Deutsche Postbank Home Finance Limited Internal Control/ Audit/ Reporting 1 Delegation of Power (a) Attach a note indicating

the delegation of powers entrusted to various As per Annexure attached levels of officials for all types of transactions, viz. borrowing, investment, sanction of loans, waivers of any kind, capital and revenue expenditures, etc., together with Board approval therefore.

INS -19

(b) Please indicate the system of control on use of such powers by various All the Sanctions of loans are built in the software and all financial authorities are officials. complied by concerned department and verified by accounts department and also periodically checked by Internal and external auditors 2 System of Internal audit/Concurrent Audit/EDP Audit (a) Managed in-house or through an out-side agency. For latter give the name/s and jurisdiction, if any. (b) Indicate the periodicity of such audit. The Company has a team of Internal Auditors (Twelve); strategically located at Branches and Head Office. The Company has 26 Branches & 11 HO-Functions, which are reviewed by Internal Audit team. 1. Audit Periodicity: Branches a). 11 Branches: Audit Frequency: Monthly (concurrent basis); Business covered: 69%; 04-Branches: (RPC-North) comprising Delhi-CP & SJ, Gurgaon, Faridabad Brs; 02-Branches: (RPC-South) comprising Bengaluru- JN & RR Branches; 02-Branches: (RPC-West) comprising Mumbai & Thane Branches; 03-Branches: (Independent) Hyderabad, Noida (incl. Delhi-Ptm); b). 04 Branches Audit Frequency: Quarterly; Business covered: 14% Branches: Bhopal, Chennai, Jaipur & Pune; c). 11 Branches Audit Frequency: Half Yearly; Business covered: 17% 11 Branches: Ahmedabad, Chandigarh, Indore, Jodhpur, Kochi, Kolkata, Lucknow, Ludhiana, Mysore, Vadodara, and Vishakhapatnam

2. Audit Periodicity: HO- Functions Audit Frequency: Half Yearly; Eleven Departments: Accounts, DPBFCL, Credit, HR/Admn, IT, Operations, 'Legal & Recovery', Sales, 'Seceretarial & Compliances', Training, Treasury; (c) Indicate the system of reporting by the auditor and compliance by the Internal Audit findings are reported to Management Committee every month (with concerned functionaries. significant areas requiring attention & status of pending audit queries) (d) Any system of reporting the highlights of the audit findings to the Board and/ or Audit committee? E If so, at what interval? 3 Inspection by Regulatory Authorities Indicate inspections, if any conducted by RBI, ROC, PF, ESIC, Govt. Department, etc. during the last three years. Internal Audit findings are reported to Audit Committee constituted by Board during the meetings held Half-yearly No other inspection expect the following: NHB NHB, Service Tax, ESIC 08------------ NHB, PF 2009-10--------2008-09-----------2007-

Management Information System [MIS] (a) Any MIS in place? If yes, please give details viz. periodicity, purpose, MIS is prepared on a monthly basis. Reports are submitted by MIS & Control submitted by / to whom, etc. along with formats prescribed. Department to the Top Management and also to Promoters. (b) Who does the scrutiny of the MIS submitted and what follow-up action is taken? The MIS report is being scrutinized by the respective departmental heads and by the Senior Management. The follow up action is taken as and when necessary on case to case basis. Yes, MIS is periodically submitted to the Board. The MIS is presented at each Board Meeting on quarterly basis.The MIS is submmited with respect to financials, Business, Recovery & Manpower.

(c) Any system of submission of MIS to the Board? If yes, indicate the type, purpose, periodicity, etc. together with a copy of the latest MIS submitted. 5 Corporate - Branch Inter-action

(a) Whether any system in place for Top Management/ Corporate Heads visit to branches? If yes. indicate at what periodicity, purpose, reporting system, etc.

Yes, however, there is no defined periodicity for the Top Management to visit the branches. With the Zonal Business Managers structure in place it is ensured that every branch is visited by a senior manager once in a month. Once in a quarter on a regular basis it is ensured that someone from the Top Management visits the branches. The Visits are planned for overall review and working of branch. All India Conferences of the branches and head office management is organised on yearly basis besides periodic managment conference which are attended by all Zonal Business Managers.

