Over the years IL&FS has broad-based its shareholding and inducted Institutional shareholders including State Bank of India, ORIX Corporation, Japan, International Finance Corporation, Washington, Credit Commercial de France and Indivest Pte Ltd, a Subsidiary of Government of Singapore

Overview

• Dedicated Financial Institution for Development of Infrastructure in the Country
  
  
• Promoted by Leading Financial Institutions in the Country: Central Bank of India, HDFC and Unit Trust of India 
  
  
• Balance Sheet of US$ 1 billion approx. and Net-worth of more than US$ 160 million
  
  
• Managing approximately US$ 200 million on behalf of leading Indian and International Institutions
  
  
• Pan India Operations spanning all the States in the Country
  
  
• Developed, Implemented and Operated Infrastructure Projects of more than USD 2.5 billion
  
  
• First Public Private Partnership in India: Rau-Pithampur Toll Road (Madhya Pradesh)
  
  
• First Large Private Sector Initiative in the Surface Transport Sector in India: NOIDA Toll Bridge
  
  
• Largest Green-field Water Project in Asia under the Public-Private-Partnership Format: Tirupur Water Supply Project
  
  
• First Greenfield Airport in India: The Bangalore International Airport Limited
  
  
• First Municipal Bond Issue by a Local Body in India: Ahmedabad Municipal Bond
  
  
• Strong Pool of Trained Personnel dedicated to Infrastructure Development of the Nation
  
  
• Dedicated Financial Institution for Development of Infrastructure in the Country
  
  
•   Promoted by Leading Financial Institutions in the Country: Central Bank of India, HDFC and Unit Trust of India 
  
  
• Balance Sheet of US$ 1 billion approx. and Net-worth of more than US$ 160 million
  
  
• Managing approximately US$ 200 million on behalf of leading Indian and International Institutions
  
  
• Pan India Operations spanning all the States in the Country
  
  
• Developed, Implemented and Operated Infrastructure Projects of more than USD 2.5 billion
  
  
• First Public Private Partnership in India: Rau-Pithampur Toll Road (Madhya Pradesh)
  
  
• First Large Private Sector Initiative in the Surface Transport Sector in India: NOIDA Toll Bridge
  
  
• Largest Green-field Water Project in Asia under the Public-Private-Partnership Format: Tirupur Water Supply Project
  
  
• First Greenfield Airport in India: The Bangalore International Airport Limited
  
  
• First Municipal Bond Issue by a Local Body in India: Ahmedabad Municipal Bond
  
  
• Strong Pool of Trained Personnel dedicated to Infrastructure Development of the Nation

The Company has been mandated to undertake operations in the following business segments:

• Commercialization of infrastructure projects through formulation of commercially viable schemes in conjunction with public and private sector project sponsors
  
  
• Providing a full range of financial services including leasing, investment banking, corporate finance, project finance, advisory services and distribution

List of Board of Directors as of September 26 , 2005

Operations of the Company
The business operations of IL&FS can be categorized into the following broad areas:

(1) Infrastructure Project Development & Financing
(2) Investment Banking The business operations are described hereasunder:

(1) Infrastructure Project Development & Financing

IL&FS has been specifically mandated to implement infrastructure projects on a commercial format without recourse to budgetary allocations. Over the last few years, IL&FS has been actively engaged in creating and developing a framework to enable such commercialization

IL&FS's focus in infrastructure is on the following sectors:

(a) Surface Transport and Transportation Systems
(b) Water Supply
(c) Hydro Power
(d) Special Economic Zones
(e) Ports
(f) Environmental & Social Management
(g) Education

In respect of infrastructure sectors such as surface transport, water supply and area development, IL&FS has adopted a multiplicity of roles including project conceptualization, project development, financing, sponsorship, project management and project implementation.

