Terms of the Bonds

Encash Bond

Earn Interest growing up to 18.00%* p.a.
OR
Withdraw anytime after 1^st year **

Face Value Rs. 5,000/-

Redemption period : 7 years

Interest payment   :

* Subject to TDS as per then prevailing tax laws.

** Early encashment facility at any of the specified branches of ICICI Bank Banking Corporation Limited any time after one year from the Deemed Date of Allotment till one month prior to Redemption Date.

Terms and Conditions

Tax Saving Bond

Earn up to 12.6%* p.a. and Save Tax u/s 88 (Invest up to Rs. 70,000/-)
OR
Earn 12.50 %*/ 13.00%* p.a. and Save Capital Gains Tax u/s 54EA/54EB

Choose any of the following options :

* Subject to TDS as per the then prevailing tax laws.

** Percentage of Capital Gains in amount invested (assuming the amount invested is equal to sales consideration).

@   Tax Saving Bond-Option II offering benefits under Section 88 of the Income-tax Act, 1961, is in the form of a Deep Discount Bond, hence no annual interest is payable.

Terms and Conditions

Regular Income Bond

Earn 13.00%* p.a. with Monthly Income Option
OR
Earn 13.75%* p.a. for 5 years
OR
Choose half-yearly option

Choose any of the following options:

* Subject to TDS as per the then prevailing tax laws.

Terms and Conditions

Money Multiplier Bond

Rs. 4,000/- becomes Rs. 1 Lac * in 24 years 5 months
OR
Earn 14.0%* p.a. (Option II)
OR
Double * your money in 5 years 4 months

Choose any of the following options :

Option I              -----         Invest Rs. 4,000/- and receive twice* your money in 5 years 4 months.

Option II             -----         Invest Rs. 4,000/- and receive four times* your money in 10 years 7 months

Option III            -----         Invest Rs. 4,000/- and receive twenty five times* your money in 24 years 5 months

Annualized Yield to Investor under various options:

* Subject to TDS as per the then prevailing tax laws.

• Encash Bond, Regular Income Bond and Money Multiplier Bond - Preference in allotment, up to 70 percent of the Issue size, after allotment to Tax Saving Bond, for applications for a total of 50 or less than 50 Bonds (not including Tax Saving Bond) by Individuals, Minors & Kartas of HUFs.
• Encash Bond, Regular Income Bond and Money Multiplier Bond - Preference in allotment up to 20 percent of the Issue size, after allotment to Tax Saving Bond, for applications by Trusts.

Terms and Conditions

III. Terms of the Present Issue

ICICI Bank is offering for Public Subscription the fourth tranche of Unsecured Redeemable Bonds in the nature of Debentures for raising Rs. 400 crore with a right to retain oversubscription up to Rs. 400 crore.

The Bonds being offered are subject to the provisions of the Act, the Memorandum and Articles, the terms of this Prospectus, Application Form and other terms and conditions as may be incorporated in the Trustee Agreement, Letter of Allotment and/or Bond Certificates. Over and above such terms and conditions, the Bonds shall also be subject to laws as applicable, guidelines, notifications and regulations relating to the issue of capital and listing of securities issued from time to time by SEBI/the Government of India/RBI and/or other authorities and other documents that may be executed in respect of the Bonds.

Nature of Bonds

ICICI Bank is offering for subscription for cash the following four types of Bonds in the nature of Debentures.

• Encash Bond
• Tax Saving Bond
• Regular Income Bond
• Money Multiplier Bond

Out of the above Bonds, Regular Income Bond Option I and Option III, Tax Saving Bond Option IV and all options of Money Multiplier Bond would constitute direct, unsecured and subordinated obligations of the Company.

(See also status on page 11 of the Prospectus)

1. Encash Bond

Face Value          :   Rs. 5,000/-

Redemption         :   At Face Value i.e. Rs 5,000/- at the end of seven   years from the Deemed Date of Allotment

Interest                :   Interest will be payable annually at the following rates :

Annualized Yield to Maturity (YTM) at the end of each year on Early Redemption/Redemption :

* Subject to deduction of tax at source as per the then prevailing tax laws

Payment of Interest

Interest will be paid on June 30, each year at the rates applicable to each of the periods mentioned in the above table. The first interest payment will be made on June 30, 1999 for the period commencing from the Deemed Date of Allotment and the last interest payment will be made at the time of Redemption of the Bond on a pro rata basis. Also refer to para on Electronic Clearing Service on Page 11 of the Prospectus.

Early Redemption at the option of the Bondholders (Encash Facility)

An original individual allottee has the option of Early Redemption of the Bonds(“Early Redemption”) at any time after the expiry of 12 months from the Deemed Date of Allotment till one month prior to the Redemption Date, (“Relevant Period”) at any of following branches of ICICI Bank Banking Corporation Limited (“Specified Branch”) :-

Ahmedabad (JMC House, Opp. Parimal Gardens, Off C. G. Road), Bangalore (Raheja Towers, M.G. Road), Calcutta (Rasoi Court, Sir R N Mukherji Road; Ballygunge), Chandigarh (Madhya Marg, Sector 9-D), Chennai (1, Cenotaph Road; 110, Prakash Presidium, Nungambakkam High Road; Armenian Street; Vidya Mandir Senior Secondary School, IV Main Road, Gandhinagar, Adyar), Cochin (Fotofast House, M.G. Road), Coimbatore (Trichy Road), Goa (M L Furtado Road, Margao; Near EDC, Dr. Atmaram Borkar Road, Panaji; Garden Centre, Phase II Mapuca), Gobichettipalayam (Kutchery Street), Gurgaon (HUDA Shopping Centre Market Complex, Sector 14), Hyderabad (Opp. Institute of Engineers, Rajbhawan Road; CARE Hospital, Exhibition Road, Nampalli), Jaipur (Sriji Towers, C-99 Subhash Scheme), Ludhiana (SCO, 146, 147, Feroz Gandhi Market), Mangalore (Bharat Building, PM Rao Road), Mumbai (Free Press House, Nariman Point; Bhayander (W); Abhilasha, Punjabi Lane, Borivali (W); 163, Backbay Reclamation; Kailash Plaza, Vallabh Baug Lane, Ghatkopar (E); Sagar Avenue, S.V. Road, Andheri (W); Galleria Shopping Mall, Hiranandani Gardens, Powai; Surya Shopping Centre, “Shristi” Sector V, Mira Road; Poonawadi, Dr. Ambedkar Road, Dadar (E); Vimal Shopping Centre, Vasai Road (W); Maratha Mandir Annex, Mumbai Central; MICASA, St. Theresa Road, Off. Turner Road, Bandra (W), Nasik (Saharanpur), New Delhi (Phelps Bldg., A Block, Connaught Place; Greater Kailash 1, N Block Market; Indian Spinal Injuries Centre, Opp. Sector C, Vasant Kunj), Noida (G31, 32 Sector 18), Periyanayakanpalayam (Pricol, Mettupalayam Road), Pune (Shangrila Gardens, Bund Garden Road), Thane (Palm Court, Ram Maruti Road, Navpada), Vadodara (Race Course Circle, Alkapuri)

ICICI Bank may specify more branches of ICICI Bank Banking Corporation Limited for this purpose.

A Bondholder who is an original individual allottee may at any time during the Relevant Period approach any of the above mentioned branches of ICICI Bank Banking Corporation Limited for Early Redemption of the Bond at its Face Value of Rs. 5,000/-. Each Bondholder can redeem up to 50 Bonds per day.

• The Bondholders will not be permitted to encash the Bond at the Specified Branches in the following cases :
• If thumb impression is used for specimen signature.
• By legal successors in case of death of the Sole / any of the jointholder of the Bond.

In case the original individual allottee who is a minor becomes a major during the tenure of the Encash Bond and intends to exercise the option of Early Redemption of the Bond.

