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GRUH has been recognized by National Housing Bank(NHB),the apex body for

regulating the Housing Finance Industry in India.

GRUH has been awarded the Certificate of Registration from NHB to carry out the housing

finance business in India and also accept retail deposits from the public.GRUH is the third

largest HFC in private sector in terms of Disbursements among the 45 housing finance

companies approved by NHB.

GRUH is primarily engaged in the business of providing loan term finance to

individuals for Construction/ Purchase /Extension/ Repair/Renovation/Shop Loans of their

homes.GRUH also provides loans to professionals for Office premises.

GRUH also offers friendly savings options with its Multiple Option Deposit

Schemes.GRUH Deposits carry dual rating from CRISIL and ICRA, both renowned Rating

agencies.GRUH Home Deposits are rated "FAA+" by CRISIL and "MAA+" by ICRA both

representing High Safety.

With wide network of retail offices in excess of 50 ,spread across Gujrat, Maharastra,

Rajasthan, Madhya Pradesh and Karnataka, GRUH caters to a wide segment of the

population helping people build homes of their dreams and managing their saving by

providing safe and secure saving options.

With distinguished parentage of HDFC, and a long history of a professional existence,

GRUH is regarded as a trustworthy and professional company providing high quality services

by its strong customer base of more than 90000 customers.

A subsidiary of HDFC Ltd. is a N.H.B. approved Housing Finance Company with an

extensive network of 48 Retail offices in the state of Gujarat and Maharashtra GRUH now

proposes to replicate its model in the state of Rajasthan, Madhya Pradesh and Karnataka.

GRUH is in search of team members with highest level of integrity and attitude to work hard

for achievement of goals committed in the state of Gujarat, Maharashtra, Rajasthan, Madhya

Pradesh and Karnata

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The Indian economy continued to show a steady growth with strengthening of

industrial and services sector. In addition, low credit off-take and ample liquidity in the

system contributed to the boom in the retail lending in the country. Housing finance

constituted a major segment of this retail boom.

The disbursements towards housing finance by the Commercial Banks and HousingFinance Companies (HFCs) registered a growth of 29.25% with total disbursements of Rs.

53,678.62 crores during 2003-04. The banks registered a growth of 39.33% whereas HFCs

registered a growth of 16.99%. (Source: National Housing Bank Annual Report - 2003-04)

Liquidity from both domestic and international sources maintained interest rates at low levels

for major part of the year.

However, in the recent past, on account of various other factors, the interest rates in the

economy have started showing signs of resisting any further decline. Hence, CRISIL

undertook a study of variable rate mortgages to gauge the impact of upward interest rate

movement.

CRISILs study reveals that a rise of about 150-200 basis points in interest rates will

adversely impact the repayment capability of individuals who have opted for long loan

tenures upward of 15 years and high installments as a proportion of their income

Installment to income ratio of over 50%. CRISIL estimates that a sharp rise of 150-200 basis

points sustained for a few years will increase the proportion of non-performing loans from the

current level of 2% to about 2.5%.

CRISIL believes that the overall profitability of mortgage lenders could come under

pressure unless the players raise rates. This is so since the incremental return on equity is

very low for both banks and HFCs. In fact, their study shows that for HFCs, the returns are

even lower than the banks.

However, it is likely that most of the HFCs are expected to report higher level of Non

Performing Assets (NPAs) for the year under review on account of change in the norms for

identification of NPAs introduced by National Housing Bank with effect from March 31,

2005.

Human Resources

After consolidating the financial health of GRUH, the enthusiasm of staff members

continued to be high in stepping up growth of disbursements. Their contribution was also

very valuable in maintaining healthy recoveries even under the new norms of identifying

NPAs which have changed from 180 days past dues to 90 days overdue. Such a high level of

commitment and loyalty by staff members will enable GRUH to face the challenges of the

market forces with success.

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Information Systems

GRUH's initiatives in strengthening Internal Systems and Procedures using

Information Technology, took shape in 1996 when it awarded an enterprise wide Software

Development contract to Tata Consultancy Services (TCS). This online software tool enabled

GRUH to monitor, control and enable its housing and deposit business at its retail offices

spread across the states of Gujarat and Maharashtra.

The basic software developed by TCS underwent substantial changes as the dynamics

of the housing finance business changed. The Information Systems team of GRUH was

responsible in developing and maintaining this software after TCS handed over the same to

GRUH five years back. The application software has also been audited by the internationally

acclaimed IT auditors, Pricewaterhousecoopers (PwC) to ensure that the necessary controls

were present in the system and the best industry practices were being followed by the internal

team in development and maintenance of the software. PwC was also retained to recommend

an enterprise wide Information Systems Security Policy which was suitably implemented by

GRUH.

GRUH has also taken initiates in setting up an advanced communication network for

speedier and reliable data transfer across its offices.

Risk Management

GRUH manages various risks associated with the mortgage business. These risks

include credit risk, liquidity risk and interest rate risk. GRUH manages credit risk through

internal credit norms. Liquidity risk and interest rate risks arising out of maturity mismatch of

assets and liabilities are managed through regular monitoring of the maturity profile.

The Audit Committee set up by the board has also been acting as the board level

committee to oversee the implementation of the Asset Liability Matching (ALM) position.

The Audit Committee has been reviewing the ALM statements as prescribed by NHB on a

half yearly basis and suggesting action to meet the ALM guidelines periodically.

A separate policy guideline on classification of the various constituents of the assets

and liabilities, buying and selling of investments and limits within each time bucket has been

laid down by the Audit Committee and the same are being followed by the Management.

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Home loan Scenario in India

Housing is one of the basic needs of human beings. All of us need a place to live, but the cost

of buying a house has steadily increased and it has now become difficult for the common mano have a shelter above his head. This situation gets worse with the immigration of people

from villages to the towns and metros. A house is one of the metros would cost in the range

of Rs. 8-20 lakhs, with some of them touching the Rs. 50 lakh mark. In such a situation

considerable help has been provided by the various banks and other non-banking financial

institutions involved in providing home loans. The increased competition among the banks to

capture the home loan market and to increase their market share has created the right

atmosphere for people to seriously contemplate on buying a house.

The housing sector is one of the fastest growing sectors in the economy. It registers an annual

growth rate of about 25-30%. Another important distinction of this sector is that one rupee

invested in this sector contributes 78 paisa to the GDP and about 269 industries are directly orindirectly dependent on this sector. It is also one of the largest employers. This sector is

labor-intensive; hence, if proper investment and policy initiatives are made, it could help in

drastically reducing the employment rate in the country.

In India, there is an estimated shortage of 20 million housing units and this requires an

investment of over Rs.1500 bn. investing such a huge amount is the problem that India is

facing right now. Of this amount only 30% is being financed by the unorganized sector. The

interest charges by the organized sector are exorbitant and, hence it is causing even more

indebtedness in the country. Much of the demand for housing loans to the unorganized sector

is from Tier-2, and Tier-3 cities. If the industry could expand into these areas and educate the

people about their eligibility for such loans, then the sector could witness far better growthrates than have been witnessed so far. such initiatives have been taken by some of banks and

financial institutions and this has helped bring home loans to many in the country.