ONE FIRM. shared mission, values and common culture. reward design reflecting shared destiny. common identity and brand

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1 ONE FIRM Integrating IDFC s Business Platforms IDFC has emerged as a leading knowledge driven financial services company in India playing a lead role in driving infrastructure development in the country. In recent years IDFC has rapidly expanded its capabilities and added new business segments through both organic growth and acquisitions. This growth places a particular focus on our creativity in aggregating our diverse competencies and strengths into a single integrated firm that is able to deliver superior value to all stakeholders. MISSION REWARD BRAND shared mission, values and common culture reward design reflecting shared destiny common identity and brand Creating a common culture and a sense of share purpose Linking rewards with firm performance Strengthening the IDFC brand. Positioning as One Firm 10 I D F C A N N U A L R E P O R T 09 10

2 The ONE FIRM initiative focuses on this effort. It seeks to forge a sense of shared purpose and values that will underpin our common identity and brand. Through this effort IDFC will emerge a more aligned and integrated firm that is able to better leverage its diversity, talent and expertise to deliver an enhanced value proposition to clients, improve shareholder value and realize its mission - To be the leading knowledge driven financial services firm, creating enduring value, promoting infrastructure and nation building in India and beyond. One dream transformed a nation, one stone builds the foundation, ONE FIRM will drive the growth of India s infrastructure - IDFC. Glimpse of some of our successes across verticals in the following pages ARCHITECTURE EMPLOYEE COMMUNICATION aligned organisation architecture consistent employee experience platform centric communication Delivering an enhanced value proposition to stakeholders We all work for One Firm - IDFC Communicate a common & single brand internally to all employees and focus on creating an emotional connect with IDFC ONE FIRM 11

3 W I PRO How IDFC verticals helped a JV raise Rs. 500 crore for a project to provide IT services for Delhi International Airport IDFC was the sole lender of the project Wipro bid and won a contract to develop an IT system for Terminal 3 of Indira Gandhi International Airport at New Delhi. A company called Wipro Airport IT Services Limited was formed as a joint venture between Wipro and Delhi International Airport Pvt. Ltd., where Wipro holds 74 per cent stake. The JV then entered into a Master Services Agreement (MSA) to provide airport IT infrastructure and services at Terminal 3. External finance requirement for the project (including the cost of hardware, software and implementation) was Rs. 500 crore. Terminal 3 will cater to all international and non-low cost carrier domestic flights to and from Delhi. Information technology is a key driver for critical airport operations. I D FC CA P I TA L Stepped in to leverage its strong relationship with the Wipro Group. IDFC Capital, with inputs from IDFC Project Finance and IDFC Legal then put together a unique financing structure that met with the expectations of Wipro. 12 I D F C A N N U A L R E P O R T I D F C P R O J E CT F I N A N C E Assisted in transaction structure and achievement of financial closure in a short period.

4 ASHOKA BUILDCON Four IDFC verticals tied up with infrastructure company Ashoka Buildcon, to win and finance two highway projects. Ashoka Buildcon Ltd. (ABL) tied up with IDFC to bid for two contiguous national highway projects on NH-6 in Chhattisgarh and Maharashtra. The National Highways Authority of India awarded both the projects to the ABL-IDFC consortium. The combined cost of the projects was Rs. 1,115 crore. 1 Raising the equity in a market that had turned overcautious. At this time it seemed like an uphill task to solicit proposals from equity investors to take equity stakes in the projects. 2 Structuring and syndicating Rs. 785 crore of debt for the projects was a challenge. I D F C P R O J E CT F I N A N C E I D F C C A P I T A L I D F C P R O J E CT E Q U I TY IDFC Project Finance team appraised the projects and structured the debt. IDFC has also provided part of the debt for the projects. 232 Successfully syndicated India Infrastructure 785 the debt for the projects Fund, managed by during the peak of the financial crisis. IDFC Project Equity, offered the most competitive terms to ABL and committed to invest in both the Assisted ABL in soliciting projects. proposals from equity investors to acquire an equity stake in the projects. I D F C P R I VAT E E Q U I TY 100 Invested Rs. 100 crore in ABL and own 15.62% of the Company. Assisted in diverse areas including fund raising, HR matters and business development. As a result of this joint effort by IDFC, IDFC Capital and IDFC Project Equity, ABL was able to commence work on two capital intensive projects right in the middle of global recession. O N E F I R M 13 *A L L F I G U R E S I N R S C R O R E U N L E S S O T H E R W I S E S T A T E D

