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Draft Letter of Offer (Private and Confidential)

For equity shareholders of the Company only

GIC HOUSING FINANCE LIMITED

(Incorporated on 12th December, 1989 under the Companies Act, 1956 as GIC Grih Vitta Limited and renamed to GIC Housing Finance Limited on 16th November, 1993. A certificate for commencement of business was

issued on 12th January 1990.) Registered and Corporate Office: Universal Insurance Building,

3rd Floor, Sir P.M. Road, Fort, Mumbai - 400 001. Tel: (022) - 2285 1765-7, (022) - 2285 3866/8 Fax: (022) - 2288 4985.

E-mail: [email protected]; website: www.gichfindia.com Issue of 2,69,25,533 Equity Shares of Rs.10 each for cash at a premium of Rs. [•] per Equity Share aggregating to Rs. [•] lacs on rights basis to the existing Equity Shareholders of GIC Housing Finance Ltd. (the “Company”/GICHFL”) in the ratio of One Equity Share for Every One Equity Share (i.e. 1:1) held as on the record date i.e. [•], 2006. The face value of the Equity Shares is Rs. 10/- per share and the Issue Price is [•] times the face value

PRICE BAND: Rs.37 TO Rs.42 PER EQUITY SHARE OF FACE VALUE OF RS. 10

GENERAL RISKS Investment in equity and equity related securities involve a degree of risk and investors should not invest any funds in this issue unless they can afford to take the risk of losing their investment. Investors are advised to read the risk factors carefully before taking an investment decision in this Issue. For taking an investment decision, investors must rely on their own examination of the Issuer and the Issue including the risks involved. The securities have not been recommended or approved by the Securities and Exchange Board of India (SEBI) nor does SEBI guarantee the accuracy or the adequacy of this document. The attention of investors is drawn to the statement of Risk Factors appearing on page nos. [•] to [•] of this Letter of Offer.

ISSUER’S ABSOLUTE RESPONSIBILITY The Issuer, having made all reasonable inquiries, accepts responsibility for, and confirms that this Letter of Offer contains all information with regard to the Issuer and the Issue, which is material in context of the Issue, that the information contained in this Letter of Offer is true and correct in all material respects and is not misleading in any material respect, that the opinions and intentions, expressed herein are honestly held and that there are no other facts, the omission of which makes this document as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect.

LISTING The Company's existing Equity Shares are listed on BSE (the designated stock exchange), NSE and CSE. The Company has passed resolution for delisting of its equity shares from CSE and MSE in its AGM on September 15, 2005 and made application for delisting to CSE & MSE. MSE vide their letter dated December 21, 2005 has granted delisting approval. Delisting approval from CSE is yet to be received by the Company. The Equity Shares to be issued through this Issue would be listed on BSE and NSE. The Company has received the in-principle approvals for listing from BSE and NSE vide their letters dated _________ and _________.

LEAD MANAGER TO THE ISSUE REGISTRAR TO THE ISSUE

IDBI CAPITAL MARKET SERVICES LIMITED 5th Floor, Mafatlal Centre, Nariman Point, Mumbai-400021 Tel: (022) 56371212 / 15 Fax (022) 2288 5850 Website: www.idbicapital.com E-mail: [email protected]

SHAREPRO SERVICES (INDIA) PVT. LIMITED Satam Estate, 3rd Floor, Above Bank of Baroda, Cardinal Gracious Raod, Chakala, Andheri (East), Mumbai-400 099. Tel: (022) 2821 5168 / 2834 8218 / 2832 9828 Fax:(022) 2837 5646 Website: www.shareproservices.com E-mail: [email protected]

ISSUE OPENS ON: [•] 2006 LAST DATE FOR RECEIVING REQUESTS FOR SPLIT FORMS [•] 2006 ISSUE CLOSES ON: [•] 2006

TABLE OF CONTENTS

Section Description Page Nos. I DEFINITION & ABBREVIATIONS Conventional /General Terms Offer Related Terms Company / Industry Related Terms Abbreviations Forward Looking Statements

II RISK FACTORS III INTRODUCTION

Industry Overview Company Overview Selected Financial Information

IV GENERAL INFORMATION Company Board of Directors Issue Management Team

V CAPITAL STRUCTURE VI PARTICULARS TO THE ISSUE

Objects of the Issue Capital Adequacy Ratio Basic Terms of Issue Basis of Issue Price Statement of Tax Benefits

VII ABOUT THE ISSUER COMPANY Industry Overview Business Overview Details of Properties of the Company Debt Profile of the Company Key Industry Regulations

VIII HISTORY & CORPORATE STRUCTURE OF THE COMPANY IX MANAGEMENT

Board of Directors & related details Compliance with Corporate Governance Management Organisation Structure Key Management Personnel

X PROMOTERS / PRINCIPAL SHAREHOLDERS XI FINANCIAL STATEMENT

Financial information Financial information of Group Companies

Management Discussion & Analysis of Financial condition and Results of Operations as Reflected in Financial Statement

XII LEGAL & OTHER INFORMATION Outstanding litigations & Material Developments Government Approvals/ Licensing Arrangements

XIII OTHER REGULATORY & STATUTORY DISCLOSURES XIV TERMS OF ISSUE

Issue Procedure General Instructions

XV OTHER INFORMATION Material Contracts

Declaration

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I. DEFINITIONS AND ABBREVIATIONS Conventional/ General Terms Act : The Companies Act, 1956 as amended

Equity Shares :

The Issued, Subscribed and Paid Up Equity Share Capital of the Company and the additional equity shares of the Company offered pursuant to the Rights Issue

Equity Shareholders : Means a holder/beneficial owner of equity shares of the GIC

Housing Finance Limited as on the Record Date i.e. [•]. Depository : A depository registered with SEBI under the SEBI (Depository and

Participant) Regulations, 1996, as amended from time to time. Guidelines / SEBI Guidelines / SEBI (DIP) Guidelines

: SEBI (Disclosure and Investor Protection) Guidelines, 2000 and subsequent amendments thereto

ISIN : International Securities Identification Number allotted by the

depository

Price Band : Being the price band of a minimum price of Rs.37 and the maximum price of Rs.42

Promoters :

General Insurance Company Limited, National Insurance Company Limited, The New India Assurance Company Limited, The Oriental Insurance Company Limited, United India Insurance Company Limited and IFCI Ltd.

Sole Lead Manager/IDBI Capital : IDBI Capital Market Services Limited Registrars / Registrars To The Issue/ Registrar And Share Transfer Agent / R&T Agents

: Sharepro Services (India) Pvt. Ltd.

Rights Issue/Issue : Present Issue of 2,69,25,533 Equity Shares of Rs. 10 each at a premium of Rs. [•] per share.

UIN : Unique Identification Number Offer Related Terms CAF : Composite Application Form Bankers to the Issue : IDBI Ltd. LOF / Letter of Offer : Letter of Offer of the Company for the Rights Issue of 2,69,25,533

Equity Shares of Rs. 10 each at a premium of Rs. [•] per share Record Date : [•], 2006 Company/ Industry Related Terms Articles or AOA : Articles of Association of the Company

Board : The Board of Directors of the Company or the Committee authorized to act on its behalf

Company/Issuer/GICHFL : GIC Housing Finance Limited Memorandum or MOA : Memorandum of Association Abbreviations Act : The Companies Act, 1956 and amendments thereto ACA : Associates of Chartered Accountants AY : Assessment Year ALM : Assets Liability Management AGM : Annual General Meeting

AS : Accounting Standard as issued by The Institute of Chartered Accountants of India

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BSE/Designated Stock Exchange : The Bombay Stock Exchange Ltd. CAF : Composite Application Form CAR : Capital Adequacy Ratio CBI : Central Bureau of Investigation CDSL Central Depository Services (India) Limited COD : Chief of Department CSE : The Calcutta Stock Exchange Association Limited DEMAT : Dematerialized (Electronic/Depository as the context may be) DP : Depository Participant DPG : Deferred Payment Guarantee DRT : Debt Recovery Tribunal EBIDTA : Earnings Before Interest Depreciation and Tax EGM : Extra-Ordinary General Meeting EMI : Equated Monthly Instalments EPS : Earnings Per Share

FEMA : Foreign Exchange Management Act 1999, and the subsequent amendments thereto

FERA : Foreign Exchange Regulation Act, 1973

FII :

Foreign Institutional Investor As Defined Under SEBI (Foreign Institutional Investors) Regulations, 1995 registered with SEBI and as defined under FEM (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000 and under other applicable laws in India

FY : Financial Year FDR : Fixed Deposit Receipt GoI / Government : Government of India GIC : General Insurance Company Ltd. GIC AMC : GIC Assets Management Company Ltd. HDFC : Housing and Development Finance Corporation HFC : Housing Finance Company HUDCO : Housing and Urban Development Corporation HUF : Hindu Undivided Family ICWA : Institute of Cost and Work Accountants IFCI : IFCI Ltd. ICICI : Industrial Credit and Investment Corporation of India IVCS : IFCI Venture Capital Fund Ltd. IT : Income Tax Act, 1961 Lead Manager to the Issue IDBI Capital Market Services Ltd. LoF : Letter of Offer MIS Management Information System New India : The New India Assurance Company Limited NHB : National Housing Bank NI : Negotiable Instrument NICL : National Insurance Company Limited NPA : Non Performing Assets NR : Non Resident NRE ACCOUNT : Non Resident External Account NRI : Non Resident Indian NRO ACCOUNT : Non Resident Ordinary Account NSDL : National Securities Depository Limited NSE : National Stock Exchange of India Limited MSE : Madras Stock Exchange OICL : Oriental Insurance Company Ltd. OCB : Overseas Corporate Bodies

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PAT : Profit after Tax

PAN/GIR No. : Income Tax Permanent Account Number/General Index Reference Number

PBIDT : Profit before Interest, Depreciation and Tax QAC : Quality Assurance & Control RI : Resident Indian RBI : Reserve Bank of India SBI : State Bank of India SEBI : Securities and Exchange Board of India SEBI (SAST) Regulations, 1997 : SEBI (Substantial Acquisition of Shares and Takeovers)

Regulations, 1997 and subsequent amendments thereto Stock Exchanges : BSE and NSE referred to collectively SUUTI : Specified Undertaking Unit Trust of India USD : United States Dollars UTI : Unit Trust of India In this Letter of Offer, all references to “Rs.” or “INR” refer to Rupees, the lawful currency of India. References to the singular also refer to the plural and one gender also refers to any other gender wherever applicable.

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Forward-Looking Statements Statements included in this Letter of Offer which contain words or phrases such as “will”, “aim”, “will likely result”, “believe”, “expect”, “will continue”, “anticipate”, “estimate”, “intend”, “plan”, “contemplate”, “seek to”, “future”, “objective”, “goal”, “project”, “should”, “will pursue” and similar expressions or variations of such expressions, that are “forward-looking statements”. Actual results may differ materially from those suggested by the forward looking statements due to risks or uncertainties associated with the Company’s expectations with respect to, but not limited to, the Company’s ability to successfully implement its strategy, its growth and expansion, technological changes, its exposure to market risks, general economic and political conditions in India which have an impact on its business activities or investments, the monetary and interest policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices, the performance of the financial markets in India and globally, changes in domestic and foreign laws, regulations and taxes and changes in competition in the industry. For further discussion of factors that could cause the Company’s actual results to differ, see the section entitled “Risk Factors” beginning on page no. [•] of this Letter of Offer. By their nature, certain market risk disclosures are only estimates and could be materially different from what actually occurs in the future. As a result, actual future gains or losses could materially differ from those that have been estimated. In accordance with SEBI requirements, the Company will ensure that investors are informed of material developments until such time as the grant of listing and trading permission by the Stock Exchanges for the equity shares being issued. Use of Market Data Unless stated otherwise, macroeconomic and industry data used throughout this Letter of Offer has been obtained from publications prepared by Government sources, industry sources and data generally available in the public domain. Such publications generally state that the information contained therein has been obtained from sources believed to be reliable but that their accuracy and completeness are not guaranteed and their reliability cannot be assured. Although we believe that industry data used in this Letter of Offer is reliable, it has not been independently verified.

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II. RISK FACTORS An investment in Equity Shares involves a high degree of risk. The investor should carefully consider all of the information provided in this Letter of Offer, including the risks and uncertainties described below, before making an investment in the Company’s Equity Shares. If any of the following risks actually occur, Company’s business, results of operations and financial condition could suffer, the trading price of the Company’s Equity Shares could decline and the investors may lose all or part of their investment. Note: Unless specified or quantified in the relevant risk factors below, we are not in a position to quantify the financial or other implications of any risks mentioned herein under: (The Letter of Offer also includes statistical data regarding the Housing Finance Industry. This data has been obtained from industry publications, reports and other sources that the Company and the Lead Manager believe to be reliable. Neither the Company nor the Lead Manager has independently verified such data.) A. INTERNAL RISK FACTORS The Company is yet to receive the confirmation from IFCI Ltd., one of the Promoters for participating in the present Rights Issue

Management Perception: Except for the above, other Promoters have given their consent to participate in the Rights Issue. IFCI’s Board Meeting is being held on January 30, 2006 and the confirmation for participation in the present Rights Issue is one of the agenda items. The Company is involved in certain legal proceedings The Company is involved in certain legal proceedings claims in relation to certain civil criminal and taxation matter incidental to the business of the Company. These legal proceedings are pending at different levels of adjudication before various courts and tribunals. Further more a claim is determined against the Company and the Company is required to pay all or a portion of disputed amount, it could have a material adverse effect on our results and operations and the cash flows. Similarly delay in recovery of bad loans and lengthy legal procedures may affect the liquidity position of the Company. Please refer to page no. __ for further details. Following transactions in the Equity Shares of the Company has been taken place by the Promoters / Promoter Group during last 6 months:

Sr. No.

Name of the shareholder No. of shares bought

No. of shares sold

Date of transaction

Price (in Rs.)

Nil 5000 05.10.05 46.86 Nil 10000 06.10.05 46.84 Nil 10000 07.10.05 46.36 Nil 10000 11.10.05 44.93 Nil 5000 13.10.05 44.99 Nil 10000 16.01.06 51.87 Nil 5000 17.01.06 51.82 Nil 5000 17.01.06 51.82 Nil 10000 18.01.06 51.38 Nil 10000 19.01.06 51.44

1 Oriental Insurance Company Ltd

Nil 10000 20.01.06 54.31

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50000 Nil 14.12.05 49.68 31382 Nil 14.12.05 49.85 23436 Nil 14.12.05 49.85 16000 Nil 15.12.05 49.89 3350 Nil 16.12.05 49.82

2. General Insurance Corporation of India

5203 Nil 20.12.05 49.70 NHB vide their Direction No. NHB-HFC.DIR.11/CMD/2005 dated October 1, 2005 increased the risk weightage for the standard individual housing loan assets from 50% to 75% due to which, CAR as on 31st March 2006 would be below the minimum stipulated level of 12% unless fresh capital will be infused. If the CAR as on March 31, 2006 would fall below the minimum stipulated level, the company would be subject to certain penalties from NHB. Management Perception: Steps are being initiated to infuse addition capital through Rights Issue to fulfill the Capital Adequacy Requirements. The Promoters of the Company and Companies promoted by the Promoters are involved in certain legal proceedings The Promoters of the Company and the Companies promoted by the Promoters are involved in certain legal proceedings and the Company can give no assurance that the legal proceedings will be decided in favour of our Promoters and the Companies promoted by them. Please refer to page no. __ for further details. Company has not been able to get updated information on the litigations as well as operations of its Promoters and the Companies Promoted by them. Management Perception: Adequate steps have been taken to obtain the necessary information form Promoters and the companies promoted by them. M/s Khandelwal Jain & Co., Chartered Accountants in their inspection report dated June 4, 2005 made the following major findings;

i. In ALM Report the mismatch arises during the time bucket of 0-3 years and 3-5 year. The Company had not explained to us as to how they are going the bridge the gap. Further the Company also does not have any policy to bridge the mismatch.

ii. In Thane branch, few of the Loans accounts have not been classified as NPA and certain accounts are wrongly classified as NPA

iii. Delay has been observed in filing of NHB returns iv. The Company does not carry out Concurrent Audit in respect of the Housing Loans provided by the

Company.

Management Perception:

i. The Company proposes to bridge short-term gap through short-term borrowings. The ALM Policy being finalized.

ii. The Recovery module and system was malfunctioning for certain period of time due to which NPA classification was done manually, lead to the crisis. However the same has since been rectified. Generation of recovery report has since been computerized for all branches.

iii. The filing of certain returns was delayed. However in the year 2004-05 all the returns were filed on time. iv. There is no Concurrent Audit carried out by the Company, however internal audit are carried out by

independent Chartered Accountant firms on quarterly basis.

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The housing finance companies, including GICHFL face Market Risk because of lack of hard data and historical performance measures to assess the real risk. This is typical of developing markets like India. Management Perception: The setting up of Credit Information Bureau of India Ltd. (CIBIL) is a step in the direction of mitigating this risk. Housing companies, including GICHFL face credit risk on account of the inherent nature of the business. Management Perception: GICHFL has a strong credit control mechanism in place with clear policies and guidelines in respect of security of any loan proposal. The effective appraisal system is in place and followed uniformly. These measures minimizes the credit risk to a great extent. GICHFL faces Asset Liability Mismatch caused due to difference in maturity profile of assets and liabilities. Assets generated by HFCs have an average tenor of 10-15 years as against this; liabilities contracted are of a lesser tenor. Management Perception: The average tenor of the Assets generated by GICHFL is 13 years, whereas funds from banks are available for a maximum tenor of 7-8 years. This is a peculiar risk faced by Housing Finance companies. The borrowing of GICHFL are largely linked to benchmarks like the PLR of banks and institutions and hence our debts is mainly floating in nature, exposing us to interest rate risk. Management Perception: The interest rate risk of the Company is minimized due to the fact that in the past 2 years around 80% of the loans disbursed has floating rate of interest. NPAs (Net) of the Company account 5.84% of the total Loans as on September 30, 2005. Any further increase in the NPA levels may affect the liquidity position of the Company adversely. Management Perception: The Company has identified loans given to builders as one of the major reasons for NPAs. Accordingly, from the financial year 2000-01, the Company has stopped sanctioning loans under this category. Currently 98% of the loan portfolio of the Company is to individual housing loan category in which the Net NPAs have reduced to 4.58% as on December 31 2005 as compared to 5.90% in March 31 2005. The Company has a contingent liability not provided for on account of three tax disputes in appeal amounting to Rs. 31. 20 lacs as on March 31, 2005. To the extent of this contingent liability becomes actual liability, it will adversely affect our results of operations and financial condition. Management Perception: The Company has already paid the said dues to the Income Tax Department and there will not be any cash outflow from the Company on account of this contingent liability. The investments made by the Company during the period 1995-1997 in equity shares (unquoted), redeemable preference shares (unquoted) and non convertible bonds worth Rs. 13785 lacs have been reduced to Rs. 139 lacs as on September 30, 2005.

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Management Perception: The Company has been writing off the investments in the books over a period of time to reflect the diminution in the value of investments. Further, as a policy the company has not been making fresh investments since 2001, except in short term money market mutual funds. The Company's name reflects that General Insurance Corporation of India (GIC) is one of the major shareholders in the Company whereas the holding of GIC in the Company is only 8.03%. Management Perception: GIC Housing Finance Limited was promoted by GIC and the erstwhile subsidiaries of GIC namely, NICL, OICL, New India and United India. GIC alongwith its erstwhile subsidiaries, was holding 33% of the equity capital in GICHFL. Subsequently the Government of India delinked NICL, OILC, New India and United India from GIC thereby diluting GICs stake in GICHFL. As a result the equity stake held by GIC was split between these entities. Hence as on date GIC only holds 8.03% equity stake while its four erstwhile subsidiaries cumulatively hold 25.91% equity stake. B. EXTERNAL RISK FACTOTRS Risk of Competition The Company faces competition from Banks and Cooperative Sector in the business who offers Housing Finance at the competitive rates. Share of Housing Finance Companies in the housing finance sector was 50.78% in 2001, which decreased to 38.58% in 2004. Whereas the share of Cooperative Sector was increased from 38.81% in 2001 to 55.70% in 2004. The housing finance industry has witnessed the entry of banks in the past few years. These banks have access to cheap funds and are therefore able to lend to customers at lower interest rates resulting in intense competition in the housing finance industry, and finer spreads. The Company specializes in providing housing finance with focus and core competence in housing finance. Banks on the other hand have banking as their main business activity and housing finance is an ancillary business for them. The housing finance industry depends on:

a) Prices in the real estate market, b) Interest rate prevalent in the market and c) Fiscal benefits provided by the Government from time-to-time.

Any changes in the above may affect the disbursements and consequently the margins of the Company. In view of the large population, the Company expects demand for housing to outstrip supply and hence any change in the above factors will not have a major effect on the Company's business. The Company has presence in semi-urban areas of the country, which present an opportunity for the Company to garner more business. Further, the Union Budget has emphasized on Housing in the Rural Sector, which provides an added avenue for generating business. Any change in the government policies may affect the performance of the company NHB vide their Direction No. NHB (ND)/DRS/REGU/DIR/01-69/2004 dated January 1, 2004 reduced the classification period of NPA from 180 days to 90 days. This will result in additional provisioning of the NPA of the HFC, which will result in decline in their profits. Further NHB vide their Direction No. NHB-HFC.DIR.11/CMD/2005 dated October 1, 2005 increased the risk weightage for the standard housing loan assets from 50% to 75% due to with the CAR of the HFC has declined. Any such further change in the policies by the government or the regulatory authority will adversely affect the performance of the Company.

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NOTES TO RISK FACTORS

Pre-issue Networth (as on 30/09/2005) Rs. 13831 Lacs Adjusted Pre-issue Net Asset Value (as on 30/09/2005) Rs. 51.41 Issue Size Rights Issue of 2,69,25,533 Equity Shares of Rs.

10/- each for cash at a premium of Rs. [•] per Equity Share aggregating Rs. [•] lacs.

2. There is no interest of Promoters/Directors/Key Management Personnel other than as stated in this Letter of

Offer. 3. No transactions of the Equity Shares of the Company has been taken place by the Promoters / Promoter Group

during last 6 months except as mentioned herein:

Sr. No.


No. of shares sold

Date of transaction

Price (in Rs.)


1. Oriental Insurance Company Ltd

Nil 10000 20.01.06 54.31 50000 Nil 14.12.05 49.68 31382 Nil 14.12.05 49.85 23436 Nil 14.12.05 49.85 16000 Nil 15.12.05 49.89 3350 Nil 16.12.05 49.82


5203 Nil 20.12.05 49.70

4. For Related party disclosures under Accounting Standard 18 issued by the Institute of Chartered Accountants of India please refer to para under ‘Related Party Transactions’ on page no. [•] of this Letter of Offer.

5. The Lead Manager and the Company shall update this Letter of Offer and keep the shareholders/public informed of any material changes till the listing and trading commencement.

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III. INTRODUCTION INDUSTRY

Industry Overview Housing is the one of the basic needs for every human being. Housing is an important component and a measure of socio–economic status of the people. It is regarded as a critical sector in terms of policy initiatives and interventions. The relevance of housing as a social need is long recognized and has therefore influenced the policy making at different levels, viz. national, state and local levels. This is reflected in the efforts of the Government undertaken to improve the housing and habitat conditions by way of financial allocations in the Five Year Plans and fiscal measures related to housing announced in the Union Budgets. In India, housing is basically a state level activity though the Central Government is responsible for the formulation of a broad policy framework for the housing sector and overseeing the effective implementation of the same. The importance of the housing sector can be judged by this fact that we consider house as the best investment and want to invest our hard earned money or saving in a house.

Housing Finance The Housing Finance Companies (HFCs) have stepped up their lending over the years contributing significantly to the growth of the housing sector, however they are still far from realising their full potential. Their strength lies in their specialised set of skills in lending exclusively for housing. The performance of the HFCs in recent years has been overshadowed by the competing banking sector with aggressive lending abilities, the relatively high cost of funds, higher regulatory capital requirement and lower degree of penetration in terms of geographical presence and market segments of the HFCs. Till June 30, 2004 there were 45 HFC’s registered with NHB. The Indian housing finance sector is crowded with players of all sizes and nature ranging from government organisations, insurance companies, banks, housing finance companies and co-operative organisations like HUDCO and NHB to others. Major players in the Industry are HDFC, LIC Housing Finance, Dewan Housing, Can Fin Homes, SBI Home Finance and Gujarat Rural Housing.

COMPANY OVERVIEW GIC Housing Finance Limited was incorporated as 'GIC Grih Vitta Limited' on 12th December 1989. The Company was issued the Certificate for Commencement of Business dated 12th January 1990. The name is changed to its present name vide fresh Certificate of Incorporation issued on 16th November 1993. The Company was formed with the objective of entering in the field of direct lending to individuals and other corporates to accelerate the housing activities in India. The primary business of GICHFL is granting housing loans to individuals and to persons/entities engaged in construction of houses/flats for residential purposes. The Company was promoted by General Insurance Corporation of India and its erstwhile subsidiaries namely, National Insurance Company Limited, The New India Assurance Company Limited, The Oriental Insurance Company Limited and United India Insurance Company Limited together with erstwhile UTI, ICICI, IFCI, HDFC and SBI, all of them contributing to the initial share capital. HDFC, SBI, ICICI and SUUTI have since sold off their holding in the Company and have ceased to be the Promoters of the Company. GIC Housing Finance Limited is in the business of providing housing finance to individuals and those into construction business. GICHFL offers the following products to its customers: Own Your Home Scheme: This scheme is perfectly suited to individual home loan borrowers, aiming to own a house. The Company offers a bouquet of options to the borrower in terms of tenure, rate of interest and value added services.

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Home loan to NRI: This product specifically caters to the needs of NRIs who want to purchase their own home in India. Generally these transactions prove to be very fruitful to the Company because of the creditworthiness of the NRI as well as the high value of the transaction. Tailor made products: The Company has designed tailor made products to suit individual needs and specifications depending on various criteria. Loans Sanctioned and Disbursement The company has cumulatively approved loans of Rs. 2781 crores comprising 76411 units upto March 31, 2005. Cumulative disbursement till March 31, 2005 stands at Rs. 2427 crores. Loans sanctioned and disbursed during the last 4 years and till the half year ended September 30, 2005 is given below:

(Rs. Lacs)

Particulars 2002 2003 2004 2005 Till half year ended September 30, 2005

Loans Sanctioned 25743 33285 55076 80461 20131 Loans Disbursed 22519 29559 44881 65923 23519 Loans Outstanding Total amount of housing finance outstanding as on September 30, 2005 is Rs. 171149 lacs. Out of the total outstanding on September 30, 2005, 98.34% is granted to individuals and 1.41% is outstanding with corporate clients. A clients wise breakup of the loans outstanding at the FY ended 2002, 2003, 2004, 2005 and as on September 30, 2005 is given below:

(Rs. lacs)

Particulars 2002 2003 2004 2005 Half year ended September 30,

2005 Individuals 64769 79604 106624 154542 168303 Corporates 5254 4494 3644 2776 2415 Others 815 660 631 500 430 Total 70838 84758 110899 157819 171149

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SELECTED FINANCIAL INFORMATION Following selected financial data have been prepared in accordance with Indian Accounting Standards, in conjunction with our financial statements and related notes and "Management's Discussions and Analysis". The audited financial statements have been prepared in Indian rupees and have been prepared in accordance with Indian Accounting Standards for the fiscal years ended 2001,2002, 2003, 2004, 2005 and six months period ending on 30th September, 2005.

GIC Housing Finance Ltd.

Statement of Profits and Losses Rs. in lacsParticulars For the Financial Year SIX MONTHS 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 30.09.2005 Income: Operating Income 9,095 9,163 9,676 9,920 12,453 7,583 Investment and other Income 85 74 77 90 108 38

Total (A) 9,180 9,237 9,753 10,010 12,561 7,621 Expenditure: Interest 6,849 7,599 7,272 6,990 7,865 4,784 Staff Expenses 153 162 199 185 236 128 Other Expenses 347 383 450 567 808 425 Miscellaneous expenses written off 6 6 5 5 10 5 Depreciation 72 56 43 40 44 23 Non-Performing assets written off 965 342 823 200 - - Provision for Non-performing assets (Net) 145 521 201 565 1,524 386

Total (B) 8,537 9,069 8,993 8,552 10,487 5,751 Net Profit Before Tax and Extra ordinary

Items (A-B) 643 168 760 1,458 2,074 1,870 Less:Taxation 210 150 235 526 856 473 Deferred Tax Assets - (102) (136) (180) (558) (124) Fringe Benefit Tax - - - - - 3 Extraordinary Items - - - - - -

Net Profit After Tax and Extra ordinary items 433 120 661 1,112 1,776 1,518

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GIC Housing Finance Ltd.

Statement of Assets and Liabilities Rs. in lacs Particulars Position as at Financial Year Ended Six Months 31-Mar-01 31-Mar-02 31-Mar-03 31-Mar-04 31-Mar-05 30-Sep-05 A Housing Loans: 62,742 70,839 84,758 110,900 157,819 171,149 Less: Provision for non performing Loans 410 693 1,061 1,562 3,086 3,451 62,332 70,146 83,697 109,338 154,733 167,698 B Fixed Assets Gross Block 584 598 617 652 666 676 Less: Depreciation 252 308 344 382 380 402 Net Block 332 290 273 270 286 274 Less: Revaluation Reserve - - - - - - Net Block after Revaluation Reserve 332 290 273 270 286 274 C Investments Cost of Investments 1,699 1,489 1,488 1,387 1,379 1,476 Less; Provision for Non Performing Inv 671 802 1,033 1,218 1,218 1,239 1,028 687 455 169 161 237 D Current Assets: Sundry Debtors (Secured) 1,395 745 826 677 320 422 Cash and Bank Balance: 1,269 2,201 1,388 1,611 1,707 1,815 Loans & Advances 3,163 3,148 3,666 4,491 4,554 5,021 Other Current Assets 311 149 98 199 93 377 6,138 6,243 5,978 6,978 6,674 7,635 Total E =A+B+C+D 69,830 77,366 90,403 116,755 161,854 175,844 F Deferred Tax Asset - 238 375 555 1,113 1,237 G Total Assets - G= A + B +C+D+F 69,830 77,604 90,778 117,310 162,967 177,081 Loan Funds, Current Liabilities and Provision

H Liabalities & Provisons Loan Funds: Secured Loans 59,276 66,435 74,375 89,521 127,022 141,694 Unsecured Loans 155 102 5,022 15,018 20,005 17,503 59,431 66,537 79,397 104,539 147,027 159,197 I Current Liabilities and Provisons 2,132 2,717 2,611 3,189 3,633 4,053 Total J =H+I 61,563 69,254 82,008 107,728 150,660 163,250

K Net Worth (K = G-J ) 8,267 8,350 8,770 9,582 12,307 13,831 Represented by: L Share Capital 1,797 1,797 1,797 1,797 2,693 2,693 M Reserves 6,486 6,563 6,978 7,785 9,652 11,172 N Misc. Expenditure not written-off 16 10 5 - 38 34

O Total = L+ M – N 8,267 8,350 8,770 9,582 12,307 13,831

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IV. GENERAL INFORMATION

GIC HOUSING FINANCE LIMITED (Incorporated on 12th December, 1989 under the Companies Act, 1956 as GIC Grih Vitta Limited and renamed to GIC Housing

Finance Limited on 16th November, 1993. A Certificate for Commencement of Business was issued on 12th January 1990.) Registered and Corporate Office: Universal Insurance Building,

3rd Floor, Sir P.M. Road, Fort, Mumbai - 400 001. Tel: (022) - 2285 1765-67, (022) - 2285 3866/8 Fax: (022) - 2288 4985.

E-mail: [email protected]; website: www.gichfindia.com Registration No. 11-54583

Address of the Registrar of Companies: Registrar of Companies Mumbai, Maharashtra. Dear Shareholder(s), Pursuant to the resolutions passed by the Board of Directors of the Company at its meeting held on December 26, 2005 and resolution passed by the shareholders in the Extra Ordinary General Meeting held on January 23, 2006, it has been decided to make the following offer to the Equity Shareholders of the Company: Right Issue of 2,69,25,533 Equity Shares of Rs.10 each for cash at a premium of Rs. [•]/- per Equity Share aggregating to Rs. [•] lacs on rights basis to the Equity Shareholders of GIC Housing Finance Limited (the “Company”/ “GICHFL”) in the ratio of One Equity Share for every One Equity Share held on the record date i.e. [•], 2006. The company has fixed the price band of Rs.37 to Rs.42, the Floor Price being Rs.37 and Cap Price being Rs.42. The Issue Price will be fixed on or before the fixation of Record Date. Statutory Declaration In the reasonable opinion of the Board, there are no circumstances that have arisen since the date of the last financial statement disclosed in the Letter of Offer, that materially or adversely affect or are likely to affect the performance or profitability of the Company or value of its assets or its ability to pay its liabilities within the next twelve months. Important 1. This Issue is applicable only to those shareholders whose names appear as beneficial owners as per the list to be

furnished by Depositories in respect of the Equity Shares held in the electronic form and on the Register of Members of the Company in respect of the Equity Shares held in physical form at close of business hours on [•], 2006, i.e. the Record Date.

2. Shareholders' attention is drawn to RISK FACTORS appearing on Page [•] of this Letter of Offer. 3. Please ensure that the CAF is received with this Letter of Offer. 4. Please read this Letter of Offer and the instructions contained therein and in the CAF carefully, before filling in

the CAF. The instructions contained in the CAF are an integral part of this Letter of Offer and must be carefully followed. Application is liable to be rejected if it is not in conformity with the terms of the Letter of Offer and/or the CAF.

5. All enquiries in connection with this Letter of Offer or CAF should be addressed to the Registrars to the Issue, Sharepro Services (India) Pvt. Ltd., quoting the registered Folio Number/DP ID/Client ID number and the Serial Number of the CAF and his/her full name and address.

6. In case the original CAF is not received, lost or misplaced by the shareholder, the Registrars/Company will issue a duplicate CAF on the request of the shareholder who should furnish the registered Folio Number/DP ID/Client ID number and his/her full name and address to the Registrars/Company. Please note that those applicants who are making the application in the duplicate CAF should not utilize the original CAF for any purpose including renunciation, even if it is received/found subsequently. In case the original and the duplicate CAFs are lodged for subscription, allotment will be made on the basis of the duplicate CAF and the original CAF will be ignored.

7. The Rights Issue will be kept open for a minimum period of 30 days. If extended, it will be kept open for a maximum period of 60 days.

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8. The Lead Manager and the Company shall make all information available to the Equity Shareholders and no selective or additional information would be available for a section of the Equity shareholders in any manner whatsoever including at presentations, in research or sales reports etc. after filing of the draft Letter of Offer with SEBI/Stock Exchange

9. The Lead Manager and the Company shall update the Letter of Offer and keep the public informed of any material changes till the listing and trading commences.

10. All the legal requirements as applicable till the filing of the Letter of Offer with the Designated Stock Exchange have been complied with.

BOARD OF DIRECTORS:

Sr. No. Name of the Director Position held 1. Mr. R.K Joshi Nominee Director 2. Mr. B Chakrabarti Non Executive Director 3. Mr. M.K Garg Non Executive Director 4. Mr. M Ramadoss Non Executive Director 5. Mr. V Ramasaamy Non Executive Director 6. Mr. Manu Chadha Independent & Non Executive Director 7. Mr. R.M. Malla Non Executive Director 8. Mr. M.K. Tandon Independent & Non Executive Director 9. Mr. B. P. Deshmukh Independent & Non Executive Director

10. Mr. Arun Datta Independent & Non Executive Director 11. Mr. N. R Ranganathan Nominee Director 12. Mr. A. K Guha Executive Director

For more details regarding our Board of Directors please refer to page no. [•] of this draft Letter of Offer. Issue Schedule ISSUE OPENS ON LAST DATE FOR RECEIVING

REQUESTS FOR SPLIT FORM ISSUE CLOSES ON

[•] 2006 [•] 2006 [•] 2006 ISSUE MANAGEMENT TEAM Company Secretary and Compliance Officer Mr. S. Sridharan Company Secretary and Asst Vice President GIC Housing Finance Limited, 3rd Floor, Universal Insurance Building, Sir P.M. Road, Fort, Mumbai - 400 001 Tel: (022) 2288 1783 Fax: (022) 2288 4985 Email: [email protected]

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Bankers to the Company Bank of India D.N. Road Branch, Sadhana Reyon House, Fort, Mumbai-400001 Tel No: (022) 2261 4878 Fax No: (022) 2261 0168 HDFC Bank Limited Motwani Chembers, Manikji Wadia Building Mumbai-400 023. Tel No: (022) 5657 3602 Fax No: (022) 2270 3392 ISSUE MANAGEMENT TEAM Lead Manager to the Issue: IDBI Capital Market Services Limited 5th floor, Mafatlal Centre, Nariman Point, Mumbai – 400 021 Tel: (022) 5637 1212 Fax: (022) 2288 5848 E-mail: [email protected] Website: www.idbicapital.com Contact Person: Mr. Saurabh Jain Registrar to the Issue: Sharepro Services (India) Pvt. Ltd. Satam Estate, 3rd Floor, Above Bank of Baroda, Cardinal Gracious Raod, Chakala, Andheri (East), Mumbai-400 099. Tel: (022) 2821 5168/2834 8218/ 2832 9828 Fax:(022) 2837 5646 Website: www.shareproservices.com Contact Person: Mr. Ashok Gupta Legal Advisers to the Issue: ANS Law Associates Advocates & Solicitors 41-A Filmcenter 68, Tardeo Road Mumbai-400 034 Tel: (022) 5660 4761/62 Fax:(022) 5660 4763 Contact Person: Mr. Sharad Abhyankar Email: [email protected]

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Bankers to the Issue: IDBI Ltd. 224, Mittal Court, A- Wing, 2nd Floor, Nariman Point, Mumbai – 400 021 Tel.: (022) 5658 8273 Fax: (022) 2288 0131 Auditors of the Company: M/s M.P. Chitale & Company Chartered Accountants 1st Floor, Hamam House, Ambalal Doshi Marg, Fort, Mumbai-400001. Tel No: (022) 2265 1186 Fax No: (022) 2265 5334 Email: [email protected] INTER SE ALLOCATION OF RESPONSIBILITIES Not Applicable CREDIT RATING This being a rights issue of Equity Shares, credit rating is not required. TRUSTEES This being a rights issue of Equity Shares, appointment of Trustees is not required. MONITORING AGENCY Not Applicable APPRAISING ENTITY Not Applicable MINIMUM SUBSCRIPTION i. If the Company does not receive the minimum subscription of 90% of the Issue, the entire subscription

amount shall be refunded to the applicants within 42 days from the date of closure of the Issue. ii. If there is a delay in refund of subscription amount by more than 8 days after the Company becomes liable to

pay the subscription amount (i.e. 42 days after closure of the Issue), the Company will pay interest for the delayed period, at rates prescribed under sub-sections (2) and (2A) of Section 73 of the Companies Act, 1956.

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V. CAPITAL STRUCTURE OF THE COMPANY

No. of shares Nominal Value

Issue Amount

A. Authorised Capital* 10,00,00,000 Equity Shares of Rs.10/- each 50,00,000 Redeemable Cumulative Participating or Non Participating Preference Shares of Rs. 100/- each

100,00,00,000/-

50,00,00,000/-

-- --

B. Issued Capital - 2,69,25,533 Equity Shares of Rs.10/- each - NIL Redeemable Cumulative Participating or Non

Participating Preference Shares of Rs. 100/- each

26,92,55,330

NIL

--

C. Subscribed and Paid-up Capital - 2,69,25,533 Equity Shares of Rs.10/- each - NIL Redeemable Cumulative Participating or Non Participating Preference Shares of Rs. 100/- each

26,92,55,330

NIL

--

D. Present Rights Issue in the ratio of one Equity Share for every Equity Share held as on [•] (Record Date) - 2,69,25,533 Equity Shares of Rs.10/- each at a premium of Rs. [•]/- per share

26,92,55,330 [•]

E. Post Issue Capital 5,38,51,066 Equity Shares of Rs.10/- each

53,85,10,660

--

F. Share Premium Account Before the Offer After the Offer

37,29,66,466

[•]

* The Company has reclassified its Authorised Capital in its AGM on September 15, 2005 from Rs. 150 crores

divided into 5,00,00,000 Equity Shares of Rs.10/- each and 1,00,00,000 Redeemable Cumulative Participating or Non Participating Preference Shares of Rs. 100/- each to Rs. 150 crores divided into 10,00,00,000 Equity Shares of Rs.10/- each and 50,00,000 Redeemable Cumulative Participating or Non Participating Cumulative Preference Shares of Rs. 100/- each.

NOTES TO CAPITAL STRUCTURE:

1. Share Capital History:

Sr. No

Date of allotment

No. of shares

Cumulative number of

Equity Share

Face Value (Rs.)

Issue Price (Rs.)

Consideration

Particulars

1 Incorporation 11 11 10 10 Cash Initial subscription to the Memorandum

2 30/03/1991 500000 5000011 10 10 Cash First Allotment 3 02/12/1993 500011 10000022 10 10 Cash Rights Issue 4 10/01/1995 8004900 18004922 10 50 Cash Initial Public Offering and

Allotment to Promoters 5 30/06/2004 (53800) 17951122 10 - - Forfeited and Cancelled 6 27/11/2004 8975561 2,69,25,533 10 16 Cash Rights Issue of one Equity Share

for every two Equity Shares held at Rs. 16 per share (including Premium)

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3. Promoters’ Contribution and Lock-in: The present issue being a rights issue, provisions of Promoters’ contribution and lock-in are not applicable. 4. Present Rights Issue:

Type of Instrument Ratio Face Value (Rs.)

