C M Y K

C M Y K

PROSPECTUS TRANCHE - 1September 26, 2011

POWER FINANCE CORPORATION LIMITED(Incorporated on July 16, 1986 under the Companies Act, 1956 as a public limited company)

Registered Office and Corporate Office: ‘Urjanidhi’, 1, Barakhamba Lane, Connaught Place, New Delhi 110 001, India.Tel: +91 11 2345 6000. Fax: +91 11 2341 2545.

Compliance Officer & Company Secretary: Mr. J.S. Amitabh, Tel: +91 11 2345 6000 Fax: +91 11 2345 6285.E-mail: infrabonds11-12@pfcindia.com. Website: www.pfcindia.com.

PUBLIC ISSUE BY POWER FINANCE CORPORATION LIMITED (“COMPANY” OR “ISSUER”) OF ‘LONG TERM INFRASTRUCTURE BONDS’ OF FACEVALUE OF ` 5,000 EACH, IN THE NATURE OF SECURED, REDEEMABLE, NON-CONVERTIBLE DEBENTURES, HAVING BENEFITS UNDER SECTION80CCF OF THE INCOME TAX ACT, 1961, AS AMENDED, (“BONDS”) AGGREGATING ` 200 CRORES WITH AN OPTION TO RETAIN ANOVERSUBSCRIPTION UPTO THE SHELF LIMIT (I.E. ` 6,900 CRORES).THIS TRANCHE ISSUE IS BEING OFFERED BY WAY OF THIS PROSPECTUS TRANCHE -1, WHICH CONTAINS, INTER ALIA THE TERMS AND CONDITIONSOF THE TRANCHE-1 (THE “PROSPECTUS TRANCHE -1”), WHICH SHOULD BE READ TOGETHER WITH THE SHELF PROSPECTUS DATEDSEPTEMBER 26, 2011 FILED WITH THE DESIGNATED STOCK EXCHANGE AND SEBI (THE “SHELF PROSPECTUS”). THE SHELF PROSPECTUSTOGETHER WITH THIS PROSPECTUS TRANCHE -1 SHALL CONSTITUTE “THE PROSPECTUS”The Issue is being made under the Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 (“SEBI Debt Regulations”).*The Issue does not exceed 25% of the incremental infrastructure investment made by the Company during Fiscal 2011.

The subscription list for the Issue shall remain open for subscription during banking hours for the period indicated above, except that the Issue may close on such date asmay be decided by the Board. In the event of an early closure of the Issue , the Company shall ensure that notice is provided to the prospective investors through newspaperadvertisements, at least three days prior to such earlier date of Issue closure.

*The SEBI registration of one of the Lead Managers to the issue, SBI Capital Markets Limited was valid up to July 31, 2011. The application for renewal of the certificateof registration in the prescribed manner has been made by SBI Capital Markets Limited on April 29, 2011, to SEBI, three months before the expiry of the period of thecertificate as required under Regulation 9(1) of the SEBI (Merchant Bankers) Regulations, 1992. The approval of SEBI in this regard is currently awaited.

ISSUE PROGRAMMEISSUE OPENS ON : THURSDAY, SEPTEMBER 29, 2011 ISSUE CLOSES ON : FRIDAY, NOVEMBER 4, 2011

LEAD MANAGERS TO THE ISSUE

SBI CAPITAL MARKETS LIMITED*202, Maker Tower E,Cuffe Parade, Mumbai 400 005, IndiaTel: +91 (22) 2217 8300;Fax: +91 (22) 2218 8332Email: pfc2011@sbicaps.comInvestor Grievance Email:investor.relations@sbicaps.comWebsite: www.sbicaps.comContact person: Mr. Puneet DeshpandeCompliance Officer: Mr. Bhaskar ChakrabortySEBI Registration No.: INM000003531

KARVY COMPUTERSHAREPRIVATE LIMITED”Karvy House” 46, Avenue 4, Street No. 1,Banjara Hills, Hyderabad- 500 034, IndiaTel: 1-800-3454001Fax: +91 (40) 23431551Email: pfcinfrabonds@karvy.comInvestor Grievance Email:einward.ris@karvy.comWebsite: www.karvy.comContact Person: Mr. Murali KrishnaSEBI Registration: INR000000221

GENERAL RISKSInvestors are advised to read the Risk Factors carefully before taking an investment decision in relation to this Issue. For taking an investmentdecision, investors must rely on their own examination of the Issuer and the Issue, including the risks involved. Specific attention of theinvestors is invited to “Risk Factors” on page 8 of Shelf Prospectus. This document has not been and will not be approved by any regulatoryauthority in India, including the Securities and Exchange Board of India (“SEBI”), the Reserve Bank of India (“RBI”), any registrar ofcompanies or any stock exchange in India. The Bonds are subject to a statutory lock-in for a minimum period of five years from the DeemedDate of Allotment and no trading market would exist or be established for the Bonds for this period, despite the Bonds being listed

ISSUER’S ABSOLUTE RESPONSIBILITYThe Issuer, having made all reasonable inquiries, accepts responsibility for and confirms that the Prospectus contains all information withregard to the Issuer and the Issue, which is material in the context of this Issue, that the information contained in the Prospectus is true andcorrect in all material respects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestlyheld and that there are no other material facts, the omission of which makes the Prospectus as a whole or any such information or theexpression of any such opinions or intentions misleading in any material respect.

CREDIT RATINGCRISIL Limited (“CRISIL”) has, by its letter no. SN/FSR/PFC/2011-12/645 dated August 25, 2011 assigned a rating of AAA/Stable (pronounced“Triple A rating with stable outlook”) to the Bonds. Further, ICRA Limited has, by its letter no. D/RAT/2011-2012/P3/19 dated September 7,2011, assigned a rating of AAA (pronounced triple A) with a ‘Stable’ outlook to the Bonds. These ratings are not a recommendation to buy,sell or hold securities and investors should take their own decision. These ratings are subject to revision or withdrawal at any time by theassigning rating agency(ies) and should be evaluated independently of any other ratings. For the rationale for these ratings, see Annexure II ofShelf Prospectus.

PUBLIC COMMENTSThe Draft Shelf Prospectus dated September 12, 2011 was filed with the Designated Stock Exchange, pursuant to the provisions of the SEBIDebt Regulations and was open for public comments for a period of seven Working Days, i.e., until 5 p.m on September 22, 2011

LISTINGThe Bonds are proposed to be listed on the Bombay Stock Exchange Limited (“BSE”). BSE have given its in-principle listing approval by itsletter dated September 22, 2011. The Designated Stock Exchange for the Issue is BSE.

ICICI SECURITIES LIMITEDICICI Centre,H.T. Parekh Marg,Churchgate, Mumbai 400 020, IndiaTel: +91 (22) 2288 2460;Fax: +91 (22) 2282 6580Email: pfcbondissue2011@icicisecurities.comInvestor Grievance Email:customercare@icicisecurities.comWebsite: www.icicisecurities.comContact person: Mr. Manvendra TiwariCompliance Officer: Mr. Subir SahaSEBI Registration No:INM000011179

PNB INVESTMENTSERVICES LIMITED10, Rakeshdeep Building, Yusuf Sarai,Commercial Complex, Gulmohar Enclave,New Delhi – 110049, IndiaTel: +91 (11) 49495050Fax: +91( 11) 41035057Email: trustee@pnbisl.comWebsite: www.pnbisl.comContact Person: Mr. J K AgarwalSEBI Registration No.: IND000000510

REGISTRAR TO THE ISSUE DEBENTURE TRUSTEE FOR THEBONDHOLDERS

TABLE OF CONTENTS

DEFINITIONS AND ABBREVIATIONS 1

CERTAIN CONVENTIONS, USE OF FINANCIAL, INDUSTRY AND MARKET DATA AND

CURRENCY OF PRESENTATON 6

FORWARD LOOKING STATEMENTS 7

THE ISSUE 8

RECENT DEVELOPMENTS 10

GENERAL INFORMATION 11

OBJECTS OF THE ISSUE 18

STATEMENT OF TAX BENEFITS 19

OTHER REGULATORY AND STATUTORY DISCLOSURES 22

ISSUE STRUCTURE 25

TERMS OF THE ISSUE 27

PROCEDURE FOR APPLICATION 42

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION 49

DECLARATION 50

ANNEXURE - 1 SHELF PROSPECTUS DATED SEPTEMBER 26, 2011

1

SECTION I - GENERAL

DEFINITIONS AND ABBREVIATIONS This Prospectus Tranche-1 uses certain definitions and abbreviations which, unless the context indicates or implies otherwise, have the meaning as provided below. References to statutes, rules, regulations, guidelines and policies will be deemed to include all amendments and modifications notified thereto.

Company Related Terms

Term Description “Issuer”, ‘PFC”, “our Company”,

or “the Company”, or “the Corporation”

Power Finance Corporation Limited, a public limited company incorporated under the Companies Act, 1956.

“We”, or “us”, “our” or “Group” Power Finance Corporation Limited and its Subsidiaries, PFC Green Energy Limited, PFC Consulting Ltd., Chhattisgarh Surguja Power Ltd., Coastal Karnataka Power Limited, Coastal Maharashtra Mega Power Limited, Orissa Integrated Power Limited, Coastal Tamil Nadu Power Limited, Sakhigopal Integrated Power Company Limited, Ghogarpalli Integrated Power Company Limited, Tatiya Andhra Mega Power Ltd., Nagapattinam-Madhugiri Transmission Company Limited and PFC Capital Advisory Services Limited, and its joint ventures and associates, on a consolidated basis.

Articles/ Articles of Association/AoA

Articles of Association of our Company

Board/ Board of Directors Board of Directors of our Company

Equity Shares Equity Shares of our Company of face value ` 10 each

Memorandum/Memorandum of Association/MoA

Memorandum of Association of our Company

PFCCL PFC Consulting Limited

PFCGEL PFC Green Energy Limited

Registered Office and Corporate Office

The registered office and corporate office of our Company, situated at ‘Urjanidhi’, 1, Barakhamba Lane, Connaught Place, New Delhi- 110 001, India

RoC Registrar of Companies, National Capital Territory of Delhi and Haryana

Statutory Auditors/Auditors Raj Har Gopal & Co. and N. K. Bhargava & Co., the statutory auditors of our Company

Subsidiaries PFC Green Energy Limited, PFC Consulting Ltd., Chhattisgarh Surguja Power Ltd., Coastal Karnataka Power Limited, Coastal Maharashtra Mega Power Limited, Orissa Integrated Power Limited, Coastal Tamil Nadu Power Limited, Sakhigopal Integrated Power Company Limited, Ghogarpalli Integrated Power Company Limited, Tatiya Andhra Mega Power Ltd., Nagapattinam-Madhugiri Transmission Company Limited and PFC Capital Advisory Services Limited.

Issue Related Terms

Term Description Allotment/ Allot/ Allotted The issue and allotment of the Bonds to the successful Applicants,

pursuant to the Issue.

Allottee A successful Applicant to whom the Bonds are allotted pursuant to the Issue

Applicant A Resident Individual or an HUF who applies for issuance of Bonds pursuant to the terms of the relevant tranche prospectus and Application Form

Application Amount The aggregate value of the Bonds applied for, as indicated in the Application Form

Application Form The form in terms of which the Applicant shall make an offer to subscribe to the Bonds and which will be considered as the application for Allotment of Bonds in terms of tranche prospectus

Application Interest Interest paid on application money in a manner as more particularly detailed in “Terms of the Issue – Application Interest” on page 31 of this Tranche Prospectus.

Banker(s) to the Issue/ Escrow Collection Bank(s)

The banks which are clearing members and registered with SEBI with whom the Escrow Account will be opened and in this case being State Bank of India, HDFC Bank Limited, IDBI Bank Limited, ICICI Bank Limited, Kotak Mahindra Bank Limited, Axis Bank Limited, Indusind Bank and Dhanlaxmi Bank Limited

2

Bond Certificate(s) Physical Certificate issued to the Bondholder(s) pursuant to Allotment

Bondholder(s) Any person holding the Bonds and whose name appears on the beneficial owners list provided by the Depositories or whose name appears in the Register of Bondholders maintained by the Issuer

Bonds Long term infrastructure bonds, in the nature of secured, redeemable, non- convertible debentures of the Company of face value of ` 5,000 each, having benefits under section 80CCF of the Income Tax Act

BSE Bombay Stock Exchange Limited

Buyback Amount The amount specified as buyback amount for the Bonds under “Issue Structure” on page 25 of this Tranche Prospectus.

Buyback Date The one date falling five years and one day after the Deemed Date of Allotment for Series 1 and Series 2 Bonds, and the date falling seven years and one day after the Deemed Date of Allotment for Series 3 and Series 4 Bonds on which dates the Company shall complete the buyback of the Bonds, as described under “Issue Structure” on page 25 of this Tranche Prospectus.

Buyback Intimation Period The period beginning not more than nine months prior to the Buyback Date and ending not later than six months prior to the Buyback Date

Consolidated Bond Certificate The certificate issued by the Issuer to the Bondholder for the aggregate amount of the Bonds that are applied in physical form or rematerialized and held by such Bondholder

CRISIL CRISIL Limited

Debenture Trust Deed Trust deed to be entered into between the Debenture Trustee and the Company, within three months from the Deemed Date of Allotment

Debenture Trustee/ Trustee Trustee for the Bondholders in this case being PNB Investment Services Limited

Deemed Date of Allotment The Deemed Date of Allotment shall be the date as may be determined by the Board of the Company and notified to the Designated Stock Exchange

Designated Date The date on which Application Amounts are transferred from the Escrow Account to the Public Issue Account or the Refund Account, as appropriate, following which the Board of Directors shall Allot the Bonds to the successful Applicants, provided that the sums received in respect of the Issue will be kept in the Escrow Account up to this date

Designated Stock Exchange BSE

Draft Shelf Prospectus The draft shelf prospectus dated Septemeber 12, 2011 filed by the Company with the Designated Stock Exchange in accordance with the provisions of SEBI Debt Regulations for public comments

Escrow Account Account opened with the Escrow Collection Bank(s) and in whose favour the Applicants will issue cheques or drafts, in respect of the Application Amount when submitting an Application

Escrow Agreement Agreement dated September 21, 2011 to be entered into by the Company, the Registrar to the Issue, the Lead Managers and the Escrow Collection Bank(s) for collection of the Application Amounts and where applicable, refunds of the amounts collected from the Applicants on the terms and conditions thereof

I-Sec ICICI Securities Limited

ICRA ICRA Limited

Issue Public issue of the Bonds, in one or more tranches, for an amount up to

` 6,900 crore, which does not exceed 25% of the incremental infrastructure investment made by the Company in Fiscal 2011.

Issue Closing Date Friday, November 4, 2011

Issue Opening Date Thursday, September 29, 2011

Issue Period The period between the Issue Opening Date and the Issue Closing Date inclusive of both days, during which prospective Applicants may submit their Application Forms

Lead Managers SBI Capital Markets Limited and ICICI Securities Limited

Lock-in Period Five years from the Deemed Date of Allotment

Market / Trading Lot One Bond

Notification Notification No. 50/2011 F.No. 178/43/2011-SO(ITA 1) dated September 9, 2011 issued by the Central Board of Direct Taxes, MoF

NSE National Stock Exchange of India Limited

Prospectus The Shelf Prospectus together with this Prospectus Tranche -1 shall constitute

3

“the Prospectus”

Public Issue Account An account opened with the Banker(s) to the Issue to receive monies from the Escrow Accounts for the Issue on the Designated Date

Record Date Date falling 15 days prior to the date on which interest or the Maturity Amount is due and payable

Refund Account The account opened with the Refund Bank(s), from which refunds, if any, of the whole or part of the Application Amount shall be made

Refund Bank Axis Bank

Refund Interest Interest paid on Application Amount in a manner as more particularly detailed in “Terms of the Issue – Refund Interest ”on page 32 of this Tranche Prospectus.

Register of Bondholders

The register of Bondholders maintained by the Issuer in accordance with the provisions of the Companies Act and as more particularly detailed in “Terms of the Issue – Register of Bondholders” on page 29 of this Tranche Prospectus.

Registrar to the Issue or Registrar

Karvy Computershare Private Limited

Resident Individual An individual who is a person resident in India as defined under the Foreign Exchange Management Act, 1999

SBI Caps SBI Capital Markets Limited

Security The Bonds issued by the Company will be secured by creating a charge on the book debts of the company along with identified immovable property by an first charge/pari pasu charge, as may be agreed between the Company and the Debenture Trustee, pursuant to the terms of the Debenture Trust Deed.

Series 1 Bonds ` 5,000, 8.5 %, non-cumulative Bonds with buyback facility after expiry of the Lock-in Period

Series 2 Bonds ` 5,000, 8.5 %, cumulative Bonds with buyback facility after expiry of the Lock-in Period

Series 3 Bonds ` 5,000, 8.75 %, non-cumulative Bonds with buyback facility after expiry of the Lock-in Period

Series 4 Bonds ` 5,000, 8.75 %, cumulative Bonds with buyback facility after expiry of the Lock-in Period

Shelf Limit

The maximum amount that can be raised under the Shelf Prospectus (i.e. ` 6,900

Crores)

Shelf Prospectus This shelf prospectus dated Septemeber 26, 2011 filed by the Company with the Registrar of Companies, Designated Stock Exchange in accordance with the provisions of SEBI Debt Regulations.

Stock Exchanges BSE & NSE

Terms of the Issue

Terms of the Issue shall include “Issue Structure” “Terms of the Issue” and “Procedure for Application” on page 25, 27 and 42 respectively of this Tranche Prospectus.

Tranche Prospectus / Tranche-1 Prospectus

This Tranche Prospectus dated September 26, 2011 containing inter alia the coupon rate for the Bonds and certain other information filed with the ROC in accordance with the provisions of the Act and the SEBI Debt Regulations

Tripartite Agreements Agreements entered into between the Issuer, Registrar and each of the Depositories under the terms of which the Depositories agree to act as depositories for the securities issued by the Issuer.

Working Days All days excluding Saturdays, Sundays or a public holiday in India or at any other payment centre notified in terms of the Negotiable Instruments Act, 1881

Conventional and General Terms or Abbreviations

Term/Abbreviation Description/ Full Form Act/ Companies Act Companies Act, 1956

ADB Asian Development Bank

AGM Annual General Meeting

AS Accounting Standards as notified under Companies Act

CBDT Central Board of Direct Taxes

CDSL Central Depository Services (India) Limited

CRAR Capital to Risk Assets Ratio

4

Debt Listing Agreement The listing agreement for listing of debt securities on the BSE.