IL&FS is engaged in Infrastructure Project Development & Financing across states in India such as Jammu & Kashmir, Kerala, Assam, Gujarat, Maharashtra, Jharkhand, Uttaranchal. In addition to this, IL&FS Infrastructure Development Corporation Limited, a project development subsidiary of IL&FS has entered into Project Development & Promotion Partnerships (PDPP's) with several state governments in the country

Some of the salient projects IL&FS has undertaken across the above-mentioned sectors are described hereasunder:

(a) Surface Transport and Transportation Systems

Some of the important initiatives of IL&FS in the surface transport sector are briefly provided below:

(i) Bangalore International Airport: US$ 350 million approx

BIA is one of the first green field international airport proposed to be implemented in the private sector. The airport is located at Devanhalli, about 40 kms from Bangalore. The Government of Karnataka (GoK), through a competitive bidding process selected the Siemens led consortium consisting of Siemens Project Ventures Gmbh, Unique Zurich Airports and L&T, to implement the project. IL&FS was involved in the project as advisors to KSIIDC

(ii) Mozambique Railways Privatization

IL&FS had undertaken a financial feasibility study for concessioning of Mozambique Railways on BOT basis in association with RITES. The study was funded by the World Bank.

(iii) Delhi - Noida Bridge: US$ 100 million approx

IL&FS and New Okhla Industrial Development Authority (NOIDA) have promoted the Noida Toll Bridge Company Ltd. (NTBCL) as a special purpose vehicle (SPV) to develop, construct, operate and maintain the DND Flyway on a Build Own Operate Transfer (BOOT) basis.

IL&FS was involved in conceiving the project, implementation, financial closure etc of the project. An eight-lane bridge of approximately 550 meters length across the Yamuna River and approach roads on the South Delhi and Noida ends has been completed. The project was among the first large private sector initiatives in the surface transport sector in India and has been implemented during a period characterised by difficult economic conditions, four months ahead of schedule and within budgeted costs.

(iv) Gujarat Road Projects: US$ 100 million approx

The Company has promoted two toll road projects in the State of Gujarat along with Government of Gujarat (GoG). The Vadodara Halol Toll Road (VHTR) Project was commissioned in FY-2001 and Amhedabad Toll Road (AMTR) Project was commissioned in FY-2003.

(v) North Karnataka Expressway Project: US$ 115 million approx

The Project entails construction of 77 kms cement road on National Highway Number 4, connecting Belgaum to the Maharashtra Border. IL&FS, Punj Lloyd and CTNL have formed North Karnataka Expressway Limited, a Special Purpose Vehicle to undertake the implementation of the project. The project had been bid out by NHAI, and was the first Annuity project to be awarded. The project has been commissioned well ahead of schedule in June 2004 and within the budgeted cost.

(vii) Tamil Nadu Road Projects : US$ 15 million approx

Tamil Nadu Road Development Company Limited (TNRDC) is a venture jointly promoted by IL&FS and Tamil Nadu Industrial Development Corporation Limited (TIDCO). TNRDC has taken up the improvement and maintenance of the East Coast Road (ECR), connecting Chennai and Pondicherry (via Mahabalipuram). The project was commissioned on time and within the budgeted costs and the facility is opened for commercial operations

(viii) Pradhan Mantri Grameena Sadak Yojna :

Pradhan Mantri Grameena Sadak Yojna (PMGSY) has been conceived by Government of India (GoI) to provide road connectivity to approximately 1.58 lakhs villages. The PMGSY is being managed by State Governments with the Ministry of Rural Development, GoI acting as the nodal agency

IL&FS has been appointed as Program Manager to the Warana Rural Roads Development and Maintenance Co-operative Society Limited, a subsidiary of Warana Co-operative Society, for the development, implementation and maintenance of approximately 1,100 kilometers of rural roads in Maharashtra.

(b) Water Supply

(i) Tirupur Project: US$ 250 million approx

IL&FS has evolved an integrated area development program for Tirupur, a leading knitwear centre in Tamil Nadu. The program encompasses development of water supply, drainage and effluent treatment, road network improvement, telecom up-gradation and housing. New Tirupur Area Development Corporation Limited (NTADCL), the project Company, has completed all developmental activities relating to the project including mobilization of the required equity and debt funding.

