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Private & Confidential – Not for Circulation

[This is a Disclosure Document prepared in conformity with Securities and Exchange Board of India (Issue and Listing of Debt

Securities), Guidelines, 2008]

PRIVATE PLACEMENT OF 80CCF TAX SAVING IFCI LONG TERM INFRASTRUCTURE BOND – SERIES - II

INFORMATION MEMORANDUM

IFCI LIMITED

Registered & Corporate Office: IFCI Tower, 61, Nehru Place, New Delhi - 110019 Tel No.: (011) 41792800, 41732000 Fax No. 91-11- 26230029,26230466

E-mail: [email protected], Website: www.ifciltd.com

PRIVATE PLACEMENT OF IFCI LONG TERM INFRASTRUCTURE BONDS OF Rs.5,000/- EACH FOR CASH AT PAR WITH BENEFITS UNDER SECTION 80CCF

OF THE INCOME TAX ACT, 1961

SERIES –II

REGISTRAR TO THE ISSUE TRUSTEE FOR THE BONDHOLDERS

Beetal Financial & Computer Services Pvt. Ltd. Axis Trustee Services Ltd. BEETAL HOUSE, 3rd Floor, 99, Madangir Makers Towers, F Wing, 13th Floor, Behind Local Shopping Centre, Cuffe Parade, Colaba, New Delhi -110062 Mumbai - 400005

ISSUE OPENS ON NOVEMBER 16, 2010

ISSUE CLOSES ON DECEMBER 31, 2010

IFCI TAX EXEMPTION LONG TERM INFRASTRUCTRE BOND – SERIES II – Information Memorandum

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ARRANGERS TO THE ISSUE (In alphabetical order)

Almondz Global Securities Limited Bajaj Capital Limited 2nd Floor, 3 Scindia House Bajaj House, 5th Floor Janpath, New Delhi - 110 001 97, Nehru Place, New Delhi-110019

Enam Securities Private Limited Edelweiss Capital Ltd. 801/802, Dalamal Towers, Nariman Point, 14th Floor, Express Towers, Mumbai – 400042 Nariman Point, Mumbai 400021

FIG—OPS Department ICICI Securities Ltd. HDFC Bank Limited Shree Sawan Knowledge Park Lodha –I Think Techno Campus Plot NO. D-507, T.T.C. Industrial Area Kanjurmarg (East) M.I.D.C., Turbhe Mumbai – 400042 Navi Mumbai – 400 706

IFCI Financial Services Ltd. Religare Capital Markets Limited 2B (1), Ground Floor, Film Centre 4th Floor, B Wing, D3, District Centre 68, Tardeo Road, Mumbai – 400034 Saket, New Delhi-110017

RR Investors Capital Services Pvt Ltd SPA Merchant Bankers Ltd. 47, M M Road, 25, 'C' Block Community Centre, Rani Jhansi Marg, Janak Puri, Jhandewalan, New Delhi – 110055 New Delhi - 110058


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TABLE OF CONTENTS

I DEFINITIONS/ ABBREVIATIONS………………………………………………………………4

II DISCLAIMER STATEMENT.......................................................................................5

III ISSUE STRUCTURE..................................................................................................6

IV GENERAL INFORMATION........................................................................................8 i. Authority for the Issue ii. Issue size iii. Objects of the Issue iv. Credit Rating v. Listing vi. Registrar vii. Trustees viii. Future Resource raising ix. Permission/consent from prior creditors

IV TERMS OF THE ISSUE.............................................................................................10 i. Status of Bonds ii. Form iii. Nomination iv. Transfer of Bonds v. Interest vi. Redemption vii. Buyback of Bonds viii. Payment of Interest/redemption/buyback amount ix. Taxation x. Rights of bondholders xi. Notices

V STATEMENT OF TAX BENEFITS..............................................................................18

VI PROCEDURE OF APPLICATION..............................................................................20 i. Who can apply ii. How to apply iii. Documents to be provided by all investors iv. Basis of Allotment v. Letters of allotment/refund order

VII RISK FACTORS......................................................................................................23

VIII ABOUT IFCI LTD....................................................................................................26

i. Background and Main Objects ii. Board of Directors iii. Operational performance iv. Details of other borrowings

IX LIST OF COLLECTING BRANCHES.........................................................................37


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DEFINITIONS/ ABBREVIATIONS Articles Articles of Association of IFCI Ltd. Board/ Board of Directors The Board of Directors of IFCI Ltd. or Committee thereof Bonds Unsecured, Redeemable, Non-Convertible Bonds Series II having benefits under section

80 CCF of the Income Tax, 1961 for long term Infrastructure Bonds Book Closure/ Record Date The date of closure of register of Bonds for payment of interest and repayment of principal CAR Capital Adequacy Ratio CDSL Central Depository Services (India) Ltd. Depository A Depository registered with SEBI under the SEBI (Depositories and Participant)

Regulations, 1996, as amended from time to time Depositories Act The Depositories Act, 1996, as amended from time to time Depository Participant A Depository participant as defined under Depositories Act Designated Stock Exchange Bombay Stock Exchange Ltd. DER Debt Equity Ratio Director(s) Director(s) of IFCI Ltd. unless otherwise mentioned DP Depository Participant EPS Earning Per Share FIs Financial Institutions FIIs Foreign Institutional Investors Financial Year/ FY Period of twelve months period ending March 31, of that particular year GoI Government of India/ Central Government HUF Hindu Undivided Family Issuer/ IFCI/ Company IFCI Ltd. Disclosure Document Disclosure Document dated November 16, 2010 for Private Placement of Unsecured,

Redeemable, Non-Convertible Bonds Series II having benefits under section 80 CCF of the Income Tax, 1961 for long term Infrastructure Bonds

I.T. Act The Income Tax Act, 1961, as amended from time to time Arrangers Almondz Global Securities Ltd, Bajaj Capital Ltd, Edeliweiss Capital Ltd,Enam Securities

Pvt Ltd, HDFC Bank, IFCI Financial Services Ltd Religare Capital Markets Limited,R R Investors Capital Services Pvt Ltd & SPA MERCHANT BANKERS LTD .collectively referred to as “Arrangers”

Listing Agreement Listing Agreement for Debt Securities issued by Securities and Exchange Board of India vide circular no. SEBI/IMD/BOND/1/2009/11/05 dated May 11, 2009 and Amendments to Simplified Debt Listing Agreement for Debt Securities issued by Securities and Exchange Board of India vide circular no. SEBI/IMD/DOF-1/BOND/Cir-5/2009 dated November 26, 2009 and Amendments to Simplified Debt Listing Agreement for Debt Securities issued by Securities and Exchange Board of India vide circular no. SEBI/IMD/DOF-1/BOND/Cir-1/2010 dated January 07, 2010

MoF Ministry of Finance NPAs Non Performing Assets NSDL National Securities Depository Ltd. PAN Permanent Account Number Rs. Indian National Rupee RBI Reserve Bank of India RTGS Real Time Gross Settlement Registrar Registrar to the Issue, in this case being Beetal Financial & Computer Services Pvt Ltd SEBI The Securities and Exchange Board of India, constituted under the SEBI Act, 1992 SEBI Act Securities and Exchange Board of India Act, 1992, as amended from time to time SEBI Regulations Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations,

2008 issued vide Circular No. LAD-NRO/GN/2008/13/127878 dated June 06, 2008 TDS Tax Deducted at Source The Companies Act/ The Act

The Companies Act, 1956 as amended from time to time

The Issue/ The Offer/ Private Placement

Issue through Private Placement of 2,00,000 Unsecured, Redeemable, Non-Convertible Bonds Series II having benefits under section 80 CCF of the Income Tax, 1961


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DISCLAIMER STATEMENT This Information Memorandum is neither a Prospectus nor a statement in lieu of Prospectus. It does not constitute an offer or an invitation to the Public to subscribe to the Infrastructure Bonds issued by IFCI Limited. This Information Memorandum is not intended for distribution and is for the consideration of the person to whom it is addressed and should not be reproduced / redistributed by the recipient. It cannot be acted upon by any person other than to whom it has been specifically addressed. Multiple copies hereof given to the same entity shall be deemed to be offered to the same person. The securities mentioned herein are being issued strictly on a private placement basis and this offer does not constitute a public offer/invitation. This Information Memorandum is not intended to form the basis of evaluation for the potential investors to whom it is addressed and who are willing and eligible to subscribe to these Infrastructure Bonds issued by IFCI. This Information Memorandum has been prepared to give general information regarding IFCI to parties proposing to invest in this issue of Infrastructure Bonds and it does not purport to contain all the information that any such party may require. IFCI and the Arrangers do not undertake to update this Information Memorandum to reflect subsequent events and thus it should not be relied upon without first confirming its accuracy with IFCI. Potential investors are required to make their own independent valuation and judgment before making the investment and are believed to be experienced in investing in debt markets and are able to bear the economic risk of investing in the Bonds. It is the responsibility of potential investors to have obtained all consents, approvals or authorisation required by them to make an offer to subscribe for, and purchase the Bonds. Potential investors should not rely solely on information in the Information Memorandum or by the Arrangers nor would providing of such information by the Arrangers be construed as advice or recommendation by the Issuer or by the Arrangers to subscribe to and purchase the Bonds. Potential investors also acknowledge that the Arrangers do not owe them any duty of care in respect of their offer to subscribe for and purchase of the Bonds. It is the responsibility of potential investors to also ensure that they will sell these Bonds in strict accordance with this Information Memorandum and other applicable laws, and that the sale does not constitute an offer to the public within the meaning of the Companies Act, 1956. Potential investors should also consult their own tax advisors on the tax implications of the acquisitions, ownership, sale and redemption of Bonds and income arising thereon.


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ISSUE STRUCTURE

PRIVATE PLACEMENT – LONG TERM INFRASTRUCTURE BONDS – SERIES II SUMMARY TERM SHEET Issuer IFCI Limited (“the Issuer”) Offering 2,00,000 Unsecured, Redeemable, Non-Convertible Bonds of Rs. 5,000/- each

aggregating to Rs. 100 Crore with a green-shoe option to retain over-subscription for issuance of additional Infrastructure Bonds

Type Private Placement basis Instrument Unsecured, Redeemable, Non-Convertible Bonds Series II having benefits

under section 80 CCF of the Income Tax, 1961 for long term Infrastructure Bonds

Rating BWR AA- by BRICKWORK RATINGS INDIA PVT LIMITED Eligible Investors Resident Indian Individual (Major) and HUF through Karta of the HUF Security Unsecured Face Value Rs. 5,000/- per bond Issue Price At par (Rs. 5,000/- per bond) Minimum Application

1 Bond and in multiples of 1 Bond thereafter,

Deemed Date of Allotment

January 31, 2011

Tenure 10 years, with or without buyback option after five years Options for Subscription

The Bonds are offered under the following 4 options- • Option I - Non-cumulative and Buyback after 5 years • Option II - Cumulative and Buyback after 5 years • Option III - Non-cumulative and no Buyback • Option IV - Cumulative and no Buyback

Redemption / Maturity

At par at the end of 10 years from the deemed date of allotment. For Cumulative Option, at par with cumulated interest thereon.

Coupon rate • Option I (Non-cumulative and Buyback after 5 years) - 8% p.a. • Option III (Non-cumulative and no Buyback) – 8.25% p.a.

Option II and Option IV will have cumulative payment at the end of the Buyback period or 10 years, as per the option opted by the Investor (Refer Table on Page No. 6)

Listing Proposed to be listed on BSE Trustee Axis Trustee Services Limited Depository National Securities Depository Ltd. and Central Depository Services (India) Ltd. Registrars Beetal Financial & Computer Services (P) Ltd. Mode of Payment 1. ECS/At Par Cheques/Demand Drafts Issuance Demat form only Trading Demat mode only following expiry of lock-in period Issue Open Date November 16, 2010 Issue Close Date December 31, 2010

• The issuer would have the right to pre-close the issue or extend the closing date by giving 1 day notice to the Arrangers

Deemed Date of Allotment

January 31, 2011

Buyback dates January 31 every year commencing from year 2016 to year 2020.