In case of Duplicate Bond Certificate.

In the aforesaid cases, Bondholder(s) may send their request, along with the Bond Certificates duly discharged, and in case of a minor attaining majority, with proof of his having attained majority, for Early Redemption to ICICI Bank Investors’ Services Limited, Maratha Mandir Annex, Dr. A R Nair Road, Mumbai Central, Mumbai 400 008 (I-Serv) or to such person at such address as may be notified by ICICI Bank from time to time for this purpose.

In the event the Early Redemption facility is withdrawn at any or all of the Specified Bank Branches, the Bondholder shall be able to exercise the option of Early Redemption at I-Serv or such person at such address as may be notified by ICICI Bank from time to time for this purpose.

Investors should note that they can exercise the option of Early Redemption at any of the Specified Branches or at I-Serv as mentioned above. However, payment on final Redemption of the Bond will be done at ICICI Bank in accordance with the procedure mentioned under “Procedure for Redemption by Bondholder”.

Procedure for Early Redemption of the Bond

In case the Bondholder(s) desire to exercise the option of Early Redemption, the sole/first holder should submit within the Relevant Period the Bond Certificate(s) duly discharged by the Sole/all the joint holders (signed at the reverse of the Bond Certificate(s)) along with the Early Redemption Form (available at the Specified Branches) to any of the Specified Branches, which in turn would pay to the Bondholder the Face Value of the Bond.

In case of investors residing at places where there is no branch of ICICI Bank Banking Corporation Limited, the Bondholder may exercise the option of Early Redemption of the Bond by directly sending it by Registered Post acknowledgment due to I-Serv or to such person at such address as may be notified by ICICI Bank from time to time for this purpose. Such Bondholders should submit their requests in writing along with the duly discharged Bond Certificate(s) by Sole/all the joint holders (signed at the reverse of the Bond Certificate(s)) so that I-Serv receives it within the Relevant Period.

Payment on Early Redemption

An investor who exercises the option of Early Redemption during Relevant Period, will receive the Face Value of the Bond by way of cheque/pay order etc., on presentation of duly discharged Bond Certificate to the Specified Branch. An investor who sends his duly discharged Bond Certificate along with the request for Early Redemption by post to I-Serv or such person at such address as may be notified by ICICI Bank from time to time for this purpose, will be sent the Face Value of the Bond by way of cheque/pay order within 15 days of the receipt of such request by I-Serv or by such person at such address as may be notified by ICICI Bank from time to time for this purpose.

In case the Bondholder exercises the option of Early Redemption of the Bond during the Relevant Period, the interest for the broken period i.e. from the time of payment of interest for the previous year till the date of receipt of Bond certificate by Specified branch/I-Serv or such person at such address as may be notified by ICICI Bank from time to time, will be paid to the Bondholder by ICICI Bank. A Bondholder may submit Form 15F at the time of Early Redemption with the specified branch for avoiding deduction of tax at source or for deduction of tax at lower rate. ICICI Bank would endeavour to despatch the interest warrant within a period of 15 days from the date of the Early Redemption.

If an Investor wishes for Early Redemption after the Record Date/Book Closure for payment of interest but before the due date of interest payment, ICICI Bank would assume that the interest warrant has already been despatched to the Investor and no payment on account of accrued interest would be made. In such cases ICICI Bank would deduct from the Face Value a sum equal to interest for the period from the date of Early Redemption to the due date of payment of Interest.

Upon despatching the amount(s) as specified above in respect of the Bonds to the Bondholders, ICICI Bank shall have no further liability towards those Bondholder(s) in respect of the Bond(s) and all rights vested in the Bondholder(s) would stand extinguished.

See also “Common Features, Terms and Conditions of the Bonds”.

2. Tax Saving Bond

Investors can avail of rebate under Section 88 or tax benefits under Section 54EA or Section 54EB of the Income-tax Act, 1961, by investing in Bonds issued by a public financial institution for the purpose of deploying these funds towards infrastructure projects.

The Central Board of Direct Taxes, Department of Revenue, Ministry of Finance, Government of India has vide its notification nos. 10278 and 10279 dated March 4, 1997 declared the Bonds issued by ICICI Bank as specified assets for the purposes of Section 54EA and 54EB of the Income-tax Act, 1961 and vide its Notification F No. 178/94/97-ITA-I dated August 10, 1998 declared the Tax Saving Bond Option I and Option II as eligible securities for the purposes of Section 88 of the Income-tax Act, 1961.

Investors desirous of availing of rebate under Section 88 or tax benefits under Sections 54EA or 54EB of the Income-tax Act, 1961 from payment of tax on capital gains can invest in the relevant option of this Bond.

The investor may choose any of the following Options in respect of subscription for Tax Saving Bond.

* Percentage of Capital Gains in amount invested (assuming the amount invested is equal to sales consideration).

** Subject to TDS as per the then prevailing tax laws.

@ Tax Saving Bond Option II is in the nature of a Deep Discount Bond, hence no annual interest is payable.

Note: Investors are requested to note the following:

(i) Investors applying for Option I and Option II will be able to avail of rebate only under Section 88 and not tax benefit under Section 54EA/54EB in respect of the amount subscribed to. Investors assessable as individuals under the Income-tax Act, 1961, would be entitled to avail rebate for investment upto Rs.70,000/-

(ii) Investors applying for Option III will be able to avail of benefit only under Section 54EA and not under Section 88/54EB in respect of the amount subscribed to.

(iii) Investors applying for Option IV will be able to avail of benefit only under Section 54EB and not under Section 88/54EA in respect of the amount subscribed to.

Payment of Interest

Interest will be paid on June 30 each year, for all the options except Option II. The first interest payment will be made on June 30, 1999 for the period commencing from the Deemed Date of Allotment and the last interest payment for the remaining period will be made on a pro-rata basis at the time of Redemption of the Bond. See also Electronic Clearing Services on page 11 of the Prospectus. Tax Saving Bond Option II is in the nature of Deep Discount Bond. This Bond would be issued at an Issue Price of Rs. 5,000/- each and would be redeemed at the Face Value of Rs. 7,350/- at the end of 3 years 3 months from the Deemed Date of Allotment. Hence, no annual interest payment will be made.

Taxation

Tax Saving Bond is an eligible security for the purpose of Sections 88, 54EA and 54EB of the Income-tax Act, 1961, in accordance with the option opted for.

Subscription to Option I and II would entitle individuals and HUFs to a rebate from income tax @ 20 per cent (@ 25 per cent in case of authors, playwrights, artists, musicians, actors or sportsmen) of the aggregate of the sums paid or deposited up to Rs.70,000/- in a financial year by the taxpayer out of his income chargeable to tax as prescribed in sub-section 2 of Section 88 of the Income-tax Act, 1961.

The attention of the investor is drawn to the fact that the Issue Price of Tax Saving Bond Option II would be entitled for benefits under Section 88 and not the Face Value of the Bond.

To avail benefit under Section 88, such investment needs to be held for a period of three years.

Tax Saving Bond Option II would be in the nature of a Deep Discount Bond. As regards the difference between the Issue Price and Face Value of the Tax Saving Bond Option II the Central Board of Direct Taxes vide its clarifications dated March 12, 1996 and May 23, 1996 on similar issue of other companies, has expressed the view that this will be treated as interest income assessable under the Income-tax Act, 1961. On transfer of Bonds before maturity, the difference between the sale consideration and the Issue Price will be treated as capital gains/loss if the assessee has purchased them by way of investment. However, in the case of an assessee who deals in purchase and sale of Bonds, securities etc., the profit or loss shall be treated as trading profit or loss. The difference between the Issue Price and the Face Value will be treated as interest income assessable under the Income-tax Act, 1961 and therefore, tax will have to be deducted at source at the time of redemption under the relevant provision of the Income-tax Act, 1961.

