Introduction to the HSBC Group Headquartered in London, HSBC Holdings plc is one of the largest banking and

financial services organizations in the world. HSBCs international network comprises over 9,500 offices in 79 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. With listings on the London, Hong Kong, New York and Paris stock exchanges, shares in HSBC Holdings plc are held by nearly 200,000 shareholders in some 100 countries and territories. The shares are traded on the New York Stock Exchange in the form of American Depositary Receipts. Through an international network linked by advanced technology, including a rapidly growing e-commerce capability, HSBC provides a comprehensive range of financial services: personal financial services; commercial banking; corporate, investment

banking and markets; private banking; and other activities.

HSBC in India HSBC's origins in India date back to 1853, when the Mercantile Bank of India was established in Mumbai. The Bank has since, steadily grown in reach and service offerings, keeping pace with the evolving banking and financial needs of its customers.

In India, the Bank offers a comprehensive suite of world-class products and services to its corporate and commercial banking clients as also to a fast growing personal banking customer base.

HSBC Group entities in India  The Hong Kong and Shanghai Banking Corporation Limited (HSBC)  HSBC Asset Management (India) Private Limited  HSBC Electronic Data Processing (India) Private Limited  HSBC Insurance Brokers (India) Private Limited  HSBC Operations and Processing Enterprise (India) Private Limited  HSBC Primary Dealership (India) Private Limited  HSBC Private Equity Management (Mauritius) Limited  HSBC Securities and Capital Markets (India) Private Limited  HSBC Software Development (India) Private Limited

Foundation and Growth The HSBC Group is named after its founding member, The Hong Kong Shanghai Banking Corporation Limited, which and

was established in 1865 to finance the

growing trade between China and Europe.

The inspiration behind the founding of the bank was Thomas Sutherland, a Scot who was then working as the Hong Kong Superintendent of the Peninsular and Oriental Steam Navigation Company. He realized that there was considerable demand

for local banking facilities in Hong Kong and the China coast, and he helped to establish the bank in March 1865. Then, as now, The Hong Kong and Shanghai Banking Corporation's

headquarters were at 1 Queen's Road in Hong Kong and a branch was opened in April 1865 in Shanghai.

Throughout the late nineteenth and early twentieth century, the bank established a network of agencies and branches based mainly in China and South East Asia but also with representation in the Indian sub-continent, Japan, Europe and North America. In many of its branches the bank was the pioneer of modern banking practice.

From the outset, trade finance was a strong feature of the bank's business with bullion, exchange and merchant banking also playing an important part. Additionally, the bank also issued notes in many locations throughout the South East Asia.

During the Second World War the bank was forced to close many of its branches and the head office was temporarily moved to London. However, after the war the bank played a key role in the reconstruction of the Hong Kong economy and set about further diversifying the geographical spread of the bank.

150 years in India The antecedents of the HSBC Group in India can be traced back to October 1853 when the Mercantile Bank of India, London and China was founded in Bombay (now Mumbai). Starting with an authorized capital of Rs. 5 million, the Mercantile Bank soon opened offices in London, Madras (Chennai), Colombo and Kandy, followed by Calcutta(Kolkata), Singapore,

Hong Kong, Canton(Guangchow) and Shanghai by 1855. The following hundred years were in many ways propitious for the Mercantile Bank. In 1950 it moved into its new head office building in Mumbai at Flora Fountain. The acquisition in 1959 by The Hong Kong and Shanghai Banking

Corporation Limited of the Mercantile Bank was a decisive factor in laying the foundation for today's HSBC Group. Founded in 1865 to serve the needs of the merchants of the China coast and finance the growing trade between China, Europe and the United States, HSBC has been an international bank from its earliest days.

After the Mercantile Bank was acquired by The Hong Kong and Shanghai Banking Corporation, the Flora Fountain building became and remains to this day, the Head Office of the HSBC Group in India.

Through the 1990s, HSBC has vigorously developed its role as one of the leading banking and financial services organizations in the world. Its strategy of 'managing for value' emphasizes the Group's unique balance of business and earnings between older, mature

economies and faster-growing emerging markets.

HSBC in India is proud to have retained the Group's pioneering streak by being an active partner in the development of the Indian banking industry - even giving India its first ATM way back in 1987. The organizations adaptability, resilience and commitment to its

customers have further enabled it to survive through turbulent times and prosper through good times over the past 150 years.

Commercial Banking
Personal banking HSBC offers a wide range of personal financial services, including personal lending and deposit products, through its various branches in India. Also offered branch-wide are international Gold and Classic credit cards from VISA and MasterCard and debit cards from Visa. Customers have access to 24-hour banking services through an extensive network of automated teller machines (ATMs), an integrated Call Center, and internet banking.

