Darashaw is amongst the oldest, continuously managed broking and investment-banking

house in India. Founded in 1926, it has been built on the tradition of integrity, efficiency, client
commitment and a reputation for developing the markets in which it operates.

Darashaw has the distinction of being the first resource mobilisers and brokers in government
securities to be appointed by Reserve Bank of India on the bank’s inception in 1938. It is today,
a leading broking and investment bank offering an increasing range of services, including
consultancy, to meet its client’s financial and strategic objectives with discretion and trust.

Darashaw is headquartered in Mumbai, and is spread across eight cities in India with over 100
professionals. We have recently setup operations in Singapore as well.

Our founder, Mr. Darashaw Master was a pioneer of the Indian debt market and contributed
to its development and expansion. He was responsible for the induction of the erstwhile princely
states and several other brokers into the debt markets. Darashaw had the distinction of being the
Sole Broker to the Nizam of Hyderabad, the then single largest player in the capital markets.

The seventies witnessed a tremendous growth in the banking sector, following its nationalisation.
Darashaw, under Mr. Keki D. Mehta, continued to contribute to the development of the market.
Mr. Mehta was involved in the policy changes initiated by the Reserve Bank of India to make its
market intervention techniques more effective. He was also a member of the Bombay Stock
Exchange’s committee on audit and reporting systems for the broking community. Mr. Mehta, a
qualified chartered accountant, is on the boards of various companies.

Over the last decade India has seen explosive growth of volumes and products in the financial
sector, heightened activity in trading, development of sophisticated risk management tools like
derivatives and structured products. The third generation at Darashaw has been instrumental in
the education of investors and regulators and the innovation of first ever deals.

Group Companies
1. Darashaw & Company Pvt. Ltd.

 Member Bombay Stock Exchange ( SEBI Registration No: INB010992230 BSE Cash
Segment )
 Member Bombay Stock Exchange ( SEBI Registration No: INF010992230 BSE
F&O Segment )
 Member National Stock Exchange ( SEBI Registration No: INB230992233 NSE
Cash Segment )
 Member National Stock Exchange ( SEBI Registration No: INF230992233 NSE
F&O Segment )
 Merchant Banker Category – I ( SEBI Registration No: INM000010676 )
 Portfolio Manager ( SEBI Registration No: INP000000431 )
 Mutual Fund Advisor ( SEBI Registration No: ARN-2648 )
 Member Mangalore Stock Exchange ( SEBI Registration No: INB141178732 )
  Member Over the counter Exchange of India ( SEBI Registration No: INB200533211 )

2. Darashaw Securities Pvt. Ltd.

• Member National Stock Exchange ( SEBI Registration No: INB230533233 NSE

WDM Segment )
• Member National Stock Exchange ( SEBI Registration No: INF230533233 NSE Debt
F&O Segment )

3. Baman K. Mehta & Co.

• Member Vadodara Stock Exchange ( SEBI Registration No: INB190393918 )

4. TSR Darashaw Limited. ( www.tsrdarashaw.com )

• Registrar and Share Transfer Agents Category – I ( SEBI Registration No:

INR000004009 )

The Darashaw Credo

As Darashaw learns and grows in the 21st century, along with commitment to performance and
thirst for change, it has continuously stressed upon total, unyielding integrity. It is a company of
high integral values and standards. Our reputation for honest and reliable business conduct, built
by our people over so many years, is tested and proved in each business transaction we make.

The Darashaw Values

• Positive Thinking
• Independent Working and Thinking
• Task Orientation and Thoroughness In Work
• Ability To Build Close Relationships
• Aggressive and Persistent In Achieving Goals
• Language, Communication And Quantitative Skills
• Recognising and Harvesting Market Potential
• Problem Solver
• Developing Others
• Organisation Building
• Be An Internal Darashawite and External Ambassador

Strategic Business Units

Darashaw’s business has been structured on Pan National Strategic Business units. Each of these
SBUs leverage the strong presence and the vast domain knowledge that we enjoy in the Indian
Debt and Equity Markets to serve our clients better and to seek out new business opportunities.

Darashaw’s strategy has been to seek continuous growth by deriving synergy between the
various markets that it operates in. We have built a very strong institutional and semi-
institutional distribution muscle, which allows us to cover the entire demand and supply chain
for debt and equity assets.

