Serial No.: [ ] Private & Confidential –For Private ... IM 040… · SERIES-1 IMFOR PRIVATE PLACEMENT OF SECURED, NONCONVERTIBLE, NON-CUMULATIVE, REDEEMABLE, TAXABLE BONDS IN THE

Serial No.: [______]

Addressed to: ______________________________________ Private & Confidential –For Private Circulation Only

Series-1 IM dated JUNE 27th, 2018

NATIONAL HIGHWAYS AUTHORITY OF INDIA (An Autonomous Body under the Ministry of Road Transport & Highways, Government of India)

(Constituted on June 15, 1989 by an Act of Parliament - The National Highways Authority of India Act, 1988) Head Office: G - 5 & 6, Sector 10, Dwarka, New Delhi – 110075 Tel: (011) 25074100, 25074200; Fax: +91-11-25093517, 25093515

Website: www.nhai.org; E-mail: [email protected]

(This Series-1IMis neither a Prospectus nor a Statement in lieu of Prospectus. This Series-1 IM is prepared in conformity with Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 issued vide circular No. LAD-NRO/GN/2008/13/127878 dated June 06, 2008 as amended from time to time.

(PRIVATE & CONFIDENTIAL)

SERIES-1 IM DATED JUNE 27th, 2018

SERIES-1 IMFOR PRIVATE PLACEMENT OF SECURED, NONCONVERTIBLE, NON-CUMULATIVE, REDEEMABLE, TAXABLE BONDS IN THE NATURE OF DEBENTURESOFFACE VALUE OF RS.10 LAKHS EACH FOR AN AMOUNT OF Rs.2000CRORES AND GREEN SHOE OPTION OF Rs. 1000 CRORES AGGREGATING to Rs.3000 CRORES BYNATIONAL HIGHWAYS AUTHORITY OF INDIA (“NHAI” OR THE “ISSUER” OR THE “AUTHORITY”)

ISSUE PROGRAM

ISSUE/BID OPENING DATE ISSUE/BID CLOSING DATE PAY-IN DATE DEEMED DATE OF ALLOTMENT

June 27th, 2018 June 27th, 2018 June 28th, 2018 June 28th, 2018

TRUSTEE FOR THE BONDHOLDERS

Vistra ITCL (India) Limited (P) Ltd. The IL&FS Financial Centre Plot C-22, G-Block, 7th Floor, Bandra Kurla Complex Bandra East, Mumbai - 400 051 Tel: +91 (022) 28593535 Fax: +91+91 (022) 26533207 E-mail: [email protected]

REGISTRAR TO THE ISSUE

Beetal Financial & Computer Services 99, Beetal House, Madangir, Behind Local Shopping Centre Near Harsukhdas Mandir New Delhi – 110062 Tel: +91 11 2996 1281 - 83 Fax:+91 11 2996 1284 E-mail: [email protected]

TABLE OF CONTENTS

PARTICULARS PAGE NO

I. DISCLAIMER 1

II. DEFINITIONS/ ABBREVIATIONS 5

III. ISSUER INFORMATION 7

IV. DETAILS OF MEMBERS OF THE ISSUER 10

V. DETAILS OF STATUTORY AUDITOR OF THE ISSUER 14

1) STATUTORY AUDITOR OF THE ISSUER 14

2) CHANGE IN STATUTORY AUDITOR OF THE ISSUER SINCE LAST THREE YEARS

14

VI. MANAGEMENT PERCEPTION OF RISK FACTORS 15

VII. BRIEF SUMMARY OF BUSINESS/ ACTIVITIES OF ISSUER AND ITS LINE OF BUSINESS

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1) OVERVIEW 37

2) STRENGTHS 38

3) STRATEGIES 40

4) ISSUER PROJECTS 41

5) FINANCING 43

6) CORPORATE STRUCTURE 53

VIII. KEY OPERATIONAL & FINANCIAL PARAMETERS OF THE ISSUER FOR THE LAST 3 AUDITED YEARS

54

IX. BRIEF HISTORY OF ISSUER SINCE INCORPORATION, DETAILS OF ACTIVITIES INCLUDING ANY REORGANIZATION, RECONSTRUCTION OR AMALGAMATION, CHANGES IN CAPITAL STRUCTURE, (AUTHORIZED, ISSUED AND SUBSCRIBED) AND BORROWINGS

55

1) BRIEF BACKGROUND 55

2) CHANGE IN HEAD OFFICE 55

3) VISION 55

4) MAIN OBJECTS 55

5) MAJOR EVENTS 55

6) HOLDING COMPANY 56

7) THE PROMOTER 56

8) SUBSIDIARIES AND SHAREHOLDING PATTERN 56

X. CAPITAL STRUCTURE 57

1) CAPITAL HISTORY 57

2) DETAILS OF ANY ACQUISITION OR AMALGAMATION IN THE LAST 1 YEAR

62

3) DETAILS OF ANY REORGANIZATION OR RECONSTRUCTION IN THELAST 1 YEAR

62

4) DISCLOSURES PERTAINING TO WILFUL DEFAULT 62

5) SHAREHOLDING PATTERN OF THE ISSUER 62

PARTICULARS PAGE NO

6) TOP 10 EQUITY SHARE HOLDERS OF THE ISSUER 62

7) PROMOTER HOLDING IN THE ISSUER 62

8) BORROWINGS OF THE ISSUER 63

A) DEBT OUTSTANDING 63

B) TERMS OF ASSETS CHARGED AS SECURITY 67

C) NON-CONVERTIBLE BONDS/ DEBENTURES 73

D) TOP 10 BONDHOLDERS OF THE ISSUER 76

9) AMOUNT OF CORPORATE GUARANTEES ISSUED BY THE ISSUER IN FAVOUR OF VARIOUS COUNTER PARTIES INCLUDING ITS SUBSIDIARIES, JOINT VENTURE ENTITIES, GROUP COMPANIES ETC.

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10) COMMERCIAL PAPER ISSUED BY THE ISSUER 76

11) OTHER BORROWINGS (INCLUDING HYBRID DEBT LIKE FOREIGN CURRENCY CONVERTIBLE BONDS (“FCCBS”), OPTIONALLY CONVERTIBLE BONDS/ DEBENTURES/ PREFERENCE SHARES)

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12) SERVICING BEHAVIOR ON EXISTING DEBT SECURITIES, DEFAULT(S) AND/OR DELAY(S) IN PAYMENTS OF INTEREST AND PRINCIPAL OF ANY KIND OF TERM LOANS, DEBT SECURITIES AND OTHER FINANCIAL INDEBTEDNESS INCLUDING CORPORATE GUARANTEE ISSUED BY THE ISSUER, IN THE PAST 5 YEARS

76

13) OUTSTANDING BORROWINGS/ DEBT SECURITIES ISSUED FOR CONSIDERATION OTHER THAN CASH, WHETHER IN WHOLE OR PART, AT A PREMIUM OR DISCOUNT, OR IN PURSUANCE OF AN OPTION

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XI. MATERIAL EVENT, DEVELOPMENT OR CHANGE AT THE TIME OF ISSUE 78

XII. SUMMARY TERM SHEET 79

XIII. TERMS OF OFFER 84

XIV. CREDIT RATING FOR THE BONDS 100

XV. TRUSTEES FOR THE BONDHOLDERS 101

XVI. STOCK EXCHANGE WHERE BONDS ARE PROPOSED TO BE LISTED 102

XVII. MATERIAL CONTRACTS & AGREEMENTS INVOLVING FINANCIAL OBLIGATIONS OF THE ISSUER

103

XVIII. DECLARATION 104

ANNEXURES

1. Financial Information 2. Credit Rating Letters 3. Consent of the Trustee 4. Application Form

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I. DISCLAIMERS 1. DISCLAIMER OF THE ISSUER This Series-1 IMis neither a Prospectus nor a Statement in Lieu of Prospectus. This Series-1 IMDocument is prepared in conformity with Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 issued vide circular No. LAD-NRO/GN/2008/13/127878 dated June 06, 2008 as amended from time to time. This Series-1 IMdoes not constitute an offer to public in general to subscribe for or otherwise acquire the Bonds to be issued by National Highways Authority of India (“NHAI” or the “Issuer” or the “Authority”). This Series-I IMfor the exclusive use of the addressee and it should not be circulated or distributed to third party(ies). It is not and shall not be deemed to constitute an offer or an invitation to the public in general to subscribe to the Bonds issued by the Issuer. This bond issue is made strictly on private placement basis. Apart from thisSeries-1 IM, no offer document orprospectus has been prepared in connection with the offering of this bond issue or in relation to the issuer. ThisSeries-1 IMdoesnot intended to form the basis of evaluation for the prospective subscribers to whom it is addressed and who are willing and eligible to subscribe to the bonds issued by NHAI. This Series-1 IM has been prepared to give general information regardingNHAIto parties proposing to invest in this issue of Bonds and it does not purport to contain all the information that any such party mayrequire.NHAIbelieves that the information contained in thisSeries-1 IMis true and correct asof the date hereofNHAIdoes not undertake to update thisSeries-1 IMto reflect subsequentevents and thus prospective subscribers must confirm about the accuracy and relevancy of any informationcontained herein with NHAI. However,NHAIreserves its right for providing the information at its absolutediscretion.NHAIaccepts no responsibility for statements made in any advertisement or any other material land anyone placing reliance on any other source of information would be doing so at his own risk andresponsibility. Prospective subscribers must make their own independent evaluation and judgment before making the investmentand are believed to be experienced in investing in debt markets and are able to bear the economic risk ofinvesting in Bonds. It is the responsibility of the prospective subscriber to have obtained all consents, approvalsor authorizations required by them to make an offer to subscribe for, and purchase the Bonds. It is theresponsibility of the prospective subscriber to verify if they have necessary power and competence to applyfor the Bonds under the relevant laws and regulations in force. Prospective subscribers should conduct theirown investigation, due diligence and analysis before applying for the Bonds. Nothing in thisSeries-1 IMshould be construed as advice or recommendation by the Issuer to the Issueto subscribers to the Bonds. The prospective subscribers also acknowledge that the Arrangers to the Issued not owe the subscribersany duty of care in respect of this private placement offer to subscribe for the bonds.Prospective subscribersshould also consult their own advisors on the implications of application, allotment, sale, holding, ownershipand redemption of these Bonds and matters incidental thereto. ThisSeries-1 IMis not intended for distribution. It is meant for the consideration of the personto whom it is addressed and should not be reproduced by the recipient. The securities mentioned herein arebeing issued on private placement basis and this offer does not constitute a public offer/invitation. ASeries-1 IMshall be accompanied by application formserially numbered and addressed specifically to the person to whom the offer ismade and shall be sent to him, either in writing or in electronic mode, withinthirty days of recording the names of such persons.

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2. DISCLAIMER OF THE SECURITIES & EXCHANGE BOARD OF INDIA ThisSeries-1 IMshall not be filed with Securities & Exchange Board of India (“SEBI”) for their approval. The Bonds have not been recommended or approved by SEBI nor does SEBI guarantee the accuracy or adequacy of this Series-1 IM. It is to be distinctly understood that this Series-1 IM should not, in any way, be deemed or construed that the same has been cleared or vetted by SEBI. SEBI does not take any responsibility either for the financial soundness of any scheme or the project for which the Issue is proposed to be made, or for the correctness of the statements made or opinions expressed in this Series-1 IM. The Issue of Bonds being made on private placement basis, filing of this Series-1 IM is not required with SEBI. However SEBI reserves the right to take up at any point of time, with the Issuer, any irregularities or lapses in this Series-1 IM. 3. DISCLAIMER OF THE ARRANGERS TO THE ISSUE The role of the Arranger in the assignment is confined to marketing and placement of the Debentures/Bonds (Debentures and Bonds have been used interchangeably in this Disclaimer) on the basis of this Series-1 IM (hereinafter collectively referred to as “Information Memorandum”) as prepared by the Issuer. The Arranger has neither scrutinized nor vetted nor reviewed nor has it done any due-diligence for verification of the contents of this Information Memorandum. The Arranger shall use this Information Memorandum for the purpose of soliciting subscription(s) from Eligible Investors in the Debentures to be issued by the Issuer on a private placement basis. It is to be distinctly understood that the use and distribution of this Information Memorandum by the Arranger should not in any way be deemed or construed to mean that the Information Memorandum has been endorsed by the Arranger in any manner. It is responsibility of the Issuer to comply with all laws, rules and regulations and obtain all regulatory, governmental, corporate and other necessary approvals for the issuance of the Bonds. The Arranger has not verified whether the regulatory requirements have been fulfilled and necessary approvals have been obtained by the Issuer. The Issuer has prepared this Information Memorandum and the Issuer is solely responsible and liable for its contents. The Issuer confirms that all the information contained in this Information Memorandum has been provided by the Issuer or is from publicly available information, the use of which isn’t regulated or prohibited by applicable law or regulation relating to insider dealing or otherwise and that such information has not been independently verified by the Arranger. No representation or warranty, expressed or implied, is or will be made, and no responsibility or liability is or will be accepted, by the Arranger or any of their employees, directors or their Affiliates for the accuracy, completeness, reliability, correctness or fairness of this Information Memorandum or any of the information or opinions contained therein, and the Arranger hereby expressly disclaims any responsibility or liability to the fullest extent for the contents of this Information memorandum, whether arising in tort or contract or otherwise, relating to or resulting from this Information Memorandum or any information or errors contained therein or any omissions there from. Neither Arranger and its affiliates, nor its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of this document. By accepting this Information Memorandum, the Eligible Investor accepts this Disclaimer of the Arranger, which forms an integral part of this Information Memorandum and agrees that the Arranger will not have any such liability. The Eligible Investors should carefully read thisSeries-1 IM. This Information Memorandum is for general information purposes only, without regard to specific objectives, suitability, financial

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situations and needs of any particular person and does not constitute any recommendation and the Eligible Investors are not to construe the contents of this Series-1 IM as investment, legal, accounting, regulatory or tax advice, and the Eligible Investors should consult with its own advisors as to all legal, accounting, regulatory, tax, financial and related matters concerning an investment in the Bonds. This Information Memorandum should not be construed as an offer to sell or the solicitation of an offer to buy, purchase or subscribe to any securities mentioned therein, and neither this document nor anything contained herein shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. This Information Memorandum is confidential and is made available to potential investors in the Bonds on the understanding that it is confidential. Recipients are not entitled to use any of the information contained in this Information Memorandum for any purpose other than in assisting to decide whether or not to participate in the Bonds. This document and information contained herein or any part of it does not constitute or purport to constitute investment advice in publicly accessible media and should not be printed, reproduced, transmitted, sold, distributed or published by the recipient without the prior written approval from the Arranger and the Issuer. This Information Memorandum has not been approved and will or may not be reviewed or approved by any statutory or regulatory authority in India or by any Stock Exchange in India. This document may not be all inclusive and may not contain all of the information that the recipient may consider material. Please note that: (a) The Arranger and/or their affiliates may, now and/or in the future, have other investment

and commercial banking, trust and other relationships with the Issuer and other entities related to the Issuer;

(b) As a result of those other relationships, the Arranger and/or their affiliates may get

information about the Issuer and/or the Issue or that may be relevant to any of them. Despite this, the Arranger and/or their affiliates will not be required to disclose such information, or the fact that it is in possession of such information, to any recipient of this Information Memorandum;

(c) The Arranger and/or their affiliates may, now and in the future, have fiduciary or other

relationships under which it, or they, may exercise voting power over securities of various persons. Those securities may, from time to time, include securities of the Issuer;

(d) The Arranger and/or their affiliates may exercise such voting powers, and otherwise perform

its functions in connection with such fiduciary or other relationships, without regard to its relationship to the Issuer and/or the securities;

(e) The Arranger is not acting as trustee or fiduciary for the investors or any other person; and (f) The Arranger is under no obligation to conduct any "know your customer" or other

procedures in relation to any person. NOTHING IN THIS INFORMATION MEMORANDUM CONSTITUTES AN OFFER OF SECURITIES FOR SALE IN THE UNITED STATES OF AMERICA OR ANY OTHER JURISDICTION WHERE SUCH OFFER OR PLACEMENT WOULD BE IN VIOLATION OF ANY LAW, RULE OR REGULATION. NO ACTION IS BEING TAKEN TO PERMIT AN OFFERING OF THE BONDS IN THE NATURE OF DEBENTURES OR THE DISTRIBUTION OF THIS INFORMATION MEMORANDUM IN ANY JURISDICTION WHERE SUCH ACTION IS REQUIRED. THE DISTRIBUTION/TAKING/SENDING/DISPATCHING/TRANSMITTING OF

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THIS INFORMATION MEMORANDUM AND THE OFFERING AND SALE OF THE BONDS MAY BE RESTRICTED BY LAW IN CERTAIN JURISDICTIONS, AND PERSONS INTO WHOSE POSSESSION THIS DOCUMENT COMES SHOULD INFORM THEMSELVES ABOUT, AND OBSERVE, ANY SUCH RESTRICTIONS. 4. DISCLAIMER OF THE STOCK EXCHANGE As required, a copy of thisSeries-1 IMshall be submitted to BSE Limited (hereinafter referred to as “BSE”) for hosting the same on its website. It is to be distinctly understood that such submission of the Series-1 IM with BSEor hosting the same on its website should not in any way be deemed or construed that the Series-1 IMhas been cleared or approved by BSE/NSE; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this Series-1 IM; nor does it warrant that this Issuer’s securities will be listed or continue to be listed on the Exchange; nor does it take responsibility for the financial or other soundness of this Issuer, its promoters, its management or any scheme or project of the Issuer. Every person who desires to apply for or otherwise acquire any securities of this Issuer 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 any other reason whatsoever.

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II. DEFINITIONS/ ABBREVIATIONS

AY Assessment Year Allotment/ Allot/ Allotted

The issue and allotment of the Bonds to the successful Applicant(s) in the Issue

Allottee A successful Applicant to whom the Bonds are allotted pursuant to the Issue, either in full or in part

Applicant/Investor A person who makes an offer to subscribe the Bonds pursuant to the terms of this Series-1 IM and 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 the Issue

Bondholder(s) Any person holding Bonds and whose name appears on the beneficial owners listprovided by the Depositories

Beneficial Owner(s) Bondholder(s) holding Bond(s) in dematerialized form (Beneficial Owner of the Bond(s) as defined in clause (a) of sub-section of Section 2 of the Depositories Act, 1996)

Members of the Board

The Members of the Board of National Highways Authority of India or Committee thereof

BSE/ Designated Stock Exchange

BSE Limited being the stock exchange in which Bonds of the Issuer are proposed to be listed

Record Date Reference date for payment of interest/ repayment of principal CAR Capital Adequacy Ratio CAG Comptroller and Auditor General of India IRRPL India Ratings and Research Private Limited ICRA Investment Information and Credit Rating Agency of India Limited CDSL Central Depository Services (India) Limited CCEA Cabinet Committee on Economic Affairs CRISIL Credit Rating Information Services of India Limited CARE Credit Analysis and Research Limited Depository A Depository registered with SEBI under the SEBI (Depositories and Participant)

Regulations, 1996, as amended from time to time Depositories Act The Depositories Act, 1996, as amended from time to time Depository Participant

A Depository participant as defined under Depositories Act

DP Depository Participant DRR Bond/ Debenture Redemption Reserve EPS Earnings Per Share FIs Financial Institutions FIIs/ FPIs Foreign Institutional Investors / Foreign Portfolio Investors Financial Year/ FY Period of twelve months ending March 31, of that particular year GoI/ GOI Government of India/ Central Government Trustees Trustees for the Bondholders in this case being Vistra ITCL (India) Limited Issuer/ NHAI/Authority

National Highways Authority of India, an autonomous body under the Ministry of Road Transport & Highways, Government of India, constituted by an act of Parliament - The National Highways Authority of India Act, 1988 and having its

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head office at G - 5 & 6, Sector 10, Dwarka, New Delhi – 110075 I.T. Act The Income Tax Act, 1961, as amended from time to time Km kilo meter MF Mutual Fund MoF Ministry of Finance NECS National Electronic Clearing Service NEFT National Electronic Funds Transfer NSDL National Securities Depository Limited NHDP National Highways Development Programme PAN Permanent Account Number GIR General Index Registration Number Rs./ INR Indian National Rupee RBI Reserve Bank of India RTGS Real Time Gross Settlement Registrar Registrar to the Issue, in this case being Beetal Financial & Computer Services (P) Ltd. SEBI The Securities and Exchange Board of India, constituted under the SEBI Act, 1992 SEBI Act Securities and Exchange Board of India Act, 1992, as amended from time to time SEBI Debt Regulations

Securities and Exchange Board of India (Issue andListing of Debt Securities) Regulations, 2008 issued vide circular no. LAD-NRO/GN/2008/13/127878 datedJune 06, 2008, as amended from time to time.

TDS Tax Deducted at Source under provisions of the I.T. Act Series Series-1 IM This Information Memorandum dated June[●] , 2018 containing necessary terms

and conditions of the specific issue and other necessary disclosure The Act The National Highways Authority of India Act, 1988 (“NHAI Act”)

III ISSUER INFORMATION

Name of the Issuer : National Highways Authority of India Head Office : G - 5 & 6, Sector - 10, Dwarka, New Delhi - 110075 Tel. : (011)25074100, 25074200 Fax : +91-11-25093507 Website : www.nhai.org E-mail : [email protected] Compliance Officer* for : Mr. S. Q. Ahmad the Issue GeneralManager (Finance & Accounts)

National Highways Authority of India Head Office G - 5&6, Sector 10 Dwarka New Delhi - 110075 Tel: +91 11 25074100, 25074200 E-mail: [email protected]

* The investors can contact the Compliance Officerin case of any pre-issue/ post-issue related problems such as non-credit of letter(s) of allotment/ bond certificate(s) in the demat account etc. Chief Financial Officer : Mr. Asheesh Sharma, IAS of the Issuer* Member (Finance)

National Highways Authority of India Head Office G – 5&6, Sector 10 Dwarka New Delhi - 110075 Tel.: +91 11 25074100, 25074200

Fax: +91 1125093542 E-mail: [email protected]

* The Issuer does not have a designated Chief Financial Officer. The finance function is headed byMr. Asheesh Sharma, IAS,who is the Member (Finance) of the Issuer, whose particulars are given above. Investors/Arrangers to the Issue:

Investor/arrangers of the issue 1.HDFC Bank Ltd 2. SBI Capital Market Ltd 3. Trust Investment Advisors Pvt Ltd 4. Axis Bank Ltd 5. ICICI Bank Ltd 6. Centrum Capital Ltd 7. Edelweiss Financial Services Ltd

“Out of the actual collection from the issue of Rs.2195 Crore , Arrangers have arranged an amount of Rs.170 Crores and Rs.2025 Crore have been invested directly by QIB/Investors using EBP platform of BSE”

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Trustees for theBondholders: Vistra ITCL (India) Limited The IL&FS Financial Centre Plot C-22, G-Block, 7th Floor, Bandra Kurla Complex Bandra (East) Mumbai - 400 051 Tel:+91 22 28593535 Fax:+91 22 26533207 E-mail: [email protected] Registrar to the : M/s Beetal Financial & Computer Services (P) Ltd. Issue 99, Beetal House, Madangir, Behind Local Shopping Centre

Near HarsukhdasMandir New Delhi-110062 Tel :+91 1129961281-83 Fax:+91 1129961284 Email: [email protected]

Credit Rating : India Ratings &ResearchPrivateLimited Agencies A Fitch Group Company Wockhardt Tower, Level 4, West Wing BandraKurla Complex, Bandra (E) Mumbai – 400051 Tel:+91 2240001700 Fax:+91 22 40001701 E-mail: [email protected] Website: www.indiaratings.co.in Credit Analysis and Research Limited 13th floor, E-1 Videocon Towers, Jhandewala extansion , New Delhi 110055 Tel:+91 11 45333201 Fax:+91 1145333238 E-mail: [email protected] Website: www.careratings.com CRISIL Limited Registered Office CRISIL House, Central Avenue Hiranandani Business Park Powai, Mumbai – 400 076 Tel.:+91 22 33423000 Fax:+91 2233423050 E-mail:[email protected] Website:www.crisil.com

ICRA Limited Registered Office 1105, Kailash Building

11th Floor, 26, Kasturba Gandhi Marg New Delhi—110001

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Tel.: +91 11 23357940-50 Fax: +911123357014 E-mail:[email protected] Website:www.icra.in Stautory Auditors : Comptroller and Auditor General of India Indian Audit & Accounts Department Office of the Principal Director of Commercial Audit & Ex-Officio Member, Audit Board - 1 3rd Floor, A-Wing, Indraprastha Bhawan New Delhi - 110002 Tel:+91 11 23378473 Fax:+91 1123378432 E-mail:[email protected]

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IV. DETAILS OF MEMBERS OF THE BOARD OF THE ISSUER MEMBERS OF THE BOARD OF THE ISSUER The Issuer was constituted by the NHAI Act to develop, maintain and manage the national highways vested in or entrusted to it by the Central Government. As per the NHAI Act, the Issuer is managed by Members of the Authority, which consists of:

(i) a Chairman; (ii) not more than six full-time Members; and (iii) not more than six part-time Members. Each Member is appointed by the Central Government by notification in the official gazette. Presently, the Issuer has five full time Members (excluding the Chairman) and four part time Members. Every meeting of the Issuer must be attended by at least two-thirds of total members and three-quarters of the part-time Members. The NHAI Act provides that for the purpose of discharging its functions, the Issuer shall appoint such number of officers and other employees as it may consider necessary. Details of the Chairman and full-time Members of the Authority:

Sl. No. Description

1. Name Shri Yudhvir Singh Malik, IAS* Designation Chairman, NHAI, Secretary to the Government of India,

Department of Road Transport & Highways, Government of India *Shri Yudhvir Singh Malik, IAS has been given charge of Chairman on May 16, 2018

Date of Appointment May 16, 2018 Other Directorships Nil Age 58 years

2 Name Shri R. K. Chaturvedi

Designation Member (Administration) Date of Appointment 18 May 2018 Other Directorships None Age 56 years

3. Name Shri Niraj Verma, IAS

Designation Member (PPP) Date of Appointment 14 March 2016 Other Directorships Chairman of Mumbai-JNPT Port Road Company Limited,

Mormugao Port Road Company Limited, New Mangalore Port Road Company Limited, Cochin Port Road Company Limited, Tuticorin Port Road Company Limited, Chennai-Ennore Port Road Company Limited, Vishakhapatnam Port Road Company Limited, Calcutta Haldia Port Road Company Limited,

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Sl. No. Description Ahmedabad Vadodara Expressway Company Limited and Paradip Port Road Company Limited.

Age 48 years 4. Name Shri D O Tawade

Designation Member (Technical) Date of Appointment 30 August 2016 Other Directorships None Age 60 years

5. Name Shri R. K. Pandey

Designation Member (Projects) Date of Appointment 4 November 2015 Other Directorships None Age 56 years

6. Name Shri Anand Kumar Singh

Designation Member (Projects) Date of Appointment 12 February 2016 Other Directorships None Age 51 years

7 Name Shri Asheesh Sharma, IAS

Designation Member (Finance) Date of Appointment May 18, 2018 Other Directorships Chairman & Managing Director of Indian Highways

Management Company Ltd. Age 53 years

Details of part-time Members of the Authority:

SI. No. Description

1. Name Shri Yudhvir Singh Malik, IAS* Designation Chairman, Secretary to the Government of India, Department

of Road Transport & Highways, Government of India Date of Appointment 27 June 2017 Other Directorships Chairman of National Highways & Infrastructure

Development Corporation Limited Age 58 years

2. Name Sh. Amitabh Kant, IAS (Retd)

Designation CEO, NITI Aayog Date of Appointment 06. November 2017

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SI. No. Description

Other Directorships None Age 61 years

3. Name Shri Sh. Ajay Narayan Jha, IAS

Designation Secretary to the Government of India, Department of Expenditure, Ministry of Finance, Government of India.

Date of Appointment 01 November 2017 Other Directorships None Age 58 years

4. Name Shri Manoj Kumar, IES

Designation DG & RD, Department of Road Transport & Highways, Government of India

Date of Appointment 1 March 2017 Other Directorships None Age 58 years

NONE OF THE CURRENT MEMBERS OF THE AUTHORITY OF THE ISSUER APPEAR IN THE RBI'S DEFAULTER LIST OR ECGC'S DEFAULT LIST. *Shri Yudhvir Singh Malik, IAS has been given charge of Chairman on May 16, 2018 Changes to the Members of the Issuer during the last three years The following changes have occurred to the membership of the Issuer in the three years preceding the date of this Prospectus:

Name Date of Appointment

Date of retirement / relinquishing charge

R.K. Chaturvedi May 18, 2018 Continuing Asheesh Sharma May 18, 2018 Continuing Subhash Chandra Garg, IAS July 2017 6 November 2017 Ajay Narayan Jha, IAS 31 October 2017 Continuing as a Member Shri Rajeeve Kumar, IAS 16 May 2017 27 June 2017 Shri Ashok Lavasa, IAS 30 April 2016 31 October 2017 Sh. Deepak Kumar 27 June 2017 16 May 2018 Shri Shashikanta Das, 31 August 2015 Superannuated Shri R.K.Pandey 4 November 2015 Continuing as a Member Shri Sanjay Mitra 1 January 2016 24 May 2017 Shri Anand Kumar Singh 12 February 2016 Continuing as a Member Shri Niraj Verma, IAS 14 March 2016 Continuing as a Member Mrs. Veena Ish, IAS 4 August 2016 07 September 2017 Shri D O Tawade 30 August 2016 Continuing as a Member Shri Yudhvir Singh Malik, IAS 28 November 2016 Continuing as part time member from 27 June 2017

Having additional charge of Chairman NHAI,from 16 May 2018

Shri Rohit Kumar Singh, IAS 21 December 2016 May 17, 2018

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Name Date of Appointment

Date of retirement / relinquishing charge

Smt. Sindushree Khullar 2 April 2012 9 March 2015 Shri R. P. Singh 12 June 2012 11 June 2015 Shri Rajiv Mehrishi, 9 March 2015 31 August 2015 Shri Sudhir Kumar 15 April 2013 5 October 2015 Shri V. K Chibber 1 February 2013 31 December 2015 Shri M. P. Sharma 8 February 2013 29 February 2016 Shri Satish Chandra 3 April 2013 2 April 2016 Shri R. P. Watal 30 November 2013 30 April 2016 Shri Raghav Chandra 31 August 2015 28 November 2016 Shri S.N.Das 1 August 2015 28 February 2017 Shri Amitabh Kant 6 November 2017 Continuing as part time member Shri Sh. Ajay Narayan Jha, IAS 1 November 2017 Continuing as part time member Shri Manoj Kumar 1march 2017 Continuing as part time member

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V. DETAILS OF STATUTORY AUDITOR OF THE ISSUER 1. STATUTORY AUDITOR OF THE ISSUER (FY 2016-17)

Name of Statutory Auditor Address& Contact Details Auditor since Comptroller and Auditor General of India Indian Audit & Accounts Department, Office of the Principal Director of Commercial Audit & Ex-Officio Member, Audit Board – 1

3rdFloor, A-Wing Indraprastha Bhawan New Delhi - 110002 Tel: (011) 23378473 Fax: (011) 23378432 E-mail: [email protected]

Since establishment as per The National Highways Authority of India Act, 1988

2. CHANGE IN STATUTORY AUDITOR OF THE ISSUER SINCE LAST THREE YEARS There is no change in the Statutory Auditors of the Issuer during the last three financial years.