ICICI Bank may offer market making facility in respect of these Bonds after the expiry of three years from the Deemed Date of Allotment.

Any long-term capital gains arising in the hands of the investor from the sale of a capital asset and invested, within a period of six months from it having arisen, in such approved instruments shall be eligible for an exemption from payment of Capital Gains Tax to the extent specified under the relevant section.

To avail benefit under Section 54EA, the investor is required to invest the net sales realization in the approved securities which needs to be held for three years. To avail benefit under Section 54EB, the investor is required to invest the capital gains arising, in the approved security and such investment needs to be held for seven years.

If any investor claiming benefit under Sections 88, 54EA or 54EB of the Income-tax Act, 1961 pledges these Bonds as eligible security for any loan taken by him during three/three/seven years from the Deemed Date of Allotment for Section 88/Section 54EA/Section 54EB respectively, he/she would stand to lose the relevent tax rebate/benefits and would be required to pay tax as per the provisions of the said sections. The CBDT has clarified that for the purposes of Sections 54EA and 54EB, investors would be allowed to obtain benefit under these sections if the application is made within the stipulated time limit of 6 months to the extent of allotment made.

See also “Common Features, Terms and Conditions of the Bonds”.

3. Regular Income Bond

Face Value                 :      Rs. 5,000/-

Redemption                 :      At Face Value, i.e., Rs.5,000/- at the end of five years from the Deemed Date of Allotment

The investors can choose any of the following three options in respect of payment of interest.

* Subject to TDS as per the then prevailing tax laws

Payment of Interest

Option I (Monthly Interest)

Interest will be paid on the last day of each month.

For the convenience of investors, ICICI Bank may, at its option, send every year in the month of July, a set of 12 post dated cheques dated last day of the relevant month towards the payment of interest for each month in arrears, subject to the finalization of taxation rates for the year by the Finance Act/Bill. In case TDS rates for the year undergo a change after sending the post-dated cheques, the Corporation reserves the right to recover the differential TDS amount, if any, from the investors. Payment of interest for the first month from Deemed Date of Allotment and the last month before redemption shall be made on pro-rata basis. The interest payment for the period from the Deemed Date of Allotment till the last date of the month succeeding the Deemed Date of Allotment will be paid alongwith the interest due for such succeeding month. The first set of post-dated cheques toward the interest from the Deemed Date of Allotment till June 30, 1999 will be sent with the Bond Certificate(s). Investors may note that this option is not covered under market making facility (including Anytime Facility) offered by ICICI Bank for select Bonds in select cities. Also refer to para on Electronic Clearing Service on Page 11 of the Prospectus.

Option II (Half - yearly Interest)

Interest will be paid on June 30 and December 31 of each year. The first interest payment will be made on June 30, 1999 for the period commencing from the Deemed Date of Allotment and the last interest payment will be made at the time of Redemption of the Bond on a pro-rata basis. Also refer to para on Electronic Clearing Service on Page 11 of the Prospectus.

Option III (Annual Interest)

Interest will be paid on June 30 each year. The first interest payment will be made on June 30, 1999 for the period commencing from the Deemed Date of Allotment and the last interest payment will be made at the time of Redemption of the Bond on a pro-rata basis. Also refer to para on Electronic Clearing Service on Page 11 of the Prospectus.

See also “Common Features, Terms and Conditions of the Bonds”.

4. Money Multiplier Bond (In The Nature Of Deep Discount Bond)

Each Money Multiplier Bond in the nature of Deep Discount Bond will have different Face Values under each Option and will be issued at a discounted price of Rs. 4000/- each

Minimum Application    :      One Bond

The investors can choose any of the following options (as per the Table below) in respect of the Money Multiplier Bond:

See also “Common Features, Terms and Conditions of the Bonds”.

Common Features, Terms And Conditions Of The Bonds

Interest on Application Money @5.00 per cent p.a. on the amount allotted for the period commencing from 3rd day after the date of deposit of Application Form with the Bankers to the Issue till a day prior to the Deemed Date of Allotment.

Interest on application money will be paid to all the allottees, who have paid the application money by way of cheque/cash/demand draft, on the amount allotted at the rate of 5.00 per cent p.a. Such interest will be paid for the period commencing from third day after the date of lodgement of the Application Form at the bank branches listed in the Application Form till a day prior to the Deemed Date of Allotment. The date of receipt of the Application Form as given by the bank branch will be considered as final.

In case of applications by minors, the interest warrants for interest on application money will be issued in the name of the applicant along with the name of the guardian. However, there will be no mention of the bank account number.

An investor should not deduct the interest on application money receivable by him from the amount payable on application. The interest warrants will be despatched along with the Letter of Allotment/Bond Certificates, at the sole risk of the applicant, to the sole/first applicant as mentioned in the Application Form. However, in case Interest on Application Money is less than or equal to Rs. 25/-, then the same would be paid along with the first interest payment / redemption, depending upon the instrument chosen, along with appropriate interest.

Investors applying through stockinvest will not be entitled to any interest on application money.

No interest on application money will be paid on the amount refunded, if any.

In case the cheque payable at par facility is not available, ICICI Bank reserves the right to adopt any other suitable mode of payment.

Deemed Date of Allotment

The Deemed Date of Allotment for the issue has been fixed as 30 days from the date of closure of the Issue or date of utilisation of proceeds, whichever is earlier. All benefits relating to the Bonds will be available to the investors from the Deemed Date of Allotment. The actual allotment may occur on a date other than the Deemed Date of Allotment.

Market Lot

The market lot will be one Bond ("Market Lot").

Terms of Payment

Applications should be for a minimum of one Bond and in multiples of one Bond thereafter except in case of Regular Income Bond where the application should be for a minimum of three Bonds for Option I and two Bonds for Option II and in multiples of one Bond thereafter.

Applicants should apply for any or all types of Bonds (any/all options) using the same Application Form. The maximum application under the Issue cannot exceed the size of the Public Issue i.e. Rs.400 crore.

Payment of Interest on Encash Bond, Tax Saving Bond (other than Option II) and Regular Income Bond.

Payment of interest on Encash Bond, Tax Saving Bond (other than Option II) and Regular Income Bond will be made to those Bondholders whose names appear in the register of Bondholders (or to first holder in case of joint-holders) as on Record Date/Book Closure Date to be fixed by the Company for this purpose from time to time.

Buyers of the Bonds are advised to send the Bond Certificate(s) to the Company/Registrar or to such persons as may be notified by the Company from time to time, along with a duly executed transfer deed or other suitable instrument of transfer as may be prescribed by the Company for registration of transfer of the Bond(s). Otherwise interest will be paid to the seller and not to the buyer. In such cases, claims in respect of interest, if any, shall be settled inter se amongst the parties and not against the Company.

In case of Regular Income Bond Option I, the buyers of the Bond shall have to send Bond Certificate(s) together with duly executed transfer deeds or other suitable instrument of transfer as may be prescribed by the Company and unencashed post-dated cheques (if any) to be transferred in his/her name. Otherwise interest will be paid to the seller and not the buyer. In such cases, claims in respect of interest, if any, shall be settled inter se amongst the parties and not against the Company.

In case of sale by or to companies, bodies corporate, societies registered under the applicable laws in India, Trusts, Provident Funds, Superannuation Funds, Gratuity Funds, Scientific and/or Industrial Research Organizations, Commercial Banks, Cooperative Banks, Regional Rural Banks or NRIs, certified true copy of the Power of Attorney or such other authority as may be acceptable to the Company must be lodged separately at the office of the Registrar/the Company at the time of registration of Bonds.

Interest payment will be made by cheques payable at par at such places as ICICI Bank may deem fit. In case the cheque payable at par facility is not available, ICICI Bank reserves the right to adopt any other suitable mode of payment.