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AVAILABLE OPTIONS FOR INVESTMENT IN INFRASTRUCTURE BONDS

Options

I II III IVBuyback and

Non-Cumulative Buyback and

Cumulative Non-Buyback and

Non-Cumulative Non-Buyback and

Cumulative

Minimum Application / Face Value

5,000/- 5,000/ 5000/- 5,000/

In Multiples of 5,000/ 5000/- 5,000/ 5000/-

Buy Back Option Yes Yes No No

Interest Payment Yearly NA Yearly NA

Coupon 8.00 % per annum 8.00% to be compounded

annually

8.25% 8.25% to be compounded

annually

Yield on Redemption

8.00% 8.00% 8.25% 8.25%

Coupon Payment Date

January 31 every year

NA January 31 every year

NA

Maturity Date January 31, 2021 January 31,2021 January 31, 2021 January 31, 2021

Buy Back Intimation Period

Every Year Between November 01 to 30, starting from Year 2015 till Year 2019

Every Year Between November 01 to 30, starting from Year 2015 till Year 2019

NA NA

Redemption Amount(Rs.)

5,000 10,795 5,000 11,047

Redemption Amount in case ‘Buy back’ option is exercised (in Rs) Year 5 5,000 7,347 - Year 6 5,000 7,934 - Year 7 5,000 8,569 - Year 8 5,000 9,255 - Year 9 5,000 9,995 -


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GENERAL INFORMATION IFCI Limited (“IFCI” or “Issuer” or “Company”) is offering for subscription, on private placement basis, unsecured redeemable non-convertible bonds in the nature of promissory notes of Rs. 5,000/- each for cash at par with benefits under Section 80CCF of the Income Tax Act 1961 termed as LONG TERM INFRASTRUCTURE BONDS (“Infrastructure Bonds”). The minimum application shall be for 1 Bond of Rs. 5,000/- each and in multiples of 1 Bond thereafter. AUTHORITY FOR THE ISSUE This issue is being made pursuant to the Resolution of the Board of Directors of the Company, passed at its Meeting held on July 23, 2010 and is made under appropriate provisions of the Income Tax Act, 1961. ISSUE SIZE IFCI proposes to raise Rs. 100 crore, with a green-shoe option to retain over-subscription for issuance of additional Infrastructure Bonds, through issue of Unsecured, Redeemable, Non-Convertible Bonds in the nature of promissory notes of face value of Rs. 5,000 each for cash at par with benefits under section 80CCF of the Income Tax Act, 1961 termed as IFCI LONG TERM INFRASTRUCTURE BONDS – SERIES II (”Infrastructure Bonds”) by way of private placement ('the Issue’). OBJECTS OF THE ISSUE The proceeds shall be utilized towards infrastructure lending as defined by the Reserve Bank of India in the Guidelines issued by it from time to time, after meeting the expenditures of, and related to the issue.

The main objects clase of the Memorandum of Association of the Company permits the Company to undertake its existing activities as well as the activities for which the funds are being raised through this issue.

Further, in accordance with the SEBI Debt Regulations, the Company will not utilize the proceeds of the issue for providing loans to or acquisition of shares of any person who is a part of the same group as the Company or who is under the same management as the Company of any subsidiary of the Company.

The issue proceeds shall not be utilized towards full or part consideration for the purchase or any other acquisition, inter alia by way of a lease, of any property. CREDIT RATING Brickwork Ratings India (P) Ltd. (“BRICKWORK”) has vide its letter No. BWR/BLR/RA/2010-11/0068 dated July 20, 2010 credit rating of "BWR AA-” (pronounced as BWR Double A Minus) with stable outlook for existing and proposed Bonds of the Company aggregating to Rs. 10,000 crore. Instruments with this rating are considered to offer High Credit Quality in terms of timely servicing of debt obligations. A copy of rating from BRICKWORK is enclosed as annexure to this Information Memorandum. The above rating is not a recommendation to buy, sell or hold securities and investors should take their own decision. The rating may be subject to revision or withdrawal at any time by the assigning rating agency. The rating obtained is subject to revision at any point of time in the future. The rating agency has the right to suspend, withdraw the rating at any time on the basis of new information etc. LISTING The Bonds are proposed to be listed on the Bombay Stock Exchange (BSE). IFCI shall apply for in-principle approval from the BSE for listing of Infrastructure Bonds. IFCI shall make an application to the BSE to list the Bonds to be issued and allotted under this Information Memorandum and complete all the formalities relating to listing of the Bonds within reasonable time. In connection with listing of Bonds with BSE, IFCI hereby undertakes that: • It shall comply with conditions of listing of Bonds as may be specified in the Listing Agreement with

BSE.


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• Rating obtained by IFCI shall be periodically reviewed by the credit rating agency and any revision in the rating shall be promptly disclosed by IFCI to BSE.

• Any change in rating shall be promptly disseminated to the holder(s) of the Bonds in such manner as BSE may determine from time to time.

• The Company, the Trustees and BSE shall disseminate all information and reports on Bonds including compliance reports filed by the Company and the Trustees regarding the Bonds to the holder(s) of Bonds and the general public by placing them on their websites.

REGISTRAR M/s Beetal Financial & Computer Services Pvt. Ltd. has been appointed as Registrar to the Issue. The Registrar will monitor the applications while the private placement is open and will coordinate the post private placement activities of allotment, dispatch of interest warrants etc. Investors can contact the Registrar in case of any post-issue problems such as non receipt of letters of allotment, demat credit, refund orders, interest on application money. TRUSTEES Axis Trustees Services Limited has given its consent to act as the Trustee to the proposed Issue and for its name to be included in this Information Memorandum. All remedies of the Bond holder(s) for the amount due on the Bonds will be vested with the Trustees on behalf of the Bond holders. The holders of the Bonds shall without any further act or deed be deemed to have irrevocably given their consent to and authorised the trustees to do inter-alia, all acts, deeds, and things necessary for servicing the Bonds being offered. FUTURE RESOURCE RAISING IFCI will be entitled to borrow/raise loans or avail financial assistance both from domestic and international market as also issue Bond/ Bonds/Equity Shares/Preference Shares/other securities in any manner having such ranking pari passu or otherwise and on terms and conditions as IFCI may think fit without the consent of or intimation to Bondholders or Trustees in this connection. PERMISSION/ CONSENT FROM PRIOR CREDITORS The Company hereby confirms that it is entitled to raise money through current issue of Infrastructure Bonds without the consent / permission / approval from the Bondholders / Trustees / Lenders / other creditors of IFCI. Further the Bonds proposed to be issued under the terms of this Information Memorandum being unsecured there is no requirement for obtaining permission / consent from the prior creditors.


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TERMS OF THE ISSUE

The following are the terms and conditions of Bonds being offered under this Information Memorandum for an aggregate amount of Rs. 100 crore for the financial year 2010-2011. 1. Status of Bonds

The Bonds are classified as "long-term infrastructure bonds" and are being issued in terms of Section 80CCF of the Income Tax Act and the Notification No. S.O.1639 (E) dated 09th July, 2010 issued by Central Board of Direct Taxes, Department of Revenue, Ministry of Finance, Government of India, A copy of the Notification is annexed to this Memorandum. The Infrastructure Bonds shall be non-convertible and unsecured.

In accordance with Section 80CCF of the Income Tax Act, the amount, not exceeding Rs. 20,000 per annum, paid or deposited as subscription to long-term infrastructure bonds during the previous year relevant to the assessment year beginning April 01, 2011 shall be deducted in computing the taxable income of a resident individual or HUF. In the event that any Applicant subscribes to the Bonds in excess of Rs. 20,000, the aforestated tax benefit shall be available to such Applicant only to the extent of Rs. 20,000.

Eligible investors can apply for up to any amount of the Bonds across any of the Series(s) or a combination thereof. The investors will be allotted the total number of Bonds applied for in accordance with the Basis of Allotment.

2. Form

a. The allotment of the Bonds shall be made only in dematerialized form. The Company has made depository arrangements with National Securities Depository Limited ("NSDL") and Central Depository Services (India) Limited ("CDSL", and together with NSDL, the "Depositories") for issue of the Bonds in a dematerialized form. The Company shall take necessary steps to credit the Depository Participant account of the Applicants with the number of Bonds allotted.

b. In case of Bonds that are rematerialized and held in physical form, the Company will issue one certificate to the Bondholder for the aggregate amount of the Bonds that are rematerialized and held by such Bondholder (each such certificate a "Consolidated Bond Certificate"). In respect of the Consolidated Bond Certificate(s), the Company will, upon receipt of a request from the Bondholder within 30 days of such request, split such Consolidated Bond Certificates into smaller denominations, subject to a minimum denomination of one Bond. No fees will be charged for splitting any Consolidated Bond Certificates but, stamp duty, if payable, will be paid by the Bondholder. The request to split a Consolidated Bond Certificate shall be accompanied by the original Consolidated Bond Certificate which will, upon issuance of the split Consolidated Bond Certificates, be cancelled by the Company.

3. Face Value

The face value of each Bond is Rs. 5,000.

4. Title

In case of:

(i) Bonds held in the dematerialized form, the person for the time being appearing in the register of beneficial owners maintained by the Depository; and


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(ii) the Bond held in physical form, the person for the time being appearing in the Register of bondholders (as defined below) as Bondholder,

shall be treated for all purposes by the Company, the Debenture Trustee, the Depositories and all other persons dealing with such person as the holder thereof and its absolute owner for all purposes whether or not it is overdue and regardless of any notice of ownership, trust or any interest in it or any writing on, theft or loss of the Consolidated Bond Certificate issued in respect of the Bonds and no person will be liable for so treating the Bondholder.

No transfer of title of a Bond will be valid unless and until entered on the Register of Bondholders or the register of beneficial owners maintained by the Depository prior to the Record Date. In the absence of transfer being registered, interest, Buyback Amount and/or Maturity Amount, as the case may be, will be paid to the person, whose name appears first in the Register of Bondholders maintained by the Depositories and/or the Company and/or the Registrar, as the case may be. In such cases, claims, if any, by the purchasers of the Bonds will need to be settled with the seller of the Bonds and not with the Company or the Registrar. The provisions relating to transfer and transmission and other related matters in respect of the Company's shares contained in the Articles of Association of the Company and the Companies Act shall apply, mutatis mutandis (to the extent applicable) to the Bond(s) as well.

5. Listing

The Bonds are proposed to be listed on BSE.

6. Market Lot

In accordance with Section 68B of the Companies Act, the Bonds shall be allotted only in dematerialised form. As per the SEBI Debt Regulations, the trading of the Bonds on the Stock Exchanges shall be in dematerialized form only in multiples of one Bond ("Market Lot").

7. Nomination

The Companies Act, 1956, vide Section 109A gives the bondholder an option to nominate a person to whom his/her bond(s) shall rest in the event of his/her death. In respect of bonds in dematerialized form, the Nomination shall be as per the details available in demat account of the investor (s). Nominee shall become entitled to the bond(s) in the event of death of the bond holder on production of death certificate or such other evidence as may be required by IFCI.

8. Transfer of Bonds

a. Register of Bondholders: The Company shall maintain at its registered office or such other place as permitted by law a register of Bondholders (the "Register of Bondholders") containing such particulars as required by Section 152 of the Companies Act. In terms of Section 152A of the Companies Act, the Register of Bondholders maintained by a Depository for any Bond in dematerialized form under Section 11 of the Depositories Act shall be deemed to be a Register of Bondholders for this purpose.

b. Lock in Period: In accordance with the Notification, the Bondholders shall not sell or transfer the Bonds in any manner for a period of 5 years from the Deemed Date of Allotment (the "Lock-in Period"). The Bondholders may sell or transfer the Bonds after the expiry of the Lock-in Period on the stock exchange where the Bonds are listed. These bonds can also be pledged, hypothecated or given on lien for obtaining loans from Scheduled Commercial Banks after the lock-in period of five years.

c. Transmission of bonds: However, transmission of the Bonds to the legal heirs in case of death of the Bondholder / Beneficiary to the Bonds is allowed.


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d. Transfer of Bonds held in dematerialized form: In respect of Bonds held in the dematerialized form, transfers of the Bonds may be effected only through the Depository(ies) where such Bonds are held, in accordance with the provisions of the Depositories Act, 1996 and/or rules as notified by the Depositories from time to time. The Bondholder shall give delivery instructions containing details of the prospective purchaser's Depository Participant's account to his Depository Participant. If a prospective purchaser does not have a Depository Participant account, the Bondholder may rematerialize his or her Bonds and transfer them in a manner as specified below.