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VI. MANAGEMENT PERCEPTION OF RISK FACTORS

RISKS RELATING TO THE ISSUER'S BUSINESS The Issuer is presently involved in a number of civil proceedings, including arbitration, environmental and land acquisition cases. In the event that these cases are decided against the Issuer or if there is a failure by the Issuer to adequately recover its claims against the other parties it may have an adverse effect on the Issuer's operations. The Issuer is a party to various legal proceedings and claims relating to its business and operations in India. These legal proceedings are pending at different levels of adjudication before various courts and tribunals. These legal proceedings include civil suits, arbitration claims, environmental proceedings and proceedings involving the acquisition of land for its operations. No assurance can be given that these legal proceedings will be decided in the Issuer’s favour. Any adverse decision in these proceedings may have a significant adverse effect on the Issuer’s business and results of operations. There is also no assurance that similar proceedings will not be initiated against the Issuer in the future. Further, should any new developments arise, such as a change in Indian law or rulings against the Issuer by appellate courts or tribunals, the Issuer may face an increase in the costs of construction which could in turn increase the Issuer's expenditure. The Issuer may need to make provisions in its financial statements, to reflect its increased expenses and liabilities. Additionally, the Central Government has made a direction to all concerned entities, including the Issuer, that in relation to arbitration proceedings where the Issuer is challenging the arbitral awards, it should make a payment of up to 75 per cent. of the amount claimed against a bank guarantee pending final adjudication of the appeal proceedings. The Issuer started accepting claims under this scheme on December 2016, the further implementation of this scheme may affect the Issuer's financial condition and limit its ability to allocate its financial resources towards the implementation of its projects. See - "Legal and Other Information, Outstanding Litigation and Material Developments" The Issuer's operations are significantly dependent on the funding received from the Central Government and any delay or decrease in the funding plan by the Central Government or any Government entities may adversely affect the Issuer's operations. The Issuer's operations are very capital intensive and any reduction in the budgetary allocation of capital, funding or grants by the Central Government may materially affect the Issuer's performance and operations. As the Issuer's growth plans are mainly determined by the amount of Central Government’s support in the form of budgetary allocations, any adverse developments in the policy of the Central Government in the manner in which it seeks to address the development of the infrastructure needs of India will have a material and adverse effect on the Issuer's business. If funding from the Central Government reduces or if there is any adverse change in the pattern of allocation of the cess collected by the Central Government or if there is a downturn in the macroeconomic environment in India or in sectors which are directly dependent on the road infrastructure, the results of the Issuer's operations and future performance could be materially and adversely affected. The Issuer's operations are dependent on the policies of the Central Government and the State Governments and the initiatives implemented by them to develop the road infrastructure in India. Any lack of support or any delay in the implementation of regulatory initiatives will adversely affect the Issuer's operations. The Issuer believes that the development of India's infrastructure is dependent on the formulation and effective implementation of State Government and Central Government’s programs and policies that facilitate and encourage private sector investment in the infrastructure sectors in India. Many of

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these programs and policies are evolving and their successful implementation may depend on whether they are properly designed to address the infrastructure development needs in India. Additionally, these programs will need continued support from stable and experienced regulatory regimes that not only encourage the continued movement of private capital into infrastructure development but also lead to increased competition, appropriate allocation of risk, transparency, effective dispute resolution and more efficient and cost-effective services to the end-consumer. Additionally, policies of the Central Government and State Governments which mandate development in certain specific sectors, or areas, including but not limited to rural, coastal and/or border areas may not be economically remunerative. In the event that State Government and Central Government's initiatives and regulations in the infrastructure industry do not proceed or progress in the anticipated manner, the results of the Issuer's operations could be materially affected. Further, for a successful implementation of a project, an efficient process for the acquisition of land is necessary. Whilst a modified land acquisition policy is presently being formulated by the Central Government in conjunction with the State Governments, it is yet to be finalised. Any delay in the acquisition of land will lead to delays in the implementation of the relevant projects which could materially affect the Issuer's operation and growth. The Issuer's operations may also be affected by an increase in the prices of raw materials or shortages of raw materials which may lead to an increase in the cost of construction of road projects. Any increase in the prices of raw materials or a shortage of raw materials necessary for a project may affect the financial viability of a project or cause delays in the implementation of a project. Additionally, some engineering, procurement and construction ("EPC") contracts may contain provisions where the payment made to the contractor will need to be adjusted to the wholesale prices index or the consumer prices index in India. These adjustments may lead to further increases in the construction cost for the projects. The Issuer's operations are dependent on forecasting traffic volumes. In some of the Issuer's projects, the user fee generated from highway stretches tolled by the Issuer is remitted to the Central Government and is received back by the Issuer from the Central Government. Any material decrease between the actual traffic volume and the forecasted traffic volume on account of inaccurate forecasting or (any other reason which may cause a difference between actual traffic volume and forecasts) may therefore have a material adverse effect on the Issuer's capital flows and performance. During Fiscal 2017, the Issuer deposited an amount of INR 69.39 billion including toll revenue received by the Issuer from roads operated by it to the Consolidated Fund of India ("Consolidated Fund of India"). This amount excludes any amounts raised by concessionaires under the Issuer's public private partnership ("PPP") projects. Toll revenues depend on toll receipts and are affected by changes in traffic volumes. Factors that affect traffic volumes include:

i) toll rates; ii) fuel prices in India; iii) the affordability of automobiles; iv) the quality, convenience and travel time on alternate routes outside the Issuer's network; v) the availability of alternative means of transportation, including rail networks and air

transport; vi) the level of commercial, industrial and residential development in areas served by the

Issuer's projects;

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vii) growth of the Indian economy; viii) adverse weather conditions; and ix) seasonal holidays. Revenue from toll receipts is affected by traffic volume and tariff rates, both of which are beyond the Issuer's control. The user fee structure is laid down under National Highways (Rate of Fee) Rules, 1997 and National Highways Fee (Determination of Rates and Collection) Rules, 2008 as amended and is uniformly applicable. Reduced growth of traffic on account of an economic slowdown, restrictions on mining, a decline in manufacturing and/or exports may decrease the Issuer's toll revenues. Further, any change in the applicable toll policies or other applicable laws which affects the category of vehicle or fuel, may lead to an increase or a decrease in the toll revenue and may affect the Issuer's capital inflows thereby affecting the Issuer's results. In the event of significant decrease in traffic volumes on such stretches of the road network, the Issuer may experience a corresponding decrease in the capital which the Issuer receives from the Central Government, which may reduce its future execution capabilities. Leakage of traffic and toll collection on roads operated by the Issuer may affect the volume of collections and inflows which may in turn affect the capital which the Issuer receives from the Central Government and the Issuer's future project execution capabilities. The success of toll road projects is dependent on the toll rates that are levied from the users. Any material decrease between the actual traffic volume and forecast traffic volume, or increase between the actual operation and maintenance expenses for such roads will lead to a decrease in toll receipts. Toll receipts are also primarily dependent on the integrity of toll collection systems. The revenues derived from the collection of tolls may be reduced by leakage through toll evasion, fraud, theft or technical faults in toll collection systems. If toll collection is not adequately monitored, leakage may reduce toll revenue. Although the Issuer has systems in place to minimise leakage through fraud and theft, any significant failure by the Issuer to control leakage in toll collection could have a material adverse effect on the Issuer's operations and prospects. Further, there may be situations where toll collection is disrupted or stopped due to public disturbances which may result in reduced revenue collection by the relevant concessionaires or contractors or by the Issuer. Any such disruption or stoppage of toll collection may adversely affect revenue collections. Fluctuations in interest rates and exchange rates on the Issuer's external borrowings may adversely affect its operations. As of 30 September 2017, the Issuer has outstanding multilateral external borrowings of U.S.$94.6 million from the ADB. The final instalment of such borrowings is payable on 1 July 2025. Because this loan is not hedged for repayment of principal and interest and repayment of principal and interest is made in foreign currency, any increase in the interest rates and/or any adverse fluctuation in the exchange rates may increase the cost of the Issuer's borrowings, thereby increasing the cost of the relevant projects. The Issuer may raise further borrowings for funding various projects under the NHDP and other related programmes. Any increase in domestic and/or international interest rates may have adverse impact on the Issuer's cost of borrowings and projects. The Issuer's financial condition and physical performance could be materially affected if the Issuer does not complete its projects as planned or if its projects experience delay.

The Issuer has experienced time and cost overruns in the past. There may be a delay in implementation or completion of projects or a change of scope of work, due to factors such as delays

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or failures to obtain necessary permits, or authorisations which are beyond the Issuer's control or the control of the relevant contractors or concessionaires. Delays in the completion of a project may also lead to cost overruns. Such delays in the completion of projects may delay the commencement of the Issuer's toll collections thereby affecting its operations and physical performance. Any delay in the completion of the projects may also trigger the delay mechanism in the underlying contracts and adverse consequences under the relevant contracts could follow. The Issuer's operations and financials may be adversely affected due to any delay in completion of the relevant projects and resulting in an increase in the costs for the relevant concessionaires or contractors and in some situations delaying the accrual of revenue to the Issuer. A change in Central Government’s equity stake in the Issuer or a change in the administrative structure of the Issuer may adversely affect its operations. The Issuer is an Authority constituted by a Special Act i.e. NHAI Act and it is wholly owned, controlled and administered by the Ministry of Road Transport and Highways, Government of India. 100 per cent of the Issuer’s equity is funded by the Government of India. Any change in the Government’s shareholdings or any change in the structure of the Issuer could materially adversely affect the financial status and performance of the Issuer. The Central Government can, pursuant to the powers vested in it under Section 32 of the NHAI Act supersede the Issuer. If, at any time, the Central Government is of the opinion that (i) on account of a grave emergency, the Issuer is unable to discharge the functions and duties imposed on it by or under the provisions of the NHAI Act; (ii) the Issuer has persistently defaulted in complying with any direction issued by the Central Government under the NHAI Act; (iii) in the discharge of the functions and duties imposed on it by or under the provisions of the NHAI Act; or (iv) circumstances exist which render it necessary in the public interest to do so, the Central Government may supersede the Issuer. Should the Central Government therefore exercise its power to supersede the Issuer pursuant to the power vested in it under the NHAI Act, the Issuer may not be able to carry out its business impacting its financial condition or may not be able to carry out its obligations under the Notes. The Issuer's operations may also be adversely affected if it is unable to manage its business as it grows. The Issuer's business operations may be affected by shortcomings and failures in the Issuer's internal processes and systems. The Issuer's business is highly dependent on its ability to process and monitor a large number of projects. As the Issuer develops its business, the inability of its systems to accommodate an increasing volume of projects could also constrain its ability to expand its businesses. Additionally, shortcomings or failures in the Issuer's internal processes or systems could lead to an impairment of its financial condition, financial loss, disruption of its business and reputational damage. Any inability of the Issuer to successfully scale up its resources will adversely affect its business and results of operations. The Issuer's ability to operate will depend in part on its ability to maintain and upgrade its contract management systems and policies on a timely and cost-effective basis. The information made available to the Issuer's management through its existing systems may not be timely and sufficient to manage risks or to plan for and respond to changes in market conditions and other developments in the Issuer's operations. The Issuer may experience difficulties in upgrading, developing and expanding its systems quickly enough to accommodate its growing requirements.

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The Issuer's failure to maintain or improve or upgrade its management information systems in a timely manner could materially and adversely affect its operations. The Issuer may also be subject to disruptions of its operating systems, arising from events that are wholly or partially beyond the Issuer's control, including but not limited to, computer viruses or electrical or telecommunication service disruptions, which may result in a loss or liability to it.

The Comptroller and Auditor General of India ("CAG") has expressed serious reservations regarding the maintenance of proper books of accounts and other relevant records by the Issuer. In its audit report for Fiscal 2015 and Fiscal 2014, the CAG has expressed serious reservations regarding the maintenance of proper books of accounts and other relevant records by the Issuer. The CAG has observed that the Issuer, inter alia, has not followed the applicable accounting policies and has not maintained proper records in respect of the utilisation of project based borrowed funds. In their audit report for Fiscal 2014, the CAG noted, inter alia, that (i) the Issuer did not maintain records in respect of the utilisation of project-based borrowed funds and the total borrowed costs allocated to completed and incomplete projects could not be verified; (ii) the allocation of “net establishment expenses for the year” to completed projects was against generally accepted accounting principles; (iii) adjustments had not been made in the accounts for 16 road projects passed to concessionaires for upgrade and five other road projects transferred to State Governments; and (iv) depreciation had not been accounted for in stretches of highways of completed projects, leading to an overstatement of assets. The CAG also noted in their audit report for Fiscal 2015 that due to books of the Issuer not being maintained in a proper manner, there has been an overstatement of its fixed assets capital work in progress. In some instancesthe CAG was also not able to verify the capital work in progress due to the absence of project-based details of expenditure on ongoing as well as completed projects. The CAG has in their audit report for Fiscal 2015 and Fiscal 2014 stated that they are not able to provide an audit opinion as to whether the financial statements of the Issuer for these periods give a true and fair view in accordance with the generally accepted accounting principles in India. In its audit report for Fiscal 2016, the CAG has provided an audit opinion that the Issuer's balance sheet and profit and loss account give a true and fair view in conformity with the generally accepted accounting principles of India. However, the CAG has made a number of observations. The observations from the CAG include, inter alia, statements that (i) the Issuer has not maintained proper books of accounts and other relevant records; and (ii) certain statements made by the Issuer in the offering documents relating to the Tax Free Bonds (as defined below) were not complied with. The audit report for Fiscal 2016 also includes other observations from the CAG which includes (i) non-adherence by the Issuer to certain NHAI Rules; (ii) the need for the internal control systems of the Issuer to be strengthened; and (iii) that are some instances in which the Issuer has not taken corrective action following observations or comments in their past audit reports. The audit report for Fiscal 2017 also includes other observations from the CAG which includes (i) non-adherence by the Issuer to certain NHAI Rules; and (ii) that the Balance Sheet and Profit and Loss Account Statements of the Issuer have not been drawn up in the format approved by the Central Government. Although the Issuer believes that it has complied with the undertakings provided by it in the issue documents of the Tax Free Bonds, the CAG in its audit report has remarked that that the Issuer has not complied with certain undertakings. In the event that the Issuer is determined by the trustee or otherwise to have breached such undertakings, this could have a material adverse impact on the Issuer's prospects, operations, financial condition and/or reputation.

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The Issuer has issued the Tax Free Bonds and had provided certain undertakings in the issue documents for the Tax Free Bonds stating that (i) all proceeds received out of each tranche issue of the bonds to the public shall be transferred to a separate bank account; (ii) details of all proceeds utilised out of each tranche shall be disclosed under an appropriate separate heading in its balance sheet indicating the purpose for which such proceeds were utilised; and (iii) details of all unutilised proceeds from each tranche issue, if any, shall be disclosed under an appropriate separate head in its balance sheet indicating the form in which such unutilised proceeds have been invested. Under the terms of the Tax Free Bonds, it is an event of default if inter alia, any information provided by the Issuer in its issue documents and any other information furnished, and the warranties given or deemed to be given by the Issuer to bondholders or beneficial owners relating to the issue of the Tax Free Bonds is found to be misleading or incorrect in any material respect or any warranty is found to be incorrect. The Issuer believes that it has complied with the undertaking to transfer proceeds from the offerings of the Tax Free Bonds to a separate bank account by crediting the issue proceeds to an escrow account established under the terms of the respective escrow agreements. The proceeds were further transferred to the NHAI Fund upon receipt of written notice from the Issuer and the managers to the issue confirming execution of the respective security documents under the Tax Free Bonds. The details of the respective escrow agreements along with details of transfer of proceeds is as provided below:

1. For 2011 Tax Free Bonds:

Escrow agreement dated 15 December 2011 entered into between the Issuer, SBI Capital Markets Limited, A.K Capital Services Limited, ICICI Securities Limited, Kotak Mahindra Capital Company Limited, MCS Limited and State Bank of India, Axis Bank Limited, ICICI Bank Limited, Syndicate Bank Limited, Union Bank of India and HDFC Bank Limited.

Escrow bank Escrow account

number(s) Date of credit into escrow

account Amount credited

in INR Date of transfer to

the NHAI Fund

Axis Bank (i) 911020066736591 (ii) 911020066736748 (iii) 911020066736832

28 December 2011 to 5 January 2012

31,150,852,000 7 February 2012

HDFC Bank (i) 00030350015081 (ii) 00030350015106 (iii) 00030350015098


16,674,435,000 7 February 2012

ICICI Bank (i) 000405100352 (ii) 000405100353 (iii) 000405100354


46,761,066,000 7 February 2012

State Bank of India

(i) 32107995792 (ii) 32107996525 (iii) 32107997132


4,036,184,000 7 February 2012

Syndicate Bank (i) 90623170000046 (ii) 90623170000050 (iii) 90623170000065


618,040,000 7 February 2012

Union Bank (i) 536401010000585 (ii) 536401010000583 (iii) 536401010000584


759,423,000 7 February 2012

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Escrow agreement dated 9 January 2014 entered into between the Issuer, Edelweiss Financial Services Limited, A.K Capital Services Limited, Axis Capital Limited, ICICI Securities Limited, Axis Bank Limited, HDFC Bank Limited, ICICI Bank Limited, IndusInd Bank Limited, IDBI Bank Limited, Syndicate Bank Limited and Karvy Computershare Private Limited.

Escrow bank Escrow account number(s) Date of credit into escrow account

Amount credited in INR

Date of transfer to the NHAI Fund

IndusInd Bank (i) 200999371420 (ii) 200999371437

15 January 2014 to 27 January 2014

27,381,777,000 12 February 2014

Axis Bank (i) 914020001457427 (ii) 914020001457621


4,441,969,000 12 February 2014

HDFC Bank (i) 00030350018544 (ii) 00030350018554


3,288,555,000 12 February 2014

IDBI Bank (i) 0127103000014234 (ii) 0127103000014243


80,262,000 12 February 2014

ICICI Bank (i) 000405104456 (ii) 000405104457


1,791,437,000 12 February 2014


Escrow agreement dated 20 October 2015 entered into between the Issuer, A.K Capital Services Limited, SBI Capital Markets Limited, Axis Capital Limited, Edelweiss Financial Services Limited, ICICI Securities Limited, IndusInd Bank Limited, HDFC Bank Limited, ICICI Bank Limited, IDBI Bank Limited, Axis Bank Limited, State Bank of India, Syndicate Bank Limited and Karvy Computershare Private Limited.

(a) 2016 Tax Free Bonds issued through tranche Offering Circular dated 11 December

2015

Escrow bank Escrow account number(s) Date of credit into escrow account

Amount credited in INR

Date of transfer to the NHAI Fund

Axis Bank (i) 915020056420736 (ii) 915020056421373

17 December 2015 to 31 December 2015

5,890,467,000 14 January 2016

HDFC Bank (i) 00030350022021 (ii) 00030350022031

17 December2015 to 31 December 2015

20,813,071,000 14 January 2016

IDBI Bank (i) 0011103000013545 (ii) 0011103000013554


213,753,000 14 January 2016

ICICI Bank (i) 000405110068 (ii) 000405110067


21,456,244,000 14 January 2016

IndusInd Bank (Including ASBA)

(i) 201000264609 (ii) 201000264618


43,368,435,000 14 January 2016

State Bank of India

(i) 35344311018 (ii) 35344314756


8,255,330,000 14 January 2016

Syndicate Bank (i) 90623170000104 (ii) 90623170000119


2,700,000 14 January 2016

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(b) 2016 Tax Free Bonds issued through tranche Offering Circular dated 22 February 2016

Escrow bank Escrow account

number(s) Date of credit into

escrow account Amount

credited in INR Date of transfer to

the NHAI Fund Axis Bank (i) 915020056420736

(ii) 915020056421373 24 February 2016 to 26 February 2016

453,814,000 11 March 2016

HDFC Bank (i) 00030350022021 (ii) 00030350022031

24 February 2016 to 26 February 2016

1,395,731,000 11 March 2016

IDBI Bank (i) 0011103000013545 (ii) 0011103000013554


73,908,000 11 March 2016

ICICI Bank (i) 00405110068 (ii) 000405110067


3,141,349,000 11 March 2016

IndusInd Bank (Including ASBA)

(i) 201000264609 (ii) 201000264618


22,541,132,000 11 March 2016

State Bank of India

(i) 35344311018 (ii) 35344314756


5,391,056,000 11 March 2016

Syndicate Bank (i) 90623170000104 (ii) 90623170000119


3,010,000 11 March 2016

However, the CAG's observations in its audit reports for Fiscals 2013, 2014, 2015 and 2016 were that the Issuer has not complied with the above undertaking as no separate accounts were maintained by the Issuer for the Tax Free Bonds. The Issuer, in its management reply has provided responses to each of the remarks of the CAG.. The Issuer believes that it has complied with the undertakings to provide details under an appropriate head in its balance sheet disclosing (a) the purpose for which the proceeds from the Tax Free Bonds have been utilised and (b) the details of investment of the unutilised proceeds from the Tax Free Bonds. Further, the proceeds from the Tax Free Bonds have been utilised for financing various projects implemented by the Issuer. This is in accordance with the objects of the issue provided under the issue documents for the Tax Free Bonds and therefore the requirement to disclose the use separately is satisfied as the utilisation of proceeds from the Tax Free Bonds have been disclosed as part of the capital work in progress in the balance sheet of the Issuer. Further, the Issuer believes that it has complied with the undertaking in relation to it providing the details of investment of the unutilised proceeds from each of the Tax Free Bonds in its financial statements by disclosing such investments as part of balances with scheduled banks in its balance sheet. Therefore, the Issuer is of the opinion that it has duly complied with the undertakings provided by it under the Tax Free Bonds notwithstanding adverse remarks of the CAG. In the event that the Issuer is determined by the relevant trustees under the Tax Free Bonds or otherwise to have breached such undertakings, this could have a material adverse impact on the Issuer's prospects, operations, financial condition and/or reputation. Such adverse material effect may include but is not limited to default, cross-default, acceleration and/or enforcement of the Tax Free Bonds and litigation and/or other disputes. As described above, any determination by the trustee under the relevant issue documents relating to the Tax Free Bonds that the Issuer had not complied with the terms of the Tax Free Bonds (as reported by the CAG) may result in an event of default being called by the trustee. If the trustee gives a notice of occurrence of an event of default, it may not be possible for the Issuer to cure such a breach which will result in an event of default occurring and may have a material adverse impact on the financial condition and reputation of the Issuer.

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Further, in the audit reports for the year Fiscals 2014 and 2015, the CAG has also remarked that the response to the CAG’s remarks provided in the notes to accounts of the financial statements of the Issuer were inadequate. The CAG further remarked that the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") provide that if an auditor, in his audit report, in respect of the financial results of any previous financial year has any remarks, the listed entity, in its notes to accounts, should provide how the reservation has been resolved or if the same has not been resolved, the reason thereof and the steps which the listed entity intends to take in the matter. As the Issuer had not included a statement satisfying the above, the CAG has remarked that the disclosures in the notes to accounts of the financial statements of the Issuer are inadequate and violates the Listing Regulations. The audit report for the Fiscal 2016, however, does not contain an adverse remark from the CAG in connection with the violation of the Listing Regulations by the Issuer, as the Issuer believes that its responses to the CAG (in relation to the audit report for Fiscal 2015) in relation to its compliance with the Listing Regulations was found to be satisfactory by the CAG. The audit report for Fiscal year 2017 includes the following observations from the CAG (i) non-adherence by the Issuer to certain NHAI Rules; and (ii) that the Balance Sheet and Profit and Loss Account Statements of the Issuer have not been drawn up in the format approved by the Central Government. The Listing Regulations provide that an entity which is in violation is liable to a penalty of INR 100,000 for each day during which such failure continues or INR 10,000,000 whichever is less. As of the date of this Offering Circular, no such penalty has been imposed on the Issuer for violating the Listing Regulations. For the purposes of the above paragraphs of this risk factor: 2011 Tax Free Bonds means the bonds issued pursuant to the shelf Offering Circular dated 13 December 2011 and tranche Offering Circular dated 22 December 2011. 2014 Tax Free Bonds means the bonds issued pursuant to the shelf Offering Circular and tranche Offering Circular, each dated 9 January 2014. 2016 Tax Free Bonds means the bonds issued pursuant to the shelf Offering Circular dated 11 December 2015, tranche Offering Circular dated 11 December 2015 and 22 February 2016. Tax Free Bonds means collectively, the 2011 Tax Free Bonds, the 2014 Tax Free Bonds and the 2016 Tax Free Bonds. The Issuer has certain contingent liabilities that may adversely affect its financial condition. The Issuer has contingent liabilities, which may affect its financial condition. As at 31 March 2017, the Issuer’s contingent liabilities aggregated to INR 420.75 billion. The contingent liabilities consist primarily of liabilities on account of legal disputes and corporate guarantees. These contingent liabilities, if determined against the Issuer in the future, may impact its business and the results of its operations. The Issuer is exposed to the risks associated with the non-performance of underlying assets/projects of certain SPVs). The issuer has taken up development of port connectivity projects and expressways by setting up SPVs where the Issuer contributes toward a portion of the project cost by way of an equity participation or through loans and advances. Some of these SPVs also have an equity participation by port trusts, State Government or their representative entities. The SPVs also raise loans for financing

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the projects. The SPVs are authorised to collect user fees on the developed stretches to cover repayment of debts and for meeting the costs of operations and maintenance. The Issuer has 11 project specific SPVs (out of which seven are joint ventures). Each SPV has been formed with the specific purpose of raising funds and the development of a project. The Issuer has shareholdings which range from 38 per cent. to 100 per cent. in the various SPVs. The Issuer's equity participation is exposed to the risk of non-performance of the SPV's assets and the business decisions of the other members of the SPV's board which represent other entities such as the Central Government or State Government and in some cases, certain port trusts. Some SPVs have incurred losses during the last three Fiscals. Some of the SPVs have incurred losses during the last three Fiscals, as set out below:

(INR in millions) No. Name of SPV For the first nine

months of 2017 Fiscal 2017 Fiscal 2016 Fiscal 2015

1. Calcutta Haldia Port Road Company Limited

Not available (210.68) (296.86) (279.36)

2. Cochin Port Road Company Limited

Not available (225.20) (201.89) (172.87)

3. Moradabad Toll Road Company Limited

Not available 0.46 (2.89) (0.72)

4. New Mangalore Port Road Company Limited

Not available (171.75) (418.73) (292.18)

5. Paradip Port Road Company Limited

Not available (475.10) (579.38) (516.61)

6. Tuticorin Port Road Company Limited

Not available (188.15) (189.34) (218.48)

7. Ahmedabad Vadodra Expressway Company Limited

Not available 22.57 (21.38) (26.66)

8. Mormugao Port Road Company Limited*

Not available (49.57) (51.35) (41.11)

9. Mumbai-JNPT Port Road Company Limited

Not available 567.71 578.15 758.33

10. Vishakhapatnam Port Road Company Limited

Not available 48.84 (71.72) 14.02

11. Chennai Ennore Port Road Company Limited

Not available 8.43 12.85 (9.10)*

*The SPVs were at pre-operational stage during these periods; (loss) indicated. There can be no assurance that the SPVs will achieve or sustain profitability in the future. Any losses incurred by these SPVs may have an effect on the successful execution of the Issuer's projects, its business and results of operations. The auditors for some of the SPVs have provided qualified opinions in relation to their audit reports for Fiscal 2015 and Fiscal 2016. The auditors for the above SPVs have provided qualified opinions in relation to certain SPVs. Accounts for the six month period ended 30 September 2017 for the Issuer have been subject to limited review and have not been audited. Audited performance may be materially different from the present results.

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The accounts of the Issuer and the SPVs are audited annually by the CAG and the auditors appointed by the CAG respectively and they are not subject to any interim audit. Accounts for the six month period ended 30 September 2017 have been prepared by the Issuer and are subject to limited review by PSMG & Associates (the "Auditors") and have not been audited. The Auditors have reviewed the unaudited limited review financial performance of the Issuer for the six-month period ended 30 September 2017. However, the actual audited performance may be materially different from the limited review results. The Issuer has disclosed a limited review report for the six month period ended 30 September 2017. The Issuer's projects under development are subject to construction, financing and operational risks. Some of the internal processes of the Issuer for the monitoring of its projects and enforcement of its contracts are subject to continuous revision and improvement and are in some instances evolving. At present arrangements for the regular monitoring of projects during both the construction phase and the operations phase are being carried out through regional offices and project implementation units of the Issuer. The existing risks include those relating to non-compliance with the conditions in the model concession agreement ("MCA") as well as the following:

(i) construction of the relevant projects as per the specified time schedule and agreed standards; (ii) levy of user charges strictly within the limits specified in the relevant concession agreements; (iii) protection of user interests by ensuring that performance standards, safety and other

requirements are adhered to; (iv) preventing misuse of public assets transferred to the relevant concessionaires; (v) preventing any leakage, diversion or mis-classification of Government revenues; (vi) imposing and recovering penalties for breach of contract; (vii) operating the relevant escrow accounts in accordance with the terms of the relevant

concession agreements; (viii) effective communication and exchange of information for monitoring and enforcement of

obligations; and (ix) supervision of the functioning of the relevant independent engineers with a view to ensuring

that the engineer is discharging all its duties. Thus, any inadequate reporting or monitoring of the Issuer's projects may affect its ability to implement the projects effectively. The Issuer's inability to adhere to its obligations in its project agreements could also have a material adverse effect on the cost of its projects. The Issuer's insurance coverage may not adequately protect it against all losses it incurs in its operations or otherwise. The Issuer maintains or contractually provides for insurance coverage of the type and in the amounts that it believes is adequate for its operations. In addition, not all risks may be insurable on commercially reasonable terms or at all. Although the Issuer believes that it has obtained insurance coverage customary for its business, such insurance may not provide adequate coverage in certain circumstances and is subject to certain deductibles, exclusions and limits on coverage. Therefore, to the extent that the Issuer suffers damage or losses which are not insured, or exceeds its insurance coverage, the loss would have to be borne by the Issuer. There can also be no assurance that the Issuer's claims will be paid, and the proceeds of any insurance claim may also not be sufficient to cover the reinstatement costs as a result of inflation, changes in regulations regarding infrastructure projects, environmental and other factors. The Issuer cannot make any assurances that material losses in excess of insurance proceeds will not occur in the future, potentially having an adverse effect on the Issuer's operations, business and financial conditions. A successful assertion of one or more large

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claims against the Issuer that exceeds its available insurance coverage or results in changes in its insurance policies, including premium increases or the imposition of a larger deduction or co-insurance requirement, could adversely affect its performance and operations. Further, as an internal policy, the Issuer on some occasions makes pay-outs for the relevant concessionaire's workforce, such as if the concessionaire fails to keep in force all insurances for which it is responsible. The Issuer may, at its option, obtain the insurance policies and/or pay the insurance premium and keep the relevant policy in force. The Issuer does, however, have the option to recover the premium from the relevant concessionaires or contractors. The Issuer may be unable to obtain environmental clearances from competent authorities in a timely manner or at all, and the lack of such permissions could adversely affect its projects. The Issuer's ability to commence its projects depends on it obtaining certain environmental approvals from the relevant governmental authorities. In the event that any such environmental approvals are not received on a timely basis or at all, the commencement of the relevant projects or ongoing construction in such projects will be adversely affected, which may have a material adverse impact on the Issuer's business, financial condition and results of operations. The Issuer does not own the premises from which most of its regional offices and project implementation unit offices operate. The Issuer's offices including regional offices and project implementation unit offices are on a lease or a leave and licence basis. The Issuer does not own most of its regional offices, project implementation offices. Any failure on the Issuer's part to execute and/or renew leave and licence agreements and/or lease deeds in connection with such offices or the failure to locate alternative offices in case of termination of the leases and/or leave and license agreements in connection with any branch could adversely affect the ability of the Issuer to efficiently carry out its operations. The Issuer's operations are subject to physical hazards and similar risks that could expose it to material liabilities, reduced inflows and increased execution costs. The Issuer's operations are subject to operational risks as well as project implementation risks. There are hazards inherent in construction projects such as the risk of equipment failure, impact from falling objects, collision, work accidents, fire or explosion and other hazards that may cause injury and loss of life, severe damage to and destruction of property and equipment, and environmental damage. The Issuer also does not have a structured and documented environmental and social management system to address the issues relevant to its sector. Further, the Issuer also assumes liability for defects in connection with any design or engineering work provided by the contractors. Although the Issuer sub-contracts its construction work, it may still be liable for accidents during the construction and operation of its projects. Any of the foregoing factors could have a material adverse effect on the financial condition, reputation and results of the Issuer's operations. There have been instances where certain present and past employees of the Issuer have been found to have indulged in criminal behaviour detrimental to the Issuer's business and reputation. There have been instances where certain present and past employees of the Issuer have been found to have indulged in criminal behaviour detrimental to the Issuer's business and reputation. The allegations against such present and past employees include (i) an employee being involved in allocating land to a third party at a concessional price; (ii) certain employees being involved in irregularities in the construction work on certain national highways; (iii) certain employees being involved in diversion of money allocated for land compensation; (iv) certain employees causing loss to the Issuer as a result of a discrepancy a financial bid not being corrected; and (v) certain employees