No. of shares

Issue Price (Rs.)

Consideration

Equity Shares 1:1 10/- 2,69,25,533 [•] Cash 5. Shareholding pattern of the Company as on December 31, 2005 is given below:

Category No. of Shares Held % of Share Holding Promoter's Holding Promoters Indian Promoters 11370531 42.23

Sub Total 11370531 42.23 Non Promoter's Holding Institutional Investors Mutual Funds and UTI 5500 0.02 Banks, Financial Institutions, Insurance Companies 509123 1.89

FIIs 1396068 5.19 Sub Total 1910691 7.10

Others Private Corporate Bodies 3996980 14.84 Indian Public 9541487 35.44 NRIs / OCBs 105844 0.39

Sub Total 13644311 50.67 Grand Total 26925533 100.00 Notes: a) The following Promoters have communicated their intention to subscribe to their own entitlement in this

rights issue in full.

Name of the Promoter Date of Letter New India Assurance Company Limited January 13, 2006 General Insurance Corporation of India January 23, 2006 The Oriental Insurance Company Limited January 10, 2006 United India Insurance Company Limited January 25, 2006 National Insurance Company Limited January 27, 2006

b) IFCI Ltd., one of the Promoters is yet to give their consent to participate in the present Rights Issue

c) The allotment to the Promoters even if they subscribe to unsubscribed portion to the fullest extent will not

result in public shareholding falling below the permissible minimum level. Thus the provisions of Clause 17 of SEBI (Delisting of Securities) Guidelines, 2003 are not applicable.

7. The Company has not issued any warrant, option, convertible loan, debenture or any other securities

convertible at a later date into equity, which would entitle the holders to acquire further equity shares of the Company.

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8. The Equity Shares of the Company are being traded in compulsory dematerialised mode. The market lot of the equity shares is 1 (one).

9. No transactions of the Equity Shares of the Company has been taken place by the Promoters / Promoter

Group during last 6 months except as mentioned herein:

Sr. No.


No. of shares sold

Date of transaction

Price (in Rs.)


1 Oriental Insurance Company Ltd

Nil 10000 20.01.06 54.31 50000 Nil 14.12.05 49.68 31382 Nil 14.12.05 49.85 23436 Nil 14.12.05 49.85 16000 Nil 15.12.05 49.89 3350 Nil 16.12.05 49.82


5203 Nil 20.12.05 49.70

10. The ten largest shareholders two years prior to the date of filing of this Letter of Offer with Stock Exchanges are as follows:

Sr. No.

Name of the Shareholders Number of Equity Shares

Percentage of shareholding (%)

1. IFCI Ltd. 1575000 8.74% 2. National Insurance Company Ltd. 1197000 6.64% 3. The New India Assurance Company Ltd. 1197000 6.64% 4. The Oriental Insurance Company Ltd. 1197000 6.64% 5. United Indian Insurance Company Ltd. 1197000 6.64% 6. General Insurance Corporation Ltd. 1071422 5.95% 7. SU UTI 985793 5.47% 8. CD Equisearch Pvt. Ltd. 558630 3.10% 9. EXIM Scrip Dealers Pvt. Ltd. 289901 1.61%

10. UTI – SUS 1999 164716 0.91%

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11. The ten largest shareholders as on 10 days prior to the date of filing of the Letter of Offer with Stock Exchanges are as follows:

Sr. No.


Percentage of shareholding

(%) 1. IFCI Ltd. 2200000 8.17% 2. General Insurance Corporation Ltd. 2162769 8.03% 3. The New India Assurance Company Ltd. 1936750 7.19% 4. United Indian Insurance Company Ltd. 1886750 7.01% 5. The Oriental Insurance Company Ltd. 1597512 5.93% 6. National Insurance Company Ltd. 1586750 5.89% 7. Caledonia Investments Plc 1336068 4.96% 8. Tata Investment Corporation Ltd. 665400 2.47% 9. CD Equifinance Pvt. Ltd. 642000 2.38%

10. Dilip B. Desai 316480 1.17%

12. The ten largest shareholders as on the date of filing of the Letter of Offer with Stock Exchanges are as follows:

Sr. No.


Percentage of shareholding

(%) 1. IFCI Ltd. 2200000 8.17% 2. General Insurance Corporation Ltd. 2162769 8.03% 3. The New India Assurance Company Ltd. 1936750 7.19% 4. United Indian Insurance Company Ltd. 1886750 7.01% 5. National Insurance Company Ltd. 1586750 5.89% 6. The Oriental Insurance Company Ltd. 1567512 5.82% 7. Caledonia Investments Plc 1336068 4.96% 8. Tata Investment Corporation Ltd. 665400 2.47% 9. CD Equifinance Pvt. Ltd. 642000 2.38%

10. Dilip B. Desai 316480 1.17% 13. The Company/Promoters/Directors/Lead Merchant Bankers have not entered into buyback or similar

arrangements for purchase of securities issued by the Company. 14. IDBI Capital Market Services Ltd., Lead Manager to the Issue is holding 140267 Equity Shares of the

Company amounting to 0.52% of the total Pre-Issue Capital of the Company as on December 31, 2005. IDBI Capital Market Services have not traded in the Equity Shares of the Company after its appointment as the Lead Manager to the Issue.

15. The entire price of Rs. [•]/- per share is payable on application. Since the shares allotted will be fully paid –

up at the time of allotment, the Forfeiture Clause of SEBI (DIP) Guidelines will not be applicable to the Equity Shares being allotted in terms of this Letter of Offer.

16 The Company has not availed of “bridge loans” to be repaid from the proceeds of the Issue, for incurring

expenditure on the Objects of the Issue. 17. The present Rights Issue is being made in the ratio of one equity share to every one equity share held (ie,

1:1) and will not lead to creation of fractional entitlement. 18. The total number of shareholders as on the date of filing the Letter of Offer with the stock exchange is

24175.

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19. At any given time there shall be only one denomination for the shares of the Company and the disclosures and accounting norms specified by SEBI from time to time will be complied with.

20. The Company shall not make any further issue of capital whether by way of issue of bonus shares,

preferential allotment, rights issue or public issue or in any other manner during the period commencing from the submission of the Letter of Offer to SEBI for the Rights Issue till the securities referred in the Letter of Offer have been listed or application money refunded on account of failure of the Issue.

21 The Company does not propose to alter the capital structure by way of split or consolidation of the

denomination of the shares or the issue of shares on a preferential basis or issue of bonus or rights or further public issue of shares or any other securities within a period of six months from the date of opening of the present Issue.

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VI. PARTICULARS OF THE ISSUE OBJECTS OF THE ISSUE The main object of the offering is:

1. To strength Capital Adequacy norm as specified by National Housing Bank 2. To meet the Issue expenses

Capital Adequacy Ratio (CAR) As per the NHB Housing Finance Company Direction, 2001 dated 27th September 2001, every Housing Finance Company shall maintain a minimum Capital Adequacy Ratio (CAR) of 12%. The Capital Adequacy Ratio of GICHFL as on 30th September 2005 is 13.14%. NHB vide their Direction No. NHB-HFC.DIR.11/CMD/2005 dated October 1, 2005 increased the risk weightage for the standard individual housing loan assets from 50% to 75%. The CAR as on 31st March 2006 would be below the minimum stipulated level of 12% unless fresh capital will be infused. In view of the additional business and to maintain the CAR above the minimum stipulated level of 12%, infusion of fresh capital is required. Particular of the CAR for last five years is given below: (Rs. in lacs) Year Ended March 31st 2001 2002 2003 2004 2005 Eligible Tier I Capital 8267 8350 8771 9583 11194 Eligible Tier II capital - - - - - Total Capital 8267 8350 8771 9583 11194 Total Risk Adjusted Assets 72045 66904 59038 75783 91041 Capital Adequacy Ratio (%) 11.47 12.48 14.85 12.64 12.30 Meet the Issue Expenses The expenses of the Issue include payment of fees for the Lead Manager, other Intermediaries, printing and other Issue expenses, Legal Fees, advertisements expenses and listing fees payable to the Stock Exchanges amongst others: The expenses of the Rights Issue to be incurred by the Company are estimated to be around Rs. 79.50 lacs as detailed below:

Particulars Rs. In Lacs Fees for the Lead Manager 25.00 Fees for the Registrar to the Issue 1.70 Fees to Legal Advisor to the Issue 5.00 Fees to auditors to the Issue 0.30 Additional listing fees for Stock Exchanges 1.00 SEBI Filing Fees 2.50 Corporate Action Fees 1.25 Statutory Advertisement Expenses 7.50 Printing of Offer Documents 5.25 Printing of CAF 0.25 Postage Charges 18.00 Printing of Share Certificate 0.50 Other Expenses 1.25 Stamp Duty 10.00 Total 79.50

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Means of Finance and Deployment of funds The funds of Rs. [•] raised by the Company through the proposed Rights Issue will be deployed as under:

Particulars Rs. In Lacs Housing Finance Activities [•] Issue Expenses [•] Total [•]

BASIC TERMS OF ISSUE The Equity Shares now being offered are subject to the terms of this Letter of Offer, the CAF, the Memorandum and Articles of the Company, approvals under the Foreign Direct Investment scheme of Government of India, FEMA, if applicable, Guidelines issued by SEBI, the Act, the guidelines, notifications and regulations for the Issue of capital and for the listing of securities issued by the Government and/or other Statutory Authorities and bodies from time to time and such terms and conditions as may be incorporated in the Letter of Allotment/Share Certificate or any deed or document executed by the Company regarding the Rights Issue. The principal terms and conditions of the Issue are as follows: i. Present Issue: Rights Issue of 2,69,25,533 equity shares of Rs. 10/- each in a ratio of 1:1 ii. Face Value: Each Equity Share shall have a face value of Rs.10/-. iii. Issue Price: Rs. [•]/- per Share. The company has fixed the price band of Rs.37 to Rs.42, the Floor Price being Rs.37 and Cap Price being Rs.42. The Issue Price will be fixed on or before the fixation of Record Date.

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BASIS OF THE ISSUE PRICE Qualitative Factors Profit making and dividend paying Company since 1995 Quantitative Factors 1. Earning per Share (EPS)

Financial Year EPS (Rs.)

Weight used

2002-03 3.67 1 2003-04 6.17 2 2004-05 7.60 3 Weighted Average 6.47

2. Price Earnings Ratio (P/E Ratio) Price Earning Ratio at EPS for the financial period ended March 31, 2005 based on the price of January 16, 2006

6.84

3. Industry P/E

Highest 27.2 Average 23.3 Lowest 4.3

(Source: Capital Market Vol. XX/22 Jan 02 to Jan. 15, 2006 Segment: Finance - Housing) 4. Return on networth

Financial Year Return on Net Worth (%)

Weight used

2002-03 7.54% 1 2003-04 11.61% 2 2004-05 14.44% 3 Weighted Average 12.34%

5. Net Asset Value (NAV) per share

As on 30/09/2005 (Rs.) 51.41 After the issue based on 30th September, 2005 results [•] 6. Minimum Return on Networth after Issue required for maintaining Pre-Issue EPS of Rs. 7.60 EPS Minimum Return of Networth after

Issue Rs. 7.60 [•]

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7. Peerset Analysis There are few companies is in the same line of business as GICHFL. A comparison with some of the Housing Finance Companies is as follows:

(Figures as on March 31, 2005) Name of the Company Income

(Rs. In Lacs)

PAT (Rs. In Lacs)

Equity (Rs. In Lacs)

EPS (Rs.)

P/E (x)

Price as on 27/12/2005

LIC Housing Finance Ltd. 106870 14370 8499 16.2 10.1 196.45 Dewan Housing Finance Ltd. 16380 2710 5109 5.0 9.6 64.50 GIC Housing Finance Ltd. 12560 1776 2693 7.6 5.6 55.05 Can Fin Homes 12730 2110 2050 10.0 4.4 52.70 GRUH Finance 8550 1670 2650 6.0 10.9 86.90 (Source: Capital Market Vol. XX/22 Jan 02 to Jan. 15, 2006 Segment: Finance Housing, Company Data and BSE)

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TAX BENEFITS TO THE COMPANY AND ITS SHAREHOLDERS The Company has received tax benefit certificate from M/s M. P. Chitale & Co, Chartered Accountants specifying the tax benefits available to the Company and its shareholders under the Direct Tax Laws. The contents of the same are given below. Unless otherwise specified, sections referred to are sections of the Income Tax Act, 1961. To the Company A Under the Income Tax Act, 1961 1. In accordance with and subject to the provisions of Section 112 of the Income Tax Act, 1961, long term

capital gain accruing to the Company will be subject to tax as stated below instead of normal rate of 35% (plus applicable surcharge) applicable to the Company.

(a) If long term capital gain is computed with indexation @ 20% (plus applicable surcharge) (b) If long term capital gain is computed without indexation @ 10% (plus applicable surcharge)

The Company is eligible to claim exemption in respect of tax on long term capital gains u/s. 54EC and

54ED if the amount of capital gains is invested in certain specified bonds / securities subject to the fulfillment of the conditions specified in those sections.

2. The Company is not liable to pay long term capital gains tax in respect of shares of the company held by

then for a period of more than twelve months by virtue of Section 10(38) of the Act, subject to the fulfillment of the following conditions:

(a) The transaction of sale of such equity share is entered into on or after 1 October, 2004. (b) The transaction is chargeable to securities transaction tax under Chapter VII of the Finance (No.2)

Act, 2004. 3. Short term capital gains arising on transfer of equity shares of a company would be liable to tax at the rate

of 10% (plus applicable surcharge and education cess) by virtue of Section 111 A if the following conditions are satisfied:

(a) the transaction of sale of such equity share is entered into on or after 1 October, 2004. (b) the transaction is chargeable to securities transaction tax under Chapter VII of the Finance (No.2) Act,

2004. 4. Benefits of unabsorbed business/ long term capital losses and allowances

Company has unabsorbed losses/ allowances under the Act, which can be carried forward for set off against the income under the Act of future years as under: (i) As per Section 72 of the Act, Company can carry forward the unabsorbed business losses for a

period of eight assessment years immediately succeeding the assessment year in which the loss was first computed.

(ii) As per Section 32 of the Act, Company can carry forward the unabsorbed depreciation allowance of earlier years for an indefinite period to be set off against business income under the Act of future years.

(iii) As per Section 74 of the Act, Company can carry forward the unabsorbed long term capital losses for a period of eight assessment years immediately succeeding the assessment year in which the loss was first computed to be set off against long term capital gains under the Act of future years.

5. The Company is entitled to a deduction of 40% of its profits from the business of providing long term

finance u/s 36(1) (viii) of the Income-tax Act, 1961. The said deduction is subject to the condition that the Company is required to create and maintain a special reserve to the extent of the deduction. If the aggregate amount carried to such reserve exceeds twice the amount of the paid up share capital and general reserves of the Company, the deduction is restricted to such amount only.

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6. Dividend Income received from Domestic Companies is exempt under section 10(34) of the Income-tax

Act, 1961. 7. In accordance with and subject to the provisions of Section 10(35) of the Act, the following income shall be

exempt in the hands of the Company:

(i) Income received in respect of the units of a Mutual Fund specified under Clause (23D) of Section 10 of the Act; or

(ii) Income received in respect of units from the Administrator of the specified undertaking; or (iii) Income received in respect of units from the specified company.

Under Wealth Tax Act, 1957 The Company is liable to pay wealth tax as per the provisions of Wealth Tax Act, 1957 at the rate of 1% in respect of certain assets owned by the Company, subject to the basic exemption of Rs.15 lacs. To the Resident Members of the Company B. Under the Income Tax Act, 1961 1. Dividend Income received from Domestic Companies is exempt under section 10(34) of the Income-tax

Act, 1961.

2. The shareholders are not liable to pay long term capital gains tax in respect of shares of the company held by then for a period of more than twelve months by virtue of Section 10(38) of the Act, subject to the fulfillment of the following conditions: (a) The transaction of sale of such equity share is entered into on or after 1 October, 2004. (b) The transaction is chargeable to securities transaction tax under Chapter VII of the Finance (No.2)

Act, 2004. Proviso to the section specifies that in case of individual and HUF, where the total income as reduced by such short term capital gains is below the maximum amount not chargeable to tax, then such short term capital gains shall be reduced by the amount by which the total income as so reduced falls short of the maximum amount which is not chargeable to tax and the tax on the balance of such short term capital gains shall be computed at the rate of ten percent.

3. Short term capital gains arising on transfer of the company’s shares would be liable to tax at the rate of 10% (plus applicable surcharge and education cess) by virtue of Section 111 A if the following conditions are satisfied: (a) the transaction of sale of such equity share is entered into on or after 1 October, 2004 (b) the transaction is chargeable to securities transaction tax under Chapter VII of the Finance (No.2)

Act, 2004. Further, the public issue of shares of the Company would also qualify as an eligible issue of capital and long term capital gains would qualify for the benefit of Section 54ED of the Act if the capital gains are invested in shares of the Company.

Under Wealth Tax Act, 1957 Shares held in Domestic Company are not “asset” under the Wealth-Tax Act 1957, hence not liable to wealth tax in the hands of the holder of the said shares

20

To The Non-Resident Members Of The Company C. Under the Income Tax Act, 1961 1. Under Section 115E of the Act, where shares in the company are acquired or subscribed for in convertible

foreign exchange by a Non Resident Indian, capital gains arising to the non-resident Indian on transfer of shares held for a period exceeding 12 months, shall, of the Act, be concessionally taxed at the rate of 10% (plus applicable surcharge and education cess). (Reference may also be made to the provisions of Section 115D of the Act).

2. Under section 115F of the Income Tax Act, 1961 the Long Term Capital gain as referred to in 1 above shall

be exempted from income tax entirely / proportionately if he/she invest all or a portion of the net consideration in specified assets as defined in section 115C (f) of the Income Tax Act, 1961 within 6 months of the date of transfer. The amount so exempted shall, however, be chargeable to tax under the provisions of section 115F(2) if the specified assets are transferred or converted in to money within three years from the date of acquisition thereof as specified in the said section.

3. Under provisions of Section 115G of the Act, it shall not be necessary for a Non-Resident Indian to furnish

his return of Income if his only source of income is investment income or long term capital gains or both arising out of assets acquired, purchased or subscribed in convertible foreign exchange and tax deductible at source has been deducted there from.

4. As per Section 115-I of the Act, a non-resident Indian (i.e. an individual being a citizen of India or person of

India origin who is not a “resident”) elects not to be governed by the provision of Chapter XII-A of the Income Tax Act, 1961, than his/her total income shall be computed and charged in accordance with other provisions of the Act.

5. By virtue of Section 10(34) of the Act, income earned by way of dividend income from domestic company

referred to in Section 115-O of the Act, are exempt from tax in the hands of the shareholders. 6. Where any Double Taxation Avoidance Agreement [DTA] entered into by India with any other country

provides for a concessional tax rate or exemption in respect of income from the investment in the company’s shares, those beneficial provisions shall prevail over the provisions of the Income Tax Act, 1961 in that regard.

Under Wealth Tax Act, 1957 Share held in Domestic Company are not “asset” under the Wealth-Tax Act 1957, hence not liable to wealth tax in the hands of the holder of the said shares To The Foreign Institutional Investors (FII's) D. Under the Income Tax Act, 1961 1. Under Section 115AD (1)(b)(ii) of the Act, Income by way of Short Term Capital Gain arising from the

transfer of shares held in the Company for a period of less than twelve months will be taxable @ 30% (plus applicable surcharge).

2. Under Section 115AD (1)(b)(iii) of the Act, Income by way of Long Term Capital Gain arising from the transfer of shares held in the Company will be taxable @ 10% (plus applicable surcharge)

3. Income by way of dividend received on shares of the Company is exempt u/s. 10(34) of the Income Tax Act, 1961."

4. Where any Double Taxation Avoidance Agreement [DTA] entered into by India with any other country provides for a concessional tax rate or exemption in respect of income from the investment in the company’s shares, those beneficial provisions shall prevail over the provisions of the Income Tax Act, 1961 in that regard.

21

Notes:

i. All the above benefits are as per the current tax laws as amended by the Finance Act, 2005. ii. The current position of tax benefits available to the company and to its shareholders is provided for

general information purposes only. In view of the individual nature of tax consequences, each investor is advised to consult his/ her own tax advisor with respect to specific tax consequences of his /her participation in the issue.

iii. The tax benefits listed above are not exhaustive and are based on information explanations and representations obtained from the Company and on the basis of our understanding of the business activities and operations of the company. While all reasonable care has been taken in the preparation of this opinion, M. P. Chitale & Co. accepts no responsibility for any errors or omissions therein or for any loss sustained by any person who relies on it.

iv. Unless otherwise specified, sections referred to are sections of the Income Tax Act, 1961 (the Act). M. P. Chitale & Co Chartered Accountants Place: Mumbai Date: January 25, 2006

22

VII. ABOUT THE ISSUER COMPANY INDUSTRY OVERVIEW Housing is the one of the basic needs for every human being. Housing is an important component and a measure of socio–economic status of the people. It is regarded as a critical sector in terms of policy initiatives and interventions. The relevance of housing as a social need is long recognized and has therefore influenced the policy making at different levels, viz. national, state and local levels. This is reflected in the efforts of the Government undertaken to improve the housing and habitat conditions by way of financial allocations in the Five Year Plans and fiscal measures related to housing announced in the Union Budgets. In India, housing is basically a state level activity though the central government is responsible for the formulation of a broad policy framework for the housing sector and overseeing the effective implementation of the same. The importance of the housing sector can be judged by this fact that we consider house as the best investment and want to invest our hard earned money or saving in house. Current Scenario Housing India’s total population of 102.86 crore as per Census of India, 2001, consists of 19.20 crores households residing in 18.72 crores housing units. It may be observed therein that the average number of persons per house in urban area has declined continuously from 6.06 in 1951 to 5.50 in 2001. On the contrary, the scenario in rural sector has been somewhat fluctuating. The figure was 5.52 in 1951, which increased to 6.03 in 1981, but declined to 5.50 in 2001. Occupancy i.e., the number of persons per house, in both the urban and rural areas has become almost equal by 2001. The percentage of pucca houses in urban areas increased from 64.0 percent in 1971 to 74.8 percent in 2001, whereas the percentage of semi-pucca and kutcha houses in the urban areas has declined during this period. The percentage of pucca houses in rural areas increased from 18.5 percent in 1971 to 35.4 percent in 2001. In absolute terms the number of pucca houses in rural areas has increased from 33.34 million units in 1991 to 47.48 million by the year 2001. This implies that use of permanent building materials for the construction of walls and roofs is becoming more popular in rural areas also. The tendency to own a house has shown an increasing trend among the urban households. The percentage of houses owned by the rural households is above 95 percent. A percentage wise tenure status in urban and rural areas are given below:

Particulars 1961 1971 1981 1991 2001 Urban Owned 46.2 47.1 53.5 65.9 71.5 Rented 53.8 52.9 46.5 34.1 28.5 Rural Owned 93.6 93.8 93.0 94.5 95.4 Rented 6.4 6.2 7.0 5.5 4.6

Source: Census of India

Housing Finance The Housing Finance Companies (HFC) have stepped up their lending over the years contributing significantly to the growth of the housing sector, however they are still far from realising their full potential. Their strength lies in their specialised set of skills in lending exclusively for housing. The performance of the HFCs in recent years has been overshadowed by the competing banking sector with aggressive lending abilities, the relatively high cost of funds, higher regulatory capital requirement and lower degree of penetration in terms of geographical presence and market segments of the HFCs. Till June 30, 2004 there were 45 HFC’s registered with NHB. The Indian housing finance sector (the sector) is crowded with players of all sizes and nature ranging from government organisations, insurance companies, banks, housing finance companies and co-operative organisations

23

like HUDCO and NHB to others. Major players in the Industry are HDFC, LIC Housing Finance, Dewan Housing, Can Fin Homes, SBI Home Finance and Gujarat Rural Housing. Though the sector has been witnessing increased competition, there is scope for contribution from all institutions active in housing finance. Cost of funds notwithstanding, efficient customer servicing is emerging as the cutting edge in the industry. The sector has witnessed increased awareness among the borrower community about the industry practices and there are increased expectations about transparency and information disclosures from the perspective of depositors as well as borrowers. With these developments, the market is expected to mature further with the businesses becoming more robust and stable. The housing finance companies have also been resorting to securitisation as a measure to improve their Liquidity, Capital Adequacy, and better Asset-Liability Management. As a funding source, the HFCs have availed refinance from NHB, mostly under the Liberalised Refinance Scheme (introduced by NHB with effect from April 2002) customized to the market demand. The aggregate housing loans outstanding (comprised of housing loans outstanding of HFCs, Banks, and Co-operative Sector) as on March 31, 2004 was 153219.12 crores. The graphical break of the same is as below:

0100002000030000400005000060000700008000090000

2001 2002 2003 2004

Years

(Rs.

Cro

res)

HFCsBanks Cooperative Sector

Source: Report on Trends and Progress of Housing in India – June 2004 The aggregate outstanding housing loans of HFCs, which were Rs.49,238 crores as on March 31, 2003 increased by 20.1 per cent and stood at Rs.59,111 crores as on March 31, 2004. Term wise housing loans outstanding of HFCs for 2003-2004 is given below: (Rs. Crores)

Term of Housing Loans 2002-2003 % of total 2003-2004 % of total Upto 1 year 2695.31 5.5% 4089.14 6.9% 1 to 3 Years 4670.82 9.5% 7849.98 13.3% 3 to 5 Years 4510.48 9.2% 6839.28 11.6% 5 to 7 years 4620.91 9.4% 4910.42 8.3% Above 7 years 32740.45 66.5% 35422.62 59.9% Total 49237.97 100% 59111.44 100%

Source: Report on Trends and Progress of Housing in India – June 2004 Assets Quality of Housing Finance Companies Out of 45 registered HFCs there were 30 HFCs having asset base of Rs. 10 crore and more as on June 30, 2004. The proportion of gross NPAs to total assets of these companies increased from a level of 2.23% as at March 31, 2002 to 2.39% as on March 31, 2003, which further increased to 4.45% by March 31, 2004.

24

Demand in Industry

In response to the high population growth, rapid urbanization and economic growth and changing sociological patterns, housing demand has been growing explosively in India. According to the Tenth Five Year Plan (2003-07) the investments required for the housing sector was estimated at Rs. 7,26,300 crore and it has been estimated that not more than 44% of this would flow from Banks and HFCs. Strength There has been no dearth of demand for housing and consequently for finances for the same have been abundant. Tax sops provided by the Government of India is a significant step towards upholding the future prospects of this industry. Critical success factors Housing Finance industry is facing tough competition from banks and witnessing declining spread (for HFCs). Hence, the players should have sustainable advantages to remain profitable in the long-term.

a) Cost of Funds

Cost of funds is the most crucial determinant of profitability for HFCs in the housing finance business. After the entry of banks in this business, which have access to low cost deposits, the spread of the HFCs has come under pressure.

b) Intermediation cost

Intermediation cost or cost of operation is also critical in determining the profitability, more importantly from the point of view of HFCs. The average intermediation cost of HFCs ranges from 0.7 per cent to 1 per cent of average total assets (one time cost). Banks are also expected to have the average operating cost for housing finance operation in similar range.

c) Management of NPAs

The average gross NPA of the industry is estimated at around 2-2.5 per cent of outstanding portfolio. However, within the industry, the NPA levels vary from less than 1 per cent to 7 per cent. With declining spreads, one of the crucial factors determining the profitability of HFCs will be the management of NPAs and their recovery. Hence, credit appraisal mechanism and recoveries will assume significant importance.

d) Product features

Housing Finance industry is being increasingly commoditised. Features like adjustable rate plans, lower processing fees, monthly rest, low interest rates, low EMI, lower margin money, have become common across the industry. As a result, loan products can be differentiated by offering free add-ons. However, in future, add-ons may not remain the differentiating factor for the products.

To make the loan products more attractive, finance companies have also begin to include the cost of registration, stamp duty, society charges and other associated costs while sanctioning loans. This has further lowered the threshold limit for purchasing a house.

e) Distribution reach Distribution reach is critical for HFCs for deposit mobilization as well as loan disbursements. HDFC, the largest player, had the maximum reach across the nation. The company has extension counters at several companies as well as loan desks at HDFC Bank branches. Banks enjoy a distinct advantage over the Housing Finance Companies in terms of having a branch presence across the country. However, most banks (except private sector banks and some nationalized banks) lack a clear focus on home loan product.

25

Threat in the Industry Market dynamics play a pivotal role in determining the lending rates. The entry of banks into the housing finance sector has posed a serious threat to already existent players in the field. Key issues affecting the Profitability of HFCs in the long term, the profitability of the housing finance industry will depend on the certain issues such as:

a) Declining Spreads

The spreads in the business have declined significantly after the aggressive entry of banks in direct lending. Banks have the advantage of lower cost of funds due to access to retail deposits. As a result, they have been aggressively cutting the interest rates on housing loans. Apart from lower interest rates banks offer lower or no processing fees (processing fees accounts for a large portion of administration cost of HFCs), monthly or daily rest loans and lower pre-payment charges, which affects the yields of the housing finance industry. In the medium term, the pressure on housing finance spread is expected to increase as banks are expected to compete on interest rates with the HFCs for increasing their market share.

b) Pre-payment Pre-payment is undertaken largely on the higher yield loans when the interest rates are on a downward trend, due to refinancing of the outstanding loan amount by another HFC / Bank. This erodes the portfolio of the HFCs. Pre-payment results into a lower than expected profitability for a Housing Finance Company. Pre-payment penalty is largely applicable on the fixed rate loans while, adjustable rate loans have zero pre-payment charge.

Industry Outlook Demand for housing loan, particularly for big ticket ones, is likely to go up. The home loan rates, though they inched up 0.50%-0.75% since last year, are still ruling lower than what they were five years ago. Property prices, meanwhile, have climbed up steeply resulting in a decline in rental income return to 5-6% per annum at present. However, capital appreciation at 10-15% per annum still looks strong on the back of a buoyant market. The home loans market grew more than 30 per cent in the Financial Year ended 2005 and expected to maintain the current growth rate in the next few years. The growth in the housing sector will be aided by an increase in jobs in service sectors such as information technology and banking. The service sector is growing and people in this sector are investing in houses. Cities such as Bangalore, Hyderabad, Gurgaon, Noida and Pune will see higher growth, apart from the metros. The home loan boom, which began three years ago, is likely get a further boost through Budget proposals. The thrust on infrastructure is another positive that will indirectly help housing loans. Another added attraction has been the reduction of stamp duty rates by several States. Relaxing the norms for Foreign Direct Investment in real estate will also help the housing sector. The Foreign Direct Investment in real estate sector is 100% through Automatic Route. This will provide easy entry for foreign developers and will lead to an increased supply of residential and commercial establishments. In future, the ability to foreclose defaulting mortgage assets will become a key competency for profitability in Housing Finance markets. HFCs and banks are increasingly looking at smaller towns for growth. The average loan size in these towns tends to be lower and yields marginally higher due to low competition. However, the cost of foreclosure (attaching the defaulters house property and recovering through sale) in these centres may be high. As a result, credit management (appraisal, checking and recovery) skills will be of critical importance in future.

26

BUSINESS OF THE COMPANY GIC Housing Finance Limited was incorporated as 'GIC Grih Vitta Limited' on 12th December 1989. The Company was issued the Certificate for Commencement of business dated 12th January 1990. The name has been changed to its present name vide fresh Certificate of Incorporation issued on 16th November 1993. The Company was formed with the objective of entering in the field of direct lending to individuals and other corporates to accelerate the housing activities in India. The primary business of GICHFL is granting housing loans to individuals and to persons/entities engaged in construction of houses/flats for residential purposes. The Company was promoted by General Insurance Corporation of India and its erstwhile subsidiaries namely, National Insurance Company Limited, The New India Assurance Company Limited, The Oriental Insurance Company Limited and United India Insurance Company Limited together with erstwhile UTI, ICICI, IFCI, HDFC and SBI, all of them contributing to the initial share capital. HDFC, SBI, ICICI and SUUTI have since sold off their holding in the Company and have ceased to be the Promoters of the Company. GIC Housing Finance Limited is in the business of providing housing finance to individuals and those into construction business. GICHFL offers the following products to its customers: Own Your Home Scheme: This scheme is perfectly suited to individual home loan borrowers, aiming to own a house. The Company offers a bouquet of options to the borrower in terms of tenure, rate of interest and value added services. Home loan to NRI: This product specifically caters to the needs of NRIs who want to purchase their own home in India. Generally these transactions prove to be very fruitful to the Company because of the creditworthiness of the NRI as well as the high value of the transaction. Tailor made products: The Company has designed tailor made products to suit individual needs and specifications depending on various criteria. Marketing And Selling Arrangements GICHFL has set-up 23 branch/satellite offices covering major cities and towns for soliciting business. It has got a strong marketing team, which is further assisted by Direct Selling Agents (DSAs). The Company also caters to walk-in customers among others. It has direct tie-ups with reputed builders to provide finance to individual borrowers. Besides this, the Company is active in advertising and marketing arrangements through property exhibitions and housing loan melas organized from time to time. Loans Profile Loans Sanctioned and Disbursement The company has cumulatively approved loans of Rs. 2781 crores comprising 76411 units upto March 31, 2005. Cumulative disbursement till March 31, 2005 stands at Rs. 2427 crores. Loans sanctioned and disbursed during the last 4 years and till the half year ended September 30, 2005 is given below:

(Rs. lacs)

Particulars 2002 2003 2004 2005 Till half year ended September 30, 2005

Loans Sanctioned 25743 33285 55076 80461 20131 Loans Disbursed 22519 29559 44881 65923 23519

27

Loans Outstanding Total amount of housing finance outstanding as on September 30, 2005 is Rs. 171149 lacs. Out of the total outstanding on September 30, 2005, 98.34% is granted to individuals and 1.41% is outstanding for corporate clients. A clients wise breakup of the loans outstanding at the Financial Year ended 2002, 2003, 2004, 2005 and as on September 30, 2005 is given below:

(Rs. lacs)

Particulars 2002 2003 2004 2005 Half year ended September 30,

2005 Individuals 64769 79604 106624 154542 168303 Corporates 5254 4494 3644 2776 2415 Others 815 660 631 500 430 Total 70838 84758 110899 157819 171149

28

DETAILS REGARDING THE PROPERTIES OF THE COMPANY Details of Properties on Lease and Leave and Licences Sr. No.

Property address Lessor Name Property Used as

Sq. ft.

Monthly Rent

Lease Period

Instrument

1. 3rd Floor, Universal

Insurance Building, Fort, Mumbai - 400 001.

The Saregama India Ltd.

Corporate Off.

3500 Sq. Ft.

Rs. 1,61,000/-

10 years Indenture of Sub - Lease

2 United India

Insurance Building, no.3-5-817/818, Basheerbagh, Hyderabad.

United India Insurance Company Limited.

Hyderabad 817.50 Sq. Ft.

Rs. 11,105/-

3 years Lease Deed

3 Vandana Bldg.,7th

Floor, Cannaught Place, Tolstoy Marg, New Delhi - 110 001 Vandana Bldg., 9th Floor, Cannaught Place, Tolstoy Marg, New Delhi - 110 001

Santosh Sethi R.P.Sethi

New Delhi

1027 Sq. Ft. 473 Sq. Ft.

Rs. 35945/- 20% increase after 3 year Rs. 26005/-

3 year 3 year

Lease Deed Lease Deed

4 Leo Shopping

Complex, 44-45, Residency Road, Bangalore.

Leo Shopping Complex,

Bangalore 2280 Sq. Ft.

Rs. 36480 5 years Lease Deed

5 1st Floor, Manchu

Towers, T.D. Road, Kochi - 11.

K.V.P. Krishna Kumar K.V.P. Damodaran Jayshree Ajithkumar

Kochin 1000 Sq. Ft.

Rs. 10890/-

3 years Lease Agreement

6 1, Ascon Residency

Aprt, Ground Floor, Shastri Road Trichy

Shree G Manikandan

Trichy 725 Sq. Ft.

Rs. 8500/- 3 years Lease Deed

7 S.S.Kovli Road,

Thampanoor, Thiruvanathapuram - 695 001.

P.T.C. Towers

Trivandrum 980 Sq. Ft.

Rs. 9878/-


29

Sr. No.


Sq. ft.

Monthly Rent

Lease Period

Instrument

8 Orient Chambers,

CTS No.5753, Mumbai -Pune Road, opp.KSB Pumps Ltd., Pimpari, Pune - 411 018.

Mrs. N. A. Samjani A.J. Samhani

Chinchwad

718 Sq. Ft. 308 Sq. Ft.

Rs. 10000/- Rs. 5000/-

27 months 27 months

Leave & Licence Leave & Licence

9 Shop no.40, Ground

floor, Kukreja Plaza, Plot no.46, 47 & 55, Sector - 11, C.B.D., Belapur, Navi Mumbai. Shop no.45, Ground Floor,Kukreja Plaza, Plot no.46,47 & 55, Sector - 11, CBD, Belapur, Navi Mumbai. 604, Arjena Corner, Plot no 71, Sec-17, Vashi – Navi Mumbai 400 705

Mr. Fateh Singh Jauhal & Mrs. Narinderjit Kaul Jauhal Shri Rajaram M. Ghatvisave Wel Fare Finelease Pvt. Ltd.

i) New Mumbai (Vashi Godown) New Mumbai Godown ii) New Mumbai (Office)

572 Sq. Ft. 601 Sq.Ft. 1580 Carpet Sq. Ft.

Rs. 5280/- Rs. 4,800/- Rs. 70,000/-

3 years 3 years 33 months

Leave & Licence


10 Satya Ashish,

1st Floor, Opp Sopan society, Ram Maruti Rd. Panchpakhadi, Thane 400 602. Satya Ashish, Falat no. 301, 3rd Floor, Opp Sopan society, Ram Maruti Rd. Panchpakhadi,

Mr. C. R. Zende & Mr. S.D. Kand A.M. Koshti M.E. Koshti

Thane 350 Sq. Ft. 1050 Sq. Ft.

Rs. 4350/- Rs. 22000/-

33 months 33 months


30

Sr. No.


Sq. ft.

Monthly Rent

Lease Period

Instrument

Thane 400 602.

11 SCO – 69,

Sector 20/C, Chandigarh.

M/s. Chawla Promoters & Developers

Chandigarh 480 Sq. Ft.

29000/- (Increase of 15% after 4 years)

4 years Lease Deed

12 No.216 & 217, Peters

Road, Royal Pettah, Chennai - 600 014.

Ramaniyam Real Estates Ltd.

Chennai 2442 Sq. Ft.

Rs. 47160/-


13 Shop no.D in ground

floor of K.R.V.Arcade, A.R. Plaza. Shop no.C in ground floor of K.R.V.Arcade, A.R. Plaza.

R.M.Venkatachalam & Smt. V. Sivagamy Mrs. P.V. Vaishnavi

Madurai 501.62 Sq. Ft. 437 Sq. Ft.

Rs. 10000 (20 % Increase after 3 years) Rs. 7429/- (15 % increase after 3 years)

10 years 10 years

Lease Agreement

14 1044 Cross Road,

Cut Road, Gandhipuram, Coimbatore

Mr. Govindrajulu

Coimbatore 400 Sq.Ft.

Rs. 2000/-

15 Radha Krishna

Bhuvan, Park Road Lucknow.

R.C.Sharma Lucknow 1950 Sq. Ft.

Rs. 18000/-

11 months Memorandum of Lease

16 GIC HOUSING

FINANCE LTD. "Shantiniketan", 8, 2nd Floor, Room no.4, Camac Street, Calcutta- 700017.

Smt. Kamala Singhvi & Shri Mahaveer Mall Singhvi

Kolkota 910 Sq. Ft. 910 Sq. Ft.

Rs. 4600/- Rs. 4600/-

3 years 3 years

Lease Deed

17 Vishal Chambers, B-

104, 1st Floor, Plot no.P-1, Sector- 18, Noida. U. P.

Smt. Sunita Nijhvan & Brig.V.K. Nijhvan

Noida

720 Sq. Ft.

Rs. 14,400/-

6 years

Lease Deed

31

Sr. No.


Sq. ft.

Monthly Rent

Lease Period

Instrument

Vishal Chambers, Premises No. 105, First Floor, Plot Bearing no.P-1, Sector –18, Noida

Mrs. Raj Sidhu

ii) Noida

536

Rs. 14,400/- Rs. 10,000/-

5 years

Lease Deed

18 No.138, First Floor,

Ganpati Plaza, Jaipur

Shri. Bachhuram Chippa & Shri. Kunjbihari

Jaipur 1115 (super Area) 858 (built Area)

Rs. 20000/- (Increase of 15% after 3 years)

6 years Lease Deed

19 11, Janpath,

Satyanagar, Bhubneshwar 751 007

Hari Om Goyal

Bhubneshwar

600 Sq. Ft.

Rs. 6000/- 6 years Lease Deed

20 S-2, Darius

Residency, Mizorama Panji

Roes Ahmed Khan

Panaji - Rs. 4000/- 3 years Lease Deed

32

Details Of Owned Properties Name of the Service Centre

Property address

Owned property: Office Vizag:

306, 307, III floor, Sai Shopping Centre, 47-14-1, Dwarka Nagar, Vishakhapattanam 695 001.

Panaji:

B-202, 2nd Floor, Akash Byavan, 18th June Road, Panaji-403 001.