DIN Director Identification Number

DoEA Department of Economic Affairs, Ministry of Finance, Government of India

DoFS Department of Financial Services, Ministry of Finance, Government of India

Depository(ies) CDSL and NSDL

Depositories Act Depositories Act, 1996

DP/ Depository Participant Depository Participant as defined under the Depositories Act, 1996

DRR Debenture Redemption Reserve

DTC Direct Tax Code

FDI Foreign Direct Investment

FEMA Foreign Exchange Management Act, 1999

FII Foreign Institutional Investor (as defined under the SEBI (Foreign Institutional Investors) Regulations, 1995), registered with the SEBI under applicable laws in India

FIMMDA Fixed Income Money Markets and Derivatives Association of India

Financial Year/ Fiscal/ FY Period of 12 months ended March 31 of that particular year

GDP Gross Domestic Product

GoI or Government Government of India

ICAI Institute of Chartered Accountants of India

IFRS International Financial Reporting Standards

Income Tax Act Income Tax Act, 1961, as amended

MoP Ministry of Power, GoI

RBI Reserve Bank of India

Term/Abbreviation Description/ Full Form

India Republic of India

Indian GAAP Generally accepted accounting principles followed in India

IT Information technology

LIBOR London Inter-Bank Offer Rate

MoF Ministry of Finance, GoI

MCA Ministry of Corporate Affairs, GoI

NBFC Non Banking Finance Company, as defined under applicable RBI guidelines

NECS National Electronic Clearing System

NEFT National Electronic Fund Transfer

NSDL National Securities Depository Limited

NSE National Stock Exchange of India Limited

NRI Non Resident Indian

p.a. Per annum

PAN Permanent Account Number

PAT Profit After Tax

PFI Public Financial Institution, as defined under Section 4A of the Companies Act

PMDO Pooled Municipal Debt Obligation

PPP Public Private Partnership

RBI Reserve Bank of India

` or Rupees or Indian Rupees The lawful currency of India

RTGS Real Time Gross Settlement

SARFAESI Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002

SEBI Securities and Exchange Board of India

SEBI Act SEBI Act, 1992

SEBI Debt Regulations SEBI (Issue and Listing of Debt Securities) Regulations, 2008

5

Business / Industry Related Terms

Term/Abbreviation Description/ Full Form ADB Asian Development Bank

ALCO Asset Liability Management Committee

APDRP Accelerated Power Development and Reform Program

AT&C Aggregate technical and commercial losses

CAGR Compounded Annual Growth Rate

CDM Clean Development Mechanism

CEA Central Electricity Authority

DMS Distribution Management System

DPE Department of Public Enterprises, Government of India

ECBs External Commercial Borrowings

FCNR Foreign Currency Non-Resident

IFC Infrastructure Finance Company

IPP Independent Power Producer

ISO International Organization for Standardization

ITP Independent Transmission Project(s)

JNNSM Jawaharlal Nehru National Solar Mission

MNRE Website of the Ministry of New and Renewable Energy

MW Mega Watts

NBFC Non Banking Financial Company

NCDEX National Commodities & Derivatives Exchange Limited

NHPC NHPC Limited

NPAs Non-Performing Assets

NPCIL Nuclear Power Corporation of India Limited

NPEL National Power Exchange Limited

NTPC NTPC Limited

PECAP Power Equity Capital Advisors Private Limited

PEIL Power Exchange India Limited

PSU Public Sector Undertaking

PV Photovoltaic

R-APDRP Restructured Accelerated Power Development and Reform Programme

SEBs State Electricity Boards

SERC State Electricity Regulatory Board(s)

SIA SCADA Implementing agencies

SPU State Power Utilities

SPV Special Purpose Vehicle

TCS Tata Consultancy Services Limited

UMPP Ultra Mega Power Project

USAID United States Agency for International Development

USPP United State Private Placement

Yield Ratio of interest income to the daily average of interest earning assets

6

CERTAIN CONVENTIONS, USE OF FINANCIAL, INDUSTRY AND MARKET DATA AND CURRENCY OF PRESENTATON

This section applies to the extent applicable to information which may be included in this Prospectus Tranche-1.

Certain Conventions All references in this Prospectus Tranche-1 to “India” are to the Republic of India and its territories and possessions. Financial Data Unless stated otherwise, the financial data in this Prospectus Tranche-1 is derived from (i) our audited standalone financial statements, prepared in accordance with Indian GAAP and the Companies Act for the Fiscal 2011, 2010, 2009, 2008 and 2007; and/or (ii) our consolidated financial statements, prepared in accordance with Indian GAAP and the Companies Act for the Fiscal 2011, 2010 and 2009. In this Prospectus Tranche-1, any discrepancies in any table between the total and the sums of the amounts listed are due to rounding off. The current financial year of the Company commences on April 1 and ends on March 31 of the next year, so all references to particular “financial year”, “fiscal year” and “Fiscal” or “FY”, unless stated otherwise, are to the 12 months period ended on March 31 of that year. The degree to which the Indian GAAP financial statements included in this Prospectus Tranche-1/Shelf Prospectus will provide meaningful information is entirely dependent on the reader‘s level of familiarity with Indian accounting practices. Any reliance by persons not familiar with Indian accounting practices on the financial disclosures presented in this Prospectus Tranche-1 should accordingly be limited. Currency and Unit of Presentation In this Prospectus Tranche-1, references to “`” “Rs.”, “Indian Rupees”, “INR” and “Rupees” are to the legal currency of India and references to “US$”, “USD”, and “U.S. dollars” are to the legal currency of the United States of America, references to “Euro” and “€” are to the legal currency of the European Union and references to “Yen” and “JPY” are to the legal currency of Japan. For the purposes of this Prospectus Tranche-1 data has been given as ` Crore, unless otherwise specified. In the Prospectus Tranche-1, any discrepancies in any table between total and the sum of the amounts listed are due to rounding off.

7

FORWARD LOOKING STATEMENTS Certain statements contained in the Prospectus that are not statements of historical fact constitute “forward-looking statements”. Investors can generally identify forward-looking statements by terminology such as “aim”, “anticipate”, “believe”, “continue”, “could”, “estimate”, “expect”, “intend”, “may”, “objective”, “plan”, “potential”, “project”, “pursue”, “shall”, “seek”, “should”, “will”, “would”, or other words or phrases of similar import. Similarly, statements that describe our strategies, objectives, plans or goals are also forward-looking statements. All statements regarding our expected financial conditions, results of operations, business plans and prospects are forward-looking statements. These forward-looking statements include statements as to our business strategy, revenue and profitability, new business and other matters discussed in this Prospectus Tranche-1 that are not historical facts. All forward-looking statements are subject to risks, uncertainties and assumptions about us that could cause actual results to differ materially from those contemplated by the relevant forward-looking statement. Important factors that could cause actual results to differ materially from our expectations include, among others:

• growth prospects of the Indian infrastructure sector and related policy developments;

• general, political, economic, social and business conditions in Indian and other global markets;

• our ability to successfully implement our strategy, growth and expansion plans;

• competition in the Indian and international markets;

• availability of adequate debt and equity financing at reasonable terms;

• performance of the Indian debt and equity markets;

• changes in laws and regulations applicable to companies in India, including foreign exchange control regulations in India; and

• other factors discussed in the Shelf Prospectus, including under “Risk Factors”. on page 8. Additional factors that could cause actual results, performance or achievements to differ materially include, but are not limited to, those discussed under “Our Business” on page 59 of the Shelf Prospectus. The forward-looking statements contained in this Prospectus Tranche-1 are based on the beliefs of management, as well as the assumptions made by, and information currently available to, management. Although we believe that the expectations reflected in such forward-looking statements are reasonable at this time, we cannot assure investors that such expectations will prove to be correct. Given these uncertainties, investors are cautioned not to place undue reliance on such forward-looking statements. If any of these risks and uncertainties materialize, or if any of our underlying assumptions prove to be incorrect, our actual results of operations or financial condition could differ materially from that described herein as anticipated, believed, estimated or expected. All subsequent forward-looking statements attributable to us are expressly qualified in their entirety by reference to these cautionary statements.

8

THE ISSUE

The following is a summary of the terms of the Bonds. This section should be read in conjunction with, and is qualified in its entirety by, more detailed information in “Issue Structure” and “Terms of the Issue” on page 25 and 27 respectively of this Tranche Prospectus.

COMMON TERMS FOR ALL SERIES OF THE BONDS

Issuer Power Finance Corporation Limited

Issue of Bonds Public Issue of ‘long term infrastructure bonds’ of face value of ` 5,000 each, in the nature of secured, redeemable, non-convertible debentures, having tax benefits under section 80CCF of the Income Tax Act, 1961, as amended, aggregating ` 200 crores with an option to retain an oversubscription upto the Shelf Limit (i.e. ` 6,900 crores), which does not exceed 25% of the incremental infrastructure investment made by the Company in Fiscal 2011.

Face Value (`) ` 5,000

Issue Price (`) ` 5,000

Minimum

Application One Bond

Market Lot /

Trading Lot One Bond

Pay-in Date Application Date (Full Application Amount is payable on Application)

Ratings “AAA/Stable” from CRISIL and “AAA with stable outlook” from ICRA

Listing BSE

Security The Bonds issued by the Company will be secured by creating a charge on the book debts of the company along with identified immovable property by an first charge/pari pasu charge, as may be agreed between the Company and the Debenture Trustee, pursuant to the terms of the Debenture Trust Deed.

Debenture Trustee PNB Investment Services Limited

Depositories Central Depository Services (India) Limited (“CDSL”) and National Securities Depository Limited (“NSDL”)

Registrar Karvy Computershare Private Limited

Modes of Payment

for Applicants

1. At par cheques 2. Demand drafts

Issuance# In dematerialized form and physical form

Lock-In Period Five years from the Deemed Date of Allotment

Trading In dematerialized form only following expiry of the Lock-in Period

Issue

Opening

Date Thursday, September 29, 2011

Issue

Closing

Date*

Friday, November 4, 2011, except that the Issue may close on such date as may be decided by the Board. In the event of an early closure of the Issue , the Company shall ensure that notice is provided to the prospective investors through newspaper advertisements, at least three days prior to such earlier date of Issue closure.

Deemed

Date of

Allotment

The Deemed Date of Allotment shall be the date as may be determined by the Board of the Company and notified to the BSE.

Lead Managers SBI Caps, I-Sec

* The Issue shall remain open for subscription during banking hours for the period indicated above. # In terms of Regulation 4(2)(d) of the Debt Regulations, the Company will make public issue of the Bonds in the

dematerialised form. However, in terms of Section 8 (1) of the Depositories Act, the Company, at the request of the

Investors who wish to hold the Bonds in physical form will fulfil such request.

9

SPECIFIC TERMS FOR EACH SERIES OF BONDS

Series 1 2 3 4

Face Value per Bond ` 5,000 ` 5,000 ` 5,000 ` 5,000

Frequency of Interest

payment

Annual Cumulative Annual Cumulative

Buyback Facility Yes Yes Yes Yes

Buyback Date One date, being the date falling five years and one day from the Deemed Date of Allotment

One date, being the date falling five years and one day from the Deemed Date of Allotment

One date, being the date falling seven years and one day from the Deemed Date of Allotment

One date, being the date falling seven years and one day from the Deemed Date of Allotment

Buyback Amount ` 5,000 per Bond and accrued interest calculated from the last interest payment date to the Buyback Date

` 7,519 per Bond and interest on Application Interest compounded annually at 8.5 %

` 5,000 per Bond and accrued interest calculated from the last interest payment date to the Buyback Date

` 8,995 per Bond and interest on Application Interest compounded annually at 8.75%

Buyback Intimation

Period

The period beginning not more than nine months prior to the Buyback Date and ending not later than six months prior to the Buyback Date

The period beginning not more than nine months prior to the Buyback Date and ending not later than six months prior to the Buyback Date

The period beginning not more than nine months prior to the Buyback Date and ending not later than six months prior to the Buyback Date

The period beginning not more than nine months prior to the Buyback Date and ending not later than six months prior to the Buyback Date

Interest Rate p.a (%) 8.5% 8.5% 8.75% 8.75%

Redemption/Maturity

Date

One date, being the date falling ten years from the Deemed Date of Allotment

One date, being the date falling ten years from the Deemed Date of Allotment

One date, being the date falling fifteen years from the Deemed Date of Allotment

One date, being the date falling fifteen years from the Deemed Date of Allotment

Maturity Amount ` 5,000 per Bond and accrued interest calculated from the last interest payment date to the maturity date

` 11,305 per Bond and interest on Application Interest compounded annually at 8.50%

` 5,000 per Bond and accrued interest calculated from the last interest payment date to the maturity date

`17,596 per Bond andinterest on Application Interest compounded annually at 8.75%

*As per the condition stipulated under the Notification the yield on the Bonds(to be paid by the Issuer) shall not exceed

the yield on government securities of corresponding residual maturity, as reported by FIMMDA, as on the last working

day of the month immediately preceding the month of the issue of the Bonds.

For various modes of interest payment, see “Terms of the Issue – Modes of Payment” on page 35 of this Tranche Prospectus.

IN TERMS OF THE NOTIFICATION, THE BONDS ARE CLASSIFIED AS ‘LONG TERM

INFRASTRUCTURE BONDS’, HAVING BENEFITS UNDER SECTION 80CCF OF THE INCOME TAX

ACT. IN ACCORDANCE WITH SECTION 80CCF OF THE INCOME TAX ACT, THE AMOUNT, NOT

EXCEEDING ` 20,000, PAID OR DEPOSITED AS SUBSCRIPTION TO ‘LONG-TERM INFRASTRUCTURE

BONDS’ DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR BEGINNING

APRIL 1, 2012 SHALL BE DEDUCTED IN COMPUTING THE TAXABLE INCOME OF A RESIDENT

INDIVIDUAL OR HUF. IN THE EVENT THAT ANY APPLICANT APPLIES FOR THE BONDS IN EXCESS

OF ` 20,000, (INCLUDING LONG TERM INFRASTRUCTURE BONDS BY ANY OTHER ELIGIBLE

ENTITY) THE AFORESTATED TAX BENEFITS SHALL BE AVAILABLE TO SUCH APPLICANT ONLY

TO THE EXTENT OF ` 20,000.

10

RECENT DEVELOPMENTS

There are no recent developments in relation to the Company as disclosed in the Prospectus and the sections titled “Risk Factors”, “Selected Financial information”, “Capital Structure”, “Our Business”, “Our Management”, “Our Promoter”, “Our Subsidiaries”, “Financial Indebtedness”, “Outstanding Litigations and Material Developments” and “Main Provisions of the Articles of Association of the Company” which would make them misleading in any material respect. All disclosures made in this Prospectus Tranche-1, read together with the Shelf Prospectus as the “Prospectus” with respect to this Tranche-1 Issue are true, fair and adequate to enable the investors to make a well informed decision as to the investment in this proposed Tranche-1 Issue. The Prospectus is true and correct in all material respects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other material facts, the omission of which makes the Prospectus as a whole or any such information or the expression of any such opinions or intentions misleading in any material respect.

11

GENERAL INFORMATION

Our Company was incorporated on July 16, 1986 as a public limited company under the Companies Act. We received a certificate for commencement of business on December 31, 1987. The GoI incorporated our Company as a financial institution in order to finance, facilitate and promote power sector development in India with the President of India holding 100% of our equity share capital at the time of incorporation and at present its shareholding is 73.72%.

Registered and Corporate Office

‘Urjanidhi’, 1, Barakhamba Lane, Connaught Place, New Delhi- 110 001, India. Tel.: +91 11 2345 6000 Fax: +91 11 2341 2545 Website: www.pfc.gov.in

Registration

Details Registration/Identification number

Registration Number 24862

Corporate Identity Number L65910DL1986GOI024862

RBI Registration Number classifying Company as Infrastructure Finance Company

B-14.00004

For details on changes in our Registered Office, see “History and Certain Corporate Matters” on page 91 of the Shelf Prospectus.

Address of the Registrar of Companies

Our Company is registered at the office of:

The Registrar of Companies National Capital Territory of Delhi and Haryana 4th Floor, IFCI Tower, 61, Nehru Place New Delhi 110 019, India Tel: +91 (11) 2623 5704 Fax: +91 (11) 2623 5702

Company Secretary and Compliance Officer

Mr. J. S. Amitabh, ‘Urjanidhi’, 1, Barakhamba Lane, Connaught Place, New Delhi 110 001, India Tel: +91 11 2345 6000 Fax: +91 11 2345 6285 E-mail: infrabonds11-12@pfcindia.com Website: www.pfc.gov.in

Investors may contact the Compliance Officer or the Registrar to the Issue in case of any pre-Issue or post-Issue

related problems such as non-receipt of letters of allotment, credit of allotted Bonds in the respective beneficiary

account or refund orders, etc.