The transferee(s) should ensure that the transfer formalities are completed prior to the Record Date. If a request for transfer of the Bond is not received by the Registrar before the Record Date for maturity, the Maturity Amount for the Bonds shall be paid to the person whose name appears as a Bondholder in the Register of Bondholders. In such cases, any claims shall be settled inter se between the parties and no claim or action shall be brought against the Company.

e. Succession: In the event of demise of the holder(s) of the Bonds, IFCI will recognise the executor or administrator of deceased bondholder, being an individual / HUF, or the holder of the succession certificate or other legal representative, being an individual / HUF as having title to the Bonds. IFCI shall not be bound to recognise such executor, administrator, or holder of succession certificate, unless such executor or administrators obtains probate or letter of administration or such holder is the holder of succession certificate or other legal representation, as the case may be, from a Court of India having jurisdiction over the matter. IFCI may at its absolute discretion, where it thinks fit, dispense with production of probate or letter of administration or succession certificate or other legal representation, in order to recognise such holder, being an individual / HUF as being entitled to the Bonds standing in the name of the deceased bond holder(s) on production of documentary proof or indemnity. All requests for registration of transmission along with requisite documents should be sent to the Registrars.

9. Deemed Date of Allotment

The Deemed Date of Allotment shall be January 31, 2011. All benefits under the Bonds including payment of interest will accrue to the Bondholders from the Deemed Date of Allotment.

10. Subscription

Issue opens on November 16, 2010

Issue closes on December 31, 2010

11. Interest a. Annual Payment of Interest: For Option 1 (subject to buyback, as applicable) & Option III

Bonds, interest will be paid annually commencing from the Deemed Date of Allotment and on the equivalent date falling every year thereafter.

b. Cumulative Payment of Interest: Interest on Option II & IV Bonds shall be compounded annually commencing from the Deemed Date of Allotment and shall be payable on the Maturity Date or the Buyback Date, as the case may be.

c. Day Count Convention: Interest shall be computed on a 365 days-a-year basis on the principal outstanding on the Bonds. However, where the interest period (start date to end date) includes February 29, interest shall be computed on 366 days-a-year basis, on the principal outstanding on the Bonds.

d. Interest on Application and Refund Money: The Company shall not pay any interest on


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refund of Application Amount, in whole or part. However, interest on Application Money, to the extent of allotment of bonds, shall be paid from the date of credit of this money to the bank account of IFCI to the date immediately preceding the deemed date of allotment at the respective coupon rates.

12. Redemption

Unless previously redeemed as per the terms of the Bonds, the Company shall redeem the Bonds on the Maturity Date i.e. January 31, 2021.

Bonds held in electronic form: No action is required on the part of Bondholders at the time of maturity of the Bonds. Bonds held in physical form : No action will ordinarily be required on the part of the Bondholder at the time of redemption and the maturity amount will be paid to those Bondholders whose names appear in the Register of Bondholders maintained by the Company on the Record Date fixed for the purpose of redemption. However, the Company may require that the Consolidated Bond Certificate(s), duly discharged by the sole holder or all the joint-holders (signed on the reverse of the Consolidated Bond Certificate(s)) to be surrendered for redemption on Maturity Date and sent by registered post with acknowledgment due or by hand delivery to the Registrar or Company or to such persons at such addresses as may be notified by the Company from time to time. Bondholders shall have to surrender the Consolidated Bond Certificate(s) in the manner as stated above, not more than three months and not less than two months prior to the Maturity Date so as to facilitate timely payment

13. Buyback of Bonds In respect of bonds with buyback option, exit facility shall be available at the end of 5th, 6th,7th, 8th

and 9th year. The investors, who opt and are allotted bonds with buyback facility and wish to exit through this facility shall have to apply for buy back by writing to the company (‘Early Redemption Notice”) of his/her intention to redeem all the Bonds held by him/her under the buyback option. Such early Redemption Notice from the Bondholder should reach the Registrar or the Company between November 1 to November 30 starting from year 2015 to year 2019 (‘Early Redemption Date’) for redeeming the Bonds in that particular financial year. The bonds will be redeemed on January 31 of the same financial year. Partial buyback of the bonds held under the buyback option shall not be permissible.

Bonds held in dematerialized form

The Company or the Registrar upon receipt of the notice from the Bondholders would undertake appropriate corporate action to effect the buyback. The bank details will be obtained from the Depositories for payments. Investors who have applied or who are holding the Bond in electronic form, are advised to immediately update their bank account details as appearing on the records of Depository Participant. Failure to do so could result in delays in credit of the payments to investors at their sole risk and neither the Lead Managers nor the Company shall have any responsibility and undertake any liability for such delays on part of the investors

Bonds held in physical form

On receipt of the notice from the investor for exercise of buy back option, no action would ordinarily be required on the part of the Bondholder on the Buyback Date and the Buyback Amount would be paid to those Bondholders whose names appear first in the Register of Bondholders. However, the Company may require the Bondholder to duly surrender the Consolidated Bond Certificate to the Company/Registrar for the buyback. While exercising the buyback option, bondholders are required to furnish any change of address or bank details etc.


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Upon payment of the Buyback Amounts, the Bonds shall be deemed to have been repaid to the Bondholders and all other rights of the Bondholders shall terminate and no interest shall accrue on such bonds thereafter.

Subject to the provisions of the Companies Act, where the Company has bought back any Bond(s) under the Buyback Facility, the Company shall have and shall be deemed always to have had the right to keep such Bonds alive without extinguishment for the purpose of resale and in exercising such right, the Company shall have and be deemed always to have had the power to resell such Bonds.

14. Payment of Interest/ redemption/buyback amount

Payment of Interest:

Payment of interest on the Bonds will be made to those holders of the Bonds, whose name appears first in the Register of Bondholders maintained by the Depositories and/or the Company and/or the Registrar, as the case may be, as on the Record Date.

Record Date:

The record date for the payment of interest or the Buyback Amount or the Maturity Amount shall be 30 days prior to the date on which such amount is due and payable ("Record date").

Effect of holidays on payment:

If the date of payment of interest or principal or any date specified does not fall on a Working Day, then the succeeding Working Day will be considered as the effective date. Interest and principal or other amounts, if any, will be paid on the succeeding Working Day. Payment of interest will be subject to the deduction of tax as per Income Tax Act or any statutory modification or re-enactment thereof for the time being in force. In case the Maturity Date falls on a holiday, the payment will be made on the next Working Day, without any interest for the period overdue.

Payment on Redemption or Buyback:

Bonds held in electronic form:

On the Maturity Date or the Buyback Date as the case may be, the Maturity Amount or the Buyback Amount as the case may be, will be paid as per the Depositories' records on the Record Date fixed for this purpose. No action is required on the part of Bondholders. The bank details will be obtained from the Depositories for payments. Investors who have applied or who are holding the Bond in electronic form, are advised to immediately update their bank account details as appearing on the records of Depository Participant. Failure to do so could result in delays in credit of the payments to investors at their sole risk and neither the Lead Managers nor the Company shall have any responsibility and undertake any liability for such delays on part of the investors

Bonds held in physical form:

Payments with respect to maturity or buyback of Bonds will be made by way of cheques or pay orders or electronically. The bank details will be obtained from the Registrar for effecting payments. However, if the Company so requires, payments on maturity may be made on surrender of the Consolidated Bond Certificate(s). Dispatch of cheques or pay orders in respect of payments with respect to redemptions will be made on the Maturity Date or Buyback Date within a period of 30 days from the date of receipt of the duly discharged Consolidated Bond Certificate, if required by the Company.

The Company's liability to the Bondholders including for payment or otherwise shall stand extinguished from the Maturity Date or upon dispatch of the Maturity Amounts to the Bondholders.


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Further, the Company will not be liable to pay any interest, income or compensation of any kind from the Maturity Date.

Mode of Payment:

All payments to be made by the Company to the Bondholders shall be by cheques or demand drafts or through National Electronic Clearing System ("NECS")

15. Taxation

The interest on Bonds will be subject to deduction of tax at source at the rates prevailing from time to time under the provisions of the Income Tax Act or any statutory modification or re-enactment thereof. As per the current provisions of the Income Tax Act, on payment to all categories of resident Bondholders, tax will not be deducted at source from interest on Bonds, if such interest does not exceed Rs. 2,500 in a financial year.

As per clause (ix) of Section 193 of the Income Tax Act, no income tax is required to be withheld on any interest payable on any security issued by a company, where such security is in dematerialized form and is listed on a recognized stock exchange in India in accordance with the Securities Contracts Regulation Act, 1956, as amended, and the rules notified there under. Accordingly, no income tax will be deducted at source from the interest on Bonds held in dematerialized form. In case of Bonds held in a physical form no tax may be withheld in case the interest does not exceed Rs. 2,500. However, such interest is taxable income in the hands of resident Bondholders. If interest on Bonds exceeds the prescribed limit of Rs. 2,500 in case of resident individual Bondholders, to ensure non-deduction or lower deduction of tax at source, as the case may be, the Bondholders are required to furnish either (a) a declaration (in duplicate) in the prescribed form i.e. Form 15G which may be given by all Bondholders other than companies, firms and non-residents subject to provisions of section 197A of the Income Tax Act; or (b) a certificate, from the assessing officer of the Bondholder, in the prescribed form under section 197 of the Income Tax Act which may be obtained by the Bondholders. Senior citizens, who are 65 or more years of age at any time during the financial year, can submit a self-declaration in the prescribed Form 15H for non-deduction of tax at source in accordance with the provisions of section 197A even if the aggregate income credited or paid or likely to be credited or paid exceeds the maximum limit for the financial year. These certificates may be submitted to the Company or to such person at such address as may be notified by us from time to time, quoting the name of the sole or first Bondholder, Bondholder number and the distinctive number(s) of the Bond(s) held, at least one month prior to the interest payment date.

Tax exemption certificate or document, if any, must be lodged at the office of the Registrar prior to the Record Date or as specifically required. Tax applicable on coupon will be deducted at source on accrual thereof in the Company's books and / or on payment thereof, in accordance with the provisions of the Income Tax Act and / or any other statutory modification, re-enactment or notification as the case may be. A tax deduction certificate will be issued for the amount of tax so deducted on annual basis.

16. Rights of Bondholders:

The Bonds shall not confer upon the holders thereof any rights or privileges including the right to receive notices or annual reports of, or to attend and/or vote, at a General Meeting of IFCI. If any proposal affecting the rights attached to the Bonds is considered by IFCI, the said proposal will first be placed before the registered Bondholders or Trustees for their consideration. The Bonds comprising the present Private Placement shall rank pari passu inter se without any preference to or priority of one over the other or others over them and shall also be subject to the other terms and conditions to be incorporated in the Agreement / Trust Deed(s) to be entered into by IFCI with the Trustees and the Letters of Allotment/Bond Certificates that will be issued. A


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register of Bondholders will be maintained and sums becoming due and payable in respect of the Bonds will be paid to the Registered Holder thereof. The Bonds are subject to the provisions of the Act and the terms of this Information Memorandum. Over and above such terms and conditions, the Bonds shall also be subject to other terms and conditions as may be incorporated in the Agreement/Bond Trust Deed/Letters of Allotments/Bond Certificates, guidelines, notifications and regulations relating to the issue of capital and listing of securities issued from time to time by the Government of India and/or other authorities and other documents that may be executed in respect of the Bonds.

17. Modification of rights: The rights, privileges and conditions attached to the Bonds may be varied, modified and / or abrogated with the consent in writing of the holders of at least three-fourths of the outstanding amount of the Bonds or with the sanction of the Trustees, provided that nothing in such consent or sanction shall be operative against IFCI, where such consent or sanction modifies or varies the terms and conditions governing the Bonds, if the same are not acceptable to IFCI.

18. NOTICES The communications to the bondholder(s) required to be sent by IFCI or the Trustees shall be deemed to have been given if sent by an ordinary post to the registered holder of the Bonds. All communications to be given by the bondholder(s) shall be sent by registered post or by hand delivery to the Registrar and Transfer Agents or to IFCI or to such person, at such addresses as may be notified by IFCI from time to time.

19. Miscellaneous:

Loan against Bonds

The Bonds cannot be pledged or hypothecated for obtaining loans from scheduled commercial banks during the Lock-in Period of five years.

Lien

The Company shall have the right of set-off and lien, present as well as future on the moneys due and payable to the Bondholder, whether in single name or joint name, to the extent of all outstanding dues by the Bondholder to the Company.

