Company Profile & Overview:

Larsen & Toubro Limited (L&T) is a technology, engineering, construction and manufacturing company.

It is one of the largest and most respected companies in India's private sector.

More than seven decades of a strong, customer-focused approach and the continuous quest for world-class quality have enabled it to attain and sustain leadership in all its major lines of business.

L&T has an international presence, with a global spread of offices.

IDBI Trusteeship Services Limited vide its letter Ref.No.4690/ITSL/OPR/2009/CL-376 dated January 14, 2009 has given its

consent to act as Debenture Trustee.

To receive interest or redemption in due time.

The Company's liability to the debenture holders towards all their rights including for payment.

All the rights and remedies of the Debenture Holders under this Issue shall vest in and shall be exercised by the appointed Debenture Trustee

Further the Company will not be liable to pay any interest or compensation from the dates of such redemption.

Creation of Debenture reserve:

MCA, through its circular dated April 18, 2002, has specified that NBFCs which are registered with the RBI under Section 45-IA of the RBI Act, 1934 shall create DRR to the extent of 50% of the value of debentures issued and allotted through public issue.

Hence L&T shall create DRR of 50% of the value of Debentures issued and allotted in terms of this Prospectus, for the redemption of the NCDs.

Creation of Security:

Company to keep the proceeds of the Issue in an escrow account until the documents for creation of security as stated in this Prospectus are executed.

Upon creation of security as disclosed in this Prospectus, the Escrow Collection Bank(s) shall transfer the monies from the Escrow Accounts to a separate bank account as per the terms of the Escrow Agreement.

Instrument Unsecured, Redeemable, Non-Convertible DebenturesIssue Size Rs 250 crores

Tenure 3 years (36 months from the deemed date of allotment)Put / Call option None

Coupon 9.20%Mode of Issue Private Placement to eligible investors

Dematerialized Yes. Trading In dematerialized mode only.Face value Rs. 10,00,000 per debenture

Minimum subscription 10 debentures, and in multiple of 1 thereafterIssue Price At Par

Issue opening & closing date 16 January 2009 & 20 January 2009Interest Rate & Frequency Fixed ROI. Simple interest paid annually, rear-ended

Interest on Application Money

1. Interest on application money will be paid to Investors at the Coupon Rate (subject to deduction of tax at source, as applicable) from the date of realization of cheque(s)/ demand draft(s)/ realization of funds through RTGS transfer up to the date immediately preceding the Deemed Date of Allotment.

2. The actual payment, if any, would be made within 15 days from the date of allotment

Day Count Basis Actual / 365 (Actual/ 366 in case of leap year)Security Unsecured

Step up clause:

1.The Issue Of Unsecured, Redeemable, Non-convertible Debentures to be issued in one or more series to be listed on The Wholesale Debt Market (“WDM”) Segment of the National Stock Exchange Of India Limited (“NSE”).

2.Multiple copies hereof given to the same entity shall be deemed to be given to the same person.

3.The Debentures will not be registered under the United States Securities Act Of 1933, as amended (The “U.S. Securities Act”) and may not be offered or sold within the United States (as defined under regulations under the U.S. Securities Act)

Lock-in clause – NO.

Redemption:Amount: Rs. 250 croresPeriod of maturity: 3 yearsYield on redemption: 9.20%. (Redemption at par, bullet repayment at maturity)

Rating:

CRISIL has assigned “AAA/ (Stable)” (pronounced “Triple A with stable outlook”) rating to these Debentures.

The Company shall seek a second rating equivalent to the above within 45 days from Deemed Date of Allotment.

Tax rebates/ treatment:

Tax as applicable under the Income Tax Act, 1961, or any other statutory modification or reenactment thereof will be deducted at source.

For seeking TDS exemption/lower rate of TDS, relevant certificate / document must be lodged by the debentures holders at the registered office of the Company at least 30 days before the interest payment becoming due and if required, be submitted afresh annually and/or as and when called upon for the same by the Company.

Tax exemption certificate / declaration of non-deduction of tax at source on interest on application money, should be submitted along with the application form.