The business that we deal in is divided into the following SBU’s:

1. Consultancy
- Infrastructure Advisory
- Business Consulting

2. Investment Banking

3. Retirement Benefits
- Provident Fund Intermediation
- Provident Fund Advisory
- Pensions Consulting
- Cooperatives and Rural Banks

4. Equity
- Equity Institutional Dealing
- Fundamental Research
- Technical Research
- Private Client Group

5. Debt
- Institutional Dealing

Investment Banking
Introduction

The Investment Banking team at Darashaw was set up in 1994 and ever since has been at the
forefront of the domestic debt market. We have built a reputation as a respected, committed and
trusted Investment Banker. We have been Pioneers in bringing forth New Issuers, New Investors
and New Innovative Instruments in the Indian debt markets.

We offer a range of Advisory and Investment Banking Services backed by research, views and
knowledge to meet our clients’ financial and strategic objectives with discretion, excellence and
trust:
• Resource Mobilisation: Darashaw has helped to develop the long-term debt markets in
the country. During the last four financial years, we have been associated with debt
mobilization of over Rs. 35,000 crore. We have mobilized funding through Non-
Convertible bonds, short term and long term loans. We are now making a foray into
Equity funding for our clients through Private Placement and Public Issuance of their
equity.

• Liability Management Solutions: Darashaw has been a pioneer in structuring Liability

Management for corporate clients. The basic objective of the exercise is to restructure
high cost debt, utilize derivatives for managing interest rate / currency risks thereby
positively impacting the Profit and Loss A/C of the Company.

• Risk Management Solutions: We have given risk management solutions for corporate
treasuries with the use of derivative structures. Interest Rate Derivatives are being
increasingly used as an effective hedging tool and as an important method of interest cost
reduction. Darashaw has acted as a principal driver and advisor in this field with its
clients.

• Business Consulting: Darashaw is providing many value-added Corporate Consultancy

Services to its clients. The range of services include Strategic Planning, Business
Restructuring, Treasury Management, Profit improvement plans, Divestments, Financial
Risk Management & Costing, Valuation, Business Planning and Budgeting.

• Structured Products Group: Given the importance of the securitisation market and
possible growth opportunity and economic benefits in India, Darashaw was amongst the
first to set up Structured Products Group within the Investment Banking Team. The
Securitisation market in India is still in its infancy and our activities have been tilted
towards developmental. With our emphasis on development of the market for the
product, our efforts are directed towards:
- Research and knowledge dissemination
- Interaction with Regulators and decision makers

Some of our recent prestigious mandates include:

• Pioneered the first ever Perpetual Bond issuance of Indian Overseas Bank and UCO
Bank
• Debt restructuring of Rs.1200 crore for NINL
• Debt restructuring of approx Rs.1200 crore for MCGM
• Fund mobilisation for Food Corporation of India of over Rs. 1300 crore over the past
two years
• Arrangers for Tier II issues of Indian Overseas Bank, Exim Bank, Bank of Baroda,
UCO Bank and Bank of India in 2005-06
 • Advisors to Tata Engineering’s Rs. 671 crore Convertible Debentures & Non-
Convertible Debentures issued on a Rights Basis
• Sole Arranger of Rs. 400 crore Short Term Loans to Idea Cellular Limited for Cellular
Telecom Project
• Mobilization of FCNR (B) loans and rupee term loan for Hindustan Inks
• Successful structuring and placement of an Innovative ‘Low Coupon structure’ for The
Indian Hotels Co Ltd. to raise Rs. 300 crore

Consultancy
Introduction

• Infrastructure advisory services and fund raising for large infrastructure projects are
another facet of multifarious financial solutions of DARASHAW. In tackling many
challenging core sector projects, DARASHAW has acquired critical experience,
especially in City Developmental Projects, Roads, Urban Infrastructure, specialized
projects, ESOP Advisory, Pre-IPO Advisory and business restructuring.

• Established with a focus on Corporate and Infrastructure Advisory

• In a short span of 5 years the division has been successful in carving out a niche in the
field of Financial Advisory among its clients both in Private and Public Sector.

