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Directors Report of GIC Housing Finance Ltd.

Mar 31, 2016

Dear Members,

The Directors have pleasure in presenting the 26th Annual Report of your Company and the Audited Accounts for the year ended 31st March, 2016.

FINANCIAL RESULTS

(Rs, in Lacs)

PARTICULARS March 31, 2016 March 31, 2015

Total Income 87637 73274

Less: Interest expenditure 60065 50893

Overheads 8379 6660

Depreciation & amortization 82 351

Profit Before Tax 19111 15370

Provision for Tax 6110 4860

Deferred Tax Assets 551 214

Profit Afer Tax 12450 10296

Profit brought forward 4 5

Profit available for appropriation 12454 10301

APPROPRIATIONS:

General Reserve 5835 4200

Special Reserve under Section 36(1)(viii) of Income Tax Act, 1961 3372 2856

Proposed Equity Dividend 2693 2693

Tax on Proposed Dividend 548 548

Balance carried over to Balance Sheet 6 4

IMPORTANT FINANCIAL RATIOS PARTICULARS March 31, 2016 March 31, 2015

Return on Net Worth (%) 17.28 16.53

Return on Total Assets (%) 1.55 1.53 Book Value per share (Rs,) 133.77 115.65

Earnings per share (Rs,) 23.12 19.12

Debt Equity Rato (times) 9.72 9.30

Average cost of funds (%) 9.39 9.74

Average yield on advances (%) 12.06 12.22

Net Interest Margin 2.67 2.48

DIVIDEND

Your Directors recommend payment of dividend for the year ended 31st March, 2016 of Rs, 5 per equity share ofRs, 10/- each. The total dividend outgo for the current year would amount to Rs, 32.41 crores including dividend distribution tax of Rs, 5.48 Crores, as in the previous year.

The dividend payout rato for the current year, inclusive of Additional tax on dividend will be 26.02%.

OPERATIONS - PERFORMANCE

Income, Profit, Loan Approvals and Disbursements: Total income for the year under review is Rs, 876.37 crores as against Rs, 732.74 crores for the year 2014-15. Profit before tax for the year ended is Rs, 191.11 crores and Profit after tax for the year ended is Rs, 124.50 crores as against Rs, 153.70 crores and Rs, 102.96 crores respectively for the previous year.

The Company''s main thrust continues to be on Individual Loans. New loans approved during the year amounted to Rs, 2636 crores and loans disbursed during the year are Rs, 2511 crores as against Rs, 2305 crores and Rs, 2225 crores for the year ended 31st March, 2015 respectively. The Retail Loan portfolio as at 31st March, 2016 stood at Rs, 7907 crores as compared to Rs, 6593 crores as on 31st March, 2015.

During the year under review, your Company has made provision to the extent of Rs, 15.76 crores as against Rs, 12.28 crores provided for in the year 2014-15. The Company is also carrying an Additional provision of Rs, 83.86 crores in books, beyond what is prescribed under the guidelines, as a prudential measure. Gross Non-Performing Assets on retails loans as on 31st March, 2016 is 1.76% as against 1.73% for the previous year. Net non performing loans as on 31st March, 2016 is NIL as that of the previous year.

RESOURCE MOBILISATION:

Your Company takes every effort to tap the appropriate source of funding to minimize the weighted average cost of funds. Your Company has mobilized resources through the following sources:

A. Term Loans from Banks and Insurance Companies.

Your Company has borrowed fresh long term loans of Rs, 1343 crores from banks during the year as compared to Rs, 1404 crores during the previous year. The aggregate of term loans outstanding at the end of the financial year stood at Rs, 4708 crores as against Rs, 4174 crores as at the end of the previous year.

B. Refinance from National Housing Bank (NHB):

With the continued support of National Housing Bank (NHB), your Company availed refinance amounting to Rs, 1000 crores during the year under review as against Rs, 350 crores in the previous year. The refinance facility outstanding as on 31st March, 2016 is Rs, 1630 crores as against Rs, 860 crores as at the end of the previous year.

C. Short-term Loan and Commercial Paper:

During the year 2015-16, your Company has raised resources by issuing Commercial Paper and also resorted to short-term borrowings from the banks and the outstanding amount as on 31st March, 2016 is Rs, 626 crores (Gross).

D. Non-Convertible Debentures:

Your Company has outstanding balance of Rs, 45 Crores through issue of Non-Convertible Debentures (NCDs) on private placement as on 31st March, 2016.

CREDIT RATING

Your Company had received rating from CRISIL and ICRA for its various borrowing programmes as follows:

CRISIL Rating:

For Commercial Paper/short-term loan programmes ofRs, 800 crores as [CRISIL] "A1 " (Pronounced as CRISIL A1 plus).

For Fund Based Long Term Loan Programme of Rs, 100 crores as [CRISIL] AA (Stable) (Pronounced as CRISIL double A plus/ Stable).

- For Non-Convertible Debentures Borrowing Programme ofRs, 550 crores [CRISIL] "AA (Stable)" (Pronounced as CRISIL double A Plus/Stable).

ICRA Rating:

For Commercial Paper/short-term loan programmes ofRs, 1200 crores as [ICRA] "A1 " (Pronounced as ICRA A1 plus). This rating is the highest credit quality rating assigned by ICRA for Short-Term Debt Instruments.

As per the Basel-II requirements - For Fund Based Long Term Loan Programme of Rs, 7000 crores as [ICRA] AA (Stable) (Pronounced as ICRA double A plus/stable). This rating indicates the high credit quality rating assigned by ICRA to Long-Term Debt Instruments.

- For Non-Convertible Debentures Borrowing Programme of Rs, 550 crores [ICRA] "AA (Stable)" (Pronounced as ICRA double A Plus/stable).

BRANCH EXPANSION

During the year under review your Company has opened its Branches at Greater Noida (Utar Pradesh), Raipur (Chhatsgarh), Vijayawada (Andhra Pradesh), Vasai (Maharashtra) and Patala (Punjab). The total number of Offices as on 31st March, 2016 is 60. Your Company is imitating brand building measures to generate general awareness and improve the image of the Company.

INSURANCE COVERAGE TO BORROWERS

Your Company had taken "Special Contingency Insurance" with The New India Assurance Company Ltd., which covers the borrowers of your Company as under:

Personal Accident Insurance: Personal accident (death only) risk cover, free of cost to the borrowers up to an amount of outstanding loan at any particular point of time during the term/tenure of the housing loan.

Mortgaged Property Insurance: The property acquired out of loan, for and up to an extent of the outstanding loan amount, covered free of cost against fire, earthquake and allied perils affecting the mortgaged property.

Your Company has also tied up with ''Kotak Mahindra Old Mutual Life Insurance Limited'' and "Future Generali India Life Insurance Company Limited" for getting insurance cover on the life of the borrower to the extent of the "Outstanding Home Loan". The said "Group Life Cover" is optional and the Company arranges this insurance on request from the borrower. These schemes ensure protection to the families of the borrower in case of un-expected eventualities like untimely death of borrower due to accident or natural death.

CAPITAL ADEQUACY RATIO (CAR)

The Company has been maintaining the Capital Adequacy Rato (CAR) above the minimum required level prescribed by National Housing Bank (NHB) from time to time. The CAR prescribed for the present is 12%.

The Capital Adequacy Rato of the Company as at 31st March, 2016 is 17.40% as against 15.36% as at 31st March, 2015.

DEPOSITS

Your Company has not accepted any fixed deposits and, as such, no amount of Principal or interest was outstanding as of Balance sheet date.

DEMATERIALISATION OF SHARES AND NOMINATION FACILITY AND LISTING AT STOCK EXCHANGES

As per the Securities & Exchange Board of India directives, the Transactions of the Company''s shares must be compulsorily in dematerialized form. Your Company has signed an agreement with the Central Depository Services (India) Limited and National Securities Depository Limited for transaction of shares in dematerialized form. Shareholders holding shares in physical form are requested to convert their holdings into dematerialized form. Out of 5,38,51,066 equity shares, 5,32,85,785 equity shares are in dematerialized form, (5,32,61,704 shares as on 31st March, 2015) which is 98.95% (98.91% as on 31st March, 2015) of the total shares as on 31st March, 2016.

Shareholders holding shares in physical form may utilize the nomination facility available by sending the prescribed Form No.SH-13 duly filled, to our Registrars and Share Transfer Agents viz. M/s Karvy Computershare Pvt. Ltd., Karvy Selenium, Tower B, Plot 31-32, Gachibowli, Financial District, Nanakramguda, Hyderabad, Telangana - 500 032. Shareholders holding shares in dematerialized form has to send their "Nomination" request to the respective Depository Participants.

The equity shares of the Company continue to be listed on BSE Ltd. and The National Stock Exchange of India Ltd. The Annual Listing fees for the year 2015-16 have been paid to these Stock Exchanges.

UNCLAIMED DIVIDEND TRANSFER TO INVESTORS EDUCATION AND PROTECTION FUND (IEPF)

In terms of the provisions of the Companies Act, 1956 (which are still applicable), the amount (dividends) that remained unclaimed and unpaid for more than 7 years from the date become first due for payment, shall be transferred to IEPF (Fund). In terms of the applicable statutory provisions of the Companies Act, 1956, no claim would lie against the Company or the said Fund after such transfer to IEPF.

The Company has been intimating the shareholders to lodge their claim for payment due, if any, from time to time and such claims have been settled. In spite of constant and sincere efforts to pay the unclaimed dividend to the respective shareholders, certain amount still remains unclaimed. The Company has been intimating the shareholders to lodge their claim for dividend from time to time and such information is being mentioned in the Annual Reports every year.

Unclaimed dividend amounting to Rs, 9,81,280/- that has not been claimed by shareholders for the financial year 2007-08 has been transferred to Investor Education and Protection Fund (IEPF) during the month of October, 2015 wherein no claim would lie against the Company or the said fund after the transfer.

The dividend pertaining to the financial year 2008-09 remaining unclaimed and unpaid amounting to Rs, 11,04,952/- as on 31st March, 2016, would be transferred to IEPF during October, 2016 after settlement of claims received up to the date of completion of 7 years from the date of declaration of the dividend. The Company has sent individual reminder Letters to the respective shareholders during the month of June 2016. Shareholders who have not claimed the said dividend may write to Registrars and Share Transfer agent.

STATUTORY INFORMATION:

Particulars regarding conservation of energy, technology absorption and foreign exchange earnings and expenditure Since the Company does not own any manufacturing facility, the particulars relating to conservation of energy and technology absorption stipulated in the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, required to be furnished under Section 134(m) of Companies Act, 2013 are not applicable.

The Company did not earn any income in foreign currency during the year under review and also not incurred any expenses in foreign currency.

None of the employees of your company were in receipt of remuneration in excess of the limits as laid down under Section 134 of Companies Act, 2013 read with Companies (Particulars of Employees) Amendment Rules, 2011.

DIRECTORS RESPONSIBILITY STATEMENT

The Board of Directors hereby confirms that:

a) In the preparation of Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.

b) We have selected such Accounting Policies and applied them consistently and made judgments and estimates that are reasonable and prudent to give a true and fair view of the state of affairs of the Company as at the end of 31st March, 2016 and of the Profit/Loss of the Company for the year ended on that date.

c) We have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) We have prepared the annual accounts on a going concern basis.

e) We have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and were operating effectively.

f) We have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

STATUTORY AUDITORS

M/s CNK & ASSOCIATES LLP Chartered Accountants, Mumbai were re-appointed as Statutory Auditors in the twenty-fourth Annual General Meeting of the Company for the period of Five Years from the conclusion of 24th Annual General Meeting up to the conclusion of 29th Annual General Meeting of the Company subject to ratification of their appointment at every Annual General Meeting.

The Company received the requisite confirmation from them to the effect that their re-appointment, if made, would be as per Section 139 & 141 of Companies Act, 2013.

The Directors of your Company recommend for ratification of appointment of M/s CNK & ASSOCIATES LLP Chartered Accountants, Mumbai as Statutory Auditors of the Company from the ensuing Annual General Meeting till conclusion of 27th Annual General Meeting. Suitable Resolution for re-appointment requiring approval of the shareholders forms part of the agenda of the Annual General Meeting.

SECRETARIAL AUDITOR

The Board has appointed Shri Makarand Joshi, M/s Makarand M. Joshi & Co., Practicing Company Secretaries as the Secretarial Auditor of your Company for the financial year 2015-16. The Secretarial Audit Report for the financial year ended 31st March, 2016 is annexed as Annexure A to this report. The Secretarial Audit Report does not contain any qualification, reservations or adverse remark.

DIRECTORS

Shri Y. Ramulu, Smt. Alice G. Vaidyan and Shri K. Sanath Kumar were appointed as Additional Director (s) of the Company w.e.f. 30th June, 2015, 29th January, 2016 and 21st March, 2016 respectively as per Section 161 of the Companies Act, 2013, if any and Article 111 of Articles of Association of the Company.

Your Company has received a notice in writing from a shareholder(s) as per Section 160 of the Companies Act, 2013, proposing the candidature of Shri Y. Ramulu, Smt. Alice G. Vaidyan and Shri K. Sanath Kumar for the office of Director(s) of the Company at the ensuing Annual General Meeting, for their appointments as Non Executive Directors of the Company.

None of the Directors of the Company are disqualified from being appointed as Directors as specified in Section 164 of the Companies Act, 2013. The Board of Directors recommends their appointments.

The Company has complied according to the provision of Section 149(6) of the Companies Act, 2013. The Company has also obtained declarations from all the Independent Directors pursuant to Section 149(7) of the Companies Act, 2013.

Appointment of any new Director in the Company is done by the Board on the basis of recommendation of Nomination and Remuneration Committee. While selecting new Directors, Board shall ensure that there is appropriate balance of skills, experience and knowledge in the Board so as to enable the Board to discharge its functions and duets effectively.

STATEMENT FOR FORMAL ANNUAL EVALUATION MADE BY THE BOARD OF ITS OWN PERFORMANCE, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

Our Company has prescribed required parameters to evaluate the performance of the Board and its Committees. It is always recognized that the Board comprises appropriately qualified and professional people with broad range of experience. While evaluating the performance of the individual Director, it is always seen the Knowledge to perform their role; time and level of participation; performance of dutes and level of oversight; and professional conduct and independence etc.