Pune: Neelkanth, C.T.SNO. 1018

F.P. NO. 370, Deep Banglow chowk, Model colony, Shivajinagar Bhamburda Pune 411 016`

RESIDENTIAL PROPERTY Occupied by: Joseph Sudhakar (Area in Charge)

Flat no.301, 3rd floor Norita, Hiranandani gardens Powai, Mumbai-400076 Tel-55715254

Occupied by: K. Diwakar (Group Head)

Flat no.3, Ground Floor Homedale Apartment No.36 Dhanraj Heerachand Cross Road, Division no.75 Cox Town Bangalore 560 005

Occupied by: K. Jagdish (Executive) Flat no.304, 3rd floor Norita, Hiranandani gardens Powai, Mumbai-400076 Tel no.56941794

Occupied by: Lalith Kumar Sr Executive

A-2 408 Lok Gaurav Co-operative Hsg. Society 4th floor, Vikroli (West) Mumbai – 400083 Tel no (R) 25790255

Occupied by: Ramesh More (Executive) A-2 408 Lok Gaurav

Co-operative Hsg. Society 4th floor, Vikroli (west) Mumbai – 400083 Tel no (R) 25790255

Occupied by: Shri Rajib De ( Vice President)

B-10,2nd floor The Sagar Darshan Co-Op Hsg society ltd 106,Kakad Estate Dr. R. G. Thadani Marg, Pincode - 400 018

33

Name of the Service Centre

Property address

Occupied by: Shri S.K.Mahishi ( Asst. Vice President)

B 201 2nd floor, Silver oak co-operative hsg society, Hiranandani gardens Powai, Mumbai-400076 Pin code-400 076

Occupied by: Shri Shridharan (Company Secretary & Asst. Vice President)

203, A & B Lake Castle, Building Society Hiranandani Gardens Powai, Mumbai-400076 Pin Code-400071

Vacant

A-2/306 3rd floor Lok Gaurav Co-op housing Society Ltd Vikroli (West) Mumbai-400 083

34

DEBT PROFILE OF THE COMPANY:

I. The Company has taken long-term secured loans from the following Banks:

Sr. No

Name of the Bank Amount of loan (Rs. in crores)

Date of loan agreement

Term of loan (in months)

1. Union Bank of India-I 100 11-3-04 108 The amount of loan has been secured by hypothecation of book debts vide a hypothecation agreement

dated 11th March, 2004. 2. State Bank of Hyderabad-I 50 01-03-04 84 The amount of loan has been secured by hypothecation of book debts vide a hypothecation agreement

dated 1st March, 2004. An irrevocable power of attorney has been executed in the favor of the bank, authorizing it to recover money directly from the borrowers of the Company and to issue notices or recall the money due and to file suits in the name of the Company. An irrevocable power of attorney has been executed in the favor of the banks, authorizing it to create/execute or mortgage or charge in its favor in the event the bank comes to the conclusion that its security is prejudiced on account of breach by the Company. Negative Covenants:

i) The Company shall not sell, transfer, mortgage, charge, pledge, hypothecate any of the above said charged properties and assets without previous written consent of the Bank.

ii) The Company shall carry out, whenever called upon by the Bank, such further alterations and additions in the MOA and AOA as may be deemed in the option of the Bank to safeguard its interest.

iii) Unless the Bank agrees the Company shall not: a) transfer or otherwise dispose off its undertaking or any of its capital or fixed assets; b) undertake or permit any merger, consolidation, scheme of arrangement or compromise with

its creditors or shareholders; c) give any corporate or financial guarantee.

3. Lord Krishna Bank 20 17-03-04 72

The amount of loan has been secured by hypothecation of book debts and receivables vide a hypothecation agreement dated 17th March, 2004 Negative Covenants: The Company covenants vide this loan agreement to issue a certificate that the loan has been used for priority sector financing as per RBI guidelines.

4. Vijaya Bank 50 17-7-03 72

35

Sr. No




The amount of loan has been secured by hypothecation of supply bills and book debts vide a hypothecation agreement dated 17th July, 2003. Negative Covenants: The Company shall not sell, transfer, mortgage, charge, pledge, hypothecate any of the above said charged properties and assets without previous written consent of the Bank.

5. Vijaya Bank-II 50 6-1-04 72

The amount of loan has been secured by hypothecation of supply bills and book debts vide a hypothecation agreement dated 6th January, 2004 Negative Covenants: The Company shall not sell, transfer, mortgage, charge, pledge, hypothecate any of the above said charged properties and assets without previous written consent of the Bank.

6. Andhra Bank 50 11-09-01 84

The amount of loan has been secured by hypothecation of book debts vide a hypothecation agreement dated 11th September, 2001 An irrevocable power of attorney has been executed in the favour of the bank, authorizing it to recover money directly from the borrowers of the Company and to issue notices or recall the money due and to file suits in the name of the Company.

An irrevocable power of attorney has been executed in the favour of the bank, which states that in the event of default by the Company, the Bank shall have a pari-passu mortgage/charge over the movable and immovable properties of the Company. Negative Covenants:


ii) Unless the Bank agrees the Company shall not: a) transfer or otherwise dispose off its undertaking or any of its capital or fixed assets; b) undertake or permit any merger, consolidation, scheme of arrangement or compromise with

its creditors or shareholders; c) amend MOA and AOA or alter the capital structure except as specified in the loan

agreement.

7. Kalyan Janata Sahakari Bank Ltd 3.80 22-03-01 84

36

Sr. No




The amount of loan has been secured by hypothecation of book debts vide a hypothecation agreement dated 22nd March, 2001 An irrevocable power of attorney has been executed in the favor of the bank, authorizing it to recover money directly from the borrowers of the Company and to issue notices or recall the money due and to file suits in the name of the Company. Negative Covenants: The Company shall not sell, transfer, mortgage, charge, pledge, hypothecate any of the above said charged properties and assets without previous written consent of the Bank.

8. Oriental Bank of Commerce 100 13-8-03 72

The amount of loan has been secured by hypothecation of book debts vide a hypothecation agreement dated 13th August, 2003 Negative Covenants:


ii) The Company shall not change its constitution more particularly in Promoters, directors or in the core management team or any merger, requisition, amalgamation without the prior written permission of the Bank.

iii) The Company shall not undertake any new project, any further expansion without the prior written permission of the Bank.

9. Oriental Bank of Commerce-II 50 10-2-04 72 The amount of loan has been secured by hypothecation of book debts vide a hypothecation agreement

dated 10th February, 2004 Negative Covenants:


ii) The Company shall not change its constitution more particularly in Promoters, directors or in the core management team or any merger, requisition, amalgamation without the prior written permission of the Bank.

iii) The Company shall not undertake any new project, any further expansion without the prior written permission of the Bank.

10. State Bank of Indore 50 11-9-03 84

The amount of loan has been secured by hypothecation of book debts vide a hypothecation agreement dated 11th September, 2003. Negative Covenants: N.A.

11. New India Co-op Bank Ltd 13 24-2-03 84

37

Sr. No




The amount of loan has been secured by hypothecation of book debts, housing loan receivables vide a hypothecation agreement dated 24th February, 2003. Negative Covenants: The Company shall not sell, transfer, mortgage, charge, pledge, hypothecate any of the above said charged properties and assets without previous written consent of the Bank.

12. Bank of Punjab Ltd-III 30

26-9-03 84

The amount of loan has been secured by hypothecation of book debts and receivables vide a hypothecation agreement dated 26th September, 2003. An irrevocable power of attorney has been executed in the favour of the bank, authorizing it to recover money directly from the borrowers of the Company and to issue notices or recall the money due and to file suits in the name of the Company Negative Covenants: The Company shall not release or compound any of the above-hypothecated debts without the prior consent in writing of the bank and shall not do anything whereby the recovery thereof may be delayed, imbedded or become time barred.

13. Punjab National Bank-I 50 4-12-00 120

The amount of loan has been secured by hypothecation of book debts and receivables vide a hypothecation agreement dated 4th December, 2000 An irrevocable power of attorney has been executed in the favour of the bank, authorizing it to recover money directly from the borrowers of the Company and to issue notices or recall the money due and to file suits in the name of the Company.

An irrevocable power of attorney has been executed in the favour of the bank, authorizing it to create/execute or mortgage or charge in its favour in the event the bank comes to the conclusion that its security is prejudiced on account of breach by the Company. Negative Covenants:

In the event of any other financial institutions such as GIC, NIC, NIA, OICL, UTI, any scheduled commercial bank and any other participating bank or institution assisting the project imposes any restrictive condition on the Company, such of those conditions as may be considered appropriate by the Bank shall be deemed to apply to the Company.

14. Punjab National Bank-II 100 3-7-03 84

38

Sr. No




The amount of loan has been secured by hypothecation of book debts and receivables vide a hypothecation agreement dated 3rd July, 2003 An irrevocable power of attorney has been executed in the favour of the bank, authorizing it to recover money directly from the borrowers of the Company and to issue notices or recall the money due and to file suits in the name of the Company. An irrevocable power of attorney has been executed in the favour of the bank, authorizing it to create/execute or mortgage or charge in its favour in the event the bank comes to the conclusion that its security is prejudiced on account of breach by the Company. Negative Covenants:

In the event of any other financial institutions such as GIC, NIC, NIA, OICL, UTI, any scheduled commercial bank and any other participating bank or institution assisting the project imposes any restrictive condition on the Company, such of those conditions as may be considered appropriate by the Bank shall be deemed to apply to the Company.

15. Bank of India – III 50 27-9-99 84

The amount of loan has been secured by hypothecation of book debts vide a hypothecation agreement dated 27th September, 1999 An irrevocable power of attorney has been executed in the favour of the bank, authorizing it to recover money directly from the borrowers of the Company and to issue notices or recall the money due and to file suits in the name of the Company. Negative Covenants:

i) The Company shall not sell, transfer, mortgage, charge, pledge, hypothecate any of the above charged properties and assets without previous written consent of the Bank.

ii) The Company shall not release or compound any of the above hypothecated debts without the prior consent in writing of the bank and shall not do anything whereby the recovery thereof may be delayed, imbedded or become time barred.

16. Bank of India –IV 50 28-12-01 84

The amount of loan has been secured by hypothecation of book debts vide a hypothecation agreement dated 28th December, 2001 An irrevocable power of attorney has been executed in the favour of the bank, authorizing it to recover money directly from the borrowers of the Company and to issue notices or recall the money due and to file suits in the name of the Company. Negative Covenants:



39

Sr. No




17. Bank of India –V 50 30-7-03 96

The amount of loan has been secured by hypothecation of book debts vide a hypothecation agreement dated 30th July, 2003 An irrevocable power of attorney has been executed in the favour of the bank, authorizing it to recover money directly from the borrowers of the Company and to issue notices or recall the money due and to file suits in the name of the Company. Negative Covenants:



18. Corporation Bank 150 26-9-05 96

The amount of loan has been secured by hypothecation of book debts vide a hypothecation agreement dated 26th September, 2005 Negative Covenants:

i) The Company shall not without the written consent of the Bank and or IDBI, NABARD, SIDBI, create in any manner any charge, lien or other encumbrances on the security given to the Bank in respect of such advance or cerate an interest in such security in favour of any other party or person.

ii) The Bank shall be entitled to change or alter the rate of interest chargeable to the Company on the balance outstanding in the term loan either due to variation in IDBI, NABARD, SIDBI refinance rates or banks lending rated in conformity with the directives of RBI or otherwise.

19. Syndicate Bank-III 100 17-11-05 120

The amount of loan has been secured by hypothecation of book debts vide a hypothecation agreement dated 17th November, 2005 An irrevocable power of attorney has been executed in the favour of the bank, authorizing it to recover money directly from the borrowers of the Company and to issue notices or recall the money due and to file suits in the name of the Company. Negative Covenants:

i) The Company shall not sell, transfer, mortgage, charge, pledge, hypothecate any of the above

said charged properties and assets without previous written consent of the Bank. ii) The Company shall not release or compound any of the above hypothecated debts without the

prior consent in writing of the bank and shall not do anything whereby the recovery thereof may be delayed, imbedded or become time barred.

20. Andhra Bank - III 150 28-6-05 84

40

Sr. No




The amount of loan has been secured by hypothecation of book debts vide a hypothecation agreement dated 28th June, 2005 An irrevocable power of attorney has been executed in the favour of the bank, authorizing it to recover money directly from the borrowers of the Company and to issue notices or recall the money due and to file suits in the name of the Company. Negative Covenants:

The Company shall not sell, transfer, mortgage, charge, pledge, hypothecate any of the above said charged properties and assets without previous written consent of the Bank.

21. Andhra Bank –II 50 10-11-04 84

The amount of loan has been secured by hypothecation of book debts vide a hypothecation agreement dated 10th November, 2004 An irrevocable power of attorney has been executed in the favour of the bank, authorizing it to recover money directly from the borrowers of the Company and to issue notices or recall the money due and to file suits in the name of the Company. Negative Covenants:


22. State Bank of Hyderabad –II 100 10-11-04 84

The amount of loan has been secured by hypothecation of book debts vide a hypothecation agreement dated 10th November, 2004 Negative Covenants: The Company shall not release or compound any of the above hypothecated debts without the prior consent in writing of the bank and shall not do anything whereby the recovery thereof may be delayed, imbedded or become time barred.

23. Bank of India - VI 100 7-2-05 96

The amount of loan has been secured by hypothecation of plant and machinery, stock and book debts vide a hypothecation agreement dated 7th February, 2005

An irrevocable power of attorney has been executed in the favour of the bank, authorizing it to recover money directly from the borrowers of the Company and to issue notices or recall the money due and to file suits in the name of the Company. Negative Covenants:


24. Syndicate Bank-II 100 24-9-04 120

41

Sr. No




The amount of loan has been secured by hypothecation of book debts and receivables vide a hypothecation agreement dated 24th September, 2004

An irrevocable power of attorney has been executed in the favour of the bank, authorizing it to recover money directly from the borrowers of the Company and to issue notices or recall the money due and to file suits in the name of the Company Negative Covenants:


25. State Bank of Mysore 50 29-6-04 84

The amount of loan has been secured by hypothecation of book debts vide a hypothecation agreement dated 29th June, 2004


i) The Company shall not release or compound any of the above hypothecated debts without the prior consent in writing of the bank and shall not do anything whereby the recovery thereof may be delayed, imbedded or become time barred.

ii) The Company shall not during the subsistence of the liability of the Company to the Bank under or in respect of any other credit facilities without the written consent of the Bank effect any scheme of amalgamation or reconstitution.

26

Union Bank of India -II 100 1-9-04 108

The amount of loan has been secured by hypothecation of book debts vide a hypothecation agreement dated 1st September, 2004 Negative Covenants:

The Company shall not without the prior written permission of the Bank:

i) transfer or otherwise dispose of its undertaking or any of its capital or fixed assets or except in the ordinary course of business part with any of its other assets including machinery stores and machinery spares both present and future;

ii) undertake or permit any merger, consolidation, reorganization scheme of arrangement or compromise with its creditors/shareholders.

27 Canara Bank 100 17-8-05 72

42

Sr. No




The amount of loan has been secured by hypothecation of book debts and housing loan receivables vide a hypothecation agreement dated 17th August, 2005

An irrevocable power of attorney has been executed in the favour of the bank, authorizing it to recover money directly from the borrowers of the Company and to issue notices or recall the money due and to file suits in the name of the Company.

An irrevocable power of attorney is executed in the favour of the banks, authorizing it to create/execute or mortgage or charge in its favour in the event the bank comes to the conclusion that its security is prejudiced on account of breach by the Company. Negative Covenants:

The Company shall carry out, whenever called upon by the Bank, such further alterations and additions in the MOA and AOA as may be deemed in the option of the Bank to safeguard its interest.

28 Bank of Maharashtra 50 7-6-04 72

The amount of loan has been secured by hypothecation of book debts vide a hypothecation agreement dated 7th June, 2004


The Company shall not release or compound any of the above hypothecated debts without the prior consent in writing of the bank and shall not do anything whereby the recovery thereof may be delayed, imbedded or become time barred.

II. The Company has taken unsecured loans from the following Banks:

Sr. No.

Name of the Bank Amount of loan Date of loan agreement

Term of loan

1. Karnataka Bank Ltd 50 crores 5-8-05 180 days 2. Andhra Bank 75 crores 22-12-05 90 days

43

Competition The competition in the housing finance sector has increased tremendously with many players (mainly banks) entering into the market in the recent years. Commercial Banks have entered the housing finance sector in a big way, attracted as they are backed by the mortgage-based security, and helped by their access to large funds at a relatively low-cost. Also housing finance is now classified as priority sector lending for banks and therefore more banks are entering this field. Competition has propelled the players to engage in price wars. Aggressive rate cuts were employed by the players to attract consumers. Housing loan rates have inched by 0.50 to 0.75% in the last one-year. The benchmark 10-year government securities (G-sec) rate itself increased by around 0.50% from January 1 2005. In the scenario where the interest rates are going up HFCs will find pressure on their interest margins. Other reason that resulted in keeping the interest rate on housing loans under check is the fact that there is enough liquidity in the system. Banks are flush with funds but have limited deployment avenues. Since the housing finance segment is showing good growth rates, banks are diverting funds in this sector making the competition stiffer.

KEY INDUSTRIAL REGULATIONS 1. National Housing Bank Act, 1987 The National Housing Bank (NHB) having considered it necessary in public interest had issued Housing Finance Companies (NHB) Directions 1989, to every housing finance company in exercise of the powers conferred on it under the NHB Act 1987. NHB Act 1987 has been amended further by the National Housing Bank (Amendment) Act, 2000 (15 of 2000) further to enable the NHB to safeguard the interest of depositors and promote healthy and universal growth of Housing Finance Companies in the country. The NHB have in exercise of powers conferred under sections 30, 30A, 31 and 33 of the National Housing Bank Act 1987 issued the Housing Finance Companies (NHB) Directions, 2001 2. Reserve Bank of India Act, 1934

44

VIII. HISTORY AND MAJOR EVENTS History of the Company

GIC Housing Finance Limited was incorporated as 'GIC Grih Vitta Limited' on 12th December 1989. The Company was issued the certificate for commencement of business dated 12th January 1990. The name is changed to its present name vide fresh Certificate of Incorporation issued on 16th November 1993. The Company was formed with the objective of entering in the field of direct lending to individuals and other corporates to accelerate the housing activities in India. The primary business of GICHFL is granting housing loans to individuals and to persons/entities engaged in construction of houses/flats for residential purposes. The Company was promoted by General Insurance Corporation of India and its erstwhile subsidiaries namely, National Insurance Company Limited, The New India Assurance Company Limited, The Oriental Insurance Company Limited and United India Insurance Company Limited together with erstwhile UTI, ICICI, IFCI, HDFC and SBI, all of them contributing to the initial share capital. HDFC, SBI, ICICI and SUUTI have since sold off their holding in the Company and have ceased to be the Promoters of the Company. Major Events in the Company's history

Year Event 1989 Company was incorporated with the name "GIC Grih Vitta Limited".

1989-91 The Company started its operations from 8 locations. 1991-92 The Company launched Employee and Builder Scheme Housing Scheme. 1992-93 Company's name changed to "GIC Housing Finance Limited". Apna Ghar Yojana was introduced by the

Company. 1993-94 The Company made a rights issue of 1:1; the capital crossed the Rs. 10 crores mark. 1994-95

The authorized share capital was increased to Rs. 150 crores; maiden Initial Public Offer (IPO) by the Company. New service centres were started in Navi Mumbai, Vizag and Coimbatore.

1996-97 The Company started the process of branch interlinking and computerization. 2003-04

The Company has crossed Rs. 500 crores business in individual housing loan and the total portfolio has crossed Rs. 1000 crores.

2004-05 Rights Issue of 89,75,561 Equity Shares at Rs. 16 in the ratio of 1 equity share for every 2 shares held Main objects of the Company: The main objects of the Company as set out in its Memorandum and Articles of Association inter-alia are: To carry on the business of providing long-term finance to any person or persons, company or corporation, society or association enabling borrower to construct or purchase in India a house or flat for residential purposes, upon such security and such terms and conditions as the Company may deem fit and also provide long-term finance to persons engaged in the business of construction of houses in India or flats in India for residential purposes to be sold by them by way of hire purchase or on deferred payment or other similar basis upon such terms and conditions as the Company may think fit and proper. Subsidiary Companies The Company has no subsidiaries within the meaning of Section 4 of the Act. Shareholders Agreement The Company has not entered into any shareholder agreement till date. Strategic Partners The Company does not have any strategic or financial partners. Collaboration The Company does not have any Collaboration.

45

IX. OUR MANAGEMENT

Board Of Directors: The Company is currently managed by a Board of Directors comprising of 12 Directors. Mr. R.K Joshi is our Chairman and Mr. A. K. Guha is our Managing Director. The Following table sets forth the details regarding our Board of Directors. Sr. No

Name, Age, Designation, address & Occupation of Directors

Other Directorship

1 Mr. R.K Joshi Age: 58 years Chairman 11-A, IL Palazzo, Little Gibbs Road Malabar Hills Mumbai-400006 Occupation: Service

1. Kenindia Assurance Co Limited. 2. General Insurance Corporation of India Limited 3. The New India Assurance Company Limited 4. GIC Asset Management Company Limited. 5. Life Insurance Corporation of India 6. The Andhra Pradesh Paper Mills Limited 7. ICICI Bank Limited 8. Export Credit Guarantee Corporation of India Limited. 9. Indian Register of shipping 10. Deposit Insurance and Credit Guarantee Corporation. 11. Loss Prevention Association of India Limited. 12. Asian Reinsurance Corporation 13. Governing Body of National Insurance Academy, Pune

2 Mr. B. Chakrabarti Age: 56 years Non Executive Director B-21, 2nd Floor, Mayfair Garden, Little Gibbs Road, Malabar Hills Mumbai-400 006 Occupation: Service

1. The New India Assurance Co (Trinidad & Tobago) Ltd 2. India International Pte Limited 3. Prestige Assurance Plc 4. The New India Assurance Company Limited 5. General Insurance Corporation of India 6. The New India Assurance Co (Sierra Leone) Limited 7. Saudi Indian Insurance Company 8. Loss Prevention Association of India Limited 9. Schenectady Herdillia Limited 10. Alfa Laval (India) Limited 11. Tariff Advisory Committee (Member) 12. General Body of Insurance Council (Member)

3 Mr. M.K. Garg Age: 52 years Non Executive Director 9, Harrington Road, 2nd Avenue, Chetpet, Chennai- 600031 Occupation: Service

1. Kenindia Assurance Co Limited. 2. United India Insurance Co. Limited 3. Loss Prevention Association of India Limited

4 Mr. M Ramadoss Age: 52 Years Non Executive Director 545, Asaid Village, New Delhi- 110049 Occupation: Service

1. Loss Prevention Association of India Limited 2. The Oriental Insurance Company Limited

5 Mr. V. Ramasaamy Age: 56 Years Non Executive Director Flat No 25, Alipore Estate, 8/6/1, Alipore Road, Kolkata: 700027 Occupation: Services

1. Modern Denim Limited 2. National Insurance Co. Limited

46

6 Mr. Manu Chadha

Age: 50 Years Independent and Non Executive Director B-30, Connaught Place, New Delhi-110 001 Occupation: Professional

1. Himalayan Crest Power Limited 2. Kotla Hydro Power Ltd 3. Dena Bank. 4. TRC Financial Services Limited 5. SBI Fund Management Private Limited 6. Ispat Industries Ltd.

7 Mr. R. M. Malla Age: 52 Years Non Executive Director C-4/19, Safdurjung Development Area, New Delhi-110 019. Occupation: Service

1. Assets Care Enterprises Ltd 2. Haldia Petrochemicals Limited 3. IFCI Limited 4. Tourisim Finance Corporation of India Limited 5. Management Development Institute 6. Rashtriya Gramin Vikas Nidhi

8 Mr. M. K. Tandon

Age: 64 years Independent & Non Executive Director 205, Challenger Tower IV, Thakur Village, Kandivali (West), Mumbai. Occupation: Service

1. Welspun Syntex Limited. 2. GIC Asset Management Company Limited 3. Coromandel Fertilizers Limited

9 Mr. B. P. Deshmukh Age: 61 Years Independent & Non Executive Director Flat No: 1, Snehal Apartment, Pestom Sagar, Road No. 6, Chembur Mumbai - 400 089 Retired Insurance Executive

1. Saurashtra Cements Industries Limited 2. Larsen & Tourbo Limited 3. Madras Cement Limited 4. Dalmia Securities Private Limited

10 Mr. Arun Datta Age: 58 Years Independent & Non Executive Director Aspen Green –74 Nirvana Country Near South City –II, Sector –50 Gurgaon - 122 101 Occupation: Service

1. Engineering Projects (India Limited) Limited 2. Jay Engineering Limited 3. Metal Box Limited

11 Mr. N. R Ranganathan Age: 67 years Nominee Director 4B Laxmi Villa No. 7, First Cross Road, Raja Annamalaipuram Chennai – 600 028 Occupation: Retiring

NIL

12 Mr. A. K Guha Age: 58 Years Managing Director 3, Hill park, Malabar Hills, Mumbai-400006 Occupation: Service

NIL

47

Brief Profile of our Directors Mr. R. K. Joshi: Mr. Joshi, Chairman – cum – Managing Director of General Insurance Corporation of India was appointed as a Chairman of the Company w.e.f. February 21 2005. After graduating as a Mechanical Engineer in 1970, he was with Aluminum and Heavy Engineering Industries for duration of four years. He joined General Insurance Corporation of India in 1974 and was deputed to National Insurance Company Limited with headquarters at Calcutta, India. He worked in various departments at various levels in the operating offices including overseas operations at National Insurance Company’s Singapore branch for three years and was also instrumental in the formation of India International Insurance Private Limited. Shortly after returning from Singapore, he was made the Regional in-charge for National Insurance Company’s Regional office at Hyderabad, India. After completing a successful tenure of three years in 1996, he was transferred to the Tariff Advisory Committee, Delhi, a body responsible for controlling the pricing of Insurance and Insurance related products in India. He returned to General Insurance Corporation of India in the year 1998 as Assistant General Manager (Technical) and General Manager in charge of Reinsurance Department in the year 2000 after GIC was declared as an Indian Reinsurer. On February 1, 2005, Mr. R. K. Joshi has taken over as the first Chairman-cum-Managing Director of GIC of India. Mr. A. K. Guha: Mr. Guha, M. Com, A.C.A., joined United India Insurance Company Limited in the year 1975. He has vast experience and knowledge in financial areas of Insurance Industry. During his deputation in New India Assurance Company Limited as Assistant General Manager, he had undergone training on Investment Management at Business School, Manchester, U.K., in the year 2000. Before deputation to GIC Housing from 1st January 2003 as Chief Executive, he was heading the Mumbai regional office I and II of United India Insurance. GICHFL business and profitability have increased manifold since Mr. Guha has taken charge of the Company. In recognition of his contribution, Mr. Guha has been inducted on the Board as Managing Director w.e.f. 21st June 2004. Mr. B. Chakrabarti: Mr. Chakrabarti, Chairman-cum-Managing Director of National Insurance Company Limited was appointed as an Additional Director of the Company w.e.f 19th January, 2005. He started his career in the year 1974 as a Technical Officer of United India Insurance Company Limited. He has done his B.Com (Hons) from Calcutta University and is a Chartered Accountant from the Institute of Chartered Accountants of India. He has technical proficiency in general insurance subjects as he joined the industry as a Technical Officer. On successive promotions, he had marketing and business development profiles, being the heads of divisions and regions in United India Insurance Company Limited. Subsequently, he had a wide exposure in the Management of Investment portfolio in GIC as Assistant General Manager and General Manager. He headed personnel and human resources wing in United India Insurance Company Limited as a General Manager. During his tenure as General Manager (Personnel), he galvanized the activities of the Learning Center, M.S.D and H.R.D. He was the Chief Vigilance Officer and had a stint in the Marketing and Reinsurance Department in United India Insurance Company Limited. Mr. M. K. Garg: Mr. Garg, Chairman-cum-Managing Director of United India Insurance Company Limited was appointed as an Additional Director of the Company w.e.f 19th January, 2005. He joined the General Insurance Industry in 1976 and possesses a rich experience of more than two decades. He is a Chartered Accountant by profession and a fellow member of the Insurance Institute of India. As a young and promising direct recruit Officer, he joined The New India Assurance Company Limited in the cadre of Assistant Administrative Officer. During his long career spanning more than over two decades, he had held many assignments. He worked as a Regional Manager of the Jaipur branch of The New India Assurance Company Limited from 1993 to 1997. During his stint as RM-Jaipur, he earned the best RO award consecutively for two years. He was transferred to Chandigarh and posted as Regional Manager and subsequently, in the year 1998, he was promoted as Assistant General Manager. He again earned the best RO award for Chandigarh. In the year 2000, Delhi R.O. was placed under his charge and with his sheer and exemplary hard work, he was promoted and posted as General Manager at New India Head Office, Mumbai where he was looking after Investments, Credit Insurance, Technical, Secretarial Department, Grievance and Customer Service, Estate, Establishment and Property Cell, Foreign Administration etc. He was a member of Vision 2000 Core Group founded by the General Insurance Corporation of India and submitted recommendations for Insurance Sector reforms. He has a passion for perfection in whatever he does and is untiring in learning thoroughly the nuances of any department that is placed in his charge.

48

Mr. M. Ramadoss: Mr. Ramadoss, Chairman-cum-Managing Director of Oriental Insurance Company Limited was appointed as an Additional Director of the Company w.e.f 10th March, 2005. Mr. Ramadoss is a First Class Commerce Graduate from Madras University and a Chartered Accountant from the Institute of Chartered Accountants of India. He is also a Fellow of Insurance Institute of India and an Associate of Chartered Insurance Institute of U. K. He joined the Insurance Industry in 1976 as direct recruit Class I Officer in New India Assurance Company Limited and has worked in various positions. In 2001, he was promoted as General Manager and posted to London branch for 3 years. He returned to India and joined Head Office in mid November 2004. He has a unique experience of having worked in the Insurance Industry in different parts of the country. Besides working in the Insurance Industry, he is also a visiting faculty in National Insurance Academy, Pune. He regularly takes classes in Company Training Colleges. He has also written articles in magazines and he is a member of a Working Group constituted by the Institute of Chartered Accountants of India to finalize Accounting Guidelines for General Insurance Companies. Mr. N. R. Ranganathan: Mr. Ranganathan is an alumnus of the Presidency College, Madras, Law College, Madras and the London School of Economics. He joined the Indian Administrative Services in 1960 and held many important positions. He was Secretary (Personnel) to Government of India and Member Secretary of the Planning Commission, Government of India. Mr. M. K. Tandon: Mr. Tandon was appointed as Director of the Company w.e.f. 2nd September 1999. He is M. Com, LLB, Associate Part I (Insurance Institute of India). He started his career in insurance industry in 1964. He has immense knowledge and experience in insurance industry for the past four decades. He was the Managing Director of General Insurance Corporation of India during from 04th March 1999 to 04th March 2001. Thereafter he was the Chairman-Cum-Managing Director of National Insurance Co. Ltd. from 05th March 2001 to 30th September 2001. Mr. B. P. Deshmukh: Mr. Deshmukh joined the Company as an Additional Director w.e.f. 15th October 2004. His academic qualifications include M.Com and LL.B. He is also a fellow member of the Institute of Company Secretaries of India. He worked with Maharashtra State Financial Corporation from 1967 – 1976 and got exposure in project appraisal and monitoring of advances in the form of term loan. He also got a comprehensive training in Industrial Finance conducted by the Reserve Bank of India. He resigned as Assistant Secretary in 1976. He joined the New India Assurance Company Limited as a Financial and Investment Analyst as a direct recruit officer. He got regular promotions and became a Manager in 1991. While in New India Assurance Company, he got extensive training in project appraisal, analysis and interpretation of accounts, equity research, capital market and treasury management. He was heading the Investment and Credit Insurance Department till 1994-95. In 1994, he was transferred to General Insurance Corporation of India as Company Secretary and Manager (Investment). He retired as ‘General Manager’, Investment and Credit Insurance, Life Reinsurance and Corporate Secretariat Department. During his stay in GIC, he attended various training programmes including a programme on ‘Advanced Investment Management’ at Manchester Business School (United Kingdom). He also delivered lectures and submitted papers on various subjects related to Finance and Investment, Credit Insurance etc. at various forums such as ‘Faculty of Management Studies’, Delhi University, ICWA Annual Convention, Bengal Chamber of Commerce, FICCI, etc. He is well versed in capital market, equity and debt research as also corporate matters and investment monitoring. Mr. R. M. Malla: Mr. Malla, Executive Director of IFCI Limited, was appointed as Director of the Company on 28th June 2002. He academic qualifications include M.Com from University of Delhi, MBA from Faculty of Management Studies, University of Delhi, PGDBM from Management Development Institute, Gurgaon and CAIIB from Indian Institute of Bankers. Mr. Manu Chadha: Mr. Chadha was appointed as Director of the Company on 29th April 2002. His academic qualifications include B. Com (Hons), FCA, LLB and is a practicing Chartered Accountant since 1979 and is a Senior Partner with M/s. T R Chadha & Co, Chartered Accountants. He is also on the Board of Dena Bank, SBI Mutual Fund and other body corporate. The Government of India has nominated him on the Investor Education and Protection Fund.

49

Mr. Ramasaamy: Mr. Ramasaamy was appointed as a director of the company on December 26, 2005. He is a CA, and was recruited as Direct Recruit Officer in 1976 in National Insurance Company Limited and after serving in Investment Department for 9 years was promoted to the cadre of Assistant Manager and posted to Regional Office, Chennai. He was posted as Senior Divisional Officer in Delhi and as Manager in Ludhiana. Subsequently he was posted Regional Manager at Regional Office Madurai and then as Assistant General Manager at Banaglore office for nearly 2 years. He got promoted as General Manager in 2002 and allocated the portfolios like Technical Department, Foreign Business, MSD and Grievance Departments. Mr. Arun Datta: Mr. Arun Datta was appointed as the director of the company on October 24, 2005. He holds a Bachelor Degree in Mechanical Engineering, along with post-graduate degree in Marketing. He has extensive experience in retail and institutional sales, corporate Business Development, project management and administration. He has been involved in managing large sales organization with responsibility for brand management, distributions networks and logistics. He has also assisted top executive in strategic decision making as well as day-to-day administration Borrowing Powers of the Board: The shareholders has given consent under section 293(1)(d) of the Companies Act, 1956 vide a resolution passed at the 14th AGM of the Company held on 17th September 2004, to the Board for borrowing up to a sum of Rs. 3,000 crores. Compensation to Managing Director: Mr. A. K Guha was appointed as Managing Director of our Company for the period 21st June 2004 to 31st August 2007 vide resolution passed at the Annual General Meeting held on 17th September 2004. The terms and conditions of the said resolution are stated:

Particulars Per Month (in Rs.)

Basic 22900 Dearness allowances 11377 City Compensatory Allowances 375 Fixed Personal Allowances 500 Special Allowances 2000 Deputation Allowances 1000 Total 38125 Other yearly allowances are as under: Domiciliary Mediclaim 10500 Dress Code Allowances 10000 Brief Case allowances 3000 Ex-Gratia 33961 PF- Company Contribution 33696 Leave Encashment 38889 LTS 120459 Total 250505

50

CORPORATE GOVERNANCE: The Company is committed to the principles of good corporate governance. According to the Company corporate governance is the combination of voluntary practices and compliance with laws and regulations leading to effective control and management of the Company. The Company believes that good corporate governance contemplates that corporate actions balance the interest of all stakeholders and satisfy the tests of accountability, transparency and fair play. The Company believes that all its operations and actions must be directed towards enhancing overall shareholder value. The Company has complied with SEBI guidelines in respect of corporate governance, especially with respect to the appointment of independent directors on the Board and constitution of its Board committees, the shareholder/investor grievance committee and the audit committee. The Company has complied with all the requirements of the listing agreements with the Stock Exchanges and regulations and SEBI guidelines. Further, there is no penalty/stricture levied by any statutory authority against the Company in relation to corporate governance. Structure of the Board of Directors

Sr. No. Name of Directors Nature of Directorship 1 Mr. R.K Joshi Nominee Director 2 Mr. B. Chakrabarti Non Executive Director 3 Mr. M. K Garg Non Executive Director 4 Mr. M. Ramadoss Non Executive Director 5 Mr. V. Ramasaamy Non Executive Director 6 Mr. Manu Chadha Independent & Non Executive Director 7 Mr. R.M. Malla Non Executive Director 8 Mr. M.K. Tandon Independent & Non Executive Director 9 Mr. B. P. Deshmukh Independent & Non Executive Director

10 Mr. Arun Datta Independent & Non Executive Director 11 Mr. N. R Ranganathan Nominee Director 12 Mr. A. K Guha Executive Director

Audit Committee: Audit Committee was constituted in April 1996. The Audit Committee provides directions to and reviews functions of the Audit Department. The Committee evaluates internal audit policies, plans, procedures and performance and reviews the other functions through various internal audit reports and other year-end certificates issued by the Statutory Auditors. Quarterly and Annual Accounts are placed before the Audit Committee, prior to being presented to our Board along with the recommendations of the Audit Committee. The terms of reference of Audit Committee complies with the requirements of Clause 49 of the listing agreement. The committee consists of following Directors: Composition of the Audit Committee:

Sr. No Name of Director Nature of Directorship 1 Mr. M. K. Tandon Independent & Non Executive 2 Mr. B. P. Deshmukh Independent & Non Executive 3 Mr. R. M. Malla Non Executive

The Chairman of the Audit Committee is an Independent and Non-Executive Director. The terms of reference of the Audit Committee are given below: i. To have discussions with the auditors periodically about internal control systems, the scope of audit including the

observations of the auditors and to review the half-yearly and annual financial statements before submission to the Board and ensure compliance of internal control systems.

ii. To oversee the Company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible.

51

iii. Recommending the appointment and removal of external auditor, fixation of audit fee and also approval for payment for any other services.

iv. Reviewing with management the annual financial statements before submission to the Board. v. Reviewing with the management, external and internal auditors, the adequacy of internal control systems. vi. Reviewing the adequacy of internal audit function, including the structure of the internal audit department,

staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit.

vii. Discussions with internal auditors on any significant findings and follow up thereon. viii. Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected

fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board.

ix. Discussions with external auditors before the audit commences, nature and scope of audit as well as to have post-audit discussion to ascertain any area of concern.

x. Reviewing the Company's financial and risk management policies. xi. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders

(in case of non-payment of declared dividends) and creditors, if any. Investor’s Grievance Committee We have designated personnel to solve investors’ problems along with our Share Transfer Agents, Sharepro Services (India) Pvt. Ltd. The Investors Grievances Committee looks into redressal of shareholder and investor complaints, issue of duplicate/split/consolidated share certificates, allotment and listing of shares and review of cases for refusal of transfer/transmission of shares and reference to statutory and regulatory authorities. Composition of the Investor’s Grievance Committee:

Sr. No Name of Director Nature of Directorship 1 Mr. M. K. Tandon Independent & Non Executive 2 Mr. B. P. Deshmukh Independent & Non Executive 3 Mr. R. M. Malla Non Executive

Policy on Disclosures and Internal Procedure for Prevention of Insider trading: The Company is in compliance with and will continue to comply with the provisions of the SEBI (Prohibition of Insider Trading) Regulations, 1992. In compliance with regulation 12(1) of the SEBI (Prohibition of Insider Trading) Regulations, 1992, Company has framed a code of internal procedures and conduct for prevention of insider trading. Mr. S. Sridharan, Company Secretary is responsible for setting forth policies, procedures, monitoring and adherence to the rules for the preservation of price sensitive information and the implementation of the code of conduct under the overall supervision of the board. Shareholding of the Directors The Articles of Association of the Company do not require the Chairman and the Directors to hold any qualification shares. Interest of the Directors: All directors of the Company may be deemed to be interested to the extent of fees, if any, payable to them for attending meetings of the Board or any Committee thereof, commission payable to them as well as to the extent of other remuneration, reimbursement of expenses payable to them under Articles of Association by the Company and the housing loan taken by them. The Managing Director is also interested to the extent of remuneration paid to him for services rendered by him. All Directors may also be deemed to be interested to the extent of Equity Shares, if any, already held by them or their relatives, companies, firms and trusts in which they are interested as directors, members, partners or trustees in the Company, or that may be subscribed for and allotted to them and also to the extent of any dividend payable thereon and other distributions in respect of the said Equity Shares of the Company.

52

Payment to Directors for the year ended 31st March, 2005 (Amount in Rs.)

Name of Director Sitting Fees Salaries/ Perquisites

Commission Total

Mr. Manu Chadha 16000 --- --- 16000

Mr. M. K. Tandon 40000 --- --- 40000

Mr. B. P. Deshmukh 16000 --- --- 16000

Mr. N. R Ranganathan 24000 --- --- 24000

Mr. A.K Guha 8000 --- --- 8000

Mr. R.L Baxi 24000 --- --- 24000

Payment to Directors for the period 1st April 2005 to 31st December 2005 (Amount in Rs.)

Name of Director Sitting Fees Salaries/ Perquisites

Commission Total

Mr. Manu Chadha 16000 --- --- 16000

Mr. A Datta 4000 --- --- 4000

Mr. M. K. Tandon 40000 --- --- 40000

Mr. N. R Ranganathan 20000 --- --- 20000

Mr. A.K Guha 4000 --- --- 4000

Note: 1) No other director had drawn sitting fees during the year under consideration.

2) No salary/perquisite/commission was allowed/paid to any of the directors during this period. Interest as to Property None of the Directors are interested in the properties of the Company. Changes in Directors in the last three years Sr. No.