Consulting

Infrastructure Corporate

• Financial Feasibility • Business Valuation

• Funding Option Study
• Bankable Project
Report
• Strategic Planning
• Bid Process
Management
• Pre-IPO Advisory
• ESOP Advisory
• Pvt. Equity Placement
• M&A

• Fund Mobilization

Empanelment

• World Bank
• Asian Development Bank
• KfW, Germany
• Corporate Debt Restructuring Cell
 • Stressed Asset Stabilisation Fund
• Power Finance Corporation
• Gujarat Urban Development Mission
• Gujarat Infrastructure Development Board
• Maharashtra Board for Restructuring of State Enterprises
• Himachal Pradesh Infrastructure Development Board
• Karnataka Urban Infrastructure Development Corporation
• State Industrial Development Corporation of Uttaranchal Ltd.

Debt Intermediation : Debt - Institutional

Dealing
Introduction

While the Fixed Income Market in India has attained some depth and maturity in government
Securities, the Corporate Bonds Market is yet to reach even close to the same level. However,
with a heightened focus on treasury operations by Banks and increase in the number of market
participants, the market is in a high growth phase. The Institutional Dealing Team at Darashaw is
amongst the Top 3 intermediaries in the secondary market for corporate Bonds, and as
knowledge provider, services the investment needs of the participants.

Core Functions of the team

• Intermediation services in the Secondary Corporate Bond market to Darashaw’s client

base which includes around 200 investors comprising Banks, Financial Institutions,
Primary Dealers, Mutual Funds, Insurance Companies, Pension & Provident Funds and
Corporates.
• Structured Deals in conjunction with the Investment Banking Team
• Knowledge sharing through Daily Deal Records & Weekly market Analysis. The Daily
Deal Record is used, besides our clients, by News Wires and by CRISIL for its Valuation
Matrix.
• Link between the Wholesale Debt Market and the Retail Market

Future Outlook

The Corporate Bond Market today is only around 3% of the market for Government Securities in
India, while Internationally the Corporate Bond Markets are larger than the Treasury Bond
Markets. This alone presents a strong argument for high growth. A greater focus on Treasury
operations by Banks and faster settlements through dematerialisation of Securities has
contributed to the growth of the market.
The investor base is increasing every year with more Mutual Funds, Insurance Companies and
Corporates entering the market. One of the largest investors worldwide, the Pension & Provident
Funds, need to be recognized as mainstream investors and the norms governing their investments
need to be relaxed.

With greater flexibility and freedom of investing, the participants will grow and the Indian
Corporate Bonds market will evolve into a stronger, more vibrant & liquid market.

Equity Sales
Darashaw & Company Pvt. Ltd. is a registered member with both BSE as well as NSE (Cash and
F & O Segment). Our Equity Institutional Broking business unit has relationships with several
leading FII’s, Mutual funds, Banks, Financial Institutions & Insurance companies. We have
a dedicated research and sales team catering to the specific needs of our clients.

Out Institutional equity effort is based on a team approach where Institutional Sales, Research
and Dealing work towards providing innovative ideas, better service and execution capabilities.

We advise institutions on their portfolio for long term investments as well as positional trading
ideas in stocks for the short and medium term. We value our customers and ensure the best
possible information and service.

Wealth Management
Darashaw & Company Pvt. Ltd. is a SEBI registered Portfolio Manager since 2001. The Private
client group offers portfolio management services to HNIs (resident / non resident), HUFs,
corporates and trusts.

Our portfolio management services offer the benefits of professional money management with
the flexibility and control of owning individual stocks and securities.

Our investment methodology revolves around the long term objective of wealth creation. We
identify the sunrise sectors and pick value stocks through a fundamental and or technical
perspective and buy into them early thus enabling us to give superior gains to the investor.

The portfolio performance is optimized by a combination of long term investments, medium

term fundamental picks and technical picks with efficient entry and exit levels.

There is total transparency of the portfolio through regular updates and interactions with
dedicated relationship managers and fund managers.
Sovereign Bond

What Does Sovereign Bond Mean?

A debt security issued by a national government within a given country and denominated in a.
The foreign currency used will most likely be a hard currency, and may represent significantly
more risk to the bondholder.