The performance evaluation of the Directors was completed for the year. The performance evaluation of the Chairperson, Non Executive Directors and Independent Directors was carried out by the Board and Nomination and Remuneration Committee. The Board of Directors expressed their satisfaction with the evaluator process.

MEETINGS OF THE BOARD

Board met 6 (Six) times during the year. For further details, please refer report on Corporate Governance.

RELATED PARTY TRANSACTION U/S 188

Your Company is having following related party Transactions which are not material in nature but the same are entered at arm''s length basis with the prior approval of Audit Committee:

1. Premises taken on Lease from Promoter Insurance Companies for our Registered and Corporate Office and Branch Offices.

2. Insurance Cover taken from Promoter Group Companies.

3. Raising of financial resources.

During the year, Company has also given the following Housing Loans to the Director''s relatives and KMP which have been duly approved by Audit Committee:

Name Loan Amount Outstanding due as on (Rs,) 31st March 2016 (Rs,)

Shri Aniket Milind Kharat 75,00,000/- 73,90,426/-

(Son of Shri Milind A. Kharat, CMD of United India Insurance Company Ltd. and

Non Executive Director of the Company)

Shri S. Sridharan, 21,11,282/- 14,31,713/-

Sr. Vice President & Company Secretary

Form AOC 2 as required under Companies Act, 2013 for related party transaction is annexed as Annexure B to the Directors'' Report which is having NIL Report.

CORPORATE SOCIAL RESPONSIBILTY (CSR) POLICY U/S 135 OF THE COMPANIES ACT, 2013.

Our Company is having its CSR Policy which is available at the website (www.gichfndia.com) of the Company. Company is having total available funds ofRs, 2.67 crores for spending towards CSR Activity. The approved Acton Plan for financial year 2015-16 towards CSR Programmes was:

1. Contribution to the Prime Minister''s National Relief Fund;

2. Contribution to the "Swach Bharat Kosh" set up by the Central Govt.;

3. Contribution to the "Clean Ganga Fund" set up by the Central Govt.;

4. Education;

5. Sanitation.

Accordingly, it was proposed to contribute 50% of available fund i.e., Rs, 1.34 crores to the 3 funds as stated herein above and balance available funds will be utilized towards Education and Sanitation relating CSR Actives. Your Company is in the process of finalizing the suitable NGO for its sanitation activity and the same will be executed in the F.Y 2016-17.

Your Company has contributed Rs, 1.08 crores (the carried forward amount for the F.Y. 2014-15) to Prime Minister''s National Relief Fund, Swach Bharat Kosh and Clean Ganga Fund in the F.Y. 2015-16.

The total unspent CSR amount as on 31st March, 2016 is Rs, 3.76 crores (Rs, 2.67 crores relating to F.Y. 2015-16 and Rs, 1.09 crores relating to F.Y. 2014-15).

VIGILANCE MECHANISM

As a conscious and vigilant organization, your Company has established proper vigilance mechanism for its Directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of the Company''s code of conduct or ethics policy. The Company has framed Whistle Blower Policy and the same is uploaded at the website of the Company.

NOMINATION AND REMUNERATION POLICY

The Board of Directors has framed a policy which lays down a framework for selection and remuneration of Directors, Key Manageral Personal (KMP) and Senior Management of the Company. The Nomination and Remuneration policy is available on the website (www.gichfndia.com) of the Company and also enclosed as Annexure C.

CORPORATE GOVERNANCE

The Auditors Certificate on Corporate Governance issued by the Secretarial Auditor of the Company for the year under review, as required under Companies Act, 2013 and in pursuance of SEBI (Listing Obligations and Disclosure Requirement) Regulations 2015 is annexed to the Report of the Directors on Corporate Governance.

Your Company has been complying with the principles of good Corporate Governance over the years. The Board of Directors supports the broad principles of Corporate Governance. In addition to the basic governance issues, the Board lays strong emphasis on transparency, accountability and integrity.

In terms of the provisions of Regulation 34 of SEBI (Listing Obligations and Disclosure Requirement) Regulations 2015 entered into with the Stock Exchange(s), the Management Discussion and Analysis Report forms part of this report.

HUMAN RESOURCES & INDUSTRIAL RELATIONS.

The Company aims to align HR practices with business goals, motivate people for higher performance and build a competitive working environment. Your Company has continuously been working to improve human resource competence and capabilities in the Company to deliver the desired results. Your Company has developed a comprehensive "in-house" induction training module to make sure that new employees understand the basic focus of the Company in its all operations. Apart from fixed salaries and perquisites, we also have in place performance linked incentive scheme to all the employees which rewards the outstanding performing teams that achieve certain performance targets. In pursuance of the Company''s commitment to develop and retain the best available talent, the Company has been sponsoring the employees for training programmes conducted by National Housing Bank for upgrading the skill and knowledge of the employees in different operational areas. The work force strength of Your Company as on 31st March, 2016 is 265.

EXTRACT OF ANNUAL RETURN AS PER SECTION 92

Annual Return in Form MGT 9 is enclosed as per Annexure D to the Directors'' Report.

DISCLSOUSRE UNDER THE SEXUAL HARASSMENT OF WOMEN

Your Company is committed to provide and promote safe and healthy environment to all its employees without any discrimination. During the year under review, there was no case fled pursuant to The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

ACKNOWLEDGEMENTS

The Directors thank the valued customers, shareholders for their goodwill, patronage and support.

The Directors acknowledge with gratitude the valuable and timely advice, guidance and support received from the Promoter(s) namely General Insurance Corporation of India (GIC Re), The New India Assurance Company Ltd., National Insurance Company Ltd., The Oriental Insurance Company Ltd. and United India Insurance Company Limited.

The Directors also thank the National Housing Bank for their support and continued refinance assistance, Banks for their continued support through term loans. The Directors also thank the Security Exchange Board of India (SEBI); Stock Exchanges; Depositories; Ministry of Corporate Affairs; Credit Rating Agencies; Government(s) local/statutory authorities; Registrars and Share Transfer agent and the Auditors of the Company for their continued support.

The Directors place on record their deep appreciation of the valuable contribution of the members of the staff at all levels for the progress of the Company during the year and look forward to their continued cooperation in realization of the corporate goals in the years ahead.

Place : Mumbai

Date : 29th April, 2016

Registered Office: For and on behalf of the Board of Directors

National Insurance Building,

6th Floor, 14, Jamshedji Tata Road, Sd/-

Churchgate, Warendra Sinha

Mumbai - 400 020 Managing Director & CEO


Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the 25th Annual Report of your Company and the Audited Accounts for the year ended 31st March, 2015.

FINANCIAL RESULTS

(Rs in Lacs) PARTICULARS March 31, 2015 March 31, 2014

Total Income 73274 62492

Less: Interest expenditure 50893 41925

Overheads 6660 7036

Depreciation & amortization 351 205

ProfitBefore Tax 15370 13326

Provision for Tax 4860 4450

Deferred Tax Assets (774) (879)

Deferred Tax on Special Reserve 988 -

Profit After Tax 10296 9755

Profit brought forward 5 5

Profit available for appropriation 10301 9760

APPROPRIATIONS:

General Reserve 4200 3115

Special Reserve under Section 36(1)(viii) of Income Tax Act,1961 2856 2860

Proposed Equity Dividend 2693 3231

Tax on Proposed Dividend 548 549

Balance carried over to Balance Sheet 4 5

IMPORTANT FINANCIAL RATIOS

PARTICULARS March 31,2015 March 31,2014

Return on Net Worth (%) 16.53 17.77

Return on Total Assets (%) 1.53 1.77

Book Value per share (Rs.) 115.65 101.97

Earning per share (Rs.) 19.12 18.12

Debt Equity Ratio (times) 9.30 8.47

Average cost of funds (%) 9.74 9.72

Average yield on advances (%) 12.22 12.50

Net Interest Margin 2.48 2.78

DIVIDEND

Your Directors recommend payment of dividend for the year ended 31st March, 2015 of Rs. 5 per equity share of Rs. 10/- each. The total dividend outgo for the current year would amount to Rs. 32.41 crores including dividend distribution tax of Rs. 5.48 crores, as against Rs. 37.80 crores including dividend distribution tax of Rs. 5.49 crores in the previous year.

The dividend payout ratio for the current year, inclusive of additional tax on dividend will be 31.46%.

OPERATIONS - PERFORMANCE

Income, Profit, Loan Approvals and Disbursements: Total income for the year under review is Rs. 732.74 crores as against Rs.624.92 crores for the year 2013-14. Profit before tax for the year ended isRs. 153.70 crores and profit after tax for the year ended is Rs. 102.96 crores as against Rs. 133.26 crores and Rs. 97.55 crores respectively for the previous year.

The Company''s main thrust continues to be on Individual Loans. New loans approved during the year amounted to Rs. 2305 crores and loans disbursed during the year are Rs. 2225 crores as against Rs. 1755 crores and Rs. 1665 crores for the year ended 31st March,

2014 respectively. The Retail Loan portfolio as at 31st March, 2015 stood at Rs. 6593 crores as compared to Rs. 5299 crores as on 31st March, 2014.

During the year under review, your Company has made provision to the extent of Rs. 12.28 crores as against Rs. 24.76 crores provided for in the year 2013-14. The Company is also carrying an additional provision of Rs. 58.62 crores in books, beyond what is prescribed under the guidelines, as a prudential measure. Gross Non Performing Assets on retails loans as on 31st March,

2015 is 1.73% as against 1.57% for the previous year. Net non performing loans as on 31st March, 2015 is "NIL" as that of the previous year.

RESOURCE MOBILISATION:

Your Company takes every effort to tap the appropriate source of funding to minimize the weighted average cost of funds. Your Company has mobilized resources through the following sources:

A. Term Loans:

Your Company has borrowed fresh long term loans of Rs. 1404 Crores from banks during the year as compared to Rs. 1130 crores during the previous year. The aggregate of term loans outstanding at the end of the financial year stood at Rs. 4174 crores as against Rs. 3346 crores as at the end of the previous year.

B. Refinance from National Housing Bank (NHB):

With the continued support of National Housing Bank (NHB), your Company availed refinance amounting to Rs. 350 crores during the year under review as against Rs. 100 crores in the previous year. The refinance facility outstanding as on 31st March, 2015 is Rs. 860 crores as against Rs. 723 crores as at the end of the previous year.

C. Short term Loan and Commercial Paper:

During the year 2014-15, your Company has raised resources by issuing Commercial Paper and also resorted to short term borrowings from the banks and the outstanding amount as on 31st March, 2015 is Rs. 650 crores (Gross).

D. Non Convertible Debentures:

Your Company has outstanding balance of Rs. 115 Crores through issue of Non Convertible Debentures (NCD) on private placement as on 31st March, 2015.

CREDIT RATING

Your Company had received rating from CRISIL and ICRA for its various borrowing programmes as follows:

CRISIL Rating:

- For Commercial Paper/short term loan programmes ofRs. 800 crores as [CRISIL] "A1 " (Pronounced as CRISIL A1 plus).

- For Fund Based Long Term Loan Programme ofRs. 100 crores as [CRISIL] AA /Stable (Pronounced as CRISIL double A plus/Stable).

- For Non-Convertible Debentures Borrowing Programme ofRs. 550 crores [CRISIL] "AA /Stable" (Pronounced as CRISIL double A Plus/Stable).

ICRA Rating:

- For Commercial Paper/ short term loan programmes ofRs. 1000 crores as [ICRA] "A1 " (Pronounced as ICRA A1 plus). This rating is the highest credit quality rating assigned by ICRA for Short Term Debt Instruments.

- As per the Basel-ll requirements - For Fund Based Long Term Loan Programme ofRs. 5500 crores as [ICRA] AA (Pronounced as ICRA double A plus). This rating indicates the high credit quality rating assigned by ICRA to Long Term Debt Instruments.

- For Non Convertible Debentures Borrowing Programme of Rs. 550 crores [ICRA] "AA " (Pronounced as ICRA double A Plus). BRANCH EXPANSION

During the year under review, Your Company has opened its Branch Offices at Meerut (Uttar Pradesh), Boisar (Maharashtra), Ghaziabad (Uttar Pradesh), Margao (Goa), Dwarka (Delhi), Electronic City (Bengaluru), Garia (Kolkata) and Hadapsar (Maharashtra). The total number of Offices as on 31st March, 2015 is 56. Your Company is initiating brand building measures to generate general awareness and improve the image of the Company.

INSURANCE COVERAGE TO BORROWERS

Your Company had taken "Special Contingency Insurance" with The New India Assurance Company Ltd., which covers the borrowers of your Company as under:

- Personal Accident Insurance: Personal accident (death only) risk cover, free of cost to the borrowers up to an amount of outstanding loan at any particular point of time during the term/ tenure of the housing loan.

- Mortgaged Property Insurance: The property acquired out of loan, for and up to and extent of the outstanding loan amount, covered free of cost against fire, earthquake and allied perils affecting the mortgaged property.

Your Company has also tied up with ''Kotak Mahindra Old Mutual Life Insurance Limited'' for getting insurance cover on the life of the borrower to the extent of the "Outstanding Home Loan". The said "Group Life Cover" is optional and the Company arranges this insurance on request from the borrower. These schemes ensure protection to the families of the borrower in case of un- expected eventualities like untimely death of borrower due to accident or natural death.

CAPITAL ADEQUACY RATIO (CAR)

The Company has been maintaining the Capital Adequacy Ratio (CAR) above the minimum required level prescribed by National Housing Bank (NHB) from time to time. The CAR prescribed for the present is 12%.

The Capital Adequacy Ratio of the Company as at 31st March, 2015 is 15.36% as against 17.26% as at 31st March, 2014. DEPOSITS

Your Company has not accepted any fixed deposits and, as such, no amount of Principal or interest was outstanding as of Balance sheet date.

DEMATERIALISATION OF SHARES AND NOMINATION FACILITY AND LISTING AT STOCK EXCHANGES

As per the Securities & Exchange Board of India directives, the transactions of the Company''s shares must be compulsorily in dematerialised form. Your Company has signed an agreement with the Central Depository Services (India) Ltd. and National Securities Depository Ltd. for transaction of shares in dematerialised form. Shareholders holding shares in physical form are requested to convert their holdings into dematerialised form. Out of 5,38,51,066 equity shares, 5,32,61,704 equity shares are in dematerialised form, (5,32,36,863 shares as on 31st March, 2014) which is 98.91% (98.86% as on 31st March, 2014) of the total shares as on 31st March, 2015.