The Company intends to offer the facility of Electronic Clearing Service (ECS) to help small investors. The terms of this facility (including towns where this facility would be available) would be as prescribed by RBI. Refer to the para on “Electronic Clearing Facility for Payment of Interest” appearing on this page.

Payment of Interest subject to Deduction of Tax at Source

The interest paid on application money, refund (in case of delay beyond 30 days from the date of closure of the subscription list), interest on Encash Bond,Tax Saving Bond (other than Option II) and Regular Income Bond 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, 1961 or any statutory modification or re-enactment thereof.

An investor who is entitled in accordance with the prevailing income tax laws to exemption from deduction of tax at source in respect of such interest income should quote the name of the sole/first holder, Bondholder number and the distinctive numbers of bonds held and submit: (a) a certificate from his Assessing Officer specifying that no tax should be deducted at source on the Bonds or (b) a declaration in the prescribed Form 15F verified in the prescribed manner to the effect that the tax on his estimated income during the previous year in which such income is included will be nil, at the office of the Registrar to the Issue.

All investors (other than companies and firms) claiming non deduction of tax at source from interest on application money should submit Form 15H at the time of submitting the Application Form. Other investors need to submit Form 15AA or such suitable Certificate at the time of submitting the Application Form. Resident individuals and entities assessable as individuals under the provisions of the Income-tax Act, 1961 entitled to avail of the exemption from deduction of tax at source, on interest on the Bonds, should submit Form 15F after receipt of confirmation of allotment. Other investors need to submit Form 15AA after receipt of confirmation of allotment. Form 15F/15AA, as the case may be should be submitted quoting the name of the sole/First holder, bondholder number and the distinctive numbers of bonds held to the office of the Registrar to the Issue mentioned elsewhere in this Prospectus. The Investors need to submit Form 15F/15AA each year.

Tax Treatment of Money Multiplier Bond and Tax Saving Bond Option II (in the nature of Deep Discount Bond)

As regards the difference between the Issue Price and Face Value of the Money Multiplier Bond and Tax Saving Bond Option II in the nature of Deep Discount Bonds, the Central Board of Direct Taxes vide its clarifications dated March 12, 1996 and May 23, 1996 on similar issues of other companies, has expressed the view that this will be treated as interest income assessable under the Income-tax Act, 1961. On transfer of Bonds before maturity, the difference between the sale consideration and the Issue Price will be treated as capital gains/loss if the assessee has purchased them by way of investment. However, in the case of an assessee who deals in purchase and sale of Bonds, securities etc., the profit or loss shall be treated as trading profit or loss. The difference between the Issue Price and the Face Value will be treated as interest income assessable under the Income-tax Act, 1961, and, therefore, tax will have to be deducted at source at the time of redemption under the relevant provision of the Income-tax Act, 1961.

See also “Tax Benefits” on page 16 of the Prospectus.

Electronic Clearing Service for Payment of Interest

Reserve Bank of India has introduced the concept of Electronic Clearing Service (ECS) through the clearing house to obviate the need for issuing and handling paper instruments and thereby facilitate improved customer service. This facility would be available in cities where RBI provides such facility.

As per the guidelines issued by RBI in this regard, the investor is required to give his mandate for ECS with all the details as per the format given. This will help the Company to credit the interest amount to the investor’s account with the concerned bank at the earliest. The investors will also have the convenience of direct credit to their bank account without the need to receive interest warrants by post and deposit the same in their bank accounts. The bank branch will credit the investor’s account and indicate the credit entry with ECS in the passbook/statement of account.

Subsequent to despatch of the Bond Certificate(s)/Letter of Allotment, the Company/Registrar will send to the investor a form to be duly filled up by those investors desiring to avail the facility of ECS.

Investors who have not opted for ECS will be sent interest warrants by post.

If an investor who has opted for ECS sells the Regular Income
Bond-Option I on the Stock Exchanges, he would be required to deliver unencashed warrants to the buyer along with the Bond Certificate, for which he is required to apply to the Registrar and obtain post-dated warrants, before delivering the same to the buyer.

Printing of Bank Particulars on Interest Warrants

As a matter of precaution against possible fraudulent encashment of interest warrants due to loss or misplacement, investors are advised to give particulars of their bank account viz., (a) name of the bank and branch, (b) type of account (savings/current); and (c) account number in the appropriate column in the Application Form. These bank account particulars will be printed on the interest warrants which can then be deposited only in the account specified. Investors may note that this facility is optional. If the investor does not opt for the facility, the interest warrants will be issued with the name of the first/sole holder only.

Status

The Encash Bond, Regular Income Bond Option II and Tax Saving Bond Options I, II and III will constitute direct, unsecured and unsubordinated obligations of the Company and shall rank pari passu inter se and (subject to any obligations preferred by mandatory provisions of the law prevailing from time to time) shall also, as regards amount invested and any benefits payable thereon by the Company out of its own funds, rank pari passu with all other existing direct, unsecured and unsubordinated borrowings of the Company.

Regular Income Bond Option I and III, Tax Saving Bond Option IV and all option of Money Multiplier Bond would constitute direct, unsecured and subordinated obligations of the Company and will be subordinated and postponed to the payments in respect of all prior obligations of the Company whether for principal, interest, return or otherwise, except that they will rank pari passu amongst themselves and with all other existing and future subordinated obligations of the Company.

Market-making

ICICI Bank may consider making arrangements for market-making of select Bonds in order to provide liquidity to the small investors. Under this arrangement, two way quotes would be provided for the Bonds. ICICI Bank at its sole discretion reserves the right to review/modify/discontinue the same at anytime and in any manner that it may consider necessary. Investor may note that this facility may not be offered for those Bonds where post dated interest warrants are being sent i.e. Regular Income Bond Option I (Monthly interest payment).

ICICI Bank is presently providing market-making facility for select Bonds, which were issued during the Public Issues of April 1997, December 1997, March 1998 and April 1998.

Depository Arrangement

ICICI Bank may consider making depository arrangements with National Securities Depository Limited (NSDL) for the Bonds. In the event any such arrangement materialises, investors will have the option to hold the Bonds in dematerialised form and deal with the same as per the provisions of Depositories Act, 1996 (as amended from time to time). The terms and conditions of operation under the depository arrangement will be notified to the Bondholder(s) by the Company, by publishing a notice in one English and one regional language daily newspaper in Mumbai, Chennai, Delhi and Calcutta, and/or, will be sent by ordinary post to the Registered Holders of the Bond(s). The Company or the Lead Manager however will not be liable in any manner whatsoever, in case any such arrangement does not materialise due to any reason.

Form and Denomination

The Bond Certificate(s) will be issued in denominations of One Bond (“Market Lot”). The applicant can also request for issue of single certificate for the aggregate amount (“Consolidated Certificate”) for each type of Bond to be allotted to him. In case an applicant does not specify the denomination of the certificates required by him, Bond Certificate(s) will be issued in Market Lots for each type of Bond allotted to him. In respect of Consolidated Certificates, the Company, will, only upon receipt of a request from the Bondholder, split such Consolidated Certificates into smaller denominations subject to the minimum face value of the Bond. No fees would be charged for splitting of Bond Certificates in Market Lots, but stamp duty payable, if any, would be borne by the Investor(s). The charge for splitting into lots other than Market Lot, will be borne by the Bondholder subject to the maximum amount agreed upon by the Company with the Stock Exchanges where the Bonds are proposed to be listed. The request for splitting should be accompanied by the original Bond Certificate which would be treated as cancelled by the Company.

Procedure for Redemption by Bondholders

The Bond Certificate(s), duly discharged by the soleholder/all the joint-holders (signed on the reverse of the Bond Certificate(s)) to be surrendered for redemption on maturity should be sent by the Bondholder(s) by Registered Post with acknowledgment due or by hand delivery to the office of the Company/Registrar or to such persons at such addresses as may be notified by the Company from time to time. Bondholder(s) are requested to surrender the Bond Certificate(s) in the manner as stated above, not more than three months and not less than one month prior to the Redemption Date so as to facilitate timely payment.