Phase I of the project, which provides water supply to Industries is expected to be commissioned in May, 2005 and Phase II of the project, which provides Water supply and sanitation facility to domestic users is expected to be commissioned in November, 2005

(ii) Visakhapatnam Industrial Water Supply Project: US$ 100 million approx

IL&FS in association with Andhra Pradesh Industrial Infrastructure Corporation Limited (APIIC) has developed the Visakhapatnam Industrial Water Supply Project on a commercial format. The Project has been domiciled in a Special Purpose Vehicle in the name of Visakhapatnam Industrial Water Supply Company Limited (VIWSCo). VIWSCo has executed a Concession Agreement with Government of Andhra Pradesh to construct and operate the Project facilities over the Concession Period.

(c) Hydro Power

IL&FS is focussing on the Hydro Power Sector in States having significant potential like Arunachal Pradesh, Uttaranchal and Sikkim. Initial initiatives have been well received by all concerned personnel in Government, although there would necessarily be a significant gestation period prior to specific transactions fructifying in this sector

(d) Special Economic Zones

(i) Government of India SEZ Policy

The development of Special Economic Zones (SEZ) was announced by the Ministry of Commerce (MoC), GoI in FY 2000 to provide impetus to export oriented manufacturing and other activities. IL&FS has been closely involved over the past three years with the evolution of policy relating to the governance of SEZs in the country

(ii) Maha Mumbai SEZ: US$ 1100 million approx

IL&FS has been appointed as Financial Advisor, Syndication Manager and Co-Developer by the Maha Mumbai Special Economic Zone (MMSEZ), which entails a capital outlay of Rs 49 billion

(iii) Kakinada SEZ Project cost to be determined

IL&FS has been appointed as Project Developer for a port-based Kakinada SEZ in Andhra Pradesh by Kakinada Special Economic Zone Private Limited

(iv) Handicrafts SEZ Project cost to be determined

IL&FS has been appointed as Project Developer for a Handicrafts SEZ in District Gautam Buddha Nagar by Export Promotion Council for Handicrafts, Ministry of Textiles

(e) Ports

IL&FS has been involved in the development of the ports in the country. Some of the ports IL&FS has been involved with are hereasunder:

(i) Gangavaram Port: US$ 400 million approx

IL&FS has been instrumental in structuring the deepwater green-field multi-purpose port at Gangavaram, 15 km south of Visakhapatnam port. The developer was identified and a special purpose company was set-up: Visual Infrastructure Port Limited (VIPL) to offer major tangible benefits to shippers and receivers through deeper drafts (of greater than 20 m), advanced cargo handling equipment, vast storage areas for all cargos and extensive ancillary facilities with an aim to handle 50 mtpa by the year 2020

(ii) Rewas Port: US$ 500 million approx

The Company has been selected as co-developer and financial advisor for the Rewas-Aware Port Project in Maharashtra which had been conceived an international hub with 42 all weather, deep draught berths to be implemented in three phases, with an estimated investment in Phase I of Rs 21 billion

(f) Environment & Social Management

Ecosmart India Limited (Ecosmart) promoted by IL&FS focusses on the environmental sector initiatives. Ecosmart provides consulting services to project developers, belonging to public and private sectors as well as financial institutions, in India as well as abroad

Ecosmart operates on a proactive philosophy that ecological thinking is critical to bring in both sustainability and competitiveness in any economic development. This distinguishes Ecosmart from other environmental consulting companies. Again, besides consultancy services, Ecosmart promotes environmental initiatives in the framework of public private partnership. Here Ecosmart operates as a programme manager to conceive, steer and manage projects that have a complex interface between government, business and communities. Programmes such as Ecocity and Environmental Information Centre with the Ministry of Environment and Forests, Government of India or Greenhouse Gas Reduction in Textile Cluster at Tirupur with US Agency for International Development are illustrations of ongoing projects where Ecosmart operates as a Programme Manager

(g) Education

IL&FS has set up a special purpose company viz., Schoolnet India Limited with the objective of expanding the reach of education, enhancement of the learning process and to build up a framework of networked learning with the help of information technologies and telecommunication.