Name Date of Appointment/

Cessation

Reason

1. Mr. V. Jagannathan 26-09-2003 Appointed as Additional Director, confirmed at the AGM

2. Mr. Rajendra Beri 26-09-2003 Appointed as Additional Director, confirmed at the AGM

3. Mr. Sham Lal Mohan 26-09-2003 Appointed as Additional Director, confirmed at the AGM

4. Mr. T.S. Laschar 26-09-2003 Retired by rotation from Directorship 5. Mr. R. L. Baxi 26-09-2003 Reappointed at the AGM 6. Mr. Dilip S Phatarphekar 26-09-2003 Retired by rotation from Directorship 7. Mr. H. S. Wadhwa 24-10-2003 Appointed as Additional Director 8. Mr. A. K. Guha 21-06-2004 Appointed as Additional/Managing Director

9. Mr. R. L Baxi 17-09-2004 Retirement from Directorship

10. Mr. R. M. Malla 17-09-2004 Reappointed at the AGM

11. Mr. M.K Tandon 17-09-2004 Reappointed at the AGM

53

12. Mr. Manu Chadha 17-09-2004 Reappointed at the AGM

13. Mr. H.S Wadhwa 17-09-2004 Appointed as Additional Director /confirmed at AGM

14. Mr. A. K Guha 17-09-2004 Appointed as Additional Director/Managing Director/ confirmed at AGM confirmed at AGM

15. Mr. B. P Deshmukh 15-10-2004 Appointed as Additional Director

16. Mr. V Jagannathan 01-11-2004 Resigned as Director

17. Mr. H. S. Wadhwa 01-01-2005 Resigned as Director

18. Mr. M. K. Garg 19-01-2005 Appointed as Additional Director

19. Mr. B. Chakrabarti 19-01-2005 Appointed as Additional Director

20. Mr. P. C. Ghosh 31-01-2005 Resigned as Director

21. Mr. R. K. Joshi 21-02-2005 Appointed as Nominee Director/ Chairman

22. Mr. S. L Mohan 28-02-2005 Resigned as Director

23 Mr. M. Ramadoss 10-03-2005 Appointed as Additional Director

24 Mr. A. Ramamohan Rao 09-08-2005 Resigned as Director

25 Mr. M. K Tandon 15-09-2005 Reappointed at the AGM

26 Mr. Manu Chadha 15-09-2005 Reappointed at the AGM

27 Mr. B. P. Deshmukh 15-09-2005 Appointed as Additional Director /confirmed at AGM

28 Mr. B Chakrabarti 15-09-2005 Appointed as Additional Director /confirmed at AGM 29 Mr. M. K. Garg 15-09-2005 Appointed as Additional Director /confirmed at AGM

30 Mr. M. Ramadoss 15-09-2005 Appointed as Additional Director /confirmed at AGM

31 Mr. Arun Datta 24-10-2005 Appointed as Additional Director

32 Mr. Rajendra Beri 31-10-2005 Resigned as Director

33 Mr. V Ramasaamy 26-12-2005 Appointed as Additional Director

Date of Expiration of the term of current Directors

Sr. No

Name of the Director Nature of Directorship Date of expiration of term of office/due for re-appointment

1 Mr. R. K. Joshi Nominee Director Not liable to retire by rotation 2 Mr. B. Chakrabarti Non Executive Director Retire by rotation 3 Mr. M.K Garg Non Executive Director Retire by rotation 4 Mr. M. Ramadoss Non Executive Director Retire by rotation 5 Mr. V. Ramasaamy Non Executive Director AGM 2006 6 Mr. Manu Chadha Independent & Non Executive Retire by rotation 7 Mr. R. M. Malla Non Executive Director Retire by rotation 8 Mr. M. K. Tandon Independent & Non Executive Retire by rotation 9 Mr. B. P. Deshmukh Independent & Non Executive Retire by rotation

10 Mr. Arun Datta Independent & Non Executive AGM 2006 11 Mr. N. R Ranganathan Nominee Director Not liable to retire by rotation 12 Mr. A. K Guha Executive Director August 31, 2007

54

MANAGEMENT ORGANIZATION STRUCTURE:

Asst. Vice President Accounts and Finance

Asst. Vice President Marketing and Recovery

Nothern Region

Area Managers

Branch Office / Service Center

Managing Director

Sr. Vice President

Vice President

Asst. Vice President Company Secretary and Compliance

Asst. Vice President Recoveries and

Sanctions

55

KEY MANAGERIAL PERSONNEL:

Sr. No Name Designation Age Qualification Date of

Joining Exp

Yrs. Functional

Responsibility Previously Employed

Present Annual

Compensation (Rs. )

1 Mr. A. K. Guha Managing Director

58 C.A. 21-10-2002 36 years

Supervising and Managing the overall day to day affairs of the Company

United India Insurance Company Limited

8.04 lacs

2 Mr. Rajib De Vice President

40 B.Com (Hons), ACA

08-01-1992 17 years

Marketing, Systems and Internal Audit.

HPCL 6.71 lacs

3 Mr. S. Sridharan Company Secretary and Assistant Vice President

45 B. Com, ACA, ACS, ICWA, BGL

01-03-1994 22 years

Company Secretary, Legal, Recovery and Sanctions.


6.03 lacs

4 Mr. Shrinivas M Assistant Vice President

45 BE, PGD in Construction

17-05-1993 16 years

Recovery Canfin Homes Ltd.

7.40 lacs

5 Mrs. Meena V Assistant Vice President

47 B.A. (Hons) 12-06-2002 20 years

Area Manager, New Delhi Area office.

— 3.89 lacs

6 Mr. Mahesh Ghagre

Assistant Vice President

45 B. Com, ACA

14-10-1995 21 years

Accounts and Resource Mobilisation.

GIC of India

3.54 lacs

7 Mr. K. Divakar Group Head 51 B. Sc 06-02-1992 25 years

Area Manager, Bangalore Area Office.

New India Assurance Company limited

4.94 lacs

8 Mr. H.D. Thakkar

Group Head 56 B. Com 01-01-1996 28 years

Administration and Compliance of NHB guidelines.

GIC of India

4.03 lacs

9 Mr. Potu Srinivas

Group Head 44 B. Sc, B.L., PGD IRPM

29-02-1992 20 years

Area Manager, Chennai Area Office.

Sundaram Finance

4.21 lacs

10 Mr. S. Vijayramesh

Group Head 41 B. Sc 18-07-1991 22 years

Area Manager, Navi Mumbai Area Office.

CMC Ltd. 3.87 lacs

11 Mr. R. Jayachandran

Group Head 54 B. Sc 02-11-1993 15 years

Area Manager, Trivandrum Area Office


3.87 lacs

56

12 Mr. V.R Joshi

Group Head 42 B.com LLB MBA

02-05-1993 17 Years

Area Manager, Mumbai Area office

Dewan Housing Finance Ltd

3.40lacs

13 Mr. R Ramachandran

Group Head 39 M.com 01-05-1995 18 Years

Area Manager, Madurai Area office

Can Fin Homes Ltd

3.87lacs

14 Mr. Sanjay Koppikar

Group Head 35 B.com 13-05-1993 14 Years

Area Manager, Panaji Area office

Private Company

3.30lacs

15 Mrs. Mahalakshmi Sharma

Group Head 42 M.A 16-06-1993 20 Years

Area Manager, Corporate Office

Private Company

3.29lacs

Share holding of Key Managerial Personnel:

Name Number of Shares Mr. A.K. Guha ---- Mr. Rajib De 200 Mr. S. Sridharan ---- Mr. Shrinivas M 150 Mrs. Meena V 300 Mr. Mahesh Ghagre 300 Mr. K. Divakar 150 Mr. H.D. Thakkar 50 Mr. Potu Srinivas 200 Mr. S. Vijayramesh ---- Mr. R. Jayachandran 300 Mr. Sanjay Koppikar 200 Mrs. Mahalakshmi Sharma 200 Changes in the Key Managerial Personnel in the last three years: Sr. No Name Appointed/ Resigned Date of Change Reason

1. Mr. A. K. Guha Appointed 21-10-2002 Appointed as Chief Executive 2. Mrs. Meena V Appointed 12-06-2002 Appointed as Group Head 3. Mr. N. Sowmyan Retired 31-12-2002 Retired

Notes:

1. All the Key Managerial Personnel are permanent employees of our Company, except for the Managing Director, who is on deputation from United India Insurance Co. Ltd.

2. There is no understanding with major shareholders, customers, suppliers or any others pursuant to which any of the above mentioned personnel have been recruited.

3. None of our directors and key managerial personnel have any relations amongst them.

57

Employees: Summary of manpower strength as under:

Particulars No. Officers 89 Award Staff - Sub staff - Total 89

The Company has not issued any Employee Stock Option Scheme to its employees till date.

58

X. OUR PROMOTERS AND THEIR BACK GROUND*

1. General Insurance Corporation of India (GIC)

GIC was incorporated under the Companies Act, 1956, on 22nd November 1972 in terms of General Insurance (Business) Nationalisation Act, 1972 as a private company limited by shares, the undertaking of all Insurance Companies operating in the country were taken over by four companies, the New India Assurance Company Limited , United Insurance Company Limited, National Insurance Company Limited and Oriental Insurance Company Limited and the share holding of these companies was vested with GIC thus making it holding company for the four general insurance companies operating in India. The role of GIC was to supervise and control the business of general insurance and to aid, assists and advice its subsidiaries in the matter of general insurance business, investments etc. With the opening up of the insurance sector, to provide a level playing field, the Government decided to make the subsidiary companies independent. As a result of from March 21 2003, shares of all erstwhile subsidiary companies were transferred to President of India and there by GIC ceased to be the holding company of these companies. GIC has diversifiesd into area like housing finance and management of mutual funds. GIC with erstwhile Subsidiary of companies floated Mutual Fund in 1991 as Trust Subsequently in 1993 as per SEBI Regulation GIC AMC was formed. In this Company, holding of GIC and erstwhile Subsidiary Companies is 40%, SOROS 40% and balance is held by GICHFL. The entire general insurance business in India was nationalized by General Insurance Business (Nationalization) Act, 1972 (GIBNA). The Government of India (GOI), through Nationalization took over the shares of 55 Indian insurance companies and the undertakings of 52 insurers carrying on general insurance business.

The Directors on the Board of GIC are: Mr. R. K. Joshi Mr. G.C. Chaturvedi Mr. A. K. Pawar Mr. A. K. Shukla Mr. B. Chakrabarti

Financial details of GIC for the past three years

(Rs in Lacs) Particulars 2004-05 2003-04 2002-03 Total Income 461387 416297 383279 Net Profit after Tax 20002 103762 26146 Equity Capital 21500 21500 21500 Reserves (excluding revaluation reserves) 404425 391777 295292 Net Worth 425925 41.3277 316735 Earning Per Share (Rs.) 47.00 483.00 131.00 (Face Value Rs.100)

The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995.

There has been no change in the capital structure and the Company upto March 31, 2005 and has not made any issue of equity shares during the past three years.

Litigation details pertaining to GIC: For details on litigations and disputes pending against the Company and defaults made by the Company please refer to the paragraph under “ Litigations and Disputes” on page no. ______ of this Letter of Offer.

59

2. National Insurance Company Limited (NICL)

NICL was incorporated with registered office at Kolkata on 6th December 1906 under the Companies Act, 1882 to carry on General Insurance Business. Upon nationalization of General Insurance Business in 1971 the Company was restructured by merging 22 foreign and 11 Indian Insurance Companies operating in India as per amalgamation scheme framed under the General Insurance Business (Nationalization) Act, 1972. Under the Act General Insurance Corporation of India was incorporated as a holding company for NICL. The Central Government, vide Gazette notification S.O 329 (E) dated 21st March 2003 has notified the “ Appointed Date “ on which the General Insurance Business (Nationalization Act 2002) has come into force. In view of the said notification the share capital of National Insurance Co. Ltd is now vested with the Central Government & General Insurance Corporation of India has been formally delinked from the said four public sector insurance companies. NICL is now board run autonomous Company.

Besides catering to average insurance requirements of all sections of Indian society, NICL also provides customized and innovative insurance solutions through a wide array of products.

Apart from domestic insurance business, the company also undertakes re-insurance and overseas operations. NICL also provides financial assistance to corporate sector by way of term-loans, underwriting and direct subscription to shares/debentures/bonds etc.

Headquartered in Kolkata, it has an organizational network of over 964 offices with a workforce of over 20,000 trained people. The company also has operations in Hong Kong and Nepal and ranks among the top global business insurers.

The directors on the board of NICL as on March 31, 2005 are as under: Mr. B. Chakrabarti Mr. O. N. Singh

Mr. G. Bhujabal Mr. Y. P. Chopra Mr. T. K. Das Financial details of NICL for the past three years

Rs. in Lacs Particulars 2004-05 2003-04 2002-03 Total Income (Gross Direct Premium Income)

379991 339110 257034

Net Profit after Tax 13118 59021 13491 Equity Capital 10000 10000 10000 Reserves (excluding revaluation reserves) 111627 101520 97217 Earning Per Share (Rs.) 13.12 5.90 1.35


There has been no change in the capital structure and the Company has not made an issue of equity shares during the past three years. Litigation details pertaining to NICL

For details on litigations and disputes pending against the Company and defaults made by the `Company please refer to the paragraph under “ Litigations and Disputes” on page no. ______ of this Letter of Offer.

60

3. United India Insurance Company Limited (United India)

United India, leading General Insurance Company with more than three decades of experience in non-life insurance business was formed by the merger 22 General Insurance Companies and 5 Foreign Operation of Indian Companies and is wholly owned government of India., Consequent to nationalization of general insurance. The Central Government, vide Gazette notification S.O 329 (E) dated 21st March 2003 has notified the Appointed date on which general Insurance Business (Nationalization Act 2002) shall come in to force 21st March 2003. With effect from this date the Book value of the shares in the 4 Public Sector insurance companies held by GIC stands transferred to the Central Government. In view of the said notification the share capital of United India is now vested with the Central Government & General Insurance Corporation of India has been formally delinked from the said four public sector insurance companies. United India now board run autonomous Company.

United India has a countrywide network of 24 regional offices, 371 divisional offices, 717 branch offices and 185 micro offices across the country. The company is in the process of interconnecting all the offices by wide area network.

The directors on the board of United India as on March 31, 2005 are:

Mr. M. K. Garg Mr. G. C. Chaturvedi Mr. T. K. Roy Mr. V. Ramasaamy

Financial details of United India for the past three years Rs in Lacs

Particulars 2004-05 2003-04 2002-03 Total Income 49979 50415 224110 Net Profit after Tax 30771 38045 17098 Equity Capital 10000 10000 10000 Reserves (excluding revaluation reserves) 192958 169263 134603 Earning Per Share (Rs.) 30.77 38.45 17.10


There has been no change in the capital structure and the Company has not made an issue of equity shares during the past three years.

Litigation details pertaining to United India


61

4. The Oriental Insurance Company Limited (OICL)

Oriental Fire & General Insurance Company Limited (OFGICL) was incorporated on September 12, 1947 & commenced its operation in late 1949. On the Nationalization of General Insurance Business OFGICL became one four subsidiary of General Insurance Corporation of India with the subsequent merger of ten Insurance Companies and 12 foreign insurance companies with OFGICL. To reflect gamut of operation of the Company, the name of the Company was changed in May 1984 from Oriental Fire & General Insurance Company Limited to The Oriental Insurance Company Limited. On 30th August 2003, the Shares held by GIC were transferred to Government of India and since then the Company has ceased to be a subsidiary of GIC. Now a wholly owned Government Company, OICL was delinked from GIC of India by an Act of the Parliament dated March 21 2003.

It is one of the oldest insurance companies and was established in the year 1947. The company headquartered in New Delhi transacts all kinds of general insurance business ranging from very big projects to small rural insurance covers. The company has 21 regional offices, 311 divisional offices and 635 branch offices. It specializes in devising special covers for large projects like power plants, petro-chemical, steel plants and chemical plants. The directors on the board of OICL are: Mr. M. Ramadoss Mr. K. N. Prithviraj Mr. Subhash C. Sharma Mr. R. C. Jain

Financial details of OICL for the past three years

Rs in Lacs Particulars 2003-04# 2002-03 2001-02Total Income 290000.00 286800.00 249900.00Net Profit after Tax 31648.00 6399.00 (25444.00)Equity Capital 10000.00 10000.00 10000.00Reserves (excluding revaluation reserves) 102218.00 73391 .00 57280.00NAV (Rs.) 112.22 83.39 67.28Earning Per Share (Rs.) 31.65 6.40 (25.44)

# The final accounts for the year 2003-04 have been adopted by the board and the figures provided are subject to Comptroller & Auditor General (GAG) comments and shareholders approval.



Litigation details pertaining to OICL: For details on litigations and disputes pending against the Company and defaults made by the `Company please refer to the paragraph under “ Litigations and Disputes” on page no. ______ of this Letter of Offer.

62

5. The New India Assurance Company Limited (New India)

New India, incorporated on 23rd July 1919, founded by the House of Tatas was nationalized in 1973. Currently its 100% equity is held by Government of India. The New India has earned total gross income premium of Rs. 5103.16 crores in the year 2004-05 as against Rs. 4921.47 crores in the year 2003-204. As on 31st March 2005 the Company has assets of Rs. 1987.19 Crores. During the year company operated in domestics market through a network of 26 regional Office, 393 Divisional offices , 614 branch offices and 34 Direct Agents Branches. New India is Rank No.1 in the Indian market. New India is a Largest Non-Life insurer in Afro-Asia excluding Japan. New India is the first Indian non-life company to cross Rs. 5000 crores Gross premium. New India has overseas presence in countries like Japan, U. K, Middle East, Fiji and Australia. New India is a leading global insurance group, with offices and branches throughout India and various countries abroad. The company’s overseas operation commenced in 1920. New India operates in 24 countries spanning 5 Continents in the year 2005. New India operates through a network of 19 branches, 12 Agencies, 2 Associates Companies and 2 subsidiary companies in the year 2005. The New India overseas premium is Rs. 892.35 crores in the year 2004-2005.

New India has been rated "A" (Excellent) by A.M. Best Co., making it the only Indian insurance company to have been rated by an international rating agency. The directors on the board of New India are:

Mr. B. Chakrabarti Mr. Girish Chandra Mr. Ramkumar Joshi Mr. Anil Khendelwal Mr. Ayalur Vedom Mr. Jitendra Kumar Gupta

Financial details of New India for the past three years

Rs in Lacs Particulars 2004-05 2003-04 2002-03 Total Income (Net Premium Income) 389411 363494 351643 Net Profit after Tax 40223 59021 25581 Equity Capital 15000 10000 10000 Reserves (Excluding Revaluation Reserves) 416641 384350 3304.0 Net Worth 431641 394350 340400 Earning per share (Rs.) 26.81 59.02 25.58


There has been no change in the capital structure and the Company has not made an issue of equity shares during the past three years. Litigation details pertaining to New India:


63

6. IFCI Limited (IFCI)

At the time of independence in 1947, India's capital market was relatively under-developed. Although there was significant demand for new capital, there was a dearth of providers. Merchant bankers and underwriting firms were almost non-existent and commercial banks were not equipped to provide long-term industrial finance in any significant manner. It is against this backdrop that the government established IFCI on 1st July 1948, as the first Development Financial Institution (DFI) in the country to cater to the long-term finance needs of the industrial sector. The newly established DFI was provided access to low-cost funds through the Central Bank's Statutory Liquidity Ratio (SLR), which in turn enabled it to provide loans and advances to corporate borrowers at concessional rates. This arrangement continued until the early 1990s when it was recognized that there was need for greater flexibility to respond to the changing financial system. It was also felt that IFCI should directly access the capital markets for its fund requirements. It is with this objective that the constitution of IFCI was changed in 1993 from a statutory corporation to a company under the Indian Companies Act, 1956. Subsequently, the name of the company was also changed to "IFCI Limited" w.e.f. October 1999. Directors of IFCI Mr. P. S. Shenoy Mr. Atul Kumar Rai Mr. K. Sridhar Mr. V. K. Saxena Mr. S. Ravi Prof. I. M. Panday Mr. R. M. Malla Shareholding pattern of IFCI as on 31st December 2005 Category No. of Shares held % of Shareholding

Non Promoter's Holding Institutional Investors Mutual Funds and UTI 5718382 0.9Banks, Financial Institutions, Insurance Companies 248561794 38.92FIIs 56072686 8.78

Sub Total 310352862 48.59Others Private Corporate Bodies 70226161 11Indian Public 253871484 39.75NRIs / OCBs 4225255 0.66

Sub Total 328322900 51.41Grand Total 638675762 100

64

Financial details of IFCI for the past three years

Rs in Lacs Particulars 2004-05 2003-04 2002-03 Total Income 131785 110517 143324 Net Profit after Tax (44340) (322978) (25970) Equity Capital 63868 63868 63868 Reserves (excluding revaluation reserves) 21462 21836 22910 Net Worth (318369) (285550) 37819 Earning per share (Rs.) (5.79) (51 .28) (4.78)

Share Price Data The Highest and lowest market price of the equity shares on the BSE during the past six months is given below:



Litigation details pertaining to IFCI For details on litigations and disputes pending against the Company and defaults made by the `Company please refer to the paragraph under “ Litigations and Disputes” on page no. ______ of this Letter of Offer.

* NOTE: THE INFORMATION RELATING TO THE PROMOTERS GENERALLY AND IN PARTICULAR CONCERNING FINANCIAL DETAILS AND OTHER INFORMATION IS BASED ON THE INFORMATION RECEIVED BY THE COMPANY FROM THE PROMOTERS AND WHICH INFORMATION HAS NOT BEEN INDEPENDENTLY VERIFIED. EXCEPT AS PROVIDED HEREIN THE COMPANY HAS NOT RECEIVED ANY UPDATED INFORMATION IN RESPECT TO FINANCIAL DETAILS AND OTHER INFORMATION WITH REGARDS TO THE OPERATIONS OF THE PROMOTER COMPANIES.

Date High (Rs.) Low (Rs.) Close (Rs.)

July 2005 13.55 17.85 13.25

August 2005 17.05 18.25 15.30

September 2005 16.95 18.45 15.15

October 2005 16.15 16.40 11.40

November 2005 12.40 13.72 9.29

December 2005 10.48 10.72 9.52

January 2006 10.00 12.77 10.00

65

FINANCIAL INFORMATION OF THE COMPANY

AUDITORS REPORT The Board of Directors GIC Housing Finance Ltd. P.M. Road, Mumbai.400001 Dear Sirs, Re: Proposed Rights Issue Offer to issue and allot 2,69,25,533 Equity Shares of Rs.10/- between a price band to be determined by the Company on Rights basis in the ratio of 1 Equity Share for every 1 Equity Shares held. We have examined the financial information contained in the statements annexed to this report i.e. Annexures 1 to 12 which are proposed to be included in the Letter of Offer of GIC Housing Finance Ltd. in connection with the proposed Rights Issue as required by Clause B of Part II part of Schedule II of the Companies Act, 1956 and Guidelines titled Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000 (‘Guidelines’) issued by the Securities and Exchange Board of India (SEBI) in pursuance of Section 11 of the Securities and Exchange Board of India Act, 1992, and we report that : 1. We have examined the ‘Statement of Profits and Losses’ of the Company for each of the financial years

ending 31st March, 2001, 31st March, 2002, 31st March, 2003, 31st March,2004 , 31st March, 2005, & half year ended on September 30, 2005 and ‘Statement of Assets and Liabilities’ as at those dates enclosed as Annexure-1 and Annexure-2 to this report and confirm that: i. These statements reflect the profits and losses and assets and liabilities for each of the relevant

periods as extracted from the Profit and Loss Accounts for the Financial years ended 31st March 2001, 31st March, 2002, 31st March 2003, 31st March 2004, 31st March 2005 and half year ended on September 30, 2005 and the Balance Sheets as on those dates audited by us, after making therein the disclosures and adjustments required to be made in accordance with the provisions of paragraph 6.18.7 (iv)(a) & (b) of the Securities and Exchange Board of India (Disclosures and Investor Protection) Guidelines, 2000, to the extent applicable.

ii. The Significant Accounting Policies adopted by the Company as on September 30, 2005 are

enclosed as Annexure-3 to this report. 2. We have examined the ‘Statement of Accounting Ratios’ of the Company for each of the five financial

years ended 31st March 2001, 31st March 2002, 31st March 2003, 31st March 2004, 31st March 2005, and the half year ended September 30, 2005 enclosed as Annexure-4 to this report and confirm that they have been correctly computed from the figures as stated in the ‘Statement of Profits and Losses’ and ‘Statement of Assets and Liabilities’ of the Company referred to in paragraph 1 (i) above.

3. We have examined the accompanying ‘Statement of Related Party Disclosure’ to the extent applicable for

the half year ended September 30, 2005 and the corresponding previous year enclosed as Annexure-5 to this report and confirm that the relationships and transactions between the Company and its related parties have been appropriately reported in accordance with ‘AS-18’ Related Party Disclosures’ issued by The Institute of Chartered Accountants of India.

4. We have examined the ‘Statement of Dividend Paid’ by the Company in respect of each of the years ended

31st March, 2001, 31st March, 2002, 31st March, 2003, 31st March, 2004 and 31st March, 2005 on the Shares of the Company, enclosed as Annexure-6 to this report and confirm that it correctly records the dividend paid in respect of each of those years.

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5. We have examined the ‘Statement of Tax Shelter’ for the years ended 31st March, 2001, 31st March, 2002, 31st March, 2003, 31st March, 2004, 31st March, 2005, and the half year ended September 30, 2005 enclosed as Annexure-7 to this report and report that, in our opinion it correctly reflects the ‘Tax Shelter’ for each of those years and period.

6. We have examined the ‘Cash Flow Statement’ in respect of each of the years ended 31st March, 2001, 31st

March, 2002, 31st March, 2003, 31st March, 2004, 31st March, 2005 and the half year ended September 30, 2005 enclosed as Annexure-8 to this report and confirm that, in our opinion, these statements have been prepared by the Company in accordance with the requirement of Accounting Standards 3 (Cash Flow Statements) issued by the Institute of Chartered Accountants of India.

7. We have examined the ‘Statement of Secured & Unsecured Loans’ as on September 30, 2005 enclosed as

Annexure-9 and Annexure-10 to this report and confirm that they have been correctly extracted from the figures as stated in the ‘Statement of Assets and Liabilities’ of the Company referred to in paragraph 1 (i) above.

8. We have examined the ‘Statement of Capitalization Pre-Issue’ as on September 30, 2005 enclosed as

Annexure-11 to this report and confirm that they have been correctly extracted from the figures as stated in the ‘Statement of Assets and Liabilities’ of the Company referred to in paragraph 1 (i) above.

9. We have examined the ‘Statement of Other Income in respect of each of the years ended 31st March, 2001,

31st March, 2002, 31st March, 2003, 31st March, 2004, 31st March, 2005, and the half year ended September 30, 2005 enclosed as Annexure-12 to this report and confirm that they have been correctly extracted from the figures as stated in the ‘Statement of Profits and Losses’ of the Company referred to in paragraph 1 (i) above.

We further report that the information mentioned in the above paras 2-9 above has been correctly computed

from the figures as stated in the statements of Profits and Losses and Assets and Liabilities referred to in paragraph 1 above.

This report is intended solely for your information for inclusion in the Letter of Offer in connection with the

proposed Rights Issue of the Company and is not to be used, referred to or distributed for any other purpose without our prior written consent.

M/s M. P. Chitale & Co. Chartered Accountants Place: Mumbai Dated: January 25, 2006

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Annexure – 1

GIC Housing Finance Ltd. Statement of Profits and Losses

Rs. in lacsParticulars For the Financial Year SIX MONTHS 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 30.09.2005 Income: Operating Income 9,095 9,163 9,676 9,920 12,453 7,583 Investment and other Income 85 74 77 90 108 38

Total (A) 9,180 9,237 9,753 10,010 12,561 7,621 Expenditure: Interest 6,849 7,599 7,272 6,990 7,865 4,784 Staff Expenses 153 162 199 185 236 128 Other Expenses 347 383 450 567 808 425 Miscellaneous expenses written off 6 6 5 5 10 5 Depreciation 72 56 43 40 44 23 Non-Performing assets written off 965 342 823 200 - - Provision for Non-performing assets (Net) 145 521 201 565 1,524 386

Total (B) 8,537 9,069 8,993 8,552 10,487 5,751 Net Profit Before Tax and Extra ordinary

Items (A-B) 643 168 760 1,458 2,074 1,870 Less:Taxation 210 150 235 526 856 473 Deferred Tax Assets - (102) (136) (180) (558) (124) Fringe Benefit Tax - - - - - 3 Extraordinary Items - - - - - -

Net Profit After Tax and Extra ordinary items 433 120 661 1,112 1,776 1,518

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Annexure – 2 GIC Housing Finance Ltd.

Statement of Assets and Liabilities Rs. in Lacs Particulars Position as at Financial Year Ended Six Months 31-Mar-01 31-Mar-02 31-Mar-03 31-Mar-04 31-Mar-05 30-Sep-05 A Housing Loans: 62,742 70,839 84,758 110,900 157,819 171,149 Less: Provision for non performing Loans 410 693 1,061 1,562 3,086 3,451 62,332 70,146 83,697 109,338 154,733 167,698 B Fixed Assets Gross Block 584 598 617 652 666 676 Less: Depreciation 252 308 344 382 380 402 Net Block 332 290 273 270 286 274 Less: Revaluation Reserve - - - - - - Net Block after Revaluation Reserve 332 290 273 270 286 274 C Investments Cost of Investments 1,699 1,489 1,488 1,387 1,379 1,476 Less; Provision for Non Performing Inv 671 802 1,033 1,218 1,218 1,239 1,028 687 455 169 161 237 D Current Assets: Sundry Debtors (Secured) 1,395 745 826 677 320 422 Cash and Bank Balance: 1,269 2,201 1,388 1,611 1,707 1,815 Loans & Advances 3,163 3,148 3,666 4,491 4,554 5,021 Other Current Assets 311 149 98 199 93 377 6,138 6,243 5,978 6,978 6,674 7,635 Total E =A+B+C+D 69,830 77,366 90,403 116,755 161,854 175,844 F Deferred Tax Asset - 238 375 555 1,113 1,237 G Total Assets - G= A + B +C+D+F 69,830 77,604 90,778 117,310 162,967 177,081 Loan Funds, Current Liabilities and Provision

H Liabalities & Provisons Loan Funds: Secured Loans 59,276 66,435 74,375 89,521 127,022 141,694 Unsecured Loans 155 102 5,022 15,018 20,005 17,503 59,431 66,537 79,397 104,539 147,027 159,197 I Current Liabilities and Provisons 2,132 2,717 2,611 3,189 3,633 4,053 Total J =H+I 61,563 69,254 82,008 107,728 150,660 163,250

K Net Worth (K = G-J ) 8,267 8,350 8,770 9,582 12,307 13,831 Represented by: L Share Capital 1,797 1,797 1,797 1,797 2,693 2,693 M Reserves 6,486 6,563 6,978 7,785 9,652 11,172 N Misc. Expenditure not written-off 16 10 5 - 38 34

O Total = L+ M – N 8,267 8,350 8,770 9,582 12,307 13,831

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ANNEXURE - 3

SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON SUMMARY STATEMENTS

SIGNIFICANT ACCOUNTING POLICIES: 1. SYSTEM OF ACCOUNTING:

The Company adopts the accrual concept in the preparation of the Financial Statements, following the historical cost convention.

2. PROVISIONING FOR HOUSING LOANS AND INVESTMENTS:

i. Housing loans and inter corporate loans are classified into “Performing” and “Non-Performing” assets in terms of guidelines laid down by the National Housing Bank. Housing loans are classified as standard, sub-standard, doubtful and loss assets.

ii. Provisions for non-performing assets and investments are made on a periodic review in accordance with the directives /guidelines laid down by the National Housing Bank.

3. INCOME ON HOUSING LOANS:

i. Repayment of housing loans is by way of Equated Monthly Installments (EMI) comprising principal and interest. Interest is calculated on the outstanding loan balance at the beginning of every month. EMIs commence once the entire loan is disbursed. Pending commencement of EMIs Pre-EMI interest is payable every month.

ii. Interest on Housing Loans which are classified as Non- performing assets is recognised on realisation as per the directives/guidelines laid down by National Housing Bank.

iii. Penal Interest, Fees and Other Charges are recognised when received.

4. INVESTMENTS:

i. Investments are accounted and valued at cost plus incidental expenditure incurred in connection with acquisition.

ii. Investments are classified into two categories i.e. Long-term investments and Current investments. iii. Income on Investments which are classified as Non performing is recognised on realisation as per

the directives/guidelines laid down by National Housing Bank.

5. FIXED ASSETS:

Fixed Assets are capitalised at cost. 6. DEPRECIATION:

Depreciation on Fixed Assets is provided on the reducing balance method at the rates specified by Schedule XIV of the Companies Act, 1956.

7. RETIREMENT BENEFITS:

i. Contribution to Provident Fund is charged to accounts on accrual basis. ii. Provision for leave encashment has been made on the basis of actuarial valuation. iii. Gratuity is accounted for on the basis of the premium paid to Life Insurance

Corporation of India under the Group Gratuity Scheme. 8. MISCELLANEOUS EXPENDITURE:

Right Issue expenses are amortised over a period of five years.

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GIC Housing Finance Ltd. Annexure – 4 Statement of Accounting Ratio

Rs. in Lacs Financial Year Six Months Particulars 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 30-09-2005 1 a Net Profit after tax 433 120 661 1,112 1,776 1,518 b No. of Equity Shares 180 180 180 180 269 269 Earning per share= Net profit after tax/No. of equity shares 2.41 0.67 3.67 6.17 7.60 5.64 2 a Net Profit after tax 433 120 661 1,112 1,776 1,518 b Net worth 8,267 8,350 8,770 9,582 12,307 13,831 Return on Net Worth= 0.05 0.01 0.08 0.12 0.14 0.11 Net Profit after tax/Net worth 3 a No. of Equity Shares 180 180 180 180 269 269 b Net Worth 8,267 8,350 8,770 9,582 12,307 13,831 Net Asset Value per share = 45.93 46.38 48.72 53.23 45.75 51.41 Net worth/ No. of Equity Shares Note: Ratios not in Lacs

GIC Housing Finance Ltd. Statement of Accounting Ratio

F.Y. F.Y. F.Y. F.Y. F.Y. SIX MONTHS Particulars 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 30.09.2005 CAPITAL ADEQUACY (%) 11.47 12.48 14.85 12.64 12.30 13.14 DEBT/EQUITY RATIO (TIMES) 7.19 7.97 9.05 10.91 11.95 11.51 INTEREST COVERAGE RATIO (TIMES) 1.09 1.02 1.10 1.21 1.26 1.39 CURRENT RATIO (TIMES) 2.88 2.30 2.29 2.19 1.84 1.88

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Annexure – 5 Disclosure Required as per Accounting standard 18 (AS 18) ' Related Party Disclosure'

The company has related party relationships with various parties/companies from the financial year 2000-2001 to 2004-05 and six months ended September 30, 2005. List of Related Parties: General Insurance Corporation of India. The New India Assurance Company Ltd. National Insurance Company Ltd. The Oriental Insurance Company Ltd. United India Insurance Company Ltd. Shri A.K. Guha (Managing Director) Shri B.P.Deshmukh (Director) The Company has related party transactions as follows.

Financial Year Name of the party Nature of transaction Amount (Rs in Lacs)

Repayment of

Secured Loans 2,183

Interest Paid 2012

Insurance Premium

2000-2001 GIC and Subsidiaries.

Paid 16

Repayment of

Secured Loans 13,147

Interest Paid 1264

Insurance Premium


Paid 15

Repayment of

Secured Loans 0

Interest Paid 0.2

Insurance Premium


Paid 14.02

Repayment of

Secured Loans 0

Interest Paid 0

Insurance Premium


Paid 40

Shri A.K.Guha Salary 5.05 (Managing Director)* Contribution to Pension 0.33 and other funds

2004-2005

* Shri A.K.Guha is appointed Perquisites 3.46

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as Managing Director of the Total: 8.84 Company with effect from 21st June, 2004. The above remun- Housing Loan Balance 1.66 eration is for the full year. The as on 31.03.05. Housing Loan was sanctioned Maximum Balance 1.96 prior to his appointment as During the year

Managing Director. (Previous Year - Nil) Shri A.K.Guha Salary 3.82 (Managing Director)* Contribution to Pension 0.17 and other funds * Shri A.K.Guha is appointed Perquisites 0.73 as Managing Director of the Total: 4.72 Company with effect from 21st June,2004. The above remun- Housing Loan Balance 3.80 eration is for the half year. as on 30.09.05. Maximum Balance 4.00 During the half year

Half-year ended 30.09.2005.

(Previous Year – Rs. 1,07,388/-)

Shri B.P.Deshmukh Housing Loan Balance (Director) as on 30.09.05. 1.56

Housing Loan was sanctioned Maximum Balance prior to his appointment as Director. During the half year 3.35

(Previous Year – Rs. 4,13,497/-)

Half-year ended 30.09.2005.

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Annexure - 6

GIC Housing Finance Ltd. Statement of Dividend Paid and Tax Thereon

F.Y. F.Y. F.Y. F.Y. F.Y. SIX MONTHS

Particulars 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 30.09.2005No. of Shares 17,974,572 17,974,572 17,974,572 17,974,572 26,925,533 26,925,533 Paid up value 10 10 10 10 10 10Rate of Dividend 10% 10% 12.50% 15% 15% N.A.Dividend on above (Rs.) 17,974,572 17,974,572 22,468,215 26,961,858 40,388,300 -Tax on proposed dividend (Rs.) 1,833,406 - 2,878,740 3,454,488 5,664,459 -

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Annexure - 7 GIC Housing Finance Ltd. Statement of Tax Shelter

Rs. in Lacs Financial Year Six Months Particulars 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 30.09.2005 Profit before taxation as per 643 168 760 1,458 2,075 1,871 Profit and Loss a/c Rate of Income Tax 39.55% 35.70% 36.75% 35.875% 36.5925% 33.66% Tax at Notional Rate 254 60 279 523 759 630 Adjustments: Provision for NPA 145 521 201 565 1,524 386 Difference in depreciation (6) 8 3 1 (2) 3 Dividend income exempt u/s 10(33) (23) (11) (28) (23) (28) (17) OTHER ADJUSTMENTS Miscellaneous Expenditure 6 6 6 5 - - Provision for leave Encashment - - 5 2 11 - Provision for Bonus - - - - 1 - (Profit)/Loss on sale of Invt. 20 (17) - - - - (profit)/ Loss on Sale of Asset 2 - (1) - - - Deduction u/s 36(1)(viii) (292) (270) (345) (555) (1,250) (881) Prior Period Adjustments - - 7 - - - Net Adjustment (148) 237 (152) (5) 256 (509) Tax Expense/(Shelter) (58) 85 (56) (1) 94 (171) Tax on profits 196 145 223 522 853 459

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Annexure - 8 GIC Housing Finance Ltd.

Statement of Cash Flows Rs in Lakhs

For the Financial Year

SIX

MONTHS Particulars 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 30.09.2005 A: Cash Flow From Operating Activities: Net profit before tax and extra ordinary items 643 168 760 1,457 2,075 1,871 Adjusted for: Depreciation 72 56 43 41 44 23 Miscellaneous Expenditure Written off 6 5 5 5 10 5 Non performing Assets written off 965 342 823 200 - -provision for doubtful debts 145 521 202 565 1,524 386 Prior Period Adjustments (Net) (57) - 7 - 9 -(Profit)/Loss on Sale of Investments 20 (17) (13) (3) (32) (15)Dividend and interest income on investment - - (47) (42) (29) (17)Operating Profit before Wk. Capt. Changes 1,794 1,075 1,780 2,223 3,601 2,253Adjusted for: (Increase)/Decrease in Current Assets (1,083) 737 (569) (857) 400 (853)Increase/(Decrease) in Current Liabilities (489) 585 (150) 532 310 824 Operating Profit After Wk. Capt. Changes 222 2,397 1,061 1,898 4,311 2,224 Adjusted for: (Increase)/Decrease in Housing Loans (5,199) (8,439) (14,324) (26,141) (46,919) (13,330)Cash generated from Operating Activity (4,977) (6,042) (13,263) (24,243) (42,608) (11,106)Taxation (228) (150) (264) (561) (913) (476)Net cash generated from operating activity (5,205) (6,192) (13,527) (24,804) (43,521) (11,582)B: Cash Flow from Investment Activities Acquisition of Fixed Assets (Net) (12) (14) (26) (36) (61) (10)Purchase of Investments (2,165) (6,141) (22,000) (16,330) (82,964) (50,478)Sale of Investment 2,421 6,368 22,013 16,434 83,005 50,395 Dividend and Interest income on investment - - 47 42 29 17 Net cash Generated from Investment Activity 244 213 34 110 9 (76)C: Cash Flow from Financing Activities Calls unpaid Received (Including Premium) - - - - 2 -Amount Received on Rights Issues (Including Premium) - - - - 1,436 -

Loans Borrowed (Net of Repayments) 5,302 7,107 12,861 25,141 42,488 12,170 Share issue Expenses - - - - (48) -Dividend (180) (180) (180) (225) (270) (404)Net cash generated from Financing Activity 5,122 6,927 12,681 24,916 43,608 11,766 Net Cash & Cash Equivalents Generated 161 948 (812) 222 96 108 Cash & Cash Equivalents as at Beginning of the Year 1,919 2,080 2,201 1,389 1,611 1,707

Cash & Cash Equivalents as at End of the Year 2,080 3,028 1,389 1,611 1,707 1,815

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Annexure - 9

GIC Housing Finance Ltd. Statement of Secured Loans

Rs. in Lacs Particulars September 30, 2005 Rate of Date of Last Interest Instalment Secured Loans: From Scheduled Banks VIJAYA BANK 3,998 6.25% 17.07.2009 VIJAYA BANK - II 4,498 6.25% 06.01.2010 THE KALYAN JANATA SAHAKARI BANK LTD. 158 6.75% 27.03.2008 NEW INDIA CO-OP.BANK LTD. 1,170 6.75% 31.03.2010 ANDHRA BANK 2,483 6.25% 13.09.2008 ANDHRA BANK - II 5,000 6.25% 19.11.2011 ANDHRA BANK - III 3,437 6.75% 29.06.2012 BANK OF PUNJAB LTD.(III) 2,374 6.40% 25.06.2010 PUNJAB NATIONAL BANK (I) 3,121 6.25% 30.09.2010 PUNJAB NATIONAL BANK (II) 9,992 6.25% 04.07.2010 BANK OF INDIA (III) 1,500 6.50% 01.10.2006 BANK OF INDIA (IV) 3,500 6.50% 21.03.2009 BANK OF INDIA (V) 4,375 6.50% 01.07.2012 BANK OF INDIA (VI) 10,000 6.50% 23.03.2013 ORIENTAL BANK OF COMMERCE 7,996 6.25% 29.08.2009 ORIENTAL BANK OF COMMERCE - II 5,000 6.25% 10.02.2010 STATE BANK OF INDORE 4,999 6.35% 10.09.2010 STATE BANK OF HYDERABAD 4,999 6.314% 05.03.2011 STATE BANK OF HYDERABAD - II 9,998 6.10% 22.11.2008 UNION BANK OF INDIA 10,000 6.25% 12.03.2013 UNION BANK OF INDIA - II 9,996 6.25% 10.09.2013 LORD KRISHNA BANK 2,000 6.35% 17.03.2010 STATE BANK OF MYSORE 5,000 6.31% 30.07.2011 SYNDICATE BANK 9,000 6.50% 27.09.2014 BANK OF MAHARASHTRA 5,000 6.22% 30.06.2010 CANARA BANK 9,832 6.45% 23.08.2011 CORPORATION BANK 2,268 6.50% 27.09.2013 From National Housing Bank - - - The loans are secured by way of first charge on book-debts equivalent to loan outstanding. Total 141,694

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Annexure - 10 GIC Housing Finance Ltd.