Non Resident Indian banking HSBC's Non Resident Indian Banking (NRI) centers located in Asia-Pacific, the Middle East, Europe and North America, together with HSBC's offices worldwide, provide the international related Indian Diaspora access to a range of products and services. These include NRI (both international and domestic), transactional and deposit

investment

products, together with a full range of personal and private banking products in India and overseas. Internet banking also provides easy access to HSBC's services.

Financial planning services Services include investment and custodian management and access to stock broking and insurance services, which are offered to resident as well as non-resident Indians.

Corporate banking HSBC has well-established, long-term corporate banking relationships with large

domestic Indian corporations and foreign multinationals operating in India. Services include term and working capital finance, trade facilities, corporate deposits, syndications,

payments and cash management services and factoring.

Payments and cash management HSBC provides integrated domestic and regional transaction support to corporate clients through a sophisticated range of cash management solutions, including

collection

and payment services and integration with customer back-end systems. Operations

and client services are ISO 9001 certified. Hexagon, the HSBC Group's dedicated electronic banking service allows users to perform financial transactions, obtain international financial markets information, and review details of their domestic and international accounts, from anywhere in the world, 24 hours a day.

Trade (international and domestic) and factoring services A wide range of solutions tailored to meet customer's requirements for both domestic and international businesses is offered. HSBC is also one of the leading banks involved in the bullion business through its offices in Ahmedabad, Bangalore, Chennai, Hyderabad,

Kolkata, New Delhi and is supported by the Group's global expertise in the precious metal business. HSBC is the leading provider of trade services in India and its trade centers are ISO 9002 certified.

Institutional banking Working closely with Group offices in India and overseas, trade and cash management, treasury and capital markets, are custody offered services, and to payments and

clearing,

correspondent

and electronic

banking

activities

banks,

financial

institutions, securities houses, insurance companies, asset management companies and other non-banking companies, non-government and development organizations operating in India.

Treasury and capital markets Clients consistently rate HSBC's Treasury business as one of the best in India. Its dealing room in Mumbai is one of the largest in the country, serving clients in Mumbai and in the major metropolitan centers across the country. It provides a comprehensive range of

products which include - foreign exchange, money market and fixed income products and derivatives in both rupees and major currencies.

Custody and clearing The leading custodian in Asia, HSBC's custody and clearing services are available in 28 markets in Asia-Pacific and the Middle East. With experienced staff and the latest technology, HSBC is the premier provider of sub-custodian and clearing services to foreign

institutional investors (FIIs) in India. HSBC clients include the domestic fund management sector in both the retail and institutional segments. Institutional Fund Services launched by the bank offers a comprehensive suite of products to domestic mutual funds and insurance companies ranging from custody, fund administration services, unit distribution and cash management services.

Technology The HSBC Group develops and applies advanced technology to the efficient and convenient delivery of banking and related financial services. In India, the Group provides:        Self-service banking with over 150 in-branch and off-branch ATMs and 24-hour phone banking. Trade and corporate banking services with real-time access to a centralization database Instantaneous inter-city transactions through online connections

between all branches A state-of-the-art treasury dealing system A sophisticated card system supporting debit and credit cards, domestic and international VISA, MasterCard, and co-branded cards A dedicated acquiring system for both MasterCard and Visa

transactions

HSBC's Internet banking service, provides y customers with an integrated and secure platform to access their accounts. y Internet Payment Gateway handles credit card transactions on the internet.

Asset management HSBC Asset Management (India) Private Limited offers mutual funds to its customers. With the Group's global fund management expertise and investment capabilities, it is able to deliver quality products to meet customers' investment objectives.

Global Resourcing HSBC Electronic Data Processing (India) Private Limited, through its two offices in Hyderabad, and one in Bangalore, provides data processing / customer service facilities for the HSBC Group's overseas operations.

Insurance The Insurance Regulatory Development Authority (IRDA) to operate as a composite insurance broking company, which will function as a direct and a reinsurance broker license HSBC Insurance Brokers (India) Private Limited.

Data processing HSBC Operations and Processing Enterprise (India) Private Limited, through two centers in Mumbai and Chennai, provides operational processing services for HSBC offices in India.

Primary dealership HSBC Primary Dealership (India) Private Limited has been authorized by the Reserve Bank of India to act as a primary dealer in the government securities market.

Private equity HSBC Private Equity Management (Mauritius) Limited, a subsidiary of HSBC Private Equity (Asia) Limited in Hong Kong, has a Liaison Office in Mumbai. The company specializes in the provision of equity capital to unlisted growth companies in India and Sri Lanka.

