APPLICANT'S UNDERTAKING HOUSING AND URBAN DEVELOPMENT CORPORATION LIMITED

“IN THE NATURE OF FORM 2A - MEMORANDUM CONTAINING SALIENT FEATURES OF THE PROSPECTUS”things, arbitrary use of power in the sanctioning of loansamounting to ` 14,500 crores, release of ` 8,500 crores, subscriptionin privately placed debentures of ` 1250 crores andwrite off of ` 550 crores in financial year 2002-03. CPIL prayedfor an investigation by an independent investigative agencyinto the affairs of our Company, among other reliefs. Pursuantto the above, the Central Vigilance Commission (“CVC”) conducteda vigilance audit, enquiry and submitted a report datedMarch 27, 2006 reporting irregularities in certain lending decisionsof our Company. Our Company has filed objections datedSeptember 20, 2006 against the report of the CVC before theSupreme Court. The matter is currently pending.6. The International Human Rights Association has filed a writpetition (No. 8254 of 2010) against the Union of India, ourCompany and others alleging irregularities in the award of acontract to Samadhan Sewa Samiti, a non-governmentalorganisation for the construction of toilets for the urban poorand in the rural areas under the Integrated Low Cost SanitationScheme, a project appraised by our Company. The matteris currently pending.7. M/s North Eastern India Trust for Education and Development,the petitioners in the case, has filed a contempt petition(W.A.(SH) No. 10 of 2012) before the high court of Gauhatiagainst Mr. V.P.Baligar, in his capacity as the Chairman andManaging Director of our Company and the regional chief ofour Company’s Guwahati regional office, for alleged non complianceof the order dated April 27, 2012 of the Gauhati highcourt for one time settlement with the petitioners. The Courthas issued a notice dated September 24, 2012 ((C)(SH)No.26/2012/1400-1401) seeking reasonable cause for not initiatingproceedings under the Contempt of Court Act, 1971. The matteris currently pending.Service matters1. Mr. A.N. Gupta filed a writ petition (No. 6972 of 2002) againstthe Public Enterprises Selection Board, our Company and othersbefore the High Court of Delhi challenging the terminationof his services as Director (Finance) in our Company. TheHigh Court of Delhi, pursuant to an order dated May 8, 2003dismissed the petition. Against this order, the petitioner preferreda letters patent appeal (No. 398 of 2003) before the divisionbench of the High Court of Delhi, which was also dismissedpursuant to its order dated February 7, 2006. Mr. Guptasubsequently filed a review petition (No. 121/2006 in LPA No.398/2003) before the High Court of Delhi, which was also dismissedpursuant to order dated March 24, 2006. Mr. Gupta hasnow filed a special leave petition dated June 27, 2006 beforethe Supreme Court of India against the orders dated February7, 2006 and March 24, 2006 of the High Court of Delhi. Thematter is currently pending.2. Mr. Kulwant Singh filed a writ petition (No. 16002 of 2006)against our Company before the High Court of Delhi challenginghis removal from service from our Company. The petitionwas transferred to the Central Administrative Tribunal, NewDelhi (“CAT”), which pursuant to its order dated November29, 2010 quashed the order of removal and directed for paymentof among other things, gratuity, full pay and allowancesduring the period of suspension. Our Company filed a writpetition (No. 756 of 2011) before the High Court of Delhi againstthe order of the CAT. In the meanwhile, the CAT initiatedcontempt proceedings (CP(C) 305/2011) against the ex-chairmanand managing director of our Company for non complianceof its order dated November 29, 2010. The High Court ofDelhi, pursuant to order dated April 5, 2011 has stayed thecontempt proceedings pending before CAT till the writ petitionis disposed of. The matters are currently pending.Tax matters1. The Additional Commissioner of Income Tax, New Delhi(“ACIT”) passed an assessment order dated December 28,2007 against our Company disallowing an amount of ` 55.87crores claimed as expenses in relation to, among other things,interest accrued but not due on foreign currency loans andrevenue derecognisation in accounts in the assessment year2005-06. Against this assessment order, our Company has filedan appeal before the Commissioner of Income Tax (Appeals)which was partly allowed pursuant to an order dated January11, 2012. Our Company has filed an appeal before the IncomeTax Appellate Tribunal, New Delhi against the said order. Thematter is currently pending.2. The ACIT passed an assessment order dated February 28,2005 against our Company demanding an additional amountof ` 24.78 crores as tax and penalty payable for assessmentyear 2003-04 with respect to, among other things, prior periodexpenditure, interest accrued but not due on foreign currencyloans and financial charges written off. Against this assessmentorder, our Company filed an appeal before the Commissionerof Income Tax (Appeals) which was partly allowed pursuantto an order dated January 31, 2006. Against this order,our Company has filed an appeal before the Income Tax AppellateTribunal, New Delhi. The matter is currently pending.3. The ACIT passed an assessment order dated March 19, 2004against our Company demanding an additional amount of `21.76 crores as tax and penalty payable for assessment year2002-03 with respect to among other things, interest accruedbut not due on foreign currency loans and financial chargeswritten off and deductions made on account of interest payableto the government. Against this assessment order, ourCompany filed an appeal before the Commissioner of IncomeTax (Appeals) which was partly allowed pursuant to orderdated January 30, 2006. Our Company has filed an appeal beforethe Income Tax Appellate Tribunal, New Delhi. The matteris currently pending.4. The DCIT passed an assessment order dated March 28, 2013against our Company demanding an additional amount of `133.11 crores as tax and penalty payable for assessment year2007-08 with respect, to among other things, additions undersection 14 A of the IT Act, disallowance of provision of salaryfor the purpose of pay revision and decline in profits due tochange in accounting policies. Against this assessment order,our Company filed an appeal before the Commissioner of IncomeTax (Appeals). The matter is currently pending.5. The ACIT passed an assessment order dated March 30, 2013against our Company demanding an additional amount of `68.07 crores as tax and penalty payable for assessment year2010-11 with respect to among other things, additions underHOUSING AND URBAN DEVELOPMENT CORPORATION LIMITED33