Lien on Pledge of Bonds

The Company, at its discretion, may note a lien on pledge of Bonds if such pledge of Bond is accepted by any bank or institution for any loan provided to the Bondholder against pledge of such Bonds as part of the funding.

Right to Reissue Bond(s)

Subject to the provisions of the Act, where the Company has redeemed or repurchased any Bond(s), the Company shall have and shall be deemed always to have had the right to keep such Bonds alive without extinguishment for the purpose of resale or reissue and in exercising such right, the Company shall have and be deemed always to have had the power to resell or reissue such Bonds either by reselling or reissuing the same Bonds or by issuing other Bonds in their place. This includes the right to reissue original Bonds.

Joint-holders

Where two or more persons are holders of any Bond (s), they shall be deemed to hold the same as joint holders with benefits of survivorship subject to Articles and applicable law.


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Sharing of Information

The Company may, at its option, use its own, as well as exchange, share or part with any financial or other information about the Bondholders available with the Company, its subsidiaries and affiliates and other banks, financial institutions, credit bureaus, agencies, statutory bodies, as may be required and neither the Company nor its subsidiaries and affiliates nor their agents shall be liable for use of the aforesaid information.

Issue of Duplicate Consolidated Bond Certificate(s)

If any Consolidated Bond Certificate is mutilated or defaced it may be replaced by the Company against the surrender of such Consolidated Bond Certificates, provided that where the Consolidated Bond Certificates are mutilated or defaced, they will be replaced only if the certificate numbers and the distinctive numbers are legible.

If any Consolidated Bond Certificate is destroyed, stolen or lost then upon production of proof thereof to the Bank's satisfaction and upon furnishing such indemnity/security and/or documents as we may deem adequate, duplicate Consolidated Bond Certificate(s) shall be issued.

Jurisdiction

The courts of Delhi shall have jurisdiction to settle any disputes which may arise out of or in connection with the Debenture Trust Deed or the Bonds and that accordingly any suit, action or proceedings (together referred to as "Proceedings") arising out of or in connection with the Debenture Trust Deed and the Bonds may be brought in the courts of Delhi.


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STATEMENT OF TAX BENEFITS TAX BENEFITS UNDER THE INCOME TAX ACT, 1961 Under the current tax laws (existing as well as proposed) the following tax benefits, inter alia, will be available to the Bond Holder as mentioned below. The benefits are given as per the prevailing tax laws and may vary from time to time in accordance with amendments to the law or enactments thereto. The Bond Holder is advised to consider in his own case the tax implications in respect of subscription to the Bond after consulting his tax advisor as alternate views are possible. IFCI or the Trustees shall not be liable to the Bond Holder in any manner for placing reliance upon the contents of this statement of tax benefits.

A. INCOME TAX:

Tax Benefits to the Resident Bond Holders According to section 80CCF an amount not exceeding rupees twenty thousand invested in long term infrastructure bonds shall be allowed to be deducted from the total income of an Individual or Hindu Undivided Family, This deduction shall be available over and above the aggregate limit of Rs. One Lakh as provided under sections 80C, 80CCC and 80CCD read with section 80CCE.

Section 80CCF reads as “In computing the total income of an assessee, being an individual or a Hindu undivided family, there shall be deducted, the whole of the amount, to the extent such amount does not exceed twenty thousand rupees, paid or deposited, during the previous year relevant to the assessment year beginning on the 1st day of April, 2011, as subscription to long-term infrastructure bonds as may, for the purposes of this section, be notified by the Central Government”

Taxability of Interest

Taxability of interest on Bonds would depend upon the method of accounting adopted by the resident bondholder as mentioned in the provisions of the IT Act.

Withholding Tax:

No income tax is deductible at source on interest on Bonds as per the provisions of section 193 of the I.T. Act in respect of the following:

(a) In case the payment of interest on Bonds to resident individual Bond Holder by company

by an account payee cheque and such Bonds being listed on a recognized stock exchange in India, provided the amount of interest or the aggregate of the amounts of such interest paid or likely to be paid during the financial year does not exceed Rs. 2500;

(b) When the Assessing Officer issues a certificate on an application by a Bond Holder on

satisfaction that the total income of the Bond Holder justifies nil/lower deduction of tax at source as per the provisions of Section 197(1) of the I.T. Act;

(c) When the resident Bond Holder (not being a company or a firm or a senior citizen)

submits a declaration to the payer in the prescribed Form 15G verified in the prescribed manner to the effect that the tax on his estimated total income of the financial year in which such income is to be included in computing his total income will be ‘nil’ as per the provisions of Section 197A (1A) of the I.T. Act. Under Section 197A (1B) of the I.T. Act, Form 15G cannot be submitted nor considered for exemption from deduction of tax at source if the aggregate of income of the nature referred to in the said section, viz. dividend, interest, etc as prescribed therein, credited or paid or likely to be credited or paid during the financial year in which such income is to be included exceeds the


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maximum amount which is not chargeable to tax. To illustrate, the maximum amount of income not chargeable to tax in case of individuals (other than women assesses and senior citizens) and HUFs is Rs 160,000, in case of women assesses is Rs.190, 000 and in case of senior citizen is Rs. 240,000 for financial year 2009-10. Senior citizens, who are 65 or more years of age at any time during the financial year, enjoy the special privilege to submit a self declaration to the payer in the prescribed Form 15H for non-deduction of tax at source in accordance with the provisions of section 197A (1C) of the I.T. Act even if the aggregate income credited or paid or likely to be credited or paid exceed the maximum amount not chargeable to tax i.e. Rs 240,000 for FY 2009-10, provided tax on his estimated total income of the financial year in which such income is to be included in computing his total income will be nil.

(d) On any securities issued by a company in a dematerialized form listed on recognized

stock exchange in India. (w.e.f. 1.06.2008). In all other situations, tax would be deducted at source as per prevailing provisions of the I.T. Act;

Transfer before maturity: Under section 2 (29A) of the I.T. Act, read with section 2 (42A) of the I.T. Act, a listed Bond is treated as a long term capital asset if the same is held for more than 12 months immediately preceding the date of its transfer. Under section 112 of the I.T. Act, capital gains arising on the transfer of long term capital assets being listed securities are subject to tax at the rate of 10% of capital gains calculated without indexation of the cost of acquisition. The capital gains will be computed by deducting expenditure incurred in connection with such transfer and cost of acquisition of the Bonds from the sale consideration.

In case of an individual or HUF, being a resident, where the total income as reduced by the long term capital gains is below the maximum amount not chargeable to tax i.e. Rs. 1,60,000 in case of all individuals, Rs. 1,90,000 in case of women and Rs. 2,40,000 in case of senior citizens, the long term capital gains shall be reduced by the amount by which the total income as so reduced falls short of the maximum amount which is not chargeable to income-tax and the tax on the balance of such long-term capital gains shall be computed at the rate of ten per cent in accordance with and the proviso to sub-section (1) of section 112 of the I.T. Act read with CBDT Circular 721 dated September 13, 1995.

A 2% education cess and 1% secondary and higher education cess on the total income tax (including surcharge) is payable by all categories of tax payers as per the current tax laws.

Short-term capital gains on the transfer of listed Bonds, where Bonds are held for a period of notmore than 12 months, would be taxed at the normal rates of tax in accordance with and subject to the provision of the I.T. Act. The provisions related to minimum amount not chargeable to tax, surcharge and education cess as described above would also apply to such short-term capital gains. In case the bonds are held as stock in trade, the income on transfer of bonds would be taxed as business income or loss in accordance with and subject to the provisions of the IT Act.

B. WEALTH TAX Wealth-tax is not levied on investment in Bonds under section 2(ea) of the Wealth-tax Act, 1957.

B. GIFT TAX: C. Gift-tax is not levied on gift of Bonds in the hands of the donor as well as the donee as the

provisions of the Gift-tax Act, 1958 have ceased to apply in respect of gifts made on or after 1st October, 1998.


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PROCEDURE OF APPLICATION Who can apply: 1. Resident Indian Individuals who are major 2. Hindu Undivided Families (HUF) through the Karta of HUF Joint Application: Maximum of three individuals can apply through a Joint Application and should be in the similar sequence as mentioned in the Demat Account.

How to apply: Investors are required to submit the Application Form duly filled in along with necessary enclosures at the specified Collecting Bankers as indicated in the Information Memorandum under “List of Collecting Branches.

All Applicants are required to make payment of the full Application Amount along with the Application Form.

Applications are required to be for a minimum of one (1) Bond and multiples of one (1) Bond thereafter.

The investor must complete the application for the Bonds in the prescribed form, and in block letters in English. The complete Application Form must be accompanied by either a Demand Draft or crossed Cheque of the amount as desired by the investor and made payable in favour of “IFCI LIMITED-INFRA BOND ACCOUNT”. Demand Draft charges, if any, shall be borne by the applicant.

Cheques/Demand Drafts may be drawn on any designated collection centre (as mentioned in the Information Memorandum) where application form is being deposited. The investors may attach a self attested copy of proof of DP Id and Client Id (desirable to avoid mismatch). All other details would be taken from the demat account.

Rejection of Applications:

The Company reserves its full, unqualified and absolute right to accept or reject any Application in whole or in part and in either case without assigning any reason thereof. Application would be liable to be rejected on one or more technical grounds, including but not restricted to: • Number of Bonds applied for is less than the minimum Application size; • Applications not duly signed by the sole/joint Applicants; • Application amount paid not tallying with the number of Bonds applied for; • Applications for a number of Bonds which is not in a multiple of one; • Investor category not ticked; • Bank account details not given;

• Applications by persons not competent to contract under the Indian Contract Act, 1872, as amended;

• In case of Applications under Power of Attorney where relevant documents not submitted; • Application by stockinvest; • Applications accompanied by cash; • Applications without PAN;


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• DP ID, Client ID and PAN mentioned in the Application Form do not match with the DP ID, Client ID and PAN available in the records with the depositories; and

The collecting bank shall not be responsible for rejection of the Application on any of the technical grounds mentioned above. Application form received after the closure of the Issue shall be rejected. In the event, if any Bond(s) applied for is/are not allotted, the Application monies of such Bonds will be refunded, as may be permitted under the provisions of applicable laws, without any interest. Basis of Allotment In case the aggregate of subscription of bonds under this issue and the long term infrastructure bonds already issued by the Company during the current financial year exceeds the limit prescribed under the Notification No.1639(E) dated 9th July 2010 issued by Central Board of Direct Taxes, Ministry of Finance, the Allotment of bonds shall be made in the following order of priority in consultation with the Registrar and the Registrar shall be responsible for ensuring that the Basis of Allotment is finalised in a fair and proper manner. (a) Full Allotment of Bonds to the Applicants on a first come first basis up to the Issue Closing Date or the date falling one day prior to the Oversubscription Date, whichever is earlier. (b) For Applications received on the Oversubscription Date, the Bonds shall be allotted in the following order of priority: (i) Allotment to the Applicants for Option II Bonds (ii) Allotment to the Applicants for Option I Bonds (iii) Allotment to the Applicants for Option IV Bonds (iv) Allotment to the Applicants for Option III Bonds Provided, however, that in the event of oversubscription in any series of Bonds mentioned in (i), (ii),(iii) and (iv) above, the Bonds shall be Allotted proportionately in that respective series, subject to the overall limit as per the said Notification and the Applications for the Bonds in subsequent series shall be rejected. (c) All Applications received after the Oversubscription Date shall be rejected by the

Company. Letters of Allotment/ Refund Orders

IFCI reserves, in its absolute and unqualified discretion and without assigning any reason thereof, the right to reject any application in whole or in part. The unutilised portion of the application money will be refunded to the Applicant by an account payee cheque/demand draft. In case the cheque payable at par facility is not available, IFCI reserves the right to adopt any other suitable mode of payment.

IFCI shall credit the allotted Bond to the respective beneficiary accounts/dispatch the Letter(s) of Allotment or Letter(s) of Regret/ Refund Orders in excess of Rs. 2,500, as the case may be, by registered/speed post at the Applicant’s sole risk, within 30 days from the date of allotment of the bonds. Refund Orders up to Rs.2,500 will be sent under certificate of posting.

Further,

(a) Allotment of the Bonds shall be made on January 31, 2011.

(b) Credit to dematerialised accounts will be made within two Working Days from the date of Allotment;

(c) The letters of allotment will be sent within 30 days of the date of allotment.