Investment banking HSBC Securities and Capital Markets (India) Private Limited has two main business lines. Its Institutional and proprietary broking business is based in Mumbai and, has seats on two of India's premier stock exchanges, the Bombay Stock Exchange and the National Stock Exchange. It deals in Indian securities for both Indian and international institutions and for select retail clients and is backed by an extensive research team. The Corporate Finance and Advisory business, with offices in Mumbai and New Delhi, offers a full range of integrated investment banking services in India and internationally.

Software development HSBC Software Development (India) Private Limited has established a software center in Pune to develop solutions for HSBC's Group offices worldwide.

Corporate Banking
Working Capital Loan We offer financing to meet your company's working capital requirements,

starting from the purchase of raw material to the financing of receivables. This facility can be provided as an overdraft or a loan, with tenors ranging from 3 days to 365 days.

Post-Shipment Finance Post-shipment finance occurs when you ask the bank to advance funds against a shipment that has already been made. The additional obtaining funds infused into your business ease your cash flow. You get paid for the shipment without waiting for the importer to actually deposit the funds.

Finance with documentary credits If there are no discrepancies in your documents under documentary credits, we can negotiate and pay you the discounted value of the invoice. No facilities are required, and funds will typically be advanced to you on the same day if documents are presented before noon. If documents are found to contain discrepancies, it may be possible to negotiate under reserve. This depends on a number of factors and will be at the discretion of your Corporate Relationship Manager. In all such instances, a letter of indemnity will need to be completed by you.

Finance with collections With collections, you can obtain finance from HSBC by asking us to purchase the bill of exchange from you, so that you do not have to wait until the importer pays it. When the importer pays the bill, we retain the proceeds to pay off the loan.

Pre-shipment finance Pre-shipment finance provided by HSBC is generally termed 'loans against

exports'. Loans must be supported by original irrevocable documentary credits (DCs). Advances may also be made against confirmed orders from reputed buyers of

international standing. The types of pre-shipment finance offered include packing credits, manufacturing advances and red clause credits.

Packing credits Packing credits provide an exporter with finance after goods have been

manufactured but before they are shipped. This smoothens the exporter's cash flow while the goods are being packed and waiting for shipment. The advance is repaid when the goods are shipped, if the documents are negotiated with the exporter's bank.

Manufacturing advances Manufacturing advances are provided to exporters to meet manufacturing costs, such as the purchase of raw materials.

Red clause credit A red clause credit is a DC that contains a clause from the issuing bank authorizing the advising bank to grant an advance to the exporter before documents are presented. Facilities are not required for this type of pre-shipment finance, as the advising bank is relying on the issuing bank for reimbursement rather than the customer.

Over Draft An overdraft is a facility granted to you whereby you can overdraw your current account up to an agreed limit. Overdraft is an efficient form of borrowing as you pay interest only for the time you use the money. It gives you flexibility. You can at any time deposit money into the account to reduce the outstanding balance or can draw out money whenever you need it as long as you do not exceed the limit. Interest is calculated daily on the fluctuating outstanding balance and is normally charged at the end of each month. Customers' overdraft accounts fluctuate between debit and credit over a reasonable period. What is a

"reasonable period" depends on the nature of your business. For example, an exporter who uses his overdraft to pay his supplier for goods to be shipped under a letter of credit to his overseas buyer should be able to clear the overdraft within 10 days. This is because under them

normal circumstances, the process of his preparing the shipping documents, submitting to his bank for negotiation and receiving

the proceeds of negotiation to repay the

overdraft should take no longer than 10 days. On the other hand, a manufacturer who has used the overdraft to purchase raw materials will need more time to repay the overdraft because the process of manufacture, sale and collection of payment from sales is a longer one.

Treasury and Capital Markets HSBCs Treasury and Capital Markets Group ranks among the largest such businesses in the world. While discounting a bill, the Bank buys the bill (i.e. Bill of Exchange or Promissory Note) before it is due and credits the value of the bill after a discount charge to the customer's account. The transaction is practically an advance against the security of the bill and the discount represents the interest on the advance from the date of purchase of the bill until it is due for payment. Under certain circumstances, the Bank may discount a bill of exchange instead of negotiating them. The amount the Bank advances to you also

depends on your past record and reputation of the drawee. Usually, the Bank may want some conditions to be fulfilled to be able to discount a bill:    A bill must be a usance bill It must have been accepted and bears at least two good

signatures (e.g. of reputable individuals, companies or banks etc.) The Bank will normally only discount trade bills

Where a usance bill is drawn at a fixed period after sight the bill must be accepted to establish the maturity The advising or confirming bank will hide the reimbursement instruction from the beneficiary so that his bank must present the documents to the nominated bank for negotiation in order to obtain payment under the DC terms. Operating through 60 treasury sites in over 50 countries and territories, with over 3,500 dealing and support staff, the business combines 24-hour global coverage with detailed knowledge of local markets to service the requirements of international and local financial institutions and corporations. Backed by the HSBC Group HSBC and is a one network of the of some in of the world's most experienced

professionals,

leaders

foreign exchange, new bond issues,

syndicated loan financing and derivative solutions.