12

LEAD MANAGERS

SBI Capital Markets Limited* 202, Maker Tower E Cuffe Parade Mumbai 400 005, India Tel: +91 (22) 2217 8300 Fax: +91 (22) 2218 8332 Email: pfc2011@sbicaps.com Investor Grievance Email: investor.relations@sbicaps.com Website: www.sbicaps.com Contact person: Mr. Puneet Deshpande Compliance Officer: Mr. Bhaskar Chakraborty SEBI Registration No.: INM000003531

ICICI Securities Limited ICICI Centre, H.T. Parekh Marg Churchgate Mumbai 400 020, India Tel: +91 (22) 2288 2460/ 70 Fax: +91 (22) 2282 6580 Email: pfcbondissue2011@icicisecurities.com Investor Grievance Email: customercare@icicisecurities.com Website: www.icicisecurities.com Contact person: Mr. Manvendra Tiwari Compliance Officer: Mr. Subir Saha SEBI Registration No.: INM000011179

*The SEBI registration of one of the Lead Managers to the issue, SBI Capital Markets Limited was valid up to

July 31, 2011. The application for renewal of the certificate of registration in the prescribed manner has been

made by SBI Capital Markets Limited on April 29, 2011, to SEBI, three months before the expiry of the

period of the certificate as required under Regulation 9(1) of the SEBI (Merchant Bankers) Regulations,

1992. The approval of SEBI in this regard is currently awaited.”

DEBENTURE TRUSTEE TO THE BONDHOLDERS

PNB Investment Services Limited 10, Rakeshdeep Building, Yusuf Sarai, Commercial Complex, Gulmohar Enclave, New Delhi – 110049, India Tel: +91 (11) 49495050 Fax: +91 (11) 41035057 Email: trustee@pnbisl.com Website: www.pnbisl.com Contact Person: Mr. J. K. Agarwal SEBI Registration No.: IND000000510

REGISTRAR TO THE ISSUE

Karvy Computershare Private Limited “Karvy House” 46, Avenue 4, Street No. 1, Banjara Hills, Hyderabad- 500 034, India. Tel: 1-800- 345 4001 Fax: +91 (40) 23431551 Email: pfcinfrabonds@karvy.com Website: www.karvy.com Contact Person: Mr. Murali Krishna

SEBI Registration No.: INR000000221

STATUTORY AUDITORS

Raj Har Gopal & Co. Chartered Accountants 412, Ansal Bhawan, 16, K.G. Marg, New Delhi 110001, India Tel: +91 (11) 4152 0698/ 4152 0699

N.K. Bhargava & Co. Chartered Accountants C-31, Acharya Nikaten, 1st Floor, Opp Pocket One, Mayur Vihar, Phase One, New Delhi – 110091, India Tel: +91 (11) 22793650, 22752376

13

Email: rajhargopal@hotmail.com Firm Registration No.: 002074N

Email: nkbhargavacompany@yahoo.co.in Firm Registration No.: 000429N

LEGAL ADVISORS TO THE ISSUE

JurisPrudent Consulting Partners First Floor, C-17, Community Centre, Janakpuri, New Delhi 110 058, India Tel.: +91 (11) 3200 0177 Fax: +91 (11) 4158 8441 E-mail: corporate@jurisprudentconsulting.in Contact Person: Mr. Ajay Jain

ESCROW COLLECTION BANKS / BANKERS TO THE ISSUE

State Bank of India

Capital Management Product-SBI F.A.S.T., 31, Mahal Industrial Esate, Off. Mahakali Caves Road, Andheri (East) , Mumbai-400 093 Tel: +91 (22) 2867 4805 Fax: +91 (22) 2867 5060 Email: agmpi.cmp@sbi.co.in Contact Person: Mr. Ejaz Hussain Website:www.statebankofindia.com SEBI Registration No.: INBI00000038

HDFC Bank

HDFC Bank Limited, FIG-OPS Department,Lodha I, Think Techno Campus, O-3-Level, Next to Kanjumarg Railway Station, Kanjumarg (East) Mumbai 400 042 Tel: +91 (22) 3075 2928 Fax: +91 (22) 2579 9801 Email:deepak.rane@hdfcbank.com,figdelhi@hdfcbank.com,himanshu.arora@hdfcbank.com, ajit.mann@hdfcbank.com Contact Person: Mr. Deepak Rane Website:www.hdfcbank.com SEBI Registration No.: INBI00000063

IDBI Bank Limited

Unit No. 2, Corporate Park, Near Swastik Chambers Sion-Trombay Road, Chembur, Mumbai 400 071 Tel: +91 (22) 6690 8402 Fax: +91 (22) 2528 6173 Email:v.jayananthan@idbi.co.in Contact Person: Mr. V.Jayananthan Website:www.idbibank.com SEBI Registration No.: INBI00000076

ICICI Bank Limited

9 A, Phelps Building, A-Block, Connaught Place, New Delhi-110 001 Tel: +91 (11) 6631 0336/ 6631 0322 Fax: +91 (11) 66310410/ 66310350 Email:abhay.s@icicibank.com, mohit.sa@icicibank.com, anil.gadoo@icicibank.com Contact Person: Mr. Abhay Singh/Mr.Mohit Saxena/Mr.Anil Gadoo Website:www.icicibank.com SEBI Registration No.: INBI00000004

Kotak Mahindra Bank Limited

5th Floor, Dani Corporate Park, 158 CST Road Kalina, Santacruz (E), Mumbai 400 098 Tel: +91 (22) 6759 5336 Fax: +91 (22) 6759 5374 Email: amit.kr@kotak.com Contact Person: Mr. Amit Kumar Website:www.kotak.com SEBI Registration No.: INBI00000927

Axis Bank Limited

148, Statesman House, Barakhamba Road New Delhi 110 001 Tel: +91 (11) 2331 1043 / 4152 1301 Fax: +91 (11) 2331 1054 Email:newdelhi.branchhead@axisbank.com,amit.mishra@axisbank.com Website:www.axisbank.com Contact Person: Mr. Sandeep Kumar/Ashish Dhall SEBI Registration No.: INBI00000017

14

Dhanlaxmi Bank Limited.

Janmabhoomi Bhavan, Janmabhoomi Marg, Fort, Mumbai-400 001 Tel. : 022 - 22022535 / 61541857 Fax : 022 -22871637 /61541725 Email:venkataraghavan.ta@dhanbank.co.in Contact Person : Mr. Venkataraghavan.T.A Website:www.dhanbank.com SEBI Registration No. : INBI00000025

IndusInd Bank

CMS-Hub, Solitaire Corporate Park, No. 1001, Building No. 10, Ground Floor, Guru Hargovindji Marg, Andheri East, Mumbai - 400093 Tel. : (+91) (22) 6772 3943/42/41 Fax : (+91) (11) 6623 8021/6772 Email: : sanjay.vasarkar@indusind.com Contact Person : Mr. Sanjay Vasarkar Website:www.indusind.com SEBI Registration No. : INBI00000002

LEAD BROKERS TO THE ISSUE

Almondz Global Securities Limited Address: 2nd floor, 3 Scindia House, Janpath, New Delhi 110001 Tel: 011-41514666-669 Fax: 011- 41514665

Email: vikas.galhotra@almondz.com Contact Person: Mr Vikas Galhotra SEBI Registration: MB/INM 000000834 BSE Registration: INB011225233

Bajaj Capital Investor Services Limited Address: 5th floor, Bajaj House, 97, Nehru Place, New Delhi 110019 Tel: 011-6616 1111 Fax: 011- 6660 8888

Email: surajitm@bajajcapital.com Contact Person: Mr Surajit Mishra BSE Registration: INB231269334

Edelweiss Broking Ltd. Address: Edelweiss House Off, C.S.T Road, Kalina, Mumbai 400098 Tel: +91 22 67471341, 9930362969 Fax: +91 6747 1347

Email: amit.dalvi@edelcap.com Contact Person: Mr. Amit Dalvi SEBI Registration: INB/INF/INE231311631(NSE) & INB011311637(BSE) BSE Registration: 3261

Enam Securities Pvt. Ltd. Address: Khatau Building, 2nd Floor, 44 Bank Street, Fort, Mumbai 400 001 Tel: +91 22 22677901 Fax: +91 22 22665613

Email: ajays@enam.com, vinay@emam.com Contact Person: Mr. Ajay Sheth/ Vinay Ketkar SEBI Registration: MB/INM000006856 BSE Registration: INB011287852

HDFC Securities Limited Address: Office Floor 8, ‘I Think’ Building, Jolly Board Campus, Opposite Crompton Greaves Factory, Kanjumarg (East) Mumbai 400 042 Tel: +91 (22) 3075 3442 Fax: +91 (22) 3075 3435 Email:sunil.raula@hdfcsec.com, priya.rushi@hdfcsec.com Contact Person: Mr. Sunil Raula SEBI Registration: 11094 NSE Registration INB231109431 BSE Registration: INB011109437

ICICI Securities Limited Address: ICICI Centre, H. T. Parekh Marg, Churchgate, Mumbai 400 020 Tel: +91 (22) 2288 2460 Fax: +91 (22) 2282 6580 Email: pfcbondissue2011@icicisecurities.com Contact Person: Mr. Mitesh Shah NSE SEBI Registration INB230773037 BSE SEBI Registration: INB011286854

IDBI Capital Market Services Ltd Address: Mafatlal centre, (III Floor), Nariman Point, Mumbai 400021 Tel: 022 43221212 Fax: 022 22850785

Integrated Securities Ltd. Address: 1691/36, Naiwala, (II Floor), Arya Samaj Road, Karolbagh, New Delhi 110005 Tel: 011 45170340

15

Email: rameshngs@idbicapital.com Contact Person: Mr N.G.S. Ramesh SEBI NSE Registration: INB230706631 BSE Registration: INB010706639

Fax: 011 28750478 Email: sudhakar.l@iepindia.com Contact Person: Mr L.Sudhakar NSE SEBI Registration INB231271835 BSE SEBI Registration: INB011271831

JM Financial Services Private Limited Address: 141 Maker Chamber III, Nariman Point Mumbai 400021 Tel: +91 (22) 3021 3500/ 22665577-80 Fax: +91 (22) 2266 5902 Email: rohit.singh@jmfinancial.in Contact Person: Mr. Rohit Singh SEBI Registration: NSE SEBI Reg No INB 231054835, INF 2310 54835, INE 2310 54835 BSE Registration: BSE SEBI Reg No: INB 01105 4831, INF 0110 54831

Karvy Stock Broking Ltd Address: 46, Avenue 4, Street No.1, Banjara Hills, Hyderabad 500 034 Tel: +91 40 23312454 Fax: +91 40 66621474 Email: ksblredressal@karvy.com Contact Person: Mr. Ramapriyan PB SEBI Registration: INB 230770138 BSE Registration: INB 010770138

LKP Securities Limited Address: Bank Of Maharashtra Bldg., 45/47, B S Marg, Fort, Mumbai 400001 Tel: 2266 0171 / 2265 9375 / 2266 2527 2266 3963 Fax: 2269 4480 Email:dinesh_waghela@lkpsec.com / ipo@lkpsec.com Contact Person: Mr.Dinesh K Waghela SEBI Registration: NSE INB/INF 230720030BSE Registration: BSE INB/INF 010675433

NJ IndiaInvest Private Limited Address: BANK 901, NJ Centre, Udna Udyog Nagar, Sangh Sahkari Complex, Central Road No. 10, Udna, Surat 394210 Tel: +91 (261) 398 5500 Fax: +91 (261) 398 5880 Email: husaini@njindiainvest.com Contact Person: Mr. Husaini Kanchwala SEBI Registration: INB011360535 (BSE); INB231360539 (NSE)

Religare Securities Limited Address: A3/4/5 GYS Global, Sector 125, Noida 201301 Tel: 0120-3394178 Fax: 0120-3394144 Email: chand.subash@religare.com Contact Person: Subash Bhardwaj SEBI Registration: INB 230653732 BSE Registration : INB010653732

RR Equity Brokers Pvt. Ltd Address: 47, M.M. Road, Jhandewalan, New Delhi 110055 Tel: +91 11 23636362 Fax: +91 11 23636666 Email: ravigoyal@rrfcl.com Contact Person: Mr. Ravi Goyal SEBI Registration: NSE- INB 231219636 BSE Registration : INB011219632

SBICAP Securities Limited Regd Address: 191, 19th Floor, Maker Tower - ‘F’, Cuffe Parade, Mumbai 400005 Corr Address: Mafatlal Chambers, 2nd floor, C wing, N M Joshi Marg, Lower Parel, Mumbai 400013 Tel: 022- 4227 3446 Fax: 022 4227 3391 Email: archana.dedhia@sbicapsec.com Contact Person: Archana Dedhia SEBI Registration: INB 231052938 BSE Registration : INB 011053031

Standard Chartered Securities (India) Ltd

Address: Standard Chartered Tower, 201-B/1, (I Floor), Western Express Highway, Goregaon (East), Mumbai 400063 Tel: 022-67559604 Fax: 022-67559607

Email: sanjay.rajoria@sc.com Contact Person: Mr Sanjay Rajoria NSE Registration: INB 231333338 BSE Registration: INB 011333334

SMC Global Securities Ltd Address: 17, Netaji Subhash Chandra Marg (opposite Golcha cinema), Daryaganj, New Delhi. Tel: 022-66070400

SPA Securities Ltd

Address: 25-C Block community centre, Janakpuri, New Delhi 110058 Tel: 011-45586642

16

Fax: 022-23263297

Email: mkg@smcindiaonline.com Contact Person: Mr Mahesh Gupta SEBI Registration: 23/07714-31 BSE Registration: INB 011343937

Fax: 011-45586606

Email: ashok.garg@spagroupindia.com Contact Person: Mr Ashok Garg SEBI Registration: INB 231178238 BSE Registration: INB 011178234

BANKERS TO THE COMPANY

State Bank of India

Chanderlok Building branch, 36, Janpath, New Delhi - 110 001, India. Tel: +91 (11) 2332 9831 Fax: +91 (11) 2373 9198 Email: sbi.01639@sbi.co.in Website : www.statebankofindia.com Contact Person: Mr. Rajinder Seth

Bank of India

P.T.I Builiding, 4, Sansad Marg, New Delhi – 110 001 Tel: +91 (11) 23765124, 23765125, 23765126 Fax: +91 (11) 23765123 Email: LargeCorporateBr.NewDelhi@bankofindia.co.in Website: www.bankofindia.com Contact Person: Mr. C.M. Sharma

IDBI Bank Limited

Indian Red Cross Building, 1, Red Cross Road, New Delhi - 110 001, India. Tel: +91 (11) 6628 1025 Fax: +91 (11) 2375 2730 Email: jaiprakash_nathaniel@idbi.co.in Website: www.idbi.com Contact Person: Mr. Jai Prakash Nathaniel

ICICI Bank Limited

9-A, Phelps Building, A – Block, Connaught Place, New Delhi - 110 001, India. Tel: +91 (11) 6631 0336 Fax: +91 (11) 6631 0410 Email: abhay.s@icicibank.com, mohit.sa@icicibank.com Website: www.icicibank.com Contact Person: Mr. Abhay Singh, Mr. Mohit Saxena

HDFC Bank Limited

FIG – OPS Department, - Lodha, I Think Techno Campus, O-3 Level, Next to Kanjurmarg Railway Station, Kanjurmarg (East), Mumbai – 400 042, India. Tel: +91 (22) 3075 2928 Fax: +91 (22) 2579 9801 Email: figdelhi@hdfcbank.com, kulpreet.behl@hdfcbank.com Website: www.hdfcbank.com Contact Person: Mr. Uday Dixit

Andhra Bank

M-35, Connaught Circus branch, New Delhi - 110 001, India. Tel: +91 (11) 23415616 Fax: +91 (11) 2341 6043 Email: bmdel084@andhrabank.co.in Website: www.andhrabank.in Contact Person: Mr. B L Gupta

CREDIT RATING AGENCIES

CRISIL Limited CRISIL House, Central Avenue Hiranandani Business Park, Powai, Mumbai 400 076, India Tel: +91 (22) 3342 3000 Fax: +91 (22) 3342 3050 Website: www.crisil.com

ICRA Limited Building No. 8, 2nd Floor, Tower A, DLF Cyber City, Phase- II, Gurgaon 122 002, India Tel: +91 (124) 4545 300 Fax: +91 (124) 4545 350 Website: www.icra.in

17

Credit Rating and Rationale

Letter dated August 25, 2011 of CRISIL assigning ‘AAA/Stable’ (Pronounced ‘Triple A with stable outlook’) rating for our infrastructure bonds aggregating to ` 6,900 crores and letter dated September 7, 2011 of ICRA assigning ‘AAA’ with a ‘Stable’ outlook for our long-term infrastructure bonds of ` 6,900 crores (part of ` 27,500 crores long term borrowings programmes for the financial year 2011-12). For details in relation to the rationale for the credit rating by CRISIL and ICRA, see Annexure II of the Shelf Prospectus

Expert Opinion

Except the letters dated August 25, 2011 and September 7, 2011 issued by CRISIL and ICRA, respectively, in respect of the credit rating for the Bonds, and the report dated August 27, 2011 on our financial statements as disclosed in the Shelf Prospectus as Annexure-I and Annexure-II respectively and statement of tax benefits dated August 27, 2011 issued by Raj Har Gopal & Co. and N.K. Bhargava & Co., Statutory Auditors of the Company, the Company has not obtained any expert opinion.

Minimum Subscription

In terms of the SEBI Debt Regulations, an issuer undertaking a public issue of debt securities is required to disclose the minimum amount of subscription that it proposes to raise through the issue in the offer document. In the event that an issuer does not receive the minimum subscription disclosed in the offer, all application monies received in the public issue are required to be refunded forthwith. The Company has decided to set no minimum subscription for this Tranche-1.

Issue Programme

The Issue shall remain open for subscription during banking hours for the period indicated below, except that the Issue may close on such date as may be decided by the Board. In the event of an early closure of the Issue, the Company shall ensure that notice is provided to the prospective investors through newspaper advertisements at least three days prior to such earlier date of Issue closure.

ISSUE PROGRAMME

ISSUE OPENS ON ISSUE CLOSES ON

THURSDAY, SEPTEMBER 29, 2011 FRIDAY, NOVEMBER 4, 2011

18

OBJECTS OF THE ISSUE

Issue Proceeds

This is a public issue of ‘long term infrastructure bonds’ of face value of ` 5,000 each, in the nature of secured, redeemable, non-convertible debentures, having benefits under section 80CCF of the Income Tax Act, 1961, as amended, aggregating ` 200 crores with an option to retain an oversubscription upto the (i.e.` 6,900 crores) which does not exceed 25% of incremental infrastructure investment made by the Company in Fiscal 2011. The funds raised through this Issue will be utilized towards ‘infrastructure lending’ as defined by the RBI in the regulations issued by it from time to time, after meeting the Issue expenses.

The Bonds will be in the nature of debt and will be eligible for capital allocation and accordingly will be utilized in accordance with statutory and regulatory requirements including requirements of the MoF.

The main objects clause of our Memorandum of Association permits our Company to undertake its existing activities as well as the activities for which the funds are being raised through this Issue.

In accordance with the SEBI Debt Regulations, our Company will not utilize the proceeds of the Issue for providing loans to or acquisition of shares of our Subsidiaries. Further, our Company is a public sector enterprise and, as such, we do not have any identifiable ‘group’ companies or ‘companies under the same management’.

The Issue proceeds shall not be utilized towards full or part consideration for the purchase or any acquisition, including by way of a lease, of any property.

Issue Expenses

A portion of the Issue proceeds will be used to meet Issue expenses. The estimated issue expenses for Tranche-1 is approximately ` 6.36 Crores, the breakup of which is given as under:-

Particulars Amount

(` in Crores)

Percentage of net proceeds

(Issue proceeds less Issue

expenses) of the Issue (in

%)

Percentage of total

expenses of the Issue

(in %)

Fees payable to Intermediaries Lead Managers

0.18

0.0900%

2.83%

Registrar to the Issue

0.55

0.2750%

8.65%

* Advisors

0.07

0.0347%

1.09%

* Debenture Trustee

0.06

0.0290%

0.91%

Advertising and Marketing

0.50

0.2500%

7.87%

Selling and Brokerage commission

3.50

1.7500%

55.06%

Other Miscellaneous Expenses

1.50

0.7500%

23.60%

Total

6.36

3.1786%

100.00%

*Includes fees payable for all the tranches under the Shelf Prospectus.

Monitoring of Utilization of Funds

In terms of the SEBI Debt Regulations, there is no requirement for appointment of a monitoring agency in relation to the use of proceeds of the Issue. Our Board of Directors shall monitor the utilisation of the proceeds of the Issue. Our Company will disclose in our financial statements for the relevant fiscal commencing from Fiscal 2012, the utilization of the proceeds of the Issue under a separate head along with any details in relation to all such proceeds of the Issue that have not been utilized thereby also indicating investments, if any, of such unutilized proceeds of the Issue. The Company shall also file these along with term sheets to the Infrastructure Division, Department of Economic Affairs, MoF, within three months from the end of financial year. We shall utilize the proceeds of the Issue only upon the execution of the documents for creation of security as stated in this Tranche Prospectus in the section titled ― ”Terms

of the Issue – Security” on page 37 and upon the listing of the Bonds.

