S.K.

KAPOOR & CO CHARTERED ACCOUNTANTS

The Members of, PNB HOUSING FINANCE Ltd., NEW DELHI 110 001 AUDITORSREPORT We have audited the attached Balance Sheet of PNB HOUSING FINANCE LIMITED as at 31st March, 2011, the Profit & Loss Account and the Cash Flow Statement for the year ended on that date, annexed thereto. These financial statements are the responsibility of the companys management. Our responsibility is to express an opinion on these financial statements, based on our audit. We have conducted the audit in accordance with the auditing standards generally accepted in India, which require us to plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. We report as under: 1. As required by the Companies (Auditors Report) Order, 2003 as amended by Companies (Auditors Report) Order, 2004 (collectively the order) issued by the Central Government, in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 and on the basis of such test checks of the books and reports of the company as were considered appropriate and on the basis of information and explanations given to us by the management during the course of the audit, we enclose in the Annexure , a statement on the matters specified in paragraphs (4) & (5) of the said Order to the extent applicable to the company.

2. Subject to the above and further to our comments in the Annexure referred to in paragraph 1 above, we report that: a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit ; b) In our opinion, proper books of account as required by law have been kept by the Company, so far as it appears from our examination of the books of account and unaudited returns, adequate for the purposes of our audit, have been received from the branches of the company, not visited by us;

c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement referred to in this Report are in agreement with the books of account ; d) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement comply with the requirements of Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 to the extent applicable except regarding nonprovision of deferred tax liability on the Special Reserve of Rs 101.81 crores, created and maintained u/s 36(1)(viii) of the Income Tax Act, 1961 as required by Accounting Standard-22, which has resulted in understatement of Provision for Deferred Tax Liability by Rs 33.03 crore and overstatement of Profit after Tax by Rs 4.18 crore (Note 11(b) of Schedule 16); e) On the basis of written representations received from the directors of the company as at 31st March, 2011 and taken on record by the Board of Directors, we report that no director is disqualified from being appointed as director under clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956; f) Subject to 3(d) above, in our opinion and to the best of our information and according to the explanation given to us, the Balance Sheet, Profit and Loss Account and Cash Flow Statement read with the Notes on Accounts in Schedule 16 and Significant Accounting Policies in Schedule 15, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: i) In the case of the Balance Sheet, of the STATE OF AFFAIRS of the Company as at 31st March, 2011; In the case of the Profit & Loss Account, of the PROFIT of the Company for the year ended on that date. In the case of the Cash Flow Statement, of the CASH FLOWS for the year ended on that date.

ii)

iii)

For S K Kapoor & Co Chartered Accountants

(V B Singh) Partner

M No :73124 FR No: 000745C Place : New Delhi Dated: 30.04.2011

Annexure Annexure referred to in paragraph (1) of our Audit Report of even date on the accounts of PNB HOUSING FINANCE LIMITED, for the year ended 31st March 2011. I. (a) The company has maintained proper records to show full particulars including quantitative details and situation of its fixed assets. (b) The fixed assets of the Company have been physically verified by the Management during the year and as per the information and explanations given to us, no material discrepancies were noticed on such verification. (c) During the year the company has discarded and written off obsolete/ incompatible items of Fixed Assets like computer, furniture and fixtures, Office Equipments and Electricals, which are either not usable or not compatible with present system in the opinion of management as referred to in note 14 in schedule 16 Notes on Accounts Discarding of these assets have no effect on going concern.

II.

(a) During the year, the company has not granted any loan to a party, listed in the register maintained under Section 301 of the Companies Act, 1956, (b) In view of the above para (b) (c) (d) are not applicable. (e) The Company has issued 7.25% Compulsory Convertible Debentures (CCDs) amounting to Rs 137.32 crore to Destimoney Enterprises Pvt Ltd (DEPL) which is holding 26% shares in the company in terms of the shareholder agreement dated 09-12-2009 between the Company (PNBHFL), Punjab National Bank and DEPL, listed in the register maintained under Section 301 of the Companies Act, 1956. (f) The rate of interest paid by the company on these CCDs is not prejudicial to the interest of the company. Other terms and conditions are as per the agreement between PNBHFL, Punjab National Bank and DEPL for conversion of CCDs into equity shares at a future date. The conversion price of the CCDs into equity shares is at a predetermined price as per the terms of the said shareholders agreement decided by a competitive bidding process, therefore we do not offer any comment on the reasonableness of the predetermined price. (g) The company is paying the interest on CCDs regularly as per the terms and conditions.

III.

On the basis of selective checks carried out during the course of our audit, in our opinion and according to the information and explanations given to us, the internal control system that are presently installed are generally adequate and commensurate with the size of the Company and the nature of its business with regard to purchases of fixed assets and for the sanction, disbursement and recovery of loans given by the

company. We have not observed any continuing failure to correct major weaknesses in such internal controls. IV a) According to the information and explanation given to us and on the basis of representation by the management, we are of the opinion that particulars of contract or arrangements that need to be entered in the register maintained under section 301 of the Companies Act, 1956 have been so entered. b) During the year, the company has given a service contract for procurement of loan business to DEPL which is holding 26% shares in the company, the terms of the agreement with the party are prima facie reasonable having regard to the prevailing market commission structure of corporate DMA. V. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 58A, Section 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposit) Rules, 1975 to the extent applicable and The Housing Finance Companies (NHB) Directions, 2010 with regard to acceptance of deposits from the public. There is a system of annual management audit of Corporate Office by PNB, the parent bank. However, there was no separate internal audit system at Corporate Office of the Company during the year. Internal Audit System presently comprising of quarterly audit of transactions at branch level, by internal auditors has been enlarged to make it commensurate with the size of the company and the nature of its business. (a) According to the records of the Company, undisputed statutory dues including Provident Fund, investor education & protection fund, income tax, service tax, wealth tax etc. have generally been regularly deposited with the appropriate authorities during the year. We have been informed that Government Notification about Cess payable is still awaited and considering the business of the Company, in the managements view ESI, Excise Laws, Sales Tax etc. are not applicable to the Company at present. According to the information and explanations given to us, there are no undisputed amounts payable in respect of Income Tax, Wealth Tax, and Service Tax which is outstanding for a period of more than six months as at 31st March, 2011 from the date they became payable. (b) We have been informed that there are no dues in respect of Service Tax, Wealth Tax and Cess which has not been deposited on account of any dispute, however, Income Tax demand as given hereunder has not been deposited as the same is disputed. Assement year 2008-09 Nature of Demand Allocation of Common Expenses Amount( Rs) 5,730,638

VI.

VII.