Significant progress has been made towards building an e-business in learning, training through the K-10 programme, the NOS initiative and corporate training. Schoolnet has succeeded in positioning itself as a value added service provider in technology and related services to its core customers

(2) Investment Banking

In the area of investment banking, the strategy of IL&FS has been to develop a comprehensive range of financing options for customers. IL&FS provides range of facilities, which include

(a) Asset Financing
(b) Corporate Advisory Services
(c) Capital Markets
(d) Project Financing
(e) Fund Management

(a) Asset Financing

IL&FS provides customised solutions to its customers to meet their financial needs, wherein a facility is structured based on the specific requirements of a customer. IL&FS offers the following types of credit facilities:

§ Leasing
§ Debenture Subscriptions
§ Term Loans

(b) Corporate Advisory

The corporate advisory group within IL&FS helps develop financial plans that address the requirements of the promoters as well as their corporates.

Typical assignments in this field include:

§ Structured Finance Solutions
§ Financial Re-structuring
§ Mergers and Divestitures
§ Valuation Services

(c) Capital Markets

The principal activities of the capital market services include:

§ Structuring of Issues
§ Development of Financial Plans and Financial Instruments
Underwriting

(i) Project Advisors on Ahmedabad Municipal Corporation Bond Issue

The Ahmedabad Municipal Corporation's maiden public issue of municipal bonds of Rs. 1 billion in January 1998 was the first municipal bond issue in the country which opened a new avenue for financing municipal infrastructure. Ahmedabad Municipal Corporation went in for a credit rating from CRISIL, the country's oldest rating agency to provide an independent evaluation to investors about the potential risk levels associated with the instruments

(ii) Lead Managers / Project Advisors on Visakhapatnam Municipal Bond Issue

The Visakhapatnam Municipal Corporation's maiden public issue of municipal bonds of Rs. 700 million in March 2004 was among the first municipal bond issues to get listed on National Stock Exchange. Visakhapatnam Municipal Corporation went in for a credit rating from CARE, one of the country's leading rating agency's to provide an independent evaluation to investors about the potential risk levels associated with the instruments

(d) Project Financing

IL&FS has actively developed project finance capabilities i.e. providing advisory, financial structuring, structured finance and capital market solutions, as a composite approach to finance projects for its corporate clients. IL&FS has provided project finance solutions in areas such as power, hydro, surface transport and telecom

(e) Fund Management

Over the years, IL&FS has set-up/contributed to establishment of dedicated funds for developing infrastructure in a 'Public-Private-Partnership' framework. Some of the funds are described hereasunder:

(i) Tamil Nadu Urban Development Fund
The Government of Tamil Nadu has been implementing the Tamil Nadu Urban Development project since 1988. In order to broaden the scope of the project and with a view to attracting private capital into urban infrastructure, TNUDF was established in November 1996. TNUDF is the first public private partnership between Government of Tamil Nadu and Financial Institutions such as IL&FS for providing long-term debt for civic infrastructure on a non-guarantee mode. TNUDF is managed by a Corporate Trustee viz. Tamil Nadu Urban Infrastructure Trustee Company Limited (TNUITCL). Tamil Nadu Urban Infrastructure Financial Services Ltd is the Fund Manager of Tamil Nadu Urban Development Fund.

(ii) India Project Development Fund

The India Project Development Fund (IPDF) was set up by IL&FS in FY 2001 to assume project development risk prior to financial closure of large projects in the infrastructure sector. The objective of the Fund is to act as a catalyst to kick-start the development of large infrastructure projects. Since inception, the Fund has evaluated various investment opportunities across all infrastructure sectors, with a combined project cost of over Rs 250 bn. The Fund has been successful in deploying its corpus in seven projects and currently stands fully committed

(iii) Leverage India Fund

IL&FS has sponsored the Leverage India Fund (the Fund) with a primary focus on infrastructure sectors such as power, surface transport, water supply, ports, oil & gas, telecommunication and allied infrastructure sectors. The Fund proposes to address the varying risk appetite of investors by offering equity units as well as mezzanine units. The Fund is managed jointly by IL&FS Investment Managers Limited (IIML), IL&FS private equity arm, and Punjab National Bank. The Fund has already achieved its first close and is expected to reach its target size of Rs 5 billion with a second close in coming year