net Zero emissions by 2070 is expected to drive
substantial investments in renewable energy generation, transmission infrastructure,
energy storage and green hydrogen. Supported by policy initiatives including PM Surya
Ghar: Muft Bijli Yojana, PM-KUSUM, the National Green Hydrogen Mission and Green Energy
Corridors, the renewable energy sector is expected to remain a key growth area. Leveraging
its growing renewable energy portfolio and NBFC-IFC status, HUDCO intends to continue
supporting eligible renewable energy and clean infrastructure projects through long-term
financing solutions. 

f) Strengthening Connectivity and Emerging Infrastructure

The Government's continued emphasis on multimodal connectivity,
logistics efficiency and digital transformation is expected to expand financing
opportunities across ports, airports, inland waterways, industrial infrastructure and
logistics networks. Simultaneously, emerging sectors such as data centres, Fibre net,
Battery Energy Storage Systems (BESS), semiconductor ecosystems and AI-enabled digital
infrastructure are expected to play an increasingly important role in India's economic
growth. Subject to applicable lending policies and project eligibility, HUDCO is well
positioned to support investments across these emerging infrastructure sectors, thereby
contributing to a resilient, technology-driven and low-carbon economy. 

g) City Economic Regions (CERs)- New Opportunities for Urban
Infrastructure Financing

The announcement of City Economic Regions (CERs) in the Union Budget
2026-27 is expected to strengthen planned urbanisation and regional economic development.
With a proposed allocation of Rs.5,000 Crore per CER over five years through a challenge
mode and reform-cum-results-based financing mechanism, the initiative is expected to
accelerate investment in urban infrastructure and enhance demand for long-term project
financing, creating new opportunities for 
HUDCO to support India's urban development agenda. 

h) ESG and Sustainable Finance
As environmental, social and governance (ESG) considerations assume
greater importance in infrastructure financing, HUDCO will continue strengthening
responsible financing practices through prudent project appraisal, environmental and
social risk assessment, sound governance standards and sustainable lending practices
aligned with evolving regulatory expectations and international best practices.
Looking ahead, HUDCO remains well positioned to strengthen its role as
a leading infrastructure financing institution by capitalizing its strong institutional
legacy, diversified lending portfolio and enhanced capabilities as an NBFC-
Infrastructure Finance Company (NBFC-IFC). The Corporation will
continue to support the development of investment-ready and sustainable infrastructure
through innovative financing solutions, technical consultancy, project preparation support
and capacity-building initiatives. By facilitating investments across affordable housing,
sustainable urbanisation, water security, clean energy, urban mobility, logistics, digital
infrastructure and other priority sectors, HUDCO seeks to contribute to inclusive,
resilient and sustainable economic growth in line with the vision of Viksit Bharat 2047.
BUSINESS DEVELOPMENT ACTIVITIES 


India's journey towards achieving the vision of a developed nation
by 2047 (‘Viksit Bharat') has gained further momentum, with infrastructure
development continuing to serve as a key growth enabler. Building on sustained policy
focus in recent years, the Government of India has further reinforced its commitment
through a record capital expenditure allocation of Rs.1 Lakh Crore in the Union Budget for
FY 2025 26, reflecting a nearly fivefold increase over the past decade. 1.21
With the country targeting a USD 7 Trillion economy by 2030,
infrastructure investment requirements are projected at around Rs.150 Lakh Crore, with an
increasing share expected from private sector participation.
In line with this accelerating infrastructure push, HUDCO has
strengthened its strategic positioning to support the next phase of growth. Backed by its
stable and high-quality asset base, HUDCO has progressed from a predominantly
government-focused lending institution towards actively diversifying into new business
avenues and product offerings. With robust financial indicators, including a Provisional
Coverage Ratio and a Capital to Risk-Weighted Asset Ratio, HUDCO is well-equipped to
expand its footprint in public-private partnership (PPP) and private infrastructure
financing. This strategic shift towards a more balanced and diversified portfolio,
supported by calibrated risk-based pricing, is expected to enhance overall profitability.
Building on the strategic direction set in the previous year, wherein
the Board of Directors had accorded in-principle approval to explore infrastructure
financing in public-private partnership (PPP) and private sector projects across key
sectors such as Real Estate, Roads, Energy Transition, Seaports and Airports, HUDCO has
made significant progress during the current year in operationalizing this vision.
A major milestone during the year was the approval by the Board of
Directors of policies and appraisal framework for PPP/ Private Sector financing. The Board
approved Entity Appraisal and Project Appraisal Guidelines, enabling a structured and
robust framework for evaluating opportunities across sectors (Real Estate and Roads in
July 2025, Energy and Airports in October 2025, and Seaports in November 2025). Further,
the Board also approved the Letter of Comfort Policy (December 2025), Take-out Finance
Guidelines (December 2025), and Trust Retention Guidelines (January 2026), thereby
establishing the necessary policies for expanding HUDCO's operations in the PPP/ Private
Sector space.
Another significant achievement during the year was the execution of
Memoranda of Understanding (MoUs) worth over INR 1 Lakh Crore with various Port
Authorities, including Jawaharlal Nehru Port, Mumbai Port, Visakhapatnam 
Port, Paradip and Syama Prasad Mookerjee Port, and Sagarmala Finance
Corporation Limited for financing both new and existing projects, offered at competitive
rates to ensure long-term sustainability and viability. These partnerships showcase
HUDCO's readiness to play a leading role in large-scale infrastructure development
and demonstrate the organization's capacity to leverage its financial strengths and
policy-driven approach in catalysing growth through public-private collaboration.
During the financial year, HUDCO also formally entered the PPP/ Private
financing space and actively pursued quality lending opportunities. As a result, multiple
prospective leads were generated across sectors, culminating in the receipt of two formal
loan applications: one in the Real Estate sector with debt requirement of approximately
INR 5,000 Crore and another in the Energy sector with debt requirement of approximately
INR 991 Crore. These developments mark the successful commencement of HUDCO's lending
operations in the PPP/ Private Sector space.
Going forward, HUDCO will continue to explore and participate in
infrastructure projects. By aligning its efforts with the 
Government of India's infrastructure push and the vision of Viksit
Bharat, HUDCO aims to be at the forefront of driving inclusive and sustainable
infrastructure-led growth in the country.
URBAN INVEST WINDOW (UiWIN)