19

STATEMENT OF TAX BENEFITS

Raj Har Gopal & Co. N.K.Bhargava & Co.

Chartered Accountants, Chartered Accountants,

412, Ansal Bhawan, C-31, Ist Floor, Acharya Niketan,

16, K.G. Marg Mayur Vihar Phase-I

New Delhi – 110 001 New Delhi – 110 091.

Ph no.011 41520698,41520699 Ph no. 011 22752376

E-mail:rajhargopal@hotmail.com E-mail: nkbhargavacompany@yahoo.co.in

Under the current tax laws, the following possible tax benefits, inter alia, will be available to the Debenture Holder.

This is not a complete analysis or listing of all potential tax consequences of the subscription, ownership and disposal

of bond, under the current tax laws presently in force in India. The benefits are given as per the prevailing tax laws and

may vary from time to time in accordance with amendments to the law or enactments thereto. The Debenture Holder is

advised to consider in his own case the tax implications in respect of subscription to the Debentures after consulting his

tax advisor as alternate views are possible. We are not liable to the Debenture Holder in any manner for placing

reliance upon the contents of this statement of tax benefits.

A. INCOME TAX

1. Deduction u/s 80CCF

(a) According to section 80CCF, an amount not exceeding Rupees twenty thousand invested in long term

infrastructure bonds shall be allowed to be deducted from the total income of an Individual or Hindu Undivided Family. This deduction shall be available over and above the aggregate limit of Rs. One Lakh as provided under sections 80C, 80CCC and 80CCD read with section 80CCE;

(b) Section 80CCF reads as “In computing the total income of an assessee, being an individual or a Hindu

undivided family, there shall be deducted, the whole of the amount, to the extent such amount does not exceed twenty thousand rupees, paid or deposited, during the previous year relevant to the assessment year beginning on the 1st day of April, 2012, as subscription to long term infrastructure bonds as may, for the purposes of this section, be notified by the Central Government

2. No income tax is deductible at source on interest on debentures as per the provisions of section 193 of the

I.T. Act in respect of the following:

(a) In case the payment of interest on debentures to resident individual Debenture Holder by company by an account payee cheque and such debentures being listed on a recognized stock exchange in India, provided the amount of interest or the aggregate of the amounts of such interest paid or likely to be paid during the financial year does not exceed Rs 2500;

(b) When the Assessing Officer issues a certificate on an application by a Debenture Holder on

satisfaction that the total income of the Debenture Holder justifies nil/lower deduction of tax at source as per the provisions of Section 197(1) of the I.T. Act and that certificate is filed with the Company before the prescribed date of closure of books for payment of bond interest.

(c) When the resident Debenture Holder (not being a company or a firm or a senior citizen) submits a

declaration to the payer in the prescribed Form 15G verified in the prescribed manner to the effect that the tax on his estimated total income of the financial year in which such income is to be included in computing his total income will be ‘nil’ as per the provisions of Section 197A (1A) of the I.T. Act. Under Section 197A (1B) of the I.T. Act, Form 15G cannot be submitted nor considered for exemption from deduction of tax at source if the aggregate of income of the nature referred to in the said section, viz. dividend, interest, etc as prescribed therein, credited or paid or likely to be credited or paid during the financial year in which such income is to be included exceeds the maximum amount which is not chargeable to tax. To illustrate, the maximum amount of income not chargeable to tax in case of individuals (other than women assessees and senior citizens) and HUFs is Rs 180,000, in case of women assesses is Rs.190, 000, in case of senior citizen who are 60 or more years of age is Rs. 250,000 and in case of senior citizen who are 80 or more years of age is Rs. 500,000 for financial year 2011-12. Senior citizens, who are 60 or more years of age at any time during the

20

financial year, enjoy the special privilege to submit a self declaration to the payer in the prescribed Form 15H for non-deduction of tax at source in accordance with the provisions of section 197A (1C) of the I.T. Act even if the aggregate income credited or paid or likely to be credited or paid exceed the maximum amount not chargeable to tax i.e. Rs 250,000 or Rs. 5,00,000 for very senior citizen for FY 2011-12, provided tax on his estimated total income of the financial year in which such income is to be included in computing his total income will be nil.

(d) On any securities issued by a company in a dematerialized form listed on recognized stock exchange

in India. (w.e.f. 1.06.2008). In all other situations, tax would be deducted at source as per prevailing provisions of the I.T. Act;

3. Under section 2 (29A) of the I.T. Act, read with section 2 (42A) of the I.T. Act, a listed debenture is treated as a long term capital asset if the same is held for more than 12 months immediately preceding the date of its transfer.

Under section 112 of the I.T. Act, capital gains arising on the transfer of long term capital assets being listed securities are subject to tax at the rate of 20% of capital gains calculated after reducing indexed cost of acquisition or 10% of capital gains without indexation of the cost of acquisition. The capital gains will be computed by deducting expenditure incurred in connection with such transfer and cost of acquisition/ indexed cost of acquisition of the debentures from the sale consideration.

In case of an individual or HUF, being a resident, where the total income as reduced by the long term capital gains is below the maximum amount not chargeable to tax i.e. Rs 180,000 in case of all individuals, Rs 190000 in case of women, Rs 250,000 in case of senior citizens and Rs. 500,000 in case of very senior citizens, the long term capital gains shall be reduced by the amount by which the total income as so reduced falls short of the maximum amount which is not chargeable to income-tax and the tax on the balance of such long-term capital gains shall be computed at the rate of ten per cent in accordance with and the proviso to sub-section (1) of section 112 of the I.T. Act read with CBDT Circular 721 dated September 13, 1995.

A 2% education cess and 1% secondary and higher education cess on the total income tax (including surcharge) is payable by all categories of tax payers.

4. Short-term capital gains on the transfer of listed debentures, where debentures are held for a period of not more than 12 months would be taxed at the normal rates of tax in accordance with and subject to the provision of the I.T. Act.

The provisions related to minimum amount not chargeable to tax, surcharge and education cess described at para 3 above would also apply to such short-term capital gains.

5. In case the debentures are held as stock in trade, the income on transfer of debentures would be taxed as business income or loss in accordance with and subject to the provisions of the I.T. Act.

6. (i) Under section 54 EC of the Act and subject to the conditions and to the extent specified therein, long term capital gains arising to the bondholders on transfer of their bonds in the company shall not be chargeable to tax to the extent such capital gains are invested in certain notified bonds within six months from the date of transfer. If only part of the capital gain is so invested, the exemption shall be proportionately reduced. However, if the said notified bonds are transferred or converted into money within a period of three years from their date of acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long term capital gains in the year in which the bonds are transferred or converted into money. Where the benefit of section 54EC of the Act has been availed of on investments in the notified bonds, a deduction from the income with reference to such cost shall not be allowed under section 80 C of the Act. (ii) As per the provisions of section 54F of the Act and subject to conditions specified therein, any long-term capital gains (not being residential house) arising to bondholder who is an individual or Hindu Undivided Family, are exempt from capital gains tax if the entire net sales considerations is utilised, within a period of one year before, or two years after the date of transfer, in purchase of a new residential house, or for construction of residential house within three years from the date of transfer. If part of such net sales consideration is invested within the prescribed period in a residential house, then such gains would be chargeable to tax on a proportionate basis. Provided that the said bondholder should not own more than one residential house at the time of such transfer. If the residential house in which the investment has been made is transferred within a period of three years from the date of its purchase or construction, the amount

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of capital gains tax exempted earlier would become chargeable to tax as long term capital gains in the year in which such residential house is transferred. Similarly, if the shareholder purchases within a period of two years or constructs within a period of three years after the date of transfer of capital asset, another residential house (other than the new residential house referred above), then the original exemption will be taxed as capital gains in the year in which the additional residential house is acquired.

7. As per section 56(2)(vii) of the I.T. Act, in case where individual or Hindu undivided Family receives

debentures from any person on or after 1st October, 2009

A. without any consideration, aggregate fair market value of which exceeds fifty thousand rupees, then the whole of the aggregate fair market value of such bonds/debentures or;

B. for a consideration which is less than the aggregate fair market value of the debenture by an amount exceeding fifty thousand rupees, then the aggregate fair market value of such property as exceeds such consideration;

shall be taxable as the income of the recipient.

Provided further that this clause shall not apply to any sum of money or any property received—

(a) from any relative; or

(b) on the occasion of the marriage of the individual; or

(c) under a will or by way of inheritance; or

(d) in contemplation of death of the payer or donor, as the case may be; or

(e) from any local authority as defined in the Explanation to clause (20) of section 10; or

(f) from any fund or foundation or university or other educational institution or hospital or other medical institution or any trust or institution referred to in clause (23C) of section 10; or

(g) from any trust or institution registered under section 12AA.

B. WEALTH TAX

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

C. Proposals made in Direct Taxes Code

The Hon’ble Finance Minister has presented the Direct Tax Code Bill, 2010 (‘DTC Bill’) on August 30, 2010, which is proposed to be effective from April 1, 2012. The DTC Bill is likely to be presented before the Indian Parliament. Accordingly, it is currently unclear what effect the Direct Tax Code would have on the investors.

For Raj Har Gopal & Co. For N.K.Bhargava & Co.

Chartered Accountants Chartered Accountants

Firm’s Regn. No.: 002074N Firm’s Regn. No.: 000429N

G.K. Gupta N.K.Bhargava

Partner Partner

Membership no. 81085 Membership no.080624

Place: New Delhi

Date: August 27, 2011

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OTHER REGULATORY AND STATUTORY DISCLOSURES

Authority for the Issue

The Board of Directors, at their meeting held on March 17, 2011 have approved the Issue of ‘long term infrastructure bonds’ in one or more tranche(s), of secured, redeemable, non-convertible, cumulative/ non-cumulative debentures of face value of ` 5,000 each, having benefits under Section 80CCF of the Income Tax Act, for an amount up ` 6,900 crores, subject to the provisions of the Notification.

In accordance with the terms of the Notification, the aggregate value of the Issue of Bonds (having benefits under Section 80CCF of the Income Tax Act) by the Company during the Fiscal 2012 shall not exceed 25% of the incremental infrastructure investment made by the Company during the Fiscal 2011.

Eligibility to make the Issue

The Company, the persons in control of the Company and its promoter have not been restrained, prohibited or debarred by SEBI from accessing the securities market or dealing in securities and no such order or direction is in force.

Consents

Consents in writing of the Directors, the Compliance Officer, the Statutory Auditors, Bankers to the Company, Bankers to the Issue, Lead Managers, Lead Brokers, Registrar to the Issue, Legal Advisors to the Issue, Credit Rating Agencies and the Debenture Trustee for the Bondholders, to act in their respective capacities, have been obtained and shall be filed along with a copy of each tranche prospectus with the RoC.

The Company has appointed PNB Investment Services Limited as Debenture Trustee under regulation 4(4) of the SEBI Debt Regulations. The Debenture Trustee has given its consent to the Company for its appointment under regulation 4 (4) and also in all the subsequent periodical communications sent to the holders of debt securities.

Common Form of Transfer

There shall be a common form of transfer for the Bonds held in physical form and relevant provisions of the Companies Act and all other applicable laws shall be duly complied with in respect of all transfer of the Bonds and registration thereof.

No Reservation or Discount

There is no reservation in this Issue nor will any discount be offered in this Issue, to any category of investors.

Previous Public or Rights Issues by the Company during last five years

In February 2007, the company came out with a public issue of 117,316,700 equity shares of ` 10/- each at a premium of ` 75/- each. The issue opened on January 31, 2007 and closed on February 06, 2007. The date of allotment and the date of refund was February 19, 2007. The Equity shares offered pursuant to such issue were listed on February 23, 2007 on the stock exchange.

In February 2011, the Company had also undertaken a public issue of ‘long term infrastructure bonds' of face value of ` 5,000 each at par, in the nature of secured, redeemable, non-convertible debentures for an amount upto ` 5300 Crores. These long term infrastructure bonds are outstanding as on the date of this Prospectus Tranche-1. The issue opened on February 24, 2011 and closed on March 22, 2011. The date of allotment and the date of refund was March 31, 2011. The long term infrastructure bonds offered pursuant to such issue were listed on April 13, 2011 on the stock exchange.

In May 2011, the company came out with a Further Public Offer of 229,553,340 equity shares of ` 10 each at a premium of ` 193 each, comprising of Fresh Issue of 172,165,005 Equity Shares and an Offer for Sale of 57,388,335 Equity Shares alongwith an Employee Reservation Portion of 275,464 Equity Shares. Discount of 5% to the Issue Price

being ` 10.15 per Equity Share determined pursuant to completion of the Book Building Process was offered to Eligible Employees and to Retail Bidders. The issue opened on May 10, 2011 and closed on May 12, 2011 for QIB bidders and May 13, 2011 for all other bidders. The date of allotment was May 24, 2011 and the date of refund was May 24, 2011. The Equity shares offered pursuant to such issue were listed on May 27, 2011 on the stock exchange.

There has been no further public or right issue after that.

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Commission or Brokerage on Previous Public Issues

Our Company incurred an aggregate amount of ` 2.87 crore plus service tax on account of fees and selling commission in relation to its issue of long term infrastructure bonds undertaken in fiscal 2011.

Change in auditors of our Company during the last three years

For Fiscal 2008 and 2009, Bansal Sinha & Co., Chartered Accountants were the statutory auditors of our Company. In Fiscal 2009 and 2010, our Board appointed, as approved by the Office of Comptroller and Auditor General of India, K.K. Soni & Co., Chartered Accountants as our statutory Auditors. In Fiscal 2010, our Board appointed, as approved by the Office of Comptroller and Auditor General of India, Raj Har Gopal & Co., Chartered Accountants as our Statutory Auditors, jointly with K.K. Soni & Co. In Fiscal 2011, our Board appointed, Mehra Goel & Co., Chartered Accountants, as approved by the Office of Comptroller and Auditor General of India, in place of K.K. Soni & Co. Our financial statements for the Fiscal March 31, 2011, were audited jointly by Raj Har Gopal & Co., Chartered Accountants and Mehra Goel & Co., Chartered Accountants. In Fiscal 2012, our Board appointed, as approved by the Office of Comptroller and Auditor General of India, N.K. Bhargava & Co., Chartered Accountants as our statutory auditor in place of Mehra Goel & Co.

Revaluation of assets

Our Company has not revalued its assets in the last five years.

Utilisation of Proceeds

In accordance with the terms of the Notification, the proceeds of the Issue shall be utilised towards infrastructure lending, as defined in the relevant guidelines issued by the RBI in this regard. We shall utilize the Issue proceeds only upon creation of security as stated in this Tranche Prospectus in the section titled ―”Terms of the Issue – Security” on page 37 after permission or consent for creation of security pursuant to the terms of the Debenture Trust Deed. sought to be provided as Security. The Issue proceeds shall not be utilized for providing loan to or acquisition of shares of any of any person who is part of the same group or who is under the same management. Further, the end-use of the proceeds of the Issue, duly certified by the statutory auditors of the Company, shall be reported in the annual reports of our Company and other reports issued by our Company to relevant regulatory authorities, as applicable. Such reports, along with term sheets, shall also be filed by our Company with the Infrastructure Division, DoEA, MoF, within three months from the end of the financial year.

Statement by the Board of Directors:

(i) All monies received out of the each Tranche Issue of the Bonds to the public shall be transferred to a separate bank account other than the bank account referred to in sub-section (3) of section 73 of the Companies Act;

(ii) Details of all monies utilised out of the each Tranche Issue referred to in sub-item (i) shall be disclosed under an appropriate separate head in our Balance Sheet indicating the purpose for which such monies were utilised; and

(iii) Details of all unutilised monies out of the each Tranche Issue referred to in sub-item (i), if any, shall be disclosed under an appropriate separate head in our Balance Sheet indicating the form in which such unutilised monies have been invested.

The funds raised by us from previous bonds issues have been utilised for our business as stated in the respective offer documents.

Disclaimer clause of BSE “Bombay Stock Exchange Limited (“the Exchange”) has given vide its letter no. DCS/SP/PI-BOND/001/11-12 dated September 22, 2011, given the permission to this Company to use the Exchange’s name in this offer document as one of the stock exchanges on which this company’s securities are proposed to be listed. The Exchange has scrutinized this offer document for its limited internal purpose of deciding on the matter of granting the aforesaid permission to this Company. The Exchange does not in any manner:

(i) warrant, certify or endorse the correctness or completeness of any of the contents of this offer document; or

(ii) warrant that this Company’s securities will be listed or will continue to be listed on the Exchange; or

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(iii) take any responsibility for the financial or other soundness of this Company, its promoters, its managementor any scheme or project of this Company;

and it should not for any reason be deemed or construed that this offer document has been cleared or approved by the Exchange. Every person who desires to apply for or otherwise acquires any securities of this Company may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the Exchange whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription/acquisition whether by reason of anything stated or omitted to be stated herein or for any other reason whatsoever.”

Disclaimer clause of RBI RBI does not accept any responsibility or guarantee about the present position as to financial soundness of the Company or correctness of any of the statements or representations made or opinions expressed by the Company and for repayment of deposits or discharge of liabilities by the Company.

Listing

The Bonds will be listed on BSE. We have already received In-Principle Approval from BSE vide its letter dated September 22, 2011. If permission to deal in and for an official quotation of the Bonds is not granted by BSE, the Company will forthwith repay all moneys received from the Applicants in terms of the relevant tranche prospectus. If such money is not repaid within eight days after the Company becomes liable to repay it (i.e. from the date of refusal or within seven days from the Tranche Issue Closing Date, whichever is earlier), then the Company and every Director of the Company who is an officer in default shall, on and from such expiry of eight days, be liable to repay the money, with interest at the rate of 15% p.a. on application money, as prescribed under Section 73 of the Companies Act. The Company shall use best efforts to ensure that all steps for the completion of the necessary formalities for listing at BSE are taken within seven Working Days from the date of Allotment.

Dividend The company has consistently paid dividend of 22.63%, 35%, 40%, & 45% for the financial years ended March 2007, March 2008, March 2009 & March, 2010 respectively. For the financial year ended March 2011 it has already paid interim dividend of 35% and recommended final dividend of 15% subject to approval of shareholders in the ensuing annual general meeting.

Mechanism for redressal of investor grievances

Karvy Computershare Pvt. Limited has been appointed as the Registrar to the Issue to ensure that investor grievances are handled expeditiously and satisfactorily and to effectively deal with investor complaints. All grievances relating to the Issue should be addressed to the Registrar to the Issue and the Compliance Officer giving full details of the Applicant, number of Bonds applied for, amount paid on application and Bankers to the Issue / Designated Collection Centre / Agent to which the application was submitted.