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(d) In case of rejection of the application on account of technical ground or for any other reason, refund of application money without interest will be made within a period of 30 days from the date of allotment of the bonds.

Payment of interest on application money: In respect of allotted bonds, interest on the application money shall be paid to the investors from the date of realization of the instrument to January 30, 2010 at the interest rates as applicable to the various options for subscriptions. Governing Law The Bonds are governed by and shall be construed in accordance with the existing laws in India. Any dispute arising thereof will be subject to the jurisdiction of courts at Delhi. Investors relations and grievances redressal: Arrangements have been made to redress investor grievances expeditiously as far as possible. IFCI endeavours to resolve the investors’ grievances within 30 days of its receipt. All grievances related to the issue quoting the Application Number (including prefix), number of bonds applied for, amount paid on application and place where the application was submitted, may be addressed to the Registrar and Transfer Agents, M/s Beetal Financial & Computer Services Pvt. Limited at the address as mentioned elsewhere in this Memorandum or Resources Department at the Registered & Corporate Office of IFCI.


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RISK FACTORS Prospective investors should carefully consider the risks and uncertainties described below, in addition to the other information contained in this Information Memorandum before making any investment decision relating to the Issue. Investors must rely on their own examination of the Company and this Issue, including the risks and uncertainties involved. A. INTERNAL RISK FACTORS

1) CREDIT RISK

As a financial institution, the risk of default and non-payment by borrowers and other counterparties is one of the most significant risks which may affect our profitability and asset quality.

Our loan portfolio consists of loans provided to large corporates, and medium scale enterprises, with the earlier segment constituting a significant portion of our portfolio. While large corporate customers are generally stable in their risk profile, the relatively large sized single ticket exposures to the same can impact profitability and result in NPAs on even a small number of defaults. The borrowers and/or guarantors and/or third parties may default in their repayment obligations due to various reasons including insolvency, lack of liquidity, and operational failure. Besides macroeconomic conditions, we face risks specific to each line of our business. Though the Company’s total provisioning against the NPAs, with 99% provision coverage, at present may be considered adequate to cover all the identified losses in the loan portfolio, there may not be any assurance that in the future, provisioning levels, though compliant with regulatory requirements, will be sufficient to cover all anticipated losses. This is because the Company may not be able to meet our recovery targets for NPAs set for the particular fiscal year due to the general economic slowdown at both global and domestic levels and other factors mentioned above.

2) HIGHER COST OF BORROWINGS

We may not be able to access funds at competitive rates and such higher cost of borrowings could have a significant impact on the scale of our operations and on our profit margins. Our growing business needs would require us to raise funds through commercial borrowings. Our ability to raise funds at competitive rates would depend on our credit rating, regulatory, economic and financial markets environment in the country and on the price and availability of liquidity in the financial markets. Besides any domestic developments, changes in the international markets also affect the Indian interest rate environment, and may relatively impact our borrowing costs. We may also face certain restrictions in raising lower cost sources of funds from international markets, which could affect our ability to carry out business operations and expansion plans.

3) SYSTEMS AND TECHNOLOGY

System failures, infrastructure bottlenecks and security breaches in computer systems may adversely affect our business. Our business is highly dependent on our ability to process, on a daily basis, a large number of transactions. Our financial, accounting or other data processing systems may fail to operate adequately or may become disabled as a result of events that are wholly or partially beyond our control, including a disruption of electrical or communications services. These circumstances could affect our operations and/or result in financial loss, disruption of our businesses and/or damage to our reputation. In addition, our ability to conduct business may be adversely impacted by a disruption in the infrastructure that supports our businesses and the localities in which we are located.


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4) LIQUIDITY CONCERNS We may face asset-liability mismatches, which could affect our liquidity position.

The difference between the value of assets and liabilities maturing, in any time period category provides the measure to which we are exposed to the liquidity risk. However, a large portion of our liabilities have medium to long-term maturities and asset-liability cumulative gap is positive. Still, on account of unforeseen factors, the funding mismatches could happen, which could have an adverse effect on our business and future financial performance.

5) LIQUIDITY OF BONDS The current trading of our existing listed privately placed unsecured non-convertible bonds may not reflect the liquidity of the Bonds.

We have offered other unsecured non-convertible bonds from time to time, on private placement basis, which have been listed on the WDM segment of BSE. There can be no assurance that an active public market for the Bonds will develop, and if such a market were to develop, there is no obligation on us to maintain such a market.

6) CHANGES IN SYSTEMIC INTEREST RATES Changes in interest rates may affect the price of the Bonds.

All securities where a fixed rate of interest is offered, such as the Bonds, are subject to price risk. The price of such securities will vary inversely with changes in prevailing interest rates, i.e. when interest rates rise, prices of fixed income securities fall and when interest rates drop, the prices increase. The extent to which prices increase or decrease is a function of the existing coupon, days to maturity and the extent to which prevailing interest rates increase or decrease.

7) CHANGES IN RATING

Any downgrade in the credit ratings of our Bonds may affect the value of the Bonds and thus our ability to refinance our debt. Brickwork Ratings has assigned the rating of ‘BWR AA-’ for issue of these Bonds for an aggregate amount of Rs. 10000 Crores for long term borrowings of the Company. The Issuer cannot guarantee that these ratings will not be downgraded. Such downgrades may lower the price of the Bonds and may also affect our ability to refinance our debt.

8) LEGAL PROCEEDINGS

We may be involved in legal proceedings arising from our operations from time to time to which we are, or may become, a party. We may be involved from time to time in disputes with various parties with whom we transact for our lending and other activities. These disputes may result in legal proceedings which may cause us to incur litigation costs and may delay recovery of receivables.

B. EXTERNAL RISK FACTORS

1) INTEREST RATE RISK

A large part of the Company’s loans are disbursed at fixed rates for specific tenures which may differ from its funding sources and therefore interest rate fluctuations could impact the Company’s margins as well as profitability.

Our Company’s business is largely dependent on interest income from our operations. We are exposed to interest rate risk principally as a result of lending to customers at interest rates and in amounts and for periods, which may differ from the funding sources (institutional/bank borrowings and debt offerings). We endeavour to match our interest rate positions to minimize our interest rate


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risk. Despite these efforts, there can be no assurance that significant interest rate movements will not have an effect on the results of our operations. Any adverse / unexpected movements in interest rates may affect our profitability.

2) MATERIAL CHANGES IN LEGISLATION / NEW LEGISLATION

Regulatory changes in India could adversely affect our business. Changes in laws and regulations or to the regulatory or enforcement environment in India may have an adverse effect on the products or services we offer, on the value of our assets or on the collateral available for our loans or on our business in general.

3) SLOWDOWN IN ECONOMIC GROWTH

A slowdown in economic growth could cause the Company’s business to suffer.

The Company’s performance and the quality and growth of its assets are necessarily dependent on the health of the Indian economy as well as on global economic conditions. An economic slowdown could adversely affect our business, including our ability to grow our asset portfolio, to maintain the quality of our assets and to implement our strategy. The domestic economy could be adversely affected by a variety of domestic as well as global factors.

4) FORCE MAJEURE Our business may be adversely impacted by natural calamities or unfavourable climatic changes.

India has experienced natural calamities such as earthquakes, floods, droughts and a tsunami in recent years. India has also experienced pandemics, including the outbreak of avian flu and swine flu. The extent and severity of these natural disasters and pandemics determine their impact on the economy and in turn their effect on the financial services sector of which our Company is a part. Prolonged spells of abnormal rainfall and other natural calamities could have an adverse impact on the economy which in turn could adversely affect our results of operations.

5) COMPETITION The Company faces increasing competition from other established banks and other NBFCs. The success of our business depends on our ability to face the competition.

The Company’s main competitors are established commercial banks and other NBFCs. Over the past few years, the retail financing area has seen the entry of banks, both public and private sectors as well as foreign. Banks have access to low cost funds which could enable them to offer finance to our customers at lower rates, thereby reducing our Company’s margins as well as attracting quality customers.


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ABOUT IFCI LIMITED

Corporate Details : Name of the Issuer : IFCI Ltd. Registered & Corporate Office : IFCI Tower, 61, Nehru Place, New Delhi – 110019 Tel. No. : (011) 41732000/41792800 Fax No. : (011) 26230029 Website : www.ifciltd.com E-mail : [email protected] Background IFCI was established in the year 1948 by an Act of Parliament to provide institutional finance for industrial development in the country. It was subsequently corporatized in July 1993 after passing of the Industrial Finance Corporation (Transfer of Undertaking and Repeal) Act, 1993 by the parliament of India. By virtue of this Repeal Act, the tax benefits, available to it under the Income Tax Act and Rules, as a statutory corporation, have been made available to it even after becoming a company. Subsequently, during the year 2001, its name was changed to IFCI Limited and an amended certificate of incorporation was obtained from the Registrar of Companies, Delhi & Haryana. It was registered as a non-banking financial company with RBI during the year 1998, but was exempted from most of the regulatory guidelines for non-banking financial companies, being regulated as a financial institution. From August 2007 onwards, it is being regulated as a non-banking financial company. Its lending policies over the last 60 years of operations sought to achieve the primary objective of providing medium and long term assistance to the industrial sector and to fulfill the overall goal of industrial development in the country, while remaining initially within the limits of provisions of the Industrial Finance Corporation Act 1948 and after incorporation as a company, doing business as set out in the Memorandum and Articles of Association of the IFCI Limited. Since its inception, IFCI has been meeting the changing requirements of the clients through various schemes and financial products. As the first development financial institution of India, IFCI has been instrumental in development of industry in the country in the immediate post-independence period when the Indian capital market was not developed and banks were not in a position to provide long term assistance. Initially, the funding of its resources was from Reserve Bank of India, Government of India, Bonds guaranteed by Government of India and from international multilateral agencies. Post-corporatization, the resources are being mobilized from the market through equity, bonds and loans. IFCI, at present, is a non-banking financial company as per the Reserve Bank of India Act, 1949. IFCI is also a notified public financial institution under Section 4A of the Companies Act, 1956. The management of its affairs is vested with the Board of Directors, the day to day operations being carried out by a pool of experienced professionals under the immediate supervision of the Chief Executive Officer and Managing Director. Main Objects The main objects as contained in our Memorandum of Association are: • To take over the Assets/Liabilities, rights, powers, authorities and privileges, business and functions

of Industrial Finance Corporation of India, established under Industrial Finance Corporation Act, 1948. • To carry on the business of assisting enterprises in industrial and services sectors. • To provide financial assistance in the form of Short, Medium or Long Term Loans or Working Capital

facilities or Equity Participation, individually or in syndicates and in any form/scheme as may be deemed expedient.

• To subscribe to or purchase, underwrite, invest in and acquire and hold and sell, dispose of shares, stocks, debentures or any other instruments.

• To carry on the business of leasing and hire purchase finance company. • To borrow or raise moneys by way of loans or otherwise both in rupees and foreign currencies or

secure the payment of money by the issue, sale of debentures, stock, bonds, obligations, mortgages and securities of all kinds.


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• To receive/invest moneys on deposit on such terms and conditions as may be deemed expedient in the interest of the Company.

• To draw, make, accept, endorse, discount, rediscount, negotiate, execute and issue of bills of exchange, promissory notes and other negotiable or transferable instruments.