VIII.

According to the information & explanations given & records examined by us, in our opinion, the Company has not defaulted in repayment of dues to Financial Institutions, Banks or Debenture Holders. (a)The company grants loans and advances for housing interalia on the Main security of equitable mortgage of properties, its own deposits, other securities besides other collateral securities/guarantees as stated in Note No. 2 in Schedule 16. Adequate documents and records have been maintained. (b) The Company does not give any Loan & Advance against pledge of shares, debentures or other securities as primary security (c) The Demand Loan granted by the Company under Public Deposit Scheme complies with requirements of the NHB Guidelines & that of Section 58A & Section 58AA of the Companies Act, 1956.

IX.

X.

As per the information and explanations given to us, the provisions of Special Statutes/Laws applicable to Chit Fund, Nidhi or Mutual Benefit Society are not applicable to the company. In respect of companys transactions for sale / purchase of securities and other investments, held as Investments, proper records of the transactions have been maintained and timely entries have been made therein. We confirm that companys investments are held in its own name. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others / third parties from Banks or Financial Institutions.

XI.

XII.

XIII. According to the information and explanations given to us, and based upon the test verification of the books & records of the Company, the term loans raised / applied during the year have been used for business purposes. XIV. According to the information and explanations given to us, with a view to bring down the overall cost of funds, we observe that funds raised from Overdraft/Term Loan from Banks etc. have been used to finance Housing/Non-Housing Loans, the average repayment of which ranges from 3 to 10 years. Further we have been explained that generally the Short term funds are not used for LongTerm investments. XV. According to the information and explanations given to us, the company has not made any preferential allotment of shares to any party covered in the Register maintained under section 301 of Companies Act. XVI. Charge has been created by the company in respect of debentures and bonds wherever applicable. XVII. According to the information and explanations given to us, during the year ended on 31.03.2011, 50 Suspected Fraud case involving a sum of Rs 749.71 lacs have been

noticed / reported to the Board of Directors / Audit Committee. Investigation & recovery action including taking possession of the underlying property is in progress and these accounts have been classified as NPA as per the NHB Provisioning Norms wherever applicable. XVIII. As the company has not raised any funds by way of public issue, the end use of money needs no comment. XIX. Other requirements of sub-para (ii), (viii), and (x) of para 4 of the order are not applicable.
For S K Kapoor & Co Chartered Accountants

(V B Singh)
Partner

M No: 73124 FR No: 000745C Place: New Delhi Dated: 30.04.2011

PNB HOUSING FINANCE LIMITED BALANCE SHEET AS AT MARCH 31, 2011 SCHEDULE SOURCES OF FUNDS SHAREHOLDERS' FUNDS Share Capital Reserves & Surplus LOAN FUNDS Secured Loans Unsecured Loans RUPEES 1 2 3 300,000,000 3,064,342,108 27,520,854,668 4,263,309,715 As at March 31, 2011 RUPEES As at March 31, 2010 RUPEES 300,000,000 2,447,319,048 2,747,319,048 22,833,215,344 3,723,457,744 26,556,673,088 29,303,992,136

3,364,342,108

31,784,164,383 35,148,506,491

APPLICATION OF FUNDS FIXED ASSETS Gross Block Less: Depreciation Net Block INVESTMENTS DEFERRED TAX ASSET (NET) LOANS CURRENT ASSETS, LOANS AND ADVANCES LESS: CURRENT LIABILITIES AND PROVISIONS NET CURRENT ASSETS

35,864,360 18,066,783

17,797,577 3,107,575,618 107,360,045

57,862,971 36,065,255 21,797,716 4,295,866,000 79,285,869 24,764,877,940 1,487,721,999 26,252,599,939

5 6 7 8 31,380,506,259 2,096,208,483 33,476,714,742 1,560,941,491

31,915,773,251 35,148,506,491

1,345,557,388 24,907,042,551 29,303,992,136

Significant Accounting Policies : Schedule '15' Notes forming integral part of Accounts : Schedule '16' Schedules '1' to '8' and '15' , '16' annexed hereto form part of the Balance Sheet.

(A K Singhal) AVP

(Sanjay Jain) EVP(F) &Co. Secretary

(Sukhvinder Kaur) Sr. EVP

(Sanjaya Gupta) Managing Director

(Anand Dorairaj) Director

(Vivek Vig) Director

(S K Jain) Director

(P K Gupta) Director

(Tejinder Singh Laschar) Director

(G N Bajpai) Director

(Vivek Arya) Director

(Rakesh Sethi) Director

( K R Kamath) Chairman

In terms of our report of even date For S K Kapoor & Co. Chartered Accountants PLACE: NEW DELHI DATED:

(V B Singh) Partner M No : 73124 FR No : 000745C

PNB HOUSING FINANCE LIMITED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011 SCHEDULE For the year Ended March 31, 2011 RUPEES 3,589,741,656 52,609,858 3,642,351,514 2,296,471,128 90,208,602 40,703,751 97,311,379 2,829,962 82,899,228 4,961,233 52,226,970 2,667,612,253 974,739,261 393,861 975,133,122 309,000,000 477,388 (28,074,176) 693,729,910 70,866,476 764,596,386 For the year Ended March 31, 2010 RUPEES 3,075,749,586 87,633,315 3,163,382,901 1,994,927,017 65,622,962 32,966,074 60,515,813 3,757,779 63,761,675 1,002,241 2,222,553,561 940,829,340 29,074 940,858,414 275,600,000 79,625 (2,432,839) 667,611,628 56,820,248 724,431,876

INCOME Operating Income Other Income

EXPENDITURE Interest and Other Charges 10 Personnel Expenses 11 Administrative Expenses 12 Other Expenses 13 Depreciation - Fixed Assets Provision for Doubtful Debts & Contingencies Fixed Assets Discarded/Written Off Bad Debts Written Off/Business Loss PROFIT BEFORE TAX Add: Prior period adjustments

14

Less: Provision for Tax-Current -Earlier years(Net) -Deferred Tax(Net) PROFIT AFTER TAX Add- Balance brought forward from previous year PROFIT AVAILABLE FOR APPROPRIATION APPROPRIATIONS: Special Reserve - Under Section 36(1)(viii) of the Income Tax Act, 1961 Special Reserve - Under Section 29C of NHB Act, 1987 General Reserve Proposed Dividend Dividend Distribution Tax Balance carried to Balance Sheet Earning Per Share (Refer Note 12 of Schedule 16) -Basic & Diluted Significant Accounting Policies : Schedule '15' Notes forming integral part of Accounts : Schedule '16' Schedules ' 9' to '16' annexed hereto form part of the Profit & Loss Account