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abusing their official position and favouring a particular construction company. There is a set procedure to deal with such cases by the Investigating Agency or the Commission as the case may be. It may not be possible to get the details of such cases as these may be under investigation by different agencies and may be closed or pending at different stages. The allegations against the Issuer’s employees also involve a bribery incident in connection with a U.S.-based firm, CDM Smith. It is alleged that CDM Smith through its Indian subsidiary, CDM Smith India Private Limited, paid over U.S.$1.18 million in bribes to the Issuer’s officials to secure construction contracts between 2011 and 2016. The Central Bureau of Investigation and the Central Vigilance Commission are investigating into this bribery incident. In relation to some of these matters, the Issuer and the relevant authorities have taken actions, including disciplinary actions and/or initiation of criminal proceedings against the individuals concerned. Any loss incurred by such disciplinary actions will be borne by the Issuer. While the Issuer maintains training programmes, codes of conduct and other safeguards designed to prevent the occurrence of every instance of bribery or corruption, it may not be possible for the Issuer to detect or prevent every instance of bribery and corruption by its employees or joint venture partners. Incidents such as those described above will affect the Issuer's reputation, its financial condition and its results of operations. There have been adverse media reports in relation to the Issuer, its business, and its employees There have also been various adverse media reports concerning certain present and past employees of the Issuer, oppositions from local communities and other parties to the Issuer's projects and oppositions from special interest groups such as environmental groups relating to the perceived negative impact such activities are having on the local community and the environment. Such adverse media reports can affect the Issuer's reputation, its ability to implement its projects successfully and therefore its financial condition and results of operations. The Issuer's operations could be adversely affected by strikes, work stoppages or increased wage demands by its own or its contractors' work force or any other kind of disputes involving the Issuer's work force. As of 30 September 2017, on an unconsolidated basis, the Issuer had 324 permanent employees. While the Issuer considers its current labour relations to be good, there can be no assurance that future disruptions in the form of strikes or work stoppages may not be experienced due to disputes or other problems with its work force. Such disruptions may adversely affect its business and results of operations. On many of the Issuer's projects, the Issuer engages external contractors and third parties for construction work and other services in connection with its projects. The number of contract labourers employed by the Issuer varies from time to time based on the nature and extent of work contracted to independent contractors. These third parties include engineers, contractors, suppliers of labour and materials and maintenance service agencies. They may not perform their services in a satisfactory manner and thereby exposing the Issuer to certain risks including delays and an inability to complete its projects in a timely manner. The quality of construction of the projects developed by the Issuer depends on the availability and skills of third parties, which may be adversely affected by strikes and lock-outs. There can be no assurance that skilled contractors and third parties will continue to be available at reasonable rates and in the areas in which the projects are being implemented. As a result, the Issuer

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may be required to make additional investments or provide additional services to ensure the adequate performance and delivery of contracted services. Any delay in project execution could adversely affect its profitability. Any inability to attract, recruit and retain skilled personnel could adversely affect results of the Issuer's operations. The Issuer is highly dependent on its Members, senior management and other key personnel including skilled project management personnel for managing its business. The Issuer may also face strong competition in recruiting and retaining skilled and professionally qualified staff. Due to the limited pool of skilled personnel in the Issuer's industry, competition for retaining senior management, commercial and finance professionals and engineers in the Issuer's industry is intense. The loss of the services of the Issuer's Members, senior management or other key personnel or the Issuer's inability to recruit or train a sufficient number of experienced personnel or its inability to manage the attrition levels in different employee categories may have an adverse effect on the Issuer's results of operations. Opposition from local communities and other parties may adversely affect the Issuer's operations and financial condition. The construction and operation of the Issuer's current and future projects may face opposition from local communities and other parties where these projects are located and from special interest groups such as environmental groups. Such opposition may arise in response to any proposed land acquisition, the intended operations of the Issuer in that particular area and the perceived negative impact such activities may have on the local community and the environment. Any significant opposition by local communities, environmental groups, non-governmental organisations and other parties to the projects of the Issuer may delay project implementation and adversely affect the Issuer's operations and financial condition. The Issuer is subject to risks arising from construction contracts. The risks associated with the Issuer's contractual arrangements are directly linked to the risks of non-performance, default and disputes arising from the underlying construction contracts. The different kinds of contracts which the Issuer manages for its construction activities and the associated risks relate to its PPP projects for which MCAs have been developed, its Operate, Maintain and Transfer (the "OMT") projects and its EPC projects Build, Operate and Toll (BOT) Land acquisition risk: The Issuer is responsible for acquiring land for a project on behalf of MoRTH and the Issuer provides all reasonable support and assistance to the concessionaire in procuring applicable permits required from any government authority. In the event of a delay in procuring the applicable permits, the Issuer may have to compensate the concessionaire which may be in form of an increase in the concession period. Force Majeure Risk: Force majeure covers, among others, the following events which pose a risk to the execution of construction projects: Non-Political Events Act of God, Epidemic, Extremely adverse weather conditions,

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Radioactive contamination, Ionising radiation, Fire or explosion; Strikes or boycotts; and the discovery of geological conditions, toxic contamination or archaeological remains on the

site (together, "Non-Political Events"). Indirect Political Events a. an act of war, invasion, armed conflict or act of foreign enemy, blockade, embargo, riot,

insurrection, terrorist or military action; civil commotion or politically motivated sabotage which prevents collection of tolls and/or fees;

b. industry-wide or state-wide or India-wide strikes or industrial action which prevent

collection of tolls and/or fees; and c. any failure or delay of a contractor to the extent caused by any Indirect Political Event and

which does not result in any offsetting compensation being payable by the concessionaire by or on behalf of such contractor; (together, "Indirect Political Events").

Political Events

a) change in law affected by any governmental agency, if consequences thereof cannot be dealt

with under and in accordance with the provisions of the relevant concession agreement; b) compulsory acquisition in national interest or expropriation of any project assets or rights of

the concessionaires or of the contractors by any governmental agency; c) unlawful or unauthorised or without jurisdiction revocation of or refusal to renew or grant

without valid cause any consent or approval required by developer; d) any failure or delay of a contractors but only to the extent caused by another Political Event

and which does not result in any offsetting compensation being payable to the concessionaire by or on behalf of such contractor (together, "Political Events").

Issuer Event of Default: In the event of the occurrence of a default specified in the relevant concession agreement which has not been cured within the applicable cure or remedy period as specified in the relevant concession agreement, the Issuer shall be deemed to be in default and the concessionaire shall have the right to terminate the relevant concession agreement. Any default by the Issuer under the concession agreement poses a risk of non-completion of a project or a risk of delay in the completion of a project. Concessionaire Event of Default: A default by a concessionaire may result in delays to the completion of a project or in the effective management of an already completed project. Termination Payment Liability: The MCA sometimes provides for payment to the project lender(s), in the event of a termination of the concession after the completion of the construction, of an amount equal to the debt due on the date of termination, and thereafter the project highway is transferred to the Issuer. This puts additional liability on the Issuer to directly or indirectly operate and maintain the project highway. Contract Monitoring Risk: Although there are detailed guidelines for the award of contracts to concessionaires, the institutional mechanisms for the monitoring and enforcement of PPP contracts is yet to be implemented. There is a risk that the implementation of PPP projects may not be sufficiently

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monitored owing to a satisfactory reporting process for monitoring on-site performance of contracts not being in place. Risk arising from the international competitive bidding process and consultant selection: There is a risk arising from any misstatement or misrepresentation being made by a prospective concessionaire during the bidding process. If the disclosure made by a concessionaire is not true and they do not have the relevant expertise to implement a project, it may negatively affect the successful execution of the relevant project. Insurance liability for the employees of concessionaires in case of default: If the concessionaire fails to keep in force all insurances for which it is responsible, the Issuer may be required to keep the insurance policies effective to pay the insurance premium. The Issuer does, however, have the option to recover the premium from the concessionaire or to deduct it from subsequent payments. i) OMT contracts: Under OMT agreements, the Issuer is exposed to the following risks:

a) Under the relevant OMT agreement, the Issuer has to procure the right of way to the site as a

condition precedent within a specified period of time. Any delay in procuring this right of way may entitle the concessionaire to claim damages at a specified percentage of the performance security.

b) The Issuer undertakes the risk of maintaining and protecting the construction works during any suspension of the concessionaire.

c) In the event of default or breach of the relevant OMT agreement by the Issuer, its liability is calculated based on all direct costs suffered by the concessionaire as a consequence of such breach. This compensation may also include interest payment on debt.

d) If the concessionaire fails to keep in force all insurances for which it is responsible, the Issuer is bound to pay the insurance premium and keep the policies effective. The Issuer does, however, have the option to recover the premium from the concessionaire or to deduct it from subsequent payments.

ii) EPC contracts In addition to the above types of construction contracts, the Issuer has also awarded selected highway projects to private sector participants under EPC contracts. Some of the risks the Issuer may be exposed to under EPC contracts would include the following:

a) Under the relevant EPC contract the Issuer has to procure the right of way to the site as a

condition precedent within a specified period of time. Any delay in procuring this right of way will entitle the relevant contractor to claim damages from the Issuer.

b) Additionally, the Issuer has to ensure that traffic worthiness and safety of the relevant road or highway is maintained. In the case of unforeseen events, such as floods or earthquakes causing excessive deterioration or damage to a particular highway, the Issuer also has to maintain and protect the construction works during the period of suspension of the relevant contractor. Such a liability to maintain may lead to increased works costs.

c) If the relevant contractor fails to keep in force all insurances for which it is responsible, the Issuer, shall be bound to pay the insurance premium and keep the insurance policies effective. The Issuer does, however, have the option to recover the premium from the contractor or to deduct it from subsequent payments.

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d) Any dispute arising out of or in relation to the relevant EPC contracts between the parties is a risk for the Issuer. The mechanism for dispute resolution is typically provided in the relevant EPC contracts. Such disputes materially affect project completion and execution and are a major risk.

e) The price quoted by a contractor is to be paid by the Issuer and the Issuer is exposed to the risk of price escalation related to labour or other materials necessary to carry out the project.

f) The Issuer is liable to compensate the relevant contractors for any increase in costs to the contractors due to a change and/or modification in any applicable law.

g) Upon termination of an EPC contract, the Issuer is bound to pay to the contractor a portion of the cost of those works that would not have commenced or have not been completed. Also, on the date of termination or suspension, as the case may be, the maintenance and operation of the project highway is transferred to the Issuer. This puts additional liability on the Issuer to directly or indirectly operate and maintain the project highway.

iii) Hybrid Annuity Model:

The Finance Minister during his budget speech for Fiscal 2016 announced the Government's intentions to revisit the existing PPP models. Following the announcement by the Finance Minister, broad guidelines for a Hybrid Annuity model were announced by the Issuer. The Hybrid Annuity model combines the EPC and BOT (Annuity) models, whereby Government and private enterprises share the bid project cost in the ratio of 40:60 during the construction period. The project is awarded to the developer quoting the lowest project life cycle cost, where "project life cycle cost" means the net present value of the quoted bid project cost plus the net present value of the operations and maintenance costs for the operational period. The Government funds 40 per cent. of the bid project cost, as determined by the bidder, in five equal instalments during the construction period. The private party bears the remaining 60 per cent. of the project cost, through a combination of equity contributions and debt. The proportion borne by the private party during the construction period is expected to be recovered from the Issuer through annuity payments spread over a period of time. Project costs are inflation linked (through a price index multiple) ("PIM"), which is the weighted average of the wholesale price index ("WPI") and consumer price index ("CPI") in the ratio of 70:30. The bid project cost adjusted for variation between the price index occurring between the reference index preceding the bid date and reference index date immediately preceding the appointed date shall be deemed to be the bid project cost at the commencement of construction. Bid project cost shall be adjusted to variations in PIM on a monthly basis until the commencement of operations. Further, the Government also retains the revenue risk as it remains responsible for the collection of toll revenue upon completion. On the other hand, the private participant will bear construction, operations and maintenance risks. Since the Government will bear 40 per cent. of the project cost during the construction phase, the returns to the private developer in the form of annuities during the operating phase will be proportionately lower when compared with normal annuity projects fully funded by a private developer. When compared with EPC projects, it is expected that a shift to the Hybrid Annuity model would ease the cash flow pressure on the Issuer as it would have to provide only 40 per cent, upfront funding spread over the 30-36 months of the construction period, and the private participant would be required to bear the balance 60 per cent. of the project cost through a combination of its equity contribution and debt raised from the market. Further, the 60 per cent. of the project cost borne by the private participant during the construction period is to be recovered from the Issuer in terms of annuity payments spread over a period of 15 years. Therefore, the Issuer's own upfront funding requirement will be lower in the case of the Hybrid Annuity Model compared with EPC model. Further, the annuity nature of the projects would eliminate traffic related risks thereby improving ease of financial close and refinancing ability post project completion. However, a lot would depend

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on the Issuer's ability to ensure right of way availability and approvals before awarding these projects.

The inherent risks comprised of in the Hybrid MCA include amongst others:

Force Majeure Risk

Force majeure covers events which pose a risk to the construction projects execution, namely any or all of Non-Political Event(s), Indirect Political Event(s) and Political Event(s) occurring in India as previously discussed under "Build, Operate and Toll - Force Majeure Risk".

Termination Risk

There is also the risk of termination arising from either Political Events or Non-Political Events. The MCA provides for payment to the relevant concessionaires in the case of a termination of the relevant concession agreements and the project highway being transferred to the Issuer. This puts additional liability on the Issuer to directly or indirectly operate and maintain the project highway.

RISKS RELATING TO INDIA Financial instability in other countries may cause increased volatility in Indian financial markets The Indian market and the Indian economy are influenced by economic and market conditions in other countries, particularly emerging market countries in Asia. Financial turmoil in Asia, Russia, the Middle East and elsewhere in the world in recent years has affected the Indian economy. Although economic conditions are different in each country, investors' reactions to developments in one country can have adverse effects on the securities of companies in other countries, including India. A loss of investor confidence in the financial systems of other emerging markets may cause increased volatility in Indian financial markets and, indirectly, in the Indian economy in general. Any worldwide financial instability could also have a negative impact on the Indian economy. Financial disruptions may occur again and could harm the Issuer's business, its future financial performance and the trading price of the Notes. Developments in the Eurozone have exacerbated the on-going global economic crisis. Large budget deficits and rising public debts in Europe triggered sovereign debt finance crises that resulted in the bailouts of some European economies and elevated the risk of government debt defaults, thereby forcing governments to undertake aggressive budget cuts and austerity measures, in turn underscoring the risk of global economic and financial market volatility. Moreover, in 2012, the sovereign ratings of various European Union countries were downgraded. Financial markets and the supply of credit could continue to be negatively impacted by on-going concerns surrounding the sovereign debts and/or fiscal deficits of several countries in Europe, the possibility of further downgrades of, or defaults on, sovereign debt, concerns about a slowdown in growth in certain economies and uncertainties regarding the stability and overall standing of the European Monetary Union. In response to such developments, legislators and financial regulators in the United States, Europe and other jurisdictions, including India, have implemented several policy measures designed to add stability to the financial markets. However, the overall impact of these and other legislative and regulatory efforts on the global financial markets is uncertain, and they may not have the intended stabilising effects. In the event that the current adverse conditions in the global credit markets

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continue or if there is any significant financial disruption, this could have an adverse effect on the Issuer's business and future financial performance. On 23 June 2016, the United Kingdom held a referendum on its membership of the European Union and voted to leave ("Brexit"). On 29 March 2017 the UK government gave notice (the "Article 50 Notice") to the President of the European Council of its intention to withdraw from the EU pursuant to Article 50 of the Treaty on European Union ("Article 50"). The delivery of the Article 50 Notice triggered the commencement of a negotiation process between the UK and the EU in respect of the arrangements for such withdrawal. Article 50 provides for a two year period for such negotiations to take place. The delivery of the Article 50 Notice introduces significant new uncertainties and instabilities in the financial markets. There is significant uncertainty at this stage as to the impact of Brexit on general economic conditions in the United Kingdom and the European Union and any consequential impact on global financial markets. For example, Brexit could give rise to increased volatility in foreign exchange rate movements and the value of equity and debt investments. A lack of clarity over the process for managing the exit and uncertainties surrounding the economic impact could lead to a further slowdown and instability in financial markets. These and other related events have had a significant impact on the global credit and financial markets as a whole, including reduced liquidity, greater volatility, widening of credit spreads and a lack of price transparency in the United States, Europe and global credit and financial markets. In the event that the current adverse conditions in the global credit markets continue or if there are any significant financial disruption, this could have an adverse effect on the Issuer’s business, future financial performance and the trading price of the Notes. The Issuer may be adversely affected by the Central Government's decision to withdraw the legal tender status of Rs. 500 and Rs. 1,000 denominations of banknotes issued by the RBI, which could have a material adverse effect on the Issuer's business, results of operations and financial condition. Through notifications issued by the Ministry of Finance and the RBI, banknotes of denomination of Rs. 500 and Rs. 1000 have ceased to be legal tender (the "Demonetisation of Banknotes"). According to the RBI, the Demonetisation of Banknotes is aimed at the reduction of cash hoarding, redressing the counterfeiting of Indian banknotes and other counterfeit activities relating to the funding of terrorism. The revenue of the Issuer depends on the collection of toll from highways developed by it. Due to Demonetisation of Banknotes, the Government had suspended toll-collection from 9 November 2016 to 30 December 2016. While the Central Government shall indemnify us for the loss of such revenue, there has been a significant drop in the toll revenue collected as a result of the suspension of toll-collection due to the Demonetisation of Banknotes. Any similar action by the Government in the future may adversely affect the business and financial condition of the Issuer. Any adverse change in India's credit rating by an international rating agency could adversely affect the Issuer's business and profitability In May 2013, Standard & Poor's, an international rating agency, reiterated its negative outlook on India's credit rating. It identified India's high fiscal deficit and heavy government borrowing as the most significant constraints on its ratings, and recommended the implementation of reforms and containment of deficits. In June 2013, Fitch, another international rating agency, returned India's sovereign outlook to "stable" from "negative" a year after its initial downgrade of the outlook, stating that the authorities had been successful in containing the upward pressure on the Central

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Government budget deficit in the face of a weaker-than-expected economy and that the authorities had also begun to address structural factors that have weakened the investment climate and growth prospects. Similarly, Standard & Poor's upgraded its outlook on India's sovereign debt rating to "stable" in September 2014 and reaffirmed such rating in November 2016, while reaffirming the "BBB-" long-term rating on bonds. Standard & Poor's stated that the revision reflects the view that India's improved political setting offers an environment which is conducive to reforms that could boost growth prospects and improve fiscal management. Going forward, the sovereign ratings outlook will remain dependent on whether the Central Government is able to transition the economy out of a low-growth and high inflation environment, as well as exercise adequate fiscal restraint. In July 2016, Fitch revised its outlook for the Indian banking sector to “Negative” from “Stable” due to the increase in non-performing loans. However, in November 2017, Moody’s upgraded India’s credit rating to “Baa2” from “Baa3” and changed its India rating outlook to “stable” from “positive” citing reforms such as GST, demonetisation, the inflation-targeting monetary policy framework, the Bankruptcy Act, bank recapitalisation, Aadhaar and the Direct Benefits Transfer system. There can be no assurance that these ratings will not be further revised or changed by Standard and Poor’s, Fitch or Moody’s or that any of the other global rating agencies will not downgrade India’s credit rating. Any adverse change in India's credit ratings by international rating agencies may adversely impact the Issuer's business, financial condition and results of operations and limit its access to capital markets. Any volatility in the exchange rate may lead to a decline in India's foreign exchange reserves and may affect liquidity and interest rates in the Indian economy, which may impact the Issuer Capital inflows into India have remained extremely volatile responding to concerns about the domestic macroeconomic landscape and changes in the global risk environment. A substantial decline in the import bill, mainly on account of lower crude oil prices led to a significant narrowing in the trade deficit that in turn reduced the size of the current account deficit. However, the primary challenge for the Rupee was the volatile swings in capital flows. The Rupee recorded a high of 68.7 to the U.S. dollar and a low of 64.84 to the U.S. dollar during the 12 month period up to 30 September 2017. The Rupee may come under pressure given the increased likelihood of a gradual reversal in US monetary policy that may result in a rotation of global fund flows from emerging markets to the US markets over the medium term programme. Although the Rupee is less vulnerable given the improvements in the current account deficit and visible moderation in inflation rates, there remains a possibility of needing to intervene in the foreign exchange market to control volatility of the exchange rate. The need to intervene at that point in time may result in a decline in India's foreign exchange reserves and subsequently reduce the amount of liquidity in the domestic financial system. This in turn could impact domestic interest rates. Political instability or changes in the Government in India could delay the liberalisation of theIndian economy and adversely affect economic conditions in India generally, which would impact the Issuer's financial results and prospects Since 1991, successive Indian Governments have pursued policies of economic liberalisation, including significantly relaxing restrictions on the private sector. Nevertheless, the roles of the Central Government and State Governments in the Indian economy as producers, consumers and regulators remain significant as independent factors in the Indian economy. In 2014, further to the election of a pro-business majority Government, there has been a distinct increase in expectations for policy and economic reforms of the Indian economy. There is no guarantee that the new Government will be able to enact an optimal set of reforms or that any such reforms would continue or succeed if there were a change in the current majority leadership in the Government in the future. There is also no guarantee that the Government will announce an optimal set of reforms or policies in the future. The rate of economic liberalisation is subject to change and specific laws, and policies affecting banking and finance companies, foreign investment, currency exchange and other matters affecting

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investment in the Issuer's securities are continuously evolving as well. Other major reforms that have been proposed are the direct tax code and provisions relating to the General Anti-Avoidance Rule (the "GAAR"). Any significant change in India's economic liberalisation, deregulation policies or other major economic reforms could adversely affect business and economic conditions in India generally and the Issuer's business in particular. Terrorist attacks, civil unrest and other acts of violence or war involving India and other countries could adversely impact the Issuer's business, the trading price of the Notes could decrease and lead to a loss of confidence and impair travel, which could reduce its customers' appetite for its products and services Terrorist attacks, such as those which took place in Mumbai in November 2008, and other acts of violence or war may negatively affect the Issuer's business, the trading price of the Notes and the worldwide financial markets. These acts may also result in a loss of business confidence, make travel and other services more difficult, and as a result, ultimately adversely affect its business. In addition, any deterioration in relations between India and Pakistan or between India and China might result in investors’ concern about stability in the region, which could adversely affect the trading price of the Notes. India has also witnessed civil disturbances in recent years, and future civil unrest as well as other adverse social, economic and political events in India could have an adverse impact on the Issuer. Such incidents also create a greater perception about investment in Indian companies involving a greater degree of risk, which in turn could have an adverse impact on the Issuer's business. Natural disasters could have a negative impact on the Indian economy and damage the Issuer's facilities. Natural disasters such as floods, cyclones, earthquakes or famines have in the past had a negative impact on the Indian economy. If any such event were to occur, the business of the Issuer could be affected due to the event itself or due to our inability to effectively manage the effects of the particular event. Potential effects include the damage to infrastructure and the loss of business continuity or business information. In the event that the facilities of the Issuer are affected by any of these factors, its operations may be significantly interrupted, which may materially and adversely affect its business, financial condition and results of operations. The proposed new taxation system in India could adversely affect the business of the Issuer. The Government has proposed a major reform in Indian tax laws, namely the provisions relating to the GAAR. The provisions of GAAR have been introduced in the Finance Act, 2012 and have come into effect from 1 April, 2017. The GAAR provisions intend to target and tax arrangements declared as "impermissible avoidance arrangements", which is any arrangement, the main purpose or one of the main purposes of which is to obtain a tax benefit and which satisfies at least one of the following tests: (i) creates rights or obligations which are not ordinarily created between persons dealing at arm's length; (ii) results, directly or indirectly, in misuse, or abuse, of the provisions of the IT ACT; (iii) lacks commercial substance or is deemed to lack commercial substance, in whole or in part; or (iv) is entered into, or carried out, by means, or in a manner, which are not ordinarily employed for bona fide purposes. If GAAR provisions are invoked, then the tax authorities have wide powers, including denial of tax benefit or a benefit under a tax treaty. The consequences of the implementation of GAAR cannot be determined at present and there can be no assurance that such effects would not adversely affect the business of the Issuer and its future financial performance.

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RISK IN RELATION TO BONDS Any downgrading in credit rating of the Bonds may affect the value of Bonds and thus our ability to raise further debts. Investors may not be able to recover, on a timely basis or at all, the full value of the outstanding amount and/or the interest accrued thereon in connection with the Bonds. Changes in interest rate/exchange rates may affect the prices of the Bonds. Payments made on the Bonds will be subordinated to certain tax and other liabilities preferred bylaw. There is a risk of volatility in the price of the Bonds. Any adverse change in India's credit rating by an international rating agency could adversely affect the Issuer's business and profitability

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VII. BRIEF SUMMARY OF BUSINESS/ACTIVITIES OF THE ISSUER AND ITS LINE OF

BUSINESS OVERVIEW The Issuer is an autonomous Authority of the Government of India under the Ministry of Road, Transport & Highways (MoRTH) and was constituted on 15 June 1989 by the NHAI Act, 1988. The NHAI Act governs the functions of the Issuer and frames the rules and regulations pursuant to which it operates. It commenced operations in February 1995. The Issuer was established by the Government of India for the provision and maintenance of a national highway network consistent with global standards, to meet road users' expectations in the most efficient and cost effective manner and to provide a national infrastructure system capable of supporting a sustainable economic growth. The objectives of the Issuer are provided in the NHAI Act pursuant to which the Issuer is responsible for the development, maintenance and management of the national highways entrusted to it by the Government and for matters connected or incidental thereto. The Issuer's functions include the survey, development, maintenance and management of the national highways and, inter alia, to construct offices or workshops, to establish and maintain hotels, restaurants and rest rooms on or near the highways entrusted to it, to regulate and control regular traffic volume, to develop and provide consultancy and construction services and to collect service and usage fees in accordance with the NHAI Act. The Issuer's original mandate was limited to a number of pilot projects, undertaken with the assistance of the Asian Development Bank (ADB) and Japan Bank of International Cooperation (JBIC). Subsequently, in 1998, the Government, in conjunction with the Issuer, announced the National Highways Development Programme (NHDP) comprising two initial major phases. The First Phase comprised the Golden Quadrilateral project, which established modern road transportation links between a number of major Indian cities including New Delhi, Chennai, Kolkatta, Mumbai, Bangalore and Jaipur. The Golden Quadrilateral project was split into four sections totalling 5,846 km of road network. The Second Phase involved development of the North South corridor and the East West corridor ("NS-EW Corridors"), which established highways through central India connecting Srinagar (North), Kanyakumari (South), Porbandar (West) and Silchar (East), totalling approximately 7,142 km. As of 30 September 2017, over 92 per cent. of the NS-EW Corridor projects totalling 7,142 km were completed. Since the inception of the NHDP programme, the approach to implement the NHDP has changed significantly. Initially NHDP projects were implemented through EPC contracts. Since 2005, as a policy, the Government has been implementing NHDP projects through PPP models. The various PPP models followed include BOT models, being the BOT (Toll), BOT (Annuity) and BOT (Hybrid Annuity) models. As of 30 September 2017, the Issuer has awarded 155 BOT (Toll) based contracts at a total project cost of INR 1,260.12 billion, 47 BOT (Annuity) based contracts at a total project cost of INR 288.12 billion, 49 BOT (Hybrid Annuity) based contracted at a total project cost of INR 526.34 billion and 462 EPC contracts at a projected cost of INR 1511.42 billion. The Issuer has adopted a business model that relies on outsourcing a number of activities including design, construction, supervision, operation and maintenance of national highways, rather than undertaking such activities through its own employees. This has allowed the Issuer to maintain an efficient organisational structure which focuses on operational decision-making.

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The Issuer is also involved in the implementation of the Special Accelerated Road Development Programme for Development –North East (SARDP-NE) to provide connectivity to all the State Capitals and district headquarters in the north-east region of India. The proposal would include upgrading other stretches of national highways and state highways considered critical for the economic development of the north-east region. In December 2000, a mandate was given by the Central Government to the Issuer under NHDP Phase-I to upgrade the road connectivity to the Major Ports in the Country. Port-road connectivity projects are being implemented by setting up SPVs where the Issuer contributes to the project cost by way of an equity investment or equity participation. On 9 October 2017, the Issuer was assigned a rating of Baa3 with positive outlook from Moody's Investor Service ("Moody's"), the same rating as the Government of India. Moody's also highlighted the strong link between the Issuer and the Indian Government, adding that the Issuer’s baseline risk is the same as the default risk of India and indicating a strong correlation of the Issuer's credit rating with the credit rating of the Government of India. Subsequently, on 17 November 2017, Moody's upgraded India's rating from Baa3 to Baa2, also changing the outlook from Stable to Positive. The Issuer was also assigned BBB- rating with stable outlook from S&P Global Ratings. This rating is the same with the rating of the Indian Government. As of the date of this Offering Circular, the Issuer has set up 11 SPVs comprising threewholly owned companies and eight subsidiaries. STRENGTHS Central role in Government initiatives in policy making in the infrastructure sector The Issuer believes that it has a strategic advantage owing to its strong relationship with the Central Government and the central position it occupies in the plans of the Central Government for the development and implementation of various programmes, policies and structural and procedural reforms for the roads and highway infrastructure sector in India. The Issuer is the primary agency responsible for the development of the national highways infrastructure projects under the NHDP The NHAI Act has designated the Issuer as the primary agency responsible for the development of the national highway infrastructure under the NHDP and related programmes approved by the Central Government. The Issuer manages the development of the NHDP under the mandate of MoRTH and the Central Government. There are no comparable agencies within the Central Government for the development of the national highway infrastructure. This ensures that funds can be deployed to the various infrastructure projects under the NHDP relatively efficiently and also allows the Issuer to enable private sector participation in the development of the national highway infrastructure in India. The PPP models implemented by the Issuer vary from short-term simple management contracts (with or without investment requirements) to long-term and very complex BOT forms like Design, Build, Finance, Operate and Transfer ("DBFOT"). As well as the NHDP, the Issuer has implemented several other highway projects commissioned together with the Government, such as the SARDP-NE, the Port Connectivity projects and other projects. The Issuer believes that the absence of direct competition for the implementation of the projects under the NHDP places it in a unique position as the developer of the national highway infrastructure.

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Track record of consistent operational performance and growth The Issuer believes that it has established a track record for consistent growth. Pioneering initiatives in the road sector in India The Issuer believes that it has initiated several innovative processes which are different from the practices generally followed in the infrastructure industry. Further to the adoption of performance based contracts with bonus and penalty provisions in both EPC and PPP projects, the Issuer believes that there has been an improvement in construction and service quality associated with such EPC and PPP projects. Detailed project reports ("DPRs") relating to each project currently undergo peer reviews by specialist engineers, selected from a panel of consultants, in order to enhance quality and efficiency. Mechanisms have been implemented to accelerate the process of dispute resolution, especially in relation to EPC projects. Umbrella state support agreements have also been put in place for projects undertaken within a single State. Each State support agreement executed between the Issuer and the State Government provides a legal framework for providing support and services to executing agencies to procure necessary support from the State Government for implementation of the projects in accordance with their defined schedule. Some of the other innovations introduced by the Issuer include e-tendering, e-procurement, introduction and implementation of Wayside Amenities on highways, road asset management systems, advanced traffic management systems, road user applications, green highways, safety engineering and adaptation of the some of the national highways to provide emergency landing facilities for military aircraft. The Issuer has also recently entered into a memorandum of understanding with the Indian Space Research Organisation and the North East Center for Technology Application and Research for the use of spatial technology for the monitoring and managing of national highways. Recently, the Issuer has also been involved in the plans by the Central Government and the Delhi Development Authority to enable the decongestion of Delhi-NCR region. Recently, the Issuer has placed its efforts on a proposal to decongest Delhi through the creation of various radial routes Experienced and committed management and employee base with in-depth sector expertise. The Issuer believes that it has an experienced, qualified and committed management and employee base. The Issuer believes that it is one of the few organisations where people with extensive experience in the road and highways and finance sectors are regularly seconded from various central or state services, departments and organisations to share their expertise. As of 30 September 2017, the Issuer has a total workforce of 995 employees, including 278 officers seconded from other Indian state services or departments. The Issuer is organised in a manner so as to facilitate faster operational decision-making. Supervision consultants and independent engineers are appointed through a rigorous recruitment process in order to select the most qualified professionals. Furthermore, all projects are monitored centrally at the Issuer's headquarters by both a technical and a financial division. These divisions are operated separately, each with their own management and sub-management structure. Economies of scale Given the scale of operations of the Issuer and the legislative mandate to the Issuer pursuant to the NHAI Act, the Issuer benefits from a large volume of commercial projects. The Issuer enjoys significant cost benefits as a result of its centralised decision making system. The Issuer aims to manage its projects efficiently so that equipment is stored more efficiently, manpower is deployed

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appropriately and redundant assets are minimised. The Issuer therefore, achieves large scale efficiencies and benefits from economies of scale owing to the size of its operations. STRATEGIES The Issuer's long term goal is to develop a highly-advanced highway network suitable for meeting the increasing demands of commercial transportation and heavy industrial use. The Issuer aims to achieve this goal through the following areas of strategic focus. Decentralisation of local level decisions and activities The Issuer is aiming to decentralise its field level decisions and activities in order to achieve a greater level of operational efficiency. To this end the Issuer has set up 24 Regional Offices and 164 Project Implementation Units, each with an appropriate management structure for the effective co-ordination and monitoring of local projects. Each Regional Office has been delegated the necessary powers and capacity to engage, where necessary, such technical experts as are required to achieve the most efficient outcome in the implementation of such regional office's projects. Strengthening of core processes for the NHDP implementation and management The Issuer believes that it pays significant attention to institutionalising knowledge and best practices within the project cycle. This includes preparing guidelines of best practice in land acquisition and preconstruction activities adopted in different Indian states, adopting "Resettlement and Rehabilitation" practices, in particular for externally aided projects, and preparing guidelines and standardised procedures for implementing amendments to existing project scopes and timelines. The Issuer has also developed an e-procurement system and an online platform for interaction with various service providers. These steps, the Issuer believes, will enhance its productivity and ability to implement its projects more efficiently. Strengthening of the quality audit and review processes As the Issuer relies frequently on outsourcing in the implementation of projects, its strategy is to invest resources in infrastructure required to carry out advanced audits and performance reviews of its service providers. This strategy includes improving the review process of project designs, greater involvement of the Issuer's field unit and supervision consultants at an earlier stage in a project, strengthening independent quality audits during the construction stage of EPC and PPP projects and receiving continuous feedback from stakeholders which enables it to enhance its wider monitoring framework. Greater focus on human resources The Issuer expects an increase in the scale and complexity of future national highways projects, which will require continued growth within its human resources both in terms of size and expertise. The Issuer plans to extend its outsourcing of personnel to its different areas of operation in order that the right level of expertise is available where necessary. On occasions, especially in relation to projects where land acquisition matters are involved, the Issuer is hiring retired officers who were working in the various state and national level government bodies and also other third party service providers. The Issuer believes that by doing so it shall be able to utilise the experience and expertise of these personnel to enhance its business and areas of operation.