Statement of UnSecured Loans Rs. in Lacs As on 30/09/05 Particulars Amount Interest Rate Repayment Schedule Unsecured Loans Canara Bank 5,000 5.70% 10.12.2005 Andhra Bank 7,500 5.85% 22.12.2005 Karnataka Bank Ltd. 5,000 5.75% 05.02.2006 Last Date of Repayment Deposits from Public 3 12.50% 22.04.2006 Total 17,503

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Annexure – 11 GIC Housing Finance Ltd.

Statement of Capitalisation Statement Rs. in Lacs

Particulars Pre-issue as at As Adjusted

30/9/2005 for issue based on 30/9/2005 figures

Short Term Debt 17,503 17,503 (Repayable in one year) Long Term Debts From Schedule Banks 141,694 141,694 Interest accrued and Due - - (Secured by way of first charge on Book-debts equivalent to loan outstanding) From National Housing Bank - - (secured by way of first charge on book-debts equilent to loan outstanding) Total 159,197 159,197 Shareholders Fund: Share Capital 2,693 [•] Reserves 11,172 [•] Total Shareholders Funds 13,865 [•]

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Annexure - 12 GIC Housing Finance Ltd. Statement of Other Income

Rs. in Lacs For the Financial Year Six Month Particulars 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 30.09.2005 Dividend 23 11 28 23 28 17 (Gross, Tax deducted at source Rs. Nil; Previous year Rs. Nil) Interest on Investments 22 19 19 19 1 - Other Interest 31 3 11 12 31 6 (Gross Tax deducted at source) Profit on sale of Investment - 17 12 4 32 15 Other income 9 24 7 32 16 - Total 85 74 77 90 108 38

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GROUP COMPANIES* FINANCIAL INFORMATION OF GROUP COMPANIES 1. GIC Asset Management Company Limited (GIC AMC):

GIC AMC was incorporated on 25th May 1993. It was promoted by GIC and the four Public Sector General Insurance Companies to manage the operations and investments of GIC Mutual Fund. The directors on the board of GIC AMC are:

i. Mr. R K. Joshi ii. Mr. V. H. Pandya iii. Mr. M. Raghavendra iv. Mr. Ramdas L. Baxi

Financial details of GIC AMC for the past three years

Rs in Lacs Particulars 2004-05 2003-04 2002-03 Total Income 301 457 658 Net Profit after Tax 15 172 319 Equity Capital 2000 2000 2000 Reserves (excluding revaluation reserves) Nil Nil Nil Net Assets Value (Rs.) 18.14 17.99 16.28 Earning Per Share (Rs.) 0.07 0.86 1.59



Litigation details pertaining to GIC AMC


2. Loss Prevention Association of India Limited (LPA):

LPA is engaged in promoting safety and loss control through education, training and consultancy in India and abroad since 1978. Its work involves both education and engineering aspects of safety. LPA is a company limited by guarantee without Share Capital. It is promoted by General Insurance Corporation of India Limited, The New India Assurance Company Limited, Oriental Insurance Company Limited, National Insurance Company Limited and United India Insurance Company Limited. The directors on the board of LPA are: .i Mr. K. Sridhar ii. Mr. M. Ramadoss iii. Mr. V. Ramasaamy iv. Mr. M. K. Garg v. Mr. Jai Hiremath vi. Dr. K. C. Mishra vii. Mr. B. Chakrabarti viii. Mr. Lalit Kumar

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ix. Mr. R. K. Joshi x. Mr. T. R. Viswanathan Financial details of Loss Prevention Association of India Limited for the past three years

Rs in Lacs Particulars 2004-05 2003-04 2002-03 Total Income 455 452 498 Net Profit after Tax (8) 5 44 Equity Capital N.A N.A N.A Reserves (excluding revaluation reserves) 468 468 453 Net Assets Value (Rs.) N.A N.A N.A Earning Per Share (Rs.) N.A N.A N.A



Litigation details pertaining to LPA For details on litigations and disputes pending against the Company and defaults made by the `Company please refer to the paragraph under “ Litigations and Disputes” on page no. ______ of this Letter of Offer.

3. UTI Bank Limited (UTI Bank):

UTI Bank was the first private sector bank to be set up under the new guidelines issued in 1993 by the Government of India, consequent to announcement of a policy of reform of the Indian financial sector. The bank was promoted by erstwhile Unit Trust of India, LIC, GIC, NICL, New India, United India and OICL. Unit Trust of India contributed the entire initial capital of Rs. 100 crores. UTI Bank obtained the Certificate of Incorporation on 3rd December 1993 and the Certificate of Commencement of Business on 14th December 1993. Its first branch at Ahmedabad was opened in April 1994. The bank has over 318 branches (including 9 service branches) and 95 extension counters as on date in metropolitan, urban and semi urban areas and has developed a wide customer base. The bank also has 1820 ATMs as on 31.12.2005 The directors on the board of UTI Bank are: i. Mr. P.J. Nayak ii. Mr. Surendra Singh iii. Mr. N.C. Singhal iv. Mr. A. T. Pannir Selvam v. Mr. J.R. Varma vi. Dr. R. H. Patil vii. Ms. Rama Bijapurkar viii. Mr. R. B. L. Vaish ix. Mr. S. Chatterjee x. Mr. M. V. Subbiah xi. Mr. S. B. Mathur xii. Mr. Ramesh Ramanathan

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Financial details of UTI Bank for the past three years Rs in Lacs

Particulars 2004-05 2003-04 2002-03 Total Income 233998 212686 187528 Net Profit after Tax 33458 27831 19218 Equity Capital 23780 23158 23019 Reserves (excluding revaluation reserves) 213439 90484 68792 Earning Per Share (Rs.) 14.32 12.06 10.00

Shareholding pattern of UTI Bank as on 31st March 2005

Share price Data: The Highest and lowest market price of the equity shares on the BSE during the past six months is given below:

Month High (Rs.) Low (Rs.) July 2005 273.80 242.00 August 2005 284.40 241.05 September 2005 290.80 248.00 October 2005 268.00 220.00 November 2005 274.50 228.00 December 2005 315.00 269.05 January 2006 373.00 286.35

Category No. of Shares Held % of Share HoldingPromoter's HoldingPromotersIndian Promoters 122051199 43.81

Sub Total 122051199 43.81 Non Promoter's HoldingInstitutional InvestorsMutual Funds and UTI 19568374 7.02 Banks, Financial Institutions, Insurance Companies 1571389 0.56 FIIS 59238328 21.27

Sub Total 80378091 28.85 OthersPrivate Corporate Bodies 3347499 1.20 Indian Public 15321513 5.50 NRIs/OCBs 236978 0.09

Any OtherHSBC Asia Pacific Holdings UK 33950000 12.19 Bank of New York - Depository 23285720 8.36

Sub Total 76141710 27.33 Grand Total 278571000 100.00

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The Company is not a Sick Company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995.

There has been no change in the capital structure and the Company has not made an issue of equity shares during the past three years. Litigation details pertaining to UTI Bank For details on litigations and disputes pending against the Company and defaults made by the `Company please refer to the paragraph under “ Litigations and Disputes” on page no. ______ of this Letter of Offer.

VENTURES PROMOTED BY THE PROMOTERS: 1. Ventures promoted by GIC:

i. Agricultural Insurance Company of India (AICIL): AICIL was incorporated on 20th December 2002

under the Companies Act, 1956 with a paid up share capital of Rs. 200 crores to transact in crop insurance and other allied agriculture business in India. AICIL was formed to take over agricultural insurance, which was operated by GIC of India since inception of the scheme. GIC of India promoted AICIL in collaboration with NABARD and the four erstwhile subsidiary companies of GIC of India. GIC of India holds 35% equity stake in AICIL.

ii. GIC AMC: GIC and its erstwhile subsidiaries floated a Mutual Fund in the year 1991. Subsequently in 1993, as

per SEBI regulations GIC AMC was formed. GIC and its erstwhile subsidiaries hold 40%, SOROS holds 40% and the rest is held by GICHFL.

iii. India International Pte, Singapore: The operations of the erstwhile subsidiary companies in Singapore were

merged and the Company was formed collectively by GIC and its erstwhile subsidiary companies to carry out non-life business in Singapore. The shares of this Company are not listed.

iv. Kenindia Assurance Co. Limited, Nairobi: It is a composite Life and Non-Life Insurance Company. The

share capital is being held by the GIC and its erstwhile subsidiaries (45%, 9% by each), LIC of India holds 10% and locals hold the balance.

In addition, GIC of India has subscribed to 30% of the initial Share Capital (i.e. $US 65,000) of LIC (Mauritius) Offshore Limited. LIC of India is holding the balance capital.

2. Ventures promoted by The National Insurance Company Limited

i. UTI Bank Limited ii. GIC Asset Management Company Limited iii. Oriental Capital Assurance Berhard (formerly known as United Oriental Assurance Berhard) iv. India International Insurance Pte Limited v. Kenindia Assurance Company Limited vi. Agricultural Insurance Company of India Limited vii. GIC Housing Finance Limited

3. Ventures promoted by United India Insurance Company Limited: i. Zenith Securities & Investments Limited ii. GIC Housing Finance Limited iii. GIC Asset Management Company Limited iv. UTI Bank Limited v. Oriental Capital Assurance Berhard (formerly known as United Oriental Assurance Berhard) vi. India International Insurance Pte. Limited vii. Kenindia Assurance Company Limited viii. Agricultural Insurance Company of India Limited

84

4. Ventures promoted by New India: i. The New India Assurance Company (Sierra Leone) Limited ii. The New India Assurance Company (Trinidad & Tobago) Limited iii. Kenindia Assurance Company Limited iv. India International Insurance Pte Limited

5. Ventures promoted by IFCI:

Subsidiaries

i IFCI Venture Capital Funds Limited ii IFCI Financial Services Limited

IFCI Lead*

i Assets Care Enterprise Limited ii North India Technical Consultancy Organisation Limited iii Madhya Pradesh Consultancy Organisation Limited iv HARDICON Limited v ICRA Limited vi Himachal Consultancy Organisation Limited vii Foremost Factors Limited viii Rajasthan Consultancy Organisation Limited ix Tourism Finance Corporation of India Limited * IFCI has taken a lead role in promoting these companies.

FINANCIAL DETAILS FOR THE PAST THREE YEARS OF VENTURES PROMOTED BY THE PROMOTERS 1. Agricultural Insurance Company of India Limited (AICIL)

Date of Incorporation: 20th December 2002 Nature of Activities: Crop Insurance and other allied agriculture business

Rs in Lacs

Financial details 2003-04 Total Income 20569.00 Net Profit after Tax (82.92) Equity Capital 20000.00 Reserves (excluding revaluation reserves) Nil Earning per share (Rs.) (4.08)

2. GIC Asset Management Company Limited

For financial details please refer under the heading Group Company details.

85

3. India International Pte, Singapore

Date of Incorporation: 3rd December 1987 Nature of Activities: General Insurance and reinsurance

In Singapore Dollars (SGD) Financial details For the year ended 31st December

2003 2002 2001 Total Income 163481733.00 120922222.00 77256770.00 Net Profit after Tax 12683079.00 11814684.00 13784549.00 Equity Capital 25000000.00 25000000.00 25000000.00 Reserves (excluding revaluation reserves) 110552173.00 99331594.00 88491910.00 Net Asset Value per share 5.42 4.97 4.54 Earning per share (SGD.) 0.51 0.47 0.55

4. Kenindia Assurance Co. Limited, Nairobi

Date of incorporation: 06th December 1978. Nature of Activities: General Insurance and Life Insurance.

Rs in Lacs Financial details For the year ended 31st December 2004 2003 2002Total Income 19478 13763 13433Net Profit after Tax 516 614 549Equity Capital 1881 1773 1569Reserves (excluding revaluation reserves) 856 807 1011Net Asset Value per share 269.27 221.18 195.07Earning per share (Rs.) 15.89 20.10 20.31

5. UTI Bank Limited

For financial details please refer under the heading Group Company details.

6. Oriental Capital Assurance Berhard (formerly known as United Oriental Assurance Berhard)

Date of Incorporation: 27th December 1976 Nature of Activities: General insurance and re insurance

In Malaysian Ringit '000 Financial details For the year ended 31st December 2003 2002 Total Income 128381.00 120099.00 Net Profit after Tax 19323.00 15254.00 Equity Capital 100013.00 100013.00 Reserves (excluding revaluation reserves) 33469.00 21346.00 Net Worth 133482.00 121359.00 Earning per share (In RM) 19.30 15.30

86

7. Zenith Securities & Investments Limited

Date of Incorporation: 28th March 1916 Nature of Activities: Investments

Rs in Lacs Financial details 2004-05 2003-04 2002-03 Total Income 82 52 17

Net Profit after Tax 81 72 13

Equity Capital 10 10 10

Reserves (excluding revaluation reserves) 235 161 92

Earning per share (Rs.) 806 722 126

Net Assets Value (Rs.) - - - 8. The New India Assurance Company (Sierra Leone) Limited

Date of Incorporation: 14th May 1973 Nature of Business: General Insurance

Figures in local currency Leone in '000

Financial details For the year ended 31st December 2003 2002 2001 Total Income 25876.00 (35272.00) 82687.00* Net Profit after Tax (105167.00) (35272.00) (6594.00) Equity Capital (Called up) 500.00 500.00 500.00 Reserves (excluding revaluation reserves) (18843.00) 86324.00 121596.00 Net Worth (18343.00) 86824.00 122096.00

* Premium written less reinsurance.

9. The New India Assurance Company (Trinidad & Tobago) Limited Date of Incorporation: 1977 Nature of Business: General Insurance

Figures in local currency Trinidad & Tobago USD in '000 Financial details For the year ended 31st December 2003 2002 2001 Total Income 35464.00 32027.00 — Net Profit after Tax 4604.00 7543.00 4695.00 Equity Capital 17617.00 17617.00 17617.00 Reserves (excluding revaluation reserves) 12203.00 7599.00 56.00 Net Worth 29820.00 25216.00 17673.00

87

10. IFCI Venture Capital Funds Limited

Date of Incorporation: 1975 Nature of Business: Project Financing

Rs in Lacs Financial details 2004-05 2003-04 2002-03

Total Income 351 227 243 Net Profit after Tax 236 84 54 Equity Capital 785 785 785 Reserves (excluding revaluation reserves) 457 265 182 Net Asset Value (Rs.) 15.82 13.38 12.31 Earning per share (Rs.) 3.01 1.07 0.69

11. IFCI Financial Services Limited

Date of Incorporation: 4th January 1995 Nature of Business: Stock Broking, Corporate Sales Agent for General Insurance and Life Insurance, DP Services, Selling of Mutual Funds.


Total Income 274 233 125 Net Profit after Tax 94 87 19 Equity Capital 690 675 675 Reserves (excluding revaluation reserves) 462 401 337 NAV (per share) (Rs.) 16.12 15.77 14.77 Earning per share (Rs.) 1.43 1.30 0.29

12. Assets Care Enterprise Limited

Date of Incorporation: 11th June 2002 Nature of Business: Asset Reconstruction and Securitisation

Rs in Lacs Financial details 2004-05 2003-04 2002-03 Total Income 26 81 4 Net Profit after Tax 1 6 0 Equity Capital 500 500 500 Reserves (excluding revaluation reserves) 7 6 0 Net Assets Value (per share) 10.15 10.12 10.00 Earning per share (Rs.) 0.03 0.12 0.00

88

13. North India Technical Consultancy Organization Limited

Date of Incorporation: 28th March 1984 Nature of Business: Consultancy Services

Rs in Lacs Financial details 2004-05 2003-04 2002-03 Total Income 105 96 94 Net Profit after Tax 6 6 3 Equity Capital 10 10 10 Reserves (excluding revaluation reserves) 42 39 35 Earning per share (Rs.) 60.70 60.70 29.79

Net Assets Value - - -

14. Madhya Pradesh Technical Consultancy Organisation Limited

Date of Incorporation: 23rd March 1979 Nature of Business: Industrial Consultancy and to promote entrepreneurship through self-employment.

Rs in Lacs Financial details 2003-04# 2002-03 2001-Total Income 263.49 260.88 187.20 Net Profit after Tax 11.20 1.28 0.63 Equity Capital 20.00 20.00 20.00 Reserves (excluding revaluation reserves) 39.82 3.08 2.96 Earning per share (Rs.) 559.80 63.86 31.37 Net Worth 59.82 30.88 29.61

# Provisional 15. HARDICON Limited

Date of Incorporation: 11th June 1985 Nature of Business: Industrial, Financial and Management Consultancy.

Rs in Lacs Financial details 2003-04# 2002-03 2001-2002

Total Income 49.82 57.64 48.21 Net Profit after Tax 0.70 2.18 2.13Equity Capital 10.00 10.00 10.00Reserves (excluding revaluation reserves) 4.73 4.89 5.09Net Worth 9.90 9.48 7.51 Earning per share (Rs.) (Face value Rs.100/-) 7.00 22.00 21.00

# The operational results for the year ended 31st March 2004 are yet to be adopted by the shareholders of the company at the General Body meeting.

89

16. ICRA Limited

Date of Incorporation: 16th January 1991 Nature of Business: Credit Rating, Advisory Services, and Information Services.

Rs in Lacs Financial details 2004-05 2003-04 2002-03 Total Income 4145 4000 3655 Net Profit after Tax 810 1106 986 Equity Capital 881 881 881 Reserves (excluding revaluation reserves) 7533 7071 6468 Net Assets Value (Rs.) 95.51 90.24 83.37 Earning per share (Rs.) 9.20 12.56 11.20

17. Himachal Consultancy Organisation Limited Date of Incorporation: 10th February 1977 Nature of Business: Technical Consultancy and Training.


Total Income 83.12 70.37 52.74 Net Profit after Tax 1.41 1.29 1.35 Equity Capital 15.00 15.00 15.00 Reserves (excluding revaluation reserves) 12.96 13.31 13.24

18. Foremost Factors Limited

Date of Incorporation: 14th December 1995 Nature of Business: Factoring of Domestic and Export receivables.


Total Income 434 553 466 Net Profit after Tax 119 142 93 Equity Capital 2000 2000 2000 Reserves (excluding revaluation reserves) 336 329 186 Earning per share (Rs.) 0.59 0.71 0.47

19. Rajasthan Consultancy Organisation Limited

Date of Incorporation: 16th March 1978 Nature of Business: Technical Consultancy, Training.


Total Income 10.77 9.47 12.07 Net Profit after Tax (6.02) (1 1 .53) (11.21) Equity Capital 20.00 20.00 20.00 Reserves (excluding revaluation reserves) 4.00 4.00 4.00

Net Assets Value (Rs.) Negative Negative Negative

EPS (Rs.) - - -

90

20. Tourism Finance Corporation of India Limited Date of Incorporation: 27th January 1989 Nature of Business: Financing of tourism related projects

Rs in Lacs Financial details 2004-05 2003-04 2002-03 Total Income 8115 9125 11661 Net Profit after Tax 1422 1271 971 Equity Capital 6742 6742 6742 Reserves (excluding revaluation reserves) 105 9903 9243 Earning per share (Rs.) 2.11 1.89 1.44 Net Assets Value (Rs) 25.22 24.68 23.69

The Highest and lowest market price of the equity shares on the BSE during the past six months is given below:

Month Highest (Rs.) Lowest (Rs.)

July 2005 24.40 17.60

August 2005 24.30 20.00

September 2005 24.50 18.10

October 2005 19.75 14.70

November 2005 19.40 16.00

December 2005 18.45 16.50

January 2006 20.70 16.85 Shareholding Pattern of the Company:

Promoter's Holding No. of Share Held % HoldingPromotersIndian Promoters 29464879 43.7

Sub Total 29464879 43.7Non Promoter's HoldingInstitutional InvestorsMutual Funds and UTI 121000 0.18Banks,Financial Institutions,Insurance Companies 3650785 5.42

Sub Total 3771785 5.59OthersPrivate Corporate Bodies 7219325 10.71Indian Public 25467437 37.77NRIs/OCBs 1449574 2.15Any OtherTrust & Foundation 46100 0.07

Sub Total 34182436 50.7Grand Total 67419100

91

The details of litigations involving the ventures promoted by Promoters are mentioned under the heading "Outstanding Litigations". * NOTE: THE INFORMATION RELATING TO THE COMPANIES PROMOTED BY THE PROMOTERS GENERALLY AND IN PARTICULAR CONCERNING FINANCIAL DETAILS AND OTHER INFORMATION IS BASED ON THE INFORMATION RECEIVED BY THE COMPANY FROM THE PROMOTERS AND WHICH INFORMATION HAS NOT BEEN INDEPENDENTLY VERIFIED. EXCEPT AS PROVIDED HEREIN THE COMPANY HAS NOT RECEIVED ANY UPDATED INFORMATION IN RESPECT TO FINANCIAL DETAILS AND OTHER INFORMATION WITH REGARDS TO THE OPERATIONS OF THE COMPANIES PROMOTED BY THE PROMOTERS. DISASSOCIATION WITH CERTAIN COMPANIES Companies listed below have been acted as the Promoters of the Company. However the said companies have since sold their share holding and do not have any significant influence on the Company.

SBI ICICI Erstwhile UTI HDFC

92

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS AS REFLECTED IN THE FINANCIAL STATEMENTS SELECTED FINANCIAL INFORMATION The following selected financial data have been prepared in accordance with Indian Accounting Standards, in conjunction with our financial statements and related notes and "Management's Discussion and Analysis of Financial Condition and Results of Operations". The audited financial statements have been prepared in Indian Rupees and have been prepared in accordance with Indian Accounting Standards for the fiscal years ended 2003, 2004 and 2005. For detailed financial statements, prepared in accordance with Indian Accounting Standards, as required by Guidelines, please refer "Auditor's Report" of this Letter of Offer. Statement of Profit and Loss for the fiscals ended March 31,2003,2004 and 2005.

Rs. Lacs

The following discussion of our financial condition and results of operations should be read together with the audited financial statements for each of the fiscals ended 31st March 2003, 2004 and 2005, including the notes thereto and the reports thereon, which appear elsewhere in this Letter of Offer. The audited financial statements are prepared in accordance with Indian Accounting Standards. The fiscal ends on 31st March of each year, so all references to a particular fiscal are to the twelve-month period ended 31st March of that year. 2005v/s2004 The operating income of the Company is up by 25.53% to Rs. 12453 lacs up from the previous year figure of Rs. 9920 lacs. The total sanctions for the year was Rs. 80461 lacs as compare to Rs. 55076 lacs in the previous year. The disbursement for the period is Rs. 65923 lacs as compared to the previous disbursements amounting to Rs. 44881 lacs.

2002-2003 2003-2004 2004-2005 Income: Operating Income 9,676 9,920 12,453 Investment and other Income 77 90 108

Total (A) 9,753 10,010 12,561 Expenditure: Interest 7,272 6,990 7,865 Staff Expenses 199 185 236 Other Expenses 450 567 808 Miscellaneous expenses written off 5 5 10 Depreciation 43 40 44 Non-Performing assets written off 823 200 - Provision for Non-performing assets (Net) 201 565 1,524

Total (B) 8,993 8,552 10,487 Net Profit Before Tax and Extra ordinary Items

(A-B) 760 1,458 2,074 Less: Taxation 235 526 856 Deferred Tax Assets (136) (180) (558) Extraordinary Items - - -

Net Profit After Tax and Extra ordinary items 661 1,112 1,776

93

The absolute amount of interest cost of the Company has gone up from Rs. 6990 lacs in the previous year to Rs. 7865 lacs. However due to prudent loan restructuring with loans of various maturity buckets, the average cost of borrowing for the Company has gone down from 7.60% for the year ended 31-03-2004 as compared to 6.25% for the year ended 31-03-2005. NPAs written off and provisioning for NPAs was done to the tune of Rs. 1524 lacs as against the previous year figure of Rs. 765 lacs. As a consequence of this the PBT of the Company is Rs. 2074 lacs showing a growth of 42.25% over the previous year figure. PAT has also increased to Rs. 1776 lacs registering an impressive growth of 60% over the previous year. 2004 v/s 2003 The operating income of the Company is up by 2.52% to Rs. 9920 lacs up from the previous year figure of Rs. 9676 lacs. The total sanctions for the year was Rs. 55076 lacs as compare to Rs. 33285 lacs in the previous year. The disbursement for the period is Rs. 44881 lacs as compared to the previous disbursements amounting to Rs. 29559 lacs. The interest cost of the Company has come down from Rs. 7272 lacs in the previous year to Rs. 6990 lacs inspite of increase in business. The average cost of borrowing for the Company is 7.60% for the year ended 31-03-2004 as compared to 9.97% for the year ended 31-03-2003. N PAs written off and provisioning for NPAs was done to the tune of Rs. 765 lacs as against the previous year figure of Rs. 1024 lacs. As a consequence of this the PBT of the Company is Rs. 1458 lacs showing a growth of 91 % over the previous year figure. PAT has also increased to Rs. 1112 lacs registering an impressive growth of 68% over the previous year. 2003 v/s 2002 The operating income of the Company has shown an increase from Rs. 9163 lacs to Rs. 9676 lacs. This was primarily due to increase in fees & other charges. The interest expended by the Company has reduced by 5% during the said period. The Company has spent Rs. 7272 lacs as against the previous year amount of Rs. 7599 lacs because of renegotiating the interest with the existing lenders, inspite of substantial increase in business. During this period the Company had approved loans to the tune of Rs. 33285 lacs as compared to the previous year figure of Rs. 25743 lacs. The disbursements made by the Company during the year were Rs. 29559 lacs as compared to Rs. 22519 lacs during the previous year. N PAs written off and provisioning for NPAs was done to the tune of Rs. 1024 lacs as against the previous year figure of Rs. 863 lacs. PBT during the period was up to Rs. 760 lacs from Rs. 168 lacs showing an increase of 352%. This was due to lower interest cost and higher income by way of fees and other charges. PAT has also shown the same trend going up to Rs. 661 lacs against the previous year figure of Rs. 120 lacs thereby registering an increase by 450%. Unusual or infrequent events and transaction There were no unusual or infrequent events or transactions during the last 3 years. Known trend or uncertainties Other than as described in this Letter of Offer, to our knowledge, there are no known trends or uncertainties that have or had or are expected to have a material adverse impact on revenue or income of the Company from continuing operations.

94

Future relationship between cost and revenue The relationship between cost and revenues is directly linked to the cost of borrowing and lending. The business strategy of the Company is such that its spreads will be maintained irrespective of the cost of funds and revenue generated. Status of any publicly announced new products or business segment. There are no new products/business segments, which the Company has entered into. Extent of seasonality in the business The business of the Company is of providing housing finance and is not seasonal in nature. Any significant dependence on any one customer or supplier The Company does not depend on any single customer or supplier. Its major customers are individuals whose base is well spread out. Competitive Conditions The competition in the housing finance sector has increased tremendously with many players (mainly banks) entering into the market in the recent years. Commercial Banks have entered the housing finance sector in a big way, attracted as they are backed by the mortgage-based security, and helped by their access to large funds at a relatively low-cost. Also housing finance is now classified as priority sector lending for banks and therefore more banks are entering this field. Competition has propelled the players to engage in price wars. Aggressive rate cuts were employed by the players to attract consumers. Housing loan rates have inched by 0.50 to 0.75% in the last one-year. The benchmark 10-year government securities (G-sec) rate itself increased by around 0.50% from January 1 2005. In the scenario where the interest rates are going up HFCs will find pressure on their interest margins. Other reason that resulted in keeping the interest rate on housing loans under check is the fact that there is enough liquidity in the system. Banks are flush with funds but have limited deployment avenues. Since the housing finance segment is showing good growth rates, banks are diverting funds in this sector making the competition stiffer. Details of adverse events affecting the Company since the last financial statement No circumstances have arisen since the date of the last financial statement that materially adversely affects / likely to affect the trading or profitability of the Company or the value of its assets or its ability to pay its liabilities within the next twelve months. Material Developments There are no material developments from the date of last balance sheet as disclosed in this Letter of Offer.

95

WORKING RESULTS Information relating to the Company sales, gross profit etc. as required by the Ministry of Finance Circular No. F2/5/SE/76 dated February 5, 1977 read with the amendments of No. dated March 8, 1977 as under: The unaudited working results of the Company for the period from 1st April, 2005 upto 31st December 2005 (9 months) are as given as under:

Particulars Rs. in Lacs Operating Income 11353 Other Income 69 Total Expenditure 8393 Gross Profit 3029 Depreciation 34 Profit Before Tax and Extraordinary Items 2995 Extraordinary/Exceptional/Prior Period Item - Tax Provision 569 Profit After Tax 2426 Paid-up Equity Capital 2692 EPS (not annualised) (Rs.) 9.01

96

XII. LEGAL AND OTHER INFORMATION Except as described below, there is no outstanding litigation, suits or civil or criminal prosecutions, proceedings before any judicial, quasi-judicial, arbitral or administrative tribunals, including pending proceedings for violation of statutory regulations or alleging criminal or economic offences or tax liabilities against the Company & its Directors that would have a material adverse effect on the business and there are no defaults, non-payments or overdue of statutory dues, institutional/bank dues and dues payable to holders of debentures or fixed deposits and arrears of cumulative preference shares that would have a material adverse effect on the business. Further, as of the date of filing this Draft Letter of Offer with SEBI, there are no show cause notices/claims served on the Company & its Directors from any statutory authority / revenue authorities other than those mentioned herein in below that would have a material adverse effect on the business. In relation to all litigations mentioned herein below, except for the case filed by the Company under Section 138 of the Negotiable Instruments Act, 1881 civil suits filed by the Company, Notices issued by the Company for recovery of revenue under Revenue recovery Act and also in respect of proceedings initiated under the Securitirisation Act in case of any adverse ruling, the Company may be liable to pay the amount demanded/ decreed, if any, and amount deposited, if any, by the Company with the concerned authorities in this regard may be liable to be forfeited to the extent of the demand/ decree, if any. The cases under Section 138 of the Negotiable Instruments Act, 1881 has been filed by the Company in respect of dishonour of cheques issued in favour of the Company. I. Litigations filed by the Company A. Civil Cases:

The Company has filed 17 civil suits against individuals and 8 civil suits against corporate bodies for recovery of outstanding dues. Sr. No Defendant/Respo

ndent Court where Pending Suit/Petition No

Nature of the case & particulars

Status Financial Implication, (Rs.)

1. Smt. Bindhu and Mr. R. Radhakrishna Pillai

Revenue Recovery Tribunal, Trivandrum District

The Company had advanced housing loan to the defendant and the same is to be collected as if it were an arrears of land revenue.

Revenue Recovery Action initiated under the Act. The Respondent had filed a writ petition. Writ petition disposed of pending outcome of recovery proceedings

1,76,127

2. Mr. J. Vijay Raghavan, Mr. Ramesh and Mr. Jagdish Bapat

District and Sessions Court Judge, Delhi O.S. No. 105/05

The Company has filed this recovery suit for recovery of housing loan amount advanced to the defendants together with interest payable as per the loan agreement.

Suit decreed in the favor of the Company. Execution petition filed.

3,25,717

97

Sr. No Defendant/Respondent

Court where Pending Suit/Petition No



3. Mr. Ram Prakash Sharma and others

Court of Senior Civil Judge, Delhi O.S. No. 75/03


Matter posted to 11/1/2006 for cross examination of Branch Manager

39,590

4. Smt. Anu Pandey and Mr. Yogesh Kumar

District and Sessions Court, Delhi O.S. No. 28/03


Matter posted to 3/1/2006 for cross examination of Anu Pandey

4,10,505

5. Smt Uma Singh

Court of Senior Civil Judge, Delhi O.S. No. 117/03

The Company has filed this recovery suit for recovery of housing loan amount advanced to the Defendants together with interest payable as per the loan agreement.

Matter posted to 26/5/05. Pending for publication in newspaper

55,448

6. M/s. Shaili Constructions Private Limited and others

District Judge, Hyderabad O.S.No. 76/2004.


The written statement has been filed by the defendant. The matter is posted to for framing of issues.

10,59,74,334

7. Mr. Anuj Kumar Sharma and others

Court of Civil Judge (S.D.) Ghaziabad


Pending 5,50,625

98





8. Crescent Housing Private Limited

Madras High Court No. 670/97

The Company has filed this recovery suit for recovery of short-term loan advanced to the defendants towards construction together with interest payable as per the loan agreement.

Interlocutory order passed to restrain the defendants not to change the purpose of the advance made by the Company to the defendants for conversion of residential flats to service apartments, pending disposal of the civil suit has been granted by the court and that the order is still in force.

4,47,94,037

9. Mr. Syed Abdul Rasheed and others

City Civil Judge, Bangalore O.S. No. 1069/03

The Company has filed this recovery suit for recovery of housing loan advanced to the defendants together with interest payable as per the loan agreement.

Written statement has been filed by the Defendants

30,74,378

10. Citi Builders Pvt. Ltd. (Mr. Jassu H. Bhatia) and others

Bombay High Court No. 1497/97

The Company has filed this recovery suit for recovery of project loan amount advanced for construction of houses to the defendants together with interest payable as per the loan agreement.

Property attached by Income Tax Department

1,46,30,586

11. Seasons Builders Private Limited and others


The Company has filed this recovery suit for recovery of project loan amount advanced for construction of houses to the defendants together with interest payable as per loan agreement.

Suit filed. Amendment of plaint sought.

25,00,000

99





12. JHB Construction Private Limited


The Company has filed this recovery suit for recovery of short-term loan amount advanced for construction of a commercial cum residential housing project to the defendants together with interest payable as per loan agreement.

Official Receiver appointed.

6,72,74,063

13. Mr. Govindharajan and others

Principal District Judge, Tiruchirappalli O.S. No. 271/04

The Company has filed this recovery suit for recovery of housing construction loan amount advanced to the defendants together with interest payable as per loan agreement.

The matter is posted for filing of written statement on the part of the defendant.

5,88,284

14. Mr. Joseph Manoharan and others

Sub Judge, Tiruchirappalli O.S. No. 261/04


The suit is decreed in our favour. Steps are being taken for execution

6,16,489

15. Mrs. Junaitha Hussain and others

Sub Judge, Tiruchirappalli O.S. No. 1193/04


Pending 4,13,959

16. Kandala Group Constructions Private Limited

Principal Subordinate Judge, Thiruvanthapuram O.S. No. 230/99


The suit has been decreed in our favour. Steps are being taken for execution of the decree.

1,17,84,668

100





17. M/s. Citizens Builders and others



Orders passed directing the Court Receiver to take physical possession of the properties with respect to 20 flats mortgaged the Company

3,04,16,966

18. M/s. Vora Estate Developers and others


The Company has filed this recovery suit for the recovery of short-term loan advanced for construction of residential housing project to the defendants with interest payable as per loan agreement.

Pending 5,14,18,083

19. Mr. Mahesh Rewachand Khanna and others

Court of Hon’ble Judge (S.D.) at Thane No. 151/04


The suit has been decreed in our favour. Execution application already filed.

35,33,956

20. Mr. Rajendrakumar Satapa Khumase



Application for ex-parte hearing is made

4,86,574

21. Mr. Anil Jethalal Bheda and others



Summons served on the Defendant

10,80,263

101





22. Mr. Jasjit Singh Bhatty and others


The Company has filed this suit for recovery of housing loan amount advanced to the defendants and for declaration that the suit property stands duly and validly mortgaged in favour of the Company and that it is valid subsisting and binding upon the defendants.

Steps initiated for forcible possession

45,62,724

23. Mr. Sunil Sundar Shettigar and Ors.

The Hon’ble Court of the Civil Judge (S.D.), Thane

The Defendant had applied for a housing loan of Rs. 3 lacs in September, 2001. From the date of issue of the loan amount till September 2002, 10 cheques issued by the Defendant have been dishonored. The Company has filed this suit for recovery of money advanced

Matter posted to 1/3/06.

4,47,068

24. Mr. D. A. Patel and Ors.

The Hon’ble Court of the Civil Judge, Thane

The Company had advanced a loan of Rs. 10 lacs to the Defendant in the year 2002. The Defendant committed several defaults in the repayment of monthly installments The Company has filed this suit for recovery of money advanced

Matter posted to 1/2/06.

11,45,806

25. Smt. Vijaya Prabhu and Ors.

City Civil Judge Court, Bangalore O.S. No. 8852/2004

This is a recovery suit filed by the Company for the recovery of Rs.13,15,479/- with interest at 14% p.a. on Rs. 6,75,000/- as also penal interest on the pre EMI with pending outstanding in a sum of Rs. 6,40,479/- in entirety upto the date of realization.

Matter posted to 20/2/2006

13,15,479

B. Criminal Cases filed under Section 138 of the Negotiable Instruments Act:

The Company has filed a total of 16 complaints against builders and corporate clients and 54 complaints

against individual parties under Section 138 of the Negotiable Instruments Act for dishonour of cheques issued in favour of the Company.

102

The detailed particulars of these cases are specified in the table below: Sr. No. Name of the Accused Court where Pending &

Complaint No Amount (in Rs.)

1. Shaili Constructions Private Limited and others

Metropolitan Magistrate Criminal Court, Hyderabad CC No. 189/01

50,00,000

2. Hamco Mining & Smelting Limited and others

Metropolitan Magistrate, Ballard Pier, Mumbai CC. No. 2226/SS/05

1,03,562

3. Hamco Mining & Smelting Limited and others

Metropolitan Magistrate, Ballard Pier, Mumbai CC. No. 4328/SS/05

50,00,000

4. M/s. Vora Developers and others

Metropolitan Magistrate, Ballard Pier, Mumbai CC No 1814/2005

1,00,00,000

5. Electrex India Limited and others

Metropolitan Magistrate, Ballard Pier, Mumbai CC No. 738/SS/04

10,00,000

6. M/s. Citizen Builders and others


2,50,00,000

7. Season Builders Private Limited and others


1,35,000



10,00,000



10,00,000

10. Shri Jassu H. Bhatia, proprietor of M/s. Citi Builders

Metropolitan Magistrate, Ballard Pier, Mumbai CC No. 872/S/2002

2,39,584

11. JHB Construction Private Limited and others

Metropolitan Magistrate, Ballard Pier, Mumbai CC No 1113/SS/2002

1,00,00,000



1,70,00,000

103

Sr. No. Name of the Accused Court where Pending & Complaint No

Amount (in Rs.)



1,00,00,000



50,00,000

15. Mr. V.A.S. Anand Kumar Metropolitan Magistrate, Egmore, Chennai CC. No. 2819/04

1,35,000

16. M/s Kandala Construction Private Limited and others

Additional Chief Judicial Magistrate Court, Thiruvananthapuram

50,00,000

17. Mr. Sardar Jaspal Singh Chief Metropolitan Magistrate, Patiala House, New Delhi CC. No. 372/04

25,000

18. Mr. Dipvinder Singh

Chief Metropolitan Magistrate, Patiala House, New Delhi CC No. 45/02

10,552

19. Mr. Ashwini Pawar Chief Metropolitan Magistrate, Patiala House, New Delhi CC No. 567/03

82,049

20. Mr. Devender Singh Chief Metropolitan Magistrate, Patiala House, New Delhi CC No. 36/03

36,800

21. Mohd. Shaikh Judicial Magistrate (First Class), Vashi, Navi Mumbai CC No. 4276/03

2,50,000

22. P. Raghavendran Judicial Magistrate III, Trichy

27,794

23. M/s. Empee Electronics and Anr.

Court of the Additional Metropolitan Magistrate, Bangalore P.C.R Nos 1600 to 1602 of 2005

65,66,504

24 Mohd. Abul Hasnat Metropolitan Magistrate Court, Kolkata CC. No. 11520/04

5,25,101

104


Amount (in Rs.)