The government of a country with an unstable economy will tend to

denominate its bonds in the currency of a country with a stable economy. Because
of default risk, sovereign bonds tend to be offered at a discount. Brady bonds, which
are issued by governments in developing countries, are a popular example of
sovereign debt securities.

Debt is that which is owed; usually referencing assets owed, but the term can also cover moral
obligations and other interactions not requiring money. In the case of assets, debt is a means of
using future purchasing power in the present before a summation has been earned. Some
companies and corporations use debt as a part of their overall corporate finance strategy.

A debt is created when a creditor agrees to lend a sum of assets to a debtor. In modern society,
debt is usually granted with expected repayment; in most cases, plus interest.

The debt-to-equity ratio (D/E) is a financial ratio indicating the relative proportion of
shareholders' equity and debt used to finance a company's assets. Closely related
to leveraging, the ratio is also known as Risk, Gearing or Leverage. ...

he ratio of a company's liabilities to its equity. Long-term debt-equity is the ratio of

a company's long-term liabilities to its equity. Total debt-equity is the ratio of a
company's long-term and current liabilities (debt that will be paid off within one
year) to its equity. ...

Money Market:
Whenever a bear market comes along, investors realize (yet again!) that the stock

market is a risky place for their savings. It's a fact we tend to forget while
enjoying the returns of a bull market! Unfortunately, this is part of the risk-return
tradeoff. To get higher returns, you have to take on a higher level of risk. For many
investors, a volatile market is too much to stomach - the money market offers an
alternative to these higher-risk investments. The money market is a subsection of the

fixed income market. We generally think of the term fixed income as being synonymous to
bonds. In reality, a bond is just one type of fixed income security. The difference between the

money market and the bond market is that the money market specializes in very short-term
debt securities (debt that matures in less than one year). Money market investments are also
called cash investments because of their short maturities.

<SCRIPT language='JavaScript1.1'
SRC="http://ad.doubleclick.net/adj/N568.110872.1777491741521/B3885816;abr=!
ie;sz=300x250;click0=http://ops.investopedia.com/RealMedia/ads/click_lx.ads/investopedia.com
/L16/224593810/x30/Investo/IPBAR1101_02_300x250_AF_ROS/IPBAR1101_02_300x250__
AF_ROS_2011-01-01.html/743163714f303073624f494144762b55?;ord=224593810?">
</SCRIPT> <NOSCRIPT> <A
HREF="http://ops.investopedia.com/RealMedia/ads/click_lx.ads/investopedia.com/L16/2245938
10/x30/Investo/IPBAR1101_02_300x250_AF_ROS/IPBAR1101_02_300x250__AF_ROS_2011
-01-01.html/743163714f303073624f494144762b55?
http://ad.doubleclick.net/jump/N568.110872.1777491741521/B3885816;abr=!ie4;abr=!
ie5;sz=300x250;ord=224593810?"> <IMG
SRC="http://ad.doubleclick.net/ad/N568.110872.1777491741521/B3885816;abr=!ie4;abr=!
ie5;sz=300x250;ord=224593810?" BORDER=0 WIDTH=300 HEIGHT=250 ALT="Click
Here"></A> </NOSCRIPT>
Money market securities are essentially IOUs issued by governments, financial institutions and
large corporations. These instruments are very liquid and considered extraordinarily safe.
Because they are extremely conservative, money market securities offer significantly lower
returns than most other securities.

One of the main differences between the money market and the stock market is that most
money market securities trade in very high denominations. This limits access for the individual
investor. Furthermore, the money market is a dealer market, which means that firms buy and sell
securities in their own accounts, at their own risk. Compare this to the stock market where a
broker receives commission to acts as an agent, while the investor takes the risk of holding the
stock. Another characteristic of a dealer market is the lack of a central trading floor or exchange.
Deals are transacted over the phone or through electronic systems.

The easiest way for us to gain access to the money market is with a money market mutual funds,
or sometimes through a money market bank account. These accounts and funds pool together the
assets of thousands of investors in order to buy the money market securities on their behalf.
However, some money market instruments, like Treasury bills, may be purchased directly.
Failing that, they can be acquired through other large financial institutions with direct access to
these markets.
There are several different instruments in the money market, offering different returns and
different risks. In the following sections, we'll take a look at the major money market
instruments.

bullet strategy
Definition

A strategy in which a portfolio is designed to have securities with maturities that are
highly concentrated at one point on the yield curve.