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Developing strong institutional relationships with external stakeholders The Issuer's strategy is to engage with and build strong relationships with a variety of stakeholders across various aspects of its operations. These include, but are not limited to, the Central Government, the NitiAayog, State and local Governments and agencies, implementing authorities such as the police and health service, contractors, concessionaires, technical, financial and legal consultants, audit firms, financial institutions, investors, industry associations, academic institutions, the media, and both multilateral and bilateral funding agencies such as the World Bank, the ADB and the JBIC. Greater use of information technology ("IT") The rapid advance in IT resources across various aspects of highway Development and management has resulted in a stronger incentive for the Issuer to maximise the application of these resources within its operations. Significant focus on IT is one of the key strategies for the Issuer in its plans for corporate growth. The Issuer has already instituted various information technology systems across its various operations. Examples include e-tendering, electronic tolling, advanced traffic management systems and road asset management systems. The Issuer expects to expend more resources towards the implementation of information technology across it operations to enhance its productivity and its results of operations. THE ISSUER'S PROJECTS The national highways are an integral component of the Indian economy and are fundamental to ensuring the efficient inter-state movement of both passengers and goods. The national highways connect the National and State Capitals of India, the Country's major ports and rail junctions, and provide links with border roads and international highways. The total length of the national highways (including expressways) of India stands at 120,144 km as per the NHAI Annual Report for Fiscal 2017. Whilst highways and expressways constitute only 1.9 per cent. of the length of all roads in India, they are responsible for carrying around 40 per cent. of the road traffic throughout the country. The progress of the NHDP and other similar projects, as of 30 September 2017, are as follows: Connectivity to Major Ports In December 2000, a mandate was given by the Central Government to the Issuer under NHDP Phase-I to upgrade the road connectivity to the major ports in the country. Port-road connectivity projects are being implemented by setting up SPV companies where the Issuer contributes to the project cost by way of an equity investment or equity participation. The following SPVs have been incorporated for developing port connectivity projects: No. Name of Port Length (km) Name of the SPV

1 Mormugao 18.3 Mormugao Port Road Company Limited 2 Haldia 52.2 Calcutta-Haldia Port Road Company Limited 3 JNPT Package-I 30 Mumbai JNPT Port Road Company Limited

JNPT Package-II 14.4 Mumbai JNPT Port Road Company Limited 4 Vishakapatnam 12.5 Viskhapatnam Port Road Company Limited 5 Chennai-Ennore 30 Chennai-Ennore Port Road Company Limited 6 Cochin 10.4 Cochin Port Road Company Limited 7 Tuticorin 47.2 Tuiticorin Port Road Company Limited 8 Paradip 77 Paradip Port Road Company Limited 9 New Mangalore 37.5 New Mangalore Port Road Company Limited

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No. Name of Port Length (km) Name of the SPV Total : 329.5

In addition to the above projects, there are two projects being implemented by the Issuer to provide the port connectivity for Chennai Port Gate No. 10 and ICTT Vallarpadam (Cochin) port, as follows: S. No. Name of Stretch/Port Length (km)

1 4 Lane elevated road from Maduravoyal to Chennai Port Gate (NH-4) 19 2 4 Lane connectivity to ICTT Vallarpadam NH-47 17.2 Total: 36.2

SPECIAL ACCELERATED ROAD DEVELOPMENT PROGRAMME FOR NORTH EASTERN REGION ("SARDP-NE") The Issuer is also involved in the implementation of SARDP-NE to provide connectivity to all the State capitals and district headquarters in the north-east region of India. The proposal would include upgrading other stretches of national highways and state highways considered critical for the economic development of the north-east region. The SARDP-NE envisages improvement of road connectivity to the State capitals with district headquarters in the north eastern region. The proposed programme includes improvement of 10,141 km of roads comprising national highways and state roads to be implemented under Phase 'A', Phase 'B' and Arunachal Pradesh Package. Phase A Phase A consists of improvements to 4,099 km of roads consisting of 3,014 km of national highways and 1,085 km of State roads at an estimated cost of Rs. 217.69 billion. Out of 4,099 km, BRO, State PWDs and the National Highways and Infrastructure Development Corporation Limited ("NHIDCL") have been entrusted with responsibility for the development of 3,213 km of roads. The works are in various stages of progress. Phase B Phase B involves adding extra lanes to 3,723 km of national highways and further improvements to state roads. Arunachal Pradesh Package for Roads and Highways The Arunachal Pradesh Package of Roads and Highways covering 2,319 km of road was approved by the Government as part of SARDP-NE on 9 January 2009. Out of this, 776 km has been approved by the Government for execution on a BOT (Annuity) basis and for the remaining 1,543 km approval for tendering under the EPC basis. Bharatmala Pariyojana As per the MoRTH Government of India the Issuer will develop 34,877 Km of highways under Bharatmala Pariyojana. The total length of 34,877 Km entrusted to NHAI consists of Bharatmala Pariyojana (19,800 Km); existing NHDP projects under implementation (11,382 Km), and various award projects (3,695 Km), not subsumed under Bharatmala.

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The objective of the project is to optimize the efficiency of freight and passenger movement across India by bridging critical infrastructure gaps while simultaneously creating direct and indirect employment and enhancing economic activity. The project lays a special emphasis on fulfilling the connectivity needs of backward and tribal areas, areas of economic activity, places of religious and tourist interest, border areas, coastal areas and trade routes with neighbouring countries. Therefore, the Issuer will be responsible for the development and maintenance of economic corridors, inter corridors and feeder routes, national corridor efficiency improvement, border and international connectivity roads, coastal and port connectivity roads and green-field expressways among others. The estimated total capital expenditure for the next five years with respect to this project is approximately INR 7,150 billion, borrowings from Life Insurance Fund and Employees Provident Funds, rupee denominated Masala Bonds and Bharatmala bonds and private placement long term bonds etc. Regardless of such borrowings, the Issuer intends to maintain at all times the Debt Servicing Coverage Ratio below 1.0 and the Debt Equity Ratio shall not exceed 1.3. OVERSEAS PROJECT The Central Government has mandated that the Issuer undertakes management and consultancy services in connection with construction and improvement of a two-lane highway in the Kalewa-Yargi section of the proposed India-Myanmar-Thailand Trilateral Highway. The highway will connect India with Thailand through Myanmar. The cost of this overseas project is estimated to be Rs. 11.70 billion and is fully funded by the Central Government through the Ministry of External Affairs (the “MEA”). According to an agreement between the Issuer and the MEA, the MEA will reimburse construction cost to the Issuer in phases and the Issuer will receive a service fee amounting to 6 per cent. of the lower of the estimated cost of construction and the tendered construction bid. As of the date of this Offering Circular, the Issuer has issued the letter of award to Punj Lloyd and Varaha Infra joint venture, the successful bidder, for the construction of the highway. The project is expected to be completed within 36 months from the date of the award. Government as the policy maker Pursuant to the NHAI Act, the Central Government may direct that any function in relation to thedevelopment or maintenance of national highways shall also be exercisable, among others, by any officer or authority subordinate to the Central Government. Accordingly, some of the functions were delegated by the Central Government to the respective State Governments. The NHAI Act was passed providing for the constitution of the Issuer for the development maintenance and management of the national highways and for matters connected therewith or incidental thereto. The Central Government appoints the Chairman and may also appoint up to four part-time members. The Central Government is empowered to vest in, or entrust to, the Issuer such national highways or any stretch thereof, as are vested in the Central Government under the NHAI Act. As per the NHAI Act, the Central Government provides funds to the Issuer for the discharge of its functions. Further to this, the fee collected by the Issuer is on behalf of the Government for services or benefits rendered by it under the NHAI Act. FINANCING As the Issuer has been created to act as an authority for the development, maintenance and management of national highways in India, the Government of India has the responsibility of providing funds to the Issuer for the discharge of its functions.

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The Issuer receives its funding through (i) support from the Government of India in the form of capital investment, additional budgetary support (cess and toll plough back), (ii) loans from multilateral agencies and (iii) Internal and External Borrowing Recourses (IEBR) i.e. market borrowings (both domestic and international). The development and maintenance of the national highways is financed through (i) the Government's gross budgetary support and ABS, (ii) dedicated accruals under Central Road Fund (share in the levy of cess on fuel),(iii) lending by international institutions; (iv) private financing through PPP framework including DBFOT and SPVs with equity participation by the Issuer and (v) market borrowing (including funds raised through Capital Gain Tax Exemption Bonds, Long Term Taxable and Tax Free Bonds, Rupee Denominated Masala Bonds etc. Cess The Central Government has, under the Central Road Fund Act 2000, as amended ("CRF Act"), created a dedicated fund for the NHDP by levying taxation on diesel and petrol. The receipts from the taxation are separated as follows:

i) 39.0 per cent. designated to the development and maintenance of national highways: ii) 33.5 per cent. designated to the development of rural roads; iii) 14.0 per cent spent on railway safety works, including the construction of road bridges and

the erection of safety works at unmanned rail-road crossings; iv) 10.0 per cent designated towards the development and maintenance of State roads of inter-

State and economic importance as approved by the Central Government; v) 2.1 per cent designated to the development and maintenance of national waterways; and vi) 1.0 per cent spent on the development and maintenance of roads in border areas. Loan assistance from multilateral agencies The Issuer is implementing some projects under the NHDP with external assistance in the form of loans and grants from multilateral development agencies including the ADB. The following table sets out the externally aided projects of the Issuer as of 30 September 2017: Summary of Externally Aided Projects

Category

Awarded Awarded Cost (INR crore)

Completed

No. of Contracts Length in km No. of Contracts Length in km

World Bank Funded Projects NHDP Phase I 18 983 5,538 18 982 Golden Quadrilateral 18 983 5,538 18 982 Others - - - - - NHDP Phase II EW Corridors 12 482 3,208 10 409 Sub-Total A 30 1,465 8,746 28 1,391 ADB Funded Projects NHDP Phase I 10 615 1,866 10 615 Golden Quadrilateral 9 567 1,807 9 567 Others 1 48 59 1 48 NHDP Phase II NS & EW Corridors 31 1,636 7,565 31 1,636 Sub-Total B 41 2,251 9,431 41 2,251 JBIC Funded Projects

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Category

Awarded Awarded Cost (INR crore)

Completed

No. of Contracts Length in km No. of Contracts Length in km

NHDP Phase I 7 150 634 7 150 Golden Quadrilateral 5 111 333 5 111 Others 2 39 301 2 39 Sub-Total C 7 150 634 7 150 NHDP Phase-III JICA 1 127 1,027 - - Grand Total (A+B+C) 79 3,993 19,838 76 3,792 The Issuer is also able to award grants towards a project's cost to make it commercially viable. However, the amount of any such grant is decided on a case by case basis. The disbursement of any such grant is subject to the contractual provisions of the relevant project concession agreements. The Issuer's projects, with higher traffic volumes, have enabled the Issuer to receive an upfront payment payable by the successful bidder as an outcome of the competitive bidding process. Further, projects under the BOT/DBFOT framework have also been awarded on a revenue share/premium basis, where the bidder offering the highest revenue share/premium is awarded the project. Market Borrowing The Issuer is authorised to raise funds through the issue of bonds both on the domestic and international capital markets. Summary of Indebtedness The following table sets forth the details of the Issuers' indebtedness as of the dates mentioned:

31 March 2016 (INR in billions)

31 March 2017 (INR in billions)

30 September 2017 (INR in billions)

Long Term Borrowings Secured Loans Capital Gains Tax Free Bonds- 54EC 105.67 131.97 142.03 Tax Free Secured Redeemable Non- Convertible Bonds (10Yr & 15Yr) 11-12 100.00 100.00 100.00 Tax Free Secured Redeemable Non- Convertible Bonds (10Yr & 15Yr) 13¬14 50.00 50.00 50.00 Tax Free Secured Redeemable Non- Convertible Bonds (10Yr & 15Yr) 15-16 190.00 190.00 190.00 Taxable Bonds (25Yrs, 5Yrs & 30Yrs) 2016-17 0.00 275.45 275.45 Taxable Bonds (15Yrs, 5Yrs & 30Yrs) 2017-18 0.00 0.00 150.25 Rupee Denominated Offshore (Masala) Bonds 2017-18 0.00 0.00 30.00 Loan from ADB - (Surat Manor Project) (US$ 105,500,802.74 @ Rs.66.70) 7.04 6.42 6.18 Taxable Bonds (5yrs) (Approval and no objection certificate provided by Government of India for raising taxable bonds) Total 452.71 753.84 943.91 PUBLIC PRIVATE PARTNERSHIP ("PPP") IN HIGHWAY DEVELOPMENT PPP is the Issuer's preferred mode of delivery for future phases of the Bharatmala Pariyojana and NHDP. There are a number of forms of PPP which are popular in India and have been used by the Issuer for development of the national highways:

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Build, Operate and Transfer ("BOT") (Toll) Under the BOT (Toll) model, private developers and operators are awarded project contracts where they are entitled to collect and retain toll revenues for a certain tenure known as the concession period. Toll revenues are prescribed by the Issuer on a "per vehicle per km" basis for different types of vehicles. A model concession agreement for BOT projects has been developed and is regularly revised as required to facilitate the efficient award of contracts to prospective operators. Build, Operate and Transfer ("BOT") (Annuity) In the BOT (Annuity) model, the concessionaire bids for projects on the basis of annuity payments to be received from the Issuer that would cover the construction, operational and maintenance costs of the project and cater for an expected return on the investment. The annuities are paid semi-annually by the Issuer to the concessionaire and are linked to performance covenants. The concessionaire does not bear the traffic or tolling risk in these contracts. Design, Build, Finance, Operate and Transfer ("DBFOT") The DBFOT model is similar to the BOT (Toll) and BOT (Annuity) model. However, in the DBFOT model, the concessionaire is also responsible for the design, building, financing, operation and maintenance aspects of the project. A model concession agreement for DBFOT projects has been developed and is regularly revised as required to facilitate the efficient award of contracts to prospective operators. Hybrid Annuity Model ("HAM") The Finance Minister during his budget speech for Fiscal 2016 announced the Government's intentions to revisit the existing PPP models. Following the announcement by the Finance Minister, broad guidelines for a Hybrid Annuity model were announced by the Issuer. The Hybrid Annuity Model combines the EPC and BOT (Annuity) models, whereby Government and private enterprises share the bid project cost in the ratio of 40:60 during the construction period. Project life cycle cost defined as net present value ("NPV") of the quoted bid project cost plus NPV of the operations and maintenance (O&M) cost for the entire operations period is the bid parameter. The project is awarded to the developer quoting the lowest project life cycle cost where "project life cycle cost" means the net present value of the quoted bid project cost plus the net present value of the operations and maintenance costs for the operational period. The Government funds 40 per cent. of the bid project cost, as determined by the bidder, in five equal instalments during the construction period. The private party bears the remaining 60 per cent of the project cost, through a combination of equity contributions and debt. The proportion borne by the private party during the construction period is expected to be recovered from the Issuer through annuity payments spread over a period of time. Project costs are inflation linked (through a price index multiple) ("PIM"), which is the weighted average of the wholesale price index ("WPI") and consumer price index ("CPI") in the ratio of 70:30. The bid project cost adjusted for variation between the price index occurring between the reference index preceding the bid date and reference index date immediately preceding the appointed date shall be deemed to be the bid project cost at the commencement of construction. Bid project cost shall be adjusted to variations in PIM on a monthly basis until the commencement of operations. Further, the Government also retains the revenue risk as it remains responsible for the collection of toll revenue upon completion. On the other hand, the private participant will bear construction, operations and maintenance risks. Since the Government will bear 40 per cent of the

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project cost during the construction phase, the returns to the private developer in the form of annuities during the operating phase will be proportionately lower when compared with normal annuity projects fully funded by a private developer. When compared with EPC projects, it is expected that a shift to the Hybrid Annuity model would ease the cash flow pressure on the Issuer as it would have to provide only 40 per cent. upfront funding spread over the 30-36 months of construction period, and the private participant would be required to bear the balance 60 per cent of the project cost through a combination of its equity contribution and debt raised from the market. Further, the 60 per cent of the project cost borne by the private participant during the construction period is to be recovered from the Issuer in terms of annuity payments spread over a period of 15 years. Therefore, the Issuer's own upfront funding requirement will be lower in the case of Hybrid Annuity Model compared with EPC model. Further, the annuity nature of the projects would eliminate traffic related risks thereby improving ease of financial close and refinancing ability post project completion. Operate, Maintain and Transfer ("OMT") Under the OMT model, toll collection and highway maintenance are integrated and awarded to one private operator (traditionally, tolling agents have been responsible for the collection of toll revenue, with various subcontractors undertaking road maintenance). Project construction and development will remain to be the responsibility of a separately appointed EPC contractor until completion, at which point such private operator will assume responsibility for collection of tolls in return for their maintenance of the highways and the provision of essential facilities such as emergency and safety services. The Issuer has recently awarded a number of highway projects to the private sector under the OMT model. Engineering, Procurement and Construction ("EPC") Under the EPC model, a single contractor takes responsibility for all elements of the engineering, procurement, construction and maintenance aspects of the project. This is different from a traditional EPC contract, whereby the contractor does not provide for maintenance under the initial contract. Under the EPC model, the contractor will quote for the cost of upgrading and maintaining the highway at the outset, and will be required to provide such maintenance for two years' post completion of the construction. The cost of the project is borne by the Issuer. Refinancing and Re-structuring: Refinancing and restructuring of a project is undertaken by the concessionaire to take advantage among others of the lower rate of interest, elongated tenure of payment. As of 31 March 2017, NHAI after evaluating the fund flow statement of 22 projects allowed refinancing of Rs.119.50 billion. As of 30 September 2017, NHAI allowed refinancing of Rs. 12.76 billion regarding 7 Projects. Infrastructure Debt Funds: IDF are an investment vehicle which can be sponsored by commercial banks and NBFCs in which domestic/off shore institutional investors and in particular insurance and pension funds can invest through units and bonds issued by IDF. It offers among others the benefit of lower interest rates improving the viability of projects and offering a better return on equity. Since 2014, IDF have been established by ICICI Bank, L&T and IDBI. 37 projects have been financed through IDF amounting to Rs.67.76 billion. Change of ownership: The provision of divestment in PPP projects are not uniformed overall concession agreement. Before 2009 concessions promoters has to hold at least 26% of the equity throughout the concession period. After 2009 the concessionaire can divest 100% of its equity two years after the completion of the said construction. The CCEA has allowed such divestment in all PPP Projects two years after the completion of the said construction subject to a subsequent investment in

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certain projects such as incomplete NHAI Projects, other Highway Projects, Power Sector Project and to retire debt to Financial Institution in any other Infrastructure Project. Premium Deferment: The cost of a BOT (Toll) project awarded on premium includes other than cost of construction committed premium payment to the Government, operation and maintenance cost and debt servicing cost. The primary object of the deferment is to revive any projects bid during 2011-12 that were facing financial stress due to the economic down turn. Pursuant the CCEA decision (MoRTH letter no.37012/22/2011/H(pt.III) dated 04/03/2014) the premium has been deferred in 21 cases.

One-time Fund Infusion Scheme: The CCEA has approved a scheme to revive and quickly bring languishing project to physical completion by providing financial assistance as loan at bank rate + 2%. So far NHAI has approved 8 projects. Infrastructure Investment Trust (InVIT) for Concessionaires: InvIT is a mechanism that enables developers of infrastructure assets to monetise their assets by pooling multiple projects under a single entity (trust structure). Currently, Government Securities or G-secs are the only other instruments with such a long life. The sponsor shall hold minimum 15% of the units issued by the InvIT with a lock-in period of three years from the date of issuance of units. The Minimum Investment limit is Rs.10 lac per investor helps monetize revenue generating road assets thereby increasing the propensity of bidders to invest in new road projects. It will lower the cost of capital by attracting long term investors (particularly pension and insurance funds) in completed projects. It will help reduce NPA incidence in commercial Banks, in respect of highway projects. In VIT for IRB, Reliance Infra and ILFS were approved by NHAI. Incentives for Private Sector Participation The Government has put in place financial incentives to encourage increased private sector participation in the road sector. Initiatives taken by the Government include:

i) a declaration of the road sector as an industry; ii) the provision of a capital grants subsidy of up to 40 per cent. of a project's costs to enhance

the viability of a project on a case-by-case basis; iii) a duty-free import of specifically identified high-quality construction plant and equipment; iv) a 100 per cent. tax exemption in any consecutive 10 years within a period of 20 years after

completion of construction projects which involve an addition of new lanes; v) an undertaking by the Government to meet all expenses relating to land acquisition and

other preconstruction activities (which, in essence, allows for construction and development on encumbrance-free land); and

vi) an allowance for foreign direct investment of up to 100 per cent. in the road sector. Bidding Process The general procedure for the selection of concessionaires adopted by the Issuer involves a two-stage bidding process. Projects are awarded as per the model documents prepared by the Issuer and the Central Government such as Request for Qualification ("RFQ"), Request for Proposal ("RFP") and concession agreements. The Issuer amends these model documents based on project specific requirements. The two stage process involves: Stage 1: Pre-qualification on the basis of technical expertise and financial position of the firm and its track record in similar projects which meets the minimum criteria set out in the RFQ document.

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Stage 2: Commercial bids from pre-qualified bidders are invited through issue of RFPs. For BOT (Toll) projects the bid parameter is the premium offered to the Issuer or the grant sought from the Issuer. In BOT (Annuity) projects the bid parameter is the semi-annual annuity sought from the Issuer. The Government has put in place appropriate policies and other institutional and regulatory mechanisms including a set of fiscal and financial incentives to encourage increased private sector participation in the road sector. Bidding process for Engineering, Procurement and Construction ("EPC") projects The Issuer has also adopted a single stage two part system for the selection of the bidder for award of a project. Under this process, the bid shall be invited under two parts. Eligibility and qualification of the bidder will be first examined based on the details submitted under the technical bid with respect to eligibility and qualifications criteria prescribed in the RFP. The financial bid shall only be opened to those bidders whose technical bids satisfy the eligibility and qualifications requirements as per the RFP. RELATIONSHIP WITH THE GOVERNMENT Government as the policy maker Pursuant to the NHAI Act, the Central Government may direct that any function in relation to the development or maintenance of national highways shall also be exercisable, among others, by any officer or authority subordinate to the Central Government. Accordingly, some of the functions were delegated by the Central Government to the respective State Governments. The NHAI Act was passed providing for the constitution of the Issuer for the development maintenance and management of the national highways and for matters connected therewith or incidental thereto. The Central Government appoints the Chairman and may also appoint up to four part-time members. The Central Government is empowered to vest in, or entrust to, the Issuer such national highways or any stretch thereof, as are vested in the Central Government under the NHAI Act. As per the NHAI Act, the Central Government provides funds to the Issuer for the discharge of its functions. Further to this, the fee collected by the Issuer is on behalf of the Government for services or benefits rendered by it under the NHAI Act. Statutory powers of the Government over the Issuer The Central Government is empowered to vest or entrust any national highway or stretch thereof to the Issuer by publishing a notification in the Official Gazette. Thereafter, all assets, rights or liabilities of the Central Government in respect of such national highway or stretch thereof stands transferred to the Issuer including but not limited to all debts, contracts, capital expenditure, all sums of money due to the Central Government, suits and any other legal proceedings. Financial Support from the Government Financial support to the Issuer from the Government comes primarily in the form of yearly budgetary allocations and cess collected by the Government under the CRF Act, part of which is specially allocated for national highways and capital infusion in the form of loans. The NHAI Act provides for the Central Government to provide any capital that may be required by the Issuer or pay by way of loans or grants such sums of money as it may consider necessary to ensure the efficient discharge of the Issuer's functions. The NHAI Act also provides for the constitution of the National Highways

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Authority of India Fund, a provider of capital for the collection of any grants, aid, loan facilities or any other sums received by the Issuer, under which it can draw down to meet project expenses, procurement and other ongoing costs. Alternatively, the Central Government regularly provides consent to the Issuer to raise funds through the issuance of bonds and other debt securities both on the domestic and international capital markets. As the Issuer has been set up to act as an authority for the development, maintenance and management of national highways in India, the Government of India has the responsibility of providing funds to the Issuer for the discharge of its functions. The Issuer receives its funding through (i) support from the Government in the form of capital investment, additional budgetary support (cess and toll plough back), (ii) loans from multilateral agencies and (iii) market borrowings. The development and maintenance of the national highways is financed through (i) the Government's gross budgetary support and ABS, (ii) dedicated accruals under Central Road Fund (share in the levy of cess on fuel),(iii) lending by international institutions, (iv) private financing through PPP framework including DBFOT and SPVs with equity participation by the Issuer and (v) market borrowing (including funds raised through capital gain tax exemption bonds, Masala Bonds and long term tax free bonds). The Government as the regulator The NHAI Act also designates the Central Government as the principal regulator of the Issuer. The Central Government has a range of powers enabling it to exercise a broad degree of control over the functioning of the Issuer, including over the manner in which the Issuer may invest its funds or maintain its accounts. The NHAI Act stipulates that the Issuer shall remain bound by the directions of the Central Government on questions of policy. The Central Government may suspend the Issuer from its management role on any of its national highways projects, or alternatively replace the Issuer in its management role entirely if it is of the opinion that the Issuer is either unable to discharge its functions and duties effectively, or if it persistently fails to comply with any direction of the Central Government. The Central Government is further empowered to make rules for giving effect to the provisions of the NHAI Act in certain matters which include but are not limited to matters relating to manner in which the Issuer may invest its funds or maintain its accounts. B. K. Chaturvedi Committee Report In order to resolve the procedural hurdles to the national highways projects as well as to address the financing needs of the road sector, the Central Government established the B. K. Chaturvedi Committee ("Committee") headed by Shri B.K. Chaturvedi, Member, Planning Commission. Amongst the other recommendations the Committee made the following recommendations which also has had the in-principle approval of the Central Government:

i) issuance of tax exempted bonds; ii) guarantee cover for any borrowing by the Issuer; iii) out of the borrowing approval of Rs. 300 billion earlier provided to Indian Infrastructure

Finance Company Limited ("IIFCL"), Rs. 100 billion under a fiscal stimulus package to be transferred to the Issuer, as per the its borrowing requirement;

iv) assistance in negotiating non-sovereign multilateral loans from organisations such as the World Bank, the ADB and the JBIC by providing back to back support, if necessary; and

v) providing a letter of comfort from the Ministry of Finance confirming the availability of cess at least till 2030-31.

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Risk Management Since the Issuer is the implementing agency of the NHDP/Bharatmala, steps have been taken for restructuring and strengthening the Issuer. Institutional mechanisms have been established to address delays in, amongst other things, environmental clearances and land acquisition. There is a particular focus on traffic management and safety related issues through the proposed Directorate of Safety and Traffic Management to be set up by the Central Government. It is expected that these initiatives, once fulfilled, would deliver an efficient and safe highway network across the country. In order to specify the policy and regulatory framework on a fair and transparent basis, a Model concession agreement (MCA) for PPP in respect of the national highways has been prescribed. It is expected that this common framework, based on international best practices, will significantly accelerate the pace of project awards as well as ensure an optimal balance of risk and reward among all project participants. Revenue realisation in BOT (Toll) projects is subject to some risks including, but not limited to variation in traffic, variation in toll rates, additional toll ways and occurrence of premature termination on account of certain events. The relevant concession agreement provides for various risk mitigation mechanisms including changing the concession period, differential toll rates that are linked to the cost of different roads structures and providing for termination payments upon the occurrence of any force majeure event. Risk of Early Termination of Concession: In the event of a default by a concessionaire under the relevant concession agreement and if the concessionaire has failed to cure such default within the specified cure period, the Issuer shall have the right to terminate the agreement. If such default takes place within the relevant construction period, generally no payment is made to the concessionaire and if such default takes place during the operation period, the Issuer generally will only make payment of up to 90 per cent. of the debt due as on the date of such termination to the lender of the concessionaire, less any insurance claim further to which the Issuer will get the right over the relevant asset. Land acquisition risk: The Issuer is responsible for acquiring lands required for the projects. The Issuer acquires land under the National Highways Act, 1956 ("NH Act"). In various parts of the country, the process for lands acquisition is affected by a large number of factors, including but not limited to Government policies and the social and political environment. Also, the process of land acquisition can result in litigations. However, the risk of delay associated with the land acquisition process is mitigated by the Issuer as it generally awards only those projects where land acquisition has already taken place. Approval Risk: The obligation of obtaining approvals and/or permissions is on the concessionaires/contractors. In order to manage these risks, the Issuer provides assistance to the concessionaires/contractors in seeking the approval and/or permission from the relevant authorities. Although the Issuer tries to provide all reasonable support and assistance to the concessionaires/contractors in procuring applicable approvals and/or permissions required from any Government entity, such approvals or permissions may be delayed due to various reasons resulting in delay in completion of the projects. The Issuer generally assists concessionaires/contractors in obtaining the approvals and/or permissions in relation to the following among others:

i) permission of the State Government for extraction of boulders from quarries;

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ii) permissions of village Panchayats and the Pollution Control Board for installation of crushers;

iii) licences for use of explosives; iv) permission of the State Government for drawing water from rivers and/or reservoirs; v) licence(s) from inspectors of factories or other competent authorities and clearance of the

Pollution Control Board for setting up concrete batching plants; vi) clearance from village Panchayats and the Pollution Control Board for setting up asphalt

plants; vii) applicable permits, as required, relating to environmental protection and conservation; viii) permission of State Government for the cutting of trees; and ix) any other permits or clearances required under applicable laws. Force majeure risk: Force majeure risk is applicable across all the business of the Issuer. Factors such as acts of God, epidemics, adverse weather conditions, radioactive contamination, ionising radiation, fire or explosion, strikes or boycotts, the discovery of geological conditions, toxic contamination or archaeological remains on the relevant site, Indirect Political Event(s) and Political Event(s) and change in law are often threats to various projects undertaken by the Issuer. In order to mitigate the losses due to force majeure, the Issuer has a separate mechanism of payment upon the occurrence of a force majeure event. HUMAN RESOURCES The Issuer employed 995 employees as of 30 September 2017. The employees include professionals in business management, accountancy, engineering, law, computer science, economics and other relevant disciplines. The Issuer believes that its employees are its most valuable asset and the management believes it has a good relationship with the employees. The Issuer aims to develop a collaborative culture and an ongoing consultative process at various levels of administration within the organisation. The Issuer believes that it has amicable relations with its employees. The management of the Issuer is also in constant dialogue with the employees to avoid any industrial relations actions, including strikes or work stoppages. The computerisation of the Issuer has reduced employee workloads and allowed the Issuer to maintain a relatively lean workforce during the past five to six years despite growing its business. The details of employees of the Issuer as at 30 September 2017 are as follows:

Category of Employees Number of Employees Regular 321

Deputation 278 Contract 396

Social Awareness programmes promoted by the Issuer The Issuer actively participates on social reform or national initiatives such as road safety, rehabilitation and resettlement and AIDS awareness. In addition, the Issuer is working towards the concept of "Green Highways" for future projects. In furtherance of the concept of Green Highways, the Issuer is contemplating development of horticulture and greenbelts along highways. INSURANCE The Issuer's policy is to insure its properties adequately against fire and other usual risks. The Issuer's insurance policies are subject to exclusions which are customary for those insurance policies,

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including those exclusions which relate to war and terrorism-related events. The Issuer believes that its insurance policies as described above are appropriate for its business. COMPETITION Responsibility for all of the national highways vest in the Government, and such responsibility has been designated to the Issuer under the NHDP/Bharatmala and the other programmes entrusted to it. The Issuer aims to build and upgrade the national highways to the highest international standard and is the sole appointed authority in India for overseeing the implementations of national highway projects by private parties or state agencies. Although the Issuer is the sole delegate for this role, roads authorities such as PWDs and other road construction corporations under the control of State or Union Territory governments are also working towards the development and maintenance of roads and certain other national highways, some of which also form part of the NHDP. PROPERTIES The Issuer holds certain properties in Delhi on a perpetual lease basis. The Issuer also leases 24 Regional Offices and 164 Project Implementation Units throughout India. INFORMATION TECHNOLOGY ("IT") The Issuer is continuing to invest in IT designed to help it better monitor and run its business. The Issuer has deployed the IT system across its organisation. The Issuer's website is designed to provide a comprehensive description of its business. CORPORATE STRUCTURE

The organisation structure of the Issuer is as follows:

CHAIRMAN

MEMBER (A) MEMBER (PPP)MEMBER (F) CVOMEMBER

(PROJ)MEMBER

(Tech)MEMBER (PROJ)

CGM(Admin/HR-I & II) CGM (T)CGM (Fin) &

CGM (FA) CGM (Vig)CGM (T)CGM (T)CGM (T)

GM (Admin/HR) GM (T)GM (Fin) DGM (Vig)GM (T)GM (T)GM (T)

DGM/Manager (Admin/HR)

DGM/Manager (T)

DGM/Manager (Fin) Manager (Vig)DGM/Manager

(T)DGM/Manager

(T)DGM/Manager

(T)

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VIII. KEY OPERATIONAL & FINANCIAL PARAMETERS OF THE ISSUER FOR THE LAST 3 AUDITED YEARS

(Rs. in lacs)

Sr. No.