Payment on Redemption

Despatch in respect of payment on redemption of the Bonds will be made by way of cheque/pay order, etc., only on the surrender of Bond Certificate(s), duly discharged by the sole/all the joint-holders (signed on the reverse of the Bond Certificate(s)). Despatch of cheques/pay orders etc. in respect of such payment will be made within a period of 30 days from the date of receipt of the duly discharged Bond Certificate(s) or Date of Redemption, whichever is later. The Redemption amount will be paid by cheques payable at par at such places as ICICI Bank may deem fit. In case the cheque payable at par facility is not available, ICICI Bank reserves the right to adopt any other suitable mode of payment.

The Company’s liability to Bondholder(s) towards his/their rights including for payment or otherwise shall stand extinguished from the date of redemption in all events and on the Company despatching the redemption amounts to the Bondholder(s). Further, the Company will not be liable to pay any interest, income or compensation of any kind from the date of redemption of the Bond(s).

Purchase

The Company may, at its discretion, at any time purchase Bonds at discount, at par or at a premium in the open market or through market making or otherwise. Such Bonds may, at the option of the Company, be cancelled, held or resold at such price and on such terms and conditions as the Company may deem fit and as permitted by law. The subsidiaries of the Company may also, at their discretion, subscribe to this Issue or at any time purchase Bonds at discount, at par or at premium in the open market or through market making or otherwise.

Right to Reissue Bond(s)

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 extinguishing 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 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.

Transfer/Transmission of Bond(s)

The Bonds shall be transferred and/or transmitted in accordance with the applicable provisions of the Companies Act, 1956. The provisions relating to transfer and transmission and other related matters in respect of shares of the Company contained in the Articles and the Act shall apply, mutatis mutandis (to the extent applicable to Debentures) to the Bond(s) as well. A suitable instrument of transfer as may be prescribed by the Company may also be used for the same.

In case of Regular Income Bond Option I, the buyers of the Bond shall have to send Bond Certificate(s) together with duly executed transfer deed(s) or other suitable instrument(s) of transfer as may be prescribed by the Company and unencashed post-dated cheques (if any) to be transferred in his/her name. See also Electronic Clearing Service on page 11 of the Prospectus.

Joint-holders

Where two or more persons are holders of any Bonds, they shall be deemed to hold the same as joint tenants with benefits of survivorship subject to other provisions contained in the Articles.

Nomination

The sole Bondholder or first Bondholder, along with other joint Bondholders may nominate any one person to whom in the event of death of the sole holder or all the joint-holders, as the case may be, the amount of the Bond may be paid. A nomination shall stand rescinded upon sale of a Bond by the person nominating. A buyer will be entitled to make a fresh nomination in the manner prescribed. When the Bond is held by two or more persons, the nominee shall become entitled to receive the amount only on the demise of all the holders. Fresh nominations can be made only in the prescribed form available on request at the Registered Office of the Company/Registrar.

Succession

Where a nomination has not been made or the nominee predeceases the Bondholder(s) the provisions of this paragraph will apply.

In the event of the demise of the sole holder of the Bond, or the last survivor in case of joint-holders, the Company will recognize the executor or administrator of the deceased Bondholder, or the holder of the succession certificate or other legal representative as having title to the Bond(s). The Company shall not be bound to recognize such executor, administrator or holder of the succession certificate or legal representative unless such executor or administrator obtains Probate or Letter of Administration or is a holder of the Succession Certificate or other legal representation, as the case may be, from an appropriate court in India. The Company at its absolute discretion, may in any case, dispense with production of Probate or Letter of Administration or Succession Certificate or other legal representation.

Where on the demise of a sole or last of the survivors of the joint-holders, who is a resident, an NRI becomes entitled to the Bond, the following steps will have to be complied with:

(i) Documentary evidence should be submitted to the Legacy Cell of the RBI to the effect that the Bond was acquired by the NRI as part of the legacy left by the deceased holder.

(ii) Proof that the NRI is an Indian national or is of Indian origin. Such holding by the NRI will be on a non-repatriable basis.

Where on the demise of a sole or the last of the survivors of the joint-holders, who is a non-resident, another NRI becomes entitled to the Bond, the steps as stated earlier will have to be complied with. The holding of the inheriting NRI would be on the same basis as held by the NRI from whom the Bond(s) are inherited.

Notices

All notices to the Bondholder(s) required to be given by the Company or the Trustees shall be published in one English and one regional language daily newspaper in Mumbai, Chennai, Delhi and Calcutta, and/or, will be sent by ordinary post to the Registered Holders of the Bond(s) from time to time.

Issue of Duplicate Bond Certificate(s)

If any Bond Certificate(s) is/are mutilated or defaced or the cages for recording transfers of Bonds are fully utilized, the same may be replaced by the Company against the surrender of such Certificate(s). Provided, where the Bond Certificate(s) are mutilated or defaced, the same will be replaced as aforesaid only if the certificate numbers and the distinctive numbers are legible.

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

Trustees for the Bondholders

The Company has appointed Bank of Maharashtra, "Lokmangal", 1501, Shivaji Nagar, Pune 411 005 to act as Trustees for the Bondholders (“Trustees”). The Company and the Trustees will enter into a Trustee Agreement, inter alia, specifying the powers, authorities and obligations of the Trustees and the Company. The Bondholder(s) shall, without further act or deed, be deemed to have irrevocably given their consent to the Trustees or any of their agents or authorized officials to do all such acts, deeds, matters and things in respect of or relating to the Bonds as the Trustees may in their absolute discretion deem necessary or require to be done in the interest of the Bondholder(s). Any payment made by the Company to the Trustees on behalf of the Bondholder(s) shall discharge the Company pro tanto to the Bondholder(s).

The Trustees will protect the interest of the Bondholders in the event of default by the Company in regard to timely payment of interest and repayment of principal and they will take necessary action at the cost of the Company. The major events of default which happen and continue without being remedied for a period of 30 days after the dates on which the monies specified in (i) and (ii) below become due and will necessitate repayment before stated maturity are as follows:

(i) Default in payment of monies due in respect of interest owing upon the Bonds;

(ii) Default in payment of any other monies including costs, charges and expenses incurred by the Trustees.

No Bondholder shall be entitled to proceed directly against the Company unless the Trustees, having become so bound to proceed, fail to do so.

Future Borrowings

The Company will be entitled to borrow/raise loans or avail of financial assistance in whatever form as also issue Debentures/Bonds/other securities in any manner having such ranking in priority, pari passu or otherwise and change the capital structure including the issue of shares of any class, on such terms and conditions as the Company may deem appropriate, without the consent of, or intimation to, the Bondholders or the Trustees in this connection.

Bondholder not a Shareholder

The Bondholders will not be entitled to any of the rights and privileges available to the Shareholders.

Rights of Bondholders

1.The Bonds shall not, except as provided in the Act, confer upon the holders thereof any rights or privileges available to the members of the Company including the right to receive Notices or Annual Reports of, or to attend and/or vote, at the General Meeting of the Company. However, if any resolution affecting the rights attached to the Bonds is to be placed before the shareholders, the said resolution will first be placed before the concerned registered Bondholders for their consideration. In terms of Section 219(2) of the Act, holders of Bonds shall be entitled to a copy of the Balance Sheet on a specific request made to the Company.

2.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 Special Resolution passed at a meeting of the concerned Bondholders, provided that nothing in such consent or resolution shall be operative against the Company, where such consent or resolution modifies or varies the terms and conditions governing the Bonds, if the same are not acceptable to the Company.