128,900,000 15,300,000 450,000,000 66,000,000 10,706,850 93,689,536 764,596,386 23.12

110,000,000 23,600,000 450,000,000 60,000,000 9,965,400 70,866,476 724,431,876 22.25

(A K Singhal) AVP

(Sanjay Jain) EVP(F)&Co. Secretary

(Sukhvinder Kaur) Sr. EVP

(Sanjaya Gupta) Managing Director

(Anand Dorairaj) Director

(Vivek Vig) Director

(S K Jain) Director

( P K Gupta) Director

(Tejinder Singh Laschar) Director

(G N Bajpai) Director

(Vivek Arya) Director

(Rakesh Sethi) Director

( K R Kamath) Chairman

In terms of our report of even date For S K Kapoor & Co. Chartered Accountants

PLACE: NEW DELHI DATED:

(V B Singh) Partner M No : 73124 FR No : 000745C

SCHEDULE : 1 SHARE CAPITAL As at March 31, 2011 RUPEES 500,000,000 As at March 31, 2010 RUPEES 500,000,000

AUTHORISED 50,000,000 Equity Shares of Rs.10/- each ISSUED, SUBSCRIBED AND PAID UP 30,000,000 Equity Shares of Rs.10/each fully paid up (74% Shares are held by PNB, its nominees and 26% shares are held by
Destimoney Enterprises Pvt Ltd)

300,000,000

300,000,000

SCHEDULE : 2 RESERVES AND SURPLUS As at March 31, 2011 RUPEES As at March 31, 2010 RUPEES

RUPEES SPECIAL RESERVE -(In terms of Section 36(1) (viii) of the Income Tax Act,1961) As per last Balance Sheet Add : Transfer from Profit & Loss Account -(In terms of Section 29 C of NHB Act, 1987) As per last Balance Sheet Add : Transfer from Profit & Loss Account (Refer Note 21 of Schedule 16) GENERAL RESERVE As per last Balance Sheet Add : Transfer from Profit & Loss Account

889,181,036 128,900,000 23,600,000 15,300,000

1,018,081,036

779,181,036 110,000,000 889,181,036 23,600,000 23,600,000 1,013,671,536 450,000,000 1,463,671,536 70,866,476 2,447,319,048

38,900,000

1,463,671,536 450,000,000

1,913,671,536 93,689,536 3,064,342,108

BALANCE IN PROFIT AND LOSS ACCOUNT

SCHEDULE : 3 LOAN FUNDS As at March 31, 2011 RUPEES As at March 31, 2010 RUPEES

A. SECURED 1. INR Loans i) Term Loan / Overdraft from Punjab National Bank (Secured by hypothecation of book debts and negative lien on properties charged to/guarantees obtained by the company against Loans disbursed). ii) Refinance from National Housing Bank (Secured by Hypothecation of Loans /book debts against which refinance has been availed). iii) Term Loan from Punjab & Sind Bank (Secured by Hypothecation of Loans /book debts against which loan has been availed) iv) Term Loan from United Bank of India (Secured by Hypothecation of Loans /book debts against which loan has been availed) v) Term Loan from South Indian Bank (Secured by Hypothecation of Loans /book debts against which loan has been availed) vi) Term Loan from HDFC Bank (Secured by Hypothecation of Loans /book debts against which loan has been availed) vii) Term Loan from Union Bank of India (Secured by Hypothecation of Loans /book debts against which loan has been availed)

RUPEES

8,549,441,627

5,643,145,199

3,450,435,000

3,930,653,000

330,001,037

666,541,598

215,976,091

215,988,516

2,999,999,999

2,333,300,000

2,999,989,501

2. Foreign Currency Loans i) FCNR(B) Term Loan from State Bank of Travancore (Secured by Hypothecation of Loans against which loan has been availed) ii) FCNR (B) Term Loan from South Indian Bank (Secured by Hypothecation of Loans against which loan has been availed) 3. Bonds -8.70% Secured Redeemable Bonds 2012 (Redeemable at par between 2010 & 2012. Put & Call option exercisable on 08.08.2009 was not exercised by anyone) -8.70% Secured Redeemable Bonds 2016 (Redeemable at par on 09.08.2016 ) -9.25% Secured Redeemable Bonds 2017 (Redeemable at par on 30.03.2017 with a put & call option exercisable on 30.07.2014) -9.50% Secured Redeemable Bonds 2012 (Redeemable at par on 10.10.2012) -9.30% Secured Redeemable Bonds 2012 (Redeemable at par on 29.12.2012) -9.20% Secured Redeemable Bonds 2023 (Redeemable at par in five equal annual installments from 16.01.2019 to 16.01.2023) -10.79% Secured Redeemable Bonds 2013 (Redeemable at par on 30.09.2013) -8.55% Secured Redeemable Bonds 2014 (Redeemable at par on 09.11.2014) -8.85% Secured Redeemable Bonds 2019 (Redeemable at par on 09.11.2019) [All the above bonds are secured by Hypothecation of book debts to the extent of 1.25 times of outstanding amount and mortgage of buildings of Rs 7,723,100/-] 27,520,854,668 B. UNSECURED 1. FIXED DEPOSITS Non-cumulative Cumulative Interest Accrued & Due on Deposits (Floating charge has been created on SLR securities of Rs 44.22 Crores (Previous Year Rs 44.22 Crores) as per NHB Directions) 2. Tier II Subordinated Bonds - 9.25% Unsecured Redeemable Bonds, 2016 (Redeemable at par on 22.03.2016) 3. Compulsorily Convertible Debentures - 7.25% Unsecured Compulsorily Convertible Debentures, 2012 (Convertible into equity shares of Rs 10/- each at a premium of Rs 91.50 at anytime on or before 09.06.2012) 1,373,235,217 1,000,000,000 1,000,000,000 22,833,215,344 280,000,000 400,000,000 25,012,450 130,860,490