In India, we have a large corporate clientele, with whom, we have partnered in creating long-term relationships. We attribute this to our ability to provide quick and innovative solutions with an underlying customer focus.

HSBC has extensive derivative trading and sales networks in four hubs globally, with additional regional centers that maintain an active presence. The dealing hub in Mumbai services the spokes in New Delhi, Kolkata, Chennai and Bangalore. We are dominant

participants in the foreign exchange, money, government and corporate debt, and over-the-counter off-balance sheet product markets. The Bank aims to provide:    The full risk management services to our corporate and

institutional client base Suitable investment products to our investor client base Focus on delivering wealth management applications

Equities Corporate Finance and Advisory

Corporate Finance and Advisory These services are offered by HSBC Securities and Capital Markets(India) Pvt. Ltd. Corporate Finance & Advisory (CFA) group provides public and private sector

corporate and government clients with strategic advise and provides critical financial advice in the areas of:  Mergers & Acquisitions  Primary & Secondary Capital Market Funding  Privatizations  Structured Financial Solutions CFA liaises closely with other HSBC wholesale banking divisions, in

particular Securities and Corporate & Institutional Banking, to ensure a full range of products and services is made available to the corporate & institutional clients of HSBC. Leveraging our global sector strengths and relationships CFA has effectively executed large landmark transactions in the mergers and acquisitions area.

Equities Research and Broking The Securities business is conducted by HSBC Securities and Capital Markets (India) Private Limited, which is a licensed Broker based in Mumbai. They have seats on the two premier of stock exchanges, The Stock Exchange, Mumbai (BSE) and National Stock India Limited (NSE). The company has specialized salespersons in

Exchange

Mumbai, Hong Kong,

London and

New York and caters primarily to the institutional

client base. Its clientele includes Foreign Institutional Investors, Local Institutions, Mutual Funds, Overseas Corporate Bodies, Non Resident Indians and Corporates. HSBC has an extensive research team that offers research products for equities to its clients. The Company also offers execution services for equities trading to select retail clients. The Company is a registered broker with the RBI and acts as its agent to the RBI to 9% Relief Bonds and these services are available to the retail client. Debt broking: The Company is a member of the National Stock Exchange for the wholesale debt segment and provides broking services to institutions.

Project and Export Finance These services are offered by HSBC Securities and Capital Markets (India) Pvt. Ltd. HSBC is a leader blue in chip providing corporates Project and and Export Finance (PEF) services to

governments,

top-tier banks. The PEF department has global

representation with over 140 professionals located in London, New York, Mexico City, Paris, Stockholm, Rome, Dubai, Mumbai, Madrid, Singapore, Beijing, Caracus,

Johannesburg, Hong Kong SAR and Sydney. This worldwide staff is dedicated to PEF business, making HSBC's PEF department one of the largest project and export finance departments in the world.

Project and Export Finance offers four core products: Multi-sourced Export Credit Finance - HSBC has a wealth of experience in providing both single and multi-sourced export credit facilities. We have close working relationships with many of the principal export credit agencies including those from United Kingdom,

United States, France, Germany, Italy, Belgium, Spain, Netherlands, Finland, Austria, Switzerland, Denmark, Sweden, Canada, Japan and Israel. Based on our most up-to-date understanding of commercial and political risk allocation issues, HSBC offers genuine multi-sourcing capabilities, which only few international banks could even consider. Project Advisory - HSBC has many years of experience in providing advisory services to governments, project sponsors, contractors and special purpose project companies. Our experience and expertise covers a range of industrial sectors, including oil and gas, power, telecommunications, transport, petrochemicals, water, mining, steel, manufacturing and process industries. Project Debt Arranging As one of the largest and strongest Financial bonds, export

Services Providers in the world, HSBC has clear competence in delivering a range of debt products, including commercial bank debt, capital market

credit, local currency bank debt and multi-lateral agency debt. Forfeiting - HSBC Forfeiting can structure and execute non-recourse off balance sheet facilities world-wide using bills of exchange, letters of credit, guarantees and formal loan agreements