Particulars FY 2016-17 (audited)

FY 2015-16 (audited)

FY 2014-15 (audited)

1. Capital 13,959,380.47 12,551,457.89 10,452,040.18 2. Reserves & Surplus 0.00 748.68 45.46 3. Capital Grants 1,365,643.01 1,366,280.32 1,366,901.41 4. Borrowings 7,538,464.71 4,527,036.70 2,489,285.59 5. Total Fixed Assets 21,776,720.00 17,649,443.14 14,083,894.32 6. Investments (at cost) 90,959.00 121,652.89 121,625.00 7. Current Assets, Loans & Advance 4,187,028.21 3,314,307.25 1,733,237.32 8. Current Liabilities & Provisions 3,191,219.03 2,639,879.69 1,630,484.00 9. Net Current Assets 995,809.18 674,427.56 102,753.32 10. Total Income 1,354.40 1,294.24 1,696.01 11. Total Expenditure 28,090.30 23,436.89 21,507.14 12. (Profit) / Loss for the Year 26,735.89 22,142.65 19,811.13 13. Surplus brought forward - - - 14. Surplus carried to Balance Sheet - - -

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IX. BRIEF HISTORY OF ISSUER SINCE INCORPORATION, DETAILS OF ACTIVITIES INCLUDING ANYREORGANIZATION, RECONSTRUCTION OR AMALGAMATION, CHANGES IN CAPITAL STRUCTURE, (AUTHORIZED, ISSUED AND SUBSCRIBED) AND BORROWINGS

1. BRIEF BACKGROUND NHAI is an autonomous organisation of the Government of India under the Ministry of Road Transport & Highways and was constituted on June 15, 1989 by an Act of Parliament – The National Highways Authority of India Act, 1988, and was made operational in February, 1995 with the appointment of full time Chairman and other Members. NHAI has an all India presence through its different offices (Regional Offices/Project implementation Units/Corridor Management Units) in different cities. The functioning of NHAI is thus governed by NHAI Act and rules, and regulations framed thereunder. It succeeds the previous Ministry of Surface Transport. 2. CHANGE IN HEAD OFFICE On September 21, 2000, the Head Office of NHAI was shifted from 1, Eastern Avenue, Maharani Bagh, New Delhi - 110 065 to G - 5 & 6, Sector-10, Dwarka, New Delhi - 110 075 for administrative and operational efficiency. 3. VISION To meet the nation‘s need for the provision and maintenance of National Highways network to global standards and to meet user‘s expectations in the most time bound and cost effective manner, within the strategic policy frame work set by the GoI and thus promote economic well-being and quality of life of the people. The long term vision of NHAI is to meet the challenges of developing the Nation by providing an unparalleled network of physical connectivity both to the common man as well as to the commercial transportation and for other heavy industrial use. This commitment results in a greater public good and NHAI is a means for achieving that public good for Indian industry as well as the common people at the grassroots level. 4. MAIN OBJECTS The main objects of NHAI are provided in the NHAI Act as per which NHAI is responsible for the development, maintenance and management of National Highways entrusted to it, by the GoI and for matters connected or incidental thereto. NHAI was constituted to survey, develop, maintain and manage National Highways and inter alia to construct offices or workshops, to establish and maintain hotels, restaurants and rest rooms at or near the highways vested in or entrusted to it, to regulate and control plying of vehicles, to develop and promote consultancy and construction services and to collect fees for services and benefits rendered in accordance with NHAI Act. 5. MAJOR EVENTS Year: Event: 1989 Establishment of the Issuer under the NHAI Act.

1995 The Issuer became fully operational with the appointment of a full-time Chairman and other Members.

1998 Announcement of the NHDP programme, whereby the Issuer would be entrusted with road construction totalling 46,200 km to be completed in seven phases.

2000 Government approval obtained from the Cabinet Committee on Economic Affairs ("CCEA") for Phase I of the NHDP.

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Year: Event: 2003 Government approval obtained from CCEA for NHDP Phase II 2005 Government approval obtained from CCEA for NHDP Phase III and IV 2006 Government approval obtained from CCEA for NHDP Phase V and VI 2007 Government approval obtained from CCEA for NHDP Phase VII

2009 Approval received from the Government of India for a revised strategy to implement the NHDP, based on the B. K. Chaturvedi Committee Report.

2012 The Issuer successfully raised the first public issue of tax free bonds under the IT Act totalling an aggregate sum of INR 100 billion.

2014 The Issuer successfully raised a further INR 50 billion through tax free bonds. 2016 The Issuer successfully raised an additional INR 190 billion through tax free bonds. 2017 The Issuer successfully raised an additional INR 275 billion through taxable bonds.

2018 The Issuer successfully raised INR 30 billion through Rupee denominated offshore bonds (Masala bonds). The Issuer registered its logo.

6. HOLDING COMPANY NHAI does not have any holding company. 7. THE PROMOTER Under Entry 23 of the Union List of the Seventh Schedule to the Constitution of India the development and maintenance of National Highways is vested in Central Government. Further, Section 5 of NHAI Act provides that the Central Government may direct that any function in relation to the development or maintenance of National Highways shall also be exercisable among other by any officer or authority subordinate to the Central Government. In exercise of the above powers vested in the Central Government vide Entry 23 of the Union List of the Seventh Schedule to the Constitution of India and under Section 5 of the NHAI Act, the President of India gave his assent to The National Highways Authority of India Bill, 1988 which was passed by both the Houses of Parliament on December 16, 1988. Accordingly National Highways Authority of India was established on June 15, 1989 as an autonomous body under the Ministry of Road Transport and Highways, Government of India. 8. SUBSIDIARY AND SHAREHOLDING PATTERN No. Company Name Date of

Incorporation Issuer

Shareholding in Company (per cent.)

Joint venture Partners with

Issuer

Joint venture shareholding in Company (per cent.)

Share Capital of the company

(INR in millions)

Wholly-owned subsidiaries 1. Ahmedabad-Vadodara

Expressway Company Limited 5 April 2000 100 N/A N/A 3,128.50

2. Cochin Port Road Company Limited

19 January 2004 100 N/A N/A 579.00

3. Moradabad Toll Road Company Limited

13 August 1998 100 N/A N/A 300.00

4. Calcutta-Haldia Port Road Company Limited

26 December 2000 89.62 Kolkata Port Trust 10.38 1,926

Joint Venture companies 5. Tuticorin Port Road Company

Limited 19 January 2004 79.79 V.O.Chidambaranar

Port Trust 20.21 1,237.00

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No. Company Name Date of Incorporation

Issuer Shareholding in Company (per cent.)

Joint venture Partners with

Issuer

Joint venture shareholding in Company (per cent.)

Share Capital of the company

(INR in millions)

6. Paradip Port Road Company Limited

19 January 2004 78.95 Paradip Port Trust 21.05 1,900.00

7. New Mangalore Port Road Company Limited

19 January 2004 74.11 New Mangalore Port Trust

25.89 1,402.3

8. Mumbai-JNPT Port Road Company Limited

26 December 2000

42.95 Jawaharlal Nehru Port Trust

51 1,486.60

City Industrial Development Corporation of Maharashtra Limited

6.05

9. Vishakhapatnam Port Road Company Limited

26 December 2000

50.06 Vishakhapatna m Port Trust

49.94 773.00

10. Mormugao Port Road Company Limited

26 December 2000

53.08 Mormugao Port Trust

6.92 1,995.00

11. Chennai-Ennore Port Road Company Limited

26 December 2000

37.60 Chennai Port Trust 37.61 3,718.00 Government of Tamil Nadu

15.65

Kamarajar Port Ltd 9.14

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X. CAPITAL STRUCTURE NHAI has not issued any shares against capital and capital grants invested by GoI (in pursuance of NHAI Act). The capital of NHAI as on March 31, 2018 , is set forth below:

(as on March 31, 2018)

Particulars Amount

(Rs. in lakhs)

i) Capital u/s 12(i)(b) - Commencing Capital ii) Capital u/s 17

a) Capital Base 80,100.00 b) Cess Fund (up to March 31, 2017) 93,48,920.00

Add: Cess fund received during Financial Year 2017-18(01 April 2017 to 31 March 2018)

12,42,945.00

c) Additional Budgetary Support (NHDP and others) 17,98,254.00 d) Capital – Net off toll collection, negative grant etc. 618,355.88 e) Plough back of Toll Remittance, etc. w.e.f. 01.04.2010 (Gross) 38,77,303.00

Less: 1) Expenditure on Toll Collection Activities (w.e.f. from April 1, 2010)

(1,09,084.27)

2) (Excess)/Surplus of Expenditure on Maintenance of Highways over Maintenance Grant Received (w.e.f. April 1, 2010).

(3,71,624.56)

3) Plough Back transferred to SPVs (17,407.23) 4) Transfer of Exceptional item from P & L A/c (40,310.88) Sub-Total 1,63,47,350.94 Total 1,64,27,450.94 1. CAPITAL HISTORY (AS ON MARCH 31, 2018) A) CAPITAL BASE BUILD-UP S. No. Date Investor Amount

(Rs. in lacs) Cumulative Amount

(Rs. in lacs) 1. December 18, 1996 MoRTH, GoI 5,000.00 5,000.00 2. February 10, 1997 MoRTH, GoI 10,000.00 15,000.00 3. March 12, 1997 MoRTH, GoI 5,000.00 20,000.00 4. December 24, 1997 MoRTH, GoI 29,000.00 49,000.00 5. March 17, 1999 MoRTH, GoI 10,100.00 59,100.00 6. December 6, 1999 MoRTH, GoI 16,000.00 75,100.00 7. October 28, 2004 MoRTH, GoI 500.00 75,600.00 8. March 31, 2005 MoRTH, GoI 4,500.00 80,100.00

B) CESSFUND BUILD-UP S. No. Date Investor Amount


(Rs. in lacs) 1 March 14, 2000 MoRTH, GoI 1,03,200.00 1,03,200.00 2 August 1, 2000 MoRTH, GoI 1,80,000.00 2,83,200.00 3 September 20, 2001 MoRTH, GoI 1,00,000.00 3,83,200.00 4 December 27, 2001 MoRTH, GoI 50,000.00 4,33,200.00 5 March 28, 2002 MoRTH, GoI 60,000.00 4,93,200.00 6 July 9, 2002 MoRTH, GoI 50,000.00 5,43,200.00

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S. No. Date Investor Amount (Rs. in lacs)

Cumulative Amount (Rs. in lacs)

7 September 11, 2002 MoRTH, GoI 50,000.00 5,93,200.00 8 March 27, 2003 MoRTH, GoI 1,00,000.00 6,93,200.00 9 November 28, 2003 MoRTH, GoI 1,49,475.00 8,42,675.00 10 February 23, 2004 MoRTH, GoI 49,825.00 8,92,500.00 11 August 30, 2004 MoRTH, GoI 92,400.00 9,84,900.00 12 March 23, 2005 MoRTH, GoI 46,200.00 10,31,100.00 13 March 31, 2005 MoRTH, GoI 46,200.00 10,77,300.00 14 June 22, 2005 MoRTH, GoI 80,000.00 11,57,300.00 15 September 28, 2005 MoRTH, GoI 80,000.00 12,37,300.00 16 November 22, 2005 MoRTH, GoI 80,000.00 13,17,300.00 17 December 30, 2005 MoRTH, GoI 86,974.00 14,04,274.00 18 June 27, 2006 MoRTH, GoI 80,000.00 14,84,274.00 19 August 11, 2006 MoRTH, GoI 80,000.00 15,64,274.00 20 November 22, 2006 MoRTH, GoI 1,60,000.00 17,24,274.00 21 December 27, 2006 MoRTH, GoI 2,60,000.00 19,84,274.00 22 March 19, 2007 MoRTH, GoI 60,745.00 20,45,019.00 23 June 29, 2007 MoRTH, GoI 1,63,526.00 22,08,545.00 24 October 12, 2007 MoRTH, GoI 1,63,525.00 23,72,070.00 25 December 31, 2007 MoRTH, GoI 1,63,525.00 25,35,595.00 26 March 27, 2008 MoRTH, GoI 1,63,530.00 26,99,125.00 27 July 10, 2008 MoRTH, GoI 1,74,312.00 28,73,437.00 28 September 29, 2008 MoRTH, GoI 1,74,312.00 30,47,749.00 29 December 30, 2008 MoRTH, GoI 1,74,312.00 32,22,061.00 30 March 25, 2009 MoRTH, GoI 1,74,311.00 33,96,372.00 31 June 30, 2009 MoRTH, GoI 1,99,435.00 35,95,807.00 32 September 29, 2009 MoRTH, GoI 2,29,487.00 38,25,294.00 33 January 27, 2010 MoRTH, GoI 2,14,461.00 40,39,755.00 34 March 30, 2010 MoRTH, GoI 97,087.00 41,36,842.00 35 June 29, 2010 MoRTH, GoI 1,96,200.00 43,33,042.00 36 September 27, 2010 MoRTH, GoI 1,96,200.00 45,29,242.00 37 December 30, 2010 MoRTH, GoI 1,96,225.00 47,25,467.00 38 March 30, 2011 MoRTH, GoI 2,55,469.00 49,80,936.00 39 June 27, 2011 MoRTH, GoI 2,06,200.00 51,87,136.00

40 September 28, 2011 & December 27, 2011

MoRTH, GoI 4,12,500.00 55,99,536.00

41 April 24, 2012 MoRTH, GoI 1,03,150.00 57,02,786.00 42 May 29, 2012 MoRTH, GoI 1,03,150.00 58,05,936.00 43 October 19, 2012 MoRTH, GoI 3,94,000.00 61,99,936.00 44 July 5, 2013 MoRTH, GoI 1,71,436.00 63,71,372.00 45 September 17, 2013 MoRTH, GoI 1,71,436.00 65,42,808.00 46 October 28, 2013 MoRTH, GoI 1,71,436.00 67,14,244.00 47 February 04, 2014 MoRTH, GoI 1,71,437.00 68,85,681.00 48 September 17, 2014 MoRTH, GoI 4,78,290.00 73,63,971.00 49 November 05, 2014 MoRTH, GoI 2,10,299.00 75,74,270.00 50 May 20, 2015 MoRTH, GoI 4,60,500.00 80,34,770.00

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S. No. Date Investor Amount (Rs. in lacs)


51 July 23, 2015 MoRTH, GoI 4,60,500.00 84,95,270.00 52 September 28, 2015 MoRTH, GoI 4,60,500.00 89,55,770.00 53 December 28, 2015 MoRTH, GoI 16,05,00.00 91,16,270.00 54 22 June 2016 MoRTH, GoI 2,00,000.00 93,16,270.00 55 5 July 2016 MoRTH, GoI 2,00,000.00 95,16,270.00 56 5 August 2016 MoRTH, GoI 2,07,650.00 97,23,920.00 57 8 Feb 2017 MoRTH, GoI (375,000.00) 93,48,920.00 58 24 April 2017 MoRTH, GoI 3,85,736.00 97,34,656.00 59 31 July 2017 MoRTH, GoI 3,85,736.00 1,01,20,392.00 60 29 September 2017 MoRTH, GoI 3,71,473.00 1,04,91,865.00 61 26 December 2017 MoRTH, GoI 1,00,000.00 1,05,91,865.00

C) ADDITIONAL BUDGETARY SUPPORT (NHDP) BUILD-UP S.No. Date Investor Amount


(Rs. in lacs) 1 June 24, 2005 MoRTH 35,000.00 35,000.00 2 September 2, 2005 MoRTH 35,000.00 70,000.00 3 March 31, 2006 MoRTH 9,000.00 79,000.00 4 November 25, 2006 MoRTH 2,500.00 81,500.00 5 December 01, 2006 MoRTH 2,500.00 84,000.00 6 March 26, 2007 MoRTH 29,400.00 113,400.00 7 March 31, 2007 MoRTH 5,000.00 118,400.00 8 March 31, 2007 MoRTH 1,000.00 119,400.00 9 March 31, 2007 MoRTH 15,000.00 134,400.00 10 March 31, 2007 MoRTH 1,350.00 135,750.00 11 March 31, 2007 MoRTH 317.00 136,067.00 12 March 09, 2007 MoRTH 4,416.00 140,483.00 13 June, 14, 2007 MoRTH 22,084.00 162,567.00 14 March 31, 2008 MoRTH 29,400.00 191,967.00 15 November 30, 2008 MoRTH 12,400.00 204,367.00 16 March 05, 2009 MoRTH 3,500.00 207,867.00 17 April 21, 2009 MoRTH 6,667.00 214,534.00 18 September 30, 2009 MoRTH 13,333.00 227,867.00 19 May 12, 2010 MoRTH 5,500.00 233,367.00 20 May 24, 2010 MoRTH 22,800.00 256,167.00 21 February 28, 2011 MoRTH 16,980.00 273,147.00 22 March 31, 2011 MoRTH 39,020.00 312,167.00 23 May 26, 2011 MoRTH 25,000.00 337,167.00 24 May 26, 2011 MoRTH 32,001.00 369,168.00 25 March 31, 2012 MoRTH 19,063.00 388,231.00 26 March 31, 2012 MoRTH 45,157.00 433,388.00 27 May 18, 2012 MoRTH 9,167.00 442,555.00 28 June 23, 2012 MoRTH 20,833.00 463,388.00 29 June 23, 2012 MoRTH 25,000.00 488,388.00 30 March 31, 2013 MoRTH 20,074.00 508,462.00

61

S.No. Date Investor Amount (Rs. in lacs)


31 March 31, 2013 MoRTH 4,811.00 513,273.00 32 March 31, 2013 MoRTH 115,954.00 629,227.00 33 March 31, 2013 MoRTH 7,058.00 636,285.00 34 June 05, 2013 MoRTH 10,000.00 646,285.00 35 June 30, 2013 MoRTH 40,000.00 686,285.00 36 January 25, 2014 MoRTH 17,826.00 704,111.00 37 January 25, 2014 MoRTH 17,214.00 721,325.00 38 March 31, 2015 MoRTH 60,000.00 781,325.00 39 March 31, 2016 MoRTH 37,027.00 818,352.00 40 May 18, 2016 MoRTH 1,000.00 819,352.00 41 June 20, 2016 MoRTH 10,000.00 829,352.00 42 September 29, 2016 MoRTH 375,000.00 1,204,352.00 43 January 30, 2017 MoRTH 4,000.00 1,208,352.00 44 March 24, 2017 MoRTH 100,000.00 1,308,352.00 45 March 31, 2017 MoRTH 50,902.00 1,359,254.00 46 March 31, 2017 MoRTH 24,000.00 1,383,254.00 47 April 30, 2017 MoRTH 13,000.00 1,396,254.00 48 December 26, 2017 MoRTH 150,000.00 1,546,254.00 49 February 26, 2018 MoRTH 150,000.00 1,696,254.00 50 March 13, 2018 MoRTH 90,000.00 1,786,254.00 51 March 31, 2018 MoRTH 12,000.00 1,798,254.00

E) ADDITIONAL BUDGETARY SUPPORT (PLOUGH BACK OF TOLL REMITTANCE, ETC.) BUILD-UP S. No. Date* Investor Amount Cumulative Amount 1 November 18, 2010 MoRTH, GoI 38,597.00 38,597.00 2 December 30, 2010 MoRTH, GoI 58,367.00 96,964.00 3 March 14, 2011 MoRTH, GoI 58,898.00 1,55,862.00 4 March 31, 2011 MoRTH, GoI 6,438.00 1,62,300.00 5. July 18, 2011 MoRTH, GoI 59,078.00 2,21,378.00 6. July 29, 2011 MoRTH, GoI 74,026.00 2,95,404.00 7. December 20, 2011 MoRTH, GoI 70,764.00 3,66,168.00 8. March 27, 2012 MoRTH, GoI 65,421.00 4,31,589.00 9. November 08, 2012 MoRTH, GoI 1,77,700.00 6,09,289.00 10. June 26, 2013 MoRTH, GoI 1,19,250.00 7,28,539.00 11. September 24, 2013 MoRTH, GoI 1,19,250.00 8,47,789.00 12 October 28, 2013 MoRTH, GoI 1,19,250.00 9,67,039.00 13 December 27, 2013 MoRTH, GoI 1,19,250.00 10,86,289.00 14 July 23, 2014 MoRTH, GoI 1,36,200.00 12,22,489.00 15 September 17, 2014 MoRTH, GoI 1,36,200.00 13,58,689.00 16 October 27, 2014 MoRTH, GoI 1,36,200.00 14,94,889.00 17 December 31, 2014 MoRTH, GoI 1,36,200.00 16,31,089.00 18 May 25, 2015 MoRTH, GoI 1,62,500.00 17,93,589.00 19 July 30, 2015 MoRTH, GoI 1,62,500.00 19,56,089.00

62

S. No. Date* Investor Amount Cumulative Amount 20 September 30, 2015 MoRTH, GoI 1,62,500.00 21,18,589.00 21 December 14, 2015 MoRTH, GoI 1,62,500.00 22,81,089.00 22 May 17, 2016 MoRTH, GoI 1,25,000.00 24,06,089.00 23 August 16, 2016 MoRTH, GoI 1,25,000.00 25,31,089.00 24 September 30, 2016 MoRTH, GoI 1,25,000.00 26,56,089.00 25 February 8, 2017 MoRTH, GoI 3,75,000.00 30,31,089.00 26 April 24, 2017 MoRTH, GoI 2,11,553.00 32,42,642.00 27 July 07,2017 MoRTH, GoI 2,11,554.00 3,454,196.00 28 September 29, 2017 MoRTH, GoI 2,11,554.00 3,665,750.00 29 December 26, 2017 MoRTH, GoI 2,11,553.00 38,77,303.00 2. DETAILS OF ANY ACQUISITION OR AMALGAMATION IN THE LAST1 YEAR None 3. DETAILS OF ANY REORGANIZATION OR RECONSTRUCTION IN THELAST 1 YEAR None 4. DISCLOSURES PERTAINING TO WILFUL DEFAULT None of our members are wilful defaulter 5. SHAREHOLDING PATTERN OF THE ISSUER

(as on march 31, 2018)

NHAI is an autonomous body constituted by an act of Parliament - The National Highways Authority of India Act, 1988, under the Ministry of Road Transport & Highways, Government of India. NHAI has not issued any shares against capital and capital grants invested by Government of India (in pursuance of NHAI Act). The entire capital base of NHAI is contributed by the Ministry of Road Transport & Highways, Government of India and as such, 100% owner’s capital in NHAI is held by the Government of India. The promoters have not pledged or encumbered by their shareholding in the Issuer.

6. TOP 10 EQUITY SHARE HOLDERS OF THE ISSUER(AS ON MARCH 31, 2018)

NHAI is an entity constituted under the NHAI Act and therefore does not have any equity shares.

7. PROMOTER HOLDING IN THE ISSUER(AS ON MARCH 31, 2018) The entire capital base of NHAI is contributed by the Ministry of Road Transport &

Highways, Government of India and as such, 100% capital in NHAI is held by the Government of India.

63

8. GROSS BORROWINGS OF THE ISSUER (AS ON MARCH 31, 2018) A) DEBT OUTSTANDING As on SEPTEMBER 30th, 2017, we had outstanding secured borrowings of approximately Rs.90,77,200.00 lakhs and unsecured borrowings of Rs.3,60,242.00 lakhs. Bonds Outstanding as on SEPTEMBER 30th, 2017, Issued by the Authority: Set forth below is a brief summary of our significant outstanding bonds as on SEPTEMBER 30th, 2017, together with a brief description of certain significant terms of such financing arrangements. (i) SECURED BORROWINGS a) BONDS ISSUED BY NHAI Capital gains tax exemption bonds under Section 54EC of the Income Tax Act. Set forth below is a brief summary of our outstanding capital gains tax exemption bonds issued under Section 54EC of the IT Act as on September 30, 2017, together with a brief description of certain significant terms of such financing arrangements. These bonds are not listed on any stock exchange. The bonds are secured by mortgage over NHAI’s immovable property, located in Gujarat, or such other immovable property that may be agreed between NHAI and the Trustees for the bondholders ranking pari-passu with the mortgages created and/or to be created on the said property for securing bonds or any other instrument.

Sl. No.

Debenture Series

Tenor/Period of Maturity

Coupon Total Value of Outstanding

Bonds (in lakhs Rs.)

Date of Allotment

Redemption Date/

Schedule

Credit Rating Trustee

1. NHAI Bonds Series -XVI (2015-16)

3 years from the Deemed Date of Allotment

6.00% payable annually

4,28,117.00 On Tap basis

Bullet, at the time of maturity i.e. 3 years

“IND AAA” (Assigned) byIRRPL

IL&FS Trustee Company Limited

2. NHAI Bonds Series -XVII (2016-17)


6.00% p.a. till 30-11-16 5.25% w.e.f 01-12-16 Payable annually

5,57,274.20 On Tap basis


AAA by CRISIL, AAA by CARE AAA by India Ratings AAA by ICRA

SBICAP Trustee Company Limited

3. NHAI Bonds Series -XVIII (2017-18)


5.25% payable annually.

546074.90 On Tap basis



SBICAP Trustee Company Limited

Tax Free Bonds issued under Section 10(15)(iv)(h) of the Income Tax Act. Set forth below is a brief summary of our outstanding Tax Free Bonds issued under Section 10(15)(iv)(h) of the Income Tax Act, together with a brief description of certain significant terms. The bonds are secured by way ofpari-passu mortgage over the property of NHAI situated at Ahmedabad along with fixed assets of NHAI, being highway projects comprising of all superstructures constructed on national highways except those under Surat-Manor Tollways Project, in favor of SBICAP Trustee Company Limited.

64

Sl. No.

Debenture Series


Coupon Amount (in lakh Rs. )

Date of Allotment

Redemption Date/

Schedule

Credit Rating

1. Tax free secured redeemable non –convertible bonds, in the nature of debentures. (2011-12)

10 years from deemed date of allotment


6,71,408.12 January 25, 2012

January 25, 2022

CRISILAAA/ Stable by CRISIL “CARE AAA” by CARE "Fitch AAA(ind) with Stable Outlook” by FITCH

15 years from Deemed Date of Allotment


3,28,591.88 January 25, 2012

January 25, 2027

2. Tax free secured Redeemable non –convertible bonds, in the nature of debentures.** (2013-14)

10 years from deemed date of allotment (Private Placement)


45,200.00 November 25, 2013

November 25, 2023

“CRISIL AAA/Stable” by CRISIL,“CARE AAA” by CARE"Fitch AAA(ind) with Stable Outlook” by FITCH

15 years from Deemed Date of Allotment (Private Placement)


84,960.00 November 25, 2013

November 25, 2028


Public –Retail


30,132.21 February 5, 2014

February 5, 2024

“CRISIL AAA/Stable” by CRISIL,“CARE AAA” by CARE, “BWR AAA with Stable Outlook” by BRICKWORK

Public – Others


47,524.71 February 5, 2014

February 5, 2024


Public –Retail


1,18,980.75 February 5, 2014

February 5, 2029

Public – Others


1,73,202.33

February 5, 2014

February 5, 2029

3. Tax free secured Redeemable non –convertible bonds, in the nature of debentures.** (2015-16)



54,900.00 September 18, 2015

September 18, 2025




3,32,300.00 September 18, 2015

September 18, 2030



Public –Retail


65,576.03 January 11, 2016

January 11, 2026



Public –Others


68,640.24 January 11, 2016

January 11, 2026



Public –Retail


2,67,526.27 January 11, 2016

January 11, 2031



Public –Others


5,98,257.46 January 11, 2016

January 11, 2031


65

Sl. No.

Debenture Series



Date of Allotment

Redemption Date/

Schedule

Credit Rating



45,500.00 February 18, 2016

February 18, 2026




1,37,300.00 February 18, 2016

February 18, 2031



Public –Retail


19,233.40 March 9, 2016 March 9, 2026 AAA by CRISIL, AAA by CARE AAA by India Ratings AAA by ICRA


Public –Others


97,88.07 March 9, 2016 March 9, 2026 AAA by CRISIL, AAA by CARE AAA by India Ratings AAA by ICRA


Public –Retail


1,12,766.60 March 9, 2016 March 9, 2031 AAA by CRISIL, AAA by CARE AAA by India Ratings AAA by ICRA


Public –Others


1,88,211.93 March 9, 2016 March 9, 2031 AAA by CRISIL, AAA by CARE AAA by India Ratings AAA by ICRA

Taxable Bonds Sl. No.

Debenture Series Tenor/ Period of Maturity


Date of Allotment

Redemption Date/

Schedule

Credit Rating

1. Taxable secured Redeemable non –convertible bonds, in the nature of debentures**



5,00,000.00 August 3, 2016

August 3, 2041 AAA by CRISIL, AAA by CARE AAA by India Ratings AAA by ICRA

2.o. Taxable secured Redeemable non –convertible bonds, in the nature of debentures**



5,00,000.00 September 1, 2016

August 30, 2041





5,02,000.00 December 23, 2016

December 23, 2021





8,50,000.00 January 24, 2017

January 24, 2047





4,02,500.00 March 20, 2017

March 18, 2022


66

Sl. No.