Shareholders holding shares in physical form may utilise the nomination facility available by sending the prescribed Form No.SH-13 duly filled, to our Registrar and Share Transfer Agent viz. M/s. Sharepro Services (India) Pvt. Ltd., Mumbai. Shareholders holding shares in dematerailised form has to send their "Nomination" request to the respective Depository Participants.

The equity shares of the Company continue to be listed on BSE Ltd., and The National Stock Exchange of India Ltd., The Annual Listing fees for the year 2014-15 have been paid to these Stock Exchange.

UNCLAIMED DIVIDEND TRANSFER TO INVESTORS EDUCATION AND PROTECTION FUND (IEPF)

In terms of the provisions of the Companies Act, 1956 (which are still applicable), the amount (dividends) that remained unclaimed and unpaid for more than 7 years from the date become first due for payment, shall be transferred to IEPF (Fund). In terms of the applicable statutory provisions of the Companies Act, 1956, no claim would lie against the Company or the said Fund after such transfer to IEPF.

The Company has been intimating the Shareholders to lodge their claim for payment due, if any, from time to time and such claims have been settled. In spite of constant and sincere efforts to pay the unclaimed dividend to the respective Shareholders, certain amount still remains unclaimed. The Company has been intimating the Shareholders to lodge their claim for dividend from time to time and such information is being mentioned in the Annual Reports every year.

Unclaimed dividend amounting to Rs. 6,91,170/- that has not been claimed by Shareholders for the financial year 2006-07 has been transferred to Investor Education and Protection Fund (IEPF) during the month of November, 2014 wherein no claim would lie against the Company or the said fund after the transfer.

The dividend pertaining to the financial year 2007-08 remaining unclaimed and unpaid amounting to Rs. 9,91,880/- as on 31st March, 2015, would be transferred to IEPF during August, 2015 after settlement of claims received up to the date of completion of 7 years from the date of declaration of the dividend. The Company has sent individual reminder letters to the respective shareholders during the month of June, 2015. Shareholders who have not claimed the said dividend may write to Registrars and Share Transfer agents.

Another unpaid amount of Rs. 55,673/- (Rs. 6,000/- pertaining to Right Issue in the year 2006 and Rs. 49,673/- pertaining to Fixed Deposit in the year 2000 to 2003) lying in the unpaid account of the Company since last previous years is to be transferred to Investors Educations and Protection Fund against which no claim shall lie against the Company after such transfer.

STATUTORY INFORMATION:

Particulars regarding conservation of energy, technology absorption and foreign exchange earnings and expenditure

Since the Company does not own any manufacturing facility, the particulars relating to conservation of energy and technology absorption stipulated in the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, required to be furnished under Section 134(m) of the Companies Act, 2013 are not applicable.

The Company did not earn any income in foreign currency during the year under review and also not incurred any expenses in foreign currency.

None of the employees of your company were in receipt of remuneration in excess of the limits as laid down under Section 134 of the Companies Act, 2013 read with Companies (Particulars of Employees) Amendment Rules, 2011.

DIRECTORS RESPONSIBILITY STATEMENT

The Board of Directors hereby confirms that:

a. In the preparation of Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.

b. We have selected such Accounting Policies and applied them consistently and made judgments and estimates that are reasonable and prudent to give a true and fair view of the state of affairs of the Company as at the end of 31st March, 2015 and of the profit /Loss of the Company for the year ended on that date.

c. We have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d. We have prepared the annual accounts on a going concern basis.

e. We have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and were operating effectively.

f. We have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

AUDITORS

M/s. CNK & ASSOCIATES LLP, Chartered Accountants, Mumbai were re-appointed as Statutory Auditors in the 24th Annual General Meeting of the Company for the period of Five Years from the conclusion of 24th Annual General Meeting up to the conclusion of 29th Annual General Meeting of the Company subject to ratification of their appointment at every Annual General Meeting.

The Company received the requisite confirmation from them to the effect that their re-appointment, if made, would be as per Section 139 & 141 of the Companies Act, 2013.

The Directors of your Company recommend for ratification of appointment of M/s. CNK & ASSOCIATES LLP, Chartered Accountants, Mumbai as Statutory Auditors of the Company from the ensuing Annual General Meeting till conclusion of 26th Annual General Meeting. Suitable resolution for re-appointment requiring approval of the shareholders forms part of the agenda of the Annual General Meeting.

DIRECTORS

Shri B. Chakrabarti (Chartered Accountant), Shri A. V. Muralidharan (Chartered Accountant and Company Secretary) and Shri M. K. Garg (Chartered Accountant) were appointed as Additional Director (s) of the Company w.e.f. 6th February, 2015 as per Section 161 of the Companies Act, 2013, if any and Article 111 of Articles of Association of the Company.

Your Company has received a notice in writing from a shareholder(s) as per Section 160 of the Companies Act, 2013, proposing the candidature of Shri B. Chakrabarti, Shri A. V. Muralidharan and Shri M. K. Garg for the Office of Director(s) of the Company at the ensuing Annual General Meeting, for their appointment as an Independent Director up to the conclusion of 27th Annual General Meeting of the Company."

None of the Directors of the Company are disqualified from being appointed as Directors as specified in Section 164 of the Companies Act, 2013. The Board of Directors recommends their appointment. Your Independent Directors meet all the criteria of Independence as provided in Section 149(6) of the Companies Act, 2013.

Appointment of any new Director in the Company is done by the Board on the basis of recommendation of Nomination and Remuneration Committee. While selecting new Directors, Board shall ensure that there is appropriate balance of skills, experience and knowledge in the Board so as to enable the Board to discharge its functions and duties effectively.

STATEMENT FOR FORMAL ANNUAL EVALUATION MADE BY THE BOARD OF ITS OWN PERFORMANCE, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

Our Company has prescribed required parameters to evaluate the performance of the Board and its Committees. It is always recognized that the Board comprises appropriately qualified and professional people with broad range of experience. While evaluating the performance of the individual Director, it is always seen the Knowledge to perform their role; time and level of participation; performance of duties and level of oversight; and professional conduct and independence etc.

The performance evaluation of the Directors was completed for the year. The performance evaluation of the Chairman and the Non Executive Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process.

RELATED PARTY TRANSACTION U/S 188 OF THE COMPANIES ACT, 2013

Your Company is having following related party transactions which are not material in nature but the same are entered at arm''s length basis with the prior approval of Audit Committee:

1) Premises taken on Lease from Promoter Insurance Companies for our Registered and Corporate Office and Branch Offices.

2) Insurance Cover taken from Promoter Group Companies.

3) Raisingoffinancialresources.

During the year, Company has also given the following Housing Loans to the Directors & their relatives which have been duly approved by Audit Committee:

Name Loan Amount Outstanding due as on 31st March, 2015

Shri Ashok K. Roy (Chairman) 22,49,659/- 21,60,421/-

Shri Aniket Milind Kharat 75,00,000/- 74,80,742/-

(Son of Shri Milind A. Kharat, CMD of United India Insurance Company Ltd. and Non Executive Director of the Company)

Form AOC 2 as required under the Companies Act, 2013 for related party transaction is annexed as Annexure A to the Directors'' Report which is having nil report.

CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY U/S 135 OF THE COMPANIES ACT, 2013.

Our Company is having its CSR Policy which is available at the website of the Company. Company is having total available funds of Rs. 2.17 crores for spending towards CSR Activity. The approved Action Plan for financial year 2014-15 towards CSR Programmes was:

1. Contribution to the Prime Minister''s National Relief Fund;

2. Contribution to the "Swach Bharat Kosh" set up by the Central Govt.;

3. Contribution to the "Clean Ganga Fund" set up by the Central Govt.;

4. Education;

5. Sanitation

Accordingly, it was proposed to contribute 50% of available fund i.e. Rs. 1.08 Crores to the 3 funds as stated herein above and balance available funds will be utilized towards Education and Sanitation relating CSR Activities. Since being the first year of activity for the Company and the process of selecting agency/NGO is being finalised, the balance funds will be carried forward and will be utilized for the approved activity in the coming financial year.

VIGILANCE MECHANISM

As a conscious and vigilant organization, your Company has established proper vigilance mechanism for its Directors and employees to report concerns about unethical behaviour, actual or suspected fraud or violation of the Company''s code of conduct or ethics policy. The Company has framed Whistle Blower Policy and the same is uploaded at the website of the Company.

CORPORATE GOVERNANCE

The Auditors Certificate on Corporate Governance issued by the Statutory Auditors of the Company for the year under review, as required under the Companies Act, 2013 and in pursuance of Clause 49 of the Listing Agreement is annexed to the Report of the Directors on Corporate Governance.

Your Company has been complying with the principles of good Corporate Governance over the years. The Board of Directors supports the broad principles of Corporate Governance. In addition to the basic governance issues, the Board lays strong emphasis on transparency, accountability and integrity.

In terms of the provisions of Clause 49 of the Listing Agreement entered into with the Stock Exchange(s), the Management Discussion and Analysis Report forms part of this report.

HUMAN RESOURCES & INDUSTRIAL RELATIONS.

The Company aims to align HR practices with business goals, motivate people for higher performance and build a competitive working environment. Your Company has continuously been working to improve human resource competence and capabilities in the Company to deliver the desired results. Your Company has developed a comprehensive "in-house" induction training module

to make sure that new employees understand the basic focus of the Company in its all operations. Apart from fixed salaries and perquisites, we also have in place performance linked incentive scheme to all the employees which rewards the outstanding performing teams that achieve certain performance targets. In pursuance of the Company''s commitment to develop and retain the best available talent, the Company has been sponsoring the employees for training programmes conducted by National Housing Bank for upgrading the skill and knowledge of the employees in different operational areas. The work force strength of your Company as on 31st March, 2015 is 218.

EXTRACT OF ANNUAL RETURN AS PER SECTION 92 OF THE COMPANIES ACT, 2013

Annual Return in Form MGT 9 is enclosed as per Annexure B to the Directors'' Report.

SECRETARIAL AUDIT REPORT

Secretarial Audit Report is annexed as per Annexure C to the Directors'' Report.

ACKNOWLEDGEMENTS

The Directors thank the valued customers, shareholders for their goodwill, patronage and support.

The Directors acknowledge with gratitude the valuable and timely advice, guidance and support received from the Promoter(s) namely General Insurance Corporation of India (GIC Re), The New India Assurance Company Ltd., National Insurance Company Ltd., The Oriental Insurance Company Ltd. and United India Insurance Company Ltd.

The Directors also thank the National Housing Bank for their support and continued refinance assistance, Banks for their continued support through term loans. The Directors also thank the Security Exchange Board of India (SEBI); Stock Exchanges; Depositories; Ministry of Corporate Affairs; Credit Rating Agencies; Government(s) local/ statutory authorities; Registrar and Share Transfer Agent and the Auditors of the Company for their continued support.

The Directors place on record their deep appreciation of the valuable contribution of the members of the staff at all levels for the progress of the Company during the year and look forward to their continued cooperation in realization of the corporate goals in the years ahead.

Place : Mumbai Date : 6th May, 2015

For and on behalf of the Board of Directors Warendra Sinha Managing Director & CEO

Registered Office: Royal Insurance Building, 6th Floor, 14, Jamshedji Tata Road, Churchgate, Mumbai-400020


Mar 31, 2014

Dear Shareholders,

The Directors have pleasure in presenting the 24th Annual Report of your Company and the Audited Accounts for the year ended 31st March, 2014.

FINANCIAL RESULTS (Rs. in Lacs) PARTICULARS March 31, 2014 March 31, 2013

Total Income 62492 55390 Less: Interest expenditure 41925 37323 Overheads 7036 6554 Depreciation & amortisation 205 209 Profit Before Tax 13326 11304 Provision for Tax 4450 3710 Deferred Tax Assets (879) (909) Profit After Tax 9755 8503 Profit Brought Forward 5 2 Profit Available for Appropriation 9760 8505

APPROPRIATIONS: General Reserve 3115 2805 Special Reserve under Section 36(1)(viii) of Income Tax Act, 1961 2860 2545 Proposed Equity Dividend 3231 2692 Tax on Proposed Dividend 549 458 Balance carried over to Balance Sheet 5 5

IMPORTANT FINANCIAL RATIOS

PARTICULARS March 31, 2014 March 31, 2013

Return on Net Worth (%) 17.77 17.09 Return on Total Assets (%) 1.77 1.79 Book Value Per Share (Rs.) 101.97 92.36 Earning Per Share (Rs.) 18.12 15.79 Debt Equity Ratio (times) 8.47 7.99 Average Cost of Funds (%) 9.72 9.86 Average Yield on Advances (%) 12.50 12.62 Net Interest Margin 2.78 2.76

DIVIDEND

Your Directors recommend payment of dividend for the year ended 31st March, 2014 of Rs. 6/- per equity share of Rs.10/- each, including one time Silver Jubilee dividend of Rs.1/- per equity shar. The total dividend outgo for the current year would amount to Rs. 37.80 crores including dividend distribution tax of Rs.5.49 crores, as against Rs.31.50 crores including dividend distribution tax of Rs.4 .58 crores in the previous year.

The dividend payout ratio for the current year, inclusive of additional tax on dividend will be 38.75%.

OPERATIONS - PERFORMANCE

Income, Profit, Loan Approvals and Disbursements: Total Income for the year under review is Rs.624.92 crores as against Rs.553.90 crores for the year 2012-13. Profit before tax for the year ended is Rs.133.26 crores and Profit after tax for the year ended is Rs.97.55 crores as against Rs.113.04 crores and Rs.85.03 crores respectively for the previous year.

The Company''s main thrust continues to be on Individual Loans. New loans approved during the year amounted to Rs. 1755 crores and loans disbursed during the year are Rs. 1665 crores as against Rs. 1424 crores and Rs. 1353 crores for the year ended 31st March, 2013 respectively. The Retail Loan portfolio as at 31st March, 2014 stood at Rs. 5299 crores, as compared to Rs. 4524 crores as on 31st March, 2013.