182,725,504

1,000,000,000

1,000,000,000

1,000,000,000

1,000,000,000

1,000,000,000

1,000,000,000

1,000,000,000

1,000,000,000

1,500,000,000

1,500,000,000

1,500,000,000 750,000,000 1,250,000,000

1,500,000,000 750,000,000 1,250,000,000

418,298,947 1,450,480,753 1,868,779,700 21,294,798

1,890,074,498

696,984,214 1,997,192,084 2,694,176,298 29,281,446 2,723,457,744

4,263,309,715 31,784,164,383

3,723,457,744 26,556,673,088

SCHEDULE : 4
FIXED ASSETS As at April 1, 2010 RUPEES Furniture & Fixture Office Equipment & Electrical Equipment Vehicles Computers Building Intangible Assets (Computer Software) Total Assets Previous Year * 24,287,928 10,910,275 2,063,416 8,630,667 10,888,608 GROSS BLOCK Additions Deductions As at March 31, 2011 RUPEES 14,995,547 5,098,976 2,063,416 2,817,813 10,888,608 * As at April 1, 2010 RUPEES 17,935,734 5,622,729 764,229 6,734,153 3,989,451 DEPRECIATION For the Deduction Year during the year RUPEES 937,952 488,960 336,360 721,732 344,958 RUPEES 9,022,339 4,574,279 6,212,857 As at March 31, 2011 RUPEES 9,851,347 1,537,410 1,100,589 1,243,028 4,334,409 NET BLOCK As at As at March 31, March 31, 2011 2010 RUPEES 5,144,200 3,561,566 962,827 1,574,785 6,554,199 RUPEES 6,352,194 5,287,546 1,299,187 1,896,514 6,899,157

RUPEES 1,811,693 1,185,127 1,252,516 -

RUPEES 11,104,074 6,996,426 7,065,370 -

1,082,077 57,862,971 63,122,640

4,249,336 3,726,217

1,082,077 26,247,947 8,985,886

35,864,360 57,862,971

1,018,959 36,065,255 40,902,910

2,829,962 3,757,779

1,018,959 20,828,434 8,595,434

18,066,783 36,065,255

17,797,577 21,797,716

63,118 21,797,716 22,219,730

*Includes Buildings of Rs.7,723,100/-(PreviousYear Rs.7,723,100/-) mortaged for securing secured redeemable bonds (see schedule 3).

SCHEDULE : 5 INVESTMENTS As at March 31, 2011 RUPEES LONG TERM INVESTMENT QUOTED - OTHER THAN TRADE (FULLY PAID) i) 8.07% GOI Stock 2017 of Face Value of Rs.300,000,000/(Previous Year Rs. 300,000,000/-) ii)10.25% GOI Stock 2021 of Face Value of Rs.100,000,000/(Previous Year Rs.100,000,000/-) CURRENT INVESTMENT UNQUOTED - OTHER THAN TRADE (FULLY PAID) Others i) Certficate of Deposit of UCO Bank of Face Value of Rs 750,000,000/- (Previous Year Rs 2,000,000,000/-) ii) Certficate of Deposit of Central Bank of India of Face Value of Rs 700,000,000/- (Previous Year Rs Nil) iii) Certficate of Deposit of Federal Bank Ltd of Face Value of Rs 500,000,000/- (Previous Year Rs Nil) iv) Certficate of Deposit of Punjab National Bank of Face Value of Rs 250,000,000/- (Previous Year Rs Nil) v) Certficate of Deposit of State Bank of Patiala of Face Value of Rs 500,000,000/- (Previous Year Rs Nil) QUOTED - OTHER THAN TRADE (FULLY PAID) Bonds and Debentures vi) 9.75% IFCI Bonds 2025 of Face Value of Rs Nil (Previous Year Rs 809,000,000/-) vii) 9.55% IFCI Bonds 2025 of Face Value of Rs Nil (Previous Year Rs 550,000,000/-) viii) 8.70% P&SB Bonds of Face Value of Rs Nil (Previous Year Rs 90,000.000/-) ix) 8.95% PFC Bonds 2025 of Face Value of Rs Nil (Previous Year Rs 465,000,000/-) As at March 31, 2010 RUPEES

316,650,000 125,550,000

316,650,000 125,550,000

748,861,179 685,515,796 488,488,000 244,394,643 498,116,000

1,953,076,000 -

3,107,575,618 Cost (RUPEES) 442,200,000 2,342,790,000 2,665,375,618 1,953,076,000

817,090,000 528,275,000 90,225,000 465,000,000 4,295,866,000 Market Value (RUPEES) 414,850,000 2,323,740,000 N.A. N.A.

Aggregate value of quoted investments Previous Year Aggregate value of unquoted investments Previous Year Note: The particulars of securities purchased and sold during the year are: Particulars Face Value (RUPEES) 257,000,000 50,000,000 150,000,000 100,000,000 100,000,000 100,000,000

Purchase (RUPEES) 263,512,660 50,000,000 150,000,000 100,000,000 100,000,000 100,000,000

Sales (RUPEES) 263,525,908 50,003,650 150,001,080 100,003,700 100,003,700 100,009,700

1. 9.55% IFCI Bonds 2025 2. 8.79% IRFC Bonds 2030 3. 8.57% Central Bank of India Bonds2025 4. 8.83% IRFC Bonds 2031 5. 8.83% IRFC Bonds 2032 6. 8.83% IRFC Bonds 2033 SCHEDULE : 6 LOANS - Secured, Considered Good (See Note '2' Schedule '16' )

Housing Loans Non-Housing Loans

As at March 31, 2011 RUPEES 24,799,889,054 6,580,617,205 31,380,506,259

As at March 31, 2010 RUPEES 19,552,643,191 5,212,234,749 24,764,877,940

SCHEDULE : 7 CURRENT ASSETS, LOANS AND ADVANCES CURRENT ASSETS RUPEES Interest Accrued on Investments Cash and Bank Balance Cash in Hand With scheduled Bank -in Current Accounts -in Fixed Deposits Stamps in hand Other Assets Assets acquired in extinguishment of loans (Held for sale or disposal) Less:Provision for Doubtful Debts LOANS AND ADVANCES LOANS (Secured, Considered Good excepting provision made for doubtful advances) Instalments Due from Borrowers * (Note 2 & 3 of Schedule 16) Demand Loan against Deposits ADVANCES (Unsecured, Considered Good) Staff Loan Advances recoverable in cash or in kind or for value to be received TDS and Advance Income Tax Advance Fringe Benefit Tax Advance Interest Tax * Net of interest de-recognised Rs.29,950,825/- (Previous Year Rs.25,502,442/-) SCHEDULE : 8 CURRENT LIABILITIES AND PROVISIONS As at March 31, 2011 RUPEES As at March 31, 2010 RUPEES 212,233,639 20,212,603 3,986,034 2,841,715 852,710,639 1,175,000 2,096,208,483 2,832,254 1,698,808 712,494,305 2,142,000 90,551 1,487,721,999 As at March 31, 2011 RUPEES 8,467,013 7,878,140 262,530,581 401,261,075 53,635 As at March 31, 2010 RUPEES 28,559,414 6,682,130 62,587,736 47,648