Debenture Series Tenor/ Period of Maturity


Date of Allotment

Redemption Date/

Schedule

Credit Rating




1,52,500.00 June 06, 2017 June 06, 2022 AAA by CRISIL, AAA by CARE AAA by India Ratings AAA by ICRA




5,00,000.00 June 16, 2017 June 14, 2047 AAA by CRISIL, AAA by CARE AAA by India Ratings AAA by ICRA




3,50,000.00 July 14, 2017 July 12, 2047 AAA by CRISIL, AAA by CARE AAA by India Ratings AAA by ICRA




5,00,000.00 August 24, 2017

August 24, 2032


10. Taxable secured Redeemable non –convertible bonds, in the nature of debentures



85,000.00 06.11.2017 06.11.2022 AAA by CRISIL, AAA by CARE AAA by India Ratings AAA by ICRA

11. Taxable unsecured Redeemable non –convertible bonds, in the nature of debentures



5,00,000.00 22.11.2017 22.11.2032 AAA by CRISIL, AAA by CARE AAA by India Ratings AAA by ICRA

(ii) UNSECURED BORROWINGS

Details of Foreign Currency un-secured loans National Highways Authority of India has secured loan from ADB vide a Loan Agreement dated October 5, 2000 for an amount of $180,000,000. However the total loan availed is $149,749,847.25. The loan is secured by the Government of India vide guarantee agreement dated October 5, 2000.The objective for availing the loan was to remove capacity constraints and improve road safety of critical section of the Western Transport corridor connecting Delhi to Mumbai (Surat- Manor Tollway Project). Name of the

Bank Type

of Facility

Loan Documentation

Interest/Coupon Rate Repayment Facility/ Amount Sanctioned/Availed

Outstanding Amount as on March

31, 2018 (in Rs. Lakhs)

Asian Development Bank

Term Loan

Loan Agreement dated October 5, 2000

Based on the cost to the bank of such currency or currencies plus a spread, both as reasonably determine by the bank from time to time.

Principal Payment Half Yearly on January 1 and July 1.

$149,749,847.25 59,283.46

Foreign Currency bonds facilities (Unsecured) National Highways Authority of India has raised an amount of Rs. 3,00,000.00 lakh through Masala Bonds in May 2017.

67

Debenture Series Tenor/ Period of Maturity Coupon Amount (in lakh Rs. )

Date of Allotment

Redemption Date/ Schedule

Credit Rating

Masala Bond -2021

5 years from Deemed Date of Allotment

7.30% 3,00,000.00 May 18, 2017 Bullet repayment On May 18, 2022

Unrated

Loan from NSSF National Highways Authority of India has raised an amount of Rs. 3,00,000.00 lakh through Masala Bonds in May 2017. Debenture Series Tenor/ Period of

Maturity Coupon Amount (in

lakh Rs. ) Date of

Loan Redemption Date/

Schedule Credit Rating

Loan 10 Years 7.70% Payable half yearly

10,00,000.00 18.01.2018 Bullet repayment On 18.01.2028

Unrated

Loan 10 Years 7.92% Payable half yearly

10,00,000.00 07.03.2018 Bullet repayment On 07.03.2018

Unrated

B) TERMS OF ASSETS CHARGED AS SECURITY

Principal terms of issue in brief Details of assets charged as security Debt Facility Tax Free Bonds (10 years) Secured by a legal mortgage over NHAI’s

immovable property situated at Ahmedabad, Gujarat, alongwith first charge on fixed assets of NHAI (as reflected in the Balance Sheet for the financial year ended March 31, 2011), being highway projects comprising of all superstructure including highway lightings, road barriers and dividers, bridges, culverts and all other super structures constructed on national highways except those under the Surat-Manor Tollway Project entrusted to NHAI

Amount Rs. 6,71,408.12lacs Raised in Financial Year 2011-2012 Credit Rating “AAA/Stable” by CRISIL, “AAA” by

CARE and “AAA(ind) with Stable Outlook” by FITCH

Coupon Rate 8.20% p.a. Interest Payment Annual Maturing in Financial Year 2021-22 Bond Trustee SBICAP Trustee Company Limited Debt Facility Tax Free Bonds (15 years) Secured by a legal mortgage over NHAI’s

immovable property situated at Ahmedabad, Gujarat,alongwith first charge on fixed assets of NHAI (as reflected in the Balance Sheet for the financial year ended March 31, 2011), being highway projects comprising of all superstructure including highway lightings, road barriers and dividers, bridges, culverts and all other super structures constructed on national highways except those under the Surat-Manor Tollway Project entrusted to NHAI

Amount Rs. 3,28,591.88 lac Raised in Financial Year 2011-2012 Credit Rating “AAA/Stable” by CRISIL, “AAA” by



immovable property situated at Ahmedabad, Gujarat,alongwith first charge on fixed assets of NHAI (as reflected in the Balance Sheet for the financial year ended March 31, 2013), being highway projects comprising of all superstructure including highway lightings, road barriers and dividers, bridges, culverts and all other super structures constructed on national highways except those under the Surat-

Amount Rs. 45,200.00 lacs Raised in Financial Year 2013-2014 Credit Rating “AAA/Stable” by CRISIL, “AAA” by

CARE and “and BWR AAA by Brickwork

Coupon Rate 8.35% p.a. Interest Payment Annual Maturing in Financial Year 2023-24

68

Principal terms of issue in brief Details of assets charged as security Bond Trustee SBICAP Trustee Company Limited Manor Tollway Project entrusted to NHAI

Debt Facility Tax Free Bonds (15 years) Secured by a legal mortgage over NHAI’s


Amount Rs. 84,960.00 lac Raised in Financial Year 2013-2014 Credit Rating ““AAA/Stable” by CRISIL, “AAA” by




Amount Rs. 77656.92 lacs Raised in Financial Year 2013-2014 Credit Rating AAA/Stable” by CRISIL, “AAA” by


Coupon Rate 8.27% p.a. (others); 8.52% p.a. (retail) Interest Payment Annual Maturing in Financial Year 2023-24 Bond Trustee SBICAP Trustee Company Limited Debt Facility Tax Free Bonds (15 years) Secured by a legal mortgage over NHAI’s


Amount Rs. 292183.08 lacs Raised in Financial Year 2013-2014 Credit Rating “AAA/Stable” by CRISIL, “AAA” by


Coupon Rate 8.50% p.a. (others); 8.75% p.a. (retail) Interest Payment Annual Maturing in Financial Year 2028-2029 Bond Trustee SBICAP Trustee Company Limited Debt Facility Bond Series XVI Secured by a legal mortgage over NHAI’s

immovable property located at Ahmedabad, Gujarat ranking paripassu with the mortgage(s) created and/ or to be created on the said property for securing the bonds or any other instruments

Amount Rs. 4,28,117.00 lacs Raised in Financial Year 2015-2016 Credit Rating ‘IND AAA by IRRPL Coupon Rate 6.00% p.a. Interest Payment Annual Maturing in Financial Year 2018-2019 Bond Trustee IL& FS Trustee Co. Limited Debt Facility Tax Free Bonds (10 years) (Private

Placement) Secured by a legal mortgage over NHAI’s immovable property situated at Ahmedabad, Gujarat, alongwith first charge on fixed assets of Amount Rs. 54900.00 lacs

69

Principal terms of issue in brief Details of assets charged as security Raised in Financial Year 2015-16 NHAI, being highway projects comprising of all

superstructure including highway lightings, road barriers and dividers, bridges, culverts and all other super structures constructed on national highways except those under the Surat-Manor Tollway Project entrusted to NHAI

Credit Rating ““IND AAA” by IRRPL, “CARE AAA” by CARE, "[ICRA] AAA” by ICRA “CRISIL AAA/Stable” by CRISIL

Coupon Rate 7.11% Interest Payment Annual Maturing in Financial Year 2025-26 Bond Trustee SBICAP Trustee Company Limited Debt Facility Tax Free Bonds (15 years) (Private

Placement) Secured by a legal mortgage over NHAI’s immovable property situated at Ahmedabad, Gujarat,alongwith first charge on fixed assets of NHAI, being highway projects comprising of all superstructure including highway lightings, road barriers and dividers, bridges, culverts and all other super structures constructed on national highways except those under the Surat-Manor Tollway Project entrusted to NHAI

Amount Rs. 332300.00lac Raised in Financial Year 2015-16 Credit Rating IND AAA” by IRRPL, “CARE AAA”

by CARE, "[ICRA] AAA” by ICRA “CRISIL AAA/Stable” by CRISIL

Coupon Rate 7.28% p.a. Interest Payment Annual Maturing in Financial Year 2030-31 Bond Trustee SBICAP Trustee Company Limited Debt Facility Tax Free Bonds (10 years) (Public

Issue) Secured by a legal mortgage over NHAI’s immovable property situated at Ahmedabad, Gujarat,alongwith first charge on fixed assets of NHAI being highway projects comprising of all superstructure including highway lightings, road barriers and dividers, bridges, culverts and all other super structures constructed on national highways except those under the Surat-Manor Tollway Project entrusted to NHAI

Amount Retail Rs. 65576.03 lacs Non Retail 68640.24lacs

Raised in Financial Year 2015-2016 Credit Rating IND AAA” by IRRPL, “CARE AAA”


Coupon Rate 7.14% p.a. (others); 7.39% p.a. (retail) Interest Payment Annual Maturing in Financial Year 2025-2026 Bond Trustee SBICAP Trustee Company Limited Debt Facility Tax Free Bonds (15 years)

(Public Issue) Secured by a legal mortgage over NHAI’s immovable property situated at Ahmedabad, Gujarat,alongwith first charge on fixed assets of NHAI (as reflected in the Balance Sheet for the financial year ended March 31, 2013), being highway projects comprising of all superstructure including highway lightings, road barriers and dividers, bridges, culverts and all other super structures constructed on national highways except those under the Surat-Manor Tollway Project entrusted to NHAI

Amount Retail Rs. 267526.27 lac Non retail Rs. 598257.46lacs



Coupon Rate 7.35% p.a. (others); 7.60% p.a. (retail) Interest Payment Annual Maturing in Financial Year 2030-31 Bond Trustee SBICAP Trustee Company Limited

70

Principal terms of issue in brief Details of assets charged as security Debt Facility Tax Free Bonds (10 years) (Private

Placement) Secured by a legal mortgage over NHAI’s immovable property situated at Ahmedabad, Gujarat, alongwith first charge on fixed assets of NHAI, being highway projects comprising of all superstructure including highway lightings, road barriers and dividers, bridges, culverts and all other super structures constructed on national highways except those under the Surat-Manor Tollway Project entrusted to NHAI

Amount Rs. 455,00.00 lac Raised in Financial Year 2015-16 Credit Rating ““IND AAA” by IRRPL, “CARE

AAA” by CARE, "[ICRA] AAA” by ICRA “CRISIL AAA/Stable” by CRISIL

Coupon Rate 7.02% Interest Payment Annual Maturing in Financial Year 2025-26 Bond Trustee SBICAP Trustee Company Limited Debt Facility Tax Free Bonds (15 years) (Private

Placement) Secured by a legal mortgage over NHAI’s immovable property situated at Ahmedabad, Gujarat, alongwith first charge on fixed assets of NHAI, being highway projects comprising of all superstructure including highway lightings, road barriers and dividers, bridges, culverts and all other super structures constructed on national highways except those under the Surat-Manor Tollway Project entrusted to NHAI

Amount Rs. 1,37,300.00 lac Raised in Financial Year 2015-16 Credit Rating IND AAA” by IRRPL, “CARE AAA”


Coupon Rate 7.39% p.a. Interest Payment Annual Maturing in Financial Year 2030-31 Bond Trustee SBICAP Trustee Company Limited Debt Facility Tax Free Bonds (10 years) (Public

Issue) Secured by a legal mortgage over NHAI’s immovable property situated at Ahmedabad, Gujarat, alongwith first charge on fixed assets of NHAI being highway projects comprising of all superstructure including highway lightings, road barriers and dividers, bridges, culverts and all other super structures constructed on national highways except those under the Surat-Manor Tollway Project entrusted to NHAI

Amount Retail Rs. 19,233.40 lac Non Retail 9,788.07 lac



Coupon Rate 7.04% p.a. (others); 7.29% p.a. (retail) Interest Payment Annual Maturing in Financial Year 2025-2026 Bond Trustee SBICAP Trustee Company Limited Debt Facility Tax Free Bonds (15 years)

(Public Issue) Secured by a legal mortgage over NHAI’s immovable property situated at Ahmedabad, Gujarat, alongwith first charge on fixed assets of NHAI (as reflected in the Balance Sheet for the financial year ended March 31, 2013), being highway projects comprising of all superstructure including highway lightings, road barriers and dividers, bridges, culverts and all other super structures constructed on national highways except those under the Surat-Manor Tollway Project entrusted to NHAI

Amount Retail Rs. 1,12,766.60 lac Non retail Rs. 1,88,211.93 lac



Coupon Rate 7.39% p.a. (others); 7.69% p.a. (retail) Interest Payment Annual

71

Principal terms of issue in brief Details of assets charged as security Maturing in Financial Year 2030-31 Bond Trustee SBICAP Trustee Company Limited Debt Facility Bond Series XVII Secured by a legal mortgage over NHAI’s


Amount Rs. 5,57,274.20 lacs Raised in Financial Year 2016-2017 Credit Rating AAA by CRISIL, CARE, ICRA, IRRPL Coupon Rate 6.00% p.a. till 30-11-2016

5.25% p.a. w.e.f 01-12-2016 Interest Payment Annual Maturing in Financial Year 2019-2020 Bond Trustee SBICAP Trustee Company Limited Debt Facility Bond Series I Secured by a legal mortgage over NHAI’s


Amount Rs. 5,00000.00 lac Raised in Financial Year 2016-2017 Credit Rating AAA by CRISIL, CARE, ICRA, IRRPL Coupon Rate 8.03% p.a. Interest Payment Annual Maturing in Financial Year 2041-42 Bond Trustee SBICAP Trustee Company Limited Debt Facility Bond Series II Secured by a legal mortgage over NHAI’s


Amount Rs. 5,00000.00 lac Raised in Financial Year 2016-2017 Credit Rating AAA by CRISIL, CARE, ICRA, IRRPL Coupon Rate 7.68% p.a. Interest Payment Annual Maturing in Financial Year 2041-42 Bond Trustee SBICAP Trustee Company Limited Debt Facility Bond Series III Secured by a legal mortgage over NHAI’s


Amount Rs. 5,02000.00 lac Raised in Financial Year 2016-2017 Credit Rating AAA by CRISIL, CARE, ICRA, IRRPL Coupon Rate 7.17% p.a. Interest Payment Annual Maturing in Financial Year 2021-2022 Bond Trustee SBICAP Trustee Company Limited Debt Facility Bond Series IV Secured by a legal mortgage over NHAI’s


Amount Rs. 8,50,000.00 lac Raised in Financial Year 2016-2017 Credit Rating AAA by CRISIL, CARE, ICRA, IRRPL Coupon Rate 7.22% p.a. Interest Payment Annual

72

Principal terms of issue in brief Details of assets charged as security Maturing in Financial Year 2046-2047 Bond Trustee SBICAP Trustee Company Limited Debt Facility Bond Series V Secured by a legal mortgage over NHAI’s


Amount Rs. 4,02,500.00 lac Raised in Financial Year 2016-2017 Credit Rating AAA by CRISIL, CARE, ICRA, IRRPL Coupon Rate 7.60% p.a. Interest Payment Annual Maturing in Financial Year 2021-2022 Bond Trustee SBICAP Trustee Company Limited Debt Facility Bond Series I Secured by a legal mortgage over NHAI’s


Amount Rs. 1,52,500.00 lac Raised in Financial Year 2017-2018 Credit Rating AAA by CRISIL, CARE, ICRA, IRRPL Coupon Rate 7.27% p.a. Interest Payment Annual Maturing in Financial Year 2022-2023 Bond Trustee SBICAP Trustee Company Limited Debt Facility Bond Series II Secured by a legal mortgage over NHAI’s


Amount Rs. 5,00,000.00 lac Raised in Financial Year 2017-2018 Credit Rating AAA by CRISIL, CARE, ICRA, IRRPL Coupon Rate 7.24% p.a. Interest Payment Annual Maturing in Financial Year 2047-2048 Bond Trustee SBICAP Trustee Company Limited Debt Facility Bond Series XVIII Secured by a legal mortgage over NHAI’s


Amount Rs. 2,40,500.00 lac Raised in Financial Year 2017-2018 (till

September 30, 2017) Credit Rating AAA by CRISIL, CARE, ICRA, IRRPL Coupon Rate 5.25% p.a. Interest Payment Annual Maturing in Financial Year 2020-2021 Bond Trustee SBICAP Trustee Company Limited Debt Facility Bond Series III Secured by a legal mortgage over NHAI’s


Amount Rs. 3,50,000.00 lac Raised in Financial Year 2017-2018 Credit Rating AAA by CRISIL, CARE, ICRA, IRRPL Coupon Rate 7.14% p.a. Interest Payment Annual

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Principal terms of issue in brief Details of assets charged as security Maturing in Financial Year 2047-2048 Bond Trustee SBICAP Trustee Company Limited Debt Facility Bond Series IV Secured by a legal mortgage over NHAI’s


Amount Rs. 5,00,000.00 lac Raised in Financial Year 2017-2018 Credit Rating AAA by CRISIL, CARE, ICRA, IRRPL Coupon Rate 7.38% p.a. Interest Payment Annual Maturing in Financial Year 2032-2033 Bond Trustee SBICAP Trustee Company Limited Debt Facility Bond Series V Secured by a legal mortgage over NHAI’s


Amount Rs. 85000.00 lac Raised in Financial Year 2017-2018 Credit Rating AAA by CRISIL, CARE, ICRA, IRRPL Coupon Rate 7.11% p.a. Interest Payment Annual Maturing in Financial Year 2022-2023 Bond Trustee SBICAP Trustee Company Limited Debt Facility Bond Series VI Unsecured bonds Amount Rs. 5,00,000.00 lac Raised in Financial Year 2017-2018 Credit Rating AAA by CRISIL, CARE, ICRA, IRRPL Coupon Rate 7.64% p.a. Interest Payment Annual Maturing in Financial Year 2032-2033 Bond Trustee SBICAP Trustee Company Limited C) NON-CONVERTIBLE BONDS/ DEBENTURES

Bond Type Deemed Date of Allotment

Tenure (Months)

Coupon Rate

(% p.a.)

Amount Outstanding (Rs. in lacs)

Repayment Date

Credit Rating

Secured/ Unsecured

Tax Free Bonds (10 years)

25.01.2012 120 8.20 6,71,408.12 25.01.2022 “AAA/Stable” by CRISIL, “AAA” by CARE and “AAA(ind) with Stable Outlook” by FITCH

Secured**


25.01.2012 180 8.30 3,28,591.88 25.01.2027 “AAA/Stable” by CRISIL, “AAA” by CARE and “AAA(ind) with Stable Outlook” by FITCH

Secured**

Tax Free Bonds (10 years) (Private Placement)

25.11.2013 120 8.35 45,200.00 25.11.2023 “AAA/Stable” by CRISIL, “AAA” by CARE and “AAA(ind) with Stable Outlook” by FITCH

Secured***

Tax Free Bonds 25.11.2013 180 8.48 84,960.00 25.11.2028 “AAA/Stable” by Secured***

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Tenure (Months)

Coupon Rate

(% p.a.)


Repayment Date

Credit Rating

Secured/ Unsecured

(15 years) (Private Placement)

CRISIL, “AAA” by CARE and “AAA(ind) with Stable Outlook” by FITCH


February 5, 2014

120 8.27 (others); 8.52 (retail)

77,656.92 05.02.2024 “AAA/Stable” by CRISIL, “AAA” by CARE and “AAA(ind) with Stable Outlook” by FITCH

Secured***


February 5, 2014

180 8.50 (others); 8.75 (retail)

2,92,183.08 05.02.2029 “AAA/Stable” by CRISIL, “AAA” by CARE and “AAA(ind) with Stable Outlook” by FITCH

Secured***

NHAI 54EC Bonds (Tr-XVI)

Last date of each month during April 2015 to March 2016

36 6.00 4,28,117.00 Last date of each month during April 2018 to March 2019

“IND AAA” by India Ratings

Secured*


18.09.2015 120 7.11 5,49,00.00 18.09.2025 AAAby CRISIL, AAA by CARE AAA by India Ratings AAA by ICRA

Secured^



Secured^


11.01.2016 120 7.14 (others); 7.39 (retail)

1,34,216.27 11.01.2026 AAAby CRISIL, AAA by CARE AAA by India Ratings AAA by ICRA

Secured^


11.01.2016 180 7.35 (others); 7.60 (retail)


Secured^


18.02.2016 120 7.02 45,500.00 18.02.2026 AAAby CRISIL, AAA by CARE AAA by India Ratings AAA by ICRA

Secured^



Secured^


09.03.2016 120 7.04 (others); 7.29 (retail)

29,021.47 09.03.2026 AAAby CRISIL, AAA by CARE AAA by India Ratings AAA by ICRA

Secured^


09.03.2016 180 7.39 (others); 7.69 (retail)


Secured^

NHAI 54EC Bonds (Tr-XVII)


36 6.00%p.a.till 30.9.16 Coupon w.e.f 01.12.16 will be 5.25% p.a

5,57,274.20 Last date of each month during April 2019 to March 2020


Secured*

Taxable Bonds (25 years)

03.08.2016 300 8.03% 5,00,000.00 03.08.2041 AAA by CRISIL, AAA by CARE AAA by

Secured^

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Tenure (Months)

Coupon Rate

(% p.a.)


Repayment Date

Credit Rating

Secured/ Unsecured

India Ratings AAA by ICRA


01.09.2016 300 7.68% 5,00,000.00 30.08.2041 AAA by CRISIL, AAA by CARE AAA by India Ratings AAA by ICRA

Secured^



Secured^



Secured^



Secured^



Secured^



Secured^



Secured^



Secured^


06.11.2017 60 7.11% 85000.00 06.11.2022 AAA by CRISIL, AAA by CARE AAA by India Ratings AAA by ICRA

Secured^



Unsecured^

NHAI 54EC Bonds (Tr-XVIII)


36 5.25% p.a 665741.30 Last date of each month during April 2020 to March 2021


Secured*

* The bonds are secured by a legal mortgage over NHAI’s immovable property located at Ahmedabad, Gujarat ranking paripassu with the mortgage(s) created and/ or to be created on the said property for securing the bonds or any other instruments.

** The bonds are secured by a legal mortgage over NHAI’s immovable property situated at Ahmedabad, Gujarat, along with first charge on fixed assets of NHAI (as reflected in the Balance Sheet for the financial year ended March 31, 2011), being highway projects comprising of all superstructure including highway lightings, road barriers and dividers, bridges, culverts and all other super structures constructed on national highways except those under the Surat-Manor Tollway Project entrusted to NHAI.

*** The bonds are secured by a legal mortgage over NHAI’s immovable property situated at Ahmedabad, Gujarat, along with first charge on fixed assets of NHAI (as reflected in the Balance Sheet for the financial year ended March 31, 2013), being highway projects comprising of all superstructure including highway lightings, road barriers and dividers, bridges, culverts and all other super structures constructed on national highways except those under the Surat-Manor Tollway Project entrusted to NHAI.

^ The bonds are secured by a legal Mortgage over the property of NHAI situated at Ahmedabad along with fixed assets of NHAI, being highway projects comprising of all superstructures including highway lightings, road barriers and dividers, bridges, culverts and all other super structures constructed on national highways except those under the Surat-Manor Tollway Project entrusted to NHAI with a minimum security cover of one time of the aggregate face value amount of Bonds outstanding at all times.

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D) TOP 10 BONDHOLDERS OF THE ISSUER* (UPDATED)

S. NO. NAME VALUE 1 EFPO 200,000,000,000.00 2 LIFE INSURANCE CORPORATION OF INDIA 170,000,000,000.00 3 THE HONGKONG AND SHANGHAI BANKING CORP.LTD. 19,849,029,000.00 4 STATE BANK OF INDIA 15,960,844,000.00 5 WIPRO LIMITED 15,764,188,000.00 6 HDFC TRUSTEE COMPANY LIMITED 12,650,000,000.00 7 NPS Trust 11,106,000,000.00 8 BANK OF INDIA 10,050,000,000.00 9 IDFC BANK LIMITED 10,000,379,000.00 10 PUNJAB NATIONAL BANK 9,180,000,000.00

* Top 10 holders’ of bonds have been shown on a cumulative basis for all outstanding bonds. 9. AMOUNT OF CORPORATE GUARANTEES ISSUED BY THE ISSUER IN FAVOUR OF

VARIOUS COUNTER PARTIES INCLUDING ITS SUBSIDIARIES, JOINT VENTURE ENTITIES, GROUP COMPANIES ETC.

The Issuer has not issued, in any form, any corporate guarantee in favour of any counter party including its subsidiaries, joint venture and group companies.

10. COMMERCIAL PAPER ISSUED BY THE ISSUER(as on March 31, 2018 ) The Issuer has not issued any Commercial Paper till the date of this Series-1 IM . 11. OTHER BORROWINGS (INCLUDING HYBRID DEBT LIKE FOREIGN CURRENCY

CONVERTIBLE BONDS (“FCCBS”), OPTIONALLY CONVERTIBLE BONDS/ DEBENTURES/PREFERENCE SHARES)

(as on March 31, 2018 )

The Issuer has not issued any hybrid debt like Foreign Currency Convertible Bonds (“FCCBs”), Optionally Convertible Bonds/ Debentures/ Preference Shares etc.

12. SERVICING BEHAVIOR ON EXISTING DEBT SECURITIES, DEFAULT(S) AND/OR

DELAY(S) IN PAYMENTS OF INTEREST AND PRINCIPAL OF ANY KIND OF TERM LOANS, DEBT SECURITIES AND OTHER FINANCIAL INDEBTEDNESS INCLUDING CORPORATE GUARANTEE ISSUED BY THE ISSUER, IN THE PAST 5 YEARS

a. The main constituents of the Issuer’s borrowings are generally in the form of loans from

banks and financial institutions, assistance from multilateral and bilateral financing agencies, bonds, debentures etc.

b. The Issuer has been servicing all its principal and interest liabilities on time and there has

been no instance of delay or default since inception. c. The Issuer has neither defaulted in repayment/ redemption of any of its borrowings nor

affected any kind of roll over against any of its borrowings in the past. d. The Issuer has not issued, in any form, any corporate guarantee in favour of any counter

party including its subsidiaries, joint venture and group companies in the past.

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13. OUTSTANDING BORROWINGS/ DEBT SECURITIES ISSUED FOR CONSIDERATION OTHER THAN CASH, WHETHER IN WHOLE OR PART, AT A PREMIUM OR DISCOUNT, OR IN PURSUANCE OF AN OPTION

The Issuer confirms that other than and to the extent mentioned elsewhere in this Series-1 IM, it has not issued any debt securities or agreed to issue any debt securities or availed any borrowings for a consideration other than cash, whether in whole or in part, at a premium except the private placement of tax free bonds in FY 2013-14 for a premium of Rs. 45,45,656.00and in FY 2015-16 for a premium of Rs. 7,03,22,000.00or discount or in pursuance of an option since inception.

The Issuer hereby confirms that apart from above there has been no material event, development or change having implications on the financials/ credit quality of the Issuer (e.g. any material regulatory proceedings against the Issuer/ promoters of the Issuer, tax litigations resulting in material liabilities, corporate restructuring event etc) at the time of Issue which may affect the Issue or the investor’s decision to invest/ continue to invest in the debt securities of the Issuer.

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XI. MATERIAL EVENT, DEVELOPMENT OR CHANGE AT THE TIME OF ISSUE

The Issuer hereby confirms that, except for any information disclosed in this Series 1 IM, there has been no material event, development or change having implications on the financial condition or credit quality of the Issuer at the time of issue of the Notes which may affect the issue of the Notes or an investor's decision to invest or continue to invest in the debt securities of the Issuer.

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XII. SUMMARY TERM SHEET

Issuer National Highways Authority of India (“NHAI”/ the “Authority”/ the “Issuer”) Issue Size Rs.2000 Crore with Green shoe option upto Rs.1000 Crore aggregating to

Rs. 3000 crores Base issue Size Rs. 2000 crores Green Shoe Option Rs. 1000 crores Security name 8.55% %NHAI Taxable Bonds 2018-19 Series -I Objects of the Issue Part financing of the various projects being implemented by NHAI under the NHDP

and other national highway projects as approved by the Government of India Instrument Taxable Secured Redeemable Non-Convertible Bonds in the nature of Debentures Issuance Mode In Demat mode only Trading Mode In Demat mode only Credit Rating “CRISIL AAA/Stable” by CRISIL, “[ICRA]AAA/Stable” by ICRA, “IND

AAA/Stable” by IRRPL and “CARE AAA” by CARE Seniority Secured, Senior and Unsubordinated Mode of Issue Private Placement under electronic book mechanism of BSE under SEBI Circular

ref SEBI/HO/DDHS/CIR/P/2018/05 dated January 5, 2018 read with “Operational Guidelines for issuance of Securities on Private Placement basis through an Electronic Book Mechanism” issued by BSE vide their Notice No. 20180328-53 dated March 28, 2018 and / or any subsequent guidelines as may be issued by BSE from time to time, in this regard.

Security Mortgage over the property of NHAI situated at Ahmedabad along with fixed assets of NHAI, being highway projects comprising of all superstructures including highway lightings, road barriers and dividers, bridges, culverts and all other super structures constructed on national highways except those under the Surat-Manor Tollway Project entrusted to NHAI and projects awarded under TOTs with a minimum security cover of one time of the aggregate face value amount of Bonds outstanding at all times. Such security creation requires prior approval and authorization by the Government of India as owner of the land. The No-Objection Certificate has been received by the NHAI from the Government of India in this respect. The Issuer states that it has executed necessary Bond/ Debenture Trust Deed and will be submit the same to with BSE within five working days of execution of the same for uploading on its website. The creation of such security shall be sufficient compliance of the Issuer’s obligation to create security.

Eligible Investors All QIBs, and any non-QIB Investors specifically mapped by the Issuer on the BSE BOND – EBP Platform, are eligible to bid / invest / apply for this Issue. All investors are required to comply with the relevant regulations/ guidelines applicable to them for investing in this Issue.

Bond Series NHAI Taxable Bonds 18-19 Series-1 Face Value Rs. 10 lacs per Bond Minimum bid size and in multiples thereafter

1 Debenture of Rs. 10,00,000 (Rupees Ten Lakhs) each and in multiple of 1 Debenture of Rs. 10,00,000 (Rupees Ten Lakhs) eachthereafter

Issue Price At par

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Redemption Amount At par (Rs. 10 lacs) per Bond

Minimum Application

1 Debenture of Rs. 10,00,000 (Rupees Ten Lakhs) each and inmultiple of 1 Debenture of Rs. 10,00,000 (Rupees Ten Lakhs) eachthereafter

Tenor 30 years from the Deemed Date of Allotment Put Option Not applicable Put Option Price Not applicable Put Option Date Not applicable Put Notification Time Not applicable Call Option 10 years from the date of allotment & then on 20 years from the deemed date of

allotment Call Option Price At par Call Option Date 10 years from the date of allotment & then on 20 years from the deemed date of

allotment Call Notification Time

One month prior to the date of call

Redemption/ Maturity

30 years from deemed Date of Allotment [28th June 2018]

Coupon Rate 8.55% p.a. Step Up/ Step Down Coupon Rate

The Reset date is on 10th& 20th year from the deemed date of allotment.

Coupon Payment Frequency

Annual

Coupon Payment Dates

First interest payment on 28th June 2019 and thereafter annually every year

Coupon Type Fixed Coupon Reset Process

At the end of 10th and 20th year at formula of 15 days (working) average annualized G-SEC rate of 10 year maturity ending on the last Friday/last working day of the week preceding the disbursement date or Annualized GSEC rate of 10 year maturity on last Friday/last working day of the week preceding the disbursement date Whichever is higher plus 50 bps).

Day Count Basis Actual/ Actual Interest shall be computed on an “actual/actual basis”. In case of a leap year, if February 29 falls during the tenor of a security, then the number of days shall be reckoned as 366 days (Actual/Actual day count convention) for a whole one year period, irrespective of whether the interest is payable annually, half yearly, quarterly or monthly etc. It is thus emphasized that for a half yearly interest payment, 366 days would be reckoned twice as the denominator; for quarterly interest, four times and for monthly interest payment, twelve times.