The bullet strategy is based on the acquisition of a number of different types of

securities over an extended period of time, but with all the securities maturing
around the same target date. One of the main benefits of the bullet strategy is that
it allows the investor to minimize the impact of fluctuations in the interest rate,
while still realizing excellent returns on the investments.

Dec. 10 (Bloomberg) -- A proposal to sell joint euro-region debt has emerged as a new flashpoint
among European leaders running out of options to stabilize bond markets.

With a European Union summit set for next week in Brussels, officials from Italy, Luxembourg,
Belgium and Greece said the proposal should be explored, prompting resistance from Germany,
France and Austria. Economists and analysts from Goldman Sachs Group Inc., Morgan Stanley
and HSBC Holdings Plc said it may end the euro-region debt crisis.

The plan would establish a European Debt Agency to sell bonds to finance as much as 50 percent
of EU member borrowing, climbing to as much as 100 percent for countries unable to lure
investors. Opponents say the proposal would raise interest rates for stronger nations. The
weighted-average five-year borrowing cost for the 16 euro-region nations was 3.05 percent
yesterday, compared with 1.95 percent on German debt, data compiled by Bloomberg show.

“It’s very important that negotiations continue on the path of some kind common bond issuance
and a more centralized fiscal policy,” said Steven Major, global head of fixed-income research at
London-based HSBC. “We can’t go on like this with the ECB doing the heavy lifting. We need a
more sustainable solution.”

A joint euro bond may be the first time one country has issued debt on behalf of another. In
1989, so-called Brady bonds were issued by nations, including Colombia, Brazil and Venezuela,
backed by the U.S. government. The bonds are named after former Treasury Secretary Nicholas
Brady, who helped create the program.

Credit Agricole
The European Financial Stability Facility, the 440 billion- euro bailout fund set up by the EU
after the Greece rescue, plans to sell bonds in January to pay for aid to Ireland. While backed by
most of the same nations that would be involved in a euro bond, it has attracted a AAA rating
through a number of credit enhancements and would therefore likely attract lower yields than a
euro bond, according to analysts at Credit Agricole Corporate & Investment Bank.

Politicians are tabling ideas to tackle the euro-region’s fiscal crisis after the European Central
Bank was forced to step up its buying of government bonds when a bailout of Ireland last month
failed to defend the region’s bond markets against investors betting on a breakup of the euro.

Irish bonds fell after the nation said Nov. 21 that it had asked for a bailout, with the 10-year yield
reaching a record 680 basis points more than benchmark German bunds on Nov. 30. Yields have
declined since the ECB stepped up purchases of bonds from Ireland, Portugal and Greece on
Dec. 1, reducing the Irish- German spread to 503 basis points yesterday.

‘Intellectually Attractive’

Luxembourg Prime Minister Jean-Claude Juncker and Italian Finance Minister Giulio Tremonti
put forward a plan for selling joint bonds in a Financial Times commentary on Dec. 6,
heightening the current debate. The idea is “intellectually attractive,” EU Economic and
Monetary Affairs Commissioner Olli Rehn said the same day, while Greek Prime Minister
George Papandreou said it’s time to “seriously discuss” it.

Juncker, who chairs meetings of euro-group finance ministers, took a swipe at the German
opposition, prompting a riposte from a key ally of German Chancellor Angela Merkel.

Germany rejected his proposal to create euro-region bonds too quickly and has shown “simple”
thinking on the matter, Juncker said on Dec. 8, Die Zeit reported citing an interview. Germany is
dealing with European matters “in an unEuropean way” and the bond proposal was dismissed
before Germany had examined it properly, the German newspaper cited him as saying.

The Debate

Michael Meister, the senior finance and economy spokesman for Merkel’s Christian Democratic
bloc, shot back in an interview later that day.

“We can’t put any more on the table,” Meister said in an interview. Juncker and Tremonti “can
surely say what they want. They can go ahead with joint bonds if they want,” he said.