275,151,389 17,382,727

257,768,662

364,481,546 13,383,499 351,098,047

285,698,969 11,837,020

309,978,547 9,510,559

CURRENT LIABILITIES Interest Accrued But Not Due- Deposits - Bonds/Loans Unclaimed Deposits (Including unclaimed interest accrued and due Rs.30,876,425/Previous Year Rs. 23,647,528/- ) Sundry Creditors Other Liabilities PROVISIONS Provision for - Doubtful Debts & Contingencies - Leave Encashment - Taxation - Proposed Dividend (including tax thereon)

RUPEES 185,495,123 14,148,822

122,611,467 26,832,681 24,478,434

373,566,527

109,137,130 3,727,265 22,075,595 367,386,232 193,000,000 9,363,756 705,842,000

271,900,000 12,693,114 826,075,000 76,706,850 1,187,374,964 1,560,941,491

69,965,400 978,171,156 1,345,557,388

SCHEDULE : 9 OPERATING INCOME For the year Ended March 31, 2011 RUPEES For the year Ended March 31, 2010 RUPEES

RUPEES INTEREST INCOME i) on Loans - Housing Loans - Non-Housing Loans (TDS Rs 18,205,463/Previous Year Rs 11,736,832/-) ii) on Demand loans iii) on Deposits (TDS Rs 1,486,987/Previous Year Rs.67,418/-) iv) on Investments (TDS Rs Nil Previous Year Rs 182,353/-) - Long Term - Current

2,463,541,136 908,651,395 3,372,192,531 1,272,246 3,373,464,777 34,865,534

2,115,469,792 701,687,101 2,817,156,893 1,060,419 2,818,217,312 8,938,007

34,458,676 9,277,405

3,452,066,392 8,290,447 128,425,272

86,358,986 42,769,728 2,956,284,033 32,671,297 83,111,591 3,682,665 3,075,749,586 153,791 64,800,000 23,051,061

DIVIDEND FEES & OTHER CHARGES PROFIT/(LOSS) ON SALE OF INVESTMENTS - LONG TERM - CURRENT OTHER INCOME Interest on Income / Interest Tax Refund Provision for Contingencies Written Back Miscellaneous Income (TDS Rs 1,767,036/- Previous Year Rs 916,112/-) Profit/(loss) on sale of fixed assets

959,545.00 63,495 52,830,520 (284,157)

959,545 3,589,741,656

52,609,858 3,642,351,514

(371,537) 87,633,315 3,163,382,901

SCHEDULE : 10 INTEREST AND OTHER CHARGES For the year Ended March 31, 2011 RUPEES 2,062,129,463 227,969,360 3,047,628 3,324,677 2,296,471,128 For the year Ended March 31, 2010 RUPEES 1,729,178,544 259,965,782 1,841,317 3,941,374 1,994,927,017

Interest on loans Interest on deposits Bank Charges Brokerage on deposits SCHEDULE : 11 PERSONNEL EXPENSES

Salaries and Allowances Contribution to Provident Fund Staff Welfare & Training Expenses

For the year Ended March 31, 2011 RUPEES 77,842,151 6,456,697 5,909,754 90,208,602

For the year Ended March 31, 2010 RUPEES 56,419,881 4,496,480 4,706,601 65,622,962

SCHEDULE : 12 ADMINISTRATIVE EXPENSES For the year Ended March 31, 2011 RUPEES 15,145,660 103,997 4,917,475 84,897 723,227 5,270,109 14,431,471 26,915 40,703,751 For the year Ended March 31, 2010 RUPEES 12,927,012 322,138 4,364,408 75,178 1,704,607 4,429,404 9,045,747 97,580 32,966,074

Rent Repairs & Maintenance - building Repairs & Maintenance - others Rates & Taxes Registration and Filing Fees Electricity and Water Charges General Office Expenses Insurance SCHEDULE : 13 OTHER EXPENSES

Travelling* Conveyance Printing & Stationery Postage & Telephone Director's Sitting Fee Legal Expenses Professional Charges Auditors Remuneration - Audit Fee - Tax Audit Fee - Out of Pocket Expenses - Other Certifications Publicity DMA Commission Miscellaneous

For the year Ended March 31, 2011 RUPEES 4,770,988 5,170,926 2,346,701 6,027,722 195,000 1,894,494 30,972,232 551,500 220,600 401,079 275,750 4,698,388 36,960,081 2,825,918 97,311,379

For the year Ended March 31, 2010 RUPEES 4,127,152 3,974,432 2,057,715 4,949,174 164,000 834,612 18,915,087 441,200 165,450 357,133 220,600 3,167,585 19,733,680 1,407,993 60,515,813

* Includes expenditure incurred in foreign currency Rs Nil (Previous Year Nil) SCHEDULE : 14 PRIOR PERIOD ADJUSTMENT For the year Ended March 31, 2011 RUPEES INCOME Fees & Other Charges EXPENDITURE General Office Expenses Professional Charges Postage & Telephone Salary & Allowances Repairs & Maintenance - others 87909 193136 14174 (792486) 103,406 (393,861) 393,861 For the year Ended March 31, 2010 RUPEES 34,130 34,130 5,056 5,056 29,074

SCHEDULE: 15 SIGNIFICANT ACCOUNTING POLICIES 1. GENERAL METHOD AND SYSTEM OF ACCOUNTING The accounts of the company are prepared under the Historical Cost convention on accrual method of accounting on the principle of going concern and in accordance with the Companies Act, 1956, the applicable accounting standards issued by The Institute of Chartered Accountants of India, National Housing Bank Act, 1987 and The Housing Finance Companies (NHB) Directions, 2010 issued by National Housing Bank. 2. REVENUE RECOGNITION (a) FEE AND OTHER CHARGES Income from fee and other charges viz. Administrative Fee, Processing Fee, Penal Interest on Overdue/Additional Interest on Defaults, Pre-payment charges etc. is recognised on receipt basis. (b) DIVIDEND INCOME Dividend is accounted for in the year in which the same is received. (c) OTHER INCOME Interest on tax refunds and other incomes are accounted for on receipt basis. (d) INTEREST ON LOANS Interest Income is recognised on accrual basis except in case of non-performing assets where interest is accounted on realisation. In loans, the repayment is received by way of Equated Monthly Instalments (EMIs) comprising principal and interest. Interest is calculated on the outstanding balance at the beginning of the month. EMIs generally commence once the entire loan is disbursed. Pending commencement of EMIs, Pre-EMI interest is charged every month. 3. FIXED ASSETS Fixed Assets used in the business are capitalised at cost inclusive of all related expenses. 4. DEPRECIATION (i) Depreciation on Fixed Assets is provided on the Written Down Value Method at the rates prescribed in Schedule XIV of the Companies Act, 1956 on prorata basis. Wherever the depreciation rates are not prescribed, the rates prescribed by Income Tax Act,1961 & Rules are used. (ii) Assets costing upto Rs. 5000/- are charged to revenue. 5. INVESTMENTS Investments are capitalised at cost inclusive of brokerage and stamp charges excluding interest/dividend accruing till the date of purchase. The difference between the carrying amount and disposal proceeds of investments, net of expenses, is recognised in the Profit & Loss Account. Investments are classified as long term investments and current investments and are valued in accordance with guidelines of National Housing Bank and Accounting Standard on Accounting for Investments (AS-13), issued by The Institute of Chartered Accountants of India. Long term investments are valued at cost. However, when there is a decline, other than temporary, in the value of long term investment, the carrying amount is reduced to recognise the decline. Current investments are valued at lower of cost or market value determined on individual investment basis. 6. EMPLOYEE BENEFITS (i) The company has taken LIC Policy to cover the accumulated gratuity liability till 31.03.2011 of its employees. LIC has made actuarial valuation on renewal date i.e. 1-1-2011. The premium on this policy has been accounted for on accrual basis in line with the Accounting Standard on