(b) Any system of Branch-in-charges conferences to review various performances? If yes, indicate at what periodicity, purpose, reporting system, etc.

Yes, Branches performances are reviewed through structured review conferences at regional or Branch level at least once a quarter.

Regulatory compliance (a Indicate the dates of submission of various returns - quarterly, halfyearly, annual, etc. to NHB during last three financial years. (b) Compliance to the supervisory letter issued after the previous NHB inspection (c) Indicate the dates of submission of various returns quarterly, halfyearly, annual, etc. to ROC during last three financial years. (d) Indicate whether any system is in place to report to the Board the various regulatory compliances. If yes, attach a copy of the latest such compliance report submitted to the Board.

As per Annexure attached Copy of correspondence attached As per Annexure attached Yes, there is an internal system of monthly compliance certification to the compliance office by functional departments reporting to the compliance officer based on which the compliance officer submit a quarterly compliance certificate to the board of directors at each meeting. Further, as and when any new regulatory compliance introduced, the same is reported to board and then implemented in the company. As per Annexure attached

(e) Indicate the dates of submission of return to any other regulatory authority such as SBI, Stock Exchange, PF, ESIC, Income tax, Govt. Authorities, etc. during last three financial years. 7

Complaints (a) Whether any record of oral and written complaints from the following Yes, the Register is maintained in respect of complaints received at Head Office and is maintained in a Register? If yes who maintains it, give a proforma of the Branches. Both Head Office and Branches handle the complaint of Borrowers and if register maintained. the branch finds it of serious nature and beyond their authority, the same is referred to Head Office for the resolution. (a ) Depositors (b) Borrowers (c) Shareholders (d) Others (b) Whether branches maintain complaints register? (c) Give statistics of Complaints received from (i) Shareholders, (ii) Depositors and (iii) borrowers, during last three financial years. Yes, the data is maintained at Head Office. The branch/depositor forwards the complaint to Head Office for resolution. Yes, the Register is maintained at Head office and at Branches for tracking and resolution of the customer complaints.

Yes In case of Depositors, during FY. 2007-08, 2008-09 & 2009-10, the no. of complaints received are 3, 2 & 0 respectively. As regards borrowers, during FY 2007-08, 2008-09 & 2009-10, 632, 996 & 683 complaints were received respectively and responded. The complaints receipt and resolution mechanism is monitored at Head Office Complaints are firstly addressed at branches and in case it requires the HO intervention, the same is sent by branch to Customer Care Deptt. at Head Office and with input from the concerned department, it is resolved and responded to the complainant. Yes, all the serious complaints and action thereon is informed to the Top Management. A monthly MIS on the status of complaints received and resolved is published to the Top Management.

(d) What is the system of control to ensure that all complaints are satisfactorily and promptly attended to? (e) At what level complaints are to be disposed off?

(f) Any system of reporting serious complaints and action taken to the Top Management? 8

Frauds/ Embezzlement (a) Indicate whether any case of fraud, embezzlement, etc. had surfaced/ Yes, there are some frauds, embezzlement, etc detected during the last 3 years. The detected during the last three financial years? If yes give details in the necessary details as per the required format is attached as per annexure. following format. Sr. No. 1 Date 2 Nature of Fraud 3 Persons Involved 4

(b) Whether the Top Management / Board has been kept informed? If yes, Yes, the Top Management and Board is been informed. please enclose a copy of the note/s submitted in this regard. (c) Whether reported to NHB. Yes

Date: Managing Director/ Chief Executive Officer

Deutsche Postbank Home Finance Limited Internal Control/ Audit/ Reporting 1 Delegation of Power (a) Attach a note indicating the delegation of powers entrusted to various As per Annexure attached levels of officials for all types of transactions, viz. borrowing, investment, sanction of loans, waivers of any kind, capital and revenue expenditures, etc., together with Board approval therefore.