During the year under review, your Company has made provision to the extent of Rs. 24.76 crores as against Rs. 26.93 crores provided for in the year 2012-13. The Company is also carrying an additional provision of Rs. 58.62 crores in books, beyond what is prescribed under the guidelines, as a prudential measure. Gross Non Performing Assets on retail loans as on 31st March, 2014 is 1.57% as against 1.86% for the previous year. Net non performing loans as on 31st March, 2014 is "NIL" as that of the previous year.

RESOURCE MOBILISATION:

Your Company takes every effort to tap the appropriate source of funding to minimize the weighted average cost of funds. Your Company has mobilized resources through the following sources:

A. Term Loans:

Your Company has borrowed fresh long term loans of Rs. 1130 crores from banks during the year as compared to Rs. 254 crores during the previous year. The aggregate of term loans outstanding at the end of the financial year stood at Rs. 3346 crores as against Rs. 2640 crores as at the end of the previous year.

B. Refinance from National Housing Bank (NHB):

With the continued support of National Housing Bank (NHB), your Company availed refinance amounting to Rs. 100 crores during the year under review as against Rs.425 crores in the previous year. The refinance facility outstanding as on 31st March, 2014 is Rs. 723 crores as against Rs. 823 crores as at the end of the previous year.

C. Short term Loan and Commercial Paper:

During the year 2013-14, your Company has raised resources by issuing Commercial Paper and also resorted to short term borrowings from the banks and the outstanding amount as on 31st March, 2014 is Rs. 475 crores (Gross).

D. Non Convertible Debentures:

Your Company has outstanding balance of Rs. 115 crores through issue of Redeemable Non Convertible Debentures (NCDs) on Private Placement as on 31st March 2014.

CREDIT RATING

Your Company had received rating from CRISIL and ICRA for its various borrowing programmes as follows:

CRISIL Rating:

. For Commercial Paper/short term loan programmes of Rs. 800 crores as [CRISIL] "A1 " (Pronounced as CRISIL A1 plus).

. For Fund Based Long Term Loan Programme of Rs. 100 crores as [CRISIL] AA /Stable (Pronounced as CRISIL double A plus/ Stable).

. For Non-Convertible Debentures Borrowing Programme of Rs.550 crores [CRISIL] "AA /Stable" (Pronounced as CRISIL double A Plus/Stable).

ICRA Rating:

. For Commercial Paper/ short term loan programmes of Rs. 800 crores as [ICRA] "A1 " (Pronounced as ICRA A1 plus). This rating is the highest credit quality rating assigned by ICRA for Short Term Debt Instruments.

. As per the Basel-II requirements - For Fund Based Long Term Loan Programme of '' 4500 crores as [ICRA] AA (Stable) (Pronounced as ICRA double A plus). This rating indicates the high credit quality rating assigned by ICRA to Long Term Debt Instruments.

. For Non Convertible Debentures Borrowing Programme of Rs.550 crores [ICRA] "AA " (Stable) (Pronounced as ICRA double A Plus).

BRANCH EXPANSION

During the year under review your Company has opened its branches at Patna (Bihar), Ahmedabad (Gujarat), Yelahanka (Bangalore, Karnataka), Chandanagar (Hyderabad, Andhra Pradesh), Kalyan & Borivali (Maharashtra) and Dehradun (Uttarakhand). The total number of Offices as on 31st March, 2014 is 47. Your Company is initiating brand building measures to generate general awareness and improve the image of the Company.

INSURANCE COVERAGE TO BORROWERS

Your Company had taken "Special Contingency Insurance" with The New India Assurance Company Ltd., which covers the borrowers of your Company as under:

. Personal Accident Insurance: Personal accident (death only) risk cover, free of cost to the borrowers up to an amount of outstanding loan at any particular point of time during the term/ tenure of the housing loan.

. Mortgaged Property Insurance: The property acquired out of loan, for and up to and extent of the outstanding loan amount, covered free of cost against fire, earthquake and allied perils affecting the mortgaged property.

Your Company has also tied up with ''Kotak Mahindra Old Mutual Life Insurance Limited'' for getting insurance cover on the life of the borrower to the extent of the "Outstanding Home Loan". The said "Group Life Cover" is optional and the Company arranges this insurance on request from the borrower. These schemes ensure protection to the families of the borrower in case of un-expected eventualities like untimely death of borrower due to accident or natural death.

CAPITAL ADEQUACY RATIO (CAR)

The Company has been maintaining the Capital Adequacy Ratio (CAR) above the minimum required level prescribed by National Housing Bank (NHB) from time to time. The CAR prescribed for the present is 12%.

The Capital Adequacy Ratio of the Company as at 31st March, 2014 is 17.26% as against 14.04% as at 31st March, 2013.

DEPOSITS

Your Company has not accepted any fixed deposits and, as such, no amount of Principal or interest was outstanding as of Balance Sheet date.

DEMATERIALISATION OF SHARES AND NOMINATION FACILITY AND LISTING AT STOCK EXCHANGES

As per the Securities & Exchange Board of India directives, the transactions of the Company''s shares must be compulsorily in dematerialised form. Your Company has signed an agreement with the Central Depository Services (India) Limited and National Securities Depository Limited for transaction of shares in dematerialised form. Shareholders holding shares in physical form are requested to convert their holdings into dematerialised form. Out of 5,38,51,066 equity shares, 5,32,36,863 equity shares are in dematerialised form, (5,32,21,194 shares as on 31st March, 2013) which is 98.86% (98.83% as on 31st March, 2013) of the total shares as on 31st March, 2014.

Shareholders holding shares in physical form may utilise the nomination facility available by sending the prescribed Form No. SH-13 duly filled, to our Registrars and Share Transfer Agents viz. M/s Sharepro Services (India) Pvt. Ltd., Mumbai. Shareholders holding shares in dematerailised form has to send their "Nomination" request to the respective Depository Participants.

The equity shares of the Company continue to be listed on Bombay Stock Exchange Ltd., and The National Stock Exchange of India Ltd., The Annual Listing fees for the year 2014-15 have been paid to these Stock Exchange.

UNCLAIMED DIVIDEND TRANSFER TO INVESTORS EDUCATION AND PROTECTION FUND (IEPF)

In terms of Section 205C of the Companies Act, 1956, the amount (dividends) that remained unclaimed and unpaid for more than 7 years from the date become first due for payment, shall be transferred to IEPF (Fund). In terms of the applicable statutory provisions of the Companies Act, 1956, no claim would lie against the Company or the said Fund after such transfer to IEPF.

The Company has been intimating the shareholders to lodge their claim for payment due, if any, from time to time and such claims have been settled. In spite of constant and sincere efforts to pay the unclaimed dividend to the respective shareholders, certain amount still remains unclaimed. The Company has been intimating the shareholders to lodge their claim for dividend from time to time and such information is being mentioned in the Annual Report every year.

Unclaimed dividend amounting to Rs. 4,19,163/- that has not been claimed by shareholders for the financial year 2005-06 has been transferred to Investor Education and Protection Fund (IEPF) during the month of November, 2013, as per the provisions of the Companies Act, 1956. As per section 205(B) of the Companies Act, 1956, no claim would lie against the Company or the said fund after the transfer.

The dividend pertaining to the financial year 2006-07 remaining unclaimed and unpaid amounting to Rs. 7,19,136/- as on 31st March, 2014, would be transferred to IEPF during November, 2014 after settlement of claims received up to the date of completion of 7 years from the date of declaration of the dividend. The Company has sent individual reminder letters to the respective shareholders during the month of June, 2014.

Shareholders who have not claimed the said dividend may write to Registrars and Share Transfer Agent.

STATUTORY INFORMATION:

Particulars regarding conservation of energy, technology absorption and foreign exchange earnings and expenditure

Since the Company does not own any manufacturing facility, the particulars relating to conservation of energy and technology absorption stipulated in the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, required to be furnished under section 217(1)(e) of the Companies Act, 1956 (Section 134(m) of the Companies Act, 2013) are not applicable.

The Company did not earn any income in foreign currency during the year under review. The Company has incurred an amount of Rs.55,501/- towards expenses in foreign currency.

None of the employees of your Company were in receipt of remuneration in excess of the limits as laid down under Section 217(2A) of the Companies Act, 1956 (Section 134 of Companies Act, 2013) read with Companies (Particulars of Employees) Rules, 1975 as amended from time to time.

DIRECTORS RESPONSIBILITY STATEMENT

The Board of Directors hereby confirms that:

a. In the preparation of Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.

b. We have selected such Accounting Policies and applied them consistently and made judgments and estimates that are reasonable and prudent to give a true and fair view of the state of affairs of the Company as at the end of 31st March, 2014 and of the Profit /Loss of the Company for the year ended on that date.

c. We have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d. We have prepared the annual accounts on a going concern basis.

AUDITORS

M/s CNK & Associates, LLP, Chartered Accountants, Mumbai were re-appointed as Statutory Auditors in the twenty-third Annual General Meeting of the Company and their term is scheduled to end at the conclusion of the forthcoming Annual General Meeting and is eligible for re-appointment.

The Company received the requisite confirmation from them to the effect that their re-appointment, if made, would be as per Section 139 & 141 of the Companies Act, 2013.

The Directors of your Company recommend re-appointment of M/s CNK & Associates, LLP, Chartered Accountants, Mumbai as Statutory Auditors of the Company from the ensuing Annual General Meeting till conclusion of 29th Annual General Meeting. Suitable resolution for re-appointment requiring approval of the shareholders forms part of the agenda of the Annual General Meeting.

DIRECTORS

Shri A. R. Sekar, Director resigned from Directorship on 31st March, 2014, consequent to his superannuation from the services of The New India Assurance Company Ltd.

The Directors of your Company wish to place on record their appreciation for the services rendered and contribution made by Shri A. R. Sekar during his tenure as Director of the Company.

Mrs. Mona Mukund Bhide (Legal Practitioner), Shri V. Ramasamy (Ex-CMD of National Insurance Company Limited) and Shri Kamlesh Shivji Vikamsey (Chartered Accountant) were appointed as Additional Directors of the Company w.e.f. 17th September, 2013, pursuant to the provisions of Section 161 of the Companies Act, 2013 if any and Article 111 of Articles of Association of the Company.

Your Company has received a notice in writing from a shareholder(s) as per Section 160 of the Companies Act, 2013, proposing the candidature of Mrs. Mona Mukund Bhide, Shri V. Ramasamy and Shri Kamlesh Shivji Vikamsey, for the office of Director(s) of the Company at the ensuing Annual General Meeting, for their appointment as an Independent Director up to the conclusion of 28th Annual General Meeting of the Company."

None of the Directors of the Company are disqualified from being appointed as Directors as specified in Section 164 of Companies Act, 2013. The Board of Directors recommends their appointment. Your Independent Directors meet all the criteria of Independence as provided in Section 149(6) of the Companies Act, 2013.

CORPORATE GOVERNANCE

The Certificate on Corporate Governance issued by the Statutory Auditors of the Company for the year under review, as required under the Companies Act, 1956 & Companies Act, 2013 and in pursuance of Clause 49 of the Listing Agreement is annexed to the Report of the Directors on Corporate Governance.

Your Company has been complying with the principles of good Corporate Governance over the years. The Board of Directors support the broad principles of Corporate Governance. In addition to the basic governance issues, the Board lays strong emphasis on transparency, accountability and integrity.

In terms of the provisions of Clause 49 of the Listing Agreement entered into with the Stock Exchange(s), the Management Discussion and Analysis Report forms part of this report.

HUMAN RESOURCES & INDUSTRIAL RELATIONS.

The Company aims to align HR practices with business goals, motivate people for higher performance and build a competitive working environment. Your Company has continuously been working to improve human resource competence and capabilities in the Company to deliver the desired results. Your Company has developed a comprehensive "in-house" induction training module to make sure that new employees understand the basic focus of the Company in its all operations. Apart from fixed salaries and perquisites, we also have in place performance linked incentive scheme to all the employees which rewards the outstanding performing teams that achieve certain performance targets. In pursuance of the Company''s commitment to develop and retain the best available talent, the Company had been sponsoring the employees for training programmes conducted by National Housing Bank for upgrading the skill and knowledge of the employees in different operational areas. The work force strength of Your Company as on 31st March, 2014 is 220.

ACKNOWLEDGEMENTS

The Directors thank the valued customers, shareholders for their goodwill, patronage and support.

The Directors acknowledge with gratitude the valuable and timely advice, guidance and support received from the Promoter(s) namely General Insurance Corporation of India (GIC Re), The New India Assurance Company Ltd., National Insurance Company Ltd., The Oriental Insurance Company Ltd. and United India Insurance Company Ltd.

The Directors also thank the National Housing Bank for their support and continued refinance assistance, Banks for their continued support through term loans. The Directors also thank the Security Exchange Board of India (SEBI); Stock Exchanges; Depositories; Ministry of Corporate Affairs; Credit Rating Agencies; Government(s) local/ statutory authorities; Registrars and Share Transfer Agent and the Auditors of the Company for their continued support.

The Directors place on record their deep appreciation of the valuable contribution of the members of the staff at all levels for the progress of the Company during the year and look forward to their continued cooperation in realization of the corporate goals in the years ahead.

Place: Mumbai Date: 7th May, 2014

Registered Office: For and on behalf of the Board of Directors Royal Insurance Building, 6th Floor, 14, Jamshedji Tata Road, Churchgate, Warendra Sinha Mumbai-400020 Managing Director & CEO


Mar 31, 2013

Dear Members,

The Directors have pleasure in presenting the 23rd Annual Report of your Company and the Audited Accounts for the year ended 31st March, 2013.

