APPLICANT'S UNDERTAKING HOUSING AND URBAN DEVELOPMENT CORPORATION LIMITED

“IN THE NATURE OF FORM 2A - MEMORANDUM CONTAINING SALIENT FEATURES OF THE PROSPECTUS”2. We may not be able to foreclose on or realise the value ofour collateral on a timely basis, or at all, when borrowersdefault on their obligations to us and this may have a materiallyadverse effect on our business, results of operationsand financial condition.3. Our business is vulnerable to interest rate volatility and wewill be impacted by any volatility in such interest rates inour operations, which could cause our net interest marginsto decline and adversely affect our profitability.4. We may not be able to successfully manage and maintainour growth, which could have a material adverse effect onour results of operations and financial condition.5. Any inability to meet our debt finance obligations may havean adverse effect on our business and results of operations.6. We face asset-liability mismatches which could affect ourliquidity and consequently may adversely affect our operationsand profitability.7. Financing of Indian housing and urban infrastructure sectoris very competitive and increasing competition may resultin declining margins and market shares.8. We may be unable to secure funding at competitive rates,which could adversely affect our growth, expansion and resultsof operations.9. We are currently involved in certain criminal proceedings,and any adverse decision in any of these proceedings mayhave an adverse effect on our business, results of operationsand financial condition.10. Our business may be adversely affected by future regulatorychanges.11. We have a limited history with respect to operating throughjoint ventures and certain other business lines and are subjectto all of the risks and uncertainties associated with commencingnew business lines in general.12. We have high loan concentrations with our top ten borrowerscontributing to 34.67% of our total loans outstanding ason March 31, 2013 and default by any one of them couldsignificantly affect our business.13. We are subject to certain restrictive covenants in our loandocuments, which may restrict our operations and ability togrow and may adversely affect our business.14. Our Directors may have interests in companies/entities similarto ours, which may result in a conflict of interest thatmay adversely affect future financing opportunity from referrals.15. We are involved in certain legal proceedings, which, if determinedagainst us, could adversely impact our businessand financial condition.16. We have experienced incidents of fraud in the past and mayexperience such frauds in the future as well, which may havean adverse effect on our business, results of operation andfinancial condition.17. In the event of our failing to meet the capital adequacy andstatutory liquidity requirements on account of any changesin the existing regulatory policy, our results of operationand financial condition could be severely affected.18. In the event that our contingent liabilities were to materialise,our financial condition could be adversely affected.19. We may be required to bear additional tax liability for previousassessment years, which could adversely affect ourfinancial condition.20. We are subject to risks arising from exchange rate fluctuationsand devaluation of the Indian rupee against any foreigncurrencies which could increase our cost of finance,thereby adversely affecting our results of operation and financialcondition.21. Borrowing for the purchase or construction of property maynot continue to offer borrowers the same fiscal benefits itcurrently offers, which would result in lower demand for ourhousing finance portfolio, and thereby, adversely affect ourbusiness.22. The upgrade of our Information Technology systems is due,and in the event such upgrade is unsuccessful or delayed,our business could be significantly affected.23. Our Registered Office is not owned by or leased to us, and inthe event we are unable to continue to operate from suchpremises, our business, financial condition and results ofoperation may be adversely affected.24. With regard to the composition of our Board, we are currentlynot in compliance, and have not been able to complyon certain occasions in the past, with guidelines issued bythe Department of Public Enterprises.25. Our statutory auditors have qualified their audit report onour financial statements in the past and any qualificationsin the auditor’s report in the future may impact our results ofoperations.26. Our profits and cashflows could be adversely affected uponthe approval of the ‘Voluntary Retirement Scheme 2013’ byour shareholders.27. We have negative cash flows in recent periods and an inabilityto generate and sustain positive cash flows in thefuture may adversely affect our business, results of operationand financial condition.28. Office copies of some of the forms required to be filed withthe RoC in the past with regard to certain corporate actionsare not traceable in our office as also with the RoC, whichmay affect our compliance with the Companies (Central Government)General Rules and Forms, 1956.29. We benefit from certain tax benefits available to us as apublic financial institution and if these benefits are no longeravailable to us, our business, financial condition, results ofoperations may be adversely affected.30. Loss of our key management personnel may have an adverseaffect on our business, results of operations, financialcondition and ability to grow.31. In the event that our insurance is not adequate to protect usagainst all potential losses to which we are exposed; ourbusiness, profitability and financial condition may be adverselyaffected.32. The proposed adoption of IFRS may result in our financialcondition and results of operations appearing materiallyHOUSING AND URBAN DEVELOPMENT CORPORATION LIMITED37