INS -19

(b) Please indicate the system of control on use of such powers by various All the Sanctions of loans are built in the software and all officials. financial authorities are complied by concerned department and verified by accounts department and also periodically checked by Internal and external auditors 2 System of Internal audit/Concurrent Audit/EDP Audit (a) Managed in-house or through an out-side agency. For latter give the name/s and jurisdiction, if any. (b) Indicate the periodicity of such audit. The Company has a team of Internal Auditors (Twelve); strategically located at Branches and Head Office. 1. Audit at RPC's & Branches a). Audit Frequency: Monthly (concurrent basis); Audit coverage : 50% of Sanctioned & 75% of 1st Disbursed cases) i). Three RPCs, covering 8 Branches and ii).Two Branches (Hyderabazd & NOIDA); b). Audit Frequency: Quarterly; Audit coverage : 50% (Sanctioned & First Disbursed cases) Four Branches (Bhopal, Chennai, Jaipur & Pune); c). Audit Frequency: Half Yearly; Audit coverage : 50% (Sanctioned & First Disbursed cases) Ten Branches (Ahmedabad, Chandigarh, Indore, Jodhpur, Kolkata, Lucknow, Ludhiana, Mysore, Vadodara and Vishakhapatnam)

2. HO- Functions (Eleven Departments) Audit Frequency: Half Yearly; Audit coverage : as per Audit Plan (c) Indicate the system of reporting by the auditor and compliance by the Internal Audit findings are reported to Management Committee concerned functionaries. every month (with significant areas requiring attention & status of pending audit queries)

(d) Any system of reporting the highlights of the audit findings to the Board and/ or Audit committee? E If so, at what interval? 3 Inspection by Regulatory Authorities Indicate inspections, if any conducted by RBI, ROC, PF, ESIC, Govt. Department, etc. during the last three years.

Internal Audit findings are reported to Audit Committee constituted by Board during the meetings held Half-yearly No other inspection expect the following: 2009-10--------- NHB 2008-09------------ NHB, Service Tax, ESIC 2007-08------------ NHB, PF

Management Information System [MIS] (a) Any MIS in place? If yes, please give details viz. periodicity, purpose, MIS is prepared on a monthly basis. Reports are submitted by submitted by / to whom, etc. along with formats prescribed. MIS & Control Department to the Top Management and also to Promoters. (b) Who does the scrutiny of the MIS submitted and what follow-up action is taken? The MIS report is being scrutinized by the respective departmental heads and by the Senior Management. The follow up action is taken as and when necessary on case to case basis. Yes, MIS is periodically submitted to the Board. The MIS is presented at each Board Meeting on quarterly basis.The MIS is submmited with respect to financials, Business, Recovery & Manpower.

(c) Any system of submission of MIS to the Board? If yes, indicate the type, purpose, periodicity, etc. together with a copy of the latest MIS submitted. 5 Corporate - Branch Inter-action (a) Whether any system in place for Top Management/ Corporate Heads visit to branches? If yes. indicate at what periodicity, purpose, reporting system, etc.

Yes, however, there is no defined periodicity for the Top Management to visit the branches. With the Zonal Business Managers structure in place it is ensured that every branch is visited by a senior manager once in a month. Once in a quarter on a regular basis it is ensured that someone from the Top Management visits the branches. The Visits are planned for overall review and working of branch. All India Conferences of the branches and head office management is organised on yearly basis besides periodic managment conference which are attended by all Zonal Business Managers.

(b) Any system of Branch-in-charges conferences to review various performances? If yes, indicate at what periodicity, purpose, reporting system, etc.

Yes, Branches performances are reviewed through structured review conferences at regional or Branch level at least once a quarter.

Regulatory compliance (a Indicate the dates of submission of various returns - quarterly, halfyearly, annual, etc. to NHB during last three financial years. (b) Compliance to the supervisory letter issued after the previous NHB inspection (c) Indicate the dates of submission of various returns quarterly, halfyearly, annual, etc. to ROC during last three financial years. (d) Indicate whether any system is in place to report to the Board the various regulatory compliances. If yes, attach a copy of the latest such compliance report submitted to the Board.