25. Mihir Mukherjee Metropolitan Magistrate Court, Kolkata CC No. 6887/04

7,31,080

26. K Arumugaraj

In the Court of Judicial Magistrate II, Madurai

15,860

27. Shenbagarajan


20,600

28. K Ravi


22,600

29. M Rajendran

Court of Judicial Magistrate II,Trichy CC No. 116/2004

20,450

30. P.Rajendran Court of Judicial Magistrate Trichy CC No 400/2005

4,32,014

31. K.B.S.Manian Court of Judicial Magistrate Trichy CC No 415/2005

1,98,221

32. M.Sampath Court of Judicial Magistrate Trichy CC. No. 7183/2005

24,162

33. Attique H Dalvi & Anr.

The Additional Chief Metropolitan 33rd Court, Ballard Pier, Mumbai. CC No. 3614/M/2004

25,000

34. Damji Solanki and Anr.

The Additional Chief Metropolitan 33rd Court, Ballard Pier, Mumbai. CC. No. 3617/SS/2004

10,000

105


Amount (in Rs.)

35. Mr. Ramesh Singh


6,000

36. Mr. Anil J. Sarkar


25,000

37. Bijay Lal

The Additional Chief Metropolitan 33rd Court, Ballard Pier, Mumbai. CC No. 3236/M/2004

2,00,000

38. Mr. Ramesh Muddanna Shetty


20,000

39. Mr. Ganesh Ahire


16,507

40. Mr. Subhash Kate & Anr.


1,27,097

41. Mr. Ujjal Banerjee


25,000

106


Amount (in Rs.)

42. Mr. Venkatesh N. Gadewar


50,000

43. Mr. V. N. Gadewar


11,22,483

44. Mr. Ramesh Sheth


4,00,000

45. Mr. Devkaran Dave


2,72,000

46. Mr. Mahendra Kumar Sharma

The Additional Chief Metropolitan 33rd Court, Ballard Pier, Mumbai. CC. No. 2758/S/2005

20,000

47. Mr. Dave Devkaran Gangadhar


2,72,000

48. Ms. Amina Mohammed Ishaque and Ors.

The Additional Chief Metropolitan 33rd Court, Ballard Pier, Mumbai. CC. No. 3447/S/2005

50,000

49 Mr. Brurjee Karmabir Singh

The Additional Chief Metropolitan 33rd Court, Ballard Pier, Mumbai.

1,06,243

107


Amount (in Rs.)

50. Mr. Milind Alandikar

The Judicial Magistrate Court, Pune C.C. No. 14805/04

50,000

51. Mr. Jayant Atakare

The Judicial Magistrate Court, Pune

3,00,000

52. Mr. Sujit Pimpale

The Judicial Magistrate Court, Pune

30,000

53. Mr. Waman Kharat

The Judicial Magistrate Court, Pune CC. No. 20447/05

50,000

54. Mrs. C. R. Pillai


3,861

55. Mr. J. Shriniwas


5,786

56. Mr. Snehdeep Singh

The Court of Chief Metropolitan Magistrate, Delhi

17,071

57. Mr. S. Ramani and Prema Ramani

The Court of Chief Metropolitan Magistrate, Patiala House

56,658

58. Mr. Sushil Kumar


40,000

59. Mr. Rajinder Kumar and anr.


55,000

60. Mr. Charanjit Singh The Court of Chief Metropolitan Magistrate, Patiala House

60,000

108


Amount (in Rs.)

61. Mr. Douglas and D. Latha The Court of Chief Metropolitan Magistrate, Patiala House

14,200

62. Mr. Dinesh Chandra Kala The Court of Chief Metropolitan Magistrate, Patiala House

25,000

63. Mr. Amar Singh and Smt. Usha Rani


33,145

64. Mr. Mamchand The Court of Chief Metropolitan Magistrate, Patiala House

28,000

65. Mr. Chintamani The Court of Chief Metropolitan Magistrate, Patiala House

25,000

66. Mr. Anil Gupta The Court of Chief Metropolitan Magistrate, Patiala House

20,000

67. Mr. Miraz Ahmed The Court of Chief Metropolitan Magistrate, Patiala House

5,06,120

68. Mr. Mahajan The Court of Chief Metropolitan Magistrate, Patiala House

7,25,000

69. Mr. Kamal Kishore Shukla The Court of Chief Metropolitan Magistrate, Patiala House

2,00,000

70

Mr. K.S. Santosh

The Hon’ble Chief Judicial Magistrate, Ernakulam No 66 of 2005

21,600

C. Criminal Cases:

Sr. No

Accused Court where Pending Suit/Petition No



1. Shri. Sunil Sundar Shettigar and Mr. Sunil Andhere

Judicial Magistrate (First Class) at Thane OMA 233/02

A criminal case has been filed due to fraudulent transaction entered into by the Accused with the Company.

Summons have been issued

3,00,000

109

Sr. No

Accused Court where Pending Suit/Petition No



2. Dilip Patel and others

Judicial Magistrate Ist Class, Thane

The Company had advanced a loan of Rs. 10 lacs. The Accused committed several defaults in repayment of monthly installment against the said loan. The accused had also produced false and fabricated documents to avail the loan. The Company has filed a complaint under Section 406, 420, 465, 467, 488 and 471 r/w Section 120 B of IPC in March 2005

Summons has been issued. Next date of hearing is on 1/2/06.

Not Ascertainable

D. Taxation Litigation Sr. No

Asst year Authority before which pending/

Case No.

Nature of the case & particulars Status Amount of claim

involved (Rs.)

1. 1998-1999 Income Tax Appellate Tribunal, Mumbai

The Company has filed an appeal against the order passed by the Commissioner of Income Tax (Appeals) for denying the indexation benefit available under Section 48 of the Income Tax Act in connection with the redemption/repurchase of units of mutual fund.

Pending 2,62,500The Company has already deposited the disputed amount with the concerned authority.

2. 2002-2003 Commissioner of Income Tax (Appeals)

The Company has filed an appeal against the order passed u/s 14A by the Deputy Commissioner of Income Tax holding that the Company has incurred ad-hoc expenses for earning dividend income.

Pending 3,32,685The Company has already deposited the disputed amount with the concerned authority


The Company has filed an appeal against the order passed by the Deputy Commissioner of Income Tax for levying interest tax on notional interest income accrued on non-performing assets of the Company



The Company has filed an appeal against the order passed by the Deputy Commissioner of Income Tax for levying interest tax on notional interest income accrued on non-performing assets of the Company


110

E. Labour Cases

Defendant/ Respondent Court/Authority where pending Case No.

Nature of the case and particulars

Status Financial implications if any on the Company (In Rs.)

Smt P. Parvathi and the Presiding Officer, Labour Court – I

High Court, Andhra Pradesh at Hyderabad W.P.M.P No. 1117/02

The Company has appealed the interim order passed by the Presiding Officer of the Labour Court for reinstatement of the defendant with back wages. The Company has already deposited the amount of wages in the court.

Final hearing pending before the Hyderabad High Court on 3/2/06

No liability to be incurred. The Company has already deposited the claim amount in the court.

II. Litigations filed against the Company

A. Civil litigations

Sr. No Defendant/Respond

ent Court where

Pending Suit/Petitio

n No

Nature of the Cases & particular

Status Financial Implication, if any, in case of

a Non favourable outcome.

(Rs in Lacs) 1. Mr. Sarat Chandra

Das v/s. Jyoman Builders Private Limited

Kerala High Court

The Company is made an additional party to the suit filed by one of the creditors of defendant no.1 for winding up of the Company for non-completion of the project.

In the Company Court petition, Court receiver has been directed to take steps for completion of the remaining work and to sell the unsold flats and appropriate the realised amounts towards the outstanding loan overdues.

3,50,00,000

2. Mr. Syed Khan The Court of the Senior Civil Judge, Delhi Suit No. 399 of 2004

The Plaintiff had borrowed a sum of Rs.1,90,000/- and installments towards the same were debited from the accounts of the Plaintiff. The Plaintiff stopped making payment on account of misuse by the Company of the blank loan documents and also took entered the suit premises of the Plaintiff to dispossess him of the same. A Suit is filed by the Plaintiff for rendition of accounts and seeking relief for permanent injunction

Matter posted to 21/4/06 for evidence.

N.A.

111

3. Tottenham India Law Associates v/s. GICHFL & others

Court of Senior Civil Judge, Tis Hazari, New Delhi

Suit filed by the legal firm for recovery of outstanding professional fees

Pending 1,81,982

B. Consumer Protection Cases

Sr. No Complainant Court where Pending

Suit/Complaint No

Nature of the Cases & particular

Status Financial Implication, if any, in case of

a Non favourable outcome. (In Rs.)

1. Mr. Jhankar Bahadur Uday Singh Kami

Consumer Dispute Redressal Forum– Thane CC No. 327/2004

The Company had sanctioned a housing loan of Rs.2,75,000/- in January 2004 to the Complainant. The Complainant had purchased a flat against a price of Rs.3,15,000/- . The Company refused to disburse the loan amount after the said agreement was submitted to it after payment of stamp duty and registration fees. A complaint has been filed against the Company, seeking compensation for deficiency of services.

Pending 1,20,000

2. Mr. Mukund Ranganath Shekatkar

Consumer Dispute Redressal Forum – Thane CC. No. 323/04

The Complainant was sanctioned a housing loan of Rs. 4.5 lacs but the Company had not advanced the same on account of deficiency. A complaint has been filed by him for refund of the sum paid as upfront fees

Pending 4,950

3. Mr. M. Ganeshan State Consumer Dispute Redressal Forum, Chennai (Appellate Forum)

As per the Order of the District Consumer Forum, Chennai, amount deposited as pre-deposit pending outcome of appeal.

Pending 17,202

4. Mr. Arun B. Ubale

District Consumer Forum, Thane

Compensation sought for deficiency of service

Pending Amount not quantified.

5. Mr. Bandhu Jadhav v/s. GICHFL

District Consumer Forum, Thane CC. No. 88/05

Compensation sought for deficiency of service

Pending Amount not quantified.

112

6. Mr. Vijay Pal Singh

The District Consumer Disputes Redressal Forum: Curzon Road: New Delhi O.C. No. 1419/04

The Complainant had been sanctioned a loan amount of Rs. 3 lacs. The Complainant prayed before the Court to direct the Company to pay the balance loan amount and compensation for damages.

Pending 1,46,000

III. Notices issued by the Company for recovery of outstanding dues:

A. Requisition notices issued by the Company.

As per the Kerala Revenue Recovery Act, 1968, the Company has been notified as a government institution in the Official Gazette SR. No. 641/2002 vide notification No. 268/2002. The Company has issued 12 requisitions to the District Collectors of the respective districts in the State of Kerala under the Kerala Revenue Recovery Act, 1968, under which the respective jurisdiction lies with regard to each individual case, in order to recover the housing loans advanced to the borrowers.

Sr. No

Borrower in default

Authority Date of the Requisition issued

Status Financial Implication, if any, in case of a Non favourable outcome. (in Rs.)

1.

Smt. M.I. Remani

The District Collector, Ernakulam

1.12.2004 The Borrower has paid Rs.25,000/-. The matter is in progress. Stay was vacated in our favor.

2,25,156

2.

Shri/Smt S.K. Madusoodanand Nair, Kochi

The District Collector, Kottayam

2.12.2004 Acknowledgement has been received from the District Collector.

2,16,870

3.

Shri Venu C.


10.12.2004 Acknowledgement has been received from the District Collector on 20/1/2005. The borrower may apply for OTS to the Company.

3,16,265

113

Sr. No

Borrower in default



4. Shri/Smt Jose Thomas


28.3.2005 Acknowledgement has been received from the District Collector on 12/5/05. The borrower has applied to the High Court for quashing recovery proceedings but the High Court has rejected his application and has passed an order for depositing minimum of Rs.2.5 lacs. Borrower is yet to make payment.

9,93,899

5.

Shri/Smt V.T Joseph


28.3.2005 Acknowledgement has been received from the District Collector on 25/5/05. The borrower has applied for quashing the RR proceedings, which was rejected by the High Court of Kerala. The Borrowers has been asked to deposit the arrears or face RR proceedings

10,80,438

6.

Shri Dharmaraja Iyer


10.12.2004 Acknowledgement has been received from the District Collector. The Borrower has been asked to deposit the arrears or file recovery proceedings.

8,82,165

7.

Shri Salimon P.J.


1.12.2004 The Borrower has settled the entire arrears on 7/11/05. Presently his account is in NPA. He has applied for a stay asking for some more time for settlement of the entire loan to RR office.

6,08,771

8

Shri K.S. Santosh.



3,13,768

114

Sr. No

Borrower in default



9.

Shri Sudhir T.T.



2,33,410

10.

Shri Joseph Jacob



9,94,709

11.

Shri R. Vijaykumar



2,54,635

12.

Shri A.P. George, Shri A.O. Pathrose



5,19,135

B. Notices issued by the Company under Section 13(2) of the Securitisation & Reconstruction

of Financial Assets and Enforcement of Security Interest Act, 2002:

The Company has issued 76 demand notices to the borrowers whose account has been classified as a Non-Performing Asset by the Company on account of irregularity in the repayment of the housing loans advanced to them. The outstanding dues are inclusive of outstanding principal, interest and penal interest. The Company has neither filed any case under Section 138 of the Negotiable Instruments Act, 1881 nor filed any recovery suit against the borrowers in default to whom the notices have been issued.

Sr. No

Borrower in default

Amount of loan advanced

Date of Notice Financial Implication in case of a Non

favourable outcome (In Rs)

1. Mr. Anwar Khan/Munawar Sultan, Noida

Rs. 5,00,000/- 19th January, 2005

Rs.6,73,926/-

2. Mr. Sachida Nand Singh Chauhan, Noida

Rs. 2,00,000/- 19th January, 2005

Rs.2,73,255/-

115

Sr. No

Borrower in default




3. Mr. Devendra Puri, Noida

Rs. 8,00,000/-

19th January, 2005

Rs.9,32,762/-

4. Mr. Hiwale George Thomas, Mumbai

Rs. 5,00,000/-

24th May, 2005

Rs.7,85,386/-

5. Mr. Dadwal Singh, Mumbai

Rs. 5,75,000/-

24th May, 2005

Rs.8,52,393/-

6. Mr. Padhy Banamali K., Mumbai

Rs.1,80,000/-

24th May, 2005

Rs.3,52,980/-

7. Mr. Rajesh Soni., Mumbai

Rs. 8,50,000/-

24th May, 2005

Rs.14,59,366/-

8. Mr. Panigraphy & Manash Kashinath., Mumbai

Rs. 1,80,000/-

24th May, 2005

Rs.3,15,734/-

9. Mr. Sudesh Kumar Singh., Mumbai

Rs. 2,60,000/-

24th May, 2005

Rs.4,28,839/-

10. Mr. and Mrs. Ramakant Bhosale, Mumbai

Rs. 1,90,000/-

24th May, 2005

Rs.4,31,647/-

11. Mr. Saste, Mumbai Rs. 1,99,000/-

24th May, 2005

Rs.4,05,040/-

12. Mrs. And Mr. Khade, Mumbai

Rs. 10,00,000/-

24th May, 2005

Rs.15,37,636/-

13. Mr. Dudhawadkar, Mumbai

Rs. 4,97,000/-

24th May, 2005

Rs.7,39,590/-

14. Mr and Mrs Timchand Bhosale

Rs. 2,47,000/-

30th April, 2005

Rs.3,98,728/-

15. Mr and Mrs Tulsidharam Pillai

Rs. 4,25,000/-

30th April, 2005

Rs.7,38,084/-

16. Mr. Parmar Phillips Rs. 2,87,000/-

24th May, 2005

Rs.4,85,723/-

17. Mr. Bhandari S. Rs. 1,28,000/-

24th May, 2005

Rs.2,08,287/-

18. Mr Shetty Raghuram J.

Rs. 21,00,000/-

24th May, 2005

Rs.32,41,239/-

19. Mr. Kotian Jaya Rs. 3,00,000/-

24th May, 2005

Rs.4,64,191/-

20. Mr. Jaswant Gala Rs. 3,80,000/-

24th April, 2005

Rs.4,81,538/-

21. Mr. Ahmed Khan Rs. 4,00,000/-

24th April, 2005

Rs.6,12,968/-

22. Mr. Shivprasad Mukadam

Rs. 2,43,000/- 24th April, 2005

Rs.3,04,584/-

23. Mr. Jaguste Rs. 2,50,000/-

24th April, 2005

Rs.3,46,081/-

24. Mr. Kanhaiya Singh Rs. 3,60,000/-

24th April, 2005

Rs.4,81,963/-

25. Mr. V.M. Ramkumar

Rs. 3,00,000/-

24th April, 2005

Rs.3,99,900/-

26. Mr. Kutty Lakshman

Rs. 4,00,000/-

22nd March, 2005

Rs.7,05,864/-

27. Mr. Seena Shetty Rs. 5,69,000/- 22nd March, Rs.9,00,857/-

116

Sr. No

Borrower in default




2005 28. Mr. Motiram

Dhumale Rs. 70,000/-

22nd March, 2005

Rs.1,11,199/-

29. Mr. Vishwakarma Radheshyam

Rs. 2,29,000/-

22nd March, 2005

Rs.4,08,367/-

30. Mr. Jitendra Chauhan

Rs. 60,000/-

22nd March, 2005

Rs.1,15,995/-

31. Mr and Mrs Rajesh Mohite

Rs. 3,95,000/-

17th January 2005

Rs.8,55458/-

32. Mr. George Xavier Rs. 4,20,000/-

17th January 2005

Rs.9,60509/-

33. Mr and Mrs Prasad Verma

Rs. 3,80,000/-

17th January 2005

Rs.5,84,267/-

34. Mr. Abhaykumar Waghchoure

Rs.2,13,177/-

14th January 2005

Rs.5,27,561/-

35. Mr Mrinal Mitra Rs.6,25,000/-

14th January 2005

Rs.10,86,192/-

36. Mr. Kalawad Ningappa

Rs.3,90,000/-

14th January 2005

Rs.6,22,736/-

37. Mr and Mrs Ashok Bhojak

Rs.5,00,000/-

23rd December 2004

Rs.7,85,946/-

38. Mr. H. Jain Dharmesh

Rs.4,85,000/-

23rd December 2004

Rs.9,36,826/-

39. Mr. Krishna Rao Rs.3,00,000/-

23rd December 2004

Rs.5,43,276/-

40. Mr. Anil Rajguru Rs.3,20,000/-

23rd December 2004

Rs. 5,55759/-

41. Mr. Gawade Pandharinath V.

Rs.1,80,000/-

23rd December 2004

Rs.3,10,928/-

42. Mr. Bhikaji Mhangre

Rs.3,50,000/-

27th March 2005

Rs.6,14,420/-

43. Mr. Pradeep R. Paralikar

Rs.2,85,000/-

27th March 2005

Rs.6,14,052/-

44. Mr. Mahendra Kenia

Rs.4,80,000/-

27th March 2005

Rs.8,26,878/-

45. Mr. Kharat Keshav Rs.3,00,000/- 13th August 2004

Rs. 5,94,774/-

46. Mrs. Bano Shaikh Rs. 4,00,000/- 13th August 2004

Rs. 5,23,161/-

47. Mr. Sharad Mhatre Rs. 2,00,000/- 13th August 2004

Rs.3,44,948/-

48. Mr. Garware Rs. 2,38,000/- 17th December 2004

Rs.3,84,068/-

49. Mr. Amod Gore Rs. 2,70,000/- 17th December 2004

Rs.2,93,059/-

50. Mr and Mrs Nasir Shaikh

Rs.5,00,000/- 17th December 2004

Rs.12,46,157/-

51. Mr. Sainath Dalal Rs.3,00,000/- 17th December 2004

Rs.2,34,565/-

53. Mr and Mrs Ashok Tripathi

Rs.3,00,000/- 17th December 2004

Rs.4,30,833/-

54. Mr. Ramakrishna Rs.3,70,000/- 17th December Rs.7.36,324/-

117

Sr. No

Borrower in default




Varadkar 2004 55. Mr. Rijjelwal

Bhushan Rs. 4,86,000/- 17th December

2004 Rs.5,83,189/-

56. Mrs. Smita Bhatkar Rs.3,00,000/- 17th December 2004

Rs.4,07,268/-

57. Mr Thapa Lal Bahadur / Thapa Yogendra Lal

Rs.4,00,000/- 29th December 2004

Rs. 4,33,623/-

58. Mr. Devendra Kandaswamy

Rs. 2,24,000/- 29th December 2004

Rs.2,81,806/-

59. Mr. Chandrakant Pagare

Rs.2,42,000/- 29th December 2004

Rs.4,22,304/-

60. Mr. Dagdoo Shete Rs.5,00,000/- 29th December 2004

Rs.6,48,893/-

61. Mr. Chintaman Kothari

Rs.7,00,000/- 29th December 2004

Rs.8,46,624/-

62. Mr. Digamber Pasadhe

Rs.2,57,000/- 29th December 2004

Rs.4,34,361/-

63. Mr. Rajagopalan Rs.2,80,000/- 27th December 2004

Rs.6,09,618/-

64. Mr and Mrs Muthukrishnan

Rs.19,00,000/- 27th December 2004

Rs.44,22,816/-

65. Mr. N. Gunasekaran/ G. Grace

Rs.1,80,000/- 27th December 2004

Rs.5,38,328/-

66. Mr and Mrs Swaminathan

Rs.2,00,000/- 27th December 2004

Rs.3,28,561/-

67. T.G. Ramamohan Rs. 6,00,000/- 27th December 2004

Rs.12,77,3761/-

68. Mr and Mrs Rajivnath

Rs.7,50,000/- 13th January 2005

Rs.18,35,966/-

69. Mr and Mrs Kalyan Kumar Jordan

Rs. 10,00,000/- 7th February, 2005

Rs.12,46,216/-

70. Mr. Saroj Mishra Rs.4,30,000/- 7th February, 2005

Rs.8,60,486/-

71. Mr. Sanjay Malhotra

Rs.5,50,000/- 7th February, 2005

Rs.7,40,741/-

73. Mr. Amritlal Singh Rs.8,00,000/- 7th February, 2005

Rs.10,48,497/-

74. Mr. J Stephenson/Ajith Kumari

Rs.2,15,000/- 14th October 2004

Rs.2,41,965/-

75. Citizen Builders Rs.3,00,00,000/- 25th January, 2005

Rs.8,79,02,432/-

76. Seasons Builders Pvt Ltd

Rs.40,00,000/- 27th December, 2004

Rs.1,15,75,000/-

118

LITIGATION DETAILS OF THE PROMOTER COMPANIES*

A) Litigation details pertaining to NICL:

There are about 2,13,989 claims amounting to Rs. 1784.12 crores pending before various motor accident tribunals. The figures stated are provisional and subject to audit.

B) Litigation details pertaining to United India:

As on 31st March 2004 there are about 2,64,001 claims amounting to Rs. 2655.81 crores pending before various motor accident tribunals.

C) Litigation details pertaining to OICL:

By virtue of the company's operation in providing motor insurance, there have been a number of litigations against the company for settlement of motor third party insurance claims. Similarly several of OICL's customers have approached various legal forums for non-settlement/short-settlement of claims. These are litigations in the normal course of business operations. These apart there have been cases filed in matters relating to Personnel Department and Estate Department as well. The company handles these litigations at the Branch/Division/Region and a few by the Head Office.

There is no central data bank in respect of litigation claims filed against/by Oriental Insurance. There were 234950 claims for an estimated amount of Rs. 2266 crores as on 31st March 2003 and the figures for year ended 31st March 2004 (provisional unaudited) are 244055 claims for an amount of Rs. 2492 crores.

D) Litigation details pertaining to New India:

New India being a general insurance company the litigations filed by/against the company mainly relate to claim settlements (major portion being motorthird party claims).There are 2,36,705 motorthird party claims outstanding in courts/tribunals as on 31st March 2004 involving an amount of Rs. 3065.65 crores. The Company is a wholly owned by the Government of India doing general insurance business. There are litigations filed by/against the Company relating to claim settlements (major portion being motor third party claims) under normal course of its business. Similarly there could be employee-employer related litigation filed by / litigations filed by/against the Company. However no litigations as such filed against any of the directors in their personal capacity. Income tax filed against the Company.

Sr No

Parties Authority where pending

Particulars Status Financial liability involved

1. Assessing Office ITAT The Department is treating premium recoverable as per Internal Audit queries amounting to Rs 2.87 crores as unaccounted income for the year 2000-01

The Department has obtained COD permission

Rs 110 Lacs

2. Assessing officer ITAT Interest tax pertaining to the years 1995-1996, 1996-1997, 1997-98

The department has to obtain COD permission

1995-96- Rs 702.59 lacs 1996-97- Rs 651.48 lacs 1997-98- Rs 762.55 lacs

119

Income Tax Cases filed by the Company:

Sr No

Parties Authority where pending

Particulars Status Financial liability involved

1. CIT (A) of Income Tax, Mumbai

ITAT, Mumbai

Company Assessment for AY 2000-01 matters i. Applicability of Rule 5 of first schedule to the Income Tax Act 1961 ii. Disallowance u/s 14A of the Act iii. Treating interest on NPAs as income iv. Disallowance of provision for wage arrears for the assessment year 2000-01

COD permission received awaiting hearing at ITAT

RS 6225.25 lacs. (All dues already stand paid)

2. CIT(A) of Income Tax, Mumbai

ITAT, Mumbai

Company’s Assessment for AY 2001-02 matters i. Applicability of Rule 5 of first schedule to the Income Tax 1961 ii. Disallowance u/s 14A of the Act iii. Treating interest on NPAs as income iv. Disallowance of prior period expenses

COD permission received awaiting hearing at ITAT

Rs 2718 lacs (All dues already stand paid)

3. CIT (A) of Income Tax Mumbai

ITAT, Mumbai

Company’s Assessment for AY 2002-03 matters i. Applicability of Rule 5 of first schedule to the Income Tax 1961 ii. Disallowance u/s 14A of the Act 1961 iii. Profit on sale of long term investment iv. Levy of interest under section 234D v. Short grant of interest under section 244A

Submitted for COD permission

Rs 2034 lacs. (All dues already stand paid)

4. CIT (A) of Income Tax Mumbai

ITAT, Mumbai

Company’s Assessment for AY 2003-04 matters i. Applicability of Rule 5 of first schedule to the Income Tax 1961 ii. Disallowance u/s 14A of the Act 1961 iii. Profit on sale of long term investment iv. Short grant of interest under section 244A


Rs 5914 lacs. (All dues already stand paid)

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5. Tax

Asst Commissioner of Income

CIT (A) Mumbai

Company’s Assessment for 2004-05 i. Profit on sale of investments ii. Broken period interest iii. Amortization of premium paid on purchase of securities iv. Other minor issues

Pending hearing with CIT (A)

Rs 11937 lacs to be paid on or before 25th January 2006

6. CIT(A) Mangalore

IATA Bangalore

Demand of arrears of TDS u/s 194 (A) i.e. interest on MACT awards for AYs 2000-01 to 2003-04 pertaining to Mangalore

COD permission obtained pending hearing at ITAT

Rs 24.85 lacs

7. CIT (A) Mangalore

IATA Bangalore

Demand of arrears of TDS u/s 194 (A) i.e. interest on MACT awards for AYs 2000-01 to 2003-04 pertaining to Udipi DO

COD permission obtained pending hearing at ITAT

Rs 12.94 lacs

8. CIT (A) Bangalore

IATA Bangalore

Demand of arrears of TDS u/s 194 (A) i.e. interest on MACT awards for AYs 2003-04 for 11 of our Bangalore Dos

Submitted for COD permission.

Rs 1.96 lacs

9. ITAT, Jodhpur Rajasthan High Court Jodhpur Bench

Not deduction of tax at source on amount of interest paid on MACT awards, jodhpur Dos I and II


FY 1996-97 amount not quantified FY 1997-98 Rs 41881 (penalty)

E) Litigation details pertaining to IFCI:

• As on 31st March 2004 IFCI had filed 802 recovery applications involving an amount of Rs. 1065300 lacs in various debt recovery tribunals.

• As on 31st March 2004 two claims were pending in courts against IFCI Limited, which have not been acknowledged as debts amounting to Rs. 4600 lacs.

* NOTE: THE INFORMATION RELATING TO THE PROMOTERS GENERALLY AND IN PARTICULAR CONCERNING THE LEGAL PROCEEDINGS AND CLAIMS IS BASED ON THE INFORMATION RECEIVED BY THE COMPANY FROM THE PROMOTERS AND WHICH INFORMATION HAS NOT BEEN INDEPENDENTLY VERIFIED. EXCEPT AS PROVIDED HEREIN THE COMPANY HAS NOT RECEIVED ANY UPDATED INFORMATION IN RESPECT TO THE LEGAL PROCEEDINGS AND OTHER INFORMATION WITH REGARDS TO THE CLAIMS FILED BY OR AGAINST THE PROMOTER COMPANIES.

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GROUP COMPANIES PROMOTED BY THE PROMOTERS OF THE COMPANY ** A. UTI BANK LTD Outstanding litigations pertaining to UTI Bank Limited as on 31/3/05 Cases filed against the bank (1) There are 5 major litigations involving claims against the Bank to the extent of approximately

Rs.39.02 crores, not acknowledged as debts. Brief details are given the table below. Sr No

Claimant Court/Forum Particulars Financial liability involved (Rs in Lacs)

1. Stiefel Und Schuh (I) Ltd

Calcutta High Court

Stiefel Und Schuh (I) Limited were granted certain credit facilities filed a damage suit no.345 of 1996 before the Calcutta High Court against the Bank allegedly for not extending need based support to the Company at the appropriate time fore effecting their export transactions. The Company alleged that the Deferred Payment Guarantee issued by the Bank on their behalf was not according to their requirements owing to which, they suffered losses and damages for Rs.23.55 crores which they claimed from the Bank. The court passed and ad interim order for maintaining status quo with regard to the securities under the DPG with liberty to the Bank to take such liberty as is deemed appropriate under the law for recovery of its dues. Pursuant to such liberty being granted, the Bank filed an application under Section 19 of Recovery of Debts due to Banks and Financial Institution Act 1993 for recovery of its claims enforcement of securities and other reliefs. The case has now been transferred from the High Court to DRT in November 2000. The damage suit filed by the Company against the Bank would be heard simultaneously with our main suit as a counter claim.

Rs 2355 Lacs

2. Videsh Sanchar Nigam Limited (VSNL A/c Shristi Videocrop

Civil Court Delhi M/s Srishti Videocorp Limited were sanctioned a guarantee limit of Rs.4.20 crores in September 1996 for a period of 1 year against cash margin of 50%. The guarantee was favouring VSNL. As the Company did not perform some of its items and conditions of the agreement

Rs 257 Lacs

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Limited) with VSNL, the guarantee was invoked by VSNL for partial payment of Rs. 1.62 crores on 7th February 1997. The Bank paid the invoked amount to VSNL and asked for the original Bank Guarantee. VSNL took a stand that invocation was partial and hence did not return the Bank Guarantee. The Bank has maintained its stand time and again that the payment should be taken as full and final. These views were based on the legal opinion obtained by the Bank. Further the Bank was advised by its lawyers to file a caveat in the said matter as they envisaged that VSNL would be initiating proceedings against the Bank. Accordingly the Bank filed a caveat in the matter so that the VSNL do not get exparty injunction. VSNL subsequently filed a suit in the matter against UTI Bank Limited and M/s Srishti Videocorp Limited; however, no interim relief was sought by VSNL. The claim of VSNL filed with the court has been opposed by the Bank on the above mentioned ground.

3. M/s Bhatpara Naihati Co-op Bank

Civil Court Kolkata

M/s Bhatpara Naihati Co-op. Bank has filed a Money Suit No.45 of 2003 against Home Trade Ltd., Mr. Indranil De and UTI Bank before the Civil Judge (Sr. Div), Barasat, 24 Paraganas, Kolkata for recovering a sum of Rs.4,57,46,478.45 from all the Defendants jointly and severally. We have filed our reply stating that our Bank is not involved either directly or indirectly in the said transactions. We have also filed a declaratory case against Bhatpara-Naihati Co-operative Bank, Home Trade, Mr. Indranil Dey case before Kolkata High Court and it is pending. We have filed a petition to transfer the case to Kolkatta High Court.

Rs 457 lacs

4. Legal Heirs of Late Mr N R Lohia

High Court, Kolkata

Uniworth Limited (UWL), Kolkata was enjoying various credit facilities extended by the Bank from time to time against which as security, inter alia, Late N R Lohia pledged his fixed Deposit Receipts. UWL was called upon by the Bank to regularize the account failing which it was proposed that the FDRs given by Late N R Lohia would be encahsed and adjusted against the dues of UWL. The Bank accordingly encahsed the FDRs and adjusted the amount of FDRs against the outstanding of UWL. Thereafter an

Rs 820 lacs

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application was filed by the Bank for recovery of the remaining outstanding amount from UWL before the DRT, Kolkatta, which is still pending as the Company has been referred to BIFR. Mr. Lohia (since deceased and represented by the beneficiary) being aggrieved with the adjustment of the FDR amounts, filed a suit in the Calcutta High Court challenging the action of the Bank’s such adjustment. The suit is still pending fir disposal.

5. Punjab National Bank (PNB)

Debt Recovery Tribunal, Delhi

Punjab National Bank has filed a recovery case against the Bank and Mr. Dinesh Arora, PNB has claimed a sum of Rs.13,10,044. Mr. Dinesh Arora is the customer of UTI Bank’s Pritampura branch ad is alleged to have fraudulently collected two fake demand drafts. As for as UTI Bank is concerned the account was opened on the bases of Election I – card and other Docs.

Rs 13 lacs

6. Rajivkumar Aggarwal

High Court Delhi Rs 5 Lacs

7. Jitendra Sharma

Kota Rs 5 Lacs

(2) Others (a) Consumer cases

There are 32 cases filed and pending against the Bank before various Consumer Forums across the country. The total claim amount in all these Complaints is of Rs Rs 84 Lacs.

(b) Cases before the Banking Ombudsman

There are 20 cases filed and pending against the Bank before Banking Ombudsman across the country. The total claim amount in all these Complaints is of Rs Rs 422 Lacs.

(c) There are no matters likely to affect operation and finances of the Company including disputed tax

liabilities,; (d) There is no criminal prosecution launched against the Company and the Directors for alleged offences

under the enactments specified in paragraph 1 of Part 1 of Schedule XIII to the Companies Act, 1956.

1) CBI has filed a charge sheet against one of the employees of the Bank, Shri Sanjeev Gupta allegedly for conspiring with Prakash Industries Ltd. relating to the lease transaction of an Air Pollution Control Equipment. The Bank is fighting his case as his role was limited only to the preparation of the cheques and has filed a criminal Revision Petition before the High Court, Delhi and is stated for hearing on 7th October 2005.

2) The Labour officer at Kochi filed a prosecution against CMD in the capacity as the principal

employer u/s 24 of C.L.A Act. A Writ Petition was filed in High Court of Kerala at Ernakulam and order was passed on 31st October, 2003 staying all the proceedings.

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3) A Complaint has been filed by the Labour Enforcement Office of Contract Labour department (central) appointment under Contract Labour (Regulation & Abolition) Act 1970 for the offences under Section 23 & 24 of the said Act before the metropolitan magistrate’s Court at Dadar against one of our employee who is presently Vice President (Projects), Shri A.R. Shymroy. The case is contested.

4) A dismissed employee, Mr. Astana has filed petition before the L.C. Kanpur to declare him as a

workman under ID Act and Re-instate him. The reply is filed on 16/3/2005. The next date of hearing in on 22/4/05.

5) We understand that a case has been filed by one Mr. Prabhakar Barde, Advocate and Saving Bank

Accountholder in Judicial Magistrate First Class, Baramathi against the Bank and its Directors under Section 409 & 500 of IPC allegedly claiming for reversal of charges for non-maintenance of average quarterly balance in a Savings Bank Account. The amount involved is Rs.2000/- (appx). We have not received any notice / communication from the Court so far. In case summons/notices are received, we can defend the case appropriately. In our view, the complaint has no legal sanctity and likely to be dismissed.

(e) There are no litigations against the Directors involving violation of statutory regulation or criminal

offence. Cases filed by the Bank In the ordinary course, the Bank has filed recovery cases before various Debt Recovery Tribunals against defaults. Bank has also filed cases under Section 138 of NI Act against various defaulters and they are in various stages. B. IFCI Venture Capital Funds Ltd. Status Of Litigation Cases As On 31st March, 2005 The following is the summarized position of the litigation details of IFCI Venture Capital Funds Ltd: (Rs. in Crores) Sr. No. Particulars No. of Cases Total Amount 1 Legal Suits filed by IVCF 46 10.61 2 Legal Suit filed against IVCF 1 0.02 C. GIC Assets Management Company Limited There are no pending litigations in which the Company/Group Company and Director /Directors of group companies are involved including default to the financial institution/banks, non – payment of statutory dues and dues towards instrument holders like debenture holders, fixed deposits, and arrears on cumulative preference shares together with the amounts involved and the present status of such litigations/defaults. There are no cases of pending litigation, defaults, etc. in respect of companies/firms/ventures with which the Company was associated in the past but is no longer associated shall also be mentioned in case their name(s) continues to be associated with particular litigation(s). There are no pending proceedings initiated for economic offences against the directors, the Promoters of the Company and Group Companies indicating their present status. There are no past cases in which penalties were imposed by the concerned authorities.

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We also confirm that: 1. The Company, Promoters of the Company, Directors of the Company, Directors of the Promoters,

the Associate Companies, Group Companies in which the Directors of the Company are associated as directors or Promoters have not been prohibited from accessing the capital market under any order or direction passed by SEBI or any other regulatory authority; and

2. The Company, Promoters, their relatives (as per Act), Group Companies, Associate Companies

are not detained as willful defaulters by RBI/Government authorities. D. ICRA Ltd.

Cases filed by ICRA

A. Associated Journals Limited

ICRA took an office premises at New Delhi on lease from M/s Associated Journals Limited (AJL) w. e. f. May 1, 1996 for a period of eight years with an option to vacate the same by giving 3 months notice. A notice for termination of lease was given by ICRA to AJL on November 18, 1997 and AJL was requested to refund an amount of Rs. 46,72,500 from out of security deposit of Rs. 66,75,000 held by them after making adjustment of 3 months rent amounting to Rs. 16,68,750 and rent for the period between November 1, 1997 to November 18, 1997 amounting to Rs. 3,33,750. Inspite of continuous follow up AJL has not yet refunded the security deposit and, therefore, ICRA had no other option but to proceed legally.

Accordingly, ICRA filed a suit in November 1998 against AJL in Delhi High Court for recovery of the Security Deposit of Rs. 46,72,500 as above alongwith interest in accordance with the terms of the Lease Agreement.

AJL in written statement to the High Court has stated that ICRA continued its possession of the premises and handed over the keys before the Hon’ble Court on December 7, 1998 and ICRA was liable to pay rent till that date. According to M/s Associated Journals Limited, the notice of termination/determination issued on November 18, 1997 was not cognizable until possession was handed over. After justifying its own stand, AJL made a counter claim of Rs. 12,85,383.06 against ICRA in addition to the interest and costs of the suit after adjustment of the security deposit.

The admission – denial of the documents filed by both the parties has been completed and matter was listed on March 19, 2004 and August 16, 2004 before the Hon’ble Court for framing of issues. The matter was posted for evidence before the Joint Registrar on November 29, 2004 and March 14, 2005. The case was listed for evidence on September 23, 2005 before the Joint Registrar. However, no representative from AJL appeared and the Joint Registrar re – notified the matter to the date already fixed for disposal of the said application by the Hon’ble Court i.e. December 12, 2005 and the case was adjourned to March 3, 2006.

B. Associated Journals Limited

In addition to the above, a petition has been filed by ICRA on December 23, 1998 with the Allahabad High Court for winding of AJL. It is understood that the court had sent a notice to AJL at Lucknow which was returned back since the office of AJL was locked. Subsequently, a list of Directors of AJL has been forwarded to the court through our Advocate for delivery of court notice to them. Accordingly to our Advocate the notice has been served to the directors of AJL.

On April 27, 2004 the Allahabad High Court directed the counsel for the petitioner (i.e. ICRA Ltd.) to seek instructions as to whether the petitioner, in the light of pendency of the civil suit before the Delhi High Court, was interested in pursuing the winding up petition (or withdraw the same with liberty to file a fresh petition in case of future need). An affidavit was filed on behalf of the Company before the Allahabad High Court wherein it was prayed, inter alia, that in the interest

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of justice, the hearing of winding up petition be adjourned till the disposal of the civil suit in Delhi High Court.

The petition came for hearing on September 16, 2005 before the Company Judge and was heard. The Company judge however, relying upon a decision of the Division Bench held that the matter has to be considered by the Lucknow bench upto the stage of the order of winding up and only thereafter can be heard at Allahabad. Hence, the court directed that the record of the Company Petition be transmitted to the Company Judge at Lucknow.

Arrangements are being made for taking away the papers from the office of Allahabad Advocate and to engage a counsel at Lucknow. The matter would be heard at Allahabad Court only after winding up order is passed at Lucknow.

C. Winding Up of M/s Captech Online Private Limited

A sum of Rs. 4,213,734 is receivable from M/s Captech Online Private Limited towards professional services rendered by the Company. As the Company was unable to recover the said amount inspite of vigorous follow up, the Company initiated the process of filing a winding up petition in Hon’ble High Court at Mumbai. On September 14, 2004, the winding up petition was signed by the Managing Director of the Company and filed with the Court. On December 10, 2004 the matter was listed. Our Advocate submitted with the Hon’ble High Court that Captech’s office has been closed down and they are not accepting the service of the Petition. Our Advocate requested the Hon’ble High Court to allow advertisement of the Petition as a substituted service. However, the Hon’ble High Court declined to pass such Order.