Accounting for Employee Benefits (AS-15), issued by the Institute of Chartered Accountants of India. (ii) Provision for leave encashment is made on the basis of actuarial valuation as on 31.3.2011. (iii) Retirement benefits of employees on deputation from Punjab National Bank are borne and hence no provision is considered necessary by the company. 7. TRANSACTION INVOLVING FOREIGN EXCHANGE (i) (ii) (iii) Foreign currency monetary liabilities are translated at the rate which reflects the liability of the company in Indian Rupee which is likely to be repaid at the balance sheet date. Income and expenditure items are accounted for at the exchange rate prevailing on the date of transaction. Generally Exchange differences arising on Foreign Currency transactions are recognised as income or expense as the case may be in the period in which they arise. However, in case of forward exchange contracts, the Exchange difference between the forward rate and the exchange rate at the date of transaction is recognised as an income or expense over the life of the forward contract in line with Accounting Standard on Accounting for the Effects of Changes in Foreign Exchange Rates (AS-11) issued by Institute of Chartered Accountants of India. by PNB

8. TAXES ON INCOME Taxes on Income are accounted for in accordance with Accounting Standard (AS) 22Accounting for taxes on income, issued by the Institute of Chartered Accountants of India. Income tax comprises both current and deferred tax. Current tax is measured on the basis of estimated taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961. The tax effect of timing differences that result between taxable income and accounting income and are capable of reversal in one or more subsequent periods are recorded as a deferred tax asset or deferred tax liability. They are measured using substantially enacted tax rates and tax regulations as of the Balance Sheet date. Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws, are recognised, only if there is virtual certainty of its realisation, supported by convincing evidence. Deferred tax assets on account of other timing differences are recognised only to the extent there is a reasonable certainty of its realisation. 9. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS (AS 29) Provisions are recognised when the Company has a legal and constructive obligation as a result of a past event, for which it is probable that cash outflow will be required and a reliable estimate can be made of the amount of the obligation. Contingent liabilities are disclosed when the Company has a possible or present obligation where it is not probable that an outflow of resources will be required to settle it. Contingent Assets are neither recognised nor disclosed. 10. DERIVATIVE TRANSACTIONS (i) The derivative transactions entered for hedging interest bearing liabilities are accounted for on accrual basis.

(ii)

Gains or losses on swaps are accounted for on the date of unwinding and are adjusted in the Interest Expenditure account.

11. POSSESSION OF SECURED ASSETS (i) As per the National Housing Bank Directions 2010, the land and buildings, including Assets/ Properties acquired from NPA Advances in settlement of Loans, are held as Other Current Assets till their disposal. These assets are required to be disposed off within 3 years from the date of acquisition (if it exceeds 10% of net owned funds of the company) unless and until extended by the NHB. All the expenses incurred on the upkeep of the property including safeguarding, insurance, rates & taxes etc are charged to Profit & Loss Account in the year of incurrence. Where the possession of the secured assets has been taken by the Company under SARFAESI Act, 2002 such assets are classified in Current Assets at cost or market price (as per valuation report), whichever is less till its final disposal. The diminution in value is provided as Provision for Doubtful Debts & Contingencies. The loss, if any, is ascertained and accounted for in the year of its disposal.

(ii)

12. INSTALMENTS - ACCOUNTING OF LOANS (i) Loans to the extent, the instalments have not become due as at the year end are being shown under Loans. (ii) Loans to the extent the instalments have become due on or before 31 March, 2011 are being shown under Loans and Advances. 13. PRUDENTIAL NORMS Income recognition and Provisions on Loans & Advances are being made on the basis of prudential norms laid down by National Housing Bank (NHB). 14. UNCLAIMED DEPOSITS Deposits, which have become due but have not been presented for payment or renewal are transferred to unclaimed deposits. Interest for the period from last maturity date till the date of renewal of unclaimed deposits is accounted for during the year of its renewal. 15. SHARE/ BOND ISSUE EXPENDITURE Expenditure incurred on issue of shares/bonds is charged to Profit & Loss Account in the year it is incurred. 16. BROKERAGE/DMA COMMISION Brokerage on Deposits/ DMA Commission on loans is charged to Profit & Loss Account in the year it is incurred. 17. INCENTIVE PAID TO EMPLOYEES Cash Incentive paid to employees in terms of performance linked incentive scheme is charged to Profit & Loss Account in the year it is incurred.
st

SCHEDULE: 16 NOTES ON ACCOUNTS 1. The age-wise analysis of loans in respect of which the instalments (including interest) have become due are as under: For the year Ended For the year Ended March 31, 2011 March 31, 2010 RUPEES RUPEES Outstanding for over six months 43,913,693 29,116,027 Outstanding for six months or less 241,785,276 280,862,520 285,698,969 309,978,547 2. Loans and instalments due from borrowers shown under Loans and Advances are secured wholly or partly by: (a) (b) (c) (d) 3. Equitable Mortgage of Property Pledge of shares, units, NSCs, other securities, assignment of life insurance policies. Bank guarantees corporate guarantees, government guarantee or personal guarantees. Undertaking to create a security.