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ISSUE STRUCTURE

This is a public issue of ‘long term infrastructure bonds’ of face value of ` 5,000 each, in the nature of secured, redeemable, non-convertible debentures, having benefits under section 80CCF of the Income Tax Act, 1961, as amended, aggregating ` 200 crores with an option to retain an oversubscription upto the Shelf Limit (i.e. ` 6,900 crores). The Company shall issue the Bonds in one or more tranche(s), on or prior to March 31, 2012, up to the amount of ` 6,900 crore approved by the Board, which does not exceed 25% of the incremental infrastructure investment made by the Company in Fiscal 2011. The following are the key terms of the Bonds. This section should be read in conjunction with, and is qualified in its entirety by, more detailed information in “Issue Structure” “Terms of the Issue” and “Procedure for Application” on page 25, 27 and 42 respectively of this Tranche Prospectus.

Issue Structure

Particulars Resident Individuals HUFs

Minimum number of Bonds per application*

One Bond and in multiples of One Bond thereafter.

One Bond and in multiples of One Bond thereafter.

Terms of Payment Full amount with the Application Form Full amount with the Application Form

Mode of Allotment Dematerialized as well as physical form Dematerialized as well as physical form

Trading Lot One Bond One Bond

*The Bonds are classified as ‘long term infrastructure bonds’ and are being issued in terms of Section 80CCF of the

Income Tax Act and the Notification. In accordance with Section 80CCF of the Income Tax Act, the amount, not

exceeding ` 20,000, paid or deposited as subscription to ‘long-term infrastructure bonds’ during the previous year

relevant to the assessment year beginning April 1, 2012 shall be deducted in computing the taxable income of a resident

individual or HUF. In the event that any Applicant applies for and is Allotted Bonds in excess of ` 20,000 (including

‘long term infrastructure bonds’ issued by any other eligible entity), the aforestated tax benefit shall be available to

such Applicant only to the extent of ` 20,000 for the Fiscal 2012.

Particulars of the Bonds being issued

The Company is offering the Bonds which shall have a fixed rate of interest. The Bonds will be issued with a face value of ` 5,000 each. Interest on the Bonds shall be payable on annual or cumulative basis depending on the series selected by the Applicants as provided below:

Bond Particulars

Series 1 2 3 4

Face Value per Bond ` 5,000 ` 5,000 ` 5,000 ` 5,000

Frequency of Interest

payment

Annual Cumulative Annual Cumulative

Buyback Facility Yes Yes Yes Yes

Buyback Date One date, being the date falling five years and one day from the Deemed Date of Allotment

One date, being the date falling five years and one day from the Deemed Date of Allotment

One date, being the date falling seven years and one day from the Deemed Date of Allotment

One date, being the date falling seven years and one day from the Deemed Date of Allotment

Buyback Amount ` 5,000 per Bond and accrued interest calculated from the last interest payment date to the Buyback

` 7,519 per Bond and interest on Application Interest compounded annually at 8.5 %

` 5,000 per Bond and accrued interest calculated from the last interest payment date to the Buyback

` 8,995 per Bond and interest on Application Interest compounded annually at 8.75%

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Date Date

Buyback Intimation

Period

The period beginning not more than nine months prior to the Buyback Date and ending not later than six months prior to the Buyback Date

The period beginning not more than nine months prior to the Buyback Date and ending not later than six months prior to the Buyback Date

The period beginning not more than nine months prior to the Buyback Date and ending not later than six months prior to the Buyback Date

The period beginning not more than nine months prior to the Buyback Date and ending not later than six months prior to the Buyback Date

Interest Rate p.a (%) 8.5% 8.5% 8.75% 8.75%

Redemption/Maturity

Date

One date, being the date falling ten years from the Deemed Date of Allotment

One date, being the date falling ten years from the Deemed Date of Allotment

One date, being the date falling fifteen years from the Deemed Date of Allotment

One date, being the date falling fifteen years from the Deemed Date of Allotment

Maturity Amount ` 5,000 per Bond and accrued interest calculated from the last interest payment date to the maturity date

` 11,305 per Bond and interest on Application Interest compounded annually at 8.50%

` 5,000 per Bond and accrued interest calculated from the last interest payment date to the maturity

date

` 17,596 per Bond and interest on Application Interest compounded annually at 8.75%

* As per the condition stipulated under the Notification the yield on the Bonds(to be paid by the Issuer) shall not exceed

the yield on government securities of corresponding residual maturity, as reported by FIMMDA, as on the last working

day of the month immediately preceding the month of the issue of the Bonds.

Terms of Payment

The entire Face Value per Bond is payable on Application. In the event of Allotment of a lesser number of Bonds than applied for, the Company shall refund the amount paid on application to the Applicant, in accordance with the terms of the respective tranche prospectus.

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TERMS OF THE ISSUE

This is a public issue of ‘long term infrastructure bonds’ of face value of ` 5,000 each, in the nature of secured, redeemable, non-convertible debentures, having benefits under section 80CCF of the Income Tax Act, 1961, as amended, aggregating ` 200 crores with an option to retain an oversubscription upto the Shelf Limit (i.e.` 6,900 crores)

The Company shall issue the Bonds in one or more tranche(s), on or prior to March 31, 2012, up to the amount of ` 6,900 crore approved by the Board, which does not exceed 25% of the incremental infrastructure investment made by the Company in Fiscal 2011.

This tranche issue is being offered by way of this Prospectus Tranche -1 contains, inter alia the terms and conditions of the Tranche-1, which should be read together with the Shelf Prospectus dated September 26, 2011 filed with the Stock Exchanges and SEBI. The Shelf Prospectus together with this Prospectus Tranche -1 shall constitute “the Prospectus”

The terms and conditions of Bonds being offered will be incorporated into the Debenture Trust Deed and are subject to the provisions of the Companies Act, the tranche prospectus(es), the Application Form and other terms and conditions as may be incorporated in the Debenture Trust Deed and/or Consolidated Bond certificate(s). In addition, the Issue of Bonds in tranches shall be subject to laws as applicable from time to time, including guidelines, rules, regulations, notifications and any statutory modifications or re-enactments relating to the issue of capital and listing of securities, or in relation to the Company, issued from time to time by SEBI, GoI, BSE and/or other authorities and other documents that may be executed in respect of the Bonds. The statements in these terms and conditions include summaries of and are subject to the detailed provisions of the Debenture Trust Deed.

The 8.50%, non-cumulative Bonds (“Series 1 Bonds”), the 8.50%, cumulative Bonds (“Series 2 Bonds”), the 8.75% non-cumulative Bonds (“Series 3 Bonds”) and the 8.75% cumulative Bonds (“Series 4 Bonds”) (Series 1 Bonds, Series 2 Bonds, Series 3 Bonds and Series 4 Bonds are collectively referred to as the “Bonds”). The Bonds would in each case be governed by a debenture trust deed (“Debenture Trust Deed”) to be entered into between the Company and PNB Investment Services Limited (in its capacity as the “Debenture Trustee”, which expression shall include its successor(s)) as trustee for the holders of the Bonds (“Bondholders”). Karvy Computershare Private Limited has been appointed as the registrar to the issue (“Registrar” or “Registrar to the Issue”) pursuant to the appointment letter dated August 1, 2011 (as amended and/or supplemented and/or restated from time to time, the “Registrar

Appointment Letter”).

The Bonds are classified as ‘long term infrastructure bonds’ and are being issued in terms of Section 80CCF of the Income Tax Act and the Notification. In accordance with Section 80CCF of the Income Tax Act, the amount, not exceeding ` 20,000, paid or deposited as subscription to ‘long-term infrastructure bonds’ during the previous year relevant to the assessment year beginning April 1, 2012 shall be deducted in computing the taxable income of a resident individual or HUF. In the event that any Applicant applies for and is Allotted Bonds in excess of ` 20,000 in one or more tranches (including ‘long term infrastructure bonds’ issued by any other eligible entity), the aforestated tax benefit

shall be available to such Bondholder only to the extent of ` 20,000.

Words and expressions defined in the Debenture Trust Deed and the Tripartite Agreements shall have the meaning ascribed in the Debenture Trust Deed and/or the Tripartite Agreements, as the case may be, unless the context otherwise requires or unless otherwise stated.

Any reference to “Bondholders” or “holders” in relation to any Bond held in dematerialized form shall mean the persons whose name appears on the beneficial owners list as provided by the Depository and in relation to any Bond in physical form, such holder of the Bond (whose interest shall be as set out in a Consolidated Bonds Certificate (as defined below) whose name is appearing in the Register of Bondholders (as defined below). The Debenture Trustee acts for the benefit of the Bondholders in accordance with the provisions of the Debenture Trust Deed.

1. Authority for the Issue The Board of Directors, at its meeting held on March 17, 2011, has approved the Issue, in one or more tranches, of secured, redeemable, non-convertible debentures having benefits under Section 80CCF of the Income Tax Act, for an amount not exceeding ` 7,500 crores. Further, the Chairman and Managing Director of our Company has been authorised to inter-change the amount to be mobilized, that has been subsequently decided as ` 6,900 crores for the Fiscal 2012. In terms of the Notification No. 50/2011 F.No. 178/43/2011-SO (ITA 1) dated September 9, 2011 issued by Central Board of Direct Taxes, the aggregate value of issuance of ‘long term infrastructure bonds’ (having benefits under

28

Section 80CCF of the Income Tax Act) by the Company during the Fiscal 2012 shall not exceed 25% of the incremental infrastructure investment made by the Company during the Fiscal 2011. For the purpose of calculating the incremental infrastructure investment, the aggregate gross infrastructure investments made by the Company during the Fiscal 2011 was considered and 25% of such incremental infrastructure investment was ` 6,913.61 crores and hence the limit for this Issue is ` 6,900 crores.

2. Issue, Status of Bonds

2.1. Public Issue of ‘long term infrastructure bonds’ of face value of ` 5,000 each, in the nature of secured, redeemable, non-convertible debentures, having benefits under section 80CCF of the Income Tax Act, 1961, as amended, aggregating ` 200 crores with an option to retain an oversubscription upto the Shelf Limit (i.e. ` 6,900 crores).

2.2. The Bonds are secured pursuant to a Debenture Trust Deed. The Bondholders are entitled to the benefit of the Debenture Trust Deed and are bound by and are deemed to have notice of all the provisions of the Debenture Trust Deed. The Company is issuing the Bonds in accordance with the Notification and pursuant to the Notification, the Bonds issued by the Company may be classified as ‘long term infrastructure bonds’ for the purposes of Section 80 CCF of the Income Tax Act.

2.3. The Bonds are issued in the form of secured, redeemable, non convertible debentures. The claims of the Bondholders shall be pari passu to the claims of the secured creditors of the Company, if any, now existing or in the future, (subject to any obligations preferred by mandatory provisions of the applicable law prevailing from time to time).

3. Form, Face Value, Title and Listing etc

3.1. Form

The Allotment of the Bonds shall be in a dematerialized form as well as physical form. The Company has made depository arrangements with CDSL and NSDL for the issuance of the Bonds in dematerialized form, pursuant to the tripartite agreement dated April 25, 2006 between the Company, CDSL and the Registrar to the Issue and the tripartite agreement dated May 16, 2006 between the Company, NDSL and the Registrar to the Issue (collectively, “Tripartite Agreements”).

The Company shall take necessary steps to credit the Depository Participant account of the Applicants with the number of Bonds allotted in dematerialized form. The Bondholders holding the Bonds in dematerialised form shall deal with the Bonds in accordance with the provisions of the Depositories Act, 1996 (“Depositories

Act”) and/or rules as notified by the Depositories from time to time.

3.1.2 The Bondholders may rematerialize the Bonds issued in dematerialized form, at any time after Allotment, in accordance with the provisions of the Depositories Act and/or rules as notified by the Depositories from time to time.

3.1.3 In case of Bonds issued in physical form, whether on Allotment or on rematerialization of Bonds Allotted in dematerialized form, the Company will issue one certificate for each Series of the Bonds to the Bondholder for the aggregate amount of the Bonds that are held by such Bondholder (each such certificate, a “Consolidated

Bond Certificate”). In respect of the Consolidated Bond Certificate(s), the Company will, on receipt of a request from the Bondholder within 30 days of such request, split such Consolidated Bond Certificate(s) into smaller denominations in accordance with the Articles of Association, subject to a minimum denomination of one Bond. No fees will be charged for splitting any Consolidated Bond Certificate(s) and any stamp duty, if payable, will be paid by the Bondholder. The request to split a Consolidated Bond Certificate shall be accompanied by the original Consolidated Bond Certificate(s) which will, on issuance of the split Consolidated Bond Certificate(s), be cancelled by the Company.

3.2. Face Value

The face value of each Bond is ` 5,000.

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3.3. Title

3.3.1 In case of:

(i) Bonds held in the dematerialized form, the person for the time being appearing in the register of beneficial owners maintained by the Depository; and

(ii) the Bond held in physical form, the person for the time being appearing in the Register of Bondholders (as defined below) as Bondholder,

shall be treated for all purposes by the Company, the Debenture Trustee, the Depository and all other persons dealing with such person as the holder thereof and its absolute owner for all purposes whether or not it is overdue and regardless of any notice of ownership, trust or any interest in it or any writing on, theft or loss of the Consolidated Bond Certificate issued in respect of the Bonds and no person will be liable for so treating the Bondholder.

3.3.2 No transfer of title of a Bond will be valid unless and until entered on the Register of Bondholders or the register of beneficial owners maintained by the Depository prior to the Record Date. In the absence of transfer being registered, interest and/or Maturity Amount, as the case may be, will be paid to the person, whose name appears first in the Register of Bondholders maintained by the Depository and/or the Company and/or the Registrar to the Issue, as the case may be. In such cases, claims, if any, by the purchasers of the Bonds will need to be settled with the seller of the Bonds and not with the Company or the Registrar to the Issue. The provisions relating to transfer and transmission and other related matters in respect of the Company’s shares contained in the Articles of Association of the Company and the Companies Act shall apply, mutatis mutandis (to the extent applicable) to the Bond(s) as well.

3.4. Listing The Bonds will be listed on BSE. BSE has given its in-principle listing approval by its letter dated September 22, 2011. The Designated Stock Exchange for the Issue is BSE.

3.5. Market Lot

3.5.1 The Bonds shall be allotted in physical as well as dematerialized form. As per the SEBI Debt Regulations, the trading of the Bonds shall be in dematerialised form only in multiples of one Bond (“Market Lot”).

3.5.2 For details of Allotment, see “Procedure for Application – Basis of Allotment” beginning on page 47 of this Tranche Prospectus.

3.6. Procedure for Rematerialisation of Bonds Bondholders who wish to hold the Bonds in physical form may do so by submitting a request to their Depository Participant in accordance with the applicable procedure stipulated by the Depository Participant.

4. Transfer of the Bonds, Issue of Consolidated Bond Certificates etc

4.1. Register of Bondholders The Company shall maintain at its registered office or such other place as permitted by law a register of Bondholders (“Register of Bondholders”) containing such particulars as required by Section 152 of the Companies Act. In terms of Section 152A of the Companies Act, the Register of Bondholders maintained by a Depository for any Bond in dematerialized form under Section 11 of the Depositories Act shall be deemed to be a Register of Bondholders for this purpose.

4.2. Lock-in Period

4.2.1. No Transfer during Lock-in Period In accordance with the Notification, the Bondholders shall not sell or transfer the Bonds in any manner for a

period of five years from the Deemed Date of Allotment (the “Lock-in Period).

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4.2.2. Transfer after Lock-in Period

(a) The Bondholders may sell or transfer the Bonds after the expiry of the Lock-in Period on the stock

exchange where the Bonds are listed.

(b) If a request for transfer of the Bond is not received by the Registrar to the Issue before the Record Date for

maturity, the Maturity Amount for the Bonds shall be paid to the person whose name appears as a Bondholder in the Register of Bondholders. In such cases, any claims shall be settled inter se between the parties and no claim or action shall be brought against the Company.

4.3. Transfers

4.3.1 Transfer of Bonds held in dematerialized form:

In respect of Bonds held in the dematerialized form, transfers of the Bonds may be effected, after the expiry of the Lock-in Period, only through the Depository where such Bonds are held, in accordance with the provisions of the Depositories Act and/or rules as notified by the Depository from time to time. The Bondholder shall give delivery instructions containing details of the prospective purchaser’s Depository Participant’s account to his Depository Participant. If a prospective purchaser does not have a Depository Participant account, the Bondholder may rematerialize his or her Bonds and transfer them in a manner as specified in section 4.3.2 below.

4.3.2. Transfer of Bonds in physical form:

Subject to the Lock-in period, the Bonds may be transferred by way of a duly executed transfer deed or other suitable instrument of transfer as may be prescribed by the Company for the registration of transfer of Bonds. Purchasers of Bonds are advised to send the Consolidated Bond Certificate to the Company or to such persons as may be notified by the Company from time to time. If a purchaser of the Bonds in physical form intends to hold the Bonds in dematerialized form, the Bonds may be dematerialized by the purchaser through his or her Depository Participant in accordance with the provisions of the Depositories Act and/or rules as notified by the Depositories from time to time.

4.4. Formalities Free of Charge Registration of a transfer of Bonds and issuance of new Consolidated Bond Certificates will be effected without charge by or on behalf of the Company, but on payment (or the giving of such indemnity as the Company may require) in respect of any tax or other governmental charges which may be imposed in relation to such transfer, and the Company being satisfied that the requirements concerning transfers of Bonds, including under our Articles of Association have been complied with.

5. Debenture Redemption Reserve (“DRR”) Pursuant to Regulation 16 of the SEBI Debt Regulations and Section 117C of the Companies Act, any company that intends to issue debentures to create a DRR to which adequate amounts shall be credited out of the profits of the company until the redemption of the debentures. Further, the Ministry of Company Affairs (“MCA”) has, through its circular dated April 18, 2002, specified that public financial institutions shall create a DRR to the extent of 50% of the value of the debentures issued through public issue. Accordingly, the Company shall create DRR of 50% of the value of Bonds issued and allotted in terms of the Tranche Prospectus, for the redemption of the Bonds. The Company shall credit adequate amounts to the DRR from its profits every year until the Bonds are redeemed. The amounts credited to the DRR shall not be utilized by the Company for any purpose other than for the redemption of the Bonds.

6. Application Amount and Tax Savings

Eligible Applicants can apply for up to any amount of the Bonds across any of the Series(s) or a combination thereof. The Applicants will be allotted the Bonds in accordance with the Basis of Allotment. In the event any Applicant applies for and is allotted Bonds in excess of ` 20,000 (including ‘long term infrastructure bonds’ issued by any other eligible entity), the aforestated tax benefit shall be available to such Bondholder only to the extent of ` 20,000.

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7. Deemed Date of Allotment The Deemed Date of Allotment shall be the date as may be determined by the Board of the Company and notified to the BSE. All benefits under the Bonds including payment of interest will accrue to the Bondholders from the Deemed Date of Allotment. Actual Allotment may occur on a date other than the Deemed Date of Allotment.