• To provide consultancy and merchant banking services in or outside India. • To perform and undertake activities pertaining to warehousing, bill marketing, factoring, custodial

services and related fields. • To carry on the business of Depository Participants and provide related services. • To set up Trusts, under the Indian Trust Act for establishment of mutual funds, venture capital funds

and funds of any kind and to carry on and to provide related services. • To deal, transact, undertake, buy, sell foreign currencies as an authorized (Foreign Exchange)

Dealer. Present Business Activities: Though started as a term lending institution, IFCI has diversified to many other activities over the period and provides a wide range of services to industry in the areas of both fund based and fee based services. Its products and services include: • Project Finance, which includes financial assistance to industrial and service concerns for their new

projects as also for expansion, diversification and modernization schemes, underwriting, direct subscription to equity, senior debt financing in the form of loans, debentures, securitized debts, mezzanine products, including subordinated debt and preference capital and equity financing through unlisted equity;

• Corporate Loans, including short term loans for working capital, capital expenditure and general corporate expenditure purposes;

• Project Development, which includes project conceptualization and participation in the development of a project as a co-promoter or financial investor, in consortium with other financiers with an objective to exit the project in a definite time frame after implementation, with the desired return:

• Principal Investments, which includes equity investments made by the company with a view to earning non-interest income;

• Resolution of Non-Performing Assets, including acquisition of non-performing assets from other banks and institutions with a view to leveraging the expertise developed in course of its business in resolution of such assets;

• Financial Services, comprising debt and equity syndication, structured finance; • Project and Corporate Advisory Services, which include investment appraisal, business asset

valuation, privatization and PSU disinvestment, advice on mergers & joint ventures, buy/sell advisory, legal advisory, capital structuring, study of techno-economic feasibility, IPO monitoring, financial analysis and modeling as well as advisory services to state and central governments. IFCI has provided these services to reputed corporates like SAIL, BHEL, BEML, ONGC, GAIL, Neelachal Ispat, Inland Waterways Authority, ITPO, Air India, Uttaranchal Jal Vidyut Nigam, Tata Steel, Indian Hotels Ltd., Omaxe Ltd and various governments like Government of India, Government of Uttar Pradesh and Government of Rajasthan; and

• Other Fee Based Services, which include managing the disbursement of funds from the Sugar Development Fund of Government of India to the eligible sugar manufacturing companies and recovery from such companies and financial appraisal of such companies’ sugar projects on management fee basis.

Subsidiaries and Associates During the course of its existence, IFCI has established various subsidiaries as an extension of its business and many other organizations of national and social importance. Recently, tangible steps have been taken for reorientation and growth of these subsidiaries viz., IFCI Venture Capital Fund (IVCF), IFCI Financial Services Ltd. (IFIN), IFCI Infrastructure Development Ltd. (IIDL) and IFCI Factors Ltd. (previously Foremost Factors Ltd.). These entities, managed by professional Boards, have tremendous potential for growth and have shown remarkable progress in the immediate past year. IFCI has also promoted some of the specialized institutions like Management Development Institute (MDI), Information


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& Credit Rating Agency of India Ltd. (ICRA), Asset Care Enterprise Ltd. (ACE), Institute of Leadership Development (previously known as Institute of Labour Development), Tourism Finance Corporation of India Ltd. (TFCI). IFCI has also taken part in establishment of national institutions like Securities Trading Corporation of India Ltd. (STCI), LIC Housing Finance Ltd., GIC Housing Finance Ltd., Entrepreneurship Development Institute of India (EDII) and various Technical Consultancy Organizations (TCOs), Stock Holding Corporation of India Ltd., National Stock Exchange of India Ltd., OTC Exchange of India, Biotech Consortium India Ltd., A B Home Finance Ltd. And continues to hold stakes in these organizations. Board of Directors The composition of the Board of Directors of the Company (as on March 31, 2010) stood as under: Name Designation Address Shri Prakash P Mallya Non-Executive

Chairman No.46, Pratosh, 2nd Cross, Bannerghatta Road Panduranganagar, Bangalore-560076

Shri Atul Kumar Rai Chief Executive Officer and Managing Director

IFCI Limited, IFCI Tower 61, Nehru Place, New Delhi – 110 019

Shri P. G. Murlidharan Independent Director Lavanya, VH-52, Vikramapuram Hill Kuravankonam, Trivandrum – 695003

Shri K. V. Eapen Director (Nominated by Govt. of India)

Department of Financial Services Ministry of Finance, Jeevan Deep Parliament Street, New Delhi – 110 001

Shri Sanjeev Kumar Jindal Director (Nominated by Govt. of India)

Department of Financial Services Ministry of Finance, Jeevan Deep Parliament Street, New Delhi – 110 001

Smt. Usha Sangwan Director (Executive Director, LIC)

Central Office, Yogakshema Jeevan Bima Marg P.O. Box No 19953, Mumbai – 400021

Prof. Shobhit Mahajan Independent Director 780, Sector-4, Urban Estate Gurgaon – 122001

Shri Tejinder Singh Laschar

Independent Director C-287, 1st Floor, Defence Colony New Delhi – 110024

Shri K. Raghuraman Independent Director B-1, 1st Floor, Green Park Extension New Delhi-110016

Shri S. Shabbeer Pasha Independent Director Chartered Accountant, 96/8, Al-Ameen Apartments First Cross, South End Road, Bangalore-560004

Shri Sujit K. Mandal Whole Time Director IFCI Ltd., IFCI Tower 61, Nehru Place New Delhi – 110 019

Major events including Capital Restructuring Share Capital: IFCI started its operations with an initial equity share capital of Rs. 5 crore in 1948-49. The share capital was gradually increased to Rs. 10 crore by 1973 and Rs. 202.50 crore by June 1993. After incorporation as a company, IFCI came out with its public issue in December 1993 and its equity capital stood at Rs. 339.07 crore as at the end of March 1994. Subsequently, through a rights issue in the year 2000-01, its equity share capital was increased to Rs. 638.67 crore. During the year 2007-08, a major portion of the Zero Coupon Convertible Debentures was converted into equity shares of IFCI through exercise of the option by the holders and the equity share capital increased to Rs. 737.84 crore as on March 31, 2010. The preference share capital, issued during the years from 1997-98 to 2000-01, stood at Rs. 263.84 crore as on March 31, 2010. With the formation of IDBI in 1964, the shares of IFCI, originally subscribed by the Government of India and Reserve Bank of India, were transferred to IDBI and the stake of IDBI was increased to 50% subsequently through additional acquisition. However, with initial public issue, the shareholding pattern


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became diversified with the general public holding a substantial portion. The shareholding pattern, as on March 31, 2010 is as under:

Particulars (%age) Mar 31, 2010 Dec 31, 2009Banks, Financial Institutions, Insurance Companies, Mutual Funds & UTI

32.28 32.68

Bodies Corporate 12.80 14.32Foreign Institutional Investors 13.02 12.99Others – Public 41.90 40.01

Restructuring of Liabilities As a development financial institution, a major portion of the financial assistance of IFCI was being made to Greenfield projects and to the projects in underdeveloped states. With the industrial liberalization and globalization through economic reforms, many Indian industries became uncompetitive. The industrial recession during the 1990s made many of the large projects financed by IFCI un-viable and non-performing assets. This affected its profitability and liquidity, which necessitated restructuring of IFCI’s liabilities for the first time in its five decade history. With the cooperation from all classes of investors, the liabilities were successfully restructured. With this and the financial support of Rs. 2,932 crore from the Government of India, the company turned around and started earning operational profit from the year 2004-05 and net profit from the year 2006-07 onwards. Operational Performance The salient features of operational performance of IFCI during the last four years till 2009-10 are stated below:

(Amounts in Rs. in crore) Performance indicators (for year ended/ as on)

31-Mar-10 31-Mar-09 31-Mar-08 31-Mar-07

Operational Income 1,657 1,402 1,963 1,990Other Income 22 83 149 57Total Income 1,679 1,485 2,112 2,047Profit After Tax 671 657 1,021 898Shareholders’ Funds* 3,415 3,174 2,675 446Loan Funds 13,562 9,674 10,223 12,924Debt Equity Ratio (times) 3.97 2.72 3.19 13.06Capital Adequacy Ratio (%) 17.88 19.76 17.40 14.04Net NPA to Net Advances (%) 0.50 0.00 0.00 0.00

*excluding revaluation reserve and including Preference capital.

DETAILS OF OTHER BORROWINGS (DETAILS DEBT SECURITIES ISSUED IN THE PAST, PARTICULARS OF DEBT SECURITIES ISSUED FOR CONSIDERATION OTHER THAN CASH OR AT A PREMIUM OR DISCOUNT OR IN PURSUANCE OF AN OPTION, HIGHEST TEN HOLDERS OF EACH CLASS OR KIND OF SECURITIES, DEBT EQUITY RATIO)

1. Details of borrowings (as on March 31, 2010)

Particulars As on March 31,2010 Amount (Rs. in crore)Optionally Convertible Debentures 400.00 400.00Non-Convertible Debentures 818.19 818.19Bonds 7045.88 6951.54Term Loans 4614.98 3148.00Others 148.94 217.81Foreign Currency Borrowings 534.19 592.20Total 13562.18 12127.74

2. Highest ten holders of securities:


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a) Equity Shareholders (as on March 31, 2010) Sr No Name of the Shareholder No. of shares % 1 Life Insurance Corporation of India 61944644 8.39 2 General Insurance Corporation of India 16644581 2.26 3 Punjab National Bank 13694905 1.86 4 Barclays Capital Maurtius Ltd 12560720 1.70 5 Central Bank of India 11149326 1.51 6 BNP Paribas Arbitrage 11032000 1.50 7 Canara Bank 10339988 1.40 8 The Oriental Insurance Company Ltd. 10245438 1.39 9 SocieteGenerale 10212480 1.38 10 GMO Emerging Markets Fund 9423210 1.28 TOTAL 167247292 22.67

b) Preference Shareholders (as on March 31, 2010)

Sr No Name of the Shareholder Amount (Rs) % 1 State Bank of India 800000000 23.13 2 Punjab National Bank 770000000 22.26 3 Oriental Bank of Commerce 406612000 11.76 4 Canara Bank 282646000 8.17 5 Union Bank of India 141322000 4.09 6 LIC Housing Finance Ltd 105000000 3.04 7 Bajaj Holdings and Investment Limited 103306000 2.99 8 Andhra Bank 90000000 2.60 9 Housing Development Finance Corporation 82644500 2.39 10 IDBI Bank Limited 75000000 2.17 TOTAL 2856530500 82.60

c) Bonds (as on March 31, 2010)

Sr No Name of the Bondholder Amount (Rs)(Crores)

%

1 Life Insurance Corporation of India 843.38 11.97 2 State Bank of India 615.15 8.73 3 Central Board of Trustees – EPFO 757.05 10.74 4 Bank of Baroda 434.78 6.17 5 Punjab National Bank 316.97 4.50 6 Central Bank of India 283.23 4.02 7 UCO Bank 258.76 3.67 8 Canara Bank 210.01 2.98 9 Bank of India 166.17 2.36 10 Oriental Bank of Commerce 115.33 1.64 TOTAL 4000.83 56.78

d) Debentures (as on March 31, 2010)

Sr No Name of the Debenture holder Amount (Rs) % 1 Government of India 400.00 32.84 2 Life Insurance Corporation of India 618.19 50.75 3 State Bank of India 200.00 16.42 TOTAL 1218.19 100.00

(There were three debenture holders as on March 31, 2010)

e) DEBT EQUITY RATIO As on Debt Equity Ratio (times)


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March 31, 2009 2.72 September 30, 2009 3.19 March 31, 2010 3.97 September 30, 2010 (before considering the present Issue) 4.99 September 30, 2010( after considering present Issue of Rs.100. cr) 5.01

4. PARTICULARS OF DEBT SECURITIES ISSUED (I) FOR CONSIDERATION OTHER THAN

CASH, WHETHER IN WHOLE OR PART, (II) AT A PREMIUM OR DISCOUNT, OR (III) IN PURSUANCE OF AN OPTION

The Company confirms that other than and to the extent mentioned elsewhere in this Information Memorandum, it has not issued any debt securities or agreed to issue any debt securities for consideration other than cash, whether in whole or in part, at a premium or discount or in pursuance of an option since inception. SERVICING BEHAVIOR ON EXISTING DEBT SECURITIES AND OTHER BORROWINGS The payment of interest and repayment of principal is being done in a timely manner on the respective due dates. UNDERTAKING REGARDING COMMON FORM OF TRANSFER The Bonds shall be transferred subject to and in accordance with the rules/ procedures as prescribed by the NSDL/ CDSL/ Depository Participant of the transferor/ transferee and any other applicable laws and rules notified in respect thereof. The normal procedure followed for transfer of securities held in dematerialized form shall be followed for transfer of these Bonds held in electronic form. The seller should give delivery instructions containing details of the buyer’s DP account to his depository participant. The transferee(s) should ensure that the transfer formalities are completed prior to the Record Date. In the absence of the same, interest will be paid/ redemption will be made to the person, whose name appears in the records of the Depository. In such cases, claims, if any, by the transferee(s) would need to be settled with the transferor(s) and not with the Company. The Company undertakes that it shall use a common form/ procedure for transfer of Bonds issued under terms of this Information Memorandum. MATERIAL EVENT, DEVELOPMENT OR CHANGE AT THE TIME OF ISSUE The Company hereby declares that there has been no material event, development or change at the time of issue which may affect the issue or the investor’s decision to invest/ continue to invest in the debt securities of the Company. MATERIAL CONTRACTS, AGREEMENTS INVOLVING FINANCIAL OBLIGATIONS OF THE ISSUER Copies of the documents, referred to below, shall be available for inspection at the Registered & Corporate Office of IFCI between 10:00 a.m. to 12:00noon on any working day until the issue closing date: a) The Industrial Finance Corporation (Transfer of Undertaking and Repeal) Act, 1993. b) Memorandum and Articles of Association of the Company. c) Certificate of incorporation dated May 21, 1993. d) Fresh Certificate of incorporation dated October 27, 1999, upon change of name.