Advances are classified as performing and non-performing assets and provisions are made in accordance with guidelines on prudential norms issued by National Housing Bank (NHB). Detail is given hereunder: (Rs. in lac) Loans Standard Sub Doubtful Loss Total Standard Housing Loans (including instalments 246856.61 1506.05 1213.02 579.92 250155.60 due from borrowers) (195207.08) (1790.04) (731.17) (305.97) (198034.26) (Previous Year) Provisions made 1235.00 153.64 347.99 579.92 2316.55 (Previous Year) (305.97) (976.00) (179.00) (196.34) (1657.31) Non-Housing Loans (including instalments 65654.95 525.36 326.14 66506.45 due from borrowers) (Previous Year) (52402.89) (230.60) (73.11) (7.71) (52714.31) Provisions made 263.33 52.54 71.58 387.45 (Previous Year) (209.88) (23.06) (17.04) (7.71) (257.69) Total Loans 312511.56 2031.41 1539.16 579.92 316662.05 (Previous Year) (247609.97) (2020.64) (804.28) (313.68) (250748.57) Total Provisions 1498.33 206.18 419.57 579.92 2704.00 (Previous Year) (1185.88) (202.06) (213.38) (313.68) (1915.00)

4. a) In view of prevailing industry scenario, uncertainties about recoveries and increasing incidence of frauds it has been considered prudent to keep a Provision of Rs 14.98 crores equivalent to 0.50%(Rs 12.35 crores Previous Year Rs 9.76 crores) of standard housing loans and 0.40%(Rs 2.63 crores Previous Year Rs 2.10 crores) of standard non-housing loans against the requirement of Rs 1.45 crores equivalent to 0.20% on loans other than individual housing loans as per NHB Directions, 2010. b) The company has retained a Provision for Contingencies of Rs 0.15 crore made in March 08 in respect of fraudulent encashment of a cheque pending completion of investigation. 5. Interest on non-performing assets is recognised on realisation basis as per the NHB Guidelines. Accordingly the total interest de-recognised as at the Balance Sheet date is summarised as under:-

Cumulative interest B/F from last Balance Sheet Less: Recovered/ written back/ written off during the year Add: Interest de-recognised for the year on - Sub Standard Assets (Net) - Doubtful/ Loss Assets Total interest de-recognised as on 31.03.2011 6. Capital to Risk Assets Ratio (CRAR) Items i ii iii 7. CRAR (%) CRAR Tier I Capital (%) CRAR Tier II Capital (%) For the year Ended March 31, 2011 20.83 12.16 8.67

RUPEES 25,502,442 16,319,850 17,034,829 3,733,404 29,950,825

For the year Ended March 31, 2010 16.78 11.88 4.90

Exposure to Real Estate Sector Category a Direct Exposure (i) Residential Mortgages(including loan against residential property) Lending fully secured by mortgages on residential property that is or will be occupied by the borrower or that is rented (Out of which Individual Housing Loans upto Rs 15 lacs Rs 1252.40 crores Previous Year Rs 1070.65 crores) (ii) Commercial Real Estate Lending secured by mortgages on commercial real estates. Exposure would also include non-fund based (NFB) limits (iii) Investments in Mortgage Backed Securities (MBS) and other securitised exposures a Residential b Commercial Real Estate Indirect Exposure Fund based and non-fund based exposures on National Housing Bank (NHB) and Housing Finance Companies (HFCs)

Rs in crores For the year For the year Ended Ended March 31, 2011 March 31, 2010

3007.88

2352.66

158.74

154.83

Nil Nil Nil

Nil Nil Nil

8. Asset Liability Management Maturity pattern of certain items of assets and liabilities Liabilities Borrowings Market from banks Borrowings 1 day to 30-31 days (one month) Over 1 month to 2 months Over 2 months to 3 months Over 3 months to 6 months Over 6 months to 1 year Over 1 year to 3 years Over 3 years to 5 years Over 5 years to 7 years Over 7 years to 10 years Over 10 years Total 9. Managerial remuneration:For the year Ended March 31, 2011 RUPEES 4,213,878 238,431 4,452,309 0 135,564 For the year Ended March 31, 2010 RUPEES 688,634 39,480 728,114 36,600 1,53,078 215 2 53 112 190 876 358 7 11 0 1824 28 8 8 44 39 423 314 109 215 197 1385 Rs in crores Assets Advances Investments (Net of NPA Provision) 20 196 20 0 20 71 60 0 149 0 333 0 288 0 553 32 516 0 1196 12 3155 311

Salaries and Allowances Contribution to Provident Fund Total Value of perquisites (Car, Accommodation etc) Travelling Expenses (Including LFC of Rs Nil Previous Year Rs 139,848/-) 10. Related Party Transactions:

In view of the exemption available to the company under para 9 of Accounting Standard on Related Party Disclosures (AS-18), related party relationships with other state controlled enterprises and transactions with such enterprises are not being disclosed. However, the company has identified all other related parties having transactions during the year as given below: a) Key Management Personnel S.No 1. Name of transacting related party Sh V K Sood & Relatives Managing Director (upto 25.06.2010) Sh Sanjaya Gupta & Relatives Managing Director (w.e.f. 25.06.2010) Salary & Allowances Cont. to PF Travelling exp. Housing Loan Salary & Allowances Cont. to PF Travelling exp. (Rs. in Lac) Amount 14.15 0.68 0.51 7.55 27.99 1.70 0.84

2.

b) Other Entities: S.No 1. Name of transacting related party Destimoney Enterprises Pvt Ltd Board Meeting Airfare and Conveyance DMA Commission Interest on Debentures Dividend Compulsorily Convertible Debentures Issued

(Rs. in Lac) Amount 6.22 9.63 803.41 156.00 13732.35

c) Only the independent directors are paid sitting fees for the Board / Audit Committee meetings at the rate of Rs.5,000/- per meeting and for Other Committee meetings Rs 3,000/- per meeting besides out of pocket expenses. During the year the Company has paid a sum of Rs. 1.95 lac towards sitting fees. 11. Deferred Taxes a) The break up of net deferred tax asset as at 31.03.2011 is as under: Particulars As at March 31, 2011 RUPEES 6,697,993 4,118,281 93,857,781 2,685,990 107,360,045 (RUPEES) As at March 31, 2010 RUPEES 6,193,042 3,110,406 68,555,439 1,426,982 79,285,869

Deferred Tax Asset: De-recognised Interest Provision for Leave Encashment Provision for Doubtful Debts and Contingencies Depreciation on Fixed Assets Net deferred tax asset

b) As per the opinion of the Expert Advisory Committee of the ICAI, the Company is required to create provision of deferred tax liability on Special Reserve created and maintained u/s 36(1)(viii) of the Income Tax Act,1961. As per prevalent practice amongst Housing Finance Companies, the company has not made such provision. 12. Earning per share (EPS) calculation (basic and diluted) a. Amount used as the numerator Profit after tax b. Weighted average number of equity shares used as the denominator c. Nominal value of shares d. Earning per share (EPS) Unit Rupees Number Rupees Rupees 2010-11 693,729,910 30,000,000 300,000,000 23.12 2009-10 667,611,628 30,000,000 300,000,000 22.25

13. Segment Reporting: Companys prime business is to provide loans against/for purchase, construction, repairs & renovations of Houses/ Flats/Commercial Properties etc. There are no business operations located Outside India. Hence all the activities are considered as a Single business/ Geographical Segment for the purposes of Accounting Standard on Segment Reporting (AS-17), issued by The Institute of Chartered Accountants of India. 14. Impairment of Assets (AS 28): The management feels that the Accounting Standard (AS 28) would not apply to investment, inventories and financial assets such as loans and advances. However as regard to financial assets such as loans and advances the same has been covered by provision in accordance with guidelines on prudential norms issued by National Housing Bank (NHB).