As per Annexure attached Copy of correspondence attached As per Annexure attached Yes, there is an internal system of monthly compliance certification to the compliance office by functional departments reporting to the compliance officer based on which the compliance officer submit a quarterly compliance certificate to the board of directors at each meeting. Further, as and when any new regulatory compliance introduced, the same is reported to board and then implemented in the company. As per Annexure attached

(e) Indicate the dates of submission of return to any other regulatory authority such as SBI, Stock Exchange, PF, ESIC, Income tax, Govt. Authorities, etc. during last three financial years. 7

Complaints (a) Whether any record of oral and written complaints from the following Yes, the Register is maintained in respect of complaints received is maintained in a Register? If yes who maintains it, give a proforma of the at Head Office and Branches. Both Head Office and Branches register maintained. handle the complaint of Borrowers and if the branch finds it of serious nature and beyond their authority, the same is referred to Head Office for the resolution. (a ) Depositors Yes, the data is maintained at Head Office. The branch/depositor forwards the complaint to Head Office for resolution. Yes, the Register is maintained at Head office and at Branches for tracking and resolution of the customer complaints.

(b) Borrowers

(c) Shareholders (d) Others (b) Whether branches maintain complaints register? (c) Give statistics of Complaints received from (i) Shareholders, (ii) Depositors and (iii) borrowers, during last three financial years.

Yes In case of Depositors, during FY. 2007-08, 2008-09 & 2009-10, the no. of complaints received are 3, 2 & 0 respectively. As regards borrowers, during FY 2007-08, 2008-09 & 2009-10, 632, 996 & 683 complaints were received respectively and responded. The complaints receipt and resolution mechanism is monitored at Head Office Complaints are firstly addressed at branches and in case it requires the HO intervention, the same is sent by branch to Customer Care Deptt. at Head Office and with input from the concerned department, it is resolved and responded to the complainant. Yes, all the serious complaints and action thereon is informed to the Top Management. A monthly MIS on the status of complaints received and resolved is published to the Top Management.

(d) What is the system of control to ensure that all complaints are satisfactorily and promptly attended to? (e) At what level complaints are to be disposed off?

(f) Any system of reporting serious complaints and action taken to the Top Management?

Frauds/ Embezzlement (a) Indicate whether any case of fraud, embezzlement, etc. had surfaced/ Yes, there are some frauds, embezzlement, etc detected during detected during the last three financial years? If yes give details in the the last 3 years. The necessary details as per the required format following format. is attached as per annexure. Sr. No. 1 Date 2 Nature of Fraud 3 Persons Involved 4

(b) Whether the Top Management / Board has been kept informed? If yes, Yes, the Top Management and Board is been informed. please enclose a copy of the note/s submitted in this regard. (c) Whether reported to NHB. Yes

Date: Managing Director/ Chief Executive Officer

Deutsche Postbank Home Finance Limited Details of Various Statutory Returns submitted for last three 3 financial years Nature of Return National Housing Bank (NHB) Annual 31.03.2010 31.03.2009 31.03.2008 Half Yearly 31.03.2010 30.09.2009 31.03.2009 30.09.2008 31.03.2008 30.09.2007 Quartrely 31.03.2010 31.12.2009 30.09.2009 30.06.2009 31.03.2009 31.12.2008 30.09.2008 30.06.2008 31.03.2008 31.12.2007 30.09.2007 30.06.2007 Submission Date

31-May-10 29-May-09 30-May-08

12-May-10 13-Nov-09 15-May-09 27-Nov-08 30-May-08 30-Nov-07

15-Apr-10 15-Jan-10 15-Oct-09 15-Jul-09 15-Apr-09 15-Jan-09 15-Oct-08 9-Jul-08 15-Apr-08 10-Jan-08 15-Oct-07 10-Jul-07

Ragistrar of Companies (ROC) Annual Return 31.03.2010 31.03.2009 31.03.2008 31.03.2007 Income Tax Return of Income 31.03.2010 31.03.2009 31.03.2008 31.03.2007 Wealth Tax Annual Return 31.03.2010 31.03.2009 31.03.2008 31.03.2007 Service Tax Half Yearly Return 31.03.2010 30.09.2009 31.03.2009 30.09.2008 31.03.2008 30.09.2007 31.03.2007 30.09.2006

Yet to be furnished 7-Aug-09 1-Sep-08 6-Aug-07

Yet to be furnished 29-Sep-09 29-Sep-08 31-Oct-07

Yet to be furnished 30-Sep-09 29-Sep-08 31-Oct-07

23-Apr-10 23-Oct-09 24-Apr-09 24-Oct-08 25-Apr-08 25-Oct-07 25-Apr-07 24-Oct-06