APPLICANT'S UNDERTAKING HOUSING AND URBAN DEVELOPMENT CORPORATION LIMITED

“IN THE NATURE OF FORM 2A - MEMORANDUM CONTAINING SALIENT FEATURES OF THE PROSPECTUS”DETAILS PERTAINING TO THE ISSUEOBJECTS OF THE ISSUE1. Issue ProceedsThe CBDT has, by the CBDT Notification, authorised our Companyto raise the Bonds aggregating to ` 5,000.00 crores out ofwhich our Company has already raised an amount of ` 190.80crores on a private placement basis through a disclosure documentdated August 30, 2013 and a resolution of the ResourceCommittee (sub-committee of the Board) on September 2, 2013.Our Company proposes to raise the balance amount of ` 4,809.20crores * through a public issue of the Bonds in one or more tranchesprior to March 31, 2014.*In terms of the CBDT Notification, in addition to the tranche(s)of public issue, our Company may also raise Bonds on a privateplacement basis in one or more tranches during the process ofthe present Issue, not exceeding ` 1,500 crores, i.e. upto 30% ofthe allocated limit for raising funds through the Bonds duringthe Fiscal 2014, at its discretion, wherein suitable amountsshall be earmarked for subscription by Sovereign Wealth Funds,Pension and Gratuity Funds. Our Company shall ensure thatBonds issued through the public issue route and private placementroute shall together not exceed ` 4,809.20 crores. In caseour Company raises funds through private placements duringthe process of the present Issue, the Shelf Limit for the Issueshall get reduced by such amount raised.In terms of the Foreign Exchange Management (Borrowing andLending in Rupees) Regulations, 2000 (the “FEMA BorrowingRegulations”), monies borrowed in Indian rupees from personsresident outside India (as defined in FEMA) cannot be utilisedfor re-lending activities. Consequently, subscription monies raisedthrough the Issue from FIIs, Eligible NRIs, Eligible QFIs and othernon resident Applicants across all Categories shall not be utilisedfor “relending” activities and our Company shall keep all subscriptionmonies received from FIIs, Eligible NRIs, Eligible QFIsand all other non resident Applicants across all Categories in aseparate account opened and maintained by the Company, theproceeds of which account shall not be utilised for any lendingpurposes in terms of Regulation 6(2) of the FEMA BorrowingRegulations, and shall be utilized for the following purposes:(a) Debt servicing, which includes servicing of both the principalamounts as well as interest payments of various debt facilitiesavailed by our Company in the past and currently outstandingin its books of accounts, including loans, market borrowings(which include our non-convertible bonds/ debentures);(b) Statutory payments;(c) Establishment and administrative expenses;(d) Other working capital requirements of our Company; and(e) Any other purposes and end-uses as may be allowed by RBIfrom time to time through relevant regulations/guidelines/clarificationsissued by RBI.The main objects clause of the Memorandum of Association permitsour Company to undertake its existing activities as well asthe activities for which the funds are being raised through theIssue. Further, in accordance with the SEBI Debt Regulations, ourCompany is required to not utilize the proceeds of the Issue forproviding loans to or acquisition of shares of any person who isa part of the same group as our Company or who is under thesame management as our Company or any subsidiary of our Company.Our Company does not have any subsidiary. Further, ourCompany is a public sector enterprise and as such, there are noidentifiable group companies or companies under the same management.The Issue proceeds shall not be utilized towards full or part considerationfor the purchase or any other acquisition, among otherthings, by way of a lease, of any property.2. Interim use of ProceedsThe Board of Directors, in accordance with the policies formulatedby them from time to time, will have flexibility in deployingthe proceeds received from the Issue. Pending utilization of theproceeds out of the Issue for the purposes described above, ourCompany intends to temporarily invest funds in deposits withbanks or as may be approved by the Board. Such investmentwould be in accordance with the Board approved guidelines preparedon the basis of directions received from DPE.3. Monitoring of Utilization of FundsThere is no requirement for appointment of a monitoring agencyin terms of the SEBI Debt Regulations. The Board of Directors ofour Company shall monitor the utilisation of the proceeds of theIssue. Our Company will disclose in our Company’s financial statementsfor the relevant financial year commencing from Fiscal 2014,the utilization of the proceeds of the Issue under a separate headalong with details, if any, in relation to all such proceeds of theIssue that have not been utilized thereby also indicating investments,if any, of such unutilized proceeds of the Issue. Further, inaccordance with the Debt Listing Agreement, our Company willfurnish to the BSE on a half yearly basis, a statement indicatingmaterial deviations, if any, in the use of Issue proceeds and shallalso publish the same in newspapers simultaneously with thehalf-yearly financial results. We shall utilize the proceeds of theIssue only upon execution of the documents for creation of securityas stated in the Prospectus Tranche – I in the section titled“Terms of the Issue” on page 43 and upon the listing of the Bonds.ISSUE PROCEDUREThis section applies to all Applicants. ASBA Applicants and Applicantsapplying through the Direct Online Application Mechanism(as defined hereinafter) should note that the ASBA processand the Direct Online Application Mechanism involves applicationprocedures that are different from the procedure applicableto all other Applicants. Please note that all Applicants are requiredto pay the full Application Amount or ensure that the ASBAAccount has sufficient credit balance such that the entire ApplicationAmount can be blocked by the SCSB while making anApplication. In case of ASBA Applicants, an amount equivalentto the full Application Amount will be blocked by the SCSBs inthe relevant ASBA Accounts.ASBA Applicants should note that they may submit their ASBAApplications to the Members of the Syndicate or Trading Membersonly at the Syndicate ASBA Application Locations, or directlyto the Designated Branches of the SCSBs. Applicants otherthan ASBA Applicants are required to submit their Applicationsto the Members of the Syndicate or Trading Members (at theapplication centres of the Members of the Syndicate will be mentionedin the Application Form) or make online Applicationsusing the online payment gateway of the relevant StockExchange(s).Applicants are advised to make their independent investigationsand ensure that their Applications do not exceed the investmentlimits or maximum number of Bonds that can be held by themunder applicable law or as specified in the Shelf Prospectus andthe Prospectus Tranche – I.Please note that this section has been prepared based on thecircular no. CIR./IMD/DF-1/20/2012 dated July 27, 2012 issued bySEBI (“Debt Application Circular”). The procedure mentioned inthis section is subject to the Stock Exchange(s) putting in placeHOUSING AND URBAN DEVELOPMENT CORPORATION LIMITED7