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e) Certified copy of the resolution of the shareholders passed at the Annual General Meeting held on September 30, 1998, authorizing the Board of Directors of the Company of borrowing powers under section 293(1)(d) of the Companies Act, 1956.

f) Annual reports of the Company for the financial years 2004-05, 2005-06, 2006-07, 2007-08, 2008-09 and 2009-2010.

g) Copy of letter appointing M/s Beetal Financial & Computer Services Limited as Registrar and Transfer Agents.

h) Copy of letter appointing Axis Trustee Services Ltd. as Trustees to the Bondholders. i) Board Resolution dated July 23, 2010 authorizing the issue of Bonds offered under terms of this

Information Memorandum. j) Consent from the Trustees to the Bondholders and Registrars to the Issue referred to in this

Information Memorandum to act in their respective capacities. c. Copy of application made to BSE for grant of in-principle approval for listing of Bonds.

k) Letter from Brickwork Ratings India (P) Ltd conveying the credit rating for the Bonds of the Company. l) Tripartite Agreement between the Company, NSDL and Beetal Financial Computers Pvt Ltd.for issue

of Bonds in dematerialised form. m) Tripartite Agreement between the Company, CDSL and Beetal Financial Computers Pvt Ltd.for issue

of Bonds in dematerialised form DECLARATION It is hereby declared that this Information Memorandum contains full disclosures in accordance with Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 issued vide Circular No. LAD-NRO/GN/2008/13/127878 dated June 06, 2008.

The Company also confirms that this Information Memorandum does not omit disclosure of any material fact which may make the statements made therein, in light of the circumstances under which they are made, misleading. The Information Memorandum also does not contain any false or misleading statement.

The Company accepts no responsibility for the statement made otherwise than in the Information Memorandum or in any other material issued by or at the instance of the Company and that anyone placing reliance on any other source of information would be doing so at his own risk. Signed in pursuance of internal authority granted.

Place: New Delhi Date: November 16, 2010


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LIST OF HDFC BANK BRANCHES Agra: F3-F3A First Floor, Friends Wasan Plaza, Sanjay Place, 0562-4010383; Ahmedabad: Astral Tower, Near Mithakhali Six Road, Navrnagpura, 079-32423470 / Mani Nagar Branch, Nakshatra Building, Nr. Sales India, Maninagar Char Rasta, Maninagar, 079–66623333; Ahmednagar: Ambar Plaza, "A" Wing, Second Floor, Station Road, 0241-2451963; Ajmer: Near Suchna Kendra, Adj. to Swami Complex, 0145-5100123; Akola: Sethi Heights, 1st Floor, Opp. Zilla Parishad, 0724-2420726; Aligarh: 3-316 Bhalla Complex Ramghat Road, 0571-2741973; Allahabad: 58, S.P Marg Civil Lines, 9335070679; Alwar: Bhagat Singh Circle, Opp. UIT, 0144-5100880; Ambala: 6352/11, Nicholson Road, First Floor, 9315802678; Amravati: C/o Rasik Plaza, Morshi Road, Jaystambh Chowk, 9372499428; Amreli: Street # 2, Manekpara Main Road, 09328126897; Amritsar: 26 Kennedy Avenue, First Floor, 0183-3018603; Anand: HDFC Bank Ltd., 1st Floor, Sanket Complex, Next to Sales India, Grid Cross Road, 09327568094; Ankleshwar: Commercial Plot 73/P, GIDC Estate, S.A. Motors Building, Old Ankleshwar Highway, 02646-650826; Asansol: P.C Chatterjee Market, Rambandhu Talaw, 0341-2315179; Aurangabad: Divekar Plaza, CTS No.18272, IInd Floor, Railway Station Road, Padampura, 0240-6604355; Bagalkot: Opp. Railway Station, Ward No.10, 9343340658; Balasore: F.M. Circle, Balasore Branch, 06782-263335; Bangalore: Cash Management Services "SALCO CENTRE", # 8/24, Richmond Road, 080-66633131 / Airport Road Branch, Golder Towers, Kodihali, Old Airport Road, 9343705571; Bardoli: Shree Ambika Niketan, Station Road, Sardar Baug, 09327568085; Bareilly: WBO, 1st Floor, 154 Krishna Place, Civil Lines, 0581-3299631; Baroda: 5th Floor, Midway Heights, Near Panchmukhi Hanuman Temple, Lokmanya Tilak Road, Near Kirti Mandir, Kala Ghoda, Raopura, 93247468108 / Alkapuri Branch, 36, Alkapuri Society, R.C. Dutt Road, Vadodara, Gujarat, 9327058557; Batala: SCF 173-174 Jalandhar Road, 01871-500042; Begusarai: Kachhari Chowk, Today Market, 9334391765; Belgaum: No.4830/2A Opp. District Hospital, Dr. Ambedkar Road, 0831-2404415; Bhagalpur: Triveni Apartment, Dr. R.P Road, 9334391764; Bharuch: 127, Alfa Society, Link Road, 9327468094; Bhatinda: 83/1 Liberty Chowk, Civil Lines, 9316982824; Bhavnagar: 1st Floor, Sterling Point, Waghawadi Road, 0278-2561625; Bhilai: Chauhan Estate, G.E. Road, Supela, 09301174457; Bhilwara: Shop No. 1-2-3-4, "A" Block, First Floor, SK Plaza, Pur Road, 01482-512686; Bhiwadi: Riico Chowk Bhiwadi, 01493-510646; Bhiwani: S-175D/1, Jalan Nagar, Meham Chowk, 01664-324542; Bhopal: Asha Avenue, 1st Floor, Z-1, Zone-1 M.P Nagar, 0755-4002914; Bhubaneswar: C111, Business Park, 1st Floor, Sahid Nagar, 0674-2543486; Bhuj: 101/102 Sunrise Tower, Vijay Nagar, Hospital Road, 9327568107; Bhusaval: Mansingh Complex. C.T.S. No. 3294 (H.No. 4/285) Jamner Road, Opp. CSM Complex, 9323563602; Bikaner: Roshan Plaza, Rani Bazar, 0151-5130042; Bilaspur: A-99 Link Road, Near Agresen Chowk, 9302299907; Bokaro: B-9, City Centre, Sector-4, Bokaro Steel City, 06542- 232787; Burdwan: 45 GT Road/Burdwan, 0342-2566355; Calicut: IIIrd Floor, Simax Towers, Kannur Road, Nadakkave, 0495-4433154; Chandigarh: SCO-189-190 Sector 17-C, 0172-4603770; Chenganassery: Golden Towers, M.C Road, 0481-2425002; Chengannur: Bin Tower, Govt. Hospital Junction, M.C Road, 0479-2456215; Chennai: No.115, Dr. Radhakrishnan Salai, 2nd Floor, Opp. to CSI Kalyani Hospital, Mylapore, 9381750927 / Nunagambakkam, No.40 Nunagambakkam Heigh Road, 044-28252435; Cochin: First Floor, Palarivattom 25, 0484-4456607; Coimbatore: WBO, 1552, B7, First Floor, Classic Towers, Trichy Road, 0422-4202636; Cuddapah: HDFC Bank Ltd, RRR Towers, Dwaraka Nagar, R.S Road, Nagarajupalli, 08562-645003; Cuttack: HDFC Bank Ltd, Holding No.32, 32/A Bajrakabati Road, 0671-2332744; Dahanu: Matru Ashish, Irani Road. 02528 -225603; Daman: ACE Shopping Mall, Dilip Nagar, Teen Batti, 06432-292539; Darbhanga: Natraj Bhawan, Ist Floor, Katki Bazar, Tower Chawk, 06272-295030; Davangere: #651 B.H.M Enclave, H.M Road, Mandipet, 08192-232781; Dehradun : WBO Deptt, HDFC Bank, 56, Rajpur Road, 0135-3245791; Delhi: Fig-Ops 1st Floor, Kailash Bldg, C.P, 011-43174071; Delhi-NCR: Faridabad Branch, 5-R/2, B.K Chowk, NIT, Faridabad, Haryana-121001, 9313639131 / Gurgaon Branch, Sec 14 , Gurgaon Haryana -122001, 0124-222279 / Ghaziabad Branch, C-29, RDC, Rajnagar, UP-201001, 9313700326 / Noida Branch, Ansals Fortune Arcade, K-Block, Sec 18, 9312966963 / Sonepat Branch, L-203, Model Town, Sonepat , Haryana-131001, 9992929961; Deoghar: Assam Acess Road, Near Tower Chowk, 06432-292539; Dhanbad: Sri Ram Plaza, 1st Floor, Bank More Dhanbad, 0326-2308831; Dharamshala: 363/3, Centre Point, Civil Line, 01892-229569; Dhule: Wholesale Banking Operations (CMS), Lane No.6 , Mundada Arcade, Parola Road, 02562-235672; Durgapur: Balai Commercial Complex, 3rd Floor, Benachity, Nachan Road, 0343-2588501; Erode: No.680, Lotus Enclave, Brough Road, 0424-2261287; Fazilka: M.C No. 594, Gaushala Road, 01638-502759; Ferozepur: Building No.30/7, Udham Singh Chowk, 9316280934; Gandhidham: Plot No.1, Sector-8, Rabindranath Tagore Road, 02836-653251; Gaya: K.P Road Near Ghanta Ghar, 0631-2222968; Gondal: HDFC Bank Ltd., Wholesale Banking Operations, 1st Floor, Aadinath Complex, College Chowk, 91-2825-645161; Gorakhpur: Wholesale Banking Operations, Shreenath Complex, 10 Park Road, Civil Lines, 0551-2205685; Gurdaspur: HDFC Bank Ltd, SCF-1 Improvement Trust Bldg, Hanuman Chowk, 01874-242335; Guwahati: 1st Floor, Mishra Complex, Jail Road, Fancy Bazar, 0361-2734323; Gwalior: J.K Plaza, Gast Ka Tazia, Lashkar, 07514015007; Hajipur: Vimel Complex, Dak Banglow Road, 06224-260264; Haldwani: 8/6 Bhotia Paraw, Nainital Road, 05946-282801; Hamirpur: NH-88, New Road, 01972-320496; Hazaribagh: HDFC Bank, Annanda Chowk, 06546-292434; Himmatnagar: G.F Shop No.5-8 & First Floor 4–9, Kumar House, Durga Oil Mill Compound, 02772-571156; Hissar: 3 & 4 M.C Area Red Square Market Railway Road, 01662-241023; Hoshiarpur: WBO, Ist Floor, Opp. Maharaja Hotel, Sutheri Road, 01882-502956; Hosur: No.24 & 25, Maruthi Nagar, SIPCOT PO, Near Dharga, 04344-400554; Hubli: Shriram Plaza Dervice Branch Club Road, 0836-2217084; Hyderabad: WBO 1-10-60/3, III Floor, Suryodaya, Begumpet, 040-30472772 / Ladikapul Branch, 6-1-473, Saeedplaza, Ground Floor, Lakdikapul, 040-23244998; Ichalkaranji: House No 7-55(Old No.9-148) Main Road, Janta Chowk, 0230-2422613; Indore: 1st Floor, Brilliant Avenue, Sch No. 94, Sector -B, Behind Bombay Hospital, Ring Road, 0731-3912851; Jabalpur: 1st Floor, Kumbhare Mension, 636, Vijay Nagar , MR- 4, Main Road , SBI Chowk, 0761-4018773; Jagadhri: Plot No.1, Rajesh Nagar Colony, Ambala Road, 01732-247006; Jagraon: Opp SSP Office,Tehsel Road, 01624-541771; Jaipur: 2nd Floor, O-10,Ashok Marg,C-Scheme, 9314274796; Jalandhar: 1st Floor,