Under the guidance of the Union Ministry of 
Housing & Urban Affairs, HUDCO launched the 

‘Urban Invest Window' (UiWIN) as the one-stop facilitator
for infrastructure development of Urban Local Bodies across the country. The UiWIN was
launched by the Hon'ble Union 
Minister of Housing and Urban Affairs on 8th November, 2025
during the National Urban Conclave. Leveraging its pan-India presence, long-standing
engagement with ULBs, and expertise in urban infrastructure financing, 
HUDCO's 'Urban Invest Window' (UiWIN) is uniquely
positioned to institutionalise a structured and scalable urban infrastructure support
mechanism. Key functionalities of UiWIN, operating through HUDCO Regional 
Offices functioning as State-level UiWINs, focus on providing support
in: (i) Capacity Building of ULBs; (ii) Project Formulation; (iii) Asset Management &
Monetization; and (iv) Access to Finances for the project and financial closure. UiWIN
adopts a comprehensive, area-based and ring-fenced development approach within selected
ULBs, progressing systematically from project conceptualisation to financial closure and
on-ground implementation.
W orking closely with the State Government and the ULBs, UiWIN will
build a pipeline of bankable, investment-ready urban projects. UiWIN is perfectly aligned
with all missions of the Govt. of India for urban development, which will enable cities to
leverage the government programmes such as Urban Challenge Fund (UCF) for transformative
Growth. In addition to handholding ULBs to make projects UCF-ready as a technical agency,
HUDCO would also act as a financial intermediary, bridging ULBs with market financing as
well as being a counter-part funding agency of the State share of the Scheme. Further,
UiWIN will also design to promote collaborative project planning and implementation across
the 
City Economic Regions (CER) as well as supporting cities by unlocking
marked based financing through municipal bond and Special Infra Grant recommended by the
16th Finance Commission.
Since the launch of UiWIN in November 2025, Memorandum of
Understandings (MoUs) have been signed with IIT / IIMs as Knowledge Partners for Capacity
Building activities of ULBs as well as with ULBs / State under UiWIN for comprehensive
area-based infrastructure development. A Regional Workshop of UiWIN was organized at
Vishakhapatnam wherein 172 participants attended. A Preliminary Project Report (PPR) for
availing line of credit of USD 1 Billion, jointly from World 
Bank & Asian Development Bank, has been submitted to Department of
Economic Affairs, MoF, GoI.

26. ST ATUTORY AND OTHER INFORMATION REQUIREMENT
The particulars of annexure(s) forming part of the Directors'
Report are as under:

  

    
Particulars
    
Annexure
  
  

    
Management Discussion & Analysis Report
    
1
  
  

    
Corporate Governance Report
    
2
  
  

    
Business Responsibility & Sustainability
    Report along with Reasonable Assurance Report for BRSR Core
    
3
  
  

    
Secretarial Audit Report
    
4
  
  

    
Annual Report on CSR Activities
    
5
  
  

    
Declaration of the Code of Conduct
    
6
  
  

    
Performance Evaluation of HUDCO for MoU
    Financial Year 2025-26
    
7
  
  

    
Management Reply to comments of Statutory
    Auditors on financial statements 
    
8
  
  

    
Comments of the Comptroller and Auditor
    General of India
    
9
  


27. ACKNOWLEDGEMENT 

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.

  

    

    
For and on behalf of the Board of
    Directors
  
  

    

    
Sd/-
  
  

    

    
Sanjay Kulshrestha
  
  

    
Place : New Delhi
    
Chairman & Managing Director
  
  

    
Date : 28th July, 2026
    
(DIN: 06428038)