8. Subscription

8.1 Period of Subscription

The Issue shall remain open for the period mentioned below:

Issue Opens on Thursday, September 29, 2011

Issue Closes on Friday, November 4, 2011

The Issue shall remain open for subscription during banking hours for the period indicated above, except that the Issue may close on such date as may be decided by the Board. In the event of an early closure of the Issue , the Company shall ensure that notice is provided to the prospective investors through newspaper advertisements, at least three days prior to such earlier date of Issue closure.

8.2 Underwriting

There is no underwriting in this Tranche. 8.3 Minimum Subscription

Under the SEBI Debt Regulations, the Company is required to stipulate a minimum subscription amount which it seeks to raise. The consequence of minimum subscription amount not being raised is that the Issue shall not proceed and the application moneys received are refunded to the Applicants.

The company has decided to set no minimum subscription for the issue.

9. Interest

9.1. Annual Payment of Interest

9.1.1 For Series 1 Bonds and Series 3 Bonds, interest at the rate of 8.5% and 8.75% p.a., respectively, will be paid

annually commencing from the Deemed Date of Allotment and on the equivalent date falling every year thereafter. The last interest payment will be made on the Maturity Date.

9.2. Cumulative Payment of Interest 9.2.1 Interest on Series 2 Bonds and Series 4 Bonds shall be compounded annually at the rate of 8.5% and 8.75%

p.a., respectively commencing from the Deemed Date of Allotment and shall be payable on the Maturity Date.

9.3. Day Count Convention Interest shall be computed on a 365 days-a-year basis on the principal outstanding on the Bonds. However, where the interest period (start date to end date) includes February 29, interest shall be computed on 366 days-a-year basis, on the principal outstanding on the Bonds.

9.4. Interest on Application and Refund Money

9.4.1 Application Interest The Company shall pay to the successful Applicants, interest at the rate of 5.50 % p.a. on the Application Amount, three days from the date of receipt of the Application Form, or the date of realization of the Application Amount, whichever is later, upto one day prior to the Deemed Date of Allotment, subject to deductions under the Income Tax Act, if the amount of such interest exceeds the prescribed limit of ` 2,500.

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Interest on Application Amount shall be paid along with first interest payment compounded annually for Series 1 and Series 3 at their respective coupon rates and at buyback date or maturity date whichever is earlier compounded annually for Series 2 and Series 4 at their respective coupon rates

9.4.2 Refund Interest The Company shall pay interest on refund of Application Amount on the amount not Allotted, at the rate of 4% p.a. on the amount not Allotted, three days from the date of receipt of the Application Form, or the date of realization of the Application Amount, whichever is later, upto one day prior to the Deemed Date of Allotment, subject to deductions under the Income Tax Act, if the amount of such interest exceeds the prescribed limit of ` 2,500. Interest on refund shall be paid along with the refund money. Payment of interest on refund of Application Amount is not applicable in case of applications rejected on technical grounds or withdrawn by the Applicants.

10. Redemption

10.1 Unless previously redeemed under any buyback facility, the Company shall redeem the Bonds on the Maturity

Date.

10.2 Procedure for Redemption by Bondholders

The procedure for redemption is set out below:

10.2.1 Bonds held in electronic form:

No action is required on the part of Bondholders at the time of maturity of the Bonds.

10.2.2 Bonds held in physical form:

No action will ordinarily be required on the part of the Bondholder at the time of redemption, and the Maturity Amount will be paid to those Bondholders whose names appear in the Register of Bondholders maintained by the Company on the Record Date fixed for the purpose of redemption. However, the Company may require the Consolidated Bond Certificate(s), duly discharged by the sole holder or all the joint-holders (signed on the reverse of the Consolidated Bond Certificate(s)) to be surrendered for redemption on Maturity Date and sent by the Bondholders by registered post with acknowledgment due or by the delivery to the Registrar to the Issue or Company or to such persons at such addresses as may be notified by the Company from time to time. Bondholders may be requested to surrender the Consolidated Bond Certificate(s) in the manner stated above, not more than three months and not less than one month prior to the Maturity Date so as to facilitate timely payment. See “Payment on Maturity, Redemption or Buyback” on page 34 of this Tranche Prospectus.

11. Buyback of Bonds

11.1 An Applicant subscribing to the Bonds shall, at the time of submitting the Application Form, indicate his or her preference for utilizing the buyback facility offered by the Company for the Bonds by opting for it in the Application Form and completing all formalities prescribed therein.

11.2 A Bondholder may at any time during the Buyback Intimation Period inform the Company in writing of the following:

(a) A Bondholder who has opted for buyback in the Application Form, in a manner specified in section 11.1 above, may inform the Company of their intention not to utilize the buyback facility offered by the Company; or

(b) A Bondholder who has not opted for buyback in the Application Form, in a manner specified in section 11.1 above, may inform the Company of their intention to utilize the buyback facility offered by the Company;

In the event that a Bondholder expresses his or her intention to utilize the buyback facility being offered by the Company, such Bonds shall be bought back by the Company in a manner as specified in section 11.3 below.

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11.3 For the avoidance of doubt, the Bondholders may note the following:

(a) In case a Bondholder has opted for buyback in the Application Form in the manner specified in section 11.1 above, and has not, at any time during the Buyback Intimation Period in the manner specified in section 11.2 above, expressed any intention to not utilize the buyback facility offered by the Company, the buyback shall be effected by the Company in the manner specified in section 11.4 below;

(b) In case a Bondholder has not opted for buyback in the Application Form in the manner specified in section 11.1 above, and has not, at any time during the Buyback Intimation Period in the manner specified in section 11.2 above, expressed an intention to utilize the buyback facility offered by the Company, such Bonds shall not be bought back by the Company and such Bonds shall continue till the Maturity Date.

(c) In case a Bondholder who has opted for buyback in the Application Form in the manner specified in 11.1 above, expresses, at any time during the Buyback Intimation Period in the manner specified in section 11.2 above, any intention to not utilize the buyback facility offered by the Company, such Bonds shall not be bought back by the Company and such Bonds shall continue till the Maturity Date; and

(d) In case a Bondholder who has not opted for buyback in the Application Form in the manner specified in 11.1 above, expresses, at any time during the Buyback Intimation Period in the manner specified in section 11.2 above, an intention to utilize the buyback facility offered by the Company, such Bonds shall be bought back by the Company in the manner specified in section 11.4 below.

11.4 The buyback of Bonds from their respective Bondholders shall be effected by the Company on the Buyback

Date, subject to the terms set forth herein:

(a) Bonds held in dematerialized form

No action will ordinarily be required on part of the Bondholder. On receiving instructions from the Company, the Registrar to the Issue would undertake appropriate corporate action to effect the buyback.

(b) Bonds held in physical form

No action would ordinarily be required on part of the Bondholder on the Buyback Date and the Buyback Amount would be paid to those Bondholders whose names appear first in the Register of Bondholders. However, the Company may require the Bondholder to duly surrender the Consolidated Bond Certificate to the Company/Registrar to the Issue for the buyback 30 Working Days prior to the Buyback Date.

11.5 Any notice or letter or any other written instrument sent pursuant to section 11.1 received after the lapse of the Buyback Intimation period but not more than 3 months after the lapse of the Buyback Intimation period shall be accepted by the Company and the buyback facility extended but without the interest component for the period between the record date and the date of the receipt of the written instrument. No notice or letter or any other written instrument sent to the Company pursuant to section 11.1 above shall be accepted by the Company if it has been received 3 months after the lapse of the Buyback Intimation Period. In such an event, the Bonds not being eligible for buyback by the Company, shall continue till the Maturity Date. A Bondholder of whose Bonds have not been bought back by the Company, shall be entitled to sell his or her Bonds on the stock exchanges.

11.6 On payment of the Buyback Amounts, the Bonds shall be deemed to have been repaid to the Bondholders and all other rights of the Bondholders shall terminate and no interest shall accrue on such Bonds.

11.7 Subject to the provisions of the Companies Act, where the Company has bought back any Bond(s), the Company shall have and shall be deemed always to have had the right to keep such Bonds alive without extinguishment for the purpose of resale and in exercising such right, the Company shall have and be deemed always to have had the power to resell such Bonds, at such price and terms & conditions as permissible under applicable regulation(s) in that regard at that point of time.

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12. Payments

12.1 Payment of Interest

Payment of interest on the Bonds will be made to those Bondholders whose name appears first in the Register of Bondholders maintained by the Depository and/or the Company and/or the Registrar to the Issue, as the case may be as, on the Record Date. Whilst the Company will use the electronic mode of payments for making payments, where facilities for electronic mode of payments are not available to the Bondholder or where the information provided by the Applicant is insufficient or incomplete, the Company proposes to use other modes of payment to make payments to the Bondholders, including through the dispatch of cheques through courier, hand delivery or registered post to the address provided by the Bondholder and appearing in the Register of Bondholders maintained by the Depository and/or the Company and/or the Registrar to the Issue, as the case may be as, on the Record Date.

12.2 Record Date

The record date for the payment of interest or the Maturity Amount shall be 15 days prior to the date on which such amount is due and payable (“Record Date”).

12.3 Effect of holidays on payments If the date of payment of interest or principal or any date specified does not fall on a Working Day, the succeeding Working Day will be considered as the effective date. Interest and principal or other amounts, if any, will be paid on the succeeding Working Day. Payment of interest will be subject to the deduction of tax as per the Income Tax Act or any statutory modification or re-enactment thereof for the time being in force. In case the date of payment of interest or principal or any date specified falls on a holiday, the payment will be made on the next Working Day, without any interest for the period overdue.

12.4 Payment on Maturity, Redemption or Buyback The procedure for payment in maturity, redemption and buyback is set out below:

12.4.1 Bonds held in electronic form:

No action is required on the part of Bondholders on the Maturity Date or Buyback Date.

12.4.2 Bonds held in physical form:

The Company may require the Consolidated Bond Certificate(s), duly discharged by the sole holder or all the joint-holders (signed on the reverse of the Consolidated Bond Certificate(s)) to be surrendered for redemption on the Maturity Date, or otherwise in the event of redemption or buyback, and sent by the Bondholders by registered post with acknowledgment due or by the delivery to the Registrar to the Issue or Company or to such persons at such addresses as may be notified by the Company from time to time. Bondholders may be requested to surrender the Consolidated Bond Certificate(s) in the manner stated above, not more than three months and not less than one month prior to the Maturity Date so as to facilitate timely payment.

12.5 Whilst the Company will use the electronic mode of payments for making payments, where facilities for electronic mode of payments are not available to the Bondholder or where the information provided by the Applicant is insufficient or incomplete, the Company proposes to use other modes of payment to make payments to the Bondholders, including through the dispatch of cheques through courier, hand delivery or registered post to the address provided by the Bondholder and appearing in the Register of Bondholders maintained by the Depository and/or the Company and/or the Registrar to the Issue, as the case may be as, on the Record Date. In the case of payment on maturity being made on surrender of the Consolidated Bond Certificate(s), the Company will make payments or issue payment instructions to the Bondholders within 30 days from the date of receipt of the duly discharged Consolidated Bond Certificate(s). The Company shall pay interest at 15% p.a., in the event that such payments are delayed beyond a period of eight days prescribed under the Companies Act after the Company becomes liable to pay such amounts.

12.6 The Company’s liability to the Bondholders including for payment or otherwise shall stand extinguished from the Maturity Date or on dispatch of the amounts paid by way of principal and/or interest to the Bondholders. Further, the Company will not be liable to pay any interest, income or compensation of any kind accruing subsequent to the Maturity Date.

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13. Manner and Mode of Payment

13.1 Manner of Payment:

All payments to be made by the Company to the Bondholders shall be made in any of the following manners:

13.1.1 For Bonds applied or held in electronic form:

The bank details will be obtained from the Depository for payments. Investors who have applied or who are holding the Bond in electronic form, are advised to immediately update their bank account details as appearing on the records of their Depository Participant. Failure to do so could result in delays in credit of the payments to investors at their sole risk and neither the Lead Managers nor the Company shall have any responsibility and undertake any liability for such delays on part of the investors.

13.1.2 For Bonds held in physical form

The bank details will be obtained from the Registrar to the Issue for effecting payments.

13.2 Modes of Payment

All payments to be made by the Company to the Bondholders shall be made through any of the following modes:

13.2.1 Cheques or Demand drafts

By cheques or demand drafts made in the name of the Bondholders whose names appear in the Register of Bondholders as maintained by the Company and/or as provided by the Depository. All Cheques or demand drafts as the case may be, shall be sent by registered/speed post at the Bondholder’s sole risk.

13.2.2 NECS

Through NECS for Applicants having an account at any of the centers notified by the RBI. This mode of payment will be subject to availability of complete bank account details including the Magnetic Ink Character Recognition (“MICR”) code as appearing on a cheque leaf, from the Depository.

The Company shall not be responsible for any delay to the Bondholder receiving credit of interest or refund or Maturity Amount so long as the Company has initiated the process in time.

13.2.3 Direct Credit

Applicants having bank accounts with the Refund Bank, as per the demographic details received from the Depository shall be eligible to receive refunds through direct credit. Charges, if any, levied by the Refund Bank for the same would be borne by our Company.

13.2.4 Real Time Gross Settlement (“RTGS”) Applicants having a bank account with a bank branch which is RTGS enabled as per the information available on the website of RBI and whose refund amount exceeds ` 2 lakhs shall be eligible to receive refund through RTGS, provided the demographic details downloaded from the Depository contain the nine digit MICR code of the Bidder’s bank which can be mapped with the RBI data to obtain the corresponding Indian Financial System Code (“IFSC”). Charges, if any, levied by the Refund Bank for the same would be borne by our Company. Charges, if any, levied by the Applicant’s bank receiving the credit would be borne by the Applicant.

13.2.5 National Electronic Fund Transfer (“NEFT”)

Payment of refund shall be undertaken through NEFT wherever the Applicants’ bank branch is NEFT enabled and has been assigned the IFSC, which can be linked to an MICR code of that particular bank branch. IFSC Code will be obtained from the website of RBI as on a date prior to the date of payment of refund, duly mapped with an MICR code. Wherever the Applicants have registered their MICR number and their bank account number while opening and operating the beneficiary account, the same will be duly mapped with the IFSC Code of that particular bank branch and the payment of refund will be made to the Bidders through this method. The process flow in respect of refunds by way of NEFT is at an evolving stage and hence use of

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NEFT is subject to operational feasibility, cost and process efficiency and the past experience of the Registrar to the Issue. In the event NEFT is not operationally feasible, the payment of refunds would be made through any one of the other modes as discussed in this section.

13.3 Printing of Bank Particulars

As a matter of precaution against possible fraudulent encashment of Consolidated Bond Certificate(s) due to loss or misplacement, the particulars of the Applicant’s bank account are mandatorily required to be provided for printing on the Consolidated Bond Certificate. Applications without these details are liable to be rejected. However, in relation to Applications for dematerialised Bonds, these particulars will be taken directly from the Depository. In case of Bonds held in physical form either on account of rematerialisation or transfer, the Bondholders are advised to submit their bank account details with the Registrar to the Issue before the Record Date, failing which the amounts will be dispatched to the postal address of the Bondholders. Bank account particulars will be printed on the Consolidated Bond Certificate(s) which can then be deposited only in the account specified.

14. Taxation

14.1 The Applicants are advised to consider and seek independent advice, as may be necessary, on the tax implications of their respective investment in the Bonds.

14.2 The interest on Bonds 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 or any statutory modification or re-enactment thereof.

14.3 As per the current provisions of the Income Tax Act, on payment to all categories of resident Bondholders, tax

will not be deducted at source from interest on Bonds, if such interest does not exceed ` 2,500 in a financial year.

14.4 As per clause (ix) of Section 193 of the Income Tax Act, no income tax is required to be withheld on any interest payable on any security issued by a company, where such security is in dematerialised form and is listed on a recognised stock exchange in India in accordance with the Securities Contracts Regulation Act, 1956, as amended, and the rules notified thereunder. Accordingly, no income tax will be deducted at source from the interest on Bonds held in dematerialised form. In case of Bonds held in physical form no tax may be withheld in case the interest does not exceed ` 2,500 in a financial year. However, such interest is taxable income in the hands of Bondholders.

14.5 If interest on Bonds exceeds the prescribed limit of ` 2,500 in a financial year in case of individual Bondholders, to ensure non-deduction or lower deduction of tax at source, as the case may be, the Bondholders are required to furnish either (a) a declaration (in duplicate) in the prescribed form, i.e., Form 15G which may be given by all Bondholders other than companies, firms and non-residents subject to provisions of section 197A of the Income Tax Act; or (b) a certificate, from the assessing officer of the Bondholder, in the prescribed form under section 197 of the Income Tax Act which may be obtained by the Bondholders.

14.6 Senior citizens, who are 60 or more years of age at any time during the financial year, can submit a self-declaration in the prescribed Form 15H for non-deduction of tax at source in accordance with the provisions of section 197A even if the aggregate income credited or paid or likely to be credited or paid exceeds the maximum limit for the financial year. To ensure non-deduction/lower deduction of tax at source from interest on Bonds, a resident Bondholder is required to submit Form 15G/15H/certificate under section 197 of the Income Tax Act or other evidence, as may be applicable, with the Application Form, or send to the Registrar to the Issue along with a copy of the Application Form on or before the closure of the Issue. Subsequently, Form 15G/15H/ original certificate issued under section 197 of the Income Tax Act or other evidence, as may be applicable, may be submitted to the Company or to such person at such address as may be notified by us from time to time, quoting the name of the sole or first Bondholder, Bondholder number and the distinctive number(s) of the Bond(s) held, at least one month prior to the interest payment date.

14.7 Bondholders are required to submit Form 15G or 15H or original certificate issued under section 197 of the Income Tax Act or other evidence in each financial year to ensure non-deduction or lower deduction of tax at source from interest on Bonds.

14.8 If the Bondholder is eligible to submit Form 15G or 15H, he or she is required to tick at the relevant place on the Application Form, to send a blank copy of the form to the Bondholders. Blank declaration form will be furnished to other Bondholders on request made at least two months prior to the interest payment date. This

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facility is being provided for the convenience of Bondholders and we will not be liable in any manner, whatsoever, in case the Bondholder does not receive the form.

14.9 As per the prevailing tax provisions, Form 15G cannot be submitted if the aggregate of income of the nature referred to in section 197A of the Income Tax Act viz. dividend, interest etc. as prescribed therein, credited or paid or likely to be credited or paid during the financial year in which such income is to be included exceeds the maximum amount which is not chargeable to tax.

14.10 Tax exemption certificate or document, if any, must be lodged at the office of the Registrar to the Issue prior to the Record Date, or as specifically required. Tax applicable on coupon will be deducted at source on accrual thereof in the Company’s books and / or on payment thereof, in accordance with the provisions of the Income Tax Act and / or any other statutory modification, re-enactment or notification as the case may be. A tax deduction certificate will be issued for the amount of tax so deducted on annual basis.