Further, during the year the company carried out exercise of identifying and discarding obsolete/incompatible items of fixed assets having written down value of Rs 0.50 crores. Most of the discarded assets have immaterial scrap value. Hence, full amount has been written off. 15. Details of movement in provisions (AS-29) Provision for Doubtful Debts Contingencies & Opening as on 01.04.10 2063.83 Addition 828.99 Rs in lacs Reversal/Adjustment Closing as on 31.03.2011 0 2892.82

Outflow in respect of above provisions would depend on developments/outcome of these events. 16. The provision for Income Tax has been made on the basis of the accounting practices consistently followed by the Company after allowing benefits under section 36(1)(viii) of the Income Tax Act, 1961. The method of bifurcation of income & expenses for long term housing finance is the same as that of last years. 17. As per the information available with the company, there are no amounts payable to Micro, Small and Medium Enterprises. 18. With respect to companys borrowing in FCNR (B) - Term Loan Account, the company has paid/ incurred interest amounting to Rs.11,077,986/- (Previous year Rs. 51,479,472/-) in foreign currency. Further the company has taken foreign currency fluctuation cover by way of Forward Exchange Contract from reputed approved dealers. A sum of Rs.7,881,354/- being the liability (Previous year Rs. 4,899,739/-) of company with respect to exchange difference for the Forward Exchange Contract and Rs Nil being the liability (Previous Year Rs 15,851,000/-) towards exchange difference for uncovered borrowing has been paid and accounted for as per the guidelines laid down by the Accounting Standard on accounting for the effects of changes in Foreign Exchange rates (AS-11) issued by The Institute of Chartered Accountants of India. 19. All Computer Software purchased from outsiders are being amortised as per Accounting Standard 26 (AS-26) as laid down by The Institute of Chartered Accountants of India. Considering the technological risks and issues of technological obsolescence, the Depreciation on written down value at the rate of 60% p.a. is being provided. All subsequent expenditure on software after its purchase and /or installation are recognised as expenditure whenever incurred. 20. As per NHB refinance guidelines, the Company is required to submit half-yearly certificate as on 30 st September and 31 March disclosing therein the difference between hypothecated book debts and NHB refinance outstanding. The adverse balance, if any, is being paid back to NHB as per their guidelines (Adverse Balance as on 31.03.11 is Nil Previous Year Rs.Nil). 21. As per Section 29 C of National Housing Bank Act, 1987, the Company is required to transfer at least 20% of its net profit every year to a reserve before any dividend is declared. For this purpose any Special Reserve created by the Company under Section 36 (1) (viii) of Income Tax Act, 1961 is considered to be an eligible transfer. Accordingly, the Company has transferred Rs 12.89 crore to Special Reserve u/s 36(1) (viii) of Income Tax Act, 1961 and Rs 1.53 crore (including Rs 0.54 crore for earlier years) to Additional Reserve (u/s 29C of NHB Act) during the year. 22. Government Notification about Cess payable u/s 441-A of the Companies Act, 1956, being not available, necessary provision has not yet been made.
th

23. Amount due from principal officers as at 31.03.2011 was Rs Nil (Previous year Rs 764,881/-). Maximum amount due from such officers at any time during the year was Rs 764,881/- (Previous year Rs 764,881/-). 24. Contingent liabilities not provided for As at March 31, 2011 RUPEES 0 70,196 17,009,790 As at March 31, 2010 RUPEES 98,000 0 17,123,453

- Estimated amount of contracts remaining unexecuted (net of advance) - Claims against the Company not acknowledged as debt - Income tax matters under dispute

25. Previous year figures have been rearranged/regrouped wherever necessary. 26. Figures have been rounded off to the nearest rupee.

27. BALANCE SHEET ABSTRACT AND COMPANYS GENERAL BUSINESS PROFILE I. REGISTRATION DETAILS Registration No. Balance Sheet Date II. 55-33856 31.03.2011 State Code 55

CAPITAL RAISED DURING THE YEAR (Amount in Rs. Thousands) Public Issue NIL Bonus Issue NIL

Rights issue Private Placement

NIL NIL

III.

POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (Amount in Rs. Thousands) Total Liabilities 36,709,448 Total Assets SOURCES OF FUNDS Paid up Capital 300,000 Reserves & Surplus Secured Loans 27,520,855 Unsecured Loans APPLICATION OF FUNDS Net Fixed Assets 17,798 Investments Net Current Assets 32,023,133 Miscellaneous Expenditure Accumulated Losses 0

36,709,448 3,064,342 4,263,310 3,107,576 0

IV.

PERFORMANCE OF COMPANY (Amount in Rs. Thousands) Turnover and other income Profit before tax Earning per share (Rupees)

3,642,351 974,739 23.12

Total Expenditure Profit After Tax Dividend Rate (%)

2,667,612 693,730 22

V. GENERIC NAMES OF THREE PRINCIPAL PRODUCTS/SERVICES OF COMPANY (As per Monetary terms) : Company is a single product company as per details below : Item code No. N.A. Product Description Loans for or against properties

given

(A K Singhal) AVP

(Sanjay Jain) EVP (F) & Co. Secretary

(Sukhvinder Kaur) Sr. EVP

(Sanjaya Gupta) Managing Director

(Anand Dorairaj) Director

(Vivek Vig) Director

(S K Jain) Director

(P K Gupta) Director

(Tejinder Singh Laschar) Director

(G N Bajpai) Director

(Vivek Arya) Director

(Rakesh Sethi) Director

(K R Kamath) Chairman

In terms of our report of even date S K Kapoor & Co. Chartered Accountants PLACE: NEW DELHI DATED: ( V B Singh) Partner M No : 73124 FR No : 000745C