The objections may not be final, Major said. Merkel opposed bilateral loans to Greece on the
same grounds, before joining euro-region nations and the International Monetary Fund in
providing 110 billion euros of loans to the debt-stricken nation. Merkel also backs a change in
the European Union treaty that allows for the creation of a permanent crisis mechanism.

Merkel’s stance is “a negotiating position,” Major said. “The worst-case scenario would be more
expensive for Germany” than issuing common bonds, he said.
Euro Falls

The euro fell against most of its major counterparts today and yields on Spanish and Italian
bonds jumped as leaders from Germany and France said they are against increasing the EU’s 440
billion-euro rescue fund and rejected joint euro-area bonds.

“Common bonds would make governments less responsible, when what we want to do is the
opposite,” French President Nicolas Sarkozy told reporters after meeting with Merkel today in
the southern German city of Freiburg.

The creation of common bonds or bills for the euro area may help bring an end to the region’s
fiscal crisis by deepening market liquidity, according to Sander Schol, a London-based director
at the Association for Financial Markets in Europe.

The AFME’s European Prime Dealers Association wrote a research paper for the European
Parliament on the potential for a common European Issuance Program. It found “smaller
liquidity premiums, more effective hedging and the removal of the market- making obligation
would lead to lower interest rates,” Schol said.

‘Optimal Risk Sharing’

Such bonds might be the “optimal risk-sharing scheme,” Goldman Sachs rate strategist
Francesco Garzarelli and economist Natacha Valla said yesterday. Designed correctly, a joint
bond program would create a financial incentive for fiscal prudence and reduce moral hazard,
Arnaud Mares, an executive director at Morgan Stanley and former senior vice president at
Moody’s Investors Service, said on Dec. 6.

Compelling theory is unlikely to bring the plan to fruition anytime soon, according to said
Michael Leister, a fixed-income analyst at WestLB AG in Dusseldorf.

“For Germany or France it wouldn’t be at all attractive, because they would end up paying a
higher yield,” he said. “This isn’t a concept you can sell to the German electorate right now, and
probably the same in Austria and France.”

Bond valuation is the determination of the fair price of a bond. As with any security or capital
investment, the theoretical fair value of a bond is the present value of the stream of cash flows it
is expected to generate. Hence, the value of a bond is obtained by discounting the bond's
expected cash flows to the present using the appropriate discount rate. In practice this discount
rate is often determined by reference to other similar instruments, provided that such instruments
exist.

If the bond includes embedded options, the valuation is more difficult and combines option
pricing with pure discounting. Depending on the type of option, the option price as calculated is
either added to or subtracted from the price of the "straight" portion. This total is then the value
of the bond; the various yields can then be calculated for the total price. See further under Bond
option.

When a company (or government) borrows money from the public or banks
Bond
(bondholders) and agrees to pay it back later
Par Value The amount of money that the company borrows. Usually it is $1,000.
Coupon This is like interest. The company makes regular payments to the bondholders,
Payments like every 6 months or every year.
The legal stuff. A written agreement between the company and the bond holder.
Indenture They talk about how much the coupon payments will be, and when the money
(par value) will be paid back to the bondholder.
Maturity Date Date when the company pays the par value back to the bondholder.
Market
This changes everyday.
Interest Rate

The thing about bonds is that the interest rate (coupon payments) is fixed. It doesn't change. And
bonds last a long time. Like 10 years or whatever. So in the meantime, the market interest rate
(the interest rates in general) go up and down. OK, well, if the coupon payments are for 10% and
then the market interest rates fall from 10% to 8%, then that bond at 10% is valuable, right. It is
paying 10% while the overall interest rate is only 8%. Exactly how much is it worth? You mean
'what is the present value of a bond?'

The Present Value The Present Value of the Coupon The Present Value of the Par Value
= +
of a Bond Payments (an annuity) (time value of money)

Example

• Par Value = $ 1,000

• Maturity Date is in 5 years
• Annual Coupon Payments of $100, which is 10%
• Market Interest rate of 8%

The Present Value of the Coupon Payments (an annuity) = $399.27

The Present Value of the Par Value (time value of money) =$680.58

The Present Value of a Bond = $ 399.27 + $ 680.58 = $1,079.86