3.The registered Bondholder or in case of joint-holders, the one whose name stands first in the Register of Bondholders shall be entitled to vote in respect of such Bonds, either in person or by proxy, at any meeting of the concerned Bondholders and every such holder shall be entitled to one vote on a show of hands and on a poll, his/her voting rights shall be in proportion to the outstanding nominal value of Bonds held by him/her on every resolution placed before such meeting of the Bondholders. The quorum for such meetings shall be at least five Bondholders present in person.

4.The Bonds are subject to the provisions of the Companies Act, 1956, the Memorandum and Articles, the terms of this Prospectus and Application Form. Over and above such terms and conditions, the Bonds shall also be subject to other terms and conditions as may be incorporated in the Trustee Agreement/ Letters of Allotment/ 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.

5.Save as otherwise provided in this Prospectus, the provisions contained in Annexure C and/or Annexure D to the Companies (Central Government’s) General Rules and Forms, 1956 as prevailing and to the extent applicable, will apply to any meeting of the Bondholders, in relation to matters not otherwise provided for in terms of the Issue of the Bonds.

6.A register of Bondholders will be maintained in accordance with Section 152 of the Act and all interest and principal sums becoming due and payable in respect of the Bonds will be paid to the registered holder thereof for the time being or in the case of joint-holders, to the person whose name stands first in the Register of Bondholders.

7.The Bondholders will be entitled to their Bonds free from equities and/or cross claims by the Company against the original or any intermediate holders thereof.

Procedure for Application

Availability of Prospectus and Application Forms

Application Forms with copies of the Prospectus may be obtained from the Registered Office and the Zonal/Regional/Development Offices of the Company, from the Lead Managers, Joint Lead Managers, Advisor to the Issue, Co-Managers, Chief Marketing Agent and Bankers to the Issue stated in this Prospectus, as well as from the collection branches of these Banks listed in the Application Form.

Who can Apply

The following categories of persons are eligible to apply in the Issue:

• Resident Indian individuals - in their own names or in the names of their minor children as natural/legal guardians.
• - in single or joint names (but not exceeding three);
• Hindu Undivided Families through the Karta;
• Companies, Bodies Corporate and Societies registered under the applicable laws in India and authorized to invest in the Bonds;
• Trusts which are authorized to invest in the Bonds;
• Provident Funds, Superannuation Funds and Gratuity Funds;
• Scientific and/or Industrial Research Organizations, which are authorized to invest in the Bonds;
• Public Financial Institutions, Statutory Corporations, Commercial Banks, Cooperative Banks and Regional Rural Banks;
• Mutual Funds;
• Associations of Persons.

How to Apply

General Instructions

1.Applications for the Bonds must be made in the prescribed Application Form.

2.The forms should be completed in block letters in English as per the instructions contained herein and in the Application Form and are liable to be rejected if not so completed.

3.Applications should be in single or joint names (not more than three).

4.Applications should be for a minimum of one Bond and in multiples of one Bond thereafter, except in case of Regular Income Bond where the minimum application should be for three Bonds for Option I and two Bonds for Option II and in multiples of one Bond thereafter. The maximum application can be equal to the size of the Issue.

5.Thumb impressions and signatures other than in English/Hindi/Gujarati/Marathi or any of the other languages specified in the 8th Schedule to the Constitution of India must be attested by a Magistrate or a Notary Public or a Special Executive Magistrate under his/her official seal.

6.Applicant’s Bank Account Details:
The name of the applicant’s bank, type of account and account number must be filled in the Application Form. This is required for the applicant’s own safety and these details will be printed on the refund orders, if any. Applications without these details are liable to be rejected.

7.Applications under Power of Attorney:
In the case of applications made under Power of Attorney or by limited companies, corporate bodies, trusts etc., a certified copy of the Power of Attorney or the relevant authority, as the case may be, must be lodged separately, along with a photocopy of the Application Form, at the office of the Registrar to the Issue simultaneously with the submission of the Application Form, indicating the name of the applicant along with the address, application serial number, date of submission of the Application Form, name of the bank and branch where it was deposited, cheque/draft number and bank and branch on which the cheque/draft was drawn.

8. PAN/GIR Number :
Where application(s) is/are for a total value of Rs. 50,000 or more, the applicant or in the case of an application in joint names, each of the applicants, should mention his/her Permanent Account Number (PAN) allotted under the Income-tax Act, 1961 or where the same has not been allotted, the GIR No. and the Income tax Circle/Ward/District. In case neither the PAN nor the GIR Number has been allotted or the applicant is not assessed to income tax, the applicant shall mention ‘Not Allotted’ in the appropriate box provided for the purpose. Application Forms without this information will be considered incomplete and are liable to be rejected.

9.Joint Applications in the case of Individuals :
Applications may be made in single or joint names (not more than three). In the case of joint application, all payments will be made out in favour of the first applicant. All communications will be addressed to the first named applicant whose name appears in the Application Form at the address mentioned therein.

10.Multiple Applications :
An applicant should submit only one application (and not more than one) for the total number of Bonds required. Two or more applications will be deemed to be multiple applications if the sole/first applicant is one and the same.
In case of a mutual fund, a separate application can be made in respect of each scheme of the mutual fund and such applications will not be treated as multiple applications provided that the applications made clearly indicate the name of each scheme under which the application has been made.
ICICI Bank reserves the right to reject, in its absolute discretion, all or any multiple applications.

11.A separate single cheque/draft/stockinvest must accompany each Application Form.

12.Applicants are requested to write their names and application serial number on the reverse of the instruments by which the payments are made.

13.Interest on application money will be paid separately by ICICI Bank wherever applicable. Thus, the same should not be deducted from the application amount.

14.Persons (other than companies and firms) claiming receipt of interest on application money without deduction of tax at source should submit Form 15H (in duplicate) at the time of submitting the Application Form. Other investors can submit a certificate as per Form 15AA. For availing the exemption from deduction of tax at source from interest on Bonds he should submit Form 15F/15AA, as the case may be alongwith the name of the sole/first applicant, bondholder number and the distinctive numbers of bonds held should be submitted by investors to the Registrar to the Issue for availing the said exemption on confirmation of allotment.

15.All Applicants are requested to tick the relevant column “Category of Investor” in the Application Form. Private/Religious/Charitable Trusts and other investors requiring approved security status for making investments and individuals should note that in case they do not tick in the relevant place, their application will be considered in the “Other Category” and allotment made accordingly. In all such cases, ICICI Bank will not be held responsible for the lower allotment, if any.

16.An investor should apply for one or more type of Bonds and/or one or more option of Bonds in a single Application Form.

17.If the investor wishes that the amount deployed by him be invested in the State of Andhra Pradesh, then he should (3) tick in the box provided. At the time of initial deployment (i.e. within a period of one year from the Deemed date of Allotment) of the resources raised in this category, preference would be given to the projects located in the state of Andhra Pradesh. In case funds could not be deployed within the said time limit, the same may be utilised by ICICI Bank for projects/other business operations in other states in such manner as it may deem fit. Pending deployment of proceeds in Andhra Pradesh, ICICI Bank may, at its sole discretion, deploy these funds in any other suitable manner.

For further instructions, please read Application Form carefully.

Payment Instructions

i.Payment may be made by way of cash/stockinvest/cheque/bank draft drawn on any bank, including a co-operative bank which is situated at and is member or sub-member of the Bankers’ clearing-house located at the place where the Application Form is submitted, i.e., at designated collection centres.
Outstation cheques/bank drafts or cheques/bank drafts drawn on banks not participating in the clearing process will not be accepted. Money orders/postal orders will also not be accepted.

ii.All cheques/drafts must be made payable to “ICICI Bank SAFETY BONDS” and crossed “A/C PAYEE ONLY”

iii.All stockinvests should be payable to the Company, i.e., “ICICI Bank Limited” and crossed “A/C PAYEE ONLY”

iv.Outstation bank drafts payable at Mumbai along with the Application Forms can be sent by registered post with acknowledgment due to MCS Limited, Sri Padmavati Bhavan, Plot No.93, Road No.16,
MIDC, Andheri (East),Mumbai 400 093, so that the same are received before the closure of the subscription list.

v.The applications shall be made only by way of cheque/bank draft/cash/stockinvest. However, if the amount payable on application is Rs. 20,000 or more together with any earlier outstanding loan or deposit placed with ICICI Bank by the applicant, such payment must be effected only by way of an account payee cheque/stockinvest or bank draft in terms of Section 269SS of the Income-tax Act, 1961. Otherwise the applications may be rejected and application money refunded without any interest.