FINANCIAL RESULTS

(Rs.in Lacs) PARTICULARS March 31, 2013 March 31, 2012 Growth (%)

Total Income 55390 43942 26

Less: Interest expenditure 37323 31125

Overheads 6554 4848

Depreciation & amortisation 209 83

Profi t Before Tax 11304 7886 43

Provision for Tax 3710 2610

Deferred Tax Assets (909) (628)

Profi t After Tax 8503 5904 44

Profi t brought forward 2 4

Profi t available for appropriation 8505 5908

APPROPRIATIONS:

General Reserve 2805 1270

Special Reserve under Section 36(1)(viii) of Income Tax Act, 1961 2545 1820

Proposed Equity Dividend 2692 2423

Tax on Proposed Dividend 458 393

Balance carried over to Balance Sheet 5 2

IMPORTANT FINANCIAL RATIOS

PARTICULARS March 31, 2013 March 31, 2012

Return on Net Worth (%) 17.09 13.05

Return on Total Assets (%) 1.79 1.38

Book Value per share (Rs.) 92.36 84.03

Earning per share (Rs.) 15.79 10.96

Debt Equity Ratio (times) 7.99 7.94

Average cost of funds (%) 9.86 9.32

Average yield on advances (%) 12.62 11.17

Net Interest Margin 2.76 1.85

DIVIDEND

Your Directors recommend payment of dividend for the year ended 31st March, 2013 of Rs.5/- per equity share of face value of Rs.10/- each. The total dividend outgo for the current year would amount to Rs.31.50 crores including dividend distribution tax of Rs.4.58 crores, as against Rs.28.16 crores including dividend distribution tax of Rs.3.93 crores in the previous year.

The dividend payout ratio for the current year, inclusive of additional tax on dividend will be 37.05%.

OPERATIONS - PERFORMANCE

Income, Profi t, Loan Approvals and Disbursements: Total income for the year under review is Rs.553.90 crores as against Rs.439.42 crores for the year 2011-12, registering a growth of 26% over the previous year. Profi t before tax for the year ended is

Rs.113.04 crores and Profi t after tax for the year ended is Rs.85.03 crores as against Rs.78.86 crores and Rs.59.04 crores respectively for the previous year.

The Company''s main thrust continues to be on individual loans. New loans approved during the year amounted to Rs.1424 crores and loans disbursed during the year are Rs.1353 crores as against Rs.1072 crores and Rs.992 crores for the year ended 31st March, 2012 respectively. The Retail Loan portfolio as at 31st March, 2013 stood at Rs.4524 crores, (refl ecting a growth rate of 17%) as compared to Rs.3864 crores as on 31st March, 2012.

Your Company has adhered to the prudential guidelines for Non Performing Assets (NPAs); issued by the National Housing Bank (NHB) under its Directions 2010, as amended from time to time.

During the year under review, your Company has made provision to the extent of Rs.26.93 Crores as against Rs.19.27 Crores provided for in the year 2011-12. The Company is also carrying an additional provision of Rs.55.87 crores in books, beyond what is prescribed under the guidelines, as a prudential measure. Gross Non Performing Assets on retails loans as on 31st March, 2013 is 1.86% as against 2.08% for the previous year. Net Non performing loans as on 31st March, 2013 is "NIL” as that of the previous year. During the course of inspection of accounts for the earlier year 2011-12, an observation had been made by National Housing Bank (NHB) in regard to the basis of classifi cation for the purpose of making appropriate provision for Non Performing Assets (NPA) for that year. The company has duly clarifi ed its position in that regard and the auditors have reiterated that as on the year ending 31st March, 2012, company has made adequate provision towards Non performing Assets, which are in compliance with the NHB Directions 2010.

RESOURCE MOBILISATION:

Your Company takes every effort to tap the appropriate source of funding to minimize the weighted average cost of funds. Your Company has mobilized resources through the following sources:

A. Term Loans:

Your Company has borrowed fresh long term loans of Rs.254 crores from banks during the year as compared to Rs.795 crores during the previous year. The aggregate of term loans outstanding at the end of the fi nancial year stood at Rs.2640 crores as against Rs.2708 crores as at the end of the previous year.

B. Refi nance from National Housing Bank (NHB):

With the continued support of National Housing Bank (NHB), your Company availed refi nance amounting to Rs.425 crores during the year under review as against Rs.265 crores in the previous year. The refi nance facility outstanding as on 31st March, 2013 is Rs.823 crores as against Rs.551 crores as at the end of the previous year.

C. Short term Loan and Commercial Paper:

During the year 2012-13, your Company has raised resources by issuing Commercial Paper and also resorted to short term borrowings from the banks and the outstanding amount as on 31st March, 2013 is Rs.400 crores (Gross).

D. Non Convertible Debentures:

During the year 2012-13, your Company has raised Rs.115 crores through issue of Non Convertible Debentures (NCD) on private placement.

CREDIT RATING

Your Company had received rating from ICRA for its various borrowing programmes as follows:

For Commercial Paper/short term loan programmes of Rs.800 crores as [ICRA] "A1 ” (Pronounced as ICRA A one plus). This rating is the highest credit quality rating assigned by ICRA for Short Term Debt Instruments.

As per the Basel-II requirements - For Fund Based Long Term Loan Programme of Rs.4500 crores as [ICRA] AA (Pronounced as ICRA double A plus). This rating indicates the high credit quality rating assigned by ICRA to Long Term Debt Instruments.

For Non Convertible Debentures Borrowing Programme of Rs.250 crores [ICRA] "AA ” (Pronounced as ICRA double A Plus).

BRANCH EXPANSION

During the year under review your Company has opened its branch at "Indore”, Madhya Pradesh. The total number of branches as on 31st March, 2013 is 33 and also your Company is having 9 out reach and collection centres spread across the country. Your Company is initiating brand building measures to generate general awareness and improve the image of the Company.

INSURANCE COVERAGE TO BORROWERS

Your Company had taken "Special Contingency Insurance” with The New India Assurance Company Ltd., which covers the borrowers of your Company as under:

Personal Accident Insurance: Personal accident (death only) risk cover, free of cost to the borrowers up to an amount of outstanding loan at any particular point of time during the term/ tenure of the housing loan.

Mortgaged Property Insurance: The property acquired out of loan, for and up to and extent of the outstanding loan amount, covered free of cost against fi re, earthquake and allied perils affecting the mortgaged property.

Your Company has also tied up with ''Kotak Mahindra Old Mutual Life Insurance Limited'' for getting insurance cover on the life of the borrower to the extent of the "Outstanding Home Loan”. The said "group Life cover is optional” and the Company arranges this insurance on request from the borrower. These schemes ensure protection to the families of the borrower in case of un-expected eventualities like untimely death of borrower due to accident or natural death.

COMPLIANCE WITH GUIDELINES OF NATIONAL HOUSING BANK (NHB) - REGULATORY GUIDELINES

Your Company has complied with the Guidelines and Directions issued by NHB on asset classifi cation of credit/ investments, Credit Rating, Fair Practices Code, Know Your Customer (KYC), Anti Money Laundering Guidelines, income recognition and provisioning for non performing loans.

CAPITAL ADEQUACY RATIO (CAR)

The Company has been maintaining the Capital Adequacy Ratio (CAR) above the minimum required level prescribed by National Housing Bank (NHB) from time to time. The CAR prescribed for the present is 12%.

The Capital Adequacy Ratio of the Company as at 31st March, 2013 is 14.04% as against 14.80% as at 31st March, 2012.

DEPOSITS

Your Company has not accepted or renewed any fresh deposits during the year within the meaning of Section 58(A) of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975. There are no unclaimed deposits as on 31st March, 2013.

DEMATERIALISATION OF SHARES AND NOMINATION FACILITY AND LISTING AT STOCK EXCHANGES

As per the Securities & Exchange Board of India directives, the transactions of the Company''s shares must be compulsorily in dematerialised form. Your Company has signed an agreement with the Central Depository Services (India) Limited and National Securities Depository Limited for transaction of shares in dematerialised form. Shareholders holding shares in physical form are requested to convert their holdings into dematerialised form. Out of 5,38,51,066 equity shares 5,32,21,194 are in dematerialised form, (5,31,91,065 shares as on 31st March, 2012) which is 98.83% (98.77% as on 31st March, 2012) of the total shares as on 31st March, 2013.

Shareholders holding shares in physical form may utilise the nomination facility available by sending the prescribed Form No.2B duly fi lled, to our Registrars and Share Transfer Agents viz. M/s. Sharepro Services (India) Private Limited, Mumbai. Shareholders holding shares in dematerailised form has to send their "nomination” request to the respective Depository Participants.

The Equity shares of the Company continue to be listed on Bombay Stock Exchange Ltd., and The National Stock Exchange of India Ltd., The Annual Listing fees for the year 2013-14 have been paid to these Stock Exchanges.

UNCLAIMED DIVIDEND TRANSFER TO INVESTORS EDUCATION AND PROTECTION FUND (IEPF)

In terms of Section 205C of the Companies Act, 1956, the amount (dividends) that remained unclaimed and unpaid for more than 7 years from the date become fi rst due for payment, shall be transferred to IEPF (Fund). In terms of the applicable statutory provisions of the Companies Act, 1956, no claim would lie against the Company or the said Fund after such transfer to IEPF.

The Company has been intimating the shareholders to lodge their claim for payment due, if any, from time to time and such claims have been settled. In spite of constant and sincere efforts to pay the unclaimed dividend to the respective shareholders, certain amount still remains unclaimed. The Company has been intimating the shareholders to lodge their claim for dividend from time to time and such information is being mentioned in the Annual Reports every year.

Unclaimed dividend amounting to Rs.5,72,766/- that has not been claimed by shareholders for the fi nancial year 2004-05 has been transferred to Investor Education and Protection Fund (IEPF) during the month of November, 2012, as per the provisions of the Companies Act, 1956. As per section 205(B) of the Companies Act, 1956, no claim would lie against the Company or the said fund after the transfer.

The dividend pertaining to the fi nancial year 2005-06 remaining unclaimed and unpaid amounting to Rs.4,31,258.50 as on 31st March, 2013, would be transferred to IEPF during November, 2013 after settlement of claims received up to the date of completion of 7 years from the date of declaration of the dividend. The Company has sent individual reminder letters to the respective shareholders during the month of July, 2013.

Shareholders who have not claimed the said dividend may write to Registrars and Share Transfer agents.

STATUTORY INFORMATION:

Particulars regarding conservation of energy, technology absorption and foreign exchange earnings and expenditure

Since the Company does not own any manufacturing facility, the particulars relating to conservation of energy and technology absorption stipulated in the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, required to be furnished under section 217 (1) (e) of the Companies Act, 1956 are not applicable.

The Company did not earn any income in foreign currency during the year under review. The Company has incurred an amount of Rs.2,37,172/- towards expenses in foreign currency.

None of the employees of your company were in receipt of remuneration in excess of the limits as laid down under section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended from time to time.

DIRECTORS RESPONSIBILITY STATEMENT

The Board of Directors hereby confi rms that:

a. In the preparation of Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.

b. We have selected such Accounting Policies and applied them consistently and made judgments and estimates that are reasonable and prudent to give a true and fair view of the state of affairs of the Company as at the end of 31st March, 2013 and of the profi t /Loss of the Company for the year ended on that date.

c. We have taken proper and suffi cient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d. We have prepared the annual accounts on a going concern basis.

AUDITORS

M/s. Contractor, Nayak and Kishnadwala, Chartered Accountants [ICAI Firm Registration No.101961W], Mumbai were re-appointed as Statutory Auditors in the twenty-second Annual General Meeting of the Company and their term is scheduled to end at the conclusion of the forthcoming Annual General Meeting and is eligible for re-appointment.

The Company received the requisite confi rmation from them to the effect that their re-appointment, if made, would be within the limits of Section 224(1B) of the Companies Act, 1956.

The Directors of your Company recommend re-appointment of M/s. Contractor, Nayak & Kishnadwala Chartered Accountants, Mumbai as Statutory Auditors of the Company from the ensuing Annual General Meeting till conclusion of twenty-forth Annual General Meeting. Suitable resolution for re-appointment requiring approval of the shareholders forms part of the agenda of the Annual General Meeting. The said appointment attracts provisions of section 224 A of the Companies Act, 1956.

DIRECTORS

In accordance with the requirements of the Companies Act, 1956, and Article 125 of the Articles of Association of the Company, S/shri M. K. Tandon and Manu Chadha Directors, who were appointed as Directors in the Board in the year 1999 and 2002 respectively are due to retire by rotation at this Annual General Meeting and are not seeking re-election.

Dr. R. K. Kaul, Director resigned from Directorship on 31st May, 2012, consequent to his superannuation from the services of The Oriental Insurance Company Limited. IFCI Limited withdrew the nomination of Shri Shivendra Tomar, from the Board of the Company on 20th December, 2012. Shri M. Sivaraman, Ex-managing Director resigned from Directorship on 31st October, 2012, consequent to his superannuation from the services.

The Directors of your Company wish to place on record their appreciation for the services rendered and contribution made by Shri M. K. Tandon, Shri Manu Chadha, Dr. R. K. Kaul, Shri Shivendra Tomar and Shri M. Sivaraman during their tenure as Director(s) of the Company.

Dr. A. K. Saxena, Chairman Cum Managing Director, The Oriental Insurance Company Limited, was appointed as an Additional Director of the company w.e.f. 16th October, 2012 pursuant to the provisions of section 260 and other applicable provisions of the Companies Act, 1956, if any and Article 111 of Articles of Association of the Company. Shri Milind A. Kharat, Chairman cum Managing Director, United India Insurance Company Limited was appointed as an Additional Director of the company w.e.f. 8th January, 2013, pursuant to the provisions of section 260 and other applicable provisions of the Companies Act, 1956, if any and Article 111 of Articles of Association of the Company.

Shri Warendra Sinha was appointed as an Additional Director of the Company pursuant to the provisions of section 260 and other applicable provisions of the Companies Act, 1956, if any and Article 111 of Articles of Association of the Company. Shri Warendra Sinha, Pursuant to Article 116, 117, 118 of the Articles of Association of the Company and pursuant to provisions of sections 198, 269 and 309, Schedule XIII and all other applicable provisions, if any, of the Companies Act, 1956 and subject to any other approvals, as may be applicable was appointed as Managing Director of the Company for the period from 31st December, 2012 to 31st December, 2014.

Your Company has received a notice in writing from a shareholder(s), under Section 257 of the Companies Act, 1956 proposing the appointment of Dr. A. K. Saxena, Shri Milind A. Kharat and Shri Warendra Sinha as Director(s) of the Company at the ensuing Annual General Meeting.