Subsequently, the winding up petition along with our Advocate’s letter was delivered by ICRA to Captech in February, 2005.

The matter was listed on April 15, 2005 in Bombay High Court for admission. The Hon’ble High Court was pleased to admit the Company’s Petition and directed our lawyer to advertise the same in local newspapers and Government Gazette. Our lawyer applied for the certified copy of the Order and has obtained the same.

Advertisements were published in Free Press Journal and Navshakti. It was also published in Maharashtra Government Gazette on May 21, 2005. The matter is yet to come up for final hearing.

D. Show Cause cum Demand Notice from Deputy Commissioner of Service Tax Cell, Chennai.

The Company received a Show Cause cum Demand Notice from the Deputy Commissioner, Service Tax Cell, Chennai requiring us to show cause why Service Tax of Rs.860,507 being the Service Tax on the Advisory Services invoices raised during the period from October, 1998 to March, 2002 not be demanded from the Company. Further, he has required us to show cause for not demanding interest and penalty thereon.

The matter was referred to Lawyers at Chennai and a reply to Show Cause cum Demand Notice drafted by the Lawyers was submitted on May 13, 2004 with the office of Service Tax Department. Later on, the Superintendent of Central Excise, Service Tax Cell called for personal hearing on July 5, 2004. The Company submitted additional information on July 20, 2004 as requested by the Department on personal hearing. A letter dated August 18, 2004 was received from the Department advising us to submit the copies of the agreements of all the clients of Advisory Services assignments rendered by our Chennai branch for the period October’98 to March’02 which were submitted by us on September 17, 2004. The Department called us again for personal hearing on October 29, 2004 and ICRA representatives along with lawyer appeared before the Deputy Commissioner of Service Tax, Chennai.

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The Company received an order dated December 30, 2004 from the Deputy Commissioner of Service Tax, Chennai rejecting the contentions as under:-

i. He confirmed the demand of Service Tax of Rs.860,507/- (Rupees Eight Hundred Sixty

Thousand Five Hundred and Seven only) proposed in the Show Cause Notice under Section 73(a) of the said Act.

ii. He confirmed the demand of interest for the period from October, 1998 to March, 2002

and until the Service Tax of Rs. 860,507/- is paid up completely under Section 75 of the said Act as proposed in the Show Cause Notice.

iii. He imposed a penalty of Rs.100/- per day under Section 76 of the said Act for the period

from October 1998 to March 2002, and until the Service Tax of Rs.860,507/- is paid up completely. The Deputy Commissioner restricted the penalty to the limit of the total tax amount.

iv. He imposed a penalty of Rs.1,000/- for the failure to file the ST3 return in time for the

period from October 1998 to March 2002, under Section 77 of the said Act.

As directed by the Board of Directors of the Company in its meeting held on February 11, 2005, the representatives of the Company alongwith Advocates appeared before the Commissioner (Appeals) on April 12, 2005 and expressed willingness to pay the disputed tax amount and requested to stay the proceedings for recovery of interest and penalties till the appeal is decided finally. None of the representatives from the Service Tax Department appeared on that day. The hearing on that only involved granting of stay and approving the payment of pre-deposit. It was in our interest to settle the pre-deposit on a priority basis. The merits of the case and our appeal were not taken up on that day. As a result, there was no discussion on reduction in Service Tax payable from Rs.860,507 to Rs.668,007 due to bad debts. The Commissioner (Appeals) was of the opinion that the issue at hand is a debatable and directed to deposit the entire amount of disputed Service Tax of Rs.860,507 and thereafter file an application for out of turn hearing. Our Advocate advised us that it is better for us to pay the entire Service Tax amount since only then the interest and penalty amount would stop accruing. The amount of disputed Service Tax was deposited on May 5, 2005.

The personal hearing for the main Appeal was held on June 14, 2005. The hearing was attended by the senior counsel, Mr. T. K. Seshadri, Mr. T.K. Bhaskar and from Chennai Branch, Mr. V. Sriram and Mr. N. Venkateswaran.

The Commissioner of Central Excise (Appeals) in his order dated August 17, 2005 decided the said appeal against the Company and held that the advisory services rendered by the Company are very much in the nature of “Management Consultant” service and are not exempted from payment of Service Tax. He held the Company liable to pay interest on the Service Tax and he set aside the payment of penalties imposed by the Adjudicating Authority. The Company has filed an appeal to the Appellate Authority. The Company has filed an appeal to the Appellate Authority against the Order passed by the Commissioner of Central Excise (Appeals). The matter is likely to come up for hearing in the month of February 2006.

Cases filed against ICRA

A. Leafin India Limited – Hyderabad

Leafin India Limited – Hyderabad The legal cases in Hyderabad have been filed on account of the default in the payment of public deposits by Leafin India Limited, a NBFC rated by ICRA. The status of the cases is as follows:-

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i. Legal Notice

In April 2000 the Managing Dircetor of ICRA had received a legal notice from Leafin Depositors Association alleging ICRA’s irresponsibility and collusion with the officials of Leafin India Limited in giving a false credit Rating. The association threatened ICRA and the Managing Director with legal action (both civil and criminal), if a proper explanation and justification for the basis of assigned rating was not given. ICRA’s advocate, Mr. S. Ravi, sent a reply to the above notice in May, 2000. There is no further progress in the matter.

ii. Criminal Complaint filed against ICRA and the Managing Director

A rejoinder was received from the advocate of the said Association in May, 2000 stating that a member of the Association had already filed a criminal complaint in the Criminal Court, Nampally, Hyderabad against ICRA and its Managing Director in his personal capacity under the provisions of Indian Penal Code and that the said complaint was referred to The C.B. – C.I.D for investigation.

The advocate has informed the Company that C.B. – C.I.D. personnel may be visiting the offices for investigation and has advised the Company to provide full cooperation and sharing of information with the investigators. Till date, there have been no further developments.

iii. Case nos. 476,478,480,482,484,486,488,489,490,491 of 2000

This pertains to the complaints filed by another 10 depositors of Leafin India Limited in the Consumer Disputes Redressal Forum, Hyderabad. On February 07, 2005, the Consumer Disputes Redressal Forum issued orders directing ICRA to pay Rs. 10000/- towards compensation to each complainant.

On March 4, 2005 ICRA has filed appeals along with affidavits in all the ten cases in the A.P. State Consumer Disputes Redressal Commission. These cases came for hearing on July 28, and ICRA’s appeals have been admitted in the State Commission. The matter was posted to October 20, 2005 for appearance of the Complainants. The counsel for the respondents filed a memo of appearance and the cases now stand posted to January 18, 2006.

iv. Cases C.D. nos. 371, 372, 373, 374, 375, 385, 386, 396, 397, 398, 399, 400, 403, 418 of

2005. 14 more depositors of Leafin India have filed complaints against ICRA. Status is as follows:

C.D. Nos.371, 373, 375, 385 & 397 (all in Forum I): In these cases the counters have been filed by ICRA on July 28, 2005. Subsequently on august 29, 2005, Leafin India has also filed its counter. In all these cases, the complainants have filed the affidavits. These cases are now posted to January 30, 2006 for filing of written arguments by Opposite Party No.1 and the Complainant.

C.D. Nos. 398, 400 & 403 (all in Forum II): ICRA has filed the counters on July 18, 2005. Subsequently, Leafin India has also filed the counter. The complainants have filed the affidavits, and the cases are now posted to January 24, 2006 for filing of written arguments by all the parties. Written arguments on behalf of ICRA have been prepared by the Counsel and are going to be filed on the said date.

C.D. nos. 372, 374, 386, 396, 399 & 418 (all in Forum III): These cases are in three stages:

For the case 418, Affidavit in chief has been filed by ICRA. This stands posted to January 18, 2006 for orders.

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Cases 372 & 399: The complainants have filed the affidavit, and the cases are listed for January 30, 2006 for filing of written arguments by Opposite Party I and the Complainant.

Cases 374, 386, & 396 are posted for February 7, 2006 for filing of written arguments by Opposite Party I and the Complainant

B. Service Tax Matters

The Board of Directors was informed in its meeting held on October 15, 2003 that the Company was neither collecting nor depositing Service Tax on Advisory Services and Information Services rendered on the basis of Trade Notice No.7/98 ST, dated October 13, 1998 issued by Mumbai Commissionerate. This notice clarified that Information and Advisory Services rendered by Credit Rating Agencies would not attract Service Tax for the reason that “Taxable Service” in respect of a credit Rating Agency means services provided to a client only in relation to credit Rating of any financial obligation, instrument or security.

However, the Company received notices from the Office of Commissioner of Service Tax in the Mumbai office vide their letters dated October 1, 2002, December 20, 2002 January 29, 2003, February 25, 2003, April 4, 2003 and August 13, 2003 wherein in addition to raising other points they indicated that ICRA is covered under the head “Management Consultants Services” w.e.f. October 16, 1998 for Advisory Services without considering the aforesaid Trade Notice No.7/98 ST, dated October 13, 1998 issued by Mumbai Commissionerate about non applicability of Service Tax on Advisory Services and Information Services rendered by the Credit Rating Agencies. In the replies given by the Company to the Central Excise Department, the Company had continued with the stand of non applicability on the basis of the said Trade Notice after taking legal opinion from the Advocates.

The Company’s informal enquiries from the other major Credit Rating Agency engaged in Advisory Services, revealed that they were also not collecting and depositing Service Tax on Advisory Services and Information Services on the basis of said Trade Notice issued by the Service Tax Department. However, they started collecting and paying Service Tax after covering themselves under the head “Banking and other Financial Services” w.e.f. August 16, 2002 since the companies were also covered for payment of Service Tax from that dare on Advisory and other auxiliary financial services including transfer of information and data processing etc. It may be clarified that before August 16, 2002 the Body Corporates (including Companies) were not covered under “Banking and other Financial Services” for payment of Service Tax.

In view of the above and on the basis of an opinion taken from M/s K.R. Chawla & Co., Advocates about the applicability of Service Tax on Advisory Services and Information Services rendered by the Company, as a matter of abundant caution, the Company voluntarily covered the aforesaid services w.e.f. August 16, 2002 under the head of “Banking and other Financial Services” and deposited the dues in September 2003 along with interest.

C. Show Cause cum Demand Notice from Deputy Commissioner of Service Tax Cell, Mumbai.

Last communication was received from office of the Deputy Commissioner of Service Tax unit Mumbai IV vide their reference no. ICRA/MIV/ST/2878 dated August 13, 2003 in the form of Show cause Cum Demand Notice.

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The Company clarified the stand in response to the above letter vide our letter dated August 25, 2003 and also offered to appear personally on the dare convenient to the Deputy Commissioner.

After submitting the reply to the Deputy Commissioner’s office, the Company has neither received any communication nor heard anything from the Service Tax Department.

E. RAJASTHAN CONSULTANCY ORGANISATION LIMITED Sr No Parites against

whom cases filed Court/Forum Particulars Status

1 V N Bhargava, Consultant (Mech)

Rajasthan High Court V.N.Bhargava, Consultant (Mech), made allegations against Shri K.B.Singh, the then M.D. subsequently, Mr. Bhargava, was suspended on 10.3.85 Mr. Bhargava filed case in the labour court and won the case in 1998. RAJCON appealed before the Rajasthan High Court on 28.2.98

Pending

2. Mr Ashok Jain Labour Court Jaipur

Mr. Jain after resigning, filed the case in the labour court claiming officiating & other allowances.

Pending

3. Mr Vishnu Mathur Consultant Incharge

Rajasthan High Court Mr. Vishnu Mathur, the Consultant Incharge had abandoned his service of RAJCON w.e.f. 9.10.2001. However, he is disputing the same and lodged claims for salary and perks.

First Hearing on 11.2.05. Next Date Not Notified

4. Mr R K Jain, Accounts officer

Rajasthan High Court Mr. R.K.Jain, the Accounts officer, had abandoned his service of RAJCON w.e.f. 12.9.2001. However, he is disputing the same and lodged claims for salary and perks

First hearing on 15.9.2005. Next date on 20.2.2006

F. Kenindia Assurance Company Limited (Incorporated in Kenya)

As on 31st December 2004 the Company has filed 843 cases for recovery of Rs 739 lacs. The Company has filed to 843 Cases filed by the Company

As on 31st December 2004 there are about 9395 claims amounting to Rs 2618 lacs filed against the Company.

G. Foremost Factors Limited

As on 31st March 2005 the Company has filed 12 cases amounting to Rs 107 Lacs. There are no cases filed against the Company.

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H. IFCI Financial Services Limited

The Company has filed an appeal before the Securities Appellate Tribunal (SAT) against the demand of Rs 37 lacs made by SEBI on account of turnover based registration fees.

There is one labour case pending against the Company under the Minimum Wages Act filed by a contract workmen.

I Madhya Pradesh Consultancy Organisation Limited: There are four cases filed against the company. The amount involved is not ascertainable.

J HARDICON Limited:

There are no litigations filed by or against the company as on 31st March 2004 except suits filed by two ex-employees in different courts of law, protesting the termination of their services. The amount involved is not ascertainable.

K Tourism Finance Corporation of India Limited:

As on 31st March 2004 there are 51 cases filed by the company with principal amount involved being Rs. 155.39 crores.

L The New India Assurance Company (Sierra Leone) Limited:

As per the Balance Sheet as on 31st December 2003: The company has denied liability for claims amounting to US$ 86,79,769 and 77,70,556 Liberian $on the Liberian branch from the situation in Liberia. There are pending litigations for which the company has obtained legal opinion that it will incur no liability on these claims.'

M Litigation details pertaining toThe New India Assurance Company (Trinidad & Tobago) Limited:

As per the Balance Sheet as on 31st December 2003: The company has denied liability for claims intimated arising from the events of 27th July 1990. This is based on legal advice, which is based on reinsurers' common stand that these losses are not covered under treaty wordings. Also, no provisions have been made for legal costs, which may be incurred in respect of court actions arising out of these claims.

The company is defending various legal actions relating to claims in dispute. These arose during the normal course of business. After taking legal advice, the management has established certain provisions that are reflected in these financial statements. The actual outcome of these legal actions could result in payments that differ from provisions established by management.'

* NOTE: THE INFORMATION RELATING TO THE GROUP COMPANIES PROMOTED BY THE PROMOTERS OF THE COMPANY GENERALLY AND IN PARTICULAR CONCERNING THE LEGAL PROCEEDINGS AND CLAIMS IS BASED ON THE INFORMATION RECEIVED BY THE COMPANY FROM THE GROUP COMPANIES PROMOTED BY THE PROMOTERS OF THE COMPANY AND WHICH INFORMATION HAS NOT BEEN INDEPENDENTLY VERIFIED. EXCEPT AS PROVIDED HEREIN THE COMPANY HAS NOT RECEIVED ANY UPDATED INFORMATION IN RESPECT TO THE LEGAL PROCEEDINGS AND OTHER INFORMATION WITH REGARDS TO THE CLAIMS FILED BY OR AGAINST THE GROUP COMPANIES PROMOTED BY THE PROMOTERS OF THE COMPANY.

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LITIGATION AGAINST THE OUR DIRECTOR MR R. M. MALLA Our Director Mr. R M Malla is also a director in Haldia Petrochemicals Ltd. Chatterjee Petochem (Mauritius) Co. and Others has filed proceeding against the Company viz Haldia Petrochemicals Ltd and its Directors challenging allotment of equity shares to IOC and other related issues. The Proceeding are pending before the Company Law Board New Delhi. The proceedings does not have any financial implication against the Director.

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GOVERNMENT APPROVALS AND LICENSING Various approvals and Licenses obtained by the Company are listed below. It must, however, be distinctly understood that in granting the above consents/ licenses/ permissions/ approvals, the Government does not take any responsibility for the financial soundness of the Company or for the correctness of any of the statements or any commitments made or opinions expressed. Investment Approvals (FIPB/ RBI, etc.) As per Notification No. FEMA 20 / 2000 - RB dated 3rd May 2000, as amended from time to time, under automatic route of Reserve Bank, the Company is not required to make an application for Issue of Equity Shares to NRIs/FIIs with repatriation benefits. However, the allotment / transfer of the Equity Shares to NRIs/ FIIs shall be subject to prevailing RBI Guidelines. Sale proceeds of such investments in Equity Shares will be allowed to be repatriated along with the income thereon subject to the permission of the RBI and subject to the Indian tax laws and regulations and any other applicable laws. Approval for carrying out Housing Finance Buisness Certificate of registration No. 01.0025.02 dated May 7, 2002 from NHB under section 29A of the NHB Act, 1987 to GICHFL to carry on the business of a housing finance institution.

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XIII. OTHER REGULATORY AND STATUTORY DISCLOSURES

IMPORTANT INFORMATION

• Under no circumstances should any request be sent to the Lead Manager to the Offer. • The Company undertakes to provide adequate Funds to the Registrars to the Offer for posting of

the Refund Orders/ Letters of Allotment/ Share Certificates by registered post wherever applicable.

AUTHORITY FOR THE PRESENT ISSUE The Board of Directors of the Company (hereinafter referred to as “The Board”) in pursuance to a special resolution passed at the Extra-ordinary General Meeting held on January 23, 2006 have decided to offer 2,69,25,533 equity shares of Rs. 10/- each at premium of Rs. [•] per share aggregating to Rs. [•] to the existing equity shareholders of the Company on rights basis in the ratio of 1 (one) equity share for every 1 (one) equity share (i.e. 1:1) held as on [•] (hereinafter referred to as “Record Date”). The company has fixed the price band of Rs.37 to Rs.42, the Floor Price being Rs.37 and Cap Price being Rs.42. The Issue Price will be fixed on or before the fixation of Record Date. PROHIBITION BY SEBI The Company, its Promoters, Directors or any of the Company’s associates or group companies with which the Directors of the Company are associated as Directors or Promoters have not been prohibited from accessing the capital market under any order or direction passed by SEBI. The Promoters, their relatives, GICHFL, Group Companies are not detained as willful defaulters by RBI/ Government authorities and there are no violations of securities laws committed by them in the past or pending against them. ELIGIBILITY GIC Housing Finance Ltd. is an existing listed Company. It is eligible to offer this Rights Issue in terms of Clause 2.4 (iv) of the SEBI (DIP) Guidelines, 2000. DISCLAIMER CLAUSE AS REQUIRED A COPY OF THIS LETTER OF OFFER HAS BEEN SUBMITTED TO SEBI. IT IS TO BE DISTINCTLY UNDERSTOOD THAT THE SUBMISSION OF THIS LETTER OF OFFER TO SEBI SHOULD NOT, IN ANY WAY, BE DEEMED OR CONSTRUED THAT THE SAME HAS BEEN CLEARED OR APPROVED BY SEBI. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OF ANY SCHEME OR THE PROJECT FOR WHICH THE ISSUE IS PROPOSED TO BE MADE, OR FOR THE CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THE OFFER DOCUMENT. LEAD MERCHANT BANKER, IDBI CAPITAL MARKET SERVICES LIMITED, HAS CERTIFIED THAT THE DISCLOSURES MADE IN THE LETTER OF OFFER ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH SEBI GUIDELINES FOR DISCLOSURES AND INVESTOR PROTECTION IN FORCE FOR THE TIME BEING. THIS REQUIREMENT IS TO FACILITATE INVESTORS TO TAKE AN INFORMED DECISION FOR MAKING INVESTMENT IN THE PROPOSED ISSUE.

IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE ISSUER COMPANY IS PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT INFORMATION IN THE LETTER OF OFFER, THE LEAD MANAGER IS EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT THE COMPANY DISCHARGES ITS RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND TOWARDS THIS PURPOSE, THE LEAD MANAGER, IDBI CAPITAL MARKET SERVICES LIMITED

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HAS FURNISHED TO SEBI A DUE DILIGENCE CERTIFICATE DATED JANUARY 30, 2006 IN ACCORDANCE WITH SEBI (MERCHANT BANKERS) REGULATION 1992 WHICH READS AS FOLLOWS:

(I) WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO LITIGATION LIKE COMMERCIAL DISPUTES, PATENT DISPUTES, DISPUTES WITH COLLABORATORS ETC. AND OTHER MATERIALS IN CONNECTION WITH THE FINALISATION OF THE LETTER OF OFFER PERTAINING TO THE SAID ISSUE.

(II) ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE

COMPANY, ITS DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES, INDEPENDENT VERIFICATION OF THE STATEMENTS CONCERNING THE OBJECTS OF THE ISSUE, PROJECTED PROFITABILITY, PRICE JUSTIFICATION AND THE CONTENTS OF THE DOCUMENTS MENTIONED IN THE ANNEXURE AND OTHER PAPERS FURNISHED BY THE COMPANY.

WE CONFIRM THAT:

(A) THE LETTER OF OFFER FORWARDED TO SEBI IS IN CONFORMITY WITH

THE DOCUMENTS, MATERIALS AND PAPERS RELEVANT TO THE ISSUE; (B) ALL THE LEGAL REQUIREMENTS CONNECTED WITH THE SAID ISSUE, AS

ALSO THE GUIDELINES, INSTRUCTIONS, ETC. ISSUED BY SEBI, THE GOVERNMENT AND ANOTHER COMPETENT AUTHORITY IN THIS BEHALF HAVE BEEN DULY COMPLIED WITH; AND

(C) THE DISCLOSURES MADE IN THE LETTER OF OFFER ARE TRUE, FAIR AND ADEQUATE TO ENABLE THE INVESTORS TO MAKE A WELL INFORMED DECISION AS TO THE INVESTMENT IN THE PROPOSED ISSUE.

(D) WE CONFIRM THAT BESIDES OURSELVES, ALL THE INTERMEDIARIES NAMED IN THE LETTER OF OFFER ARE REGISTERED WITH SEBI AND THAT TILL DATE SUCH REGISTRATION IS VALID.

AS PER CLAUSE 5.1.1 OF THE SEBI (DIP) GUIDELINES, 2000 THE LIABILITY OF THE LEAD MANAGER SHALL CONTINUE EVEN AFTER COMPLETION OF THE ISSUE PROCESS. THE FILING OF THE LETTER OF OFFER DOES NOT, HOWEVER ABSOLVE THE COMPANY FROM ANY LIABILITIES UNDER SECTION 63 OF THE COMPANIES ACT, 1956, OR FROM THE REQUIREMENT OF OBTAINING SUCH STATUTORY OR OTHER CLEARANCES AS MAY BE REQUIRED FOR THE PURPOSE OF THE PROPOSED ISSUE. SEBI FURTHER RESERVES THE RIGHT TO TAKE UP AT ANY POINT OF TIME, WITH THE LEAD MANAGER FOR ANY IRREGULARITIES OR LAPSES IN THE LETTER OF OFFER.

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THE PROMOTERS / DIRECTORS OF GICHFL VIZ. MR. R. K. JOSHI, MR. A K GUHA, MR. V. RAMASAAMY, MR. B. CHAKRABARTI, MR. M. K. GARG, MR. M. RAMADOSS, MR. N. R. RANGANATHAN, MR. M. K. TANDON, MR. B. P. DESHMUKH, MR. R. M. MALLA, MR. ARUN DATTA, MR. MANU CHADHA DECLARE AND CONFIRM THAT NO INFORMATION/MATERIAL LIKELY TO HAVE A BEARING ON THE DECISION OF INVESTORS IN RESPECT OF THE SHARES OFFERED IN TERMS OF THIS LETTER OF OFFER HAS BEEN SUPPRESSED / WITHHELD AND / OR INCORPORATED IN THE MANNER THAT WOULD AMOUNT TO MIS-STATEMENT/ MISREPRESENTATION AND IN THE EVENT OF ITS TRANSPIRING AT ANY POINT IN TIME TILL ALLOTMENT/REFUND, AS THE CASE MAY BE, THAT ANY INFORMATION/MATERIAL HAS BEEN SUPPRESSED/WITHHELD AND/ OR AMOUNTS TO A MIS-STATEMENT/MIS-REPRESENTATION, THE PROMOTERS/DIRECTORS UNDERTAKE TO REFUND THE ENTIRE APPLICATION MONIES TO ALL SUBSCRIBERS WITHIN 7 DAYS THEREAFTER WITHOUT PREJUDICE TO THE PROVISIONS OF SECTION 63 OF THE COMPANIES ACT. CAUTION / DISCLAIMER CLAUSE OF THE ISSUER AND THE LEAD MANAGER The Company and the Lead Manager accept no responsibility for the statements made otherwise than in the Letter of Offer or in the advertisement or any other material issued by or at the instance of the issuer and that anyone placing reliance on any other source of information would be doing so at their own risk. DISCLAIMER IN RESPECT OF JURISDICTION This Offer is being made in India to persons resident in India (including Indian nationals resident in India who are majors, Hindu Undivided Families, companies, corporate bodies and societies registered under the applicable laws in India and authorised to invest in shares, Indian mutual funds registered with SEBI, Indian Financial Institutions, Commercial Banks, Regional Rural Banks, Co-Operative Banks (subject to RBI permission), Trusts registered under the Societies Registration Act, 1860, or any other Trust law and who are authorised under their constitution to hold and invest in shares) and to NRIs, OCBs (subject to RBI permission) and FIIs as defined under the Indian laws. This Offer Document does not, however, constitute an offer to sell or an invitation to subscribe to securities issued hereby in any other jurisdiction. Any person into whose possession this Offer Document comes is required to inform himself about and to observe any such restrictions. Any dispute arising out of this Offer will be subject to the jurisdiction of appropriate court(s) in India only. No action has been or will be taken to permit a public offering in any jurisdiction where action would be required for that purpose, except that this Offer Document has been submitted to the SEBI. Accordingly, the equity shares represented thereby may not be offered or sold, directly or indirectly, and this Offer Document may not be distributed, in any jurisdiction, except in accordance with the legal requirements applicable in such jurisdiction. Neither the delivery of Offer Document nor any sale hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of GIC Housing Finance Limited since the date hereof or that the information contained herein is correct as of any time subsequent to this date. LISTING The existing equity shares of the Company are listed on BSE (Designated Stock Exchange), NSE and CSE. Applications will be made to the BSE and the NSE for permission to deal in and for an official quotation in respect of the equity shares of the Company being offered in terms of this Letter of Offer. The Company has received ‘in-principle’ approval from BSE and NSE for listing of the equity shares issued pursuant to the Rights Issue vide their letter ________, dated _______ and letter ________, dated _______ respectively. The Company has passed resolution for delisting of equity shares from CSE and MSE in its AGM on September 15, 2005 and made application for delisting to CSE & MSE. MSE vide their letter dated December 21, 2005 has granted delisting approval. Delisting approval from CSE is yet to be received by the Company. The Equity Shares to be issued through this Issue would be listed on BSE and NSE.

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DISCLAIMER CLAUSE OF THE BOMBAY STOCK EXCHANGE LIMITED (BSE) As required a copy of this Draft Letter of Offer has been submitted to BSE. The BSE has given the permission to the Company vide its letter _________ to use their name in this Draft Letter of Offer as one of the stock exchanges on which Equity Shares of the Company being issued in terms of this Draft Letter of Offer are proposed to be listed. “Bombay Stock Exchange Limited (“the Exchange”) has given vide its letter dated _______ permission to this company to use the Exchange’s name in this Letter of Offer as one of the stock exchanges on which this company’s securites are proposed to be listed. The Exchange has scrutinized this Letter of Offer for its limited internal purpose of deciding on the matter of granting the aforesaid permission to this Company. The Exchange does not in any manner:

i. warrant, certify or endorse the correctness or completeness of any of the contents of this letter of offer; or

ii. warrant that this company’s securities will be listed or will continue to be listed on the Exchange; or iii. take any responsibility for the financial or other soundness of this company, its promoters, its

management or any scheme or project of this company; and it should not for any reason be deemed or construed that this letter of offer has been cleared or approved by the Exchange. Every person who desires to apply for or otherwise acquires any securities of this company may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the Exchange whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription /acquisition whether by reason of anything stated or omitted to be stated herein or for any other reason whatsoever." DISCLAIMER CLAUSE OF THE NATIONAL STOCK EXCHANGE OF INDIA LIMITED (NSE) As required a copy of this Draft Letter of Offer has been submitted to the NSE. The NSE has given the permission to the Company vide its letter dated _________ to use their name in this Draft Letter of Offer as one of the stock exchanges on which Equity Shares of the Company being issued in terms of this Draft Letter of Offer are proposed to be listed. NSE has scrutinized this Draft Letter of Offer for their limited internal purpose of deciding on the matter of granting the aforesaid permission to the Company. It is to be distinctly understood that the aforesaid permission given by NSE should not in any way be deemed or construed that the Draft Letter of Offer has been cleared or approved by NSE nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this Draft Letter of Offer; nor does it warrant that the Company’s securities will be listed or will continue to be listed on the Exchange nor does it take any responsibility for the financial or other soundness of the Company, its promoters, its management or any scheme or project of this Company. Every person who desires to apply for or otherwise acquires any securities of this Company may do so pursuant to an independent inquiry or any investigation and analysis and shall not have any claim against the exchange whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription/ acquisition whether by reason of anything stated or omitted to be stated herein or for any other reason whatsoever. FILING A copy of this Letter of Offer dated _________ has been filed with SEBI, Mumbai, The Bombay Stock Exchange Limited (BSE) (Designated Stock Exchange), and the National Stock Exchange (NSE). IMPERSONATION Attention of the applicants is specifically drawn to the provisions of Sub-Section (1) of section 68A of the Companies Act, 1956 which is reproduced below:

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“ Any person who –

(a) makes in a fictitious name an application to a Company for acquiring, or subscribing for, any shares therein, or

(b) otherwise induces a Company to allot or register any transfer of shares therein to him, or any other person in a fictitious name,

shall be punishable with imprisonment for a term which may extend to five years.”

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CONSENTS Consents in writing of: (a) the Directors, the Company Secretary and Compliance Officers, the Auditors, Lead Manager to the Issue and Registrar to the Issue, to act in their respective capacities, have been obtained and shall be filed along with a copy of the Letter of Offer with SEBI and such consents have not been withdrawn up to the time of delivery of this draft Letter of Offer for registration with SEBI. M/s M. P. Chitale & Co, Stautory Auditors, have given their written consent to the inclusion of their report in the form and context in which it appears in this draft Letter of Offer and such consent and report has not been withdrawn up to the time of delivery of this Letter of Offer for filing with the SEBI. EXPERT OPINION Except as otherwise stated in the letter of offer no expert opinion has been obtained in respect of the present Rights Issue. EXPENSES OF THE ISSUE Please refer to para under ‘ Issue Expenses’ on page no. _____ of this Draft Letter of Offer. PREVIOUS PUBLIC ISSUES OR RIGHTS ISSUES The Company has made a rights issue of 8975561 equity share of Rs. 10 at a premium of Rs. 6 per share aggregating to Rs. 14,36,08,976/- in September 2004. The object of the said issue was to enhance the CAR and to meet the issue expenses.

PREVIOUS ISSUE OF SHARES OTHERWISE THAN FOR CASH

The Company has not made any issue otherwise than for cash.

COMMISSION OR BROKERAGE ON PREVIOUS ISSUES

The Company made one public issue since inception and 1.50% of the issue price underwriting commission was paid, as the issue was underwritten. The Company has paid the brokerage of 1.50% of the issue price to the members of any recognized stock exchange in India on the issue price of Equity Shares on the basis of allotment made against applications bearing their respective stamps in the Broker’s column. Brokerage at the same rate was also paid to the Bankers to the Issue in respect of allotments made against applications procured by them provided the relative forms off application bear their respective stamps in the Broker’s column.

PARTICULARS IN REGARD TO CAPITAL ISSUE DURING THE LAST THREE YEARS

By The Company

The Company has made a rights issue of 8975561 equity share of Rs. 10 at a premium of Rs. 6 per share aggregating to Rs. 14,36,08,976/- in September 2004. The object of the said issue was to enhance the CAR and to meet the issue expenses. Listed companies under the same management within the meaning section 370 (1)(B) of the Companies Act, 1956 None of the listed group companies of GICHFL have made preferential allotment of shares or issued debentures or made any public or rights issue in the past three years.

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PROMISE VERSUS PERFORMANCE The Company had made a public issue of 53,99,600 Equity Shares of Rs. 10/- each for cash at a premium of Rs. 40/- per share aggregating Rs. 26,99,80000 in the year 1995.The promises made in the prospectus at the time of the IPO and the actual performances of the Company are given below:

Particulars For the year ended March 31 (In Rs lacs)

1995 1996 1997 Projected Actual Variation

% Projected Actual Variation

% Projected Actual Variation

%Sanctions 9300 11537 24.10 14000 20223 44.45 17000 16360 -3.76Disbursements 7080 5649 -20.21 9100 12453 36.85 11400 14279 25.25Operating Income: 1839 1437 -21.86 3107 2580 -16.96 4294 4692 9.27Investment Income 293 571 94.88 310 794 156.13 212 355 67.45Fees & Other

h110 152 38.18 207 359 73.43 408 262 -35.78

Total Income 2242 2160 -3.66 3624 3733 3.01 4914 5309 8.04PBDIT 1971 1964 -0.36 3249 3340 2.80 4544 4739 4.29Interest 1320 1156 -12.42 2176 1729 -20.54 3270 3229 -1.25Depreciation 22 13 -40.91 37 20 -45.95 60 26 -56.67PBT 629 795 26.39 1036 1591 53.57 1214 1484 22.24PAT 455 623 36.92 750 1134 51.20 879 1023 16.38EPS (Rs) 4.27 5.56 30.21 4.17 6.30 51.08 4.88 5.68 16.39Dividend (%) 12.5 15 20.00 15 17 13.33 17 20 17.65Book Value (Rs) 31.61 31.06 -1.74 34.46 36.61 6.24 37.64 40.15 6.67

For Listed Companies in the Group None of the listed companies in the group have issued equity shares pursuant to a public/ rights issue during the past five years. STOCK MARKET DATA The equity shares of the Company are listed on the Stock Exchange, Mumbai. The stock market data for the equity shares on the BSE are as follows:

High Low

Particulars

High (Rs)

Date (Rs) Volume on date of high (no. of shares)

Low (Rs)

Date (Rs) Volume on date of Low (no of shares)

Average Price (Rs.)

2003 46.50 10/12/2003 298058 10.80 25/04/2003 17700 19.19 2004 43.00 09/01/2004 79026 23.00 17/05/2004 12100 25.75 2005 59.80 23/12/2005 596563 29.90 18/01/2005 46925 49.3

June, 2005 45.05 08/06/2005 178845 35.75 29/06/2005 30950 42.43 July, 2005 49.90 15/07/2005 1020042 36.30 13/07/2005 29275 40.89 Aug, 2005 52.70 18/08/2005 240905 42.15 01/08/2005 243975 47.59 Sep., 2005 55.30 20/09/2005 488918 44.85 23/09/2005 98930 49.07 Oct., 2005 48.70 04/10/2005 37631 38.15 21/10/2005 29969 44.31 Nov. 2005 48.90 07/11/2005 32266 43.95 02/11/2005 21950 46.55 Dec., 2005 59.80 23/12/2005 596563 45.55 05/12/2005 18885 49.60

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Week end price of equity Shares of GICHFL on the BSE

Week ended Closing Price (Rs)

Highest During the week

Lowest during the week

26/12/05-30/12/05 50.70 55.00 50.05 02/01/06-06/01/06 52.40 53.80 52.40 09/01/06-13/01/06 51.65 53.30 51.65 16/01/06-20/01/06 55.15 56.35 51.35

The market price of GICHFL as on 27/12/2005 immediately after the date on which the resolution of the Board of Directors approving the issue was passed 26/12/2005 is Rs. 51.35/-. The market price of GICHFL as on 24/01/2006 immediately after the date of the EGM (23/01/2006) was Rs. 56.60/-.

The Cum-Rights Closing price of the shares of the Company as on ____ was ______ The Ex-Rights closing price of the shares of the Company as on ___ was _____

Mechanism for redressal of investor grievances The Company has a Registrar and Share Transfer Agent. The investor grievances are redressed within a period of one week from the date of receipt of the complaint. Disposal of Investor Grievance The Company has appointed Sharepro Services (India) Pvt. Ltd., Registrar and Share Transfer Agents, as a common agency to expedite the process of share transfer. The share transfers lodged are being processed on a day-to day basis and memorandum of transfers is generated on a fortnightly basis. Investor Grievance received during the period from October 1, 2005 to December 31, 2005 have been resolved and there are no pending investor grievances as on date. Details of the investor complaints received are given below: Sr. No

Particulars Received Resolved

1. Non Receipt of Share after transfer 5 5 2. Non Receipt of Dividend 15 15 3. Received letter from SEBI

regarding loss of share certificate 3 3

Total 23 23 The Company has appointed Mr. S. Sridharan, Company Secretary, as Compliance Officer. The investors may contact the Compliance Officer in case of any pre issue/post issue related problems such as non-receipt of allotment advice, refund orders, demat credits etc. The Compliance Officer will be available at the following address: Company Secretary and Asst. Vice President, GIC Housing Finance Limited, 3rd Floor, Universal Insurance Building, Sir P.M. Road, Fort, Mumbai - 400 001 Tel: (022) 2288 1783 Fax: (022) 2288 4985 Change in Auditors There has been no change in the auditors during last three years. Capitalization of reserves or profit We have not capitalized our reserves or profits during the last five years. Revaluation of Assets We have not revalued our assets in the past five years.

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XIV. TERMS OF THE ISSUE The Equity Shares now being offered are subject to the provisions of the Act and the terms and conditions of this Letter of Offer, the CAF, the MoA and AoA of the Company, the approvals from the Government of India, FIPB and RBI, if applicable, FEMA, guidelines issued by SEBI, laws, guidelines, notifications and regulations for issue of capital and for listing of Equity shares issued by SEBI, Government of India, RBI and/or other statutory authorities and bodies from time to time, listing agreements entered into by the Company with Stock Exchanges, terms and conditions as stipulated in the allotment advise or letters of allotment, rules as may be applicable and introduced from time to time. RANKING OF EQUITY SHARES The Equity Shares allotted pursuant to this Letter of Offer shall rank pari-passu in all respects with the existing Equity Shares of the Company including in respect of dividend, if any, declared by the Company, for the financial year, in which these Equity Shares are allotted. RIGHTS OF SHAREHOLDERS Subject to applicable laws, the equity shareholders shall have the following rights : • Right to receive dividend, if declared; • Right to attend general meetings and exercise voting powers, unless prohibited by law; • Right to vote on a poll either in person or by proxy; • Right to receive offers for rights shares and be allotted bonus shares, if announced; • Right to receive surplus on liquidation; • Right to free transferability; and • Such other rights, as may be available to a shareholder of a listed public Company under the

Companies Act and our Memorandum and Articles. MARKET LOT Since trading of our equity shares is in dematerialized form, the tradable lot is one equity share. In case of physical certificates the Company would issue one certificate for the Equity shares allotted to one person (Consolidated Certificate). In respect of the consolidated certificate, the Company will only upon receipt of a request from the Equity shareholders, split such consolidated certificate into smaller denomination with in week’s time from the date of the request from the Equity shareholders. No fee would be charged by the Company for splitting the consolidated certificate. NOMINATION FACILITY TO THE INVESTOR In accordance with Section 109A of the Companies Act, the sole or first holder, along with other joint holder, may nominate any one person in whom, in the event of the death of sole holder or in case of joint holders, death of all the holders, as the case may be, the Equity Shares allotted, if any, shall vest. A person, being a nominee, entitled to the Equity Shares by reason of the death of the original holder(s), shall in accordance with Section 109A of the Companies Act, be entitled to the same advantages to which he or she would be entitled if he or she were the registered holder of the equity share(s). Where the nominee is a minor, the holder(s) may make a nomination to appoint, in the prescribed manner, any person to become entitled to equity share(s) in the event of his or her death during the minority. A nomination shall stand rescinded upon a sale/ transfer/ alienation of equity share(s) by the person nominating. A buyer will be entitled to make a fresh nomination in the manner prescribed. Fresh nomination can be made only on the prescribed form available on request at our Registered / Corporate Office or to our Registrar and Transfer Agents.

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MINIMUM SUBSCRIPTION The minimum subscription which must be raised by this issue of Equity Shares is 90% of the total issue of Rs ________/- being the aggregate issue size of 26925533 Equity Shares of Rs. 10/- each at a price of Rs.___/- per share offered in terms of this Letter of Offer. The Board of Directors will proceed to allot the shares on receipt of the application money payable on 90% of the 26925533 equity shares. If the Company does not receive the minimum subscription of 90% of the issued amount upto the date of closure of the issue, or if the subscription level falls below 90% after the closure of issue on account of cheques having been returned unpaid or withdrawal of applications, the Company shall forthwith refund the entire subscription amount received within 42 days from the date of closure of the issue. If there is a delay beyond 8 days after the Company becomes liable to pay the amount, the Company shall pay interest for the delayed period as per Section 73 of the Companies Act, 1956. BASIS OF THE OFFER The Equity Shares are being offered for subscription for cash to those existing Equity Shareholders whose names appear as beneficial owners as per the list furnished by the depositories in respect of the Equity Shares held in the electronic form and on the Register of Members of the Company in respect of Equity Shares held in the physical form at the close of business hours on the Record Date. The Company has in consultation with the Designated Stock Exchange fixed the Record Date for determining the shareholders who are entitled to receive this offer for Equity shares on a rights basis. The Equity Shares are being offered for subscription in the ratio of one Equity Share for every one Equity Shares held by the Equity Shareholders. The shareholders whose names appear as beneficial owners as per the list furnished by the depositories in respect of the Equity Shares held in electronic form and on the register of members of the Company in respect of the shares held in physical form on _______at the close of business hours shall be entitled to the equity shares on the Rights basis in the ratio of one equity share for every one equity share held by them. DISPOSAL OF ODD LOTS The equity shares are being issued in the ratio of one-equity shares for every one-equity share held as on record date. As such the rights issue will not lead to any odd lots. OPTION TO SUBSCRIBE Applicants to the Equity Shares of the Company issued through this Rights Issue shall be allotted the securities in dematerialized (electronic) form at the option of the applicant. RIGHTS ENTITLEMENT As your name appears as beneficial owner in respect of the shares held in the electronic form or appears in the register of members as an equity shareholder of the Company on the Record Date, you are entitled to this Rights Offer. The number of Equity Shares to which you are entitled is shown in Block I of Part A of the enclosed CAF and as shown in part A of the enclosed CAF. FRACTIONAL ENTITLEMENT The present rights issue being in the ratio of 1:1 will not lead to any fractional entitlement. JOINT-HOLDERS Where two or more persons are registered as the holders of any Equity Shares, they shall be deemed (so far as the Company is concerned) to hold the same as joint-holders with benefits of survivorship subject to provisions contained in the Articles.