15. Security

15.1 The Bonds issued by the Company will be secured by creating a charge on the book debts of the company along with identified immovable property by an first charge/pari pasu charge, as may be agreed between the Company and the Debenture Trustee, pursuant to the terms of the Debenture Trust Deed.

16. Events of Default

16.1 The Debenture Trustee at its discretion may, or if so requested in writing by the holders of not less than 75% in principal amount of the Bonds then outstanding or if so directed by a Special Resolution shall (subject to being indemnified and/or secured by the Bondholders to its satisfaction), give notice to the Company specifying that the Bonds and/or any particular Series of Bonds, in whole but not in part are and have become due and repayable at the Early Redemption Amount on such date as may be specified in such notice inter alia if any of the events listed in 16.2 below occur.

16.2 The description below is indicative and a complete list of events of default and its consequences shall be

specified in the Debenture Trust Deed:

(i) Default is made in any payment of the principal amount due in respect of any of the Series of Bonds and such failure continues for a period of 30 days;

(ii) Default is made in any payment of any installment of interest in respect of Series 1 Bonds and/ or Series 3 Bonds or in the payment of cumulative interest on Series 2 Bonds and/ or Series 4 Bonds and such failure continues for a period of 15 days;

(iii) Default is made in any payment of any other sum due in respect of any Series of the Bonds and such failure continues for a period of 15 days;

(iv) The Company does not perform or comply with one or more of its other material obligations in relation to the Bonds or the Debenture Trust Deed which default is incapable of remedy or, if in the opinion of the Debenture Trustee capable of remedy, is not remedied within 30 days after written notice of such default shall have been given to the Company by the Debenture Trustee and which has a material adverse effect on the Company;

(v) The Company is (or is deemed by law or a court to be) insolvent or bankrupt or unable to pay (in the opinion of the Debenture Trustee) a material part of its debts, or stops, suspends or threatens to stop or suspend payment of all or (in the opinion of the Debenture Trustee) a material part of (or of a particular type of) its debts; or

(vi) Any encumbrancer takes possession, or a receiver or an administrator is appointed of the whole or (in the opinion of the Debenture Trustee) any substantial part of the property, assets or revenues of the Company (as the case may be) and is not discharged within 45 days.

16.3 The Early Redemption Amount payable on the occurrence of an Event of Default shall be as detailed in the

Debenture Trust Deed.

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16.4 If an Event of Default occurs which is continuing, the Debenture Trustee may with the consent of the Bondholders, obtained in accordance with the provisions of the Debenture Trust Deed, and with a prior written notice to the Company, take action in terms of the Debenture Trust Deed.

16.5 In case of default in the redemption of Bonds, in addition to the payment of interest and all other monies payable hereunder on the respective due dates, the Company shall also pay interest on the defaulted amounts.

17. Bondholder’s Rights, Nomination Etc.

17.1 Bondholder Not a Shareholder

The Bondholders will not be entitled to any of the rights and privileges available to the equity and preference shareholders of the Company.

17.2 Rights of Bondholders Some of the significant rights available to the Bondholders are as follows:

(a) The Bonds shall not, except as provided in the Companies Act, confer on Bondholders any rights or privileges available to members of the Company including the right to receive notices or annual reports of, or to attend and / or vote, at the Company’s general meeting(s). However, if any resolution affecting the rights of the Bondholders is to be placed before the shareholders, such resolution will first be placed before the concerned registered Bondholders for their consideration. In terms of Section 219(2) of the Companies Act, Bondholders shall be entitled to a copy of the balance sheet on a specific request made to the Company.

(b) 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 a 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 modification, variation or abrogation is not acceptable to the Company.

(c) The registered Bondholder or in case of joint-holders, the person whose name stands first in the Register of Bondholders shall be entitled to vote in respect of such Bonds, either by being present in person or, where proxies are permitted, by proxy, at any meeting of the concerned Bondholders summoned for such purpose and every such Bondholder shall be entitled to one vote on a show of hands and on a poll, his or her voting rights shall be in proportion to the outstanding nominal value of Bonds held by him or her on every resolution placed before such meeting of the Bondholders.

(d) Bonds may be rolled over 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 a Special Resolution passed at a meeting of the concerned Bondholders after providing at least 21 days prior notice for such roll-over and in accordance with the SEBI Debt Regulations. The Company shall redeem the Bonds of all the Bondholders, who have not given their positive consent to the roll-over.

The above rights of Bondholders are merely indicative. The final rights of the Bondholders will be as per the Debenture Trust Deed to be executed by the Company with the Debenture Trustee.

Special Resolution for the purpose of this section is a resolution passed at a meeting of Bondholders of at least three-fourths of the outstanding amount of the Bonds, present and voting.

17.3 Succession Where Bonds are held in joint names and one of the joint holders dies, the survivor(s) will be recognized as the Bondholder(s) in accordance with applicable law and the provisions of the AoA. It will be sufficient for the Company to delete the name of the deceased Bondholder after obtaining satisfactory evidence of his death, provided that a third person may call on the Company to register his name as successor of the deceased Bondholder after obtaining evidence such as probate of a will for the purpose of proving his title to the Bonds. In the event of demise of the sole or first holder of the Bonds, the Company will recognise the executors or administrator of the deceased Bondholders, or the holder of the succession certificate or other legal representative as having title to the Bonds only if such executor or administrator obtains and produces probate

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of will or letter of administration or is the holder of the succession certificate or other legal representation, as the case may be, from an appropriate court in India. The Directors of the Company in their absolute discretion may, in any case, dispense with production of probate of will or letter of administration or succession certificate or other legal representation.

17.4 Nomination Facility to Bondholder

17.4.1 In accordance with Section 109A of the Companies Act, the sole Bondholder or first Bondholder, along with other joint Bondholders (being individual(s)) may nominate any one person (being an individual) who, in the event of death of the sole holder or all the joint-holders, as the case may be, shall become entitled to the Bond. A person, being a nominee, becoming entitled to the Bond by reason of the death of the Bondholders, shall be entitled to the same rights to which he will be entitled if he were the registered holder of the Bond. Where the nominee is a minor, the Bondholders may make a nomination to appoint any person to become entitled to the Bond(s), in the event of his death, during the minority. A nomination shall stand rescinded on 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 Bondholders. Fresh nominations can be made only in the prescribed form available on request at the Company’s registered or administrative office or at such other addresses as may be notified by the Company.

17.4.2 The Bondholders are advised to provide the specimen signature of the nominee to the Company to expedite the transmission of the Bond(s) to the nominee in the event of demise of the Bondholders. The signature can be provided in the Application Form or subsequently at the time of making fresh nominations. This facility of providing the specimen signature of the nominee is purely optional.

17.4.3 In accordance with Section 109B of the Companies Act, any person who becomes a nominee by virtue of the provisions of Section 109A of the Companies Act, shall on the production of such evidence as may be required by the Company’s Board or Committee of Directors, as the case may be, elect either:

(a) to register himself or herself as the holder of the Bonds; or (b) to make such transfer of the Bonds, as the deceased holder could have made.

17.4.4 Further, the Company’s Board or Committee of Directors, as the case may be, may at any time give notice requiring any nominee to choose either to be registered himself or herself or to transfer the Bonds, and if the notice is not complied with, within a period of 90 days, the Company’s Board or Committee of Directors, as the case may be, may thereafter withhold payment of all interests or other monies payable in respect of the Bonds, until the requirements of the notice have been complied with.

17.4.5 Notwithstanding anything stated above, Applicants to whom the Bonds are credited in dematerialized form, need not make a separate nomination with the Company. Nominations registered with the respective Depository Participant of the Bondholder will prevail. If the Bondholders require changing their nomination, they are requested to inform their respective Depository Participant. For Applicants who opt to hold the Bonds in physical form, the Applicants are require to fill in the details for ‘nominees’ as provided in the Application Form.

18. Debenture Trustee

18.1 The Company has appointed PNB Investment Services Limited to act as the Debenture Trustee for the Bondholders. The Company intends to enter into a Debenture Trust Deed with the Debenture Trustee, the terms of which will govern the appointment and functioning of the Debenture Trustee and shall specify the powers, authorities and obligations of the Debenture Trustee. Under the terms of the Debenture Trust Deed, the Company will covenant with the Debenture Trustee that it will pay the Bondholders the principal amount on the Bonds on the relevant Maturity Date and also that it will pay the interest due on Bonds on the rate specified under the Debenture Trust Deed.

18.2 The Bondholders shall, without further act or deed, be deemed to have irrevocably given their consent to the Debenture Trustee or any of their agents or authorised officials to do all such acts, deeds, matters and things in respect of or relating to the Bonds as the Debenture Trustee may in their absolute discretion deem necessary or require to be done in the interest of the Bondholders. Any payment made by the Company to the Debenture Trustee on behalf of the Bondholders shall discharge the Company pro tanto to the Bondholders. All the rights and remedies of the Bondholders shall vest in and shall be exercised by the Debenture Trustee without reference to the Bondholders. No Bondholder shall be entitled to proceed directly against the Company unless the Debenture Trustee, having become so bound to proceed, failed to do so.

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18.3 The Debenture Trustee 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 Company’s cost.

19. Miscellaneous

19.1 Loan against Bonds

The Bonds cannot be pledged or hypothecated for obtaining loans from scheduled commercial banks during the Lock-in Period.

19.2 Lien The Company shall have the right of set-off and lien, present as well as future on the moneys due and payable to the Bondholder or deposits held in the account of the Bondholder, whether in single name or joint name, to the extent of all outstanding dues by the Bondholder to the Company.

19.3 Lien on Pledge of Bonds Subject to applicable laws, the Company, at its discretion, may note a lien on pledge of Bonds if such pledge of Bond is accepted by any bank or institution for any loan provided to the Bondholder against pledge of such Bonds as part of the funding.

19.4 Right to Reissue Bond(s) Subject to the provisions of the Companies Act, where the Company has bought back any Bond(s), the Company shall have and shall be deemed always to have had the right to keep such Bonds alive without extinguishment 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 resell or 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.

19.5 Joint-holders Where two or more persons are holders of any Bond (s), they shall be deemed to hold the same as joint holders with benefits of survivorship subject to Articles and applicable law.

19.6 Sharing of Information The Company may, at its option, use its own, as well as exchange, share or part with any financial or other information about the Bondholders available with the Company, its Subsidiary(ies) and affiliates and other banks, financial institutions, credit bureaus, agencies, statutory bodies, as may be required and neither the Company nor its subsidiaries and affiliates nor their agents shall be liable for use of the aforesaid information.

19.7 Notices

All notices to the Bondholders required to be given by the Company or the Debenture Trustee shall be published in one English language newspaper having wide circulation and/or, will be sent by post/courier to the registered Bondholders from time to time.

19.8 Issue of Duplicate Consolidated Bond Certificate(s) If any Consolidated Bond Certificate is mutilated or defaced it may be replaced by the Company against the surrender of such Consolidated Bond Certificates, provided that where the Consolidated Bond Certificates are mutilated or defaced, they will be replaced only if the certificate numbers and the distinctive numbers are legible.

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

The above requirement may be modified from time to time as per applicable law and practice.

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19.9 Future Borrowings The Company shall be entitled at any time in the future during the term of the Bonds or thereafter to borrow or raise loans or create encumbrances or avail of financial assistance in any form, and also to issue promissory notes or debentures or any other securities in any form, manner, ranking and denomination whatsoever and to any eligible persons whatsoever, and to change its capital structure including through the issue of shares of any class, on such terms and conditions as the Company may deem appropriate, without requiring the consent of, or intimation to, the Bondholders or the Debenture Trustee in this connection.

19.10 Jurisdiction The Bonds, the Debenture Trust Deed, the Tripartite Agreement and other relevant documents shall be governed by and construed in accordance with the laws of India. The Company has in the Debenture Trust Deed agreed, for the exclusive benefit of the Debenture Trustee and the Bondholders, that the courts of New Delhi are to have jurisdiction to settle any disputes which may arise out of or in connection with the Debenture Trust Deed or the Bond

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PROCEDURE FOR APPLICATION

This section applies to all Applicants. All Applicants are required to make payment of the full Application Amount along with the Application Form.

The Prospectus and the Application Forms of this Tranche-1 issue, may be obtained from our Registered Office and Corporate Office or the or Lead Brokers or from the Lead Managers. In addition, Application Forms would also be made available to BSE where listing of the Bonds is sought.

Application Form

Applicants are required to submit their Applications to the Bankers to the Issue on all working days during which issue is open. Such Applicants shall only use the specified Application Form bearing the stamp of the Banker to the Issue or Lead Managers or Registered Members of Recognised Stock Exchanges for the purpose of making an Application in terms of this tranche prospectus.

WHO CAN APPLY

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

• Indian nationals resident in India who are not minors in single or joint names (not more than three); and

• Hindu Undivided Families or HUFs, in the individual name of the Karta. The Applicant should specify that the Application is being made in the name of the HUF in the Application Form as follows: “Name of Sole or First Applicant: XYZ Hindu Undivided Family applying through XYZ, where XYZ is the name of the Karta”. Applications by HUFs would be considered at par with those from individuals.

Non-resident investors including NRIs, FIIs and OCBs are not eligible to participate in the Issue.

Application Size

Applications are required to be for a minimum of one Bond and multiples of one Bond thereafter.

Instructions for Completing the Application Form

Applications must be:

(a) Made only in the prescribed Application Form. (b) Completed in block letters in English as per the instructions contained in the tranche prospectus(es) and in the

Application Form, and are liable to be rejected if not so completed. Applicants should note that the Bankers to the Issue will not be liable for errors in data entry due to incomplete or illegible Application Forms.

(c) In single name or in joint names (not more than three, and in the same order as their Depository Participant details).

(d) Applications are required to be for a minimum of one Bond and in multiples of one Bond thereafter. (e) Thumb impressions and signatures other than in English/ Hindi or any of the other languages specified in the

Eighth Schedule to the Constitution of India must be attested by a Magistrate or Notary Public or a Special Executive Magistrate under his official seal.

(f) No receipt would be issued by the Company for the Application money. However, the Bankers to the Issue or collection centre(s)/ agents, on receiving the Applications will acknowledge receipt by stamping and returning the acknowledgment slip to the Applicant.

(g) In case investor does not select any of the series in the Application Form, the Company shall consider the Series 4 for the purposes of the Allotment.

General Instructions

Dos:

1. Check if you are eligible to apply. 2. Read all the instructions carefully and complete the Application Form. 3. Applications are required to be in single or joint names (not more than three). 4. If Allotment of Bonds is sought in the dematerialised form, ensure that the details about the Depository

Participant and beneficiary account are correct and the beneficiary account is active. 5. In case of an HUF applying through its Karta, the Applicant is required to specify the name of an Applicant in

the Application Form as “XYZ Hindu Undivided Family applying through PQR”, where PQR is the name of the Karta.

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6. Applicant’s Bank Account Details: The Bonds shall be allotted in dematerialised and physical form. For instructions on how to apply for Allotment in the physical form, see “Procedure for Application –

Applications for Allotment of Bonds in the physical form” on page 44 of this Tranche Prospectus. In case of Allotment in dematerialised form, the Registrar to the Issue will obtain the Applicant’s bank account details from the Depository. The Applicant should note that on the basis of the name of the Applicant, Depository Participant’s name, Depository Participant’s identification number and beneficiary account number provided by them in the Application Form, the Registrar to the Issue will obtain from the Applicant’s beneficiary account, the Applicant’s bank account details. The Applicants are advised to ensure that bank account details are updated in their respective beneficiary accounts as these bank account details would be printed on the refund order(s), if any. Failure to do so could result in delays in credit of refunds to Applicants at the Applicants sole risk and neither the Lead Managers nor our Company nor the Refund Bank nor the Registrar to the Issue shall have any responsibility and undertake any liability for such delay.

7. Applications under Power of Attorney: Unless the Company specifically agree in writing, and subject to such terms and conditions as the Company may deem fit, in the case of Applications made under power of attorney, a certified copy of the power of attorney is required to be lodged separately, along with a copy 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 number, date of submission of the Application Form, name of the bank and branch where it was deposited, cheque/demand draft number and the bank and branch on which the cheque/demand draft was drawn.

8. Permanent Account Number: All Applicants should mention their PAN allotted under the Income Tax Act in the Application Form. In case of joint applicants, the PAN of the first Applicant should be provided and for HUFs, PAN of the HUF should be provided. The PAN would be the sole identification number for participants transacting in the securities markets, irrespective of the amount of the transaction. Any Application Form without the PAN is liable to be rejected. Applicants should not submit the GIR Number instead of the PAN as the Application is liable to be rejected on this ground.

9. Joint Applications: Applications may be made in single or joint names (not exceeding three). In the case of joint Applications, 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 may make multiple applications for the total number of Bonds required. 11. Applicants are requested to write their names and Application serial number on the reverse of the instruments

by which the payments are made. 12. Tax Deduction at Source: Persons (other than companies and firms) resident in India claiming interest on

bonds without deduction of tax at source are required to submit Form 15G/Form 15H at the time of submitting the Application Form, in accordance with and subject to the provisions of the Income Tax Act. Other Applicants can submit a certificate under section 197 of the Income Tax Act. For availing of the exemption from deduction of tax at source from interest on Bonds the Applicant is required to submit Form 15G/ Form 15H certificate under section 197A of the Income Tax Act/ valid proof of exemption, as the case may be along with the name of the sole/ first Applicant, Bondholder number and the distinctive numbers of Bonds held to us on confirmation of Allotment. Applicants are required to submit Form 15G/ 15H/ certificate under section 197A of the Income Tax Act/ valid proof of exemption in each financial year.

13. All Applicants are requested to tick the relevant column “Category of Investor” in the Application Form. 14. Ensure that the Applications are submitted to the Bankers to the Issue or collection centre(s)/ agents as may be

specified before Issue Closing Date. 15. Ensure that the name(s) given in the Application Form is exactly the same as the name(s) in which the

beneficiary account is held with the Depository Participant. In case the Application Form is submitted in joint names, ensure that the beneficiary account is also held in same joint names and such names are in the same sequence in which they appear in the Application Form.

16. Tick the Series in the Application Form that you wish to apply for.

Don’ts:

1. Do not make an application for lower than the minimum Application size. 2. Do not pay the Application Amount in cash, by money order or by postal order or by stockinvest. 3. Do not send Application Forms by post; instead submit the same to a Bankers to the Issue / Designated

Collection Centre / Agent only. 4. Do not submit the GIR number instead of the PAN, as the Application Form is liable to be rejected on this

ground. 5. Do not submit the Application Forms without the full Application Amount for the number of Bonds applied

for.

For further instructions, investors are advised to read the relevant tranche prospectus and Application Form carefully.