None of the Directors of the Company are disqualifi ed from being appointed as Directors as specifi ed in Section 274 of the Companies Act, 1956. The Board of Directors recommends their appointment.

CORPORATE GOVERNANCE

The Auditors Certifi cate on Corporate Governance issued by the Statutory Auditors of the Company for the year under review, as required under the Companies Act, 1956 and in pursuance of Clause 49 of the Listing Agreement is annexed to the Report of the Directors on Corporate Governance.

Your Company has been complying with the principles of good Corporate Governance over the years.The Board of Directors supports the broad principles of Corporate Governance. In addition to the basic governance issues, the Board lays strong emphasis on transparency, accountability and integrity.

In terms of the provisions of Clause 49 of the listing agreement entered into with the Stock Exchange(s), the Management Discussion and Analysis Report forms part of this report.

HUMAN RESOURCES & INDUSTRIAL RELATIONS

The Company aims to align HR practices with business goals, motivate people for higher performance and build a competitive working environment. Your Company has continuously been working to improve human resource competence and capabilities in the Company to deliver the desired results. Your Company has developed a comprehensive "in-house” induction training module to make sure that new employees understand the basic focus of the Company in its all operations. Apart from fi xed salaries and perquisites, we also have in place performance linked incentive scheme to all the employees which rewards the outstanding performing teams that achieve certain performance targets. In pursuance of the Company''s commitment to develop and retain the best available talent, the Company had been sponsoring the employees for training programmes organized by reputed professional institutions and training programmes conducted by National Housing Bank for upgrading the skill and knowledge of the employees in different operational areas. Employees'' relations remained cordial and the work atmosphere remained congenial during the year under review. The work force strength of your Company as on 31st March, 2013 is 198.

ACKNOWLEDGEMENTS

The Directors thank the valued customers, shareholders for their goodwill, patronage and support.

The Directors acknowledge with gratitude the valuable and timely advice, guidance and support received from the Promoter(s) namely General Insurance Corporation of India (GIC Re), The New India Assurance Company Limited, National Insurance Company Limited, The Oriental Insurance Company Limited, United India Insurance Company Limited and IFCI Limited.

The Directors also thank the National Housing Bank for their support and continued refi nance assistance, Banks for their continued support through term loans. The Directors also thank the Security Exchange Board of India (SEBI); Stock Exchanges; Depositories; Ministry of Corporate Affairs; Credit Rating Agencies; Government(s) local / statutory authorities; Registrars and Share Transfer agents and the Auditors of the Company for their continued support.

The Directors place on record their deep appreciation of the valuable contribution of the members of the staff at all levels for the progress of the Company during the year and look forward to their continued cooperation in realization of the corporate goals in the years ahead.

Place: Mumbai

Date: 10th May, 2013

Registered Office For and on behalf of the Board of Directors

Universal Insurance Building, 3rd Floor, Sir P. M. Road,

Fort, Mumbai - 400001 Warendra Sinha

Managing Director


Mar 31, 2012

To The members of GIC Housing Finance Ltd.,

The Directors have great pleasure in presenting the Twenty-Second Annual Report on the business and operations of your Company together with the Audited Statement of Accounts for the year ended 31st March, 2012.

FINANCIAL RESULTS

(Rs. in Lacs)

PARTICULARS March 31, 2012 March 31,2011

Total Income 43942 33987

Less: Interest expenditure 31125 21483

Overheads 4848 2712

Depreciation & other amortisation 83 73

Profit Before Extraordinary Income 7886 9719

Profit on sale of Long Term Investment NIL 8848

Less: Additional Provision for Contingencies NIL 4000

Profit Before Tax 7886 14567

Provision for Tax 2610 4510

Deferred Tax Assets (628) (1319)

Profit After Tax- 5904 11376

Profit brought forward 4 5

Adjustment for short Income Tax provision NIL 1

Profit available for appropriation 5908 11381

APPROPRIATIONS:

General Reserve 1270 6115

Special Reserve under Section 36(1)(viii) of Income Tax Act, 1961 1820 1820

Proposed Equity Dividend 2423 2962

Tax on Proposed Dividend 393 480

Balance carried over to Balance Sheet 2 4

Note: During the year an amount of Rs.456 lacs has been transferred from General Reserve to Special Reserve in terms of Section 29C(1) of the National Housing Bank Act, 1987.

IMPORTANT FINANCIAL RATIOS:

PARTICULARS March 31, 2012 March 31, 2011

Return on Net Worth (%) 12.99 26.45

Return on Total Assets (%) 1.36 3.20

Book Value per share (Rs.) 84.43 79.87

Earning per share (Rs.) 10.96 21.13

Debt Equity Ratio (times) 7.91 7.18

Average cost of funds (%) 9.32 7.52

Average yield on advances (%) 11.17 10.11

DIVIDEND

Your Directors recommend payment of dividend for the year ended 31st March, 2012 of Rs.4.50 per equity share of face value of Rs.10 each. The total dividend outgo for the current year would amount to Rs.28.16 crores including dividend distribution tax of

Rs.3.93 crores, as against Rs.34.42 crores (inclusive of onetime special dividend of Rs.1 per share declared in view of profit on sale of investments amounting to Rs.88.48 crores during the previous year) including dividend distribution tax of Rs.4.80 crores in the previous year.

The dividend payout ratio for the current year, inclusive of additional tax on dividend will be 47.70%.

OPERATIONS - PERFORMANCE

Income, Profit, Loan Approvals and Disbursements: Total income for the year under review is Rs.439.42 crores as against Rs.339.87 crores for the year 2010-11, registering a growth of 29% over the previous year. Profit before tax for the year ended is Rs.78.86 crores and Profit after tax for the year ended is Rs.59.04 crores as against Rs.145.67 crores and Rs.113.76 crores respectively for the previous year. Your Company had profit on sale of long term investments amounting to Rs.88.48 crores in the previous year.

The Company's main thrust continues to be on individual loans. New loans approved during the year amounted to Rs.1073 crores and loans disbursed during the year are Rs.992 crores as against Rs.1069 crores and Rs.969 crores for the year ended 31st March, 2011 respectively. The Retail Loan portfolio as at 31st March, 2012 stood at Rs.3864 crores, (reflecting a growth rate of 13.45%) as compared to Rs.3406 crores as on 31st March, 2011.

Your Company has adhered to the prudential guidelines for Non Performing Assets (NPAs); issued by the National Housing Bank (NHB) under its Directions 2010, as amended from time to time. During the year, the National Housing Bank (NHB) has made upward revision in the provisioning requirements for doubtful assets up to 100%; increase in provisioning requirements in different slabs of default bucket ranging from 5% to 50% and also introduced for the first time provisioning requirement of 0.4% of the outstanding loan portfolio of standard housing loan assets and 1% on standard non housing loans. The impact on profitability is due to newly introduced provisioning requirements for "standard assets" and upward provisioning requirements for all categories of NPA assets. The additional provision charged during the year for the purpose of complying with the said newly introduced provision for "standard assets" and for NPA accounts are Rs.19.27 crores. National Housing Bank has also during the year mandated not to levy "foreclosure charges" on closure of home loans sanctioned under floating interest basis which your Company has complied with.

During the year under review, your Company has made provision to the extent of Rs.19.27 Crores as against Rs.38.73 Crores provided for in the year 2010-11. The Company is also carrying an additional provision of Rs.26.39 crores in books, beyond what is prescribed under the guidelines, as a prudential measure. The total cumulative provision towards individual housing loan portfolio inclusive of the additional provision of Rs.26.39 crores as on 31st March, 2012 is Rs.80.28 crores. Gross Non Performing Assets on retails loans as on 31s1 March, 2012 is 2.08% as against 2.78% for the previous year. Net Non-performing loans as on 31s' March, 2012 is "NIL" as against 0.41% for the previous year.

RESOURCE MOBILISATION:

Your Company takes every effort to tap the appropriate source of funding to minimize the weighted average cost of funds. During the year under review, due to prevailing inflationary pressures, Reserve Bank of India has increased the "Key rates" in the first quarter and continued with the same rates in the rest of the quarter for the purpose of controlling the inflation. Hence there is increase in average cost of funds during the year. Your Company has mobilized resources through the following sources:

A. Term Loans:

Your Company has borrowed fresh long term loans of Rs.795 crores from banks during the year as compared to Rs.620 crores during the previous year. The aggregate of term loans outstanding at the end of the financial year stood at Rs.2808 crores (including short term loans amounting to Rs.100 crores) as against Rs.2677 crores as at the end of the previous year (including short term loans amounting to Rs.300 crores).

B. Refinance from National Housing Bank:

With the continued support of National Housing Bank (NHB), Your Company availed refinance amounting to Rs.265 crores during the year under review as against Rs.210 crores in the previous year. The refinance facility outstanding as on 31st March, 2012 is Rs.551 crores as against Rs.410 crores as at the end of the previous year.

C. Commercial Paper:

During the year 2011-12, your Company has raised resources by issuing Commercial Paper to the extent of Rs.675 crores. The outstanding Commercial Paper as on 31st March, 2012 is Rs.245 crores (Gross).

CREDIT RATING

Your Company had received rating from ICRA for its various borrowing programmes as follows:

- For Commercial Paper Programme of Rs.800 crores as [ICRA] "A1 " (Pronounced as ICRA A one plus). This rating is the highest credit quality rating assigned by ICRA for Short Term Debt Instruments.

- For Fund Based Short Term Loan Programme of Rs.800 crores as [ICRA] "A1 " (Pronounced as ICRA A one plus). This rating is the highest credit quality rating assigned by ICRA for Short Term Debt Instruments.

- As per the Basel-ll requirements - For Fund Based Long Term Loan Programme of Rs.3500 crores as [ICRA] AA (Pronounced as ICRA double A plus). This rating indicates the high credit quality rating assigned by ICRA to Long Term Debt Instruments.

BRANCH EXPANSION:

During the year under review your Company has opened its branch at "Nere Panvel". The total number of branches as on 31st March, 2012 stood at 31.

INSURANCE COVERAGE TO BORROWERS:

Your Company had taken "Special Contingency Insurance" with The New India Assurance Company Ltd., which covers the borrowers of your Company as under:

- Personal Accident Insurance: Personal accident (death only) risk cover, free of cost to the borrowers up to an amount of outstanding loan at any particular point of time during the term/ tenure of the housing loan.

- Mortgaged Property Insurance: The property.acquired out of loan, for and up to and extent of the outstanding loan amount, covered free of cost against fire, earthquake and allied perils affecting the mortgaged property.

Your Company has also tied up with 'Kotak Mahindra Old Mutual Life Insurance Limited' for getting insurance cover on the life of the borrower to the extent of the "Outstanding Home Loan". The said "group Life cover is optional" and the Company arranges this insurance on request from the borrower. These schemes ensure protection to the families of the borrower in case of un- expected eventualities like untimely death of borrower due to accident or natural death.

COMPLIANCE WITH GUIDELINES OF NATIONAL HOUSING BANK (NHB) - REGULATORY GUIDELINES

Your Company has complied with the Guidelines and Directions issued by NHB on asset classification of credit/ investments, credit rating, Fair Practices Code, Know Your Customer (KYC), Anti Money Laundering Guidelines, income recognition and provisioning for non-performing loans.

During the year under review, the National Housing Bank (NHB) has revised upward the provisioning requirements for Non Performing Assets vide its circular No NHB (ND)/DRS/1241 dated 8th September, 2011 as under:

Default in Interest/Principal Old Rule Provision (%) New Rule Provision (%)

3 to 15 months 10 15

16 to 27 months 20 25

28 to 51 months 30 40

52 and above 50 100

Loss Assets 100 100

In addition to the above, National Housing Bank also introduced Provision on Standard Assets at 0.4% in respect of Individual Housing Loans.

CAPITAL ADEQUACY RATIO (CAR)

The Company has been maintaining the Capital Adequacy Ratio (CAR) above the minimum required level prescribed by National Housing Bank (NHB) from time to time. The CAR prescribed for the present is 12%.

The Capital Adequacy Ratio of the Company as at 31st March, 2012 is 14.80% as against 15.42% as at 31st March, 2011.

DEPOSITS

Your Company has not accepted or renewed any fresh deposits during the year within the meaning of Section 58(A) of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975. There are no unclaimed deposits as on 31st March, 2012.

DEMATERIALISATION OF SHARES AND NOMINATION FACILITY AND LISTING AT STOCK EXCHANGES

As per the Securities & Exchange Board of India directives, the transactions of the Company's shares must be compulsorily in dematerialised form. Your Company has signed an agreement with the Central Depository Services (India) Limited and National Securities Depository Limited for transaction of shares in dematerialised form. Shareholders holding shares in physical form are requested to convert their holdings into dematerialised form. Out of 5,38,51,066 equity shares 5,31,91,065 are in dematerialised form, ( 5,31,52,348 shares as on 31st March, 2011) which is 98.77% (98.70% as on 31st March, 2011) of the total shares as on 31st March, 2012.

Shareholders holding shares in physical form may utilise the nomination facility available by sending the prescribed Form No.2B duly filled, to our Registrars and Share Transfer Agents viz. M/s. Sharepro Services (India) Private Limited, Mumbai. Shareholders holding shares in dematerailised form has to send their "nomination" request to the respective Depository Participants.

The Equity shares of the Company continue to be listed on Bombay Stock Exchange Ltd., and The National Stock Exchange of India Ltd., The Annual Listing fees for the year 2012-13 have been paid to these Stock Exchanges.

UNCLAIMED DIVIDEND TRANSFER TO INVESTORS EDUCATION AND PROTECTION FUND (IEPF)

In terms of Section 205C of the Companies Act, 1956, the amount (dividends) that remained unclaimed and unpaid for more than 7 years from the date become first due for payment,' shall be transferred to IEPF (Fund). In terms of the applicable statutory provisions of the Companies Act, 1956, no claim would lie against the Company or the said Fund after such transfer to IEPF

The Company has been intimating the shareholders to lodge their claim for payment due, if any, from time to time and such claims have been settled. In spite of constant and sincere efforts to pay the unclaimed dividend to the respective shareholders, certain amount still remains unclaimed. The Company has been intimating the shareholders to lodge their claim for dividend from time to time and such information is being mentioned in the Annual Reports every year.