Payment by Stockinvest

The applicant who is an individual or mutual fund has the option to use the Stockinvest instrument in lieu of cash/cheques/bank drafts for payment of application money. The applicant using stockinvest should submit the Application Form along with the instrument to the Bankers to the Issue mentioned in the Application Form. Stockinvest instruments are payable at par at all the branches of the issuing bank and as such, outstation stockinvest instruments can be attached to the Application Form. The applicant may approach the banks concerned for obtaining stockinvest and detailed instructions for the same.

The applicant has to fill in the following particulars:

1.Title of the Account as mentioned in the Application Form.

2.Number of Bond(s) applied for.

3.The amount payable on the Bond(s) applied for.

The instrument should thereafter be signed by the applicant. It should also bear the stamp of the Bank issuing the instrument and should be crossed “A/c Payee Only” and made payable only to “ICICI Bank Limited”. Service charges, if any, for issuing the stockinvest must be borne by the applicant. The applicant should not fill in the portion to be filled up by the Registrar to the Issue (right-hand portion of the instrument). The Registrar to the Issue will fill up the right-hand side of the stockinvest indicating the Bonds allotted to the applicants, calculated as follows:

(i) In case of full allotment, the number of Bonds on the right- hand side will be the same as that on the left-hand side of the instrument;

(ii) In case of partial allotment, the number filled up by Registrar to the Issue on the right-hand side of the instrument will be less than the number filled up by the applicant on the left- hand side;

(iii) In case the allotment is nil, the number filled up by the Registrar to the Issue on the right-hand side of the instrument will be nil.

The stockinvest should be used by the Purchaser and the name of the Purchaser/one of the Purchasers should be indicated as the first applicant in the Application Form. Thus, if the signature of the Purchaser on the stockinvest and the signature of the first applicant in the Application Form do not tally, the application would be treated as having been accompanied by a third party stockinvest and is liable to be rejected.

The stockinvest instrument should be used by the Purchaser within 10 days from the date of issue of the instrument, failing which such applications are liable to be rejected. For the purpose of calculating the 10 days, the last date for use of the stockinvest for submitting the Application Form to the bank is indicated on the face of the stockinvest with a notation “to be used before _____________”.

No refund order will be issued to the applicants using stockinvest for payment of application money. In case of non-allotment of Bonds, the cancelled stockinvest instruments will be returned to the applicant, within 10 weeks of closure of subscription list by Registered Post/Speed Post. The applicant will have to approach the issuing bank branch for lifting the lien.

Registrar to the Issue have been authorized by the Company (through Resolution of the Committee of Directors passed on September 30, 1998, to sign on behalf of the Company to realize the proceeds of the stockinvest from the issuing bank or to affix non-allotment advice on the instrument, or to cancel the stockinvest(s) of the non-allottee. Such cancelled stockinvest(s) shall be sent back by the Registrar directly to the investors.

Reserve Bank of India vide its circular no. DBOD No. FSC.BC.100/24.47.001/94 dated September 2, 1994 has restricted the use of stockinvest(s) to individual investors and mutual funds only. Stockbrokers, Corporate Bodies, Banks and Financial Institutions are not allowed to apply through stockinvest(s). A ceiling of Rs. 50,000/- per individual per Stockinvest by banks has been imposed. The above ceiling is not applicable to mutual funds.

Note: The above information is given for the benefit of investors and the Company is not liable for any modification of the terms of stockinvest or procedure thereof by the issuing bank.

Submission of Completed Application Forms

All applications duly completed and accompanied by account payee cheques/stockinvests/drafts/cash shall be submitted at the branches of the Bankers to the Issue (listed in the Application Form) before the closure of the Issue. Applications should NOT be sent to the Company/Lead Managers/Joint Lead Managers/Co-Managers/Chief Marketing Agent/Advisor.

Outstation bank drafts payable at Mumbai along with the Application Forms can be sent by registered post with acknowledgment due to MCS Limited, Sri Padmavati Bhavan, Plot No.93, Road No.16,
MIDC, Andheri (East),Mumbai 400 093, so that the same are received before the closure of the subscription list.

No separate receipts shall be issued for the application money. However, Bankers to the Issue at their designated branches receiving the duly completed Application Forms will acknowledge the receipt of the applications by stamping and returning the acknowledgment slip to the applicant.

Applications shall be deemed to have been received by the Company only when submitted to the Bankers to the Issue at their designated branches or on receipt by the Registrar as detailed above and not otherwise.

Rejection of Applications

The Board of Directors/Committee of Directors 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. In the event, if any Bond(s) applied for is/are not allotted in full, the excess application monies of such Bonds will be refunded, as may be permitted under the provisions of the Act.

Letters of Allotment / Bond Certificates / Refund Orders

Letters of Allotment/Bond Certificates/Refund Orders as the case may be, will be despatched by Registered Post/Speed Post at the sole risk of the applicant, to the sole/first applicant within 10 weeks from the date of closure of the subscription list.

The Company shall make efforts to allot the Bonds offered in this Issue within 30 days from the closure of the subscription list. Further as per the listing guidelines, the Company shall pay interest @ 15 per cent p.a. (except to applicants applying through stockinvest) for delay in refund beyond 30 days from the date of closure of the subscription list.

Utilization of Application Money

The sum received in respect of the Issue will be kept in separate bank account(s) and the Company will have access to such funds as per applicable provisions of law(s), regulations and approvals.

Declaration as a Public Security / Approved Security

Applications have been made to the Government of India under Section 20(f) of the Indian Trusts Act, 1882 for declaring the Bonds as “Approved/Public Securities”.

Applications have been made to the Government of Andhra Pradesh, Government of Gujarat and the Government of Maharashtra under Andhra Pradesh Endowment Trust Act, Section 2(12)(d) of the Mumbai Public Trusts Act, 1950 and Section 2(12) (d) of the Mumbai Public Trust Act, 1950 respectively for declaring the Bonds as “Approved/Public Securities”.

Investment in the Bonds by religious/charitable trusts will qualify as eligible investments under Section 11(5) of the Income-tax Act, 1961.

The Government of India has notified the Bonds issued by the Company as an eligible security for investment by Port Trusts governed under Section 88(2) of the Major Port Trusts Act.

The Central Board of Direct Taxes, Department of Revenue, Ministry of Finance, Government of India vide its notification nos. 10278 and 10279 dated March 4, 1997 has declared the Bonds issued by ICICI Bank as specified assets for the purposes of Section 54EA and 54EB of the Income Tax Act, 1961 and vide its notification No. F No. 178/94/97-ITA-I dated August 10, 1998 declared the Tax Saving Bond as eligible security for the purpose of Section 88 of the Income-tax Act, 1961.