Interest on Application Money

Interest at the respective Coupon Rate (subject to deduction of income tax under the provisions of the Income Tax Act, 1961, or any other statutory modification or re-enactment thereof, as applicable) will be paid to the applicants on the application money for the Bonds for the period starting from and including the date of realization of application money in Issuer’s Bank Account upto one day prior to the Deemed Date of Allotment

Listing Proposed on the Wholesale Debt Market (WDM) segment of BSE Limited (“BSE“) Trustees Vistra ITCL (India) Limited

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Depository National Securities Depository Limited and Central Depository Services (India) Limited

Registrars M/s Beetal Financial & Computer Services (P) Ltd. Settlement Payment of interest and repayment of principal shall be made by way of

cheque(s)/ interest/ redemption warrant(s)/ demand draft(s)/ credit through direct credit/ NECS/ RTGS/ NEFT mechanism

Business Day/ Working Day Convention

Working Days shall be all days on which commercial banks are open for business in the city of Delhi. Further, Sundays, have also been considered as non-Business Days. We have not considered the effect of public holidays as it is difficult to ascertain for future dates. If any of date(s) defined in the Series-1 IM, except the Deemed Date of Allotment, the next working day shall be considered as the effective date(s) in line with SEBI circular No CIR/IMD/DF-1/122/2016 dated November 11, 2016.

Record Date 15 days prior to each Coupon Payment Date and Redemption Date Effect of holidays

If the interest payment date falls on a holiday, the payment may be made on the following working day however the dates of the future coupon payments would be as per the schedule originally stipulated at the time of issuing the security in line with SEBI circular No CIR/IMD/DF-1/122/2016 dated November 11, 2016. If the Redemption Date (also being the last Coupon Payment Date) of the Bonds falls on a day that is not a Business Day, the redemption proceeds shall be paid by the Issuer on the preceding Business Day along with interest accrued on the Bonds until but excluding the date of such payment.

Transaction Documents

The Issuer has executed/ shall execute the documents including but not limited to the following in connection with the Issue: 1. Letter appointing Trustees to the Bondholders; 2. Bond/ Debenture Trust Deed; 3. Rating letter from CRISIL; 4. Rating letter from ICRA; 5. Rating letter from IRRPL; 6. Rating letter from CARE; 7. Tripartite Agreement between the Issuer; Registrar and NSDL for issue of

Bonds in dematerialized form; 8. Tripartite Agreement between the Issuer, Registrar and CDSL for issue of

Bonds in dematerialized form; 9. Letter appointing Registrar; 10. Application made to BSE for seeking its in-principle approval for listing of

Bonds; 11. Trustee Consent Letter. 12. Board Resolution authorizing issue of Bonds.

Conditions precedent to subscription of Bonds

The subscription from investors shall be accepted for allocation and allotment by the Issuer subject to the following: 1. Rating letters from the aforesaid rating agencies not being more than one

month old from the issue opening date; 2. Letter from the Trustees conveying their consent to act as Trustees for the

Bondholder(s); 3. Application to BSE for seeking its in-principle approval for listing of Bonds.

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4. Execution of bond trust deed Conditions subsequent to subscription of Bonds

The Issuer shall ensure that the following documents are executed/ activities are completed as per time frame mentioned elsewhere in this Series-1 IM: 1. Credit of demat account(s) of the allottee(s) by number of Bonds allotted

within 1 working days from Bid Closing date; 2. Making listing application to BSE within 15 days from the Deemed Date of

Allotment of Bonds and seeking listing permission within 20 days from the Deemed Date of Allotment of Bonds in pursuance of SEBI Debt Regulations. In case of delay in listing of the Bonds beyond 20 days from the Deemed Date of Allotment, the Issuer shall pay penal interest at the rate of 1.00% p.a. over the respective Coupon Rates of the Bonds from the expiry of 30 days from the Deemed Date of Allotment till the listing of Bonds to the bondholders.

Besides, the Issuer shall perform all activities, whether mandatory or otherwise, as mentioned elsewhere in this Series-1 IM.

Future Borrowings and Automatic Approvals to the Issuer

As long as the Company maintains the stipulated security cover in respect NCD’s, the Company shall be entitled to borrow/ raise loans or avail of financial assistance in whatever form and also issue Debentures / Notes / other securities in any manner and to change its capital structure without the consent of Debenture holders/Debenture Trustee. Further, the Company shall not be required to obtain debenture holders/ debenture trustee consent for creating pari-passu charge on the assets given as a security for further borrowings till the time stipulated security cover is maintained. In case, pari-passu letter for any charge creation is requested by the Issuer, Debenture Trustee shall be empowered to issue the same without seeking consent from the Debenture holders, as long as the Issuer satisfies the above requirement of minimum security cover maintenance.

Events of Default If the Issuer commits a default in making payment of any instalment of interest or repayment of principal amount of the Bonds on the respective due date(s), the same shall constitute an “Event of Default” by the Issuer. In case of default in payment of interest and/or principal redemption on the due dates, the Issuer shall pay an additional interest at the rate of 2.00% p.a. over the respective Coupon Rates of the Bonds for the defaulting period

Remedies Upon the occurrence of any of the Events of Default, the Trustees shall on instructions from majority Bondholder(s), declare the amounts outstanding to be due and payable forthwith and the security created under the security documents shall become enforceable, and the Trustees shall have the right to enforce any security created pursuant to the security documents towards repayment of the amounts outstanding and/or exercise such other rights as the Trustees may deem fit under the applicable laws.

Cross Default Not Applicable Role and Responsibilities of Trustees

The Trustees shall protect the interest of the Bondholders in the event of default by the Issuer in regard to timely payment of interest and repayment of principal and shall take necessary action at the cost of the Issuer. No Bondholder shall be entitled to proceed directly against the Issuer unless the Trustees, having become so bound to proceed, fail to do so. The Trustees shall carry out its duties and perform its functions as required to discharge its obligations under the terms of SEBI Debt Regulations, the Securities

83

and Exchange Board of India (Debenture Trustees) Regulations, 1993, the Bond/ Debenture Trusteeship Agreement, the Bond/ Debenture Trust Deed, Offer Letter Document and all other related transaction documents, with due care, diligence and loyalty. The Trustees shall ensure disclosure of all material events on an ongoing basis and shall supervise the implementation of the conditions regarding creation of security for the Bonds. The Issuer shall, till the redemption of Bonds, submit its latest audited/ limited review half yearly consolidated (wherever available) and standalone financial information such as Statement of Profit & Loss, Balance Sheet and Cash Flow Statement and auditor qualifications, if any, to the Trustees within the timelines as mentioned in Simplified Listing Agreement issued by SEBI vide circular No. SEBI/IMD/BOND/1/2009/11/05 dated May 11, 2009 as amended. Besides, the Issuer shall within 180 days from the end of the financial year, submit a copy of the latest annual report to the Trustees and the Trustees shall be obliged to share the details so submitted with all ‘Qualified Institutional Buyers’ (QIBs) and other existing Bondholder(s) within two working days of their specific request.

Governing Law and Jurisdiction

The Bonds are governed by and shall be construed in accordance with the existing laws of India. Any dispute arising thereof shall be subject to the jurisdiction of the competent court of New Delhi, India

Additional Covenants

1. Security Creation: The Issuer states that it has executed the necessary documents for creation of the charge, including the Debenture/ Bond Trust Deed and will be submitting the same with BSE within five working days of execution of the same for uploading on its website.

2. Default in Payment: In case of default in payment of interest and/or principal redemption on the due dates, the Issuer shall pay an additional interest at the rate of 2.00% p.a. over the respective Coupon Rates of the Bonds for the defaulting period.

3. Listing: The Issuer shall complete all the formalities and seek listing permission within 20 days from the Deemed Date of Allotment. In case of delay in listing of the Bonds beyond 20 days from the Deemed Date of Allotment, the Issuer shall pay penal interest at the rate of 1.00% p.a. over the respective Coupon Rates of the Bonds from the expiry of 30 days from the Deemed Date of Allotment till the listing of Bonds to the bondholders.

Mode of Subscription

As per SEBI circular dated January 5th , 2018 and operation al guidelines of BSE

Issue/Bid Opening Date*

27th June 2018

Issue/Bid Closing Date*

27th June 2018

Pay-in Date * 28th June 2018 Deemed Date of Allotment *

28th June 2018

Debt Equity Ratio Before the Issue –0.74 After the Issue–0.75

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XIII. TERMS OF OFFER (DETAILS OF DEBT SECURITIES PROPOSED TO BE ISSUED, MODE OF ISSUANCE, ISSUE SIZE, UTILIZATION OF ISSUE PROCEEDS, STOCK EXCHANGE WHERE SECURITIES ARE PROPOSED TO BE LISTED, REDEMPTION AMOUNT, PERIOD OF MATURITY, YIELD ON REDEMPTION, DISCOUNT AT WHICH OFFER IS MADE AND EFFECTIVE YIELD FOR INVESTOR) PRIVATE PLACEMENT OF TAXABLE SECURED REDEEMABLE NON CONVERTIBLE BONDS OF FACE VALUE OF RS.10.00 LACEACH IN THE NATURE OF DEBENTURES FOR AN AMOUNTING TO Rs. 2000 CRORES WITH GREEN SHOE OPTION TO RS. 1000 crores AGGREGATING RS. 3000CRORE BY NATIONAL HIGHWAYS AUTHORITY OF INDIA (“NHAI” OR THE “ISSUER” OR THE “AUTHORITY”) 1. ISSUE SIZE

National Highways Authority of India (“NHAI” or the “Issuer” or the “Authority”) to raise Rs. 2000 crores with green shoe option to Rs. 1000 crores aggregating Rs. 3000 Crorecrorethrough issue of Taxable Secured Redeemable Non-Convertible Bonds in the nature of Debentures (“Bonds”) of face value of Rs. 10.00 lacs each under this Series-1 IM).

2. ELIGIBILITY TO COME OUT WITH THE ISSUE

The Issuer or the person in control of the Issuer, or its promoter, has not been restrained or prohibited or debarred by SEBI/any other Government authority from accessing the securities market or dealing in securities and such direction or order is in force.

3. REGISTRATION AND GOVERNMENT APPROVALS

NHAI can undertake the activities proposed by it in view of the present approvals and no further approval from any government authority(ies) is required byNHAIto undertake the proposed activities save and except those approvals which may be required to be taken in the normal course of business from time to time.

4. AUTHORITY FOR THE ISSUE

The present Issue is being made pursuant to announcement in Union Budget, NHAI Act and resolution passed by the Members of the Board of NHAI on February 15, 2018,approving the Issue and delegation provided thereunder.

5. OBJECTS OF THE ISSUE

The funds raised through this Issue will be utilized for part financing of the various projects being implemented by NHAI under the NHDP and other national highway projects as approved by the Government of India.

Further, in accordance with the SEBI Debt Regulations, NHAI shall not utilize the proceeds of the Issue forproviding loans to or acquisition of shares of any person who is part of the same group or who is under the same management. Further, NHAI is a statutory authority and, as such, it does not have any identifiablegroup companiesorcompanies under the same management though it does have shareholding interest in certain Special PurposeVehicles which are engaged in area specific development of port roads.

85

6. UTILISATION OF ISSUE PROCEEDS

The funds being raised by the Issuer through present issue of Bonds are not meant for financing any particular project. 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. Members of the Authority shall monitor the utilisation of the proceeds of the Issue. NHAI shall disclose in its financial statements, the utilization of the proceeds of the issue under a separate head along with any details in relation to all such proceeds of theissue that have not been utilized thereby also indicating investments, if any, of such unutilized proceeds of the Issue. NHAI shall utilize the proceeds of the issue only upon the execution of the documents for creation of security as stated in this Series-1 IM and upon the listing of the Bonds. The objects of NHAI as specified in NHAI Act permits it to undertake its existing activities as well as the activities for which the funds are being raised through the Issue.

NHAI undertakes that proceeds of the present issue shall not be used for any purpose which may be in contravention of the regulations/ guidelines/ normsissued by the RBI/ SEBI/ RoC/ Stock Exchange(s).

7. MINIMUM SUBSCRIPTION

In terms of the SEBI Debt Regulations, the Issuer may decide the amount of minimum subscription which it seeks to raise by issue of Bonds and disclose the same in the Series-1 IM. The Issuer has decided not to stipulate any minimum subscription for the present Issue and therefore the Issuer shall not be liable to refund the issue subscription(s)/ proceed(s) in the event of the total issue collection falling short of issue size or certain percentage of issue size.

8. UNDERWRITING

The present Issue of Bonds is not underwritten. 9. NATURE OF BONDS

The Bonds are to be issued in the form ofTaxable Secured Redeemable Non-Convertible Bonds in the nature of Debentures.

10. FACE VALUE

Each Bond has a face value of Rs. 10 lacs. The Bonds are redeemable at par i.e. for Rs. 10 lacs. 11. SECURITY

The Bonds has been secured by way of mortgage over the property of NHAI situated at Ahmedabad along with fixed assets of NHAI, being highway projects comprising of all superstructures including highway lightings, road barriers and dividers, bridges, culverts and all other super structures constructed on national highways except those under the Surat-Manor Tollway Project entrusted to NHAI and projects awarded under ToT with a minimum security cover of one time of the aggregate face value amount of Bonds outstanding at all times. Such security creation requires prior approval and authorization by the Government of India as owner of the land. The No-Objection Certificate has been received by the NHAI from the Government of India in this respect.

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Security document has been executed in respect of the proposed bond issue.

The Issuer submits that it has executed the Bond/ Debenture Trust Deed and submit with BSE within five working days of execution of the same for uploading on its website. The creation of such security shall be sufficient compliance of the Issuer’s obligation to create security.

13. DEEMED DATE OF ALLOTMENT

All benefits under the Bonds including payment of interest will accrue to the Bondholders from and including date of allotment, June [●]2018, which shall be the Deemed Date of Allotment. All benefits relating to the Bonds will be available to the investors from the Deemed Date of Allotment. The actual allotment of Bonds may take place on a date other than the Deemed Date of Allotment.The Issuer reserves the right to keep multiple allotment date(s)/ deemed date(s) of allotment at its sole and absolute discretion without any notice. In case if the issue closing date/ pay in dates is/are changed (pre-poned/ postponed), the Deemed Date of Allotment may also be changed (pre-pond/ postponed) bythe Issuer at its sole and absolute discretion.

14. LETTER(S) OF ALLOTMENT/ BOND CERTIFICATE(S)/ REFUND ORDER(S)/ ISSUE OF

LETTER(S) OF ALLOTMENT

The beneficiary account of the investor(s) with National Securities Depository Limited (NSDL)/ Central Depository Services (India) Limited (CDSL)/ Depository Participant will be given initial credit within 2 working days from the Deemed Date of Allotment. The initial credit in the account willbe akin to the Letter of Allotment. On completion of the all statutory formalities, such credit inthe account will be akin to a Bond Certificate.

15. ISSUE OF BOND CERTIFICATE(S)

The initial credit in the account willbe akin to the Letter of Allotment. On completion of the all statutory formalities, such credit inthe account will be akin to a Bond Certificate.However, in case , if all formalities are not completed the same will be akin to letter of allotment , which on completion of the all statutory formalities, such credit will be akin to a Bond Certificate. The Bonds since issued in electronic (dematerialized) form, will be governed as per the provisions of The Depository Act, 1996, Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996, rules notified by NSDL/ CDSL/ Depository Participant from time to time and other applicable laws and rules notified in respect thereof. The Bonds shall be allotted in dematerialized form only.

16. DEPOSITORY ARRANGEMENTS

The Issuer has appointed M/s Beetal Financial & Computer Services (P) Ltd. (Address: 99, Beetal House, Madangir, Behind Local Shopping Centre, Near HarsukhdasMandir, New Delhi-110062) asthe Registrar (“Registrar”) for the present Bond Issue.The Issuer has entered into necessary depository arrangements with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) for dematerialization of the Bonds offered under the present Issue, in accordance with the Depositories Act, 1996 and regulations made thereunder. In this context, the Issuer has signed two tripartite agreements as under:

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Tripartite Agreement between the Issuer, National Securities Depository Limited

(“NSDL”) and the Registrar for dematerialization of the Bonds offered under the present Issue.

Tripartite Agreement between the Issuer, Central Depository Services (India) Limited

(“CDSL”) and the Registrar for dematerialization of the Bonds offered under the present Issue.

Investors can hold the bonds only in dematerialised form and deal with the same as per the provisions of Depositories Act, 1996 as amended from time to time.

17. PROCEDURE FOR APPLYING FOR DEMAT FACILITY

a. Applicant(s) should have/ open a Beneficiary Account with any Depository Participant of NSDL or CDSL.

b. The applicant(s) must specify their beneficiary account number and depository

participants ID in the relevant columns of the Application Form. c. If incomplete/incorrect beneficiary account details are given in the Application Form

which does not match with the details in the depository system, the allotment of Bonds shall be held in abeyance till such time satisfactory demat account details are provided by the applicant.

d. The Bonds shall be directly credited to the Beneficiary Account as given in the

Application Form and after due verification, allotment advice/refund order,if any, would be sent directly to the applicant by the Registrars to the Issue but the confirmation of the credit of the Bonds to the applicant’s Depository Account will be provided to the applicant by the Depository Participant of the applicant.

e. Interest or other benefits with respect to the Bonds would be paid to those

bondholders whose names appear on the list of beneficial owners given by the depositories tothe Issueras on the Record Date. In case, the beneficial owner is not identified by the depository on the Record Date due to any reason whatsoever,the Issuer shall keep in abeyance the payment of interest or other benefits, till such time the beneficial owner is identified by the depository and intimated to the Issuer. On receiving such intimation,the Issuer shall pay the interest or other benefits to the beneficiaries identified, within a period of 15 days from the date of receiving such intimation.

f. Applicants may please note that the Bonds shall be allotted and traded on the stock

exchange(s) only in dematerialized form. 18. FICTITIOUS APPLICATIONS

Any person who makes, in fictitious name, any application to a body corporate for acquiring, or subscribing to, the Bonds, or otherwise induced a body corporate to allot, register any transfer of Bonds therein to them or any other personin a fictitious name, shall be punishable as per provisions of extant laws.

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19. MARKET LOT

The market lot will be one Bond (“Market Lot”). Since the Bonds are being issued only in dematerialised form, the odd lots will not arise either at the time of issuance or at the time of transfer of Bonds.

20. TRADING OF BONDS

The marketable lot for the purpose of trading of Bonds shall be 1 (one) Bond of face value of Rs.10 lacs each. Trading of Bonds would be permitted in demat mode only in standard denomination of Rs.10 lacs and such trades shall be cleared and settled in recognised stock exchange(s) subject to conditions specified by SEBI. In case of trading in Bonds which has been made over the counter, the trades shall be reported on a recognized stock exchange having a nationwide trading terminal or such other platform as may be specified by SEBI.

21. MODE OF TRANSFER OF BONDS

The Bonds shall be transferred subject to and in accordance with the rules/ procedures as prescribed by the NSDL/ CDSL/ Depository Participant of the transferor/ transferee and any other applicable laws and rules notified in respect thereof. The normal procedure followed for transfer of securities held in dematerialized form shall be followed for transfer of these Bonds held in electronic form. The seller should give delivery instructions containing details of the buyer’s DP account to his depository participant.The transferee(s) should ensure that the transfer formalities are completed prior to the Record Date. In the absence of the same, interest will be paid/ redemption will be made to the person, whose name appears in the records of the Depository. In such cases, claims, if any, by the transferee(s) would need to be settled with the transferor(s) and not with the Issuer.

22. BASIS OF ALLOCATION / ALLOTMENT

Allotment to the bidders shall be done on yield priority basis in the following manner as per SEBI circular dated Janaury 5, 2018 and operational guidelines of BSE:-

a) All the bids shall be arranged in the ascending order of the yields, and a cut-off yield

shall be determined. b) All the bids below the cut-off yield shall be accepted and full allotment should be

made to such bidders. c) For all the bids received at cut-off yield, allotment shall be made on pro-rata basis.

23. COMMON FORM OF TRANSFER

The Issuer undertakes that it shall use a common form/ procedure for transfer of Bonds issued under terms of this Series-1 IM.

24. INTEREST ON APPLICATION MONEY

a. In case of change in deemed date of allotment and in respect of investors who get allotment in the bond issue , interest on application money shall be paid at the coupon rate applicable for bond series (subject to deduction of income tax under the

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provisions of the Income Tax Act, 1961, or any other statutory modification or re-enactment thereof, as applicable) from the date of receipt of application money in NHAI’s account till one day prior to the date of allotment on the aggregate face value amount of Bonds The interest on Application Money shall be computed as per “Actual/Actual” day count convention. The payment shall be made only through electronic mode. However, in case of rejection of electronic mode, due to incomplete / in correct detail provided by applicant payment may be made through cheque /demand draft. The cheque /demand draft for interest on application money shall be dispatched by the Issuer within 15 days from the Deemed Date of Allotment by registered post to the sole/ first applicant, at the sole risk of the applicant.

b. No interest on Application Money will be paid in respect of applications which are

rejected due to any reason. 25. INTEREST ON THE BONDS

The face value of the Bonds outstanding shall carry interest at the coupon rate from deemed date ofallotment and the coupon rate & frequency of payment (subject to deduction of income tax underthe provisions of the Income Tax Act, 1961, or any other statutory modification or re-enactmentthereof, as applicable) are mentioned at summary term sheet.

The interest payment shall be made through electronic mode to the bondholders whose namesappear on the list of beneficial owners given by the depository participant to R&TAas on the recorddate fixed by Issuer in the bank account which is linked to the demat of the bondholder. However, inabsence of complete bank details i.e. correct/updated bank account number, IFSC/RTGS code /NEFTcode etc., issuer shall be required to make payment through cheques / DDs on the due date at thesole risk of the bondholders.Interest or other benefits with respect to the Bonds would be paid to those Bondholders whosenames appear on the list of beneficial owners given by the depository participant to R&TA as on theRecord Date.

26. COMPUTATION OF INTEREST

Interest for each of the interest periods shall be computed as per Actual/ Actual day count convention on the face value amount of Bonds outstanding at the respective Coupon Rate rounded off to the nearest Rupee. Where the interest period (start date to end date) includes February 29, interest shall be computed on 366 days-a-year basis, on the face value amount of Bonds outstanding.

27. RECORD DATE

The ‘Record Date’ for the Bonds shall be 15 days prior to each Coupon Payment Dateand Redemption Date. In case of redemption of Bonds, the trading in the Bonds shall remain suspended between the Record Date and the Redemption Date. Interest payment and principal repayment shall be made to the person whose name appears as beneficiary with the Depositories as on Record Date. In the event of the Issuer not receiving any notice of transfer at least 15 days before the respective Coupon Payment Dateand Redemption Date, the transferees for the Bonds shall not have any claim against the Issuer in respect of amount so paid to the registered Bondholders.

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28. DEDUCTION OF TAX AT SOURCE

Tax as applicable under the Income Tax Act, 1961, or any other statutory modification or re-enactment thereof will be deducted at source out of interest payable on Bonds.

Tax exemption certificate/ declaration of non-deduction of tax at source, if applicable, on interest on application money should be submitted along with the Application Form. Regarding deduction of tax at source and the requisite declaration forms to be submitted, prospective investors are advised to consult their own tax consultant(s).In case of tax deducted at source, the Company will issue the TDS certificate to the investors.

29. PUT & CALL OPTION

There is no put option. Bondholders shall have right to exercise call option at the end of 10th year and 20the year. For details please refer to term sheet

30. REDEMPTION

The face value of the Bonds shall be redeemed at par, on the respective Redemption Dates.The Bonds will not carry any obligation, for interest or otherwise, after the Redemption Date. The Bonds shall be taken as discharged on payment of the redemption amount bythe Issuer on the Redemption Date to the registered Bondholders whose name appear in the Register of Bondholders on the Record Date. Such payment will be a legal discharge of the liability ofthe Issuer towards the Bondholders.

In case any Redemption Date falls on a day which is not a Working Day, the payment due shall be made on the immediately preceding Working Day along with interest accrued on the Bonds until but excluding the date of such payment.

31. ADDITIONAL COVENANTS

a. Security Creation: The Issuer submits that it has executed the necessary documents for creation of the charge, including the Debenture/ Bond Trust Deed and shall submit with BSE within five working days of execution of the same for uploading on its website.

b. Default in Payment: In case of default in payment of interest and/or principal

redemption on the due dates, the Issuer shall pay an additional interest at the rate of 2.00% p.a. over the respective Coupon Rates of the Bonds for the defaultingperiod.

c. Listing:The Issuer shall complete all the formalities and seek listing permission

within 20 days from the Deemed Date of Allotment. In case of delay in listing of the Bonds beyond 20 days from the Deemed Date of Allotment, the Issuer shall pay penal interest at the rate of 1.00% p.a. over the respective Coupon Rates of the Bonds from the expiry of 30 days from the Deemed Date of Allotment till the listing of Bonds to the bondholders.

32. SETTLEMENT/ PAYMENT ON REDEMPTION

Payment of interest and repayment of principal shall be made by way of cheque(s)/ interest/ redemption warrant(s)/ demand draft(s)/ credit through direct credit/ NECS/ RTGS/ NEFT

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mechanism in the name of the Bondholders whose name appear on the List of Beneficial Owners given by Depository to the Issuer as on the Record Date.

The Bonds shall be taken as discharged on payment of the redemption amount by the Issuer on the Redemption Date to the list of Beneficial Owners as provided by NSDL/ CDSL/ Depository Participant as on Record Date. Such payment will be a legal discharge of the liability of the Issuer towards the Bondholders. On such payment being made, the Issuer shall inform NSDL/ CDSL/ Depository Participant and accordingly the account of the Bondholders with NSDL/ CDSL/ Depository Participant shall be adjusted.

The Issuer’s liability to the Bondholders towards all their rights including for payment or

otherwise shall cease and stand extinguished from the due date of redemption in all events. Further the Issuer will not be liable to pay any interest or compensation from the Redemption Date. On the Issuer’s dispatching/ crediting the amount to the Beneficiary(ies) as specified above in respect of the Bonds, the liability of the Issuer shall stand extinguished.

33. EFFECT OF HOLIDAYS

If the interest payment date falls on a holiday, the payment may be made on the following working day however the dates of the future coupon payments would be as per the schedule originally stipulated at the time of issuing the security in line with SEBI circular No CIR/IMD/DF-1/122/2016 dated November 11, 2016.

If the Redemption Date (also being the last Coupon Payment Date) of the Bonds falls on a day that is not a Business Day, the redemption proceeds shall be paid by the Issuer on the preceding Business Day along with interest accrued on the Bonds until but excluding the date of such payment. ‘Business Day’ shall be a day on which commercial banks are open for business in the city of Delhi and the days when the money market is functioning in Mumbai. The interest/redemption payments shall be made only on the days when the money market is functioning in Mumbai.

Set forth below is an illustration for guidance in respect of the day count convention and effect of holidays on payments. Investors should note that this example is solely for illustrative purposes. We have not considered the effect of public holidays as it is difficult to ascertain for future dates.

Face Value of the Bond (in Rs) – 10,00,000/- Deemed Date of Allotment – June 28th , 2018 Redemption date– 28th June 2048 Coupon rate – 8.55% p.a.

Cash Flows Day, Date Day count (Actual/ Actual)

No. of Days in Coupon Period

Amount (Rupees in Crore)

1st Coupon Friday, June 28, 2019 365/365 365 187.673

2nd Coupon Monday, June 29, 2020 366 366 187.673

3rd Coupon Monday, June 28, 2021 365 365 187.673

4th Coupon Tuesday, June 28, 2022 365 365 187.673

5th Coupon Wednesday, June 28, 2023 365 365 187.673

6th Coupon Friday, June 28, 2024 366 366 187.673

7th Coupon Saturday, June 28, 2025 365 365 187.673

8th Coupon Monday, June 29, 2026 365 365 187.673

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11th Coupon Thursday, June 28, 2029 365 365 187.673








19th Coupon Sunday, June 28, 2037 365 365 187.673


21st Coupon Tuesday, June 28, 2039 365 365 187.673

22nd Coupon Thursday, June 28, 2040 366 366 187.673

23rd Coupon Friday, June 28, 2041 365 365 187.673


25th Coupon Sunday, June 28, 2043 365 365 187.673






Principal Redemption Friday, June 26, 2048 2195.000

NHAI Taxable Bonds 18-19, Series-1

Assumptions and Notes: 1. The aggregate coupon payable to each Bondholder shall be rounded off to the nearest rupee as

per the Fixed Income Money Market and Derivatives Association handbook on market practices. 2. The actual dates and maturity amount will be in accordance to and in compliance with the

provisions of SEBI circular CIR/IMD/DF-1/122/2016 dated November 11, 2016 giving effect to actual holidays and dates of maturity which qualifies the SEBI requirement.

3. For the purposes of the above illustration, as per notification dtd 20 August 2015, only such dates that fall on second and fourth Saturday of every month have been considered as non business day. Further, Sundays, have also been considered as non-Business Days.

4. Since, last coupon date along with maturity date for Tranche I is falling on a non-Business day, the respective coupon payments shall be made on the immediately succeeding Business Day.

34. LIST OF BENEFICIAL OWNERS

The Issuer shall request the Depository to provide a list of Beneficial Owners as at the end of the Record Date. This shall be the list, which shall be considered for payment of interest or repayment of principal amount, as the case may be.

35. SUCCESSION

In the event of the demise of the sole/first holder of the Bond(s) or the last survivor, in case of joint holders for the time being, the Issuer shall recognize the executor or administrator of the deceased

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Bondholder, or the holder of succession certificate or other legal representative as having title to the Bond(s).the Issuer shall not be bound to recognize such executor or administrator, unless such executor or administrator obtains probate, wherever it is necessary, or letter of administration or such holder is the holder of succession certificate or other legal representation, as the case may be, from a Court in India having jurisdiction over the matter. The Issuer may, in its absolute discretion, where it thinks fit, dispense with production of probate or letter of administration or succession certificate or other legal representation, in order to recognize such holder as being entitled to the Bond(s) standing in the name of the deceased Bondholder on production of sufficient documentary proof or indemnity.

Where a non-resident Indian becomes entitled to the Bond by way of succession, the following steps have to be complied:

a. Documentary evidence to be submitted to the Legacy Cell of the RBI to the effect that

the Bond was acquired by the NRI as part of the legacy left by the deceased holder. b. Proof that the NRI is an Indian National or is of Indian origin.

Such holding by the NRI will be on a non-repatriation basis.

38. DOCUMENTS TO BE PROVIDED BY SUCCESSFUL BIDDER(S)

Successful bidder(s) need to submit the following documents, along with the Application Form, as applicable:

Certified true copy of the Memorandum and Articles of Association Certified true copy of the Board Resolution / letter authorizing the investment Certified true copy of the Power of Attorney Form 15G/ 15H for investors seeking exemption from TDS –on interest payments Relevant certificate(s)/ order(s)/ declaration(s)/ document(s) including order under

Section195/ 197 of the Income-tax Act, 1961 on which the Debenture Holder wishes to place reliance for non-deduction of tax at source

SEBI registration certificate IRDA registration certificate Specimen signature of the authorised signatories, duly certified by an appropriate

authority Certified true copy of PAN

39. HOW TO APPLY

This Series-1 IM is neither a prospectus nor a statement in lieu of prospectus and does not constitute an offer to the public generally to subscribe for or otherwise acquire the Bonds issued by the Company. The document is for the exclusive use of the institution(s) to whom it is delivered and it should not be circulated/ distributed to third parties. This being a private placement Issue, the eligible investors who have been addressed through this communication directly, only are eligible to apply.Applications for the Bonds must be in the prescribed form and completed in BLOCK LETTERS in English and as per the instructions contained therein.

40. APPLICATION PROCESS

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Who can bid / invest / apply?

All QIBs, and any non-QIB Investors specifically mapped by the Issuer on the BSE BOND – EBP Platform, are eligible to bid / invest / apply for this Issue.

All investors are required to comply with the relevant regulations/ guidelines applicable to them for investing in this Issue.

Eligible participants bidding on proprietary basis, for an amount equal to or more than Rs.15 crore or 5% of the base issue size, whichever is lower, shall bid directly i.e. shall enter the bids directly on EBP platform.

Provided that the foreign portfolio investors may bid through their custodians.

How to bid?

All Eligible Investors will have to register themselves as a one-time exercise (if not already registered) under the BSE BOND – EBP Platform offered by BSE for participating in the electronic book mechanism. Eligible Investors will also have to complete the mandatory KYC verification process. Investors should refer to the Operational

Guidelines.

The details of the Issue shall be entered on the BSE BOND – EBP Platform by the Issuer at least 2 (two) working days prior to the Issue / Bid Opening Date, in accordance with the Operational Guidelines.

The Issue will be open for bidding for the duration of the bidding window that would be communicated through the Issuer’s bidding announcement on the BSE BOND – EBP Platform, at least 1 (one) working day before the start of the Issue / Bid Opening Date.

A bidder will only be able to enter the amount & percentage while placing their bids in the BSE BONDSome of the key guidelines in terms of the current Operational Guidelines on issuance of securities on private placement basis through an electronic book mechanism, are as follows:

(a) Modification of Bid:

Investors may note that modification of bid is allowed during the bidding period / window.