Unclaimed dividend amounting to Rs.5,47,812/- that has not been claimed by shareholders for the financial year 2003-04 has been transferred to Investor Education and Protection Fund (IEPF) during the month of November, 2011, as per the provisions of the Companies Act, 1956. As per section 205(B) of the Companies Act, 1956, no claim would lie against the Company or the said fund after the transfer.

The dividend pertaining to the financial year 2004-05 remaining unclaimed and unpaid amounting to Rs.5,92,690/- as on 31st March, 2012, would be transferred to IEPF during November, 2012 after settlement of claims received up to the date of completion of 7 years from the date of declaration of the dividend. The Company has sent individual reminder letters to the respective shareholders during the month of May, 2012.

Shareholders who have not claimed the said dividend may write to Registrars and Share Transfer agents.

STATUTORY INFORMATION:

Particulars regarding conservation of energy, technology absorption and foreign exchange earnings and expenditure

Since the Company does not own any manufacturing facility, the particulars relating to conservation of energy and technology absorption stipulated in the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, required to be furnished under section 217 (1) (e) of the Companies Act, 1956 are not applicable.

The Company did not earn any income in foreign currency during the year under review. The Company has incurred an amount of Rs.2,69,238/- towards expenses in foreign currency.

None of the employees of your company were in receipt of remuneration in excess of the limits as laid down under section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended from time to time.

DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of sub-section (2AA) of Section 217 of the Companies Act, 1956, and based on the information provided by the Management, Board of Directors report that:

a. In the preparation of Annual Accounts, the applicable accounting standards have been followed together with proper explanation;

b. The Accounting Policies selected were applied consistently. Reasonable and prudent judgements and estimates were made so as to give a true and fair view of the state of affairs of the Company as at the end of 31st March, 2012 and of the profit of the Company for the year ended on that date;

c. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

d. The annual accounts have been prepared on a going concern basis.

AUDITORS

M/s. Contractor, Nayak and Kishnadwala, Chartered Accountants, Mumbai (ICAI Firm Registration No. 101961W) were appointed as Statutory Auditors in the twenty-first Annual General Meeting of the Company and their term is scheduled to end at the conclusion of the forthcoming Annual General Meeting and is eligible for re-appointment.

The Company received the requisite confirmation from them to the effect that their re-appointment, if made, would be within the limits of Section 224(1 B) of the Companies Act, 1956.

The Directors of your Company recommend re-appointment of M/s. Contractor, Nayak & Kishnadwala Chartered Accountants, Mumbai as Statutory Auditors of the Company from the ensuing Annual General Meeting till conclusion of twenty-third Annual General Meeting. Suitable resolution for re-appointment requiring approval of the shareholders forms part of the agenda of the Annual General Meeting. The said appointment attracts provisions of section 224 A of the Companies Act, 1956.

DIRECTORS

In accordance with the requirements of the Companies Act, 1956, and Article 125 of the Articles of Association of the Company, Shri. G. Srinivasan and Shri. N.S.R. Chandraprasad, Directors are liable to retire by rotation and are eligible for re-appointment. Shri. GSrinivasan and Shri. N.S.R. Chandraprasad offer themselves for re-appointment. The Board of Directors recommends their re-appointment.

Shri.Yogesh Lohiya, Chairman of the Board resigned from Directorship on 1st January, 2012, consequent to his superannuation from the services of General Insurance Corporation of India (GIC Re). Shri. M. Ramadoss, resigned from Directorship on 29th March, 2012. Shri. Ashok Kumar Roy was appointed as Chairman of the Board consequent to his elevation to the position of Chairman Cum Managing Director of General Insurance Corporation of India.

The Directors of your Company wish to place on record their appreciation for the services rendered and contribution made by Shri. Yogesh Lohiya and Shri M. Ramadoss during their tenure as Director(s) of the Company.

Shri. A. R. Sekar, Officiating Chairman Cum Managing Director, The New India Assurance Company Ltd., was appointed as an Additional Director of the company w.e.f. 29th March, 2012 pursuant to the provisions of section 260 and other applicable provisions of the Companies Act, 1956, if any and Article 111 of Articles of Association of the Company. Shri. N. Mohan, General Manager, General Insurance Corporation of India (GIC Re) was appointed as an Additional Director of the company w.e.f. 30th April, 2012, pursuant to the provisions of section 260 and other applicable provisions of the Companies Act, 1956, if any and Article 111 of Articles of Association of the Company.

Your Company has received a notice in writing from a shareholder(s), under section 257 of the Companies Act, 1956 proposing the appointment of Shri. A. R. Sekar and Shri. N. Mohan as Director(s) of the Company at the ensuing Annual General Meeting.

None of the Directors of the Company are disqualified from being appointed as Directors as specified in Section 274 of the Companies Act, 1956. The Board of Directors recommends their appointment.

CORPORATE GOVERNANCE

The Auditors Certificate on Corporate Governance issued by the Statutory Auditors of the Company for the year under review, as required under the Companies Act, 1956 and in pursuance of Clause 49 of the Listing Agreement is annexed to the Report of the Directors on Corporate Governance.

Your Company has been complying with the principles of good Corporate Governance over the years. The Board of Directors supports the broad principles of Corporate Governance. In addition to the basic governance issues, the Board lays strong emphasis on transparency, accountability and integrity.

In terms of the provisions of Clause 49 of the listing agreement entered into with the Stock Exchange(s), the Management Discussion and Analysis Report forms part of this report.

HUMAN RESOURCES & INDUSTRIAL RELATIONS.

Your Company has continuously been working to improve human resources competencies and capabilities in the Company to deliver the desired results. Your Company has developed a comprehensive "in-house" induction training module to make sure that new employees understand the basic aspect of the Company in its all operations. In pursuance of the Company's commitment to develop and retain the best available talent, the Company had been sponsoring the employees for training programmes organized by reputed professional institutions and training programmes conducted by National Housing Bank for upgrading the skill and knowledge of the employees in different operational areas. The Company continues to focus on various initiatives in training and developing employees across levels to improve productivity, service quality, personal effectiveness and supervisory quality. Employees' relations remained cordial and the work atmosphere remained congenial during the year under review. The work force strength of Your Company as on 31st March, 2012 is 195.

OUTLOOK FOR THE YEAR 2012-13.

Gross Domestic Product (GDP) growth likely to be 6.9% for 2011-12. Going forward into 2012-13, assuming a normal monsoon, agricultural growth could stay close to the trend level, the overall domestic growth outlook for 2012-13 looks a little better than in 2011-12 and the baseline GDP growth for 2012-13 is projected at 7.3% by Reserve Bank of India. (Source: Reserve Bank of India Monetary Policy Statement 2012-13/April 17, 2012.),The projected growth for the 2012-13 is reasonably at a good level for the emerging economies like us.

Housing is a basic need that provides a place "home" to the individual and is a valuable asset which can enable him to access credit from the financial market. India is witnessing increasing levels of urban population. India's urban population is expected to increase from 400 million in 2011 to about 600 million or more by 2030 (Source: Issues for approach to 12th Five year Plan - Planning Commission). Nearly 30% of the country's population lives in cities and urban areas. Within the urban population, there is a rapidly growing informal sector whose ability to borrow from the formal sector is not adequately recognized. Mortgage penetration levels mortgage loans as a percentage of Gross Domestic Product (GDP) which is around 7.25% of India's GDP only compared with China (12 per cent), Thailand (17 per cent) and Malaysia (29 per cent) (Source: Report on trend and progress of Housing in India 2011 by National Housing Bank). Hence there is lot of scope for Housing Finance industry to penetrate and grow. An effective housing finance system improves affordability through institutional and product innovation. Availability of long term housing loans enables the individuals a greater flexibility in allocating their savings and other sources across their different needs.

Government of India in its Budget for the year 2012-13 extended the scheme of interest subvention of 1% on housing loans up to Rs.15,00,000 where the cost of the house does not exceed Rs. 25,00,000 for period of one more year is a welcome measure; which gives relief to the home loan borrowers of eligible category. In the said Budget to address the shortage of housing for low income groups, proposal is also announced for allowing "External Commercial Borrowings" for low cost housing projects.

In the first month of the current quarter of the financial year 2012-13, we have witnessed a positive trigger for growth; Reserve Bank of India announcing 50 basis points reduction in "repo rate". Majority of the Banks have announced reduction in their "Base Lending Rate" which will give your Company a marginal relief in cost of borrowing. The inflationary pressures, which started moderating from March, 2012 are again showing upward trend, especially in food prices, is a worrying factor. However, with the forecast of "normal monsoon" for the current year, which will boost the prospects of farm production, we expect the inflationary pressures to come down earliest and with interest rates moderating, your Company is expecting to maintain the momentum in loan disbursements in the financial year 2012-13.

ACKNOWLEDGEMENTS

Your Board place on record their sincere appreciation for the cooperation and support received from the Promoter(s) namely, 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. and IFCI Ltd.

Your Board acknowledges and appreciates the guidance and co-operation extended by various regulatory authorities including National Housing Bank (NHB), SEBI, Stock Exchanges and Depositories.

Your Board wishes to place on record their thanks to National Housing Bank for their continued refinance assistance and also to all the banks for their continued support through term loans.

Your Board wishes to place on record their sincere appreciation for the cooperation and support received from shareholders and customers.

Your Board thanks the Registrars and Share Transfer Agents of the Company, Credit Rating Agencies, Government(s), local/ statutory authorities and all others for their whole hearted support.

Your Board would like to thank all the employees of the Company whose efforts made the Company to reach greater heights and wish them all the best for achieving even greater heights in the future.

For and on behalf of the Board of Directors

Place: Mumbai M. Sivaraman

Date: 29th May, 2012. Managing Director


Mar 31, 2011

The Directors are pleased to present the Twenty-first Annual Report together with the Audited Statement of Accounts for the year ended 31st March, 2011.

FINANCIAL RESULTS (Rs. In Lakhs)

PARTICULARS 31st March, 2011 31st March, 2010

Total Income 33,987 31,111

Less: Interest expenditure 21,483 18,862

Overheads 2,712 2,999

Depreciation & other amortisation 73 62

Profit Before Extraordinary Income 9,719 9,188

Profit on sale of Long Term Investment 8,848 Nil

Less : Additional Provision for Contingencies 4,000 Nil

Profit Before Tax 14,567 9,188

Provision for Tax 4,510 2,825

Deferred Taxation (1319) (346)

Profit after Tax 11,376 6,709

Profit brought forward 5 21

Adjustment for short income tax provision 1 1

Profit available for appropriation 11,382 6,731

APPROPRIATIONS:

General Reserve 6,115 2,000

Special Reserve under Section 36(l)(viii) of Income 1,820 1,900

Tax Act, 1961

Proposed Equity Dividend 2,962 2,423

Tax on Proposed Dividend 480 403

Balance carried over to Balance Sheet 5 5

IMPORTANT FINANCIAL RATIOS:

PARTICULARS 31st March, 2011 31st March, 2010

Return on Net Worth (%) 26.45 18.44

Return on Total Assets (%) 3.20 2.23

Book Value per share (Rs.) 79.87 67.58

Earning per share (Rs.) 21.13 12.46

Debt Equity Ratio 7.18 7.22

Average cost of funds 7.52 7.39

Average yield on advances 10.11 10.17

DIVIDEND

Considering the good performance during the year 2010-11 and fund requirement in the near future, Your Directors are pleased to recommend a dividend of 55% i.e. Rs.5.50 per equity share, inclusive of one time special dividend of Rs.1.00 per

equity share (i.e. 10%) in view of profit on sale of investments as against 45% for the previous year. The total dividend outgo for the current year would amount to Rs.34.42 crores including dividend distribution tax of Rs.4.80 cores, as against Rs.28.26 crores including dividend distribution tax of Rs.4.03 crores in the previous year.

PERFORMANCE

Income and Profit: Total income for the year under review is Rs.428.35 crores as against Rs.311.11 crores for the year 2009-10. During the year Your Company had investment income by way of "Profit on sale of Long term investment" amounting to Rs.88.48 crores, being sale of Your Companys holding in LIC Asset Management Company Ltd. and LIC Asset Management Trustee Company Ltd.

The Companys main thrust continues on individual loans. New loans approved during the year amounted to Rs.1069 crores and loans disbursed during the year are Rs.969 crores as against Rs.777 crores and Rs.673 crores for the year ended 31st March, 2010 respectively. The Retail Loan portfolio as at 31st March, 2011 stood at Rs.3406 crores, (reflecting a growth rate of 17%) as compared to Rs.2920 crores on 31st March, 2010.

Your Company scrupulously adhered to the prudential guidelines for Non Performing Assets (NPAs); issued by the National Housing Bank (NHB) under its Directions of 2001, as amended from time to time. During the year under review your Company has made provision to the extent of Rs.38.73 Crores as against Rs.10.38 Crores provided for in the year 2009-10, including provision of Rs.21.03 crores required for Housing Loans under differential rate of interest. The Company is also carrying an additional provision of Rs.41.63 crores in books, beyond what is prescribed under the guidelines, as a prudential measure. The total cumulative provision towards individual housing loan portfolio as on 31st March, 2011 is Rs.80.84 crores. Net Non-performing loans as on 31st March, 2011 amounted to Rs.13.96 crores (0.41%) as against Rs.42.89 Crores on 31st March, 2010. The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 has proved to be a very useful tool and the Company has been successful in initiating recovery action under the Act in case of willful defaulters.

RESOURCE MOBILISATION :

Your Company constantly monitors its resource base and taps the appropriate source in its every endeavor to minimize the weighted average cost of funds. During the year under review, Your Company has mobilized resources through the following sources:

A. Term Loans:

Your Company has borrowed fresh long term loans of Rs.830 crores from banks during the year as compared to Rs.528 crores during the previous year. The aggregate of term loans outstanding at the end of the financial year stood at Rs.2,677 crores (including short term loans amounting to Rs.300 crores) as against Rs.2,344 crores as at the end of the previous year (including short term loans amounting to Rs.400 crores).

B. Refinance from National Housing Bank:

With the continued support of National Housing Bank (NHB), Your Company availed refinance amounting to Rs.210 crores during the year under review as against Rs.75 crores in the previous year. The refinance facility outstanding as on 31st March, 2011 is Rs.410 Crores as against Rs.283 crores as at the end of the previous year.