Applications by Provident Funds, Superannuation Funds and Gratuity Funds

The Government of India has, vide its notification dated September 16, 1996, permitted Provident, Superannuation and Gratuity Funds to invest up to 40 per cent in the Bonds and securities of Public Financial Institutions as defined under Section 4A of the Act with effect from October 1, 1996. The Provident, Superannuation and Gratuity Funds can, therefore, subject to compliance of the terms and conditions of their Trust Deeds, invest in the Bonds up to 40 per cent of the eligible investment funds as permitted by the Central Government, vide the said Notification. The said notification also provided for investment of 20% in Special Deposit scheme. This requirement of keeping 20% of the incremental provident fund amounts in Special Deposit scheme has been withdrawn w.e.f. April 1, 1997 vide notification dated March 27, 1997 issued by Ministry of Labour, Government of India. As per this notification, the board of trustees are free to invest this portion in either central government securities or state government securities or bonds/securities of public financial institutions. This discretionary investment is in addition to specified limit of 40% for public financial institutions.

Tax Benefits

The Company has been advised by its Taxation Advisor that under the current tax laws, the following tax benefits inter alia, will be available to the Company and the Bondholders of the Company. An investor is advised to consider in his own case the tax implications of an investment in the Bonds.

To the Company

1.The taxable income of the Company would not include dividend, interest or long-term capital gains from investment made on or before June 1, 1998 by way of shares or long-term finance in an enterprise carrying on the business of developing, maintaining and operating specified infrastructure facility in accordance with and subject to the provisions of Section 10(23G) of the Income-tax Act, 1961 (hereinafter referred to as the Income-tax Act).

2.The taxable income of the company would not include dividend income which is declared, distributed or paid after June 1, 1997 in accordance with and subject to the provisions of Section 10(33) read with Section 115-O of the Income-tax Act, 1961.

3.Under Section 36(1)(vii) of the Income-tax Act any bad debts or part thereof written off as irrecoverable, deductions would be allowable as a deduction from the total income of the Company in accordance with and subject to the provisions contained therein.

4.The Company being an approved financial corporation under the provisions of Section 36(1)(viii) of the Income-tax Act is allowed deduction at 40% of the profits derived from the business of providing long term finance computed under the head “Profits and gains of business or profession” before making any deduction under that clause, carried to Special Reserve Account under that Section. The deduction is restricted to the extent the aggregate of the amounts transferred to the Special Reserve Account for this purpose from time to time does not exceed twice the paid-up share capital and general reserves of the Company.

5.Under Section 43D of the Income-tax Act, interest on certain categories of bad and doubtful debts as specified in Rule 6EA of the Income-tax Rules, 1962, shall be chargeable to tax only in the year of receipt or credit to Profit and Loss Account of the Company whichever is earlier.

6.Under Section 48 of the Income-tax Act, the long term capital gains arising out of sale of capital assets excluding bonds and debentures (except Capital Indexed Bonds issued by the Government) will be computed after indexing the cost of acquisition/improvement.

7.Under Section 54EA and Section 54EB, capital gains arising on transfer of long term capital assets would not be charged to tax on investment of net consideration (Section 54EA) or capital gains (Section 54EB) respectively in any of the assets specified for this purpose in accordance with and subject to the conditions stipulated in these Sections of the Income-tax Act.

8.Under the provisions of Section 112 of the Income-tax Act, taxable long-term capital gains, if any, would be charged to tax at the concessional rate of 20%.

9.Under Section 5 of the Interest-tax Act, 1974 interest-tax is not payable by the Company on interest on loans and advances received from other credit institutions specified under the Interest-tax Act, 1974. The computation of chargeable interest would be on applying on the provision of Section 43 D of the Income-tax Act and after making the deduction available for interest which is established to have become a bad debt subject to conditions mentioned in
Section 5 of the Interest-tax Act, 1974.

II  To the Bondholders of the Company

A. To the Residents/ Indian public

1.The income that would be received on Encash Bond, Regular Income Bonds, Tax Saving Bonds and Money Multiplier Bonds in the nature of Deep Discount Bond on the difference between the Face Value and Issue Price in the year of redemption will qualify for deduction under Section 80L in the hands of individuals and Hindu Undivided families (HUFs) subject to a maximum amount of Rs.12,000 in aggregate per year including interest received from the Company on these Bonds subject to provisions of the said section as the Company has been advised that the clarification dated May 10, 1993 issued by the CBDT stating that interest on the ICICI Bank - Bonds qualifies for deduction under Section 80L(1)(vii) is applicable to this issue of bonds.
The company would also apply to the Central Government for notifying these bonds under section 80L(1)(ii) of the Income-tax Act.

2.No Income-tax is deductible at source under the present provisions of the Income-tax Act in respect of the following :-

(a) In case of payment of interest to a payee which in the aggregate during the financial year does not exceed Rs.2,500;

(b) When the Assessing Officer issues a Certificate on an application by a Bondholder on satisfaction that the total income of the Bondholder justifies no deduction of tax at source as per the provisions of Section 197(1) of the Income-tax Act;

(c) When the Bondholder (not being a company or a firm) submits a declaration in the prescribed form and verified in the prescribed manner to the effect that the tax on his estimated total income of the previous year in which such income is to be included in computing his total income will be nil.

3.Tax will be deducted at a lower rate where the Assessing Officer on application of any bondholder issues a certificate for such lower deduction of tax as per the provisions of Section 197(1) of the Income-tax Act.
In all other situations, tax would be deducted at source on each payment as per prevailing provisions of the Income-tax Act.

4.The tax treatment of the difference between the face value and issue price of Money Multiplier Bonds and Tax Saving Bond Option II will be in accordance with the Income-tax laws prevailing at the time of their distribution or redemption, as the case may be. Whether these distributions will be taxed in the nature of interest or capital gains is not free from doubt.
The Central Board of Direct Taxes vide its clarifications dated March 12, 1996 and May 23, 1996 on similar issues of other Companies has expressed the view that this will be treated as interest income assessable under the Income-tax Act.
On transfer of Bonds before maturity, the difference between the sale consideration and the issue price will be treated as Capital Gains/Loss if the assessee has purchased them by way of investment. In the case of an assessee who deals in purchase and sale of Bonds, securities etc. the profit or loss shall be treated as trading profit or loss. The difference between the issue price and the redemption price will be treated as interest income assessable under the Income-tax Act and, therefore, tax will have to be deducted at source under the relevant provision of the Income-tax Act.

5.Under Section 54EA and Section 54EB of the Income-tax Act, the capital gain, viz. the difference between the price on transfer and the indexed cost of acquisition of a long-term capital asset will not be subjected to tax, if the net consideration (Section 54EA) or the capital gain (Section 54EB) is invested in specified bonds, debentures, units or any of the assets in terms of and subject to compliance of certain conditions as mentioned therein.
The investment in Tax Saving Bonds of the Company would be eligible for exemption under Sections 54EA and 54EB under notifications Nos. 10278 & 10279, respectively, issued by Central Board of Direct Taxes , depending on the option opted by the investor.

6.Under Section 88 of the Income-tax Act, subscription to the Tax Saving Bonds would entitle an individual and HUFs to a rebate from income-tax @ 20 per cent (25 per cent in case of authors, Playwrights, artists, musicians, actors or sportsmen) of the aggregate of the sums paid or deposited upto Rs.70,000 in a financial year by the tax payer out of his income chargeable to tax as prescribed in sub-section 2 of Section 88 subject to conditions and the specific provisions made in this behalf under Section 88 of the Income-tax Act. If investment of a lower amount is made, tax rebate would be available at 20% of the amount invested, subject to fulfillment of prescribed conditions.

B.  Other Eligible Institutions

1. Investment in the Bonds by religious/charitable trusts will qualify as eligible investments under Section 11(5) of the Income-tax Act.

2.All notified mutual funds set up by public sector banks or financial institutions or authorised by the Securities and Exchange Board of India will be exempt from income-tax on all their income, including income from investment in Bonds under the provisions of Section 10(23D) of the Income-tax Act.

II.  Wealth-tax

Wealth-tax is not levied on investment in Bonds of the Company under Section 2(ea) of the Wealth-tax Act, 1957.

III. Gift-tax

Gift-tax is not levied on gift of Bonds of the Company in the hands of donor as well as donee.