However, in the last 10 minutes of the bidding period / window, revision of bid is only allowed for upward revision of the bid amount placed by the Investor.

(b) Cancellation of Bid

Investors may note that cancellation of bid is allowed during the bidding period / window. However, in the last 10 minutes of the bidding period / window, no cancellation of bids is permitted.

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(c) Multiple Bids

Investors may note that multiple bid is not permitted. If multiple bids are entered by the same Investor, only the first bid will be considered as valid.

(d) Withdrawal of Issue

The Issuer may, at its discretion, withdraw the issue process on the following conditions: i. non-receipt of bids upto the Issue Size; ii. bidder has defaulted on payment towards the allotment, within the

stipulated timeframe, due to which the Issuer is unable to fulfil the Issue Size.

Provided that the Issuer shall accept or withdraw the Issue on the BSE BOND – EBPPlatform within 1 (one) hour of the closing of the bidding window, and not later than 6 pmon the Issue/Bidding Closing Date.

However, Investors should refer to the Operational Guidelines as prevailing on the date of thebid.

Provisional/ Final Allocation

Allocation shall be made on a pro rata basis in the multiples of the bidding lot size, i.e., inmultiples of Rs. 10,00,000 (Rupees Ten Lakhs).

Post completion of bidding process, the Issuer will upload the provisional allocation on the BSE BOND – EBP Platform. Post receipt of investor details, the Issuer will upload the final allocationfile on the BSE BOND – EBP Platform.

Payment Mechanism

Subscription should be as per the final allocation made to the successful bidder(s) as notifiedby the Issuer by 10:30am next date of Closing Date.

Successful bidders should do the funds pay-in to the following bank account of ICCL (“Designated Bank Account”):

ICICI Bank :

Beneficiary Name: INDIAN CLEARING CORPORATION LTD Account Number: ICCLEB IFSC Code : ICIC0000106 Mode: NEFT/RTGS

YES Bank :

Beneficiary Name: INDIAN CLEARING CORPORATION LTD Account Number: ICCLEB IFSC Code : YESB0CMSNOC Mode: NEFT/RTGS

Successful bidders must do the funds pay-in to the Designated Bank Account as mentioned above in accordance ith operational guidelines of BSE EBP PLATFORM. Successful bidders

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should ensure to do the funds pay-infrom their same bank account which is updated by them in the BSE BOND - EBP Platform whileplacing the bids. In case of mismatch in the bank account details between BSE BOND – EBPPlatform and the bank account from which payment is done by the successful bidder, thepayment would be returned back.

Note: In case of failure of any successful bidder to complete the funds pay-in by the Pay-

inTime or the funds are not received in the ICCL’s Designated Bank Account by the Pay-in Timefor any reason whatsoever, the bid will liable to be rejected and the Issuer shall not be liable tothe successful bidder.

Funds pay-out on June 28th, 2018 would be made by ICCL to the following bank account of the Issuer

Beneficiary Name : National Highways Authority of India Bank : Indusind Bank Account Number : 100059847053 IFSC Code : INDB0000005 Mode : NEFT/RTGS

Application by Successful Bidder(s)

All Application Forms, duly completed, must be delivered by the Pay-in Time to the Issuer by the successful bidder(s), to the attention of Mr. S.Q.Ahmad, GM (Fin) at G-5& 6, Sector 10, Dwarka, Delhi India.Applications for the Debentures must be in the prescribed form and completed in BLOCK LETTERS in English and as per theinstructions contained therein.

41. FORCE MAJEURE

The Issuer reserves the right to withdraw the issue prior to the Issue Closing Date in the event of any unforeseen development adversely affecting the economic and regulatory environment.

42. APPLICATIONS UNDER POWER OF ATTORNEY

A certified true copy of the power of attorney or the relevant authority as the case may be alongwith the names and specimen signature(s) of all the authorized signatories and the tax exemption certificate/ document, if any, must be lodged alongwith the submission of the completed Application Form. Further modifications/ additions in the power of attorney or authority should be notified tothe Issuer or to the Registrars or to such other person(s) at such other address(es) as may be specified bythe Issuerfrom time to time through a suitable communication.

43. APPLICATION BY MUTUAL FUNDS

In case of applications by Mutual Funds, a separate application must be made in respect of each scheme of an Indian Mutual Fund registered with SEBI and such applications will not be treated as multiple applications, provided that the application made by the Asset Management Company/ Trustees/ Custodian clearly indicate their intention as to the scheme for which the application has been made.

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43. ACKNOWLEDGEMENTS

No separate receipts will be issued for the application money. However, the Arrangers to the Issue receiving the duly completed Application Form will acknowledge receipt of the application by stamping and returning to the applicant the acknowledgement slip at the bottom of each Application Form.

45. PAN

Every applicant should mention its Permanent Account Number (“PAN”) allotted under the IncomeTax Act, 1961, on the Application Form and attach a self-attested copy as evidence. ApplicationForms without PAN will be considered as incomplete and are liable to be rejected.

46. SIGNATURES

Signatures should be made in English or in any of the Indian Languages. Thumb impressions must be attested by an authorized official of a Bank or by a Magistrate/ Notary Public under his/her official seal.

47. NOMINATION FACILITY

As per extant provisions of law, only individuals holding the Bonds as Sole/Joint holder of Bondscan nominate, in the prescribed manner, a person to whom his/ their Bonds shall vest in the event of his/ their death. Non-individuals including holders of Power of Attorney cannot nominate.

48. RIGHT OF BONDHOLDER(S)

Bondholder is not a shareholder. The Bondholders will not be entitled to any other rights and privilege of shareholders other than those available to them under statutory requirements. The principal amount and interest on the Bonds will be paid to the registered Bondholders only, and in case of Joint holders, to the one whose name stands first.Besides, the Bonds shall be subject to the provisions of NHAI Act, the terms of this Series-1 IM and other terms and conditions as may be incorporated in the Bond/ Debenture Trusteeship Agreement and other documents that may be executed in respect of these Bonds.

49. MODIFICATION OF RIGHTS

The rights, privileges, terms and conditions attached to the Bonds may be varied, modified or abrogated with the consent, in writing, of those holders of the Bonds who hold at least three fourth of the outstanding amount of the Bonds or with the sanction accorded pursuant to a resolution passed at a meeting of the Bondholders, provided that nothing in such consent or resolution shall be operative againstthe Issuer where such consent or resolution modifies or varies the terms and conditions of the Bonds, if the same are not acceptable to the Issuer.

50. FUTURE BORROWINGS

The Issuershall be entitled to borrow/ raise loans or avail of financial assistance in whatever form as also issue Bonds/ Debentures/ Notes/ other securities in any manner with ranking as pari-passu basis or otherwise and to change its capital structure, including issue of shares of any class or redemption or reduction of any class of paid up capital, on such terms and

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conditions asthe Issuer may think appropriate, without the consent of, or intimation to, the Bondholder(s) or the Trustees in this connection.

51. BOND/ DEBENTURE REDEMPTION RESERVE (“DRR”)

The Corporation is a statutory body constituted under The National Highways Authority of India Act, 1988 and is not a public/ private limited company incorporated under The Companies Act. Therefore creation of Bond/ Debenture Redemption Reserve is not envisaged for the proposed issue of Bonds. The Corporation has also appointed a Trustee to protect the interest of the Bondholders.

52. NOTICES

All notices required to be given bythe Issuer or by the Trustees to the Bondholders shall be deemed to have been given if sent by ordinary post/ courier to the original sole/ first allottees of the Bonds and/ or if published in one All India English daily newspaper and one regional language newspaper.

All notices required to be given by the Bondholder(s), including notices referred to under “Payment of Interest” and “Payment on Redemption” shall be sent by registered post or by hand delivery tothe Issuer or to such persons at such address as may be notified bythe Issuer from time to time.

53. JOINT-HOLDERS

Where two or more persons are holders of any Bond(s), they shall be deemed to hold the same as joint tenants with benefits of survivorship subject to provisions of Law.

54. DISPUTES & GOVERNING LAW

The Bonds are governed by and shall be construed in accordance with the existing laws of India. Any dispute arising thereof shall be subject to the jurisdiction of the competent court of New Delhi, India.

55. INVESTOR RELATIONS AND GRIEVANCE REDRESSAL

Arrangements have been made to redress investor grievances expeditiously as far as possible,the Issuer endeavours to resolve the investor’s grievances within 30 days of its receipt. All grievances related to the issue quoting the Application Number (including prefix), number of Bonds applied for, amount paid on application and details of collection centre where the Application was submitted, may be addressed to the Compliance Officer at head office of the Issuer. All investors are hereby informed thatthe Issuer has appointed a Compliance Officer who may be contracted in case of any pre-issue/ post-issue related problems such as non-credit of letter(s) of allotment/ bond certificate(s) in the demat account, non-receipt of refund order(s), interest warrant(s)/ cheque(s) etc. Contact details of the Compliance Officer are given elsewhere in this Series-1 IM.

Date of Subscription The Date of Subscription shall be the date of realisation of proceeds of subscription money inthe Designated Bank Account of ICCL, as listed above.

99

Rejection of Applications The Company may reject any application on one or more technical grounds, including but not restricted to: Bank account details not given Details for issue of debentures in electronic/ dematerialised form not given PAN not mentioned in appropriate place In case of applications under Power of Attorney by limited companies, corporate bodies,etc.

relevant documents not submitted In the event that the number of Debentures applied for are not allotted in full, the

excessapplication money of such applicant will be refunded, as may be permitted. Settlement Process Upon final allocation by the Issuer, the Issuer or the Registrar on behalf of the Issue shallinstruct the depositories within 1 (one) day of the Date of Subscription, and the Depositoriesshall accordingly credit the allocated Debentures to the demat account of the successfulbidder(s). Within 2 (two) days of the Date of Subscription, the Depositories shall confirm to ICCL thetransfer of debentures in the demat account(s) of the successful bidder(s). Post-Allocation Disclosures by the EBP Upon final allocation by the Issuer, the Issuer shall disclose the Issue Size, coupon rate, ISIN,number of successful bidders, category of the successful bidder(s), etc., in accordance with theSEBI EBP Circular. The EBP shall upload such data, as provided by the Issuer, on its websiteto make it available to the public.

100

XIV. CREDIT RATING FOR THE BONDS CRISIL Limited (“CRISIL”) has vide its letter June 8, 2018, assigned a credit rating of “CRISIL AAA/Stable” to the Bonds of the Issuer. Instruments with this rating are considered to have the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk. A copy of rating letter from CRISIL is enclosed elsewhere in this Series-1 IM. Credit Analysis and Research Limited (“CARE”) has vide its letter June 7, 2018,assigned the credit rating of “CARE AAA”to the Bonds of the Issuer. Instruments with this rating are considered to have the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk. A copy of rating letter from CARE is enclosed elsewhere in this Series-1 IM. ICRALimited (“ICRA”) has vide its letter June 8, 2018, assigned the credit rating of “[ICRA] AAA/Stable” to the Bonds of the Issuer. Instruments with this rating are considered to have the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk. A copy of rating letter from ICRA is enclosed elsewhere in this Series-1 IM. India Ratings and Research Private Limited (“IRRPL”) has vide its letter June 8, 2018, assigned a credit rating of “IND AAA/Stable” to the Bonds of the Issuer. Instruments with this rating are considered to have the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk. A copy of rating letter from IRRPL is enclosed elsewhere in this Series-1 IM. Other than the credit ratings mentioned hereinabove,NHAI has not sought any other credit rating from any other credit rating agency(ies) for the Bonds offered for subscription under the terms of thisSeries-1 IM. The above ratings are not a recommendation to buy, sell or hold securities and investors should take their own decision. The ratings may be subject to revision or withdrawal at any time by the assigning rating agencies and each rating should be evaluated independently of any other rating. The ratings obtained are subject to revision at any point of time in the future. The rating agencies have the right to suspend, withdraw the rating at any time on the basis of new information etc.

101

XV. TRUSTEES FOR THE BONDHOLDERS

The Issuer has appointed Vistra ITCL (India) Limitedto act as trustee for the Debenture Holder(s).The address and contact details of the Trustees are as under: Vistra ITCL (India) Limited The IL&FS Financial Centre Plot C-22, G-Block, 7th Floor, Bandra Kurla Complex Bandra (East) Mumbai - 400 051 Tel: +91 (022) 28593535 Fax: +91 (022) 26533207 E-mail: [email protected] A copy of letter from Vistra ITCL (India) Limitedconveying their consent to act as Trustees for the issue of Bonds is enclosed elsewhere in thisSeries-1 IM. The Issuer hereby undertakes that a Debenture/ Bond Trust Deedinter alia, specifying the powers, authorities and obligations of the Debenture Trustee and the Issuerhas been executed in favour of the Trustees within permissible time frame as per statutory laws. The Debenture Holder(s) shall, without further act or deed, be deemed to have irrevocably given theirconsent to the Debenture Trustee or any of its agents or authorised officials to do all such acts, deeds,matters and things in respect of or relating to the Debentures as the Debenture Trustee may in itsabsolute discretion deem necessary or require to be done in the interest of the Debenture Holder(s).Any payment made by the Issuer to the Debenture Trustee on behalf of the Debenture Holder(s) shalldischarge the Issuer pro tanto to the Debenture Holder(s). The Debenture Trustee will protect theinterest of the Debenture Holder(s) in regard to the repayment of the principal and yield thereon andthe Debenture Trustee will take necessary action, subject to and in accordance with the DebentureTrust Deed, at the cost of the Issuer. The Debenture Trust Deed shall more specifically set out therights and remedies of the Debenture Holder and the manner of enforcement thereof. The Trustees shall perform its duties and obligations and exercise its rights and discretions, in keeping with the trust reposed in the Trustees by the holder(s) of the Bonds and shall further conduct itself, and comply with the provisions of all applicable laws, provided that, the provisions of Section 20 of the Indian Trusts Act, 1882, shall not be applicable to the Trustees. The Trusteesshall carry out its duties and performits functions as required to discharge its obligations under the terms of SEBI Debt Regulations, the Securities andExchange Board of India (Debenture Trustees) Regulations, 1993, the Debenture/ Bond Trusteeship Agreement, the Debenture/ Bond Trust Deed,Series-1 IM and all other related transaction documents, with due care,diligence and loyalty. The Trustees shall be vested with the requisitepowers for protecting the interest of holder(s) of the Bonds including but not limited to the right to appoint a nominee director on the Board of the Issuer in consultation with institutional holders of such Bonds. The Trustees shall ensure disclosure of all materialevents on an on-going basis and shall supervise the implementation ofthe conditions regarding creation of security for the Bonds.

102

XVI. STOCK EXCHANGE WHERE BONDS ARE PROPOSED TO BE LISTED

The Bondsare proposed to be listed on the Wholesale Debt Market (WDM) segment of BSE Limited (“BSE”).The Issuer has obtained BSE in-principle approval for listing of Bonds offered under the terms of this Series-1 IM. The Issuer shall make listing application to BSE and seek listing permission within 15 days of Deemed Date of Allotment.In case of delay in listing of the Bonds beyond 20 days from the Deemed Date of Allotment, the Issuer shall pay penal interest at the rate of 1.00% p.a. over the respective Coupon Rates of the Bonds from the expiry of 30 days from the Deemed Date of Allotment till the listing of Bonds to the bondholders.

103

XVII. MATERIAL CONTRACTS & AGREEMENTS INVOLVING FINANCIAL OBLIGATIONS OF THE ISSUER

By very nature of its business,the Issuer is involved in a large number of transactions involving financial obligations and therefore it may not be possible to furnish details of all material contracts and agreements involving financial obligations of the Issuer. However, the contracts referred to in Para A below (not being contracts entered into in the ordinary course of the business carried on by the Issuer) which are or may be deemed to be material have been entered into by the Issuer. Copies of these contracts together with the copies of documents referred to in Para B may be inspected at the headoffice ofthe Issuer between 10.00 a.m. and 2.00 p.m. on any working day until the issue closing date.

A. MATERIAL CONTRACTS

a. Copy of letter appointing Registrars b. Copy of letter appointing Trustees to the Bondholders.

B. DOCUMENTS

a. The National Highways Authority of India Act, 1988, as amended. b. Board Resolution dated15.2.2018authorizing issue of Bonds c. Letter of consent from the Trustees for acting as trustees for and on behalf of

the holder(s) of the Bonds. d. Letter of consent from the Registrars for acting as Registrars to the Issue. e. Application made to the BSE for grant of in-principle approval for listing of

Bonds. f. Letter from BSE conveying their in-principle approval for listing of Bonds. g. Letter from CRISIL conveying the credit rating for the Bonds. h. Letter from CARE conveying the credit rating for the Bonds. i. Letter from ICRA conveying the credit rating for the Bonds. j. Letter from IRRPL conveying the credit rating for the Bonds. k. Tripartite Agreement between the Issuer, NSDL and Registrars for issue of

Bonds in dematerialised form. l. Tripartite Agreement between the Issuer, CDSL and Registrars for issue of

Bonds in dematerialised form.

<lfil~RatingsPrufe",wno1 Risk O~inion

CARE/DRO/RL/2018-19/~6a4

Mr. Madhup KumarChief General Manager (Finance)National Highways Authority of IndiaG-S & 6, Sector - 10, Dwarka,NewDelhi-l10045

1June 07, 2018

Confidential

DearSi.,

Credit rating for proposed long_term Borrowing Programme

Please refer to our letter dated March 29, 2018 and your request for revalidation of the

rating assigned to the borrowing programme of your company, for a limit of RS.62,OOO

crore, ..1. The following rating has been reviewed:

p p

Instrument Amount Rating Remarks(Rs. erore)

J,ong-term Borrowing 62,000 CARE AAA; Siable ReaffirmedProgramme for FY19 (Rupees 5iJ<tyTwo (Triple A; Outlook:

1 Thousand Crore only) Stable}

3 Please arrange to get the rating revalidated, in case the co osed issue is not made

within six months from the dale of this leiter.

4. Piease inform us the below-mentioned details of issue immediately, but not later than

7 days from the date of placing the instrument:

In.t'lJment ISIN IUlJe Coupon Coupon Term. 01 Redemption Name and Detail.oftype Si'e Rate P.yment Redemption dote conlact top III,.. Oale, delan.ol Inv•• tors

,,' Debenlur.Trust ••

5. CAREreserves the right to undertake a surveillance/review of the rating from time to,. "

time, based on circumstances warranting such review, subject to at least one such

review/surveillam:e every year.

6. CAREreserves the right to revise/reaffirm/withdraw the rating assigned as also revise

~ the outlook, as a result of periodic review/surveillance, based on any event or V''Complete definitions of the fQtlngiIliEl~1ii1NlM '6St51"lt~@tldrHhtingHOm ond in other DlRf publicotions.

CO'PO •.••n OFFKE,.- Roo', Go<!,~CoH,....." s."".~. H•• ,.'" ~"..,.OH E••••• , i>p,", H>g"w.,. $;0' IE). M."' •••• OO 0» Page 1 01 2T••., 09'_1' _.1';< 345.: f", _,,_, ,_" •••• 51

CIN.l6 7190MH'993PlC07169 1

, l" F1•••. E_, •••••,- VIdo<><"" T•.••• 'J""'"_ ••••h.o"""" Now0 •••••"0 0';5

I•• _fl_ 11_41" l,oo, •• , _91_11_41"l>"

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information which in the opinion of CAREwurants such an action. In the event of

failure on the part of the entily to furnish such information, material or darifkations

as may be required by CARE so as to enable it to carry out continuous monitoring of

the rating of the debt instruments, CAREshall carry out the review on the basis of best

available information throughout the lile lime of such instruments. In such cases the

credit raling symbol shall be accompanied by "ISSUER NOT COOPERAnNGN• CARE

shall also be entitled to publicizejdi5seminale all the afore-mentioned rating actions

in any manner cOrl5idered appropriate by it, without reference to you.

7. Users of this rating may kindly refer our website www.careratings.com for latest

update on the outstanding rating.

g, CAREratings are not recommendations to buy, sell, or hold any securities.

Ifyou need any clarification, you are welcome to approach us in this regard.

Yours faithfully,

~%Y.[RiCainlDeputy Manager ,[email protected]

Encl.: As above

l,,~[Jasmeen KaurJAssociate DirectorJasmeen, [email protected]

I'I'~---------------',',,:,',."m::,,;---------------------'

CARE',ratings are opiniom on (redit quality and are nol ,ecommendation' to sanClion, 'eMw, disbu"e or ,eull•the concerned bank facilili•• or to buy, sell or hold any ,eourlty, CAREha. based its ,ating.sJoutlooks oninfo,mation oblained f,om source, believed by it to be .,,"rale and reliable. CAREdoe, nol, however, guarante"the a"u'ow, .dequacy or completeness of any informalion and is not responsible fa, any erro" or omissiOnSorfor the result, obtoined f,om the use of such Information. Mo,l entilie. who.e bank facllities/inmuments a,eraled by CAREh,ve paid a (redit rating fee, based on the amount and type of bank facililies/instrument<.In ca,e of p.rtnership/proprietary concerns, the rating/oullook ",signed by CAREis based on lhe capitald.ployed by lhe partners/proprietor and the financial strength 01 lhe firm al p,e,enl. The ,aling/ouliook mayundergo change in 'a.e Ofw,thdrowal of capilal or the unse<"red loan. brought in by lhe p'nne"/prop,lelOr inaddition to the financial perlormance and Olher relevant factofS,

CARERatings limiled______________ .".".-.•.'.'.'.-_.'.".'.'"!'l••k!.,.'.lif'••,_••.•.•_<'_".•.'~_, _

nth "00'. i-' el",', "'d.,,<o" T"",••. ' •••••••••1." '''''""0, N.w 0.''" . , '~(lSS.T.".,,_, '_4<" llOO • f •• ,,9'_ "",S131"e • WWw~.,.,.t1""C<." • CI".I61''IOMH1991PlCO".~,

Ratings

NATHIAUII96797rrFB/05 I 70194517June 8, 2018

Mr. Sanjeev KumarGM FinanceNational Highways Authority of IndiaG 5&6, Seetor-IO, DwarkaDelhi - 110075

Dear Mr. Sanjecv Kumar,

CONFIDENTIAL

CRISILAn SloP Global Company

Re: CRISIL Rating on the Rs.62000 Crore Long-Term Borrowing Programme of National HighwaysAuthority of India

All ratings assigned by CRlSIL are kept under continuous surveillance and review.Please refer to our rating letter dated May 14,2018 bearing Ret: no: NATHIAU/196797rrFB/051701945/6

Please find in the table below the rating outstanding for your company.

S.No.I

InstrumentLon -Tenn Borrowin

Rated Amount Rs. in Crore62000

In the event of your company not making the issue within a period of 180 days from the above date. or in theevent of any change in the size or structure of your proposed issue. a fresh letter of revalidation from CRISILwill be necessary.

As per our Rating Agreement. CRISIL would disseminate the rating along with outlook through its publicationsand other media. and keep the rating along with outlook under surveillance for the life of the instrument.CRlSIL reserves the right to withdraw or revise the ratings assigned to the captioned instrument at any time, onthe basis of new information, or unavailability of information or other circumstances. \vhich CRlSIL believes.may have an impact on the rating.

As per the latest SEBI circular (reference number: CIRlIMD/DFII 712013: dated October 22, 2013) oncentralized database for corporate bonds/debentures. you are required to provide international securitiesidentification number (ISIN; along with the reference number and the date of the rating letter) of allbond/debenture issuances made against this rating letter to us. The circular also requires you to share thisinformation with us within 2 days after the allotment of the ISIN. We request you to mail us all the necessaryand relevant information at [email protected]. This will enable CRISIL to verify and confirm to thedepositories, including NSDL and CDSL, the ISIN details of debt rated by us. as required by SE131.Feel free tocontact us for any clarifications you may have at [email protected]

Should you require any clarifications, please feel free to get in touch \\o'ithus.

With warm regards,

Yours sincerely,

{\ ... - L,C'~Sushmita MajumdarDirector - CRISIL Ratings

-......~~/ --- _r)-."'l~.-'~-"'''--_.'-Nivedita Shibu

Associate Director. CRISIL Ratings

A CRISIL rating reflects CRIS/L's current opinion on the likelihood of timely payment of the obligations under the rated instrument anddoes not constitute an audit of the rated entity by CRISIL. CRISIL ratings are based on information provided by the issuer or obtainedby CRISIL from sources it considers reliable. CRfSIL does not guarantee the completeness or accuracy of the information on which therating is based. A CRISJL rating is not a recommendation to buy, sell, or hold the rated instrument; it does not comment on the marnetprice or suitability for a particular investor. All CRISIL ratings are under surveillance. Ratings are revised as and when circumstances sowarrant. CRISfL is not responsible for any errors and especially states that it has no financial liability whatsoever to the subscribers /users / transmitters / distributors of this product. CRfSfL Ratings rating criteria are available without charge to the public on the CRIS/Lweb site, www.crisil.com. For the fatest rating information on any instrument of any company rated by CRISIL. please contact CustomerService He/odesk at 1aoo.267.1301.

CRISIL LimitedCorporate Identity Number: L67120MH1987PLC042363

Registered Office: CRISIL House, Central Avenue, Hiranandani Business Park, Powai, Mumbai - 400076. Phone: +91 2233423000 I Fax: +91 2240405800www.crisil.com

NATIONAL HIGHWAYS AUTHORITY OF INDIA (An Autonomous Body under the Ministry of Road Transport & Highways, Government of India)

Head Office: G - 5 & 6, Sector 10, Dwarka, New Delhi - 110075

Tel: (011) 25074100, 25074200; Fax: +91-11-25076507 Website: www.nhai.org; E-mail: [email protected]

APPLICATION FORM FOR TAXABLE SECURED REDEEMABLE NON-CONVERTIBLE BONDS IN THE NATURE OF DEBENTURES (“BONDS”)

Dear Sirs, Having read, understood and agreed to the contents and terms and conditions of NHAI Taxable Bonds 18-19Series-I Tranche Prospectus dated June 27

th, 2018, I/we hereby apply for allotment to me/us, of the under mentioned Bonds (hereinafter referred to

as “Bonds”), out of the Private Placement Issue. I/We irrevocably give my/ our authority and consent toVistra ITCL (India) Limited (P) Ltd, to act as my/our Trustees and for doing such acts and signing such documents as are necessary to carry out their duties in such

capacity. The amount payable on application as shown below is remitted herewith. We bind ourselves to the terms and conditions as contained in the Private placement prospectus. We further confirm that, the subscription to bonds is made from our bank a/c as mentioned below. Name of Applicant: Name of the Arranger:

APPLICANT’S DETAILS

SOLE/FIRST APPLICANT’S NAME IN FULL SIGNATORY/AUTHORISED SIGNATORY

SECOND APPLICANT’S NAME

THIRD APPLICANT’S NAME

ADDRESS (Do not repeat name) (Post Box No. alone is not sufficient)

PIN CODE TEL FAX E-MAIL:

SOLE/ FIRST APPLICANT CATEGORY (Tick one) INVESTMENT DETAILS

Scheduled Commercial Bank/ Public Financial Institution Security Name 8.55%-NHAI-2048

Company/ Body Corporate Face Value Rs. 10.00 lacs per Bond

Insurance Company Issue Price Rs. 10.00 lacs per Bond

Primary/ State/ District/ Central Co-operative Bank Tenure 30 years

Regional Rural Bank, Cooperative Bank Coupon/ Interest Rate 8.55% p.a.

Mutual Fund/ Trust/ Society/ SIDC No. of Bonds applied (In figures )

Provident/ Pension Fund

Statutory Body/ Corporation/ Limited Liability Partnership No. of Bonds applied for(In words)

Others (Please specify)

PAYMENT DETAILS

Total Amount Payable UTR No.

(Rs. in figures) (Rs. in words) RTGS Dated

Name & Branch of the Bank

SOLE/ FIRST APPLICANT’S BANK DETAILS (Ref. Instructions) INCOME TAX DETAILS (Ref. Instructions)

Bank Name Sole/ First Applicant Second Applicant Third Applicant

Branch P.A,N./ G.I.R. NO.

(enclose copy)

City

Account Number I.T. Circle/ Ward/ District No.

IFSC Code& MICR

Type of Account Savings Current Others

TO BE FILLED IN ONLY IF THE APPLICANT IS AN INSTITUTION

Name of the Authorised Signatory (ies) Designation Signature

1. 1.

2. 2.

3. 3.

4. 4.

DETAILS FOR ISSUE OF BONDS IN ELECTRONIC/ DEMATERIALISED FORM APPLICANT’S SIGNATURE(S)

Depository Name (please tick) NSDL CDSL Sole/ First Applicant

Depository Participant Name

DP-ID Number

Client-ID

Second Applicant

Beneficiary Account Number

Name of the Applicant Third Applicant

-------------*-------------*-----------*-----------*-------------*------------*-----------*-----------(Tear Here)-----------*-------------*-------------*-----------*-----------*-----------* -------------*------------

NATIONAL HIGHWAYS AUTHORITY OF INDIA Head Office: G - 5 & 6, Sector 10, Dwarka, New Delhi - 110075 Tel: (011) 25074100, 25074200; Fax: +91-11-25093517, 25093515 Website: www.nhai.org; E-mail:[email protected]

(To be filled in by the Applicant) Received from_________________________________________________________________ Address______________________________________________________________________ an application for ___________ Bonds vide UTR No. __________________________________ Drawn on_____________________________________________________________________

Dated____________ amounting to Rs. _____________________________________________.

For Office Use Only

Date of Receipt of Application

/ 0 6 / 1 8

Date of realization of funds

/ 0 6 / 1 8

ACKNOWLEDGEMENT SLIP

Application No. ______

Application No. NHAI/

All future communication in connection with this application should be addressed to the Registrars: M/s. Beetal Financial & Computer Services (P) Ltd.99, Beetal House, Madangir, Behind Local

Shopping Centre, Near Harsukhdas Mandir, New Delhi-110062, Tel :011-29961281-83, Fax:011-29961284, Email: [email protected] or any other person at such address as may be notified by NHAI

from time to time.

2

INSTRUCTIONS

1. Application forms must be completed in full in BLOCK LETTERS IN ENGLISH. A blank space must be left between two or more parts of the name.

A B C D E L T D

Signatures should be made in English / Hindi. Signatures made in any other Indian language must be attested by an authorized official of a Bank or by a Magistrate / Notary Public under his / her official seal.

2. Application forms duly completed in all respects must be submitted with the respective arrangers.

3. Successful bidders should do the funds pay-in to the following bank account of ICCL (“Designated Bank Account”)through RTGS: ICICI Bank :

Beneficiary Name: INDIAN CLEARING CORPORATION LTD Account Number: ICCLEB IFSC Code: ICIC0000106 Mode: NEFT/RTGS

YES Bank : Beneficiary Name: INDIAN CLEARING CORPORATION LTD Account Number: ICCLEB IFSC Code: YESB0CMSNOC

Mode: NEFT/RTGS Only

4. Cheques, Demand Draft, Cash, Money Orders and Postal Orders shall not be accepted.

5. Receipt of applications shall be acknowledged by the Issuer to the issue in the “Acknowledgment

Slip”, appearing below the Application Form. No separate receipt will be issued.

6. All applicants should mention their Permanent Account Number (PAN) or the GIR number allotted under Income-Tax Act, 1961 and the Income-Tax Circle/Ward/District. Please enclose a copy of the same along with the Application Form.

7. The bonds shall be issued in De-mat form only and subscribers may carefully fill in the details of

Client ID/ DP ID.

8. Please give the Complete Bank details like Bank Account Number, IFSC Code, Name of the Bank and Branch and Branch Code in the Column for Bank details for the purpose of payment of interest on application money through RTGS.

9. The application would be accepted as per the terms outlined in the Prospectus Series-I dated June 27

th, 2018 and SEBI guidelines and operational guidelines on EBP by stock exchange.

10. Documents to be provided by applicants: Applicants need to submit the following documentation,

along with the Application Form, as applicable:

Memorandum and Articles of Association/ Constitutional Documents/ Bye-laws/ Trust Deed;

Board Resolution authorizing the investment and containing operating instructions;

Power of Attorney/ relevant resolution/ authority to make application;

Specimen signatures of the authorized signatories (ink signed), duly certified by an appropriate authority;

Government Notification (in case of Primary Co-operative Banks and Regional Rural Banks);

Copy of Permanent Account Number Card (“PAN Card”) issued by the Income Tax Department;

Necessary forms for claiming exemption from deduction of tax at source on interest on application money, wherever applicable.