5 GUJARAT PIPAVAV IDFC, through its verticals has helped Gujarat Pipavav Port Ltd. to complete port infrastructure improvement, which are now comparable with competing ports. Gujarat Pipavav Ports Ltd. (GPPL) operates a multipurpose port at Pipavav, Gujarat with a container and bulk capacity of 6 lakh TEUs per annum and 5 million metric tonnes per annum. IDFC has partnered the company since 2005 and has facilitated the financing of the project both through debt and equity. 1 Funding requirement In 2005, GPPL needed finance to develop and expand the port. IDFC stepped in then and provided debt worth Rs. 445 crore towards this project. In FY2010, GPPL, in consultation with IDFC, reassessed the business plan, the revised project cost estimates, and the funding requirement for the project. I D F C I D F C C A P I T A L I D F C P R I VAT E E Q U I TY 1,000 Underwrote and successfully arranged debt The legal due-diligence, including common loan documentation for the consortium, was led by IDFC s legal team. Coordinated the debt syndication exercise with IDFC Limited acting as the lead bank amongst 8 banks and finance institutions (FIs) in the lender s consortium During 2005, played an instrumental role in supporting APM Terminals to take control of the project from the erstwhile promoter. Is the largest financial 200 investor in the company. It has invested Rs. 200 crore in the project. The smooth coordination between IDFC verticals has made GPPL a success story. 14 I D F C A N N U A L R E P O R T *A L L F I G U R E S I N R S C R O R E U N L E S S O T H E R W I S E S T A T E D

6 G REEN INFRA Green Infra's acquisition of a high quality portfolio of windfarms was possible only because of the seamless partnership between three verticals of IDFC. Green Infra Ltd. (GIL) was set up in 2008 by funds managed by IDFC Private Equity with an equity commitment of Rs.360 crore and the objective of becoming India's leading renewable energy-focused independent power producer. In May 2009, GIL successfully bid for a 99.4 MW portfolio of wind farms owned by BP Energy (India) Private Limited, (BPEIPL) edging out strong competition from several larger companies for this high quality portfolio. One of the key challenge was financing the transaction in the midst of a deteriorating external environment. BPEIPL was keen on closing the deal as soon as possible, the tight timeframe posed an added challenge. Another key consideration for BPEIPL was that of a fully funded bid. GIL was a relatively new player in this sector and these considerations could have come up in the way of swift closure. I D F C P R I VAT E E Q U I TY I D F C P R O J E CT F I N A N C E I D F C C A P I T A L 345 Partnered GIL and IDFC Private Equity to underwrite the entire non-recourse long term loan. This amount included securitisation of carbon emission receipts receivables of Rs. 25 crore and sub-debt of Rs.15 crore. Played a vital role in syndicating the loan to Indian Renewable Energy Development Agency and Axis Bank. Supported this landmark transaction by providing full debt financing Acted swiftly to structure and fully underwrite the entire debt to enable GIL to comply with the bid requirement. GIL's acquisition of these windfarms was possible in an accelerated timeframe only because of the seamless partnership between IDFC Private Equity, IDFC Project Finance and IDFC Capital. The transaction allowed GIL to establish its leadership in the renewable energy sector while assisting BP to achieve one of its objectives; transitioning the ownership of these windfarms to an environmentally sensitive partner. O N E F I R M 15 *A L L F I G U R E S I N R S C R O R E U N L E S S O T H E R W I S E S T A T E D

7 P LUS IDFC Projects and IDFC Capital partnered together to give PLUS Expressways Berhad a head start to acquire a stake in a highway project in Tamil Nadu. IDFC Projects and PLUS Expressways Berhad (PLUS) have been working together on road projects in India for over 15 months. The IP - PLUS JV has submitted RFQs for three projects and are exploring opportunities to bid jointly for future projects in India. Advise on acquisitions The company also needed help from an Indian company to acquire highway projects and advise them on proposed acquisitions. I D F C P R O J E CT S Appraised PLUS about the credentials of IDFC Capital and set up preliminary meetings. IDFC Capital then helped PLUS in acquiring a highway project and successfully closed the deal. I D FC CA P I TA L INVESTMENT BANKING TEAM was responsible for the detailed evaluation of this highway that consisted of assessing the target s business plan and financial model, coordinating traffic, legal and accounting due diligence with various agencies, structuring the transaction to mitigate various risks and negotiating the price, transaction structure and key covenants in the transaction documents on behalf of PLUS with the existing shareholders of the project company. IDFC s two verticals were able to help make an acquisition and win orders in the infrastructure space. 16 I D F C A N N U A L R E P O R T 09 10