C. Commerical Paper:

During the year 2010-11, your Company has issued Commercial Paper to the extent of Rs. 500 crores and placed them with the investors at the most Competitive rates of interest. The outstanding Commercial Paper as on 31st March, 2011 is "Nil".

CREDIT RATING

Your Company had received rating from ICRA for its various borrowing programmes as follows:

- For Commercial Paper Programme of Rs.800 crores as "A1+" (Pronounced as A one plus). This rating is the highest credit quality rating assigned by ICRA for Short Term Debt Instruments.

- For Fund Based Short Term Loan Programme of Rs.800 crores as "A1+" (Pronounced as A one plus). This rating is the highest credit quality rating assigned by ICRA for Short Term Debt Instruments.

- As per the Basel-II requirements - For Fund Based Long Term Loan Programme of Rs.3000 crores as "LAA+" (Pronounced as L Double A plus). This rating indicates the high credit quality rating assigned by ICRA to Long Term Debt Instruments.

BRANCH EXPANSION:

During the year under review your Company has opened its branches in tier II/III cities namely Durgapur in West Bengal, Jodhpur in Rajasthan and Kolhapur in Maharashtra. The total number of branches as on 31st March, 2011 stood at 30.

INSURANCE COVERAGE TO BORROWERS:

Your Company had taken "Special Contingency Insurance" with The New India Assurance Company Ltd., which covers the borrowers of your Company as under:

- Accidental Insurance: Personal accident (death only) risk cover, free of cost to the borrowers up to an amount of outstanding loan at any particular point of time during the term/ tenure of the housing loan.

- Mortgaged Property Insurance: The property acquired out of loan, for and up to and extent of the outstanding loan amount, covered free of cost against fire, earthquake and allied perils affecting the mortgaged property.

Your Company has also tied up with Kotak Mahindra Old Mutual Life Insurance Limited for getting insurance cover on the life of the borrower to the extent of the "Outstanding Home Loan". The said "group Life cover is optional" and the applicable premium are given as loan. These schemes ensure protection to the families of the borrower in case of un-expected eventualities like untimely death of borrower due to accident or natural death.

COMPLIANCE WITH GUIDELINES OF NATIONAL HOUSING BANK (NHB)-REGULATORY GUIDELINES

Your Company has complied with the Guidelines and Directions issued by NHB on asset classification of credit/ investments, credit rating, Fair Practices Code, Know Your Customer (KYC), Anti Money Laundering Guidelines, income recognition and provisioning for non-performing loans.

CAPITAL ADEQUACY

The Company has been maintaining the Capital Adequacy Ratio (CAR) above the minimum required level prescribed by National Housing Bank (NHB) from time to time. The rate prescribed for the present is 12%. During the year under review, the Risk weight on housing loans was changed as follows:

- Housing loans sanctioned to individuals above Rs.30 lacs but below Rs.75 lacs secured by mortgage of immoveable property which are classified as standard assets with LTV ratio is = < or 75% - Risk weight assigned is 75% as against previous risk weight of 50%.

- Housing loans sanctioned to individuals above Rs.30 lacs but below Rs.75 lacs secured by mortgage of immoveable property which are classified as standard assets with LTV ratio is = < or 75% - Risk weight assigned is 100% as against previous risk weight of 75%.

- Housing loans of Rs.75 lacs and above sanctioned to individuals irrespective of LTV ratio, secured by mortgage of immoveable property, which are classified as standard assets - Risk weight assigned is 125% as against previous risk weight of 100%.

- Loans given for the purpose of insurance of the property/borrower in case of individual housing loans - Risk weight assigned - same as applicable to respective housing loan as against previous risk weight of "nil" %.

The Capital Adequacy Ratio of the Company as at 31st March, 2011 was 15.42% as against 18.03% as at 31st March, 2010.

DEPOSITS

Your Company has not accepted or renewed any fresh deposits during the year within the meaning of Section 58(A) of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975. There are no unclaimed deposits as on 31st March, 2011.

DEMATERIALISATION OF SHARES AND NOMINATION FACILITY AND LISTING AT STOCK EXCHANGES

As per the Securities & Exchange Board of India directives, the transactions of the Companys shares must be compulsorily in dematerialised form. Your Company has signed an agreement with the Central Depository Services (India) Limited and National Securities Depository Limited for transaction of shares in dematerialised form. Shareholders holding shares in physical form are requested to convert their holdings into dematerialised form. Out of 5,38,51,066 equity shares 5,31,52,348 are in dematerialised form, which is 98.70% (98.63% as on 31st March, 2010) of the total shares as on 31st March, 2011.

Shareholders may utilise the nomination facility available by sending the prescribed Form No.2B duly filled, to our Registrars and Share Transfer Agents viz. M/s. Sharepro Services (India) Private Limited, Mumbai.

The Equity shares of the Company continue to be listed on Bombay Stock Exchange Ltd., and The National Stock Exchange of India Ltd. The Annual Listing fees for the year 2011-12 have been paid to these Stock Exchanges.

UNCLAIMED DIVIDEND TRANSFER TO INVESTORS EDUCATION AND PROTECTION FUND (IEPF)

In terms of Section 205C of the Companies Act, 1956, the amount (dividends) that remained unclaimed and unpaid for more than 7 years from the date become first due for payment, shall be transferred to IEPF (Fund). In terms of the applicable statutory provisions of the Companies Act, 1956, no claim would lie against the Company or the said Fund after such transfer to IEPF.

The Company has been intimating the shareholders to lodge their claim for payment due, if any, from time to time and such claims have been settled. In spite of constant and sincere efforts to pay the unclaimed dividend to the respective shareholders, certain amount still remains unclaimed. The Company has been intimating the shareholders to lodge their claim for dividend from time to time and such information is being mentioned in the Annual Reports every year.

Unclaimed dividend amounting to Rs.4,76,854/- that has not been claimed by shareholders for the financial year 2002-03 has been transferred to Investor Education and Protection Fund (IEPF) during the month of November, 2010, as per the provisions of the Companies Act, 1956. As per section 205(B) of the Companies Act, 1956, no claim would lie against the Company or the said fund after the transfer.

The dividend pertaining to the financial year 2003-04 remaining unclaimed and unpaid amounting to Rs.5,63,937/- as on 31st March, 2011, would be transferred to IEPF during October, 2011 after settlement of claims received up to the date of completion of 7 years from the date of declaration of the dividend. The Company has sent individual reminder letters to the respective shareholders during the month of May, 2011.

Shareholders who have not claimed the said dividend may write to Registrars and Share Transfer agents.

STATUTORY INFORMATION:

Particulars regarding conservation of energy, technology absorption and foreign exchange earnings and expenditure

Since the Company does not own any manufacturing facility, the particulars relating to conservation of energy and technology absorption stipulated in the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, required to be furnished under section 217 (1) (e) of the Companies Act, 1956 are not applicable.

The Company did not earn any income in foreign currency during the year under review. The Company has incurred an amount of Rs.62,102/- towards expenses in foreign currency.

None of the employees of your company were in receipt of remuneration in excess of the limits as laid down under section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended from time to time.

DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of sub-section (2AA) of Section 217 of the Companies Act, 1956, and based on the information provided by the Management, Board of Directors report that:

a. In the preparation of Annual Accounts, the applicable accounting standards have been followed together with proper explanation;

b. The Accounting Policies selected were applied consistently. Reasonable and prudent judgements and estimates were made so as to give a true and fair view of the state of affairs of the Company as at the end of 31st March, 2011 and of the profit of the Company for the year ended on that date;

c. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

d. The annual accounts have been prepared on a going concern basis.

AUDITORS

M/s. Contractor, Nayak and Kishnadwala, Chartered Accountants, were appointed as Statutory Auditors in the twentieth Annual General Meeting of the Company and their term is scheduled to end at the conclusion of the forthcoming Annual General Meeting and is eligible for re-appointment.

The Company received the requisite confirmation from them to the effect that their appointment, if made, would be within the limits of Section 224(1B) of the Companies Act, 1956.

The Directors of your Company recommend re-appointment of M/s. Contractor, Nayak & Kishnadwala Chartered Accountants, Mumbai as Statutory Auditors of the Company from the ensuing Annual General Meeting till conclusion of next Annual General Meeting. Suitable resolution for re-appointment requiring approval of the shareholders forms part of the agenda of the Annual General Meeting. The said appointment attracts provisions of section 224 A of the Companies Act, 1956.

DIRECTORS

In accordance with the requirements of the Companies Act, 1956, and Article 125 of the Articles of Association of the Company, S/shri. M. K.Tandon and Manu Chadha, Directors are liable to retire by rotation and are eligible for re-

appointment. S/shri. M. K. Tandon and Manu Chadha offer themselves for re-appointment. The Board of Directors recommends their re-appointment.

Shri. M. Ramaprasad, resigned from Directorship on 25th October, 2010 consequent to his resignation from the services of General Insurance Corporation of India. IFCI Ltd. withdrew nomination of Shri. Javed Yunus from the Directorship of the Board w.e.f. 21st January, 2011. The Directors of your Company wish to place on record their appreciation for the services rendered and contribution made by Shri. M. Ramaprasad and Shri. Javed Yunus during their tenure as Director(s) of the Company.

Shri. Ashok Kumar Roy, General Manager, General Insurance Corporation of India (GIC Re) was appointed as an Additional Director of the company w.e.f. 25th October, 2010, pursuant to the provisions of section 260 and other applicable provisions of the Companies Act, 1956, if any and Article 111 of Articles of Association of the Company. Shri. Shivendra Tomar Vice President, IFCI Ltd., presently on deputation to IFCI Infrastructure Development Ltd. (IIDL), as Managing Director, was appointed as an Additional Director of the Company w.e.f. 29th January, 2011, pursuant to the provisions of section 260 and other applicable provisions of the Companies Act, 1956, if any and Article 111 of Articles of Association of the Company.

Your Company has received a notice in writing from a shareholders), under section 257 of the Companies Act, 1956 proposing the appointment of Shri. Ashok Kumar Roy and Shri. Shivendra Tomar as Directors) of the Company at the ensuing Annual General Meeting.

None of the Directors of the Company are disqualified from being appointed as Directors as specified in Section 274 of the Companies Act, 1956.

CORPORATE GOVERNANCE

The Auditors Certificate on Corporate Governance issued by the Statutory Auditors of the Company for the year under review, as required under the Companies Act, 1956 and in pursuance of Clause 49 of the Listing Agreement is annexed to the Report of the Directors on Corporate Governance.

The Board of Directors fully supports and endorses Corporate Governance practices in accordance with the provisions of Clause 49 of the listing agreements, as amended. Your Company has complied with all the mandatory requirements of the said clause.

In terms of the provisions of Clause 49 of the listing agreement entered into with the Stock Exchange(s), the Management Discussion and Analysis Report forms part of this report.

HUMAN RESOURCES & TRAINING

The nature of Your Companys business requires trained employees. A Housing/ Financial service is a knowledge intensive sector where employee skills form a critical aspect in proper service delivery. Your Company has developed a comprehensive "in-house" induction training module to make sure that new employees understand the basic aspect of the Company in its all operations. In pursuance of the Companys commitment to develop and retain the best available talent, the Company had been sponsoring the employees for training programmes organized by reputed professional institutions and training programmes conducted by National Housing Bank for upgrading the skill and knowledge of the employees in different operational areas. The Company rewarded its employees during the year under review by suitably revising the scales of pay. The Board values and appreciates the contribution and commitment of the employees towards performance of the Company during the year under review. Employees relations remained cordial and the work atmosphere remained congenial during the year under review. Your Company has augmented the human resources sizably during the year. The work force strength of Your Company as on 31st March, 2011 was 199.

OUTLOOK FOR THE YEAR 2011-12

Gross Domestic Product (GDP) growth likely to average 8.2% over the 11th Plan period i.e. from 2007 to 2012 which is remarkable given the present global crisis. GDP is expected to grow by 9% during the 12th Plan period i.e. from 2012 to 2017. Indias urban population is expected to increase from 400 million in 2011 to about 600 million or more by 2030 (Source: Issues for approach to 12th Five year Plan - Planning Commission) With changing socio demographic factors like nuclearisation, urbanization and shifting population in the lower age bracket would still drive underlying asset demand and growth in the housing finance market. Housing being one of the low risk asset classes for financiers would continue to be the major contributor for their retail lending portfolio. The year 2011-12 will be more challenging year for Housing Finance Companies and Banks, due to raising interest rates and peaking of property rates; affecting the affordability of the individuals. However, taking into consideration the continuation of concessions allowed in the income tax for repayment of principal and interest up to specified limit; the net interest burden will be still within the affordable limits and as a result the demand is expected to continue.

Your Company would continue to give a more and focused attention to lending to individual loan segment keeping in view the encouragement received in the form of enhanced business performance during the year under review. Various strategies are put in place to enhance its marketing share in the housing loan segment. Your Company is expecting a significant improvement in business performance for the year 2011-12. However, given the situation of increase in interest rates resulting in increase in the cost of funds, the margins are expected to be under pressure

ACKNOWLEDGEMENTS

Your Directors wish to place on record with thanks for the consistent support and guidance given by the Promoter® namely, General Insurance Corporation of India (GIC Re), The New India Assurance Company Ltd., National Insurance Company Ltd., The Oriental Insurance Company Ltd., United India Insurance Company Ltd., and IFCI Ltd.

Your Directors acknowledge and appreciate the guidance and co-operation extended by various regulatory authorities including National Housing Bank (NHB), SEBI, Stock Exchanges and Depositories.

Your Directors wish to place on record their thanks to National Housing Bank for their continued refinance assistance and also to all the banks for their continued support through term loans.

Your Directors wish to place on record their sincere gratitude to customers and members for their continued patronage.

Your Directors thank the Registrars and Share Transfer Agents of the Company, Credit Rating Agencies, Government(s), local/statutory authorities and all others for their whole hearted support.

Your Directors also appreciate and acknowledge the contribution made by the employees whose efforts made the Company to reach greater heights and look forward for valuable sustained support and encouragement from all the stakeholders

For and on behalf of the Board of Directors

Place: Mumbai Yogesh Lohiya

Date: 31st May, 2011. Chairman



 
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