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OFFER TO NON-RESIDENT EQUITY SHAREHOLDERS/ APPLICANTS Presently 1496700 Equity Shares aggregating to 5.56% of the present issued capital are held by NRIs/FIIs/OCBs on repatriation basis. Applications received from NRIs and other NR shareholders for allotment of Equity Shares shall be, inter alia, subject to the conditions imposed from time to time by the RBI under the FEMA in the matter of refund of application moneys, allotment of Equity Shares, issue of Letter of Allotment / share certificates, payment of interest, dividends, etc. General permission has been granted to any person resident outside India to apply shares offered on rights basis by an Indian Company in terms of FEMA and the rules and regulations thereunder. Vide notification dated June 18, 2003, bearing number FEMA 94/2003, RBI has granted general permission to Indian companies to issue rights/bonus shares to existing non-resident shareholders. The existing non-resident shareholders may apply for issue of additional shares and the Company may allot the same subject to the condition that the overall issue of shares to non-residents in the total paid up capital does not exceed the sectoral cap. In other words, non-residents may subscribe for additional shares over and above shares offered on rights basis by the Company and renounce the shares offered in full or part thereof in favour of a person named by them. Non-Residents may subscribe for additional shares over and above the shares offered on rights basis by the Company and also renounce the shares offered either in full or part thereof in favour of a person named by them. The Equity Shares issued under the Rights Issue and purchased by NR shall be subject to the same conditions including restrictions in regard to the repatriability as are applicable to the previously held Equity Shares against which Equity Shares under the Rights Issue are issued. However, as per the provisions of AP (DIR) circular No. 14 dated September 16, 2003 (issued by the RBI), such shareholders who have been allotted the Equity Shares as OCBs would not be permitted to participate in the Rights Issue. Accordingly, shareholders/ applicants who are OCBs and wishing to participate in the Rights Issue would be required to submit approvals in relation thereto from the FIPB and the RBI. The Board of Directors may at its absolute discretion, agree to such terms and conditions as may be stipulated by RBI while approving the allotment of Equity Shares, payment of dividend etc. to the Equity Shareholders who are NR. NOTICES All notices to the Equity shareholder(s) required to be given by the Company in connection with the Issue shall be published in one English national daily with wide circulation, one Hindi national daily with wide circulation, one regional language daily in Mumbai being the place where the registered of the Company is situated and/or will be sent by ordinary post to the registered holders of the Equity Share(s) from time to time. ISSUE OF DUPLICATE EQUITY SHARE CERTIFICATE If any Equity Share certificate(s) is/are mutilated or defaced or the cages for recording transfers of Equity Shares are fully utilized, the Company against the surrender of such certificate(s) may replace the same, provided that the same will be replaced as aforesaid only if the certificate numbers and the distinctive numbers are legible. If any Equity Share certificate(s) is/are destroyed, stolen, lost or misplaced, then upon production of proof thereof to the satisfaction of the Company and upon furnishing such indemnity/surety and/or such other documents as the Company may deem adequate, duplicate Equity Share certificate(s) shall be issued. PRINTING OF BANK PARTICULARS ON REFUND ORDERS As a matter of precaution against possible fraudulent encashment of refund orders due to loss or misplacement, the particulars of the applicant’s bank account are mandatorily required to be given for printing on refund orders. Bank account particulars will be printed on the refund orders / refund warrants, which can then be deposited only in the account specified. The Company will in no way be responsible if any loss occurs through these instruments falling into improper hands either through forgery or fraud.

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OPTIONS AVAILABLE TO THE EQUITY SHAREHOLDER The CAF clearly indicates the number of Equity Shares, which the Equity shareholder is entitled to. If the Equity shareholder applies for an investment in Equity Shares, then he/she can:

• Apply for his/her entitlement in full • Apply for his/her entitlement in full and apply for additional Equity Shares • Apply for his/her entitlement in part • Apply for his/her entitlement in part and renounce the other part • Renounce the entire entitlement (or part of entitlement). • Renouncee for the Equity Share can apply for the Equity Shares renounced to them and also apply

for additional Equity Shares. GROUNDS FOR TECHNICAL REJECTIONS Applicants are advised to note that applications are liable to be rejected on technical grounds, including the following:

• Amount paid does not tally with the amount payable for; • Bank account details (for refund) are not given; • Age of First Applicant not given; • PAN photocopy/ PAN Communication/ Form 60 / Form 61 declaration not given if Application is

for Rs.50,000 or more; • In case of Application under power of attorney or by limited companies, corporate, trust, etc.,

relevant documents are not submitted; • If the signature of the existing shareholder does not match with the one given on the Application

Form and for renouncees if the signature does not match with the records available with their depositories;

• If the Applicant desires to have shares in electronic form, but the Application Form does not have the Applicant’s depository account details;

• Application Forms are not submitted by the Applicants within the time prescribed as per the Application Form and the Letter of Offer;

• Applications not duly signed by the sole/joint Applicants; • Applications by OCBs unless accompanied by specific approval from the RBI permitting the

OCBs to invest in the Issue; • Applications accompanied by Stockinvest; • In case no corresponding record is available with the Depositories that matches three parameters,

namely, names of the Applicants (including the order of names of joint holders), the Depository Participant’s identity (DP ID) and the beneficiary’s identity;

• Applications by ineligible Non-residents (including on account of restriction or prohibition under applicable local laws) and where last available address in India has not been provided.

HOW TO APPLY For Resident Indian Shareholders Application should be made only on the enclosed CAF provided by the Company. The enclosed CAF should be completed in all respects, as explained in the instructions indicated in the CAF. Applications will not be accepted by the Lead Managers or by the Registrar to the Issue or by the Company at any offices except in the case of postal applications as per instructions given in the Letter of Offer. Payment should be made in cash (not more than Rs.20,000) or by cheque/bank draft/ drawn on any bank (including a co-operative bank) which is situated at and is a member or a sub-member of the bankers clearing house located at the centre where the CAF is submitted and which is participating in the clearing at the time of submission of the application. Outstation cheques/money orders/postal orders will not be accepted and CAFs accompanied by such cheques/money orders/postal orders are liable to be rejected.

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For Non-Resident Shareholders on Non-Repatriation basis Applications received from the Non-Resident Equity Shareholders for the allotment of Equity Shares shall, inter alia, be subject to the conditions as may be imposed from time to time by the Reserve Bank of India, in the matter of Refund of application moneys, allotment of Equity Shares, issue of Letters of Allotment/ certificates/ payment of dividends etc. For NRIs holding shares on non-repatriation basis, payment may also be made by way of cheque drawn on Non-Resident Ordinary (NRO) Account maintained in Mumbai or Rupee Draft purchased out of NRO Account maintained elsewhere in India but payable at Mumbai. In such cases, the allotment of shares will be on non-repatriation basis. If the payment is made by a draft purchased from an NRO account, an Account Debit Certificate from the bank issuing the draft, confirming that the draft has been issued by debiting the NRO account, should be enclosed with the CAF. In the absence of the above, the application shall be considered incomplete and is liable to be rejected. All cheques/bank drafts accompanying the CAFs should be crossed. A/c Payee only and made payable to “GIC Housing Finance Ltd. - Rights Issue - NR” The CAF duly completed together with the amount payable on application must be deposited with the collecting bank/collection centres indicated on the reverse of the CAF, on or before the close of banking hours on or before the Issue closing date. A separate cheque or bank draft must accompany each CAF. Reference number of CAF should be mentioned on the reverse of the Cheque/Draft. New Demat account shall be opened for holders who have had a change of status from Resident Indian to NRI. The CAF consists of four parts: Part A: Form for accepting the Equity Shares offered and for applying for additional Equity Shares Part B: Form for renunciation Part C: Form for application for renouncees Part D: Form for request for split application forms ACCEPTANCE OF OFFER The Equity shareholder may accept and apply for the Equity Share(s) offered in whole or in part, by filling in Part "A" of the enclosed CAF and submitting the same along with payment of the application money to the Bankers to the Issue and its collection centers specified on the reverse of the CAF on or before the close of banking hours on____________, 2006. Applicants at centers not covered by the branches of collecting banks can send their CAF together with the demand draft, net of demand draft and postal charges, payable at Mumbai to the Registrar to the Issue by registered post. Such applications sent to anyone other than the Registrar to the Issue are liable to be rejected. You may apply for the equity shares offered wholly or in part by filling in the enclosed CAF and submitting the same along with the application money to the Bankers to the Issue or its designated branches on or before the closure of the subscription list. The CAF should be complete in all respects, as explained in the INSTRUCTIONS indicated in the CAF. The CAF should not be detached under any circumstances, otherwise the application(s) will be rejected forthwith. ADDITIONAL EQUITY SHARES The Equity shareholder is eligible to apply for additional Equity Shares over and above the number of Equity Shares entitled to, provided he/she applies for all the Equity Shares, to which he/she is entitled to, without renouncing them, in whole or in part, in favor of any other person(s). If you desire to apply for additional equity shares, you may fill in the number of additional equity shares in Part A of the CAF. The allotment of additional equity shares will be at the sole discretion of the board on an equitable designated stock exchange. In the case of request for additional equity shares by non-residents, the allotment will be subject to approval of Reserve Bank of India. The board may reject any application for additional equity shares without assigning any reasons thereof.

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RENUNCIATION A shareholder to whom the equity shares are offered as rights entitlement may renounce the equity shares offered to him, either in full or in part, in favour of any other person or persons. Such renouncees can only be Indian Nationals, limited companies incorporated in India and governed by the Act, statutory corporations/ institutions, societies (registered under the Societies Registration Act, 1860 or any other applicable laws) provided that such corporation/ institutions/ society is authorized under its constitution/ bye laws to hold equity shares in a company. The rights renunciation cannot be renounced jointly in favour of more than three persons, minors (unless acting through natural or legal guardians), a partnership firm, trust (unless the same is registered under the applicable Trusts laws and is authorized under its constitution to hold equity shares of a company), HUF, foreign national or his nominee (unless approved by RBI or other relevant authorities) or to any person situated within the jurisdiction where the offering in terms of this LoF could be illegal or require compliance with securities laws of such jurisdiction or to any other persons not approved by the Board. Any renunciation from Resident Indian Shareholder(s) to Non-Resident Indian(s) or from Non-Resident Indian Shareholder(s) to other Non-Resident Indian(s) or from Non-Resident Indian Shareholder(s) to Resident Indian(s) is subject to the renouncer(s)/ renouncee(s) obtaining the approval of the FIPB/ SIA and /or necessary permission of the RBI under the Foreign Exchange Management Act, 1999 (FEMA) and other applicable laws and such permissions should be attached to the CAF. Applications not accompanied by the aforesaid approval are liable to be rejected. The Board reserves the right to reject the request for allotment to renounces in its sole and absolute discretion without assigning any reason thereof. Any person(s) other than those in whose favor this offer has been made must not use part A of the CAF. Submission of the enclosed CAF to the Banker to the Issue at its collecting centers specified on the reverse of the CAF with the Form of Renunciation (Part B of the CAF) duly filled in shall be conclusive evidence in favor of the Company of the person(s) applying for Equity Shares in Part C to receive allotment of such Equity Shares. Part ‘A’ must not be used by the renouncee(s) as this will render the application invalid. By virtue of the Circular No. 14 dated September 16, 2003 issued by the RBI, Overseas Corporate Bodies (“OCB”) have been derecognized as an eligible class of investors and the RBI has subsequently issued the Foreign Exchange Management (Withdrawal of General Permission to Overseas Corporate Bodies (OCBs)) Regulations, 2003. Accordingly, the existing equity shareholders of the Company who do not wish to subscribe to the equity shares being offered but wish to renounce the same in favour of renouncees shall not renounce the same (whether for consideration or otherwise) in favour of OCB(s). Renouncee(s) will have no further right to renounce any Equity Shares in favor of any other person. PROCEDURE FOR RENUNCIATION (a) To renounce the offer in whole in favor of one renouncee: If the Equity shareholder wishes to renounce this offer in whole, then he/she has to complete Part B of the CAF. In case of joint holders, all joint holders must sign this part of the CAF. The person in whose favour renunciation has been made should complete and sign Part C of the CAF. In case of joint renouncees, all joint renouncees must sign this part of the CAF. (b) To renounce the offer in part: If the Equity shareholder wishes to either accept this offer in part and renounce the balance or renounce the entire offer in favour of two or more renouncees, separately, the CAF must be first split by applying to the Registrars to the Issue. The Equity shareholder should indicate his/her requirement for split forms in the space provided for this purpose in Part D of the CAF and return the entire CAF to the Registrars to the Issue so as to reach them latest by the close of business hours on _________ 2006. On receipt of the required number of split forms from the Registrars, the procedure as mentioned in the above Para (a) shall have to be followed.

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(c) Change and/or introduction of additional holders: If the Equity shareholder wishes to apply for Equity Shares jointly with any other person, or persons, not more than three, who is/are not already joint holders, it shall amount to renunciation and the procedure as stated above shall have to be followed. Even a change in the sequence of the joint holders shall amount to renunciation and the procedure for renunciation, as stated above shall have to be followed. However, any right of renunciation is subject to the express condition that the Board of the Company shall be entitled in its absolute discretion to reject the request for allotment from the renouncees without assigning any reasons there for. SPLITTING OF COMPOSITE APPLICATION FORMS Requests for split CAF should be sent to the Registrars to the Issue, namely Sharepro Services (India) Pvt. Ltd. before the closure of business hours on or before _____________________ by filling in Part D of the CAF along with entire CAF. Split CAF cannot be re-split. The renouncee(s) shall be entitled to obtain split CAF. HOW TO APPLY FOR SHARES The Equity shareholder may exercise any of the following options with regard to the Equity Shares offered to him/her, using the enclosed CAF: S. NO. OPTIONS AVAILABLE ACTION REQUIRED

A. Accept your entitlement to all the equity shares offered to you

Fill in and sign ‘Part A’ of the CAF.

B. Accept your entitlement to all the equity shares offered to you and apply for additional shares

Fill in and sign ‘Part A’ of the CAF after indicating in Block IV the number of additional Equity Shares applied for.

C. Accept only a part of your entitlement of the equity shares offered to you (without renouncing the balance)

Fill and sign Part A of the CAF

D. Renounce your full entitlement of the equity shares offered to you to one person (Renouncee)(Joint Renouncees not exceeding three are considered as one Renouncee)

Fill and sign Part B of the CAF indicating the number of equity shares renounced and hand over the entire CAF to the renouncee. The renouncee must fill and sign Part C of the CAF

E. Accept a part of your entitlement of the equity shares offered to you and then renounce the balance to one renouncee or more renouncees

Fill and sign Part D of the CAF for Split Forms after indicating the required number of Spilt Application Forms and send the entire CAF to the Registrars to the Issue so as to reach them on or before the last date for receiving request for Split Forms indicated in the CAF i.e., _______. On receipt of the Split Forms take action as indicated below : (i) For the equity shares, if any, which you want to accept, fill in and sign Part A of one Split Composite Application Form. (ii) For the equity shares you want to renounce, fill in and sign Part B in the required number of Split Composite Application Forms indicating the number of Equity Shares renounced to each renounceee. (iii) Each of the renouncee should then fill in and sign Part C of the respective split composite application form for the equity shares accepted by the renouncee.

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F. Renounce your entitlement of the equity

shares offered to you, to more than one Renouncee

Follow the procedures stated in (E) above for obtaining the required number of Split Composite Application Forms and on receipt of Split Composite Application Forms follow the procedure as stated in (E) (ii) and (iii) above.

G. Introduce a joint holder or change the sequence of joint holders

This will be treated as a renunciation. Fill in and sign Part B and the renouncees must fill in and sign Part C.

Application for Equity Shares should be made only on the CAFs, which are provided by the Company. The CAF should be completed in all respects as explained under the head “INSTRUCTIONS” indicated on the reverse of the CAF before submission to the Bankers to the Issue at its collecting centres on or before the last day of the closure of the Issue. Non-resident shareholders/renouncee(s) should forward their applications to the Bankers to the Issue at the specified collection centers indicated on the reverse of the CAF for non-resident applicants. No part of the CAF should be detached under any circumstances. Availability of duplicate CAF In case the original CAF is not received, or is misplaced by the applicant, the Registrar to the Issue will issue a duplicate CAF on the request of the applicant who should furnish the registered folio number/ DP and Client ID number and his/ her full name and address to the Registrar to the Issue. Any request for duplicate CAF should be addressed to the Registrar to the Issue. Please note that those who are making the application in the duplicate form should not utilize the original CAF for any purpose including renunciation, even if it is received/ found subsequently. If the applicant violates any of these requirements, he / she shall face the risk of rejection of both the applications. Application on Plain Paper An Equity Shareholder who has neither received the original CAF nor is in a position to obtain the duplicate CAF may make an application to subscribe to the Rights Issue on plain paper, along with a Demand Draft payable at Mumbai which should be drawn in favour of the Company and send the same by registered post directly to the Registrar to the Issue. The application on plain paper, duly signed by the applicants including joint holders, in the same order as per specimen recorded with the Company, must reach the office of the Registrar to the Issue before the Issue Closing Date (i.e _______) and should contain the following particulars:

• Name of Issuer, • Name and address of the Equity Shareholder including joint holders • Registered Folio Number/ DP and Client ID no. • Number of shares held as on Record Date i.e (•). • Certificate numbers and distinctive numbers, if held in physical form • Number of Rights Equity Shares entitled • Number of Rights Equity Shares applied for out of entitlement • Number of additional Equity Shares applied for, if any • Total number of Equity Shares applied for • Total amount paid at the rate of Rs. ____/- per Equity Share • Particulars of cheque/draft • Savings/Current Account Number and name and address of the Bank where the Equity

Shareholder will be depositing the refund order • Applications for a total value of Rs, 50,000 or more, i.e. where the total number of securities

applied for multiplied by the Issue price, is Rs. 50,000 or more the applicant or in the case of application in joint names, each of the applicants, should mention his/her PAN number allotted under the Income-Tax Act, 1961 and also submit a photocopy of the PAN card(s) or a communication from the Income Tax authority indicating allotment of PAN (“PAN

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Communication”) along with the application for the purpose of verification of the number. Applicants who do not have PAN are required to provide a declaration in Form 60/ Form 61 prescribed under the I. T. Act along with the application. Applications without this photocopy/ PAN Communication/declaration will be considered incomplete and are liable to be rejected.

• In case of Non-Resident shareholders, NRE/FCNR/NRO Account No., name and address of the bank and branch.

• Signature of Equity Shareholders to appear in the same sequence and order as they appear in the records of the Company

• Payment in such cases, should be through a demand draft, net of demand draft and postal charges, payable at Mumbai be drawn in favour of “GIC Housing Finance Ltd. - Rights Issue” crossed “A/c Payee only”. Please note that those who are making the application on plain paper shall not be entitled to renounce their rights and should not utilize the original CAF for any purpose including renunciation even if it is received subsequently. If the applicant violates any of these requirements, he/she shall face the risk of rejection of both the applications as well as forfeiture of amounts remitted along with the applications. The Company shall refund such application amount to the applicant without any interest thereon.

QUOTING OF UNIQUE IDENTIFICATION NUMBER (UIN) ISSUED UNDER SEBI (CENTRAL DATABASE OF MARKET PARTICIPANTS) REGULATION, 2003

In terms of SEBI (Central Database of Market Participants) Regulation, 2003 as amended from time to time and SEBI Notification dated November 25, 2003 and July 30, 2004, circular dated August 16, 2004 and press release dated December 31, 2004, no specified investor being a body corporate shall subscribe to securities which are proposed to be listed in any recognized stock exchange unless such specified investor, its Promoters and directors have been allotted unique identification number (UIN). However SEBI vide its circular no. MAPIN/Cir- 13 /2005 dated July 01, 2005 has suspended all fresh registrations for obtaining UIN and the requirement to obtain/quote UIN under the MAPIN Regulations/Circulars with effect from July 01, 2005. QUOTING OF PAN/GIR NO. IN THE APPLICATION FORMS Where an application is for allotment of securities in response to a rights issue, for a total value of Rs. 50,000/- or more i.e. the total number of securities applied for multiplied by the issue price, is Rs. 50,000/- or more the applicant or in the case of applications in joint names, each of the applicants, should mention his/her permanent account number (PAN) allotted under the Income-Tax Act, 1961 or where the same has not been allotted, the GIR number and the Income-Tax Circle/Ward/District. In case neither the permanent account number nor the GIR number has been allotted, the fact of non-allotment should be mentioned in the application forms. Application forms without this information will be considered incomplete and are liable to be rejected. NOTE ON CASH PAYMENT (SECTION 269 SS) Having regard to the provisions of Section 269 (SS) of the Income Tax Act, 1961, subscriptions against applications for securities should not be effected in cash and must be effected only by ‘Account Payee’ cheques or ‘Account Payee’ bank drafts, if the amount payable is Rs. 20,000/- or more. In case payment is effected in contravention of this provision, the application is liable to be rejected. APPLICATION NUMBER ON THE CHEQUE/DEMAND DRAFT To avoid any misuse of instruments, the applicants are advised to write the application number and name of the first applicant on the reverse of the cheque / demand draft.

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GENERAL (a) All applications should be made on the printed CAF provided by the Company and should be complete

in all respects. Applications, which are not complete in all respects or are made, otherwise than as herein provided or not accompanied by proper application money in respect thereof will be refunded without interest.

(b) Please read the instructions in the enclosed CAF carefully. (c) ALL COMMUNICATIONS IN CONNECTION WITH YOUR APPLICATION FOR THE EQUITY

SHARES INCLUDING ANY CHANGE IN YOUR REGISTERED ADDRESS SHOULD BE ADDRESSED TO THE REGISTRAR TO THE ISSUE.

(d) Application Forms must be filled in ENGLISH in BLOCK LETTERS. (e) Signatures should be either in English or Hindi or the languages specified in the Eighth Schedule to the

constitution of India. Signatures other than in the aforementioned languages or thumb impressions must be attested by a Notary Public or a Special Executive Magistrate under his/her official seal.

(f) In case of Joint Holders, all joint holders must sign the relevant parts of the Application Form in the

same order and as per the specimen signatures recorded with the Company. (g) In case of joint applicants, refunds and all payments will be made to the person whose name appears

first on the application form and all communications will be addressed to him/her. To prevent any fraudulent encashment of refund orders by third parties, the Sole/First Applicant must indicate Saving / Current Account number and the name of the bank and its branch with whom such account is held in the space provided in the CAF for the purpose so that Refund Orders are printed with these details after the name. Applications without this information are liable to be rejected.

(h) The Application Form should be presented to the Bank in its entirety. If any of the Part(s) A, B, C and

D of the Application Form(s) is /are detached or separated, such application will forthwith be rejected. (i) All shareholders must submit the CAF along with remittance only to the Bankers to the Issue

mentioned elsewhere in this Letter of Offer and not to the Company, the Registrar or the Lead Manager.

(j) Any dispute or suit action or proceedings arising out of or in relation to this Letter of Offer or in

respect of any matter or thing herein contained and claimed by either party against the other shall be instituted or adjudicated upon or decided solely by the appropriate Court where Registered Office of the Company is situated.

(k) The last date for receipt of CAF along with the amount payable is ______________. However, the

Board will have the right to extend the same for such period as it may determine from time to time, but not exceeding 60 days from the date of opening of the subscription list. If the CAF together with the amount payable there under is not received by the bankers to the issue on or before the closure of the banking hours on the aforesaid date, or such date as may be extended by the Board, the offer contained in this Letter of Offer shall be deemed to have been declined and the Board shall be at liberty to dispose the Rights hereby offered.

For further instructions please read CAF carefully.

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DEMATERIALISATION As per the provisions of the Depositories Act, 1996, the shares of a body corporate may be held in dematerialized form i.e. not in the form of physical certificates but be fungible and be represented by the statement issued through electronic mode. The equity shares of GIC Housing Finance Ltd. are traded in the demat segment The Company has also entered into a tripartite agreement dated March 1, 2004 with the National Securities Depository Limited (NSDL) and Sharepro Services (India) Pvt. Ltd. for dematerialization of the equity shares of the Company. The ISIN No. granted to the equity shares of the Company is ISIN INE2890B01019. The Company has also entered into a tri partite agreement dated February 26, 2004 with Central Depository Services Limited and Sharepro Services (India) Pvt. Ltd. for dematerialisation of equity shares of the Company. An applicant has the option to seek allotment in physical or demat mode. An applicant who seeks allotment in demat mode must have atleast one Beneficiary Account with any of the Depository Participants (DP) of NSDL registered with SEBI, prior to the application. Such applicants must necessarily fill in the details (including the Beneficiary Account Number and Depository Participant’s ID Number) appearing under the head “Request for shares in electronic form” in the CAF. Applicant must indicate in the CAF, the number of shares they wish to receive in electronic form out of the total number of equity shares applied for. In case of partial allotment, shares will first be allotted in electronic form and the balance, if any, will be allotted in physical form. Names in the CAF should be identical to those appearing in the account details in the Depository. In case of joint holders, the name should necessarily be in the same sequence as they appear in the account details in the Depository. No separate application for demat and physical shares is to be made. If such applications are made the application for physical shares will be treated as multiple applications and rejected accordingly. It may be noted that electronic shares can be traded only on the stock exchanges having electronic connectivity with NSDL and CDSL. Non transferable allotment letters/ refund orders will be directly sent to the applicant by the Registrar to the Issue. The applicant is responsible for the correctness of the applicants demographic details given in the share application form vis-à-vis those with his/her DP. Equity shares allotted in demat mode will be credited directly to the respective Beneficiary Account. MODE OF PAYMENT For Resident Applicants Payment(s) must be made by cash or by cheque/demand draft and drawn on any bank (including a co-operative bank) which is situated at and is a member or a sub-member of the Bankers' Clearing House located at the centre where the CAF is submitted. A separate cheque/draft must accompany each CAF. Only one mode of payment should be used. Money orders, postal orders and outstation cheques will not be accepted and applications accompanied by any such instruments will be rejected. Shareholders/Applicants residing at places other than those mentioned in the CAF and applicants who wish to send their applications but not having collection centres should send their application by Registered Post, ONLY to the Registrar to the Issue, Sharepro Services (India) Pvt. Ltd., enclosing a demand draft drawn on a clearing Bank and payable at Mumbai ONLY net of bank charges and postal charges, before the closure of the issue. The applications received through the registered post shall be dealt with by the Registrars to the Issue in the normal course.

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Such cheque/drafts should be payable to "GIC Housing Finance Ltd. – Rights Issue". All cheques/ drafts must be crossed 'A/c Payee only’. No receipt will be issued for the application money received. However, the Collection Centre receiving the application will acknowledge receipt of the application by stamping and returning the acknowledgement slip at the bottom of each CAF. The Company is not responsible for any postal delay/ loss in transit on this account. Application will not be accepted by the Lead Manager or by the Company For Non-Resident Applicants/ FIIs Payments by Non-Resident Shareholders will be accepted by Indian Rupee Drafts purchased abroad or cheques/drafts drawn on Non-Resident External Account (NRE Account) or Foreign Currency Non-Resident Account (FCNR Account) maintained anywhere in India but payable at Mumbai or by Telegraphic Transfer in favour of the collecting Bankers by the concerned shareholders. However, in case shares are held on a non-repatriable basis, payment may also be made by cheque /draft drawn on Non-Resident Ordinary Account (NRO A/c.) maintained anywhere in India but payable at Mumbai. Such cheques/drafts should be drawn in favour of "GIC Housing Finance Ltd.- Rights Issue - NR” payable at Mumbai, India and shall be crossed A/c. Payee Only, Banker’s Certificate regarding source of payment must be submitted with the CAFs wherever necessary. The CAF along with cheques/drafts should be deposited with any of the branches of the Bankers to the Issue nominated for this purpose. The certificate of inward remittance, if any, must be sent only to the Registrar to the Issue, Sharepro Services (India) Pvt. Ltd., quoting the details of folio no. and the name and address of the branch of the Bankers to the Issue where CAF has been deposited before the closure of the issue. DISPOSAL OF APPLICATIONS AND APPLICATION MONIES The Board, reserves its full, unqualified and absolute right to accept or reject any application in whole or in part in consultation with the Designated Stock Exchange without assigning any reason thereof, in case the application is not made in terms of this Letter of Offer. In case an application is rejected in full, the application money received will be refunded to the first named applicant within six week from the date of closure of the Issue in accordance with Section 73 of the Act. If there is delay of refund of application money by more than 8 days after the Company becomes liable to pay (i.e. forty two days after the closure of Issue), the Company will pay interest for the delayed period at the rate prescribed under sub-section (2) and (2A) of Section 73 of the Act. ALLOTMENT / REFUND A) For applications made by Cheques/Drafts The Company will issue and dispatch letter of allotment/securities certificate and/or letter of regret along with the refund orders or credit the allotted securities to the respective beneficiaries account, if any, within a period of six weeks from the date of closure of issue. If such money is not repaid with 8 days from the day the company becomes liable to pay it, the company shall pay that money with interest as stipulated under Section 73 of the Companies Act, 1956. Refunds, if any, will be made along with Allotment Letters and /or Regret Letters by refund order / pay order drawn on the Bankers to the Company and will be dispatched within 6 weeks from the date of closure of Issue, by Registered Post if the amount of such refund exceeds Rs.1500/-. Such cheque refund order / pay order will be payable at par during their validity period at all centres where the applications are received. In case of joint applications, Refund Orders, if any, will be made out in the First applicant's name and all communication will be addressed to the person whose name appears on the CAF.

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B) For application by Non-Resident Indians / Foreign Institutional Investors (FIIs) In case of Non-Resident Indians/FIIs who remit their application money from funds held in NRE/FCNR/NRO Accounts, refund/payment of interest and other disbursements, if any, shall be credited to such account, details of which should be furnished in the column provided for that purpose in the CAF. In case of non-residents who remit their application money through Indian Rupee drafts purchased from abroad, refunds/payments of interest and other disbursements, if any, will be made in US dollars at the exchange rate prevailing at such time, subject to the permission of the RBI. The Company will not be responsible for any loss on account of exchange fluctuations for converting the Indian Rupees amount into US Dollars. LETTERS OF ALLOTMENT / SHARE CERTIFICATES Share certificate, letter of allotment or letter of regret as the case may be will be despatched to the registered address of the first named applicant and/or the respective beneficiary accounts will be credited within six weeks, from the date of closure of the Issue. In case the allotment is made in physical form, and if letter of allotment is issued, the relevant share certificate will be dispatched within three months from the date of allotment in exchange for the letter of allotment. Allottees are requested to preserve such letter of allotment (if any) to be exchanged later for share certificates. DISPOSAL OF APPLICATIONS AND APPLICATION MONEY (a) The Board of the Company or Committee of Directors authorised in this behalf by the Board of the

Company reserves its full, unqualified and absolute right to accept or reject any application in whole or in part in consultation with BSE without assigning any reason thereof. If any application is rejected in full the entire application money will be refunded to the applicant in accordance with the provisions of Section 73 of the Companies Act, 1956. Where the applicant is allotted in part, the balance of the application money will be refunded to the applicant in accordance with the provisions of Section 73 of the Companies Act, 1956.

(b) Refund will be made by cheques/ pay orders drawn on refund bankers and bank charges, if any, for

encashing such cheques or pay orders will be payable by the applicant. Such cheques or pay orders will however, be payable at par at the branches of the refund bankers located at all places where applications are accepted or such places as may be approved by BSE.

(c ) Allotment of Equity Shares and export of Letters of Allotment/share certificate(s) to NRI/OCB/Non-

Residents would be subject to the approval of the Reserve Bank of India under the FEMA, if required.

(d) The Company shall provide adequate funds to the Registrar to the Issue for complying with

requirement of despatch of refund cheques/Letter(s) of Allotment / share certificate(s) by registered post/under postal certificate.

BASIS OF ALLOTMENT The basis of allotment shall be finalised by the Board of the Company or Committee of Directors of the Company authorised in this behalf by the Board of the Company. The Board of the Company or the Committee of Directors as the case may be, will proceed to allot the Equity Share in consultation with BSE in the following order of priority. i. Full allotment to the equity shareholders who have applied for their Rights entitlement either in full or

in part and also to the renouncees who have applied for Equity Shares renounced in their favour either in full or in part (subject to other provisions contained under the paragraph titled "Renunciation").

ii Allotment to the equity shareholders who having applied for their full Rights entitlement of Equity

Share offered to them and have applied for additional Equity Shares, provided there is surplus available after full allotment under (i) above and shall be at the absolute discretion of the Board of the

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Company or the Committee of the Directors authorised in this behalf by the Board of the Company and the decision of the Board of the Company or the Committee of the Directors shall be final and binding. The allotment of such additional Equity Shares will be made as far as possible on an equitable basis with reference to the number of Equity Shares held by them on the Record Date in consultation with BSE.

iii Allotment to the renouncees who have applied for all the equity shares renounced in their favour and have applied for additional equity shares, as the Board may in its absolute discretion deem fit, provided there is a surplus after making full allotment (i) and (ii) above.

iv Allotment to any other shareholder(s)/beneficial shareholder(s) as the Board of the Company or Committee of Directors of the Company authorised in this behalf by the Board of the Company may, in their absolute discretion, deem fit, provided there is surplus available after making full allotment under (i), (ii) and (iii) above.

v The Equity Shares remaining unsubscribed after making full allotments under i, ii and iii above, shall be disposed off by the Board in any manner as it in its sole discretion deems fit and the decision of the Board in this regard shall be final and binding

The allotment to the renouncee(s) in whose favour the renunciation has been exercised shall be subject to the condition that the Board of the Company or Committee of Directors shall have the discretion to reject such request without assigning any reasons thereof. In the event of over subscription, allotment will be made only within the overall size of the Rights Issue. DISPATCH OF SHARE CERTIFICATES/LETTERS OF ALLOTMENT/REFUND ORDER All the pay orders / refund orders and Letter(s) of Allotment / Share Certificates will be despatched to the first named / sole applicant at his / her own risk. The Refund Orders will be payable at par in India at all the centres where the applications were originally accepted. The instruments will be marked “Account Payee Only” and in the name of the sole/first applicant. Bank charges, if any, for encashing such refund orders / pay orders will be payable by the applicants. The Company has given an undertaking that the requisite funds will be made available to the Registrar for complying with the requirement of despatch of refund orders / allotment letters. The Company shall ensure despatch of refund orders of value over Rs.1,500/- by Registered Post only and adequate funds will be made available to the Registrar. INTEREST IN CASE OF DELAY ON ALLOTMENT/DESPATCH The Company agrees that as far as possible allotment of securities offered to the existing shareholders on Rights basis shall be made within 30 days of the closure of the issue. Share certificate, letter of allotment or letter of regret as the case may be will be despatched to the registered address of the first named applicant and/or the respective beneficiary accounts will be credited within six weeks, from the date of closure of the Issue. In case of delay beyond eight days, the Company agrees that it shall pay interest at the rate of 15% per annum. LAST DATE FOR SUBMISSION OF CAF The last date for receipt of CAF by the Bankers to the Issue together with the amount payable on application is _____________. If the relevant CAF together with amount payable there under is not received by the Bankers/Registrar to the Issue on or before the close of banking hours on the aforesaid last date the offer contained in this Letter of Offer shall be deemed to have been declined and the Board shall be at liberty to dispose of the equity shares hereby offered as provided under "Basis of Allotment".

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UNDERTAKING BY THE COMPANY The Company undertakes that: a) The complaints received in respect of the Issue shall be attended to by the Company expeditiously and satisfactorily; b) All steps for completion of the necessary formalities for listing and commencement of trading at all stock exchanges where the securities are to be listed are taken within seven working days of finalisation of basis of allotment; c) Funds required for despatch of refund orders/allotment letters/certificates by registered post shall be made available to the Registrar to the Issue by the Company. d) Certificates of securities/refund orders of the Non-Resident/Non Resident Indians shall be dispatched within the specified time subject to receipt of approval from RBI/FIPB, if required. e) No further issue of shares shall be made till the shares offered through this Letter of Offer are listed or till the application moneys are refunded on account of non-listing, under-subscription, etc. UTILIZATION OF ISSUE PROCEEDS a) All monies received out of the issue of shares to the investors shall be transferred to a separate bank account other than the bank account referred to in sub-section (3) of Section 73 of the Act; b) Details of all monies utilised out of the Issue shall be disclosed under an appropriate separate head in the balance sheet of the Company indicating the purpose for which such monies has been utilised and c) Details of all unutilized monies out of the Issue of shares, if any, shall be disclosed under an appropriate separate head in the Balance Sheet of the Company indicating the form in which such unutilized monies have been invested. The funds received against this rights issue to be kept in a separate bank account and the Company will not have any access to such funds unless it satisfies BSE (Designated Stock Exchange) with suitable documentary evidence that the minimum subscription of 90% of the issue has been received by the Company.

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XVI. OTHER INFORMATION The following contracts mentioned below (not being contracts entered into in the ordinary course of business carried on by the Company) are or may be deemed to be material contracts. Copies of these contracts along with documents referred below may be inspected at the Registered Office of the Company between 10.00 a.m. and 1.00 p.m. on any working day until the closing of the subscription list. MATERIAL CONTRACTS AND DOCUMENTS The Contracts referred to in para (A) below (not being contracts entered into in the ordinary course of the business carried on by the Company or entered into more than two years before the date of this Letter of Offer) which are or may be deemed material, have been entered into by the Company. The contracts together with the documents referred to in paragraph (B) below, copies of all of which have been attached to the copy of this Letter of Offer may be inspected at the Registered Office of the Company between 10.00 a.m. and 1.00 p.m. on any working day from the date of this Letter of Offer until the closing of the subscription list. A. MATERIAL CONTRACTS 1. Copy of MOU dated January 30, 2006 between GIC Housing Finance Limited and IDBI Capital

Market Services Limited, Lead Manager to the Issue. 2. Copy of MOU dated January 4, 2006 between GIC Housing Finance Limited and Sharepro

Services (India) Pvt. Ltd., Registrar to the Issue. 3. Copy of Tri- Partite Agreement dated March 1, 2004 between GIC Housing Finance Limited and

Sharepro Services (India) Pvt. Ltd. and National Securities Depository Limited. 4. Copy of Tri-Partite Agreement dated February 26, 2004 between GIC Housing Finance Limited

and Sharepro Services (India) Pvt. Ltd. and Central Depository Services (India) Limited. B. DOCUMENTS FOR INSPECTION 1. Copy of Memorandum and Articles of Association of the Company. 2. Copy of Certification of Incorporation of the Company 3. Copies of Annual Report for the FY 2000, 2001, 2002, 2003, 2004 & 2005. 4. Copy of Notice for EGM dated December 26, 2005 and extract of minutes of EGM passing

resolution under Sec. 81(1A) of Companies Act, 1956. 5. Copy of resolution dated December 26, 2005 passed by the Board of Directors regarding present

rights issue. 6. Copy of Resolution passed by board of directors dated January 23, 2006 fixing the price band. 7. Certificate of registration No. 01.0025.02 dated May 7, 2002 with National Housing Board 8. Copies of Prospectus dated November 14, 1994 issued in respect of the Initial Public Offer by the

Company. 9. Copy of the Letter of Offer dated September 13, 2004 issued in respect of the Rights Issue. 10. Copy of certificate dated January 25, 2006 issued by M/s M. P. Chitale & Co, Chartered

Accountants and Statutory Auditors of the Company in terms of Part II Schedule II of The Companies Act 1956 including capitalization statement, taxation statement and accounting ratios

11. Copy of Letter dated January 25, 2006 received from M/s M. P. Chitale & Co, Chartered Accountants and Statutory Auditors of the Company advising the Company on the Tax Benefits available to the Company and its shareholders.

12. Copies of various Undertakings received from the Company. 13. List of pending litigations/disputes against the Company, Group Companies and filed by the

Company. 14. Copy of in-principle approval received from BSE vide their letter no. ______________ 15. Copy of in-principle approval received from CSE vide their letter no. ______________ 16. Copy of SEBI observation letter No. _______________.

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DECLARATION

No statement made in this Draft Letter of Offer shall contravene any of the provisions of the Companies Act, 1956 and the rules made thereunder. All the legal requirements connected with the said issue as also the guidelines; instructions etc. issued by SEBI, Government and any other competent authority in this behalf have been duly complied with. Signed by the Directors of the Company

Mr. R. K. Joshi Mr. A. K. Guha Mr. V. Ramasaamy Mr. B. Chakrabarti Mr. M. K. Garg Mr. M. Ramadoss Mr. N. R. Ranganathan Mr. M. K. Tandon Mr. B. P. Deshmukh Mr. R. M. Malla Mr. Arun Datta Mr. Manu Chadha

Sd/- Mr. S. Sridharan Company Secretary

Place: Mumbai Date: ________

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