8 QU I P PO Quippo s passive telecom infrastructure business got a boost thanks to IDFC s timely financial interventions As early as March 2007, IDFC saw the potential for substantial growth in the passive telecom infrastructure business, underpinned by strong subscriber additions in the world's fastest growing mobile telecom market. IDFC Private Equity was an early investor in Quippo Telecom Infrastructure Limited (QTIL), one of India's leading independent tower operators. The initial growth capital funding from IDFC Private Equity went a long way in helping QTIL become a relevant player in the passive telecom infrastructure space. However, the transformational acquisition of the passive telecom infrastructure business of Tata's and the large associated financing requirement of Rs.2,400 crore was vital to securing the company's future. I D F C I D F C P R I VAT E E Q U I TY I D F C P R O J E CT F I N A N C E IDFC not only assisted Quippo in partnering with the Tata Group but also helped it to become India's largest independent passive telecom infrastructure provider with the highest tenancy levels in the Indian market Equity to support the company s growth plans. Direct Equity stake in WTTIL to form a common shareholder block with Quippo. 100 Lent to fund the initial capex of Quippo. Lent to support Quippo s 350 acquisition of equity stake and subsequent de-merger of tower assets into WTTIL. 74 Infused during the rights issues. 500 SHORT TERM 650 LONG TERM Loan to support WTTIL s growth plans and to meet its high capex requirement. 250 Invested as preference equity in WTTIL to meet its long term funding plans. TOTAL 452 1,850 O N E F I R M 17 *A L L F I G U R E S I N R S C R O R E U N L E S S O T H E R W I S E S T A T E D

9 awards & recognitions IDFC's businesses are today reconginsed as the leading source of knowledge and financing expertise in building india's infrastructure. More than anyone else, we understand and appreciate the prospects and challenges in infrastructure and are committed to implementing innovative solutions for a sustainable future. RD 3 in asia pacific AWA R D S IDFC PROJECT FINANCE As mandated lead arranger for Project Finance Loans for the period Jan Dec 2009 by Project Finance International asia money brokers poll AWA R D S I D FC SS K I Poll of Polls Best Local Brokerage infrastructure investor AWA R D S the private equity international AWA R D S infrastructure investor AWA R D S IDFC PRIVATE EQUITY Asian Infrastructure Fund Manager of the Year IDFC PRIVATE EQUITY Best Private Equity Firm in India IDFC PRIVATE EQUITY Asian Infrastructure Deal of Year lipper fund AWA R D S I N D I A IDFC ASSET MANAG E M E N T COMPANY LIMITED IDFC Premier Equity Fund - Plan A, Growth, Best Fund over 3 years Equity India best performance amongst the 5 star funds IDFC PREMIER EQUITY FUND Open ended diversified equitydefensive (3 year ending Dec 2009) best performance top 10% of the category I D FC GOV E R N M E N T S E CU R I T I E S - S H O RT T E RM FU N D Open ended gilt, 1 year ending Dec 2009 F U N D M A N A G E R K E N N E T H A N D R A D E business standard fund manager & business world smartest fund manager BUSINESSWORLD AWARDS 2010 IDFC PREMIER EQUITY - PLAN A Mid cap and small cap equity category Based on 3 years CAGR returns, 25.85%, as on Dec 2009 Average AUM, Rs. 1,145 crore, as on Dec I D F C A N N U A L R E P O R T 09 10

10 In the last 1 year, IDFC Mutual Fund has received a number of awards and recognitions for their schemes performance from different research and rating agencies 5 STA R F U N D S B Y I C R A AWA R D S Funds across debt and equity recognized as five star funds by ICRA awards (Feb 2009) - IDFC Premier Equity Fund, IDFC Imperial Equity Fund, IDFC Dynamic Bond Fund, IDFC Super Saver Income Fund 5 STA R R A N K I N G The domestic research agency Value Research has given 5 Star rankings to Premier Equity Fund and Imperial Equity Fund in the quarter ending June B E ST P E R F O R M I N G F U N D H O U S E B Y T H E E C O N O M I C T I M E S IDFC AMC rated as the Best Performing Fund House by the Economic Times (ET) Quarterly Mutual Fund Tracker for Q1 and Q2 of FY P L AT I N U M C AT E G O RY IDFC Imperial Equity Fund and IDFC Dynamic Bond Fund ranked in the Platinum Category which is the highest ranking given to schemes in Q1 and Q STA R R A N K I N G Government Securities Fund PF Plan and Dynamic Bond Fund has been ranked 4 Star. H I G H E ST R A N K I N G S O F C P R 1 & C P R 2 Several IDFC schemes received highest rankings of CPR1 & CPR 2 by rating agency CRISIL (subsidiary of S&P). Scheme Ranking Agencies Scheme Name Ranking / Rating IDFC Premier Equity Fund Platinum IDFC Imperial Equity Fund Silver ECONOMIC TIMES IDFC SSIF- MT Gold IDFC Dynamic Bond Gold IDFC Imperial Equity Fund IDFC Premier Equity Fund MORNING STAR IDFC Dynamic Bond Fund IDFC Classic Equity IDFC Super Saver Income Fund -ST IDFC Cash Fund IDFC Imperial Equity Fund VALUE RESEARCH IDFC Premier Equity Fund IDFC SSIF- MT IDFC Premier Equity Fund ICRA IDFC GSF - ST Economic Times Quarterly MF Tracker Ranking (Best Fund House Quarterly) Quarter Fund House Rank March 09 1 June 09 1 September 09 2 December 09 2 M A N A G E M E N T ADW IAS RC UD S S& I OR N E C& OAG NAI TL IY OS NI S 19