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911, GT Road, Nr. Narinder Cinema, 0181-5017790; Jalgaon: 3rd Floor, Sugan Heights, P.P No.324/2 , TPS II, Near Central Bus Stand Jalgaon, 0257-2237642; Jammu: CB-13, Rail Head Commercial Complex, Gandhi Nagar, 0191 -2471427; Jamnagar: Abhishek, 3rd Floor, Saru Section Road, Near Savan Apartment, 02886541963; Jamshedpur: HDFC Bank Ltd., 1st Floor, 105 SNP Area, Sakchi, 0657-2442756; Jhansi: HDFC Bank Ltd., Damroo Cinema Complex , Civil Lines, 0510-2449330; Jind: HDFC Bank Ltd., SCF-5 Rani Talab, 9315811091; Jodhpur: HDFC Bank Ltd., Ist Floor, 15, Keshav Comlex, Nimbera House, Paota, Mandore Road, 0291-2541839; Junagadh: Ground Floor, Moti Palace, Opp. Rayji Nagar, Moti Baugh Road, 0285-2670067; Kadi: Radhaswami Complex, 02764-242027; Kaithal: 1450/51 Ambala Road, Pehowa Chowk, 01746000000; Kangra: Near Bus Stand, 01892 260350; Kannur: HDFC Bank, Ist Floor, KVR Tower, South Bazar, 0497- 2705880; Kanpur: 15/46, 1st Floor, Civil Lines, 0512-3028933; Kapurthala: The Mall, Near M.G.N Public School, 01822-233973; Karad: Besides Hotel Sangam, Kolhapur Naka, 02164-229679; Karnal: Basement, SCO 778-779, Opp. Mahabeer Dal Hospital, 0184-2202789; Karur: 126/D/E Annai Plaza, Kovai Road, 04324-233722; Khanna: HDFC Bank, Opp. Bus Stand, G.T Road, 01628-221684; Kolhapur: Gemstone, 517/A/2E Ward New Shahupuri, Nr Central Bus Stand, 0231-2652791; Kolkata: Abhilasha-II, 6 Royd Street (2nd Floor), 22273761 / Stephen House Branch, Stephen House Branch,4D, BBD Bagh East, 033-30273601/09331407581; Kollam: VGP Bulidings, Near Irumpupalam, 0474-3244221; Kota: 13-14, Main Jhalawar Road, 0744-2390485; Kotkapura: B-X/740, Faridkot Road, 01635-502763; Kottayam: 3rd Floor Unity Buildings, KK Road, 0481-2302361; Kurukshetra: HDFC Bank Ltd, Shop No.1-5, Kalawati Market, Railway Road, 01744-244732; Latur: HDFC Bank Ltd, IInd Floor, Shri Prabha Arcade, Vora Bunglow, Main Road, Near Nagar Parishad, 02382-255116; Lucknow: Pranay Towers, 38, Darbari Lal Sharma Marg, 0522-3918326; Ludhiana: SCO-54, Phase -2, Urban Estate Dugri, 0161-3040060; Madurai: Sri Nithyakalyani Towers, No.34 Krishnarayan Tank Street, North Veli Street, 0452-4246609; Mandi Gobindgarh: Hukam Chand Building, Near Main Post Office, 01765-506033; Mangalore: Ideal Towers 1st Floor, Opp. Sharavu Ganapathi Temple, G.T Road, 0824-6451392; Manjeri: HDFC Bank Ltd, Kurikkal Plaza, Kacherippadi, 4833294040; Mathura: 169/2 Gaushala Road, Opp. BSA College, 9319059212; Meerut: HDFC Bank Ltd., 1st Floor, 381, Western Kutchery Road, 0121-4028363; Mehsana: Prabhu Complex, Near Rajkamal Petrol Pump, Highway Road, 02762 243173; Moga: GT Road, Opp. D.C Office, Thaman Singh Gill Market, 1636283003; Moradabad: HDFC Bank Ltd, First Floor, Chaddha Complex, GMD Road, 05913208473; Morvi: Om Shopping Complex, Ravapar Road, 02822-221316; Mumbai: Ground Floor, Maneckji Wadia Building, Nanik Motwani Marg, Near Kala Ghoda, Opp. Mumbai University, Fort, 022-40801570 / Thane Kopari Branch, Arizona Bldg.,Shop No 5, Opp Kishin Leela Tower Nath Pai Road, Kopari Colony,Thane (E), 9324614887/25980007 / Yoginagar-Borivali Branch, 1st Fl, Trimurti Krupa Chs,Bld No.2 , Subhiskha, Yoginagar Corner, Eksar Road , Borivali (W), 9967064909/022-28943952; Muzaffarnagar: 53/4-A, Bagh Kambal Wala, Jansath Road, 0131-2661333; Muzaffarpur: HDFC Bank Ltd, Tilak Maidan Road, 9334179610; Mysore: Mythri Arcade, Saraswathipuram,1st Main, 0821-4255304; Nabha: SCF 14,15 Patiala Gate, 01765224924; Nadiad: Shootout Building, College Road, 0268-6540114; Nagpur: 2, "Mile Stone" Block No.303 & 304, Near Lokmat Square, Wardha Road, 0712-2454417; Narnaul: Opp. S.P Residence, Mahinder Garh Road, 01282253388; Nasik: HDFC Bank Ltd, 3rd Floor, Archit Centre, Opp. Sandeep Hotel, Chandak Circle, Link Road, Near Mahamarg Bus Stand, 0253-6620251; Navsari: Ground Floor, Nandani Complex, Station Road, 02637-280901; Nawanshahar: B-1/148, Banga Road, 01823503053; Nellore: 17/126, G.V.R. Enclave, G.T. Road, 0861-6450852; Palakkad: VIII/246, 1st Floor, Chandranagar Jn., 0491-6452086; Palanpur: Nr. Cozy Tower, Opp. Joravar Palace, 2742651638; Panipat: 801/4, Opp. Railway Road, G.T Road, 01804015268; Panjim: 301, Milroc Lar Menezes, Swami Vivekanand Road, 6659744; Pathanamthitha: Aban Arcade, Ring Road, 0468-2272335; Patiala: Building No.11520, 1st Floor Leela bhawan, Near Gopal Sweets, 0175-5022000; Patna: Plot No.651, Jamal Road, 9334384682; Perinthalmana: Wholesale Banking, HDFC Bank Ltd., Sree Complex, Calicut Road, 04933325306; Phagwara: Kalra Complex, G.T Road, 01824-508675; Pondicherry: T.S.No.6, 100 Ft Road, Ellaipillaichavady, 0413–2206575; Porbandar: Om Shiv Shakti R.D. Chambers, M.G. Road, 0286 6541019; Pune: Fortune Square, 3rd Floor, Deep Bungalow Chowk, Model Colony, Shivajinagar, 020-41224309 / East Street Branch, 2418, East Street, General Thimmaya Road, Camp, 9371071599; Raipur: HDFC Bank Ltd, Chawla Towers, Near Bottle House, Shankar Nagar, 0771-4003110; Rajahmundry: 46-17-20, 1st Floor, Danavaipet, 0883-2428691; Rajapalayam: 251E Kadabankulam Main, Rajapalayam Thenkasi Road, 04563-230009; Rajkot: Shivalik-V, 3rd Floor, Gondal Road, 0281-6536982; Rajpura: # 11-12B, Clibre Market, 01762243114; Ramganj Mandi: Bazaar No.1, Opp. SBBJ Bank, 9875091240; Ramhgarh: N.H-33 Main Road, Near Bank of Baroda, Ramgarh Cantt, 06553-230476; Ranchi: 56, Rohini Complex Circular Road Lalpur, 6512560522; Raniganj: A/29, N.S.B Road, Opposite Asoka Petrol Pump, 9330038274; Ratlam: HDFC Bank (WBO) 90, Station Road, 07412-400672; Ratnagiri: Show Room No.3, Mangesh Shanta, Apartment, Near Maruti Mandir, Ratnagiri-Kolhapur Highway, 02352-271275; Rewari: L203, 1st Floor, Modal Town, Old Court Road, 01274-221283; Rishikesh: MC No.53 MJ Mall Railway Road, 0135-3209449; Rohtak: Jawahar Market, Opp. D-Park, Model Town, 01262-326841; Roorkee: 313/8, Civil Lines, 01332-275772; Ropar: HDFC Bank Ltd, Raj Hotel Complex, College Road, 01881-228870; Rourkela: Dewadi Bhavan, 661250066; Rudrapur: Plot No.1&2, Nanital Road, Plot No.1&2, Nanital Road, 05944-241747; Saharanpur: HDFC Bank Ltd, Court Road, 0132-3203365; Salem: HDFC Bank Ltd, 5/241-F Rathan Arcade, Five Roads, Meyyanur, 0427-2331604; Sambalpur: HDFC Bank Ltd., Nayapara Golebazar, 06632400756; Sangamner: 1 Janak Plaza, New Nagar Road, 224354; Sangli: 640, Venkatesh Senate, Sangli Miraj Road, 0233-2327836; Sangrur: SCO-1,2,3 Kaula Park, 01672-501803; Shillong: Anders Mansion, Police Bazar, 3642506043; Shimla: 3, Jankidas Bldg, 0177-2658541; Shimoga: HDFC Bank Ltd, W.B.O, No.447, Sharavathi Complex, Savarlane Road, 08182-261359; Siliguri: 136/115 Hill Cart Road, 0353-2520409; Silvassa: 1-16, Jaypee House, Opp. Patel Petrol Pump, 0260-6547172; Sindhanur: No.6-1-2992/1,Ward No.12, Kushtagi Road, 08535-220611; Solan: The Mall Road, Opp. UCO Bank, 9318618249; Solapur: HDFC Bank Ltd., 8516/11 Murarji Peth, Sun Plaza Bldg, Lucky Chowk, 0217-2320877; Srinagar: First Floor, M.S


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Shopping Mall, Residency Road, 0191-2483843; Surat: 1st Floor, Crossway Mall, Near Ram Chowk, Ghod Dod Road, 0261-6677807; Surendranagar: Middle Point, A Wing, Near Milan Cinema, Main Road, 02752-650105; Thalassery: Sahara Centre, AVK Nair Road, 0490 2325104; Theni: HDFC Bank, WBO –Theni, #422-A, Periyakulam Road, 04546-321300; Thiruvalla: Illampallil Buildings, 26/149, 1&2, MC Road, Ramanchira, 0469-2741378; Tirunelveli: HDFC Bank Ltd, 12,13, Trivandrum High Road, Vannarpettai, Palayamkottai, 0462-4200675; Tirupati: HDFC Bank Ltd, 19-8-180, Krishna Arcade, Beside IBP Petrol Pump, Near Annamaiah Circle, 8772220374; Tirupur: HDFC Bank Ltd, No-169, Chidambaram Complex, Kumaran Road, 0421-4342422; Tirur: KMS Tower, Thazhepalam, 0494-6451045; Trichur: Global Centre, M.G Road, 0487-2384870; Trichy: No.11 PLA Kanagu Towers, 11th Cross, Main Road, Thillainagar, 0431-2742204; Trivendrum: BOB Plaza , Second Floor, T.C 12/149 (3), Pattom, 0471-3083430; Udaipur: Uday 2nd Floor, 3 Durga Nursery, 0294-5103355; Udupi: Panduranga Tower/Diana Circle, Court Road, 0820-4294936; Unjha: 1st Floor, Suvidhi Complex, Station Road, 02762-240624; Valsad: 1st Floor, Ekta Apt, Tithal Road, 02632 652201; Vapi: 1st Floor, Kanta Trade Center, GIDC Char Rasta, 0260-6548104; Varanasi: D-58/9A-1K, Kush Complex, Sigra Varanasi, 05422221271; Vellore: 73 Officers Line, 0416-2210338; Veraval: HDFC Bank Ltd. "Amrut Deep", Rajmahal Road, Opp. Public Garden, 02876-650219; Vijayawada: 40-1-48/2, 2nd Floor, Valluri Complex, M.G Road, 0866-6647400; Vishakapatnam: HDFC Bank, First Floor, Potluri Castle, # 48-14-9, Dwarakanagar, 0891-6671123; Warangal: 1-8-605/1, Nakkalagutta, Hanamkonda, 0870-6454021.