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Applications for Allotment of Bonds in the physical form

Applicant(s) who wish to subscribe to, or hold, the Bonds in physical form can do so in terms of Section 8(1) of the Depositories Act and the Company is obligated to fulfill such request of the Applicant(s). Accordingly, any Applicant who wishes to subscribe to the Bonds in physical form shall undertake the following steps:

(i) Please complete the Application Form in all respects, by providing all the information including PAN

and demographic details. However, do not provide the Depository Participant details in the Application Form. The requirement for providing Depository Participant details shall be mandatory only for the Applicants who wish to subscribe to the Bonds in dematerialised form.

(ii) Please provide the following documents along with the Application Form:

(a) Self-attested copy of the PAN card;

(b) Self-attested copy of the proof of residence. Any of the following documents shall be considered as a verifiable proof of residence:

• ration card issued by the GoI; or

• valid driving license issued by any transport authority of the Republic of India; or

• electricity bill (not older than three months); or

• landline telephone bill (not older than three months); or

• valid passport issued by the GoI; or

• Voter’s Identity Card issued by the GoI; or

• passbook or latest bank statement issued by a bank operating in India; or

• leave and license agreement or agreement for sale or rent agreement or flat maintenance bill; (c) Self-attested copy of a cancelled cheque of the bank account to which the amounts pertaining to

payment of refunds, interest and redemption, as applicable, should be credited.

The Applicant shall be responsible for providing the above information accurately. Delays or failure in credit of the payments due to inaccurate details shall be at the sole risk of the Applicants and neither the Lead Managers nor the Company shall have any responsibility and undertake any liability for the same.

Applications for Allotment of the Bonds in physical form, which are not accompanied with the aforestated documents may be rejected at the sole discretion of the Company.

In relation to the issuance of the Bonds in physical form, note the following:

(i) An Applicant has the option to seek Allotment of Bonds in either electronic or physical mode. No partial Application for the Bonds shall be permitted and is liable to be rejected.

(ii) In case of Bonds that are being issued in physical form, the Company will issue one certificate to the Bondholder for the aggregate amount of the Bonds that are applied for (each such certificate a “Consolidated

Bond Certificate”).

(iii) Any Applicant who provides the Depository Participant details in the Application Form shall be Allotted

the Bonds in dematerialised form only. Such Applicant shall not be Allotted the Bonds in physical form.

(iv) No separate Applications for issuance of the Bonds in physical and electronic form should be made. If such Applications are made, the Application for the Bonds in physical mode shall be rejected. This shall be considered as a ground for technical rejection.

(v) The Company shall dispatch the Consolidated Bond Certificate to the address of the Applicant provided in the Application Form after completion of requisite procedure.

All terms and conditions disclosed in the relevant tranche prospectus in relation to the Bonds held in physical form pursuant to rematerialisation shall be applicable mutatis mutandis to the Bonds issued in physical form.

Subject to the lock-in for a minimum period of five years from the Deemed Date of Allotment, trading of the Bonds on the Stock Exchange shall be in dematerialised form only in multiples of one Bond.

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Applications for Allotment of Bonds in the dematerialised form

As per the provisions of the Depositories Act, the Bonds can be held in dematerialised form, i.e., they shall be fungible and be represented by a statement issued through electronic mode. In this context, the Tripartite Agreements have been executed between our Company, the Registrar to the Issue and the respective Depositories for offering depository option to the Bondholders.

(a) All Applicants can seek Allotment in dematerialised mode or in physical form. Applications made for receiving Allotment in the dematerialised form without relevant details of his or her depository account are liable to be rejected.

(b) An Applicant applying for the Bonds must have at least one beneficiary account with either of the Depository Participants of either of the Depositories, prior to making the Application.

(c) The Applicant must necessarily fill in the details (including the Beneficiary Account Number and Depository Participant’s identification number) appearing in the Application Form.

(d) Allotment to an Applicant will be credited in electronic form directly to the beneficiary account (with the Depository Participant) of the Applicant.

(e) Names in the Application Form should be identical to those appearing in the account details in the Depository. In case of joint holders, the names should necessarily be in the same sequence as they appear in the account details in the Depository.

(f) If incomplete or incorrect details are given under the heading ‘Applicant’s Depository Account Details’, in the Application Form, it is liable to be rejected.

(g) The Applicant is responsible for the correctness of his or her demographic details given in the Application Form vis-à-vis those with his or her Depository Participant.

(h) Bonds in electronic form can be traded only on the stock exchange having electronic connectivity with the Depositories. BSE, where the Bonds are proposed to be listed, has electronic connectivity with the Depositories.

(i) The trading of the Bonds shall be in dematerialised form only.

Allottees will have the option to re-materialise the Bonds so Allotted as per the provisions of the Companies Act

and the Depositories Act.

PAYMENT INSTRUCTIONS

Escrow Mechanism

The Company shall open Escrow Account(s) with one or more Escrow Collection Bank(s) in whose favour the Applicants shall make out the cheque or demand draft in respect of his or her Application. Cheques or demand drafts received for the Application Amount from Applicants would be deposited in the Escrow Account.

The Escrow Collection Banks will act in terms of the tranche prospectus(es) and the Escrow Agreement. The Escrow Collection Banks, for and on behalf of the Applicants, shall maintain the monies in the Escrow Account until the creation of security for the Bonds. The Escrow Collection Banks shall not exercise any lien whatsoever over the monies deposited therein and shall hold the monies therein in trust for the Applicants. On the Designated Date, the Escrow Collection Banks shall transfer the funds represented by Allotment of the Bonds from the Escrow Account, as per the terms of the Escrow Agreement, into the Public Issue Account maintained with the Bankers to the Issue, provided that the sums received in respect of the Issue will be kept in the Escrow Account and the Company will have access to such funds only after creation of security for the Bonds. The amount representing the Applications that have been rejected shall be transferred to the Refund Account. Payments of refund to the Applicants shall be made from the Refund Account are per the terms of the Escrow Agreement and the tranche prospectus(es).

The Applicants should note that the escrow mechanism is not prescribed by SEBI or the Stock Exchange and has been established as an arrangement between the Company, the Lead Managers, the Escrow Collection Banks and the Registrar to the Issue to facilitate collection from the Applicants.

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Payment into Escrow Account

Each Applicant shall draw a cheque or demand draft or remit the funds electronically through the mechanisms for the Application Amount as per the following terms:

(a) All Applicants would be required to pay the full Application Amount for the number of Bonds applied for, at the time of the submission of the Application Form.

(b) The Applicants shall, with the submission of the Application Form, draw a payment instrument for the full Application Amount in favour of the Escrow Account and submit the same to Bankers to the Issue. If the payment is not made favouring the Escrow Account along with the Application Form, the Application shall be rejected.

(c) The payment instruments for payment into the Escrow Account should be drawn in favour of “PFC – Public

Bond Issue Account”.

(d) The monies deposited in the Escrow Account will be held for the benefit of the Applicants until the Designated Date.

(e) On the Designated Date, the Escrow Collection Banks shall transfer the funds from the Escrow Account as per the terms of the Escrow Agreement into the Public Issue Account with the Bankers to the Issue. The Escrow Collection Bank shall also refund all amounts payable to Applicants whose Applications have been rejected by the Company.

(f) Payments should be made by cheque, or a demand draft drawn on any bank (including a co-operative bank), which is situated at, and is a member of or sub-member of the bankers’ clearing house located at the centre where the Application Form is submitted. Outstation cheques/bank drafts drawn on banks not participating in the clearing process will not be accepted and applications accompanied by such cheques or bank drafts are liable to be rejected.

(g) Cash/ stockinvest/money orders/ postal orders will not be accepted.

Submission of Application Forms

All Application Forms duly completed and accompanied by account payee cheques or drafts shall be submitted to the designated collection banks during the Issue Period.

No separate receipts shall be issued for the money payable on the submission of Application Form. However, the collection banks will acknowledge the receipt of the Application Forms by stamping and returning to the Applicants the acknowledgement slip. This acknowledgement slip will serve as the duplicate of the Application Form for the records of the Applicant.

Online Applications

The Company may decide to offer an online Application facility for the Bonds, as and when permitted by applicable laws, subject to the terms and conditions prescribed.

Communications

All future communications in connection with Applications made in the Issue should be addressed to the Registrar to the Issue, quoting all relevant details regarding the Applicant/Application. Applicants may address our Compliance Officer as well as the contact persons of the Lead Managers and the Registrar to the Issue in case of any Issue related problems such as non-receipt of allotment advice/credit of Bonds in the Depositary’s beneficiary account/refund orders, etc.

Rejection of Applications

The Company 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.

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Application would be liable to be rejected on one or more technical grounds, including but not restricted to:

• Number of Bonds applied for is less than the minimum Application size;

• Applications not duly signed by the sole/joint Applicants;

• Application amount paid not tallying with the number of Bonds applied for;

• Applications for a number of Bonds which is not in a multiple of one;

• Investor category not ticked;

• Bank account details not given;

• Applications by persons not competent to contract under the Indian Contract Act, 1872, as amended, including a minor without a guardian name;

• In case of Applications under Power of Attorney where relevant documents not submitted;

• Application by stockinvest or accompanied by cash / money order / postal order; • Applications without PAN; and

• For option to hold Bonds in Physical form, Depository Participant identification number, Client ID and PAN mentioned in the Application Form do not match with the Depository Participant identification number, Client ID and PAN available in the records with the depositories;

• Address not provided in case of exercise of option to hold Bonds in physical form;

• Copy of KYC documents not provided in case of option to hold Bonds in physical form. The collecting bank shall not be responsible for rejection of the Application on any of the technical grounds mentioned above.

Application Forms received after the closure of the Issue shall be rejected.

In the event, if any Bond(s) applied for is/are not Allotted, the Application monies in respect of such Bonds will be refunded, as may be permitted under the provisions of applicable laws.

Basis of Allotment

The Company shall finalise the Basis of Allotment in consultation with the Lead Managers, Designated Stock Exchange and the Registrar to the Issue.

Subject to the provisions contained in the relevant tranche prospectus and the Articles of Association of the Company, the Board or any other person(s) authorised by the Board will proceed to Allot the Bonds under the relevant tranche prospectus on a first come first basis up to the Issue Closing Date, regardless of the Series of Bonds applied for.

However, in the event of oversubscription above ` 6,900 crores, for valid applications for the bonds received on the date of oversubscription, the bonds shall be allotted proportionately, subject to the overall limit of ` 6,900 crores. Any applications for bonds received after the date of oversubscription shall be rejected.

Allotment advice/ Refund Orders

The Company reserves, in its absolute and unqualified discretion and without assigning any reason thereof, the right to reject any Application in whole or in part. The unutilised portion of the Application money will be refunded to the Applicant by an account payee cheque/demand draft. In case the cheque payable at par facility is not available, we reserve the right to adopt any other suitable mode of payment.

The Company shall credit the allotted Bond to the respective beneficiary accounts/dispatch the allotment advice/refund orders, as the case may be, by registered post at the Applicant’s sole risk, within the period of 70 days prescribed under Schedule II of the Companies Act.

Further,

(a) Allotment of the Bonds shall be made within 30 days of the Issue Closing Date; (b) credit to dematerialised accounts will be made within two Working Days from the date of Allotment; (c) the Company shall pay interest at 15% p.a. for delay beyond eight days prescribed under the Companies Act,

after the Company becomes liable to pay any amount on account of refund. The Company will provide adequate funds to the Registrar to the Issue, for this purpose.

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Filing of the Prospectus with the RoC

A copy of the prospectus shall be filed with the RoC, in accordance with the provisions of Sections 56 and 60 of the Companies Act.

Pre-Issue Advertisement

Subject to Section 66 of the Companies Act, the Company shall, on or before the Issue Opening Date, publish a pre-Issue advertisement, in the form prescribed by the SEBI Debt Regulations, in one national daily newspaper with wide circulation.

IMPERSONATION

Attention of the Applicants is specifically drawn to the provisions of sub-section (1) of Section 68 A of the

Companies Act, which is reproduced below: “Any person who:

(a) makes in a fictitious name, an application to a company for acquiring or subscribing for, any shares therein,

or

(b) otherwise induces a company to allot, or register any transfer of shares, therein to him, or any other person in

a fictitious name, shall be punishable with imprisonment for a term which may extend to five years.”

Listing

The Bonds will be listed on BSE. If the permission to deal in and for an official quotation of the Bonds are not granted by BSE, we shall forthwith repay, without interest, all such moneys received from the Applicants in pursuance of the tranche prospectus(es). If such money is not repaid within eight days after we becomes liable to repay it, then the Company and every Director of the Company who is an officer in default shall, on and from such expiry of eight days, be liable to repay the money, with interest at 15% p.a. on application money, as prescribed under Section 73 of the Companies Act.

The Company shall use best efforts to ensure that all steps for the completion of the necessary formalities for listing at the Stock Exchange are taken within seven Working Days from the date of Allotment.

Utilisation of Application Money

The sums received in respect of the Issue will be kept in the Escrow Account and the Company will have access to such funds only after creation of security for the Bonds.

Undertaking by the Issuer

We undertake that:

(a) the complaints received in respect of the Issue shall be attended to by us expeditiously and satisfactorily;

(b) we shall take necessary steps for the purpose of getting the Bonds listed within the specified time;

(c) the funds required for dispatch of refund orders/allotment advice/certificates by registered post shall be made available to the Registrar to the Issue by the company;

(d) necessary cooperation to the credit rating agency(ies) shall be extended in providing true and adequate information until the debt obligations in respect of the Bonds are outstanding;

(e) we shall forward the details of utilisation of the funds raised through the Bonds duly certified by our statutory auditors, to the Debenture Trustee at the end of each half year;

(f) we shall disclose the complete name and address of the Debenture Trustee in our annual report; and

(g) we shall provide a compliance certificate to the Debenture Trustee (on an annual basis) in respect of compliance of with the terms and conditions of issue of Bonds as contained in the tranche prospectus(es).

(h) We shall make necessary disclosures/ reporting under any other legal or regulatory requirement as may be

required by the company from time to time.

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MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION

The following contracts (not being contracts entered into in the ordinary course of business carried on by the Company or entered into more than two years before the date of this Prospectus Tranche-1) which are or may be deemed material have been entered or are to be entered into by the Company. These contracts and also the documents for inspection referred to hereunder, may be inspected on Working Days at the Registered and Corporate Office of the Company situated at ‘Urjanidhi’, 1, Barakhamba Lane, Connaught Place, New Delhi 110 001, India, from 10.00 a.m. and 12.00 noon on any working day (Monday to Friday) from the date of this Prospectus Tranche-1 until the date of closing of the issue.

MATERIAL CONTRACTS

1. Memorandum of Understanding dated September 12, 2011 between the Company and the Lead Managers.

2. Memorandum of Understanding dated September 7, 2011 between the Company and the Registrar to the Issue.

3. Appointment Letter dated August 1, 2011 for the appointment of Debenture Trustee for the Bondholders.

4. Escrow Agreement dated September 21, 2011 between the Company, the Registrar, the Escrow Collection Bank(s), and the Lead Managers.

5. Tripartite Agreement dated April 25, 2006, between CDSL, the Company and the Registrar to the Issue.

6. Tripartite Agreement dated May 16, 2006 between NSDL, the Company and the Registrar to the Issue.

MATERIAL DOCUMENTS

1. Memorandum and Articles of Association of the Company, as amended to date.

2. Resolution passed at 281st Meeting of the Board of Directors held on March 17, 2011 approving the borrowing programme of ` 27,500 crores for the year 2011-12 and authorizing the Chairman & Managing Director to exercise powers in relation to raising of debt issues.

3. Board Resolution dated September 12, 2011, approving the Issue and related matters.

4. Board Resolution dated September 26, 2011, approving the Tranche Prospectus.

5. Copy of shareholders resolution dated September 25, 2007 u/s 293 (1) (a) and 293 (1) (d) for borrowing limit and creation of security respectively

6. Letter dated August 25, 2011 of CRISIL assigning ‘AAA/Stable’ (Pronounced ‘Triple A with stable outlook’) raiting for our infrastructure bonds aggregating to ` 6,900 crores and letter dated September 7, 2011 of ICRA assigning ‘AAA with a Stable outlook’ for our long-term infrastructure bonds of ` 6,900 crores (part of ` 27,500 long term borrowings programmes for the financial year 2011-12).

7. Consents of each of the Directors, Lead Managers, Lead Brokers, Legal Advisors to the Issue, Registrar to the Issue, Bankers to the Issue, Bankers to the Company, the Debenture Trustee for the Bonds and the Credit Rating Agencies to include their names in the Prospectus Tranche-1, in their respective capacities.

8. Consent of the Auditors, for inclusion of their name and the report on the Accounts in the form and context in which they appear in the Prospectus Tranche-1 and their statement on tax benefits mentioned herein.

9. Auditor’s Report dated August 27, 2011 on unconsolidated financial statements prepared under Indian GAAP for the financial year March 31, 2007, 2008, 2009, 2010 and 2011, and consolidated financial statements prepared under Indian GAAP for the financial year 2009, 2010 and 2011.

10. Certificate dated September 12, 2011 issued by the Auditors on the amount and eligibility to carry out the Issue of Infrastructure Bonds under section 80CCF of Income Tax Act, 1961, in terms of the Notification dated September 9, 2011 of CBDT.

11. Annual Report of the Company for the last five Fiscals.

12. In-principle listing approval from BSE, through letter no. DCS/SP/PI-BOND/001/11-12 dated September 22, 2011.

13. Due Diligence Certificate dated September 26, 2011 from the Lead Managers.

14. Due Diligence Certificate dated September 22, 2011 from the Debenture Trustee.

Any of the contracts or documents mentioned above may be amended or modified at any time, without reference

to the Bondholders, in the interest of the Company in compliance with applicable laws.

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DECLARATION

We, the Directors of the Company, certify that all applicable legal requirements in connection with the Issue, including under the Companies Act, the SEBI Debt Regulations, and all relevant guidelines issued by SEBI, the Government of India and any other competent authority in this behalf, have been duly complied with, and that no statement made in this Prospectus Tranche-1 contravenes such applicable legal requirements.

We further certify that this Prospectus Tranche-1 does not omit disclosure of any material fact which may make the statements made therein, in light of circumstances under which they were made, misleading and that all statements in this Prospectus Tranche-1 are true and correct.

Signed by all the Directors of the Company

1. Mr. Satnam Singh

2. Mr. Mukesh Kumar Goel

3. Mr. Rajeev Sharma

4. Mr. Radhakrishnan Nagarajan

5. Mr. Devender Singh

6. Mr. Ravindra Harshadrai Dholakia

7. Mr. P. Murali Mohana Rao

8. Mr. Suresh Chand Gupta

9 Mr. Ajit Prasad

10. Mr. Krishna Mohan Sahni

Place: New Delhi Date: September 26, 2011

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ANNEXURE - SHELF PROSPECTUS DATED